SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
Quarterly Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
For the Quarterly Period Ended: Commission File Number
February 28, 1999 1-11038
NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 41-0857886
(State of Incorporation) (I.R.S. Employer Identification Number)
6680 N. Highway 49, Lino Lakes, MN 55014
(Address of principal executive offices)
(651) 784-1250
(Registrant's telephone number)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
YES __X__ NO _____
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding as of March 31, 1999
Common Stock, $.02 par value 3,862,792
"This document consists of __14__
pages. One exhibit is being filed."
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION
<TABLE>
<CAPTION>
BALANCE SHEETS (UNAUDITED)
- ---------------------------------------------------------------------------------------------------------------------------
FEBRUARY 28, AUGUST 31, FEBRUARY 28,
1999 1998 1998
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 1,418,410 $ 2,200,490 $ 2,732,485
Receivables:
Trade, less allowance for doubtful accounts of $32,000,
$25,000, and $25,000, respectively 1,332,697 1,042,428 1,470,136
Corporate joint ventures 451,799 352,164 399,715
Income taxes 102,047 -- --
Inventories 792,627 969,520 885,302
Prepaid expenses and other 41,361 118,259 119,737
Deferred income taxes 230,000 230,000 240,000
------------ ------------ ------------
Total current assets 4,368,941 4,912,861 5,847,375
PROPERTY AND EQUIPMENT, net 1,104,191 955,010 996,964
OTHER ASSETS:
Investments in corporate joint ventures 3,298,178 2,754,165 2,308,965
Investment in European holding company 249,510 247,869 264,430
Deferred income taxes 120,000 120,000 130,000
Other 515,397 357,106 603,952
------------ ------------ ------------
4,183,085 3,479,140 3,307,347
------------ ------------ ------------
$ 9,656,217 $ 9,347,011 $ 10,151,686
============ ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 78,933 $ 156,604 $ 106,368
Income taxes -- 66,416 18,522
Accrued liabilities:
Payroll 59,150 3,132 114,500
Other 78,943 119,375 186,279
------------ ------------ ------------
Total current liabilities 217,026 345,527 425,669
DEFERRED GROSS PROFIT 120,000 120,000 118,000
STOCKHOLDERS' EQUITY:
Preferred stock, no par value, authorized 10,000 shares, none issued
Common stock, $.02 par value per share; authorized
10,000,000 shares; issued and outstanding 3,863,759
3,847,452, and 4,128,290, respectively 77,275 76,949 82,566
Additional paid-in capital 4,547,821 4,477,167 5,031,368
Retained earnings 5,158,206 4,850,696 4,990,203
Cumulative foreign currency translation adjustments (334,304) (393,521) (366,313)
------------ ------------ ------------
9,448,998 9,011,291 9,737,824
Notes and related interest receivable from purchase of
common stock (129,807) (129,807) (129,807)
------------ ------------ ------------
Total stockholders' equity 9,319,191 8,881,484 9,608,017
------------ ------------ ------------
$ 9,656,217 $ 9,347,011 $ 10,151,686
============ ============ ============
</TABLE>
See notes to financial statements.
2
<PAGE>
NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION
<TABLE>
<CAPTION>
STATEMENTS OF INCOME (UNAUDITED)
- ------------------------------------------------------------------------------------------------------
THREE MONTHS ENDED SIX MONTHS ENDED
---------------------------- ----------------------------
FEBRUARY 28, FEBRUARY 28, FEBRUARY 28, FEBRUARY 28,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
SALES $ 2,005,873 $ 2,532,443 $ 4,161,268 $ 5,215,184
COST OF GOODS SOLD 978,486 1,241,662 2,048,189 2,629,177
----------- ----------- ----------- -----------
GROSS PROFIT 1,027,387 1,290,781 2,113,079 2,586,007
OPERATING EXPENSES:
Selling 383,363 346,960 724,994 619,695
General and administrative 322,981 430,364 835,609 954,765
Research, engineering, and
technical support 160,019 135,847 262,498 247,975
----------- ----------- ----------- -----------
866,363 913,171 1,823,101 1,822,435
----------- ----------- ----------- -----------
OPERATING INCOME 161,024 377,610 289,978 763,572
CORPORATE JOINT VENTURES AND
EUROPEAN HOLDING COMPANY:
Equity in income of corporate joint
ventures and European holding
company 3,866 99,883 181,669 214,028
Fees for technical assistance to
corporate joint ventures 566,682 371,479 1,161,395 838,300
Corporate joint venture expense (171,221) (114,635) (311,070) (300,273)
----------- ----------- ----------- -----------
399,327 356,727 1,031,994 752,055
INTEREST INCOME 19,927 54,591 35,949 87,307
----------- ----------- ----------- -----------
INCOME BEFORE INCOME TAXES 580,278 788,928 1,357,921 1,602,934
INCOME TAXES 205,000 250,000 425,000 500,000
----------- ----------- ----------- -----------
NET INCOME $ 375,278 $ 538,928 $ 932,921 $ 1,102,934
=========== =========== =========== ===========
NET INCOME PER COMMON SHARE:
Basic $ .10 $ .13 $ .24 $ .26
=========== =========== =========== ===========
Diluted $ .10 $ .13 $ .24 $ .26
=========== =========== =========== ===========
WEIGHTED AVERAGE COMMON SHARES
ASSUMED OUTSTANDING:
Basic 3,871,863 4,143,451 3,864,093 4,169,098
=========== =========== =========== ===========
Diluted 3,911,779 4,219,147 3,886,120 4,252,088
=========== =========== =========== ===========
</TABLE>
See notes to financial statements.
3
<PAGE>
NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS (UNAUDITED)
- -------------------------------------------------------------------------------------------
SIX MONTHS ENDED
----------------------------
FEBRUARY 28, FEBRUARY 28,
1999 1998
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 932,921 $ 1,102,934
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation 68,950 59,400
Equity income of corporate joint ventures
and European holding company (181,669) (214,028)
Dividends received from corporate joint ventures 10,292 284,461
Change in current assets and liabilities:
Receivables:
Trade (290,269) (305,476)
Joint ventures (99,635) 117,836
Income taxes (102,047) --
Inventories 176,893 (43,684)
Prepaid expenses and other 126,207 1,051
Accounts payable (77,671) (56,109)
Income taxes (66,416) (358,345)
Accrued liabilities 15,586 (119,879)
----------- -----------
Total adjustments (419,779) (634,773)
----------- -----------
Net cash provided by operating activities 513,142 468,161
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments in corporate joint ventures (522,660) (79,311)
Additions to property (218,131) (94,036)
Increase in other assets -- (22,000)
----------- -----------
Net cash used in investing activities (740,791) (195,347)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options 95,573 51,497
Repurchase of common stock (68,900) (915,595)
Dividends paid (581,104) (621,798)
----------- -----------
Net cash used in financing activities (554,431) (1,485,896)
----------- -----------
NET DECREASE IN CASH AND CASH EQUIVALENTS (782,080) (1,213,082)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 2,200,490 3,945,567
----------- -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,418,410 $ 2,732,485
=========== ===========
</TABLE>
See notes to financial statements.
4
<PAGE>
NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
1. INTERIM FINANCIAL INFORMATION
In the opinion of management, the accompanying unaudited financial
statements contain all necessary adjustments, which are of a normal
recurring nature, to present fairly the financial position of Northern
Technologies International Corporation as of February 28, 1999 and
1998, the results of operations for the three and six months ended
February 28, 1999 and 1998, and the cash flows for the six months
ended February 28, 1999 and 1998, in conformity with generally
accepted accounting principles.
These financial statements should be read in conjunction with the
financial statements and related notes as of and for the year ended
August 31, 1998 contained in the Company's filing on Form 10-KSB dated
November 20, 1998 and with Management's Discussion and Analysis of
Financial Condition and Results of Operations appearing on pages 8
through 11 of this quarterly report.
Certain fiscal year 1998 amounts have been reclassified to conform to
fiscal year 1999 presentations. These classification had no effect on
stockholders' equity, sales, or net income as previously reported.
2. COMPREHENSIVE INCOME
Effective September 1, 1998, the Company adopted Statement of
Financial Accounting Standards No. 130, REPORTING COMPREHENSIVE
INCOME, which establishes standards for reporting and display of
comprehensive income and its components in a full set of general
purpose financial statements. Comprehensive income is defined as all
changes in stockholders' equity except those resulting from
investments by and distributions to owners. Annual financial
statements for prior periods will be reclassified as required. The
Company's total comprehensive incomes were as follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
February 28 February 28
--------------------------- --------------------------
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Net income $ 375,278 $ 538,928 $ 932,921 $ 1,102,934
Other comprehensive (loss) income (58,048) (62,258) 59,217 (113,722)
----------- ----------- ----------- -----------
Total comprehensive income $ 317,230 $ 476,670 $ 992,138 $ 989,212
=========== =========== =========== ===========
</TABLE>
5
<PAGE>
3. INVENTORIES
Inventories consist of the following:
February 28, August 31, February 28,
1999 1998 1998
Production materials $ 154,563 $ 163,177 $ 419,147
Work in process 31,681 32,334 219,800
Finished goods 606,383 774,009 246,355
---------- ---------- ----------
$ 792,627 $ 969,520 $ 885,302
========== ========== ==========
4. PROPERTY AND EQUIPMENT
Property and equipment consist of the following:
February 28, August 31, February 28,
1999 1998 1998
Land $ 246,097 $ 246,097 $ 246,097
Buildings and improvements 1,083,964 1,077,670 1,077,670
Machinery and equipment 885,839 674,002 657,229
---------- ---------- ----------
2,215,900 1,997,769 1,980,996
Less accumulated depreciation 1,111,709 1,042,759 984,032
---------- ---------- ----------
$1,104,191 $ 955,010 $ 996,964
========== ========== ==========
5. INVESTMENTS IN CORPORATE JOINT VENTURES
During the six months ended February 28, 1999, the Company invested an
additional $522,660 in existing foreign joint ventures.
6. STOCKHOLDERS' EQUITY
During the six months ended February 28, 1999, the Company purchased
and retired 10,600 shares of common stock for $68,900.
In November 1998, the Company declared a cash dividend of $.15 per
share payable on December 18, 1998 to shareholders of record on
December 4, 1998.
During the six months ended February 28, 1999, stock options for the
purchase of 26,907 shares of the Company's common stock were exercised
at prices between $3.00 and $12.00 per share.
6
<PAGE>
7. NET INCOME PER SHARE
Basic net income per share is computed by dividing net income by the
weighted average number of common shares outstanding. Diluted net
income per share assumes the exercise of stock options using the
treasury stock method, if dilutive.
7
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATION
RESULTS OF OPERATIONS
GENERAL - The Company conducts all foreign transactions based on the U.S.
dollar, except for its investments in foreign joint ventures and foreign
company. The exchange rate differential relating to investments in foreign joint
ventures and foreign company is accounted for under the requirements of SFAS No.
52.
SALES - Net sales decreased by $526,570 or 21% during the second quarter of 1999
from those of the second quarter of 1998. Net sales decreased by $1,053,916 or
20% during the six months ended February 28, 1999 compared to the six months
ended February 28, 1998. These changes in sales are due to a decrease in demand
for corrosion inhibiting products. There has been no change in product pricing,
introduction of new products, or entry into any particular new markets.
COST OF SALES - Cost of goods sold as a percentage of net sales was 49% for the
second quarter of 1999 and 1998. The cost of goods sold percentage of net sales
was 49% and 50% for the six months ended February 28, 1999 and 1998,
respectively. Variations are due primarily to the mix of product sales.
OPERATING EXPENSES - As a percentage of net sales, total operating expenses
increased to 43% in the second quarter of fiscal 1999 from 36% in the second
quarter of fiscal 1998. Operating expenses were 44% of net sales for the six
months ended February 28, 1999 and 35% for the six months ended February 28,
1998.
Operating expense classification percentages of net sales were as follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
----------------------------- -----------------------------
February 28, February 28, February 28, February 28,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Selling expense 19% 14% 18% 12%
General and administrative 16 17 20 18
Research, engineering, and
technical support 8 5 6 5
</TABLE>
Selling expenses increased during the second quarter of fiscal 1999 as compared
to the same period in fiscal 1998 due primarily to increases in product
promotion, distributor commissions and travel expenses. These same factors
account for the increase in the selling expense for the six months ended
February 28, 1999 over the same period in fiscal 1998. Selling expenses as a
percentage of net sales increased for the quarter and six months ended February
28, 1999 as compared to the same periods in fiscal 1998 due to the decreased in
sales in fiscal 1999 and an increase in fiscal 1999 selling expenses.
General and administrative expenses decreased during the second quarter of
fiscal 1999 as compared to the same period in fiscal 1998 due primarily to
decreases in salary expense and travel expense. These same factors account for
the decrease in the general and administrative expenses for the six months ended
February 28, 1999 over the same period in fiscal 1998. General and
administrative expenses as a percentage of net sales were substantially
unchanged for the quarters ended February 28, 1999 and 1998. General and
administrative expenses as a percentage of net sales increased for the six
months ended
8
<PAGE>
February 28, 1999, as compared to the same period in fiscal 1998 due to the
decreased in sales in fiscal 1999 not being fully offsetting by the decreased
fiscal 1999 general and administrative expenses.
Research, engineering, and technical support expenses increased during the
second quarter of fiscal 1999 as compared to the same period in fiscal 1998 due
primarily to an increase in independent consulting services for product
development partially offset by decreases in staff salaries and supplies. These
same factors account for the increase in research, engineering, and technical
support expenses for the six months ended February 28, 1999 over the same period
in fiscal 1998. Such expenses, as a percentage of sales increased for the
quarter and six months ended February 28, 1999 as compared to the same period in
fiscal 1998 due to the decrease in sales and an increase in fiscal 1999
research, engineering, and technical support.
CORPORATE JOINT VENTURES AND EUROPEAN HOLDING COMPANY - Net earnings from
corporate joint ventures and European holding company were $399,327 and
$1,031,994 for the three and six months ended February 28, 1999, respectively,
compared to $356,727 and $752,055 for the three and the six months ended
February 28, 1998. This net increase is due to the weakening of the U.S. dollar
when compared to the local currencies of the Company's corporate joint ventures
and increased sales volume at certain of the Company's joint ventures.
INCOME TAXES - Income tax expense for the three and six months ended February
28, 1999 and 1998 was calculated based on management's estimate of the Company's
annual effective income tax rate. The Company's effective income tax rate for
fiscal 1999 and 1998 is lower than the statutory rate primarily due to the
Company's equity in income of corporate joint ventures and European holding
company being recognized based on after tax earnings of these entities. To the
extent joint venture's undistributed earnings are distributed to the Company, it
does not result in any material additional income tax liability after the
application of foreign tax credits.
LIQUIDITY AND CAPITAL RESOURCES
At February 28, 1999, the Company's working capital was $4,151,915, including
$1,418,410 in cash and cash equivalents, compared to working capital of
$4,567,334 and $5,421,706 as of August 31, 1998 and February 28, 1998,
respectively.
Net cash provided from operations has been sufficient to meet liquidity
requirements, capital expenditures, research and development cost, and expansion
of operations of the Company's joint ventures. Cash flows from operations for
the six months ended February 28, 1999 and 1998 was $513,142 and $468,161,
respectively. The net cash flow from operations for the six months ended
February 28, 1999 and 1998 resulted principally from net income and corporate
joint venture dividends offset by equity income of corporate joint ventures and
European holding company, increased trade receivables, and income tax payments.
Net cash used in investing activities for the six months ended February 28, 1998
was $740,791 which resulted from additional investments in existing corporate
joint ventures and additions to property. Net cash used in investing activities
for the six months ended February 28, 1998 was $195,347 which resulted from
investments in corporate joint ventures, additions to property and other assets.
Net cash used in financing activities for the six months ended February 28, 1999
was $554,431 which resulted from the payment of dividends to stockholders of
$581,104 and the repurchase of common stock of $68,900 offset by proceeds from
the exercise of stock options of $95,573. Net cash used in financing activities
for the six months ended February 28, 1998 resulted from the payment of
dividends to
9
<PAGE>
stockholders of $621,798 and the repurchase of common stock of $915,595 offset
by proceeds of $51,497 from the exercise of stock options.
The Company expects to meet future liquidity requirements with its existing cash
and cash equivalents and from cash flows of future operating earnings and
distributions of earnings and technical assistance fees from the corporate joint
venture investments.
The Company has no long-term debt and no material lease commitments at February
28, 1999.
The Company has no postretirement benefit plan and does not anticipate
establishing any postretirement benefit program.
IMPACT OF YEAR 2000
Computer programs have historically been written to abbreviate dates by using
two digits instead of four digits to identify a particular year. The so-called
"year 2000 problem" or "millennium bug" is the inability of computer software or
hardware (collectively, Systems) to recognize or properly process dates ending
in "00" and dates after the year 2000. Significant attention is being focused as
the year 2000 approaches on updating or replacing such Systems in order to avoid
System failures, miscalculations or business interruptions that might otherwise
result. The Company believes it is taking the steps necessary to insure that
this potential problem does not adversely affect the Company's operating results
in the future, and is continuing the as-yet incomplete assessment of the impact
of the year 2000 problem on the Company.
The Company has taken, and will continue to take, actions intended to minimize
the impact of the year 2000 problem and maximize the Company's state of
readiness for the year 2000. However, it is impossible to eliminate year-2000
risks entirely. Unfortunately, there is no single test that can be used to
conclusively determine whether Systems are year-2000 compliant. To the contrary,
the technology community identifies additional potential year 2000 risks
regularly. Also impeding year-2000 testing is the high degree of integration
between various Systems and the difficulty in conducting full-scale live
testing. Consequently, interrelated Systems believed secure in a test
environment could conceivably fail when operating together under real-time
workloads.
The Company's state of readiness for the year 2000, the Company's estimated
costs associates with year-2000 issues, the risks the Company faces associated
with year-2000 issues and the Company's year-2000 contingency plans are
summarized below.
STATE OF READINESS - All major internal information technology (IT) systems have
been replaced. Year-2000 issues were addressed when selecting and implementing
these new systems, and the Company believes they are year-2000 compliant. The
Company has also reviewed its major non-IT systems, including hardware,
software, phone and security systems, and the Company believes they are
year-2000 compliant. The Company anticipates continuing to invest in IT and
non-IT technology to accommodate the Company's future growth, and the Company
expects these investments and upgrades to be year-2000 compliant. The Company is
currently implementing a testing program of its other various Systems, and
expects to substantially complete this testing before August 31, 1999. The
Company is in the process of reviewing the year-2000 readiness of the corporate
joint ventures.
COSTS ASSOCIATED WITH YEAR-2000 ISSUES - Until the Company completes its System
testing, it will be unable to quantify the total expected costs associated with
year-2000 issues. The Company believes that
10
<PAGE>
these costs will not have a material adverse effect on the Company's business,
financial condition, results of operations and cash flows. The total amount the
Company has expended on year-2000 issues through February 28, 1999 was
approximately $25,000. The Company anticipates that future costs associated with
year-2000 issues will be financed with cash flows from operations.
RISKS ASSOCIATED WITH YEAR-2000 ISSUES - The Company is dependent on computer
processing in its business activities and the year-2000 problem creates the risk
of unforeseen problems in the Company's Systems and the Systems of third parties
with whom the Company does business. The failure of the Company's Systems and/or
third parties' Systems could have a material adverse effect on the Company's
results of operations, liquidity, and financial condition. Due to the general
uncertainty inherent in the year-2000 problem, resulting in part from the
uncertainty of the year 2000 readiness of third-party suppliers and customers,
the Company is unable to determine at this time whether the consequences of year
2000 failures will have a material impact on the Company's results of
operations, liquidity, or financial condition. The Company believes that it may
need to temporarily reduce its operations if third party suppliers are not
year-2000 compliant. The Company is also unable at this time to determine what
the reasonably likely worst case year-2000 scenario is for the Company.
CONTINGENCY PLANS - The Company has not yet developed specific contingency plans
for the millennium bug because its assessment of year-2000 issues is incomplete.
The Company plans on developing, to the extent practicable, a business
interruption contingency plan to address internal and external issues specific
to the year-2000 problem before August 31, 1999. However, the Company believes
that due to the widespread nature of the year-2000 problem, the contingency
planning process is an ongoing one which will require modifications as the
Company obtains additional information regarding the Company's internal systems
and equipment and the status of third-party year-2000 readiness.
EURO CURRENCY ISSUE
On January 1, 1999, eleven of the fifteen member countries of the European Union
established fixed conversion rates between their respective existing currencies
and the Euro and to adopt the Euro as their common legal currency on that date
(the Euro Conversion). Following the Euro Conversion, however, the previously
existing currencies of the participating countries are scheduled to remain legal
tender in the participating countries between January 1, 1999 and January 2002.
During this transition period, public and private parties may pay for goods and
services using either the Euro or the previously existing currencies. Beginning
January 1, 2002, the participating countries will issue new Euro-denominated
bills and coins for use in cash transactions. No later than July 1, 2002, the
participating countries will withdraw all bills and coins denominated in the
previously existing currencies making Euro Conversion complete.
The Company and the corporate joint ventures have been evaluating the potential
impact the Euro Conversion and the Euro currency may have on their results of
operations, liquidity or financial condition. The Company has determined that
expected costs for compliance will not be material to its results of operations,
liquidity, financial condition or capital expenditures. Significant
noncompliance by the Company's corporate joint ventures and their customers or
suppliers could adversely impact the Company's results of operations, liquidity
or financial condition. To date, the Euro Conversion has not had a material
impact on the overall business operations of the Company. However, there can be
no assurance that the Euro Conversion will not have a material impact on the
overall business operations of the Company in the future.
11
<PAGE>
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
None
ITEM 2 - CHANGES IN SECURITIES
None
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Annual Meeting of Stockholders of the Company (Annual Meeting) was held on
February 19, 1999. The following matters were voted on and approved by the
Company's stockholders at the Annual Meeting. The tabulation of votes with
respect to each of the following matters voted on at the Annual Meeting is set
forth as follows:
1. ELECTION OF DIRECTORS:
For Against Abstain
Sidney Dworkin 3,547,635 8,800 12,554
Vincent J. Graziano 3,555,153 1,282 12,554
Gerhard Hahn 3,555,585 850 12,554
Dr. Donald A. Kubik 3,554,997 1,438 12,554
Richard G. Lareau 3,548,135 8,300 12,554
Philip M. Lynch 3,547,897 8,538 12,554
Haruhiko Rikuta 3,554,553 1,882 12,554
Dr. Milan R. Vukcevich 3,555,585 850 12,554
2. APPOINTMENT OF DELOITTE & TOUCHE LLP AS INDEPENDENT AUDITORS.
The appointment of Deloitte & Touche LLP as independent auditors of the
Company for the fiscal year ending August 31, 1999 was ratified. Total
votes cast:
For 3,521,735
Against 2,350
Abstain 44,904
12
<PAGE>
ITEM 5 - OTHER INFORMATION
None
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
27 Financial Data Schedule
13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION
April 13, 1999
/s/ Loren M. Ehrmanntraut
-----------------------------------------------
Loren M. Ehrmanntraut
Chief Financial Officer and
Corporate Secretary
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> AUG-31-1999
<PERIOD-START> SEP-01-1998
<PERIOD-END> FEB-28-1999
<CASH> 1,418,410
<SECURITIES> 0
<RECEIVABLES> 1,364,697
<ALLOWANCES> 32,000
<INVENTORY> 792,627
<CURRENT-ASSETS> 4,368,941
<PP&E> 2,215,900
<DEPRECIATION> 1,111,709
<TOTAL-ASSETS> 9,656,217
<CURRENT-LIABILITIES> 217,026
<BONDS> 0
0
0
<COMMON> 77,275
<OTHER-SE> 9,241,916
<TOTAL-LIABILITY-AND-EQUITY> 9,656,217
<SALES> 4,161,268
<TOTAL-REVENUES> 4,161,268
<CGS> 2,048,189
<TOTAL-COSTS> 2,048,189
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 7,000
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,357,921
<INCOME-TAX> 425,000
<INCOME-CONTINUING> 932,921
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 932,921
<EPS-PRIMARY> .24
<EPS-DILUTED> .24
</TABLE>
