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Northern Technologies International Corporation Reports Increased Sales And Earnings For Fiscal 2010

Net income was $2,607,927, or $0.61 per diluted common share, for fiscal 2010 compared to a net loss of $(3,344,976), or $(0.89) per diluted common share, for fiscal 2009. NTIC's working capital was $5,918,923 at August 31, 2010, including $1,776,162 in cash and cash equivalents. 

G. Patrick Lynch, President and Chief Executive Officer of NTIC said, "Globally, several of our joint ventures recorded record sales in the third and fourth quarters of fiscal 2010 for our ZERUST® corrosion inhibiting packaging products. With the introduction of several new ZERUST® products over the past few months, we anticipate that this trend will continue and broaden during fiscal 2011."

"At the height of the recession," Lynch continued, "many enterprises suspended or slowed their 'Green Sustainability' initiatives. Now that the economic recovery is picking up pace, however, we are seeing a steady increase in orders for our Natur-Tec® products from our growing industrial distribution base."

Outlook

For the fiscal year ending August 31, 2011, NTIC expects its net sales to range between $18.0 million and $19.5 million, inclusive of sales made by NTIC's joint venture in Brazil, and to earn net income of between $3.6 million to $3.8 million, or between $0.84 and $0.88 per diluted share.

Webcast

NTIC will host a webcast tomorrow morning, November 23, 2010, beginning at 8:00 a.m. Central Standard Time, to review its results of operations for fiscal 2010 and future outlook, followed by a question and answer session.

The live audio webcast will be available to interested parties at http://ir.ntic.com/events.cfm , where it will be archived and accessible for approximately one year.

Financial Results

NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED AUGUST 31, 2010 AND 2009
     
  2010 2009
NET SALES:    
Net sales, excluding joint ventures  $12,190,171 $7,428,499
Net sales, to joint ventures  2,196,593 1,146,809
NET SALES 14,386,764 8,575,308
     
Cost of goods sold 9,384,866 5,620,668
Gross profit 5,001,898 2,954,640
     
JOINT VENTURE OPERATIONS:    
Equity in income of joint ventures  3,919,084 367,238
Fees for services provided to joint ventures 4,690,450 3,378,193
  8,609,534 3,745,431
     
OPERATING EXPENSES:    
Selling expenses 3,059,207 2,439,321
General and administrative expenses 3,923,103 2,804,257
Expenses incurred in support of joint ventures 875,869 1,427,616
Research and development expenses 3,333,683 3,024,205
Loss on impairment 554,000
  11,191,862 10,249,399
     
OPERATING INCOME (LOSS)  2,419,570  (3,549,328)
     
INTEREST INCOME  30,939  6,340
INTEREST EXPENSE  (97,676)  (132,411)
OTHER INCOME  25,094  28,423
     
INCOME (LOSS) BEFORE INCOME TAX EXPENSE  2,377,927  (3,646,976)
     
INCOME TAX BENEFIT  (230,000)  (302,000)
     
NET INCOME (LOSS)  2,607,927  (3,344,976)
     
NET INCOME ATTRIBUTABLE TO NON CONTROLLING INTEREST 24,171 --
     
NET INCOME (LOSS) ATTRIBUTABLE TO NTIC  $2,583,756 $(3,344,976)
     
NET INCOME (LOSS) PER COMMON SHARE:    
Basic $0.61 $(0.89)
Diluted $0.61 $(0.89)
     
WEIGHTED AVERAGE COMMON SHARES    
ASSUMED OUTSTANDING:    
Basic 4,223,605 3,749,012
Diluted 4,269,350 3,749,012
 
 
QUARTERLY INFORMATION (UNAUDITED)
         
  Fiscal Quarter Ended
  November 30 February 28 May 31 August 31*
Fiscal year 2010:        
Net sales $2,711,402 $2,876,478 $3,237,198 5,561,686
Gross profit 953,906 1,035,831 1,064,296 1,947,865
Income before income taxes 420,705 252,641 841,968 862,613
Income taxes (15,000) (94,000) (110,000) (11,000)
Net income 435,705 346,641 951,968 873,613
         
         
Net income per share:        
Basic $0.11 $0.08 $0.22 $0.20
Diluted $0.11 $0.08 $0.22 $0.20
         
Weighted average common shares assumed outstanding:        
Basic 4,149,096 4,194,887 4,213,465 4,223,605
Diluted 4,163,441 4,225,907 4,242,735 4,231,589
         
* During the fourth quarter of fiscal 2010, the Company decided to consolidate the financial results of Zerust Brazil for the fiscal year ended August 31, 2010. As a result, all revenues and expenses of Zerust Brazil for the fiscal year ended August 31, 2010 are included in the fourth quarter.

About Northern Technologies International Corporation

Northern Technologies International Corporation develops and markets proprietary environmentally beneficial products and services in over 55 countries either directly or via a network of joint ventures, independent distributors and agents. NTIC's primary business is corrosion prevention marketed primarily under the ZERUST® brand. NTIC has been selling its proprietary ZERUST® rust and corrosion inhibiting products and services to the automotive, electronics, electrical, mechanical, military and retail consumer markets, for over 35 years. NTIC also offers worldwide on-site technical consulting for rust and corrosion prevention issues. NTIC's technical service consultants work directly with the end users of NTIC's products to analyze their specific needs and develop systems to meet their technical requirements. In addition, NTIC markets proprietary bio-plastic technologies under the Natur-Tec® brand. Finally, NTIC's Polymer Energy® joint venture manufactures and sells advance waste plastic to fuel conversion machines.

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