Northern Technologies International Corporation (NTIC): BCG Matrix [Dec-2025 Updated]

You're looking at Northern Technologies International Corporation's (NTIC) portfolio right now, and the picture is definitely mixed as of fiscal 2025. We've got high-potential Stars like the 14.0% growth in China sales and the big Brazil energy win, all while the core ZERUST Industrial segment remains a solid Cash Cow, bringing in $55.2 million or 65.5% of consolidated sales. But, you can't ignore the Dogs, like the Oil and Gas unit shrinking 20.7%, or the Question Marks-Natur-Tec sales actually dipped 1.0% despite the market's promise-all leading to a near-zero consolidated net income of just $18,000. Let's break down exactly where NTIC needs to invest, hold, or divest based on this BCG Matrix analysis below.

Background of Northern Technologies International Corporation (NTIC)

You're looking at Northern Technologies International Corporation (NTIC), a firm that develops and markets proprietary, environmentally beneficial products and services across more than 65 countries, using a network of subsidiaries, joint ventures, and distributors. Honestly, the core of what they do is corrosion prevention, which they market primarily under the ZERUST® brand.

Beyond rust prevention, NTIC also markets a portfolio of bio-based and biodegradable polymer resin compounds and finished products, which they brand as Natur-Tec®. For analytical purposes, the company operates through two main segments: ZERUST products and services, and Nature-Tec products. The ZERUST line has served markets like automotive, electronics, military, and retail for over 50 years, and they've recently pushed into the oil and gas sector too.

Looking at the numbers for the fiscal year ending August 31, 2025, things were definitely tight. Consolidated net sales saw a slight dip, down 1.0% to $84.2 million. This was set against a backdrop of challenging market conditions and shifting order timings that management pointed to.

The profitability picture was stark; operating income dropped a significant 67.3% to $2.6 million. Consequently, net income attributable to NTIC was nearly flat at just $18,000 for the full year, a massive fall from $5.4 million the year before. To be fair, the gross profit margin also compressed, falling 210 basis points to 37.6%.

When you break down the sales by product line for fiscal 2025, you see some divergence. ZERUST® industrial net sales actually managed a small increase of 2.4%, hitting $55.2 million. However, ZERUST® oil and gas sales were hit hard, decreasing by 20.7% to $7.3 million. Natur-Tec® product sales were also slightly down by 1.0% at $21.7 million. On a positive note, NTIC China sales grew by 14.0% to $16.2 million.

Despite the tough year, the company was focused on the future, investing in business development and expanding ZERUST® industrial sales globally. They even announced a milestone multi-year order with a major international EPC in Brazil in November 2025, which validates their strategy in key global energy markets. Cash from operations was still positive, coming in at $2.4 million for the twelve months ending August 31, 2025.

Northern Technologies International Corporation (NTIC) - BCG Matrix: Stars

You're looking at the segments of Northern Technologies International Corporation (NTIC) that are leading the charge in expanding markets, which is exactly what we look for in a Star. These are the business units or products with the best market share in growing areas, and they need investment to maintain that lead.

The Star quadrant is defined by high market share within a high-growth market. These units are leaders, but that leadership costs cash for promotion and placement. If NTIC can hold this market share as the growth rate naturally slows, these Stars are set to become the next generation of Cash Cows. A key part of the strategy here is making sure we keep funding the growth engine.

Here's a look at the specific areas fitting the Star profile for NTIC as of the fiscal year ended August 31, 2025:

• NTIC China's wholly-owned subsidiary sales showed strong regional growth, increasing 14.0% to $16.24 million in fiscal 2025.
• New Natur-Tec® technologies are positioned in the high-growth bioplastics market, which has a projected Compound Annual Growth Rate (CAGR) of over 16.3% through 2035.
• The recent, major, multi-year offshore oil and gas contract in Brazil, valued at approximately US$13 million, signals success in a high-potential global energy market segment.
• Expanding ZERUST® industrial sales is leveraging existing high-share technology into new territories, evidenced by its sales performance.

Let's break down the numbers supporting these high-potential areas. The ZERUST® industrial segment, which is a core part of the corrosion protection business, is showing the kind of steady growth we expect from a Star, even while the company navigates challenging macro conditions.

The Natur-Tec® platform, while seeing a slight overall decrease in net sales of 1.0% to $21.746 million for the full fiscal year 2025, is fundamentally a Star because of the market it serves. The bioplastics industry is projected to grow at a compelling rate, with some forecasts showing a CAGR exceeding 16.3% in the coming years. This means NTIC's investment in new Natur-Tec® technologies is aimed squarely at a high-growth segment, even if current order timing created a temporary dip in sales.

The new Brazil contract is a clear indicator of high-potential market penetration. This three-year deal, valued at approximately US$13 million, is for providing corrosion protection for Floating Production Storage and Offloading (FPSO) units. Revenue recognition is scheduled to ramp during fiscal 2026 and continue through calendar 2028. This win validates the strategy to expand ZERUST® oil and gas solutions into what NTIC views as one of the fastest-growing deepwater markets globally.

For you, the takeaway is that these Stars-NTIC China, the Natur-Tec® platform in its growth market, and the newly secured Brazil energy contract-are where the company must continue to allocate capital for promotion and placement to secure future Cash Cow status. Finance: draft 13-week cash view by Friday.

Northern Technologies International Corporation (NTIC) - BCG Matrix: Cash Cows

Cash Cows for Northern Technologies International Corporation (NTIC) are characterized by a high market share in mature segments, generating substantial cash flow to support other areas of the business. The ZERUST® Industrial segment fits this profile well, representing the core, stable revenue driver.

The ZERUST® Industrial net sales were reported at $55.2 million for the fiscal year ended August 31, 2025, which constituted 65.5% of the consolidated net sales of $84.2 million. This segment demonstrated modest stability with a 2.4% growth rate compared to the prior fiscal year, primarily driven by increased demand in North America. This established market position in industrial corrosion protection is what defines its Cash Cow status.

A steady, non-consolidated cash stream also comes from joint ventures, reflecting mature international markets. Equity in income from joint ventures contributed $3.5 million in fiscal 2025. This income stream, though down 16.2% year-over-year, still provides necessary cash support, particularly from operations like EXCOR in Germany.

The overall cash generation from the core business operations is a key indicator. Cash provided by operating activities for Northern Technologies International Corporation totaled $2.4 million for the twelve months ended August 31, 2025. This cash flow is what the company strives to maintain or slightly increase through efficiency improvements rather than heavy promotional spending, which is typical for a Cash Cow.

You should look at the segment's contribution to see where the stability lies:

• ZERUST® Industrial net sales: $55,171,000.
• Growth rate for ZERUST® Industrial: 2.4%.
• Contribution to consolidated net sales: 74.2% of ZERUST® solutions, which is $62,488,397 total.
• Total Consolidated Net Sales: $84,234,000.

To maintain this position, the focus shifts to operational efficiency. Here's the quick math on how the segment stacks up against the whole:

The strategy here is definitely to 'milk' the gains passively while investing just enough into infrastructure to keep the efficiency high and the cash flowing. What this estimate hides is the pressure on overall profitability, as operating income for NTIC dropped sharply to $2.57 million in fiscal 2025. Finance: draft 13-week cash view by Friday.

Northern Technologies International Corporation (NTIC) - BCG Matrix: Dogs

When you look at Northern Technologies International Corporation (NTIC)'s portfolio through the lens of the Boston Consulting Group (BCG) Matrix, the Dogs quadrant represents those business units stuck in low-growth markets with a low relative market share. These are the areas where capital is often trapped, offering little return. Honestly, expensive turn-around plans usually don't help these units much, so the strategic move is often minimization or divestiture.

The data from fiscal 2025 clearly points to certain areas fitting this profile. For instance, the ZERUST® Oil and Gas net sales saw a significant decline of 20.7%, landing at just $7.3 million. This steep drop, attributed to market volatility and order timing, signals a unit struggling for traction in what is likely a mature or contracting segment for NTIC, a classic Dog characteristic.

The overall financial health of the parent company, as reflected by the bottom line, reinforces this view of low-performing assets. The overall consolidated net income attributable to NTIC plummeted to just $18,000 in fiscal 2025. That figure indicates a near-zero return on equity, meaning the company as a whole is barely earning anything after accounting for all costs, which is what happens when Dogs consume management focus without delivering profit.

Furthermore, the performance of associated operations shows weakness. Joint venture operating income decreased 9.8% to $8.5 million, reflecting challenging macroeconomic conditions, particularly in Europe. While joint ventures aren't fully consolidated, their declining profitability is a drag on overall results. Also, the broader ZERUST® product segment, which is the core of the business, only managed a slight revenue decline of 1.0% to $62.5 million, showing low overall growth across the board, which is the definition of a low-growth market environment for these products.

Here's a quick look at the key financial indicators that place these areas in the Dog category for fiscal 2025:

These units, by definition, frequently break even, neither earning nor consuming much cash, but they are cash traps because they tie up working capital that could be deployed elsewhere. You need to recognize the characteristics that define these Dogs:

• Low market share and low growth rates.
• Frequently break even, neither earning nor consuming cash.
• Prime candidates for divestiture.
• Should be avoided and minimized.

The data suggests that capital tied up in these low-momentum areas should be aggressively managed. Finance: draft a divestiture analysis for the ZERUST® Oil and Gas unit by next Tuesday.

Northern Technologies International Corporation (NTIC) - BCG Matrix: Question Marks

You're looking at the Question Marks quadrant for Northern Technologies International Corporation (NTIC), which means we're dealing with products in markets that are definitely growing, but where NTIC still holds a relatively small piece of the action. These units burn cash trying to grab market share, and honestly, that's exactly what the numbers for Natur-Tec® suggest for fiscal 2025.

The Natur-Tec® product line, which operates in the high-growth bioplastics market, saw its net sales decline by 1.0% year-over-year, landing at $21.7 million for the fiscal year ended August 31, 2025. To be fair, this was partly due to reduced pricing to major customers during the period. Still, a decline in a growing market signals that the low market share position is a real challenge right now.

The investment required to push this product line is evident in the expense structure. Total operating expenses for Northern Technologies International Corporation increased by 6.4% to $37,651,465 in fiscal 2025, up from $35,392,957 in fiscal 2024. This spending increase was explicitly tied to strategic investments in ZERUST® oil and gas sales infrastructure and personnel, but the overall cost structure reflects the cash burn associated with trying to build out market presence across the board.

Here's a quick look at how the key metrics line up for this segment and the associated investment:

That low order backlog creates real uncertainty for near-term revenue visibility. At year-end on August 31, 2025, the order backlog stood at $4.2 million, a noticeable drop from $5.8 million the year before. That's less cash visibility heading into the next cycle, which is a classic Question Mark risk-you're spending now for growth later, but the immediate pipeline looks thinner.

The path forward for Northern Technologies International Corporation here is clear: heavy investment is needed to gain traction quickly, or this unit risks slipping into the Dog quadrant. Management is definitely signaling this intent, focusing on future growth drivers:

• Developing new Natur-Tec® technologies.
• Pursuing emerging opportunities in the South American offshore oil and gas market.
• Expanding ZERUST® industrial sales across the global footprint.
• Positioning for renewed growth in fiscal 2026 following past strategic investments.

To capture the high market growth in bioplastics, you need to commit capital to North American distribution and new technology adoption. If you don't increase market share fast, those high growth prospects just become high-cost drains. Finance: draft 13-week cash view by Friday.