Northern Technologies (NTIC) Q2 2025 Earnings Report

NTIC delivered a challenging Q2 FY2025 as consolidated net sales declined 8.5% year over year to $19.1 million, with gross margin compressing to 35.6% from 40.0% a year ago. The contraction was driven primarily by a weaker mix in Natur-Tec and softer Zerust Oil & Gas demand, alongside pricing pressures in Natur-Tec that pressured gross margin. Despite near-term headwinds, management signaled a trough-to-recovery dynamic in the second half of fiscal 2025, anchored by a growing sales pipeline in Zerust Oil & Gas and ongoing opportunities in Natur-Tec packaging solutions, as well as a stabilizing performance from NTIC China. Importantly, NTIC maintained a solid balance sheet and liquidity runway, with more than $5 million of cash and equivalents and a diversified asset-light model that supports deleveraging and strategic investments. Management also signaled discipline in capital allocation, including dividend adjustments to preserve cash and strengthen flexibility for growth in oil & gas and compostable plastics.