Northern Technologies at Lytham Partners: growth bets gain traction

On September 29, 2026, Northern Technologies International Corporation (NTIC) addressed investors at the Lytham Partners Fall 2026 Investor Conference, highlighting growth in its key business units. Management emphasized that years of investment were starting to bear fruit, with notable strength in the industrial corrosion business, rapid expansion in the oil and gas sector, and rising demand for compostable plastics.

They noted that recent performance has been influenced by post-pandemic normalization and geopolitical factors. NTIC stated it was transitioning from an investment phase to a harvest phase, expecting higher gross margins to boost earnings growth.

The industrial corrosion business reported record sales of approximately $16 million in the quarter ending May 31, 2026. Zerust Oil & Gas revenue surged 72% year-over-year, with trailing twelve-month revenue surpassing $10 million. Zerust Oil & Gas has consistently posted revenue above $2 million for four consecutive quarters, showcasing sustained growth.

Management explained that Natur-Tec, specializing in compostable plastics, has gained traction with multinational customers seeking sustainable alternatives to polyethylene products. The company anticipates improved operating leverage, resulting in increased free cash flow, debt reduction, and higher earnings per share.

NTIC's business model comprises three core units: a profitable industrial corrosion protection segment, the rapidly growing Zerust Oil & Gas division, and Natur-Tec, which produces compostable plastics. Historically, the industrial business has grown at an annual rate of 8% to 9%, occasionally reaching 10% to 15%, while the global addressable market for industrial corrosion stands at about $600 million.

Zerust Oil & Gas leverages NTIC's technology to significantly extend the life of customer infrastructure, offering superior corrosion protection compared to traditional solutions. The Natur-Tec segment is certified to ASTM D6400 standards for compostability, offering both finished products and proprietary resin formulations to meet the needs of major multinational clients seeking sustainable alternatives to polyethylene.

NTIC's management highlighted a newly established subsidiary in Dubai to support growth in the Middle East. The company operates across 65 countries through 15 joint ventures and 11 subsidiaries, enabling expansion without substantial capital expenditure. The company's asset-light industrial approach, utilizing subcontracted extrusion and manufacturing partners, allows for efficient operations.

NTIC's free cash flow is expected to improve due to operating leverage, reducing debt while enhancing earnings per share. Despite being currently trading at a near-52-week low of $7.35, NTIC's stock is seen by analysts as having significant upside potential, with a consensus price target of $13, representing roughly a 67% increase from the current level.