Northern Technologies International Q3 2023 Earnings Call Transcript

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Provided by Quartr
July 13, 2023

There are 9 speakers on the call.

Operator

Morning, ladies and gentlemen. Thank you for standing by. Welcome to Northern Technologies International Corporation Third Quarter 2023 Earnings Conference Call and Webcast. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer Please note that today's conference is being recorded.

Operator

As part of the discussion today, the representative 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 decides to avail itself of the protections of the Safe Harbor of 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 ks, 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.

Operator

I will now hand the conference over to your speaker host for today, Ms. Patrick Lynch, Executive Officer. Please go ahead, sir.

Speaker 1

Good morning. I'm Patrick Lynch, NTIC's CEO. And I'm here with Matt Walzfeld, NTIC's CFO. Please note that a press release regarding our Q3 fiscal 2023 financial results was issued earlier this morning and is available at ntic.com. During today's call, we will review various key aspects of our fiscal 2023 Q3 financial results, Record top line sales for our ZERUST Industrial, ZERUST Oil and Gas and Natur Tec segments in turn pushed total sales for the Q3 to a new quarterly record as well.

Speaker 1

It would appear, therefore, that our strong Q3 performance not only revalidates the efficacy of our long term growth strategies, but also the value that our corrosion inhibiting products and services and bioplastic solutions provide to our growing customer base. I am proud of these results as they show that our team members and joint venture partners have been working hard to support the complex needs of our global customers, while also navigating extremely dynamic currents. As planned, we also made considerable progress rebuilding our gross margins and controlling operating expenses this period. Our Q3 gross margin of 36.7 percent marks a significant improvement on both a sequential and year over year basis. This primarily reflects the positive impact of the countermeasures we put in place against supply chain issues, Significant raw material cost increases and challenges across our European and Asian markets.

Speaker 1

As we look to the Q4 and beyond, momentum in our business remains positive. We believe NTIC China sales will improve in the Q4 and into fiscal 2024 Now that the Chinese economy finally has the opportunity to start rebounding from its exceptionally long self imposed pandemic freeze. ZERUST Oil and Gas and Natur Tec are both expected to continue to benefit from new customer relationships and incremental orders from existing customers. Therefore, we believe we are well positioned for a strong finish to fiscal 2023 and believe fiscal 2024 will also enjoy good growth and higher profitability. So with this overview, let's examine the drivers for the Q3 in more detail.

Speaker 1

For the Q3 ended May 31, 2023, our total consolidated net sales increased 10.6% to a quarterly record of $21,000,000 as compared to the Q3 ended May 31, 2022. Broken down by business units, this included a 32.7% increase in Xerus Oil and Gas Net Sales, a 9% increase in Xero's industrial net sales and a 7.8% increase in Natur Tec's net sales. Total net sales for the fiscal 2023 Q3 by our joint ventures, which we do not consolidate in our financial statements, decreased year over year by 1.1% to $26,300,000 but were up 3.3% on a sequential basis. A slight year over year decline was due primarily to Softer demand across the territories serviced by our global joint ventures and currency exchange rate fluctuations. Fiscal 2023 3rd quarter net sales by our wholly owned NTIC China subsidiary decreased by 8.4 percent to $3,300,000 due to weaker economic conditions on a year over year basis.

Speaker 1

On a sequential basis, NTIC China sales were up 15.6%, which we believe reflects stabilizing demand trends and we continue to expect demand to improve throughout the remainder of this fiscal year. We remain committed to the Chinese market and the long term opportunities it represents for NTIC. We continue to take steps to enhance and protect our Chinese operations And we continue to believe China will likely become our largest geographic market in the future. Now moving on to ZERUST Oil and Gas. The fiscal 2023 Q3 was the strongest quarter we have ever had for ZERUST Oil and Gas as sales increased 32.7 percent to a record $2,000,000 The Q3 of fiscal 2023 is also the 5th consecutive quarter of ZERUST Oil and Gas sales over $1,500,000 and on a trailing 12 month basis, we have reported nearly $7,000,000 of oil and gas sales.

Speaker 1

We believe these positive trends reflect accelerating momentum within our oil and gas business. Interest continues to grow from new and existing customers for our ZERUST Oil and Gas Solutions, which include applications to protect above ground oil storage tanks and pipeline casings from corrosion. The expanding adoption of our zeroes oil and gas solutions within the oil and gas industry is supporting bigger opportunities for our ZERUST Oil and Gas products and technologies. As a result, we believe that fiscal 2023 will be A transformative year for ZERUST Oil and Gas as we expect this business to scale and continue to contribute to profitability. Turning to our Natur Tec Bioplastics business.

Speaker 1

As expected, Natur Tec sales growth reaccelerated in the 3rd quarter after seasonality and the timing of both shipments and orders impacted Natur Tec sales in our 2nd quarter. Fiscal 2023 Third Quarter Natur Tec sales were a record $4,900,000 a 7.8% increase over the prior fiscal year period. We expect Natur Tec sales growth will remain strong in the 4th quarter, supported by favorable demand in North America and India and significant new customer wins and orders in these geographies. Globally, we continue to see growing market demand for new applications of certified compostable plastic products and resin compounds, as well as increased interest in commercial and municipal programs that use certified compostable plastics as alternatives to conventional plastics. As a result, we believe we are well positioned for long term Sustainable growth within our Natur Tec Bioplastics business.

Speaker 1

As you can see, our 3rd quarter performance reflects the progress we are making to profitably grow our business and create significant value for our shareholders. This is a testament to the leading solutions we have created, the valuable services we provide and the strength of our team members and joint ventures. With this overview, let me now turn the call over to Matt Wolsfeld to summarize our financial results for the fiscal 2023 Q3.

Speaker 2

Thanks, Patrick. Compared to the prior fiscal year period, NTIC's consolidated net sales increased 10.6% in the fiscal 2023 Q3 to a quarterly record. This growth was driven by the positive trends Patrick reviewed in his prepared remarks. Actions To improve gross margins successfully offset a 1.1% decrease in 3rd quarter sales across our joint ventures to drive a 1.5% increase in 3rd quarter joint venture operating income compared to the prior fiscal year period. Total operating expenses for fiscal 2023 Q3 were $8,000,000 a 12.8% increase over the prior fiscal year period, which was primarily due to increased personnel expenses and expenses incurred during the current fiscal year period in connection with the start up of a new Indirect majority owned subsidiary formed to assume the operations of a former joint venture in Taiwan.

Speaker 2

Operating expenses as a percentage of net sales were 38.3% compared to 37.5% for the prior fiscal year period. Gross profit as a percentage of net sales increased of 36.7% during the 3 months ended May 31, 2023 compared to 32.9% during the same period last fiscal year. The 3 80 basis point improvement was primarily a result of successful NTIC's reported net income increased 52.5 percent to $1,500,000 or $0.16 per diluted share for the fiscal 2023 Q3, compared to $1,000,000 or $0.11 per diluted share for the fiscal 2022 Q3. NTIC's non GAAP net income Adjusted for amortization expense was $1,600,000 or $0.17 per diluted share compared to $1,100,000 or $0.12 per diluted share for the fiscal 2022 Q3. A reconciliation of GAAP to non GAAP financial measures is available in our Q3 earnings press release that was issued this morning.

Speaker 2

As of May 31, 2023, working capital was $23,700,000 including $6,200,000 in cash and cash equivalents compared to $23,200,000 including $5,300,000 in cash and cash equivalents as of August 31, 2022. As of May 31, 2023, we had outstanding debt of $8,000,000 This included $5,200,000 in borrowings under our existing revolving line of credit compared to $7,100,000 as of February 28, 2023. During the fiscal 2023 Q3, the company's wholly owned subsidiary in China, NTIC China entered into 2 term loan agreements. Both loan agreements have an annual interest rate of 3.5% And the total outstanding balance was $12,800,000 as of May 31, 2023. The proceeds of these Term loans were used to pay off intercompany loans that NTIC China had with NTIC.

Speaker 2

We generated $3,500,000 in operating cash flows for the 9 months ended May 31, 2023, included $1,300,000 in the 3rd quarter, which was driven primarily by stronger profitability and waning inventory levels. On May 31, 2023, the company had $22,900,000 of investments in joint ventures, of which approximately 53.2 percent or $12,100,000 was in cash with the remaining balance primarily invested in other working capital. During the fiscal 2023 Q3, NTIC's Board of Directors declared a quarterly cash dividend of $0.07 per common share was payable on May 17, 2023 to stockholders of record on May 3, 2023. To conclude, our Q3 and year to date financial results demonstrate the continued progress we have made to increase sales across our diverse and markets and geographies and the success of our near term initiatives to improve profitability. I'm encouraged by the direction we're headed And while the economic environment remains extremely fluid, we continue to believe fiscal 2023 will be another good year of sales and profitability at NTIC.

Speaker 2

With this overview, Patrick and I are happy to take your questions.

Operator

Thank you, ladies and gentlemen. And wait for your name to be announced. Please stand by while we compile the Q and A roster.

Speaker 1

I'd also like to mention that Vineeth Dalal is joining us this morning. So if you have any questions regarding Natur Tec.

Operator

One moment for our first question. And our first question coming from the line of Timothy Clarkson with Ben Clemens. Your line is open.

Speaker 3

Hey. So I've got a few questions here. Just on a big picture basis, what's the impact of this trend towards electric cars? Does it change the need for Rust Corrosion Products is an electric car versus a gas car?

Speaker 1

It will because there's simply Fewer parts in electric vehicles than they are in an ICE engine. Okay. We have not seen yet And actually we're doing some our sales are growing into the EV market as we speak. But we do ultimately expect that there will be some transition As the industry moves more towards the vehicles.

Speaker 3

Okay. Why ask about On the compostable end, again, what would you say is, Sane, so we got the expert there. What would you say is the differentiating factors on NatureCheck's compostable products versus the competitors?

Speaker 4

I think we just we make products that are easier to process on conventional plastics equipment, cheaper and Better Properties. We are kind of unique in the fact that we are base material agnostic. So we work with BLAs, PHAs, BBADs. We work with the brand to understand their packaging requirements and then based on those packaging requirements, we actually Engineer a solution that meets the requirements at an affordable price.

Speaker 3

Okay. At what point Does the typical McDonald's or the typical fast food restaurants start to be using these kinds of products? I They use them in the airports, but at what point does it become kind of a standard?

Speaker 4

I think it's a function of regulation. Obviously, a lot of the QSRs are price conscious. So, widespread adoption is still further out. But in those areas where By law, they are required to use compostable products. We are seeing adoption happening.

Speaker 3

What would be the typical extra expense on a Postable packaging versus conventional packaging.

Speaker 4

It depends on the type of product. It could be anywhere from, Let's say a 10% to 20% treatment to maybe 2x or 3x.

Speaker 5

Okay. All right.

Speaker 3

Okay. And then just another question here on the oil business. I mean, How big is that market versus the legacy market?

Speaker 1

Well, we think that the oil and gas market More potential than everything we've done in Europe so far.

Speaker 6

Okay.

Speaker 3

Now when that those products, I always tell my customers that for essentially about 1% costs that you can extend the life of these tanks from 10 years to 30 years. Is are those kinds of payoffs actually occurring in the field?

Speaker 1

Yes, we've seen the evidence in the installations we've done. We've proven it to our customers that the solutions work in that manner, yes.

Speaker 3

Right, right. And it's not just replacing the tank, it's all the problems with leaking oil and EPA and production problems that are associated with that if the tanks start leaking obviously.

Speaker 1

There's a huge incentive By the tank farm owners to implement a solution like we're offering.

Speaker 3

Right. You guys haven't talked anything about Brazil. What's Is there anything new going on in Brazil?

Speaker 1

Nothing worth mentioning on this phone call today.

Speaker 3

Okay. All right. Well, those are that's my questions. Great quarter. Good to see the profitability come back.

Speaker 3

Thanks.

Speaker 2

Thanks Tim.

Operator

Thank you. And our next question coming from the line of Gus Richard with Northland Capital Markets. Your line is open.

Speaker 6

Yes. Thanks for taking my question.

Speaker 1

I was just wondering if you could add

Speaker 6

a little color. You mentioned sort of new customers In MaterTek, both North America and India, I was wondering if you could, is that for garment bags in India or compostable Consumer Products, just any color on that pipeline, what's going on and North America as well?

Speaker 4

Sure, Gus. In North America, we have expanded our distribution network and we are starting to see some market share pickup. So hopefully over the next few quarters, we would be able to that should add to the sales of the finished products that we sell in North America. Our traditional kind of resin sales for foodservice, their demand is consistent, but we expect some additional Pickup sales in Asia. We are seeing some new customers in the garment space in Asia, in South Asia, for example, Where we have had some good wins.

Speaker 4

So I think overall, we are starting to see new customers come in. Some of We've got a good pipeline of opportunities and especially as things kind of calm down and the supply chain challenges We're seeing some of these customers starting to adopt our solutions.

Speaker 6

Got it. And then sort of a similar question for oil and gas. Just wondering, you've got a lot of work in Caspian Sea. You talked about sort of additional orders from existing customers and new customers coming in. Can you give A little bit of color on that pipeline as well.

Speaker 1

We are getting repeat orders from existing customers and bringing in new customers on a regular basis. So as we speak, our market continues to grow pretty much everywhere. Okay.

Speaker 6

Okay, got it. And then just switching over to the cost side, Energy prices have been fluctuating. I would expect given the heat waves and whatnot that natural gas prices could increase. Sort of how are you positioned on cost escalators? How are the commodities impacting Sort of the gross margin line currently or is it just a mix issue that's going to drive upside going forward?

Speaker 2

Well, if you kind of Gus, this is Matt. If you kind of take a look back over the past 9 months, obviously, before we started this year, we are Really high commodity prices for a lot of our base materials. Over the past 9 months, we have seen that come down to a much more reasonable level. And that's one of the things that fueled the rebound in the gross margin is kind of back to meeting what our typical gross margins were before we saw the spiking of the raw material pricing. I would say even right now from a natural gas standpoint, and the derivative resin pricing, we're still Seeing relatively low levels.

Speaker 2

So we're not seeing at this point in time or have an expectation that the Raw materials are typically resins are going to be increasing anytime soon. So right now, we're continuing to see that rebound in gross margin as we see it flow through all of our existing inventory and the pricing that we're giving to our customers.

Speaker 6

Got it. And in sort of your long term contracts, am I correct in assuming that there's Sort of escalators if there is a spike in raw material?

Speaker 2

Yes. I mean, there are. And obviously, In most situations, we're doing spot pricing. In about 70% of our business, we're doing spot pricing based on the price of raw material at that time. The other 30%, some of it is just purchasing of our stock inventory, which we can control, but it takes longer for us to adjust that pricing and then have that flow through the inventory we have on hand.

Speaker 2

A small portion of our total business are blanket orders For a full year for a longer period of time, that tends to be the situation where we potentially could get caught with either negative or positive impacts on margins. We think we have a much better handle on where we are right now from a pricing standpoint. And I think we are positioning ourselves now to act quicker than we did 12 months to 15 months ago when we saw some of the volatility that we've talked about over the past 5 quarters.

Speaker 6

Got it. Got it. And then just flipping over to China,

Speaker 4

there's been

Speaker 6

a lot of commentary in the press about The strength and duration, the recovery, just any comments on kind of what you've been seeing over the last Quarter in terms of the trajectory, is it just stabilized? Is it improving? Is it moving on beyond auto? Any help there?

Speaker 2

It's difficult kind of for us to say exactly where it's hitting and what's going on from a sales standpoint in China. It's existing customers that are ordering less is what we're So there's just kind of a general slowdown compared to when I look at like the revenues that we achieved in all of our fiscal 2021 and The first half of our fiscal twenty twenty two were simply at lower sales level and not seeing the recovery and the rebound that we expected to see. We did have better sales in Q3 than Q2, but we're still a $500,000 to $1,000,000 off on a quarterly basis where we were through the majority of our fiscal 2021. So what we're looking at to see kind of That recovery take place to get back to that level and then ultimately grow the markets in China beyond that. It still is a very large potential market for us.

Speaker 2

And obviously, it's a bit of a headwind, Given that we are basically hovering right at breakeven point on that subsidiary.

Speaker 6

Got it. And then last one for me. You mentioned sort of FX impact on the JVs. Is that a dollar euro impact or any color on that one and that's it for me.

Speaker 2

The majority of it, there's 2

Speaker 6

key,

Speaker 2

really 3 key exchange rates that we deal with. Obviously, the euro from a JV standpoint, which has been relatively stable between 1.07 and 1.1 for the past few quarters. Part of the secondary impact would be in India, and that appears to be Kind of a consistent increase in the exchange rate, which has had some issues from the standpoint of if they're paying us for resins, if they're And as for their receivables, that's just a little bit of a headwind. It's going to be a push on overall revenues. Thirdly, and obviously this bounces around a little bit more is in China.

Speaker 2

One of the things that we've done in China to kind of mitigate

Speaker 6

Some of the exchange,

Speaker 2

exchange fluctuations was to move the debt that we had at NTIC China from a loan to NTIC in North America to be localized in China. And so our Chinese entity took out a little over $2,000,000 in or Right on $2,000,000 in term loans and then repaid that amount to NCIC in North America. That helps a little bit with The currency volatility there, but you still have fluctuation with currency in China, Given the sales and given the overall profitability that they have.

Speaker 6

Got it. Got it. Very helpful. Appreciate it. That's it for me.

Speaker 2

Great. Thanks, Gus.

Operator

Thank you. And our next question coming from the line of Richard Hillman, from Investors. Your line is open.

Speaker 7

Yes. Good morning, gentlemen. Yes, I had two questions. First thing was about, I guess, the sales cycle In oil and gas, what it was before and what it is now, to sign up a new customer? And Yes, basically and also how did you get to the inflection point you're at right now?

Speaker 7

Was there some sort of industry accreditation for those products? Or Can you talk about that a little bit please?

Speaker 2

I think what we're seeing is We've talked before about some of the difficulties in oil and gas being the volatility and not having kind of a baseline level of sales. And what we're finally starting to see is more of a consistent amount of ordering coming in so that we can kind of have a base level of sales that we can kind of count on a quarterly basis. And so if I look back at the past 5 quarters, It's been nice growth from the standpoint of if I go back to like Q3 last year, dollars 1,500,000 To $1,600,000 to a little over $1,600,000 to $1,800,000 and now up to $2,000,000 We're seeing a nice level of growth. The one thing that you do have with oil and gas is it is a much longer sales cycle. It takes much longer to become integrated with the customers for them to test out the product, for them to understand the return that it will give them and the benefits that it will have to the overall infrastructure.

Speaker 2

And just historically, the oil and gas market is a slower market to adopt new technology. But what We're happy with is that the sales that we have now and that we've seen over the past, as I said, 4, 5 quarters are coming from a wide number of customers in a lot of different applications, meaning that the opportunity inside of each of those customers are significantly bigger. You're not talking about selling 1 tank or selling 1 casing to a customer and then that customer goes away. You're talking about selling 1 or 2 tanks to a customer When they potentially have tens or hundreds of sales opportunities or infrastructure issues. And so that's one of the reasons why we are excited about the oil and gas space.

Speaker 2

It's just because as you get integrated with these customers and you show the potential return, The opportunity is huge multiples compared to a situation where you would just have a one off sale and then you move on.

Speaker 7

Okay. And then Matt, also I wanted to ask you about R and D across the company. Basically, what do you do you consider yourself to be a specialty chemical company? And also what are you doing to improve your R and D effort on the divisional level for your companies, your joint ventures and also with

Speaker 2

Sure. Well, I think what I'll do is, I mean, I can touch a little bit on R and D From the XEROS standpoint, then I'll let Vineeth touch on the R and D aspect from the Natur Tec standpoint. But From a Xero standpoint, you can obviously see what we're doing, as I just kind of explained in oil and gas as far as how we've transitioned a lot of the work over the past, really the past decade from being Research to more development to be more integrated with and building sales, we've really seen that transition happen. We don't partner as much from an industrial standpoint with universities. The development that we do is typically And in our R and D facility here or in our R and D facility that we have with Excor in Germany, Typically a lot of that development has to do with tweaking existing products, coming up with new formulations To potentially sell or new products to sell to existing customers and potentially new markets.

Speaker 2

That's how we've gotten into some of the new markets over the past. If I look over the past 5 or 10 years, some of the new markets that we've got into Have dealt with a lot of new products that we did develop internally and are selling. So the R and D capability from a Xero standpoint is much more Currently focused and geared towards selling and providing products to the existing markets that we're currently serving.

Speaker 4

Yes. And from a Natur Tec perspective, we do have a good strong core R and D group here in Minnesota, But we also have R and D Labs in India and some R and D going on in China. On the NatureTech side, we also partner very heavily with Michigan State which is probably one of the leading biomaterials program in the world. And then we do have some Arrangements with Clemson University for usage of testing capabilities and some specific advanced development capabilities. So We do work with universities also in India to kind of develop specific aspects of new product development that we are engaged in, in those areas.

Speaker 4

But in general, a lot of that strategic direction in terms of R and D

Speaker 1

is driven out of the U. S. Here.

Speaker 7

Okay. Okay. In terms of Natur Tec, what other areas are you going into besides just compostable Materials.

Speaker 4

So I mean the Natur Tec business is focused more on compostables and biomaterials. So we are looking at bio based products. We're looking at multilayer structures for packaging, consumer packaging, food packaging. And then on the longer term, we are also looking at fibers, especially for textiles.

Speaker 7

Compostable fibers?

Speaker 4

Yes, biobased compostable fibers, yes.

Speaker 7

Okay. Okay. Thanks very much.

Operator

Thank you. And our next question coming from the line of Gregory Weaver with Invexa Capital Management. Your line is open.

Speaker 8

Yes. Hi, good morning gentlemen. Thanks for taking my questions here and glad to have Vineet on the call. I guess I'll start with Vineet. Has there been any go to market changes for Natur Tec here over the recent timeframe in terms of some of this traction you're seeing?

Speaker 4

Nothing significant. I think we're just executing to kind of our strategic plan and just I think getting over the supply chain challenges of last year was critical, because that meant raw material was widely available. We are also executing better on some of the opportunities that we had in

Speaker 1

our pipeline. And how is

Speaker 8

it going with bulk resin sales?

Speaker 4

We don't sell bulk resins. We sell our compounds, and those are growing very nicely.

Speaker 8

Okay. I thought there was some opportunity, maybe I'm mistaken years back in Europe when they were passing some of those bag laws for What I was characterized, I thought it was bulk resin, but I guess I'm mistaken. And I guess just Patrick, I've known you since day 1 here at the head in the company and I've never heard you this bold up. So I mean people have Pressed you on some of this oil and gas stuff, but I'm super happy to see it. And I guess kind of I'll try to Get a little more color again here.

Speaker 8

Is it just that the phone is ringing now as opposed to you out there beating the pavement is part of your excitement?

Speaker 1

Yes. I mean, we're getting the phone is ringing repeatedly from the same sources. We're also finding new applications and expanding into new market segments, so geographically. So things are really humming on all across the board.

Speaker 8

And in terms of the base level of sales that Matt was talking about, I mean that Doesn't really have much Petrobras these days in it. This is just onesie twosies from a lot of guys. And I don't know if that big BP job has started to roll in yet or not, but

Speaker 1

We are delivering on the BP job and we are still selling to Petrobras, but we have not We're still working on Petrobras. They've not bought any of the tank bottom solutions from us yet, but that certainly is a technology that they're currently looking at.

Speaker 8

Okay. All right. Well, super excited to hear the enthusiasm here on oil and gas because, Yes. Given the margin structure there, it seems like it could do wonders for the overall business. So keep up the good work and thank you.

Speaker 4

Appreciate it. Thanks.

Operator

Thank you. And I am showing we have a follow-up question from Gus Richard with Northland Capital. Your line is open.

Speaker 6

Yes. Thanks for taking the additional question. Based on some of your comments, I'm wondering, are you guys starting to work on recyclable products for TetraPAX?

Speaker 4

Gus, we're not working on recycling, but we are looking at Compostable versions of those multilayer structures, there's an increasing demand from brands for fully compostable versions of those solutions, but there are some specific barrier requirements. So it's still in development for.

Speaker 6

Okay. But I'm assuming that given the inability to recycle that those products That there is an increasing desire to do so. Yes, absolutely. And you're working on the development of that and that Could be an incremental market for you down the road?

Speaker 4

Yes, potentially.

Speaker 6

Got it. Got it. Thank you.

Operator

Thank you. And our next question coming from the line of Don Hall. Your line is open.

Speaker 5

Hello, was that me? I'm not sure.

Operator

Don, all your line is open.

Speaker 5

Just one question. Do you have an inclination to buy out get 100 percent ownership in some of your joint ventures? And are there opportunities to do so? Is that Possibility going forward?

Speaker 8

And is it desirable?

Speaker 2

I'm not

Speaker 1

As you saw, we bought out India a little bit over a year ago.

Speaker 5

Yes.

Speaker 1

Yes, I believe we are looking at buying out joint ventures as if and as they come available and if that's the right decision to make at that time. So, if it's there's nothing right now on our radar to do by anymore, but if the opportunity It presents itself and it makes sense to us, we will be looking into acquiring them.

Speaker 5

All right. Thank you.

Operator

Thank you. And I see no further questions in the Q and A queue at this Tom, I will now turn the call back over to Mr. Patrick Lynch for any closing remarks.

Speaker 1

Just want to thank everybody for their interest in NTIC this morning and wish you all a good day.

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