Northern Technologies International Corporation (NASDAQ:NTIC) Q2 2024 Results Conference Call April 11, 2024 9:00 AM ET

Company Participants

Patrick Lynch - President and Chief Executive Officer
Matt Wolsfeld - Chief Financial Officer

Conference Call Participants

Gus Richard - Northland
Tim Clarkson - Van Clemens & Co.
John Bair - Ascend Wealth Advisors
Walter Ramsley - Walrus

Operator

As part of the discussion today, the representatives from NTIC will be making certain forward-looking statements regarding NTIC's future financial and operating results as well as their business plans, objectives and expectations. Please be advised that these forward-looking statements are covered under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, and that NTIC desires to avail itself of the protection of the safe harbor from these statements.

Please also be advised that the actual results could differ materially from those stated or implied by the forward-looking statements due to certain risks and uncertainties, including those described in NTIC's most recent annual report on Form 10-K subsequent quarterly reports on Form 10-Q and recent press releases. Please read these reports and other future filings that NTIC will make with the SEC. NTIC disclaims any duty to update or revise these forward-looking statements.

I will now turn the call over to NTIC management.

Patrick Lynch

Good morning. I'm Patrick Lynch, NTIC's CEO, and I'm here with Matt Wolsfeld, NTIC's CFO. Please note that a press release regarding our fiscal 2024 second quarter financial results was issued earlier this morning, and is available at ntic.com.

During today's call, we will review various key aspects of our fiscal 2024 second quarter financial results, provide a brief business update and then conclude with a question-and-answer session. When we discuss year-over-year performance, we are referring to our fiscal 2024 second quarter as compared to our fiscal 2023 second quarter.

NTIC set a series of new records in the second quarter driven by robust demand across many parts of our business. Most notable among these were record second quarter ZERUST Oil & Gas sales and record quarterly Natur-Tec sales.

I'm also particularly encouraged by the continued year-over-year improvement in our gross margin, demonstrating that our broad initiatives aimed at improving profitability are working as intended. We anticipate that profitability will continue to improve and that we will continue to generate positive operating cash flow throughout the second half of fiscal 2024.

Year-over-year cash from operating activities improved by nearly 156% to $5.6 million primarily due to higher net income and positive changes in working capital. We intend to continue to allocate capital to support our growth initiatives and quarterly dividend payment while using excess cash flow to pay down the balance on our existing line of credit.