Northern Technologies International Corp. (NASDAQ:NTIC) Q3 2020 Earnings Conference Call - Final Transcript
Jul 08, 2020 • 09:00 am ET
Ladies and gentlemen, thank you for standing by, and welcome to the Third Quarter 2020 Earnings Conference Call and Webcast. [Operator Instructions] Please be advised that today's conference may be recorded. [Operator Instructions]
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 protections of the safe harbor for these statements. Please also be advised that 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 its forward-looking statements.
I would now like to hand the conference over to NTIC's CEO, Patrick Lynch. Please go ahead.
G. Patrick Lynch
Good morning. I'm Patrick Lynch, NTIC's CEO, and I'm here with Matt Wolsfeld, NTIC's CFO. Please note that the financial results for our fiscal 2020 third quarter were included in a press release issued earlier this morning, a copy of which is available at ntic.com. During this call, we'll review various key aspects of these financial results, provide a brief business update and then conclude with a question-and-answer session.
The COVID-19 pandemic had a material impact on our fiscal 2020 third quarter. Although our operations were deemed essential and remained open, many of our global customers operated at significantly lower capacities or were locked down altogether. As a result, global demand has declined for all of our products and services. As the COVID-19 crisis continues to evolve, global economies are reopening and orders have started increasing. But at this time, the pace of our recovery remains uncertain. We are closely monitoring our markets and intend to continue providing uninterrupted order fulfillment and customer service while simultaneously ensuring the safety of our customers, joint ventures and employees. Our experienced management team, compelling product portfolio, strong balance sheet and business model are helping us navigate this challenging period while providing us with significant flexibility to continue investing in our long-term growth plans. In addition, we are proactively managing expenses and intend to further adjust our cost structure when necessary and appropriate.
So with this overview, let's examine the drivers for the quarter. For the third quarter ended May 31, 2020, our total consolidated net sales decreased 34.6% to $9.7 million, as compared to the third quarter ended May 31, 2019. Broken down by business unit, this included a 51.9% decrease in Zerust Oil & Gas net sales, a 50.4% decrease in Natur-Tec net sales, a 29.1% decrease in the net sales from NTIC to its ZERUST joint ventures