Good day, and thank you for standing by. Welcome to the Northern Technologies International Corporation Fourth Quarter Fiscal Year 2023 Earnings Conference Call and Webcast. [Operator Instructions] Please be advised that today's conference is being recorded. 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 your speaker today, Patrick Lynch, CEO. Please go ahead. G. Lynch: Good morning. I'm Patrick Lynch, NTIC's CEO, and I'm here with Matt Wolsfeld, NTIC's CFO. Please note that a press release regarding our fourth quarter and full year 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 fourth quarter and full year financial results, provide a brief business update and then conclude with a question-and-answer session. Fiscal 2023 marked NTIC's third year of consecutive record sales despite the economic challenges growing in both Europe and China as well as rising interest rates in the U.S. Our continued sales growth success demonstrates the increasing value we provide our global customers as well as the efficacy of our strategic focus on diversifying our products, end markets and geographies. I am particularly encouraged by our top line results within the large oil and gas and compostable plastics markets. While fiscal 2023 proved to be highly successful with respect to diversifying our product mix and our end markets. At the same time, we also found sales conditions for our core ZERUST industrial solutions to be very challenging in both Europe and China. Throughout the fiscal year, our European joint ventures felt the direct pressures of persistent inflation, raw material and energy cost increases as well as the indirect dampening effects of geopolitical conflicts on market demand. These trends impacted both top line results and overall profitability during fiscal 2023. As we enter fiscal 2024, demand within our North American ZERUST industrial market remains stable, and we believe we are well positioned to develop additional strength within our ZERUST Oil & Gas and Natur-Tec businesses. We will continue to invest strategically in bolstering our infrastructure throughout fiscal 2024 to support our long-term expansion needs. We will also be focused on improving our cost structure and profitability by having additional operational efficiencies, strengthen our gross margins. As a result, we expect fiscal 2024 to be another good year of top line growth and improved bottom line profitability. So with this overview, let's examine the drivers for the fourth quarter in more detail. For the fourth quarter ended August 31, 2023, our total consolidated net sales increased 2.3% to a fourth quarter record of $20.7 million as compared to the fourth quarter ended August 31, 2022. Broken down by business unit, this included a 53.1% increase in ZERUST Oil & Gas net sales and a 2.7% increase in Natur-Tec net sales. These increases were partially offset by a 3.6% decline in ZERUST industrial net sales. Our total net sales for the fiscal 2023 fourth quarter by our joint ventures, which we do not consolidate in our financial statements, decreased year-over-year by 6.6% to $24.2 million. EXCOR Germany, our largest joint venture, experienced a 24% decrease in net sales during that period. The year-over-year decline was due primarily to softer demand across the territories, serviced by our global joint ventures, as I explained previously. Fiscal 2023 fourth quarter net sales by our wholly owned NTIC China subsidiary decreased by 9.6% to $3.5 million due to weaker economic conditions on a year-over-year basis. On a sequential basis, NTIC China sales increased by 6.4%, which was the second consecutive quarter of higher sales sequentially. Stabilizing demand trends are encouraging, and we are cautiously optimistic that demand in China will improve throughout fiscal 2024. Despite challenging conditions in China during fiscal 2023, we remain committed to the Chinese market and therefore, continue to take steps to enhance and protect our Chinese operations as we continue to believe China will likely become our largest geographic market in the future. However, it is important to note that NTIC China recorded a small net loss during fiscal 2023 compared to net income over $1 million in each of the 3 years before the COVID pandemic began. Now moving on to ZERUST Oil & Gas, fiscal 2023 was a transformative year for ZERUST Oil & Gas as full year oil and gas sales increased 69.3% to an annual record of $7.8 million. For the fiscal 2023 fourth quarter, sales increased 53.1% to a quarterly record of $2.4 million. Demand continues to grow from both new and existing customers for our ZERUST Oil & Gas solutions, which today is still focused primarily on protecting above-ground oil storage tanks and pipeline casings from corrosion. As a result, we believe fiscal 2024 will be another strong year for ZERUST Oil & Gas as this business further scales and continues to contribute to profitability. Turning to our Natur-Tec bioplastics business. As expected, Natur-Tec sales remained strong during the fourth quarter and increased 2.7% year-over-year to a quarterly record of $4.9 million. We expect Natur-Tec sales growth will remain strong throughout fiscal 2024, supported by its 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. As you can see, our full year and fourth quarter financial results reflect the progress we are making towards growing our business and creating significant value for our shareholders. While core profitability during the fourth quarter was below our plan, primarily due to the challenging conditions in Europe and China, we are working hard to improve our cost structure, maintain a strong gross margin and leverage investments we are making across our infrastructure by growing sales. Before I turn the call over to Matt, I want to acknowledge the commitment of our global team of both employees and joint venture partners. Our success throughout the fiscal year and the opportunities we are pursuing to drive value for our shareholders in the future is a direct result of their efforts. With this overview, let me now turn the call over to Matt Wolsfeld to summarize our financial results for the fiscal 2023 fourth quarter.

Thanks, Patrick. Compared to the prior fiscal year period, NTIC's consolidated net sales increased 7.7% in fiscal 2023 to an annual record and grew 2.3% in fiscal 2023 fourth quarter because of the positive trends Patrick reviewed in his prepared remarks. While sales across our global joint ventures declined 6.6% in the fourth quarter, joint venture operating income increased 39.6% compared to the prior fiscal year period as a result of a onetime gain on the liquidation of a previously written off investment in our former joint venture in China, Tianjin-Zerust of nearly $2 million. For fiscal 2023, sales across our global joint ventures decreased 3.3%, while joint venture operating income increased nearly 11% compared to the prior fiscal year. Total operating expenses for the fiscal 2023 fourth quarter increased 23.4% to $9.3 million, and for the fiscal 2023 increased $17.6 million to $33.4 million. Higher operating expenses for both the fiscal 2023 fourth quarter and the full year were primarily due to increased personnel expense, other inflationary increases in expenses, and expenses incurred in connection with our new indirect majority-owned subsidiary formed to assume the operations of a former joint venture in Taiwan. Operating expenses as a percentage of net sales were 44.8% for the fourth quarter compared to 37.1% for the prior fiscal year period. For fiscal 2023, operating expenses as a percentage of net sales were 41.8% compared to 38.3% for the prior fiscal year. Gross profit as a percentage of net sales was 36.5% during the 3 months ended August 31, 2023, compared to 30.3% during the prior fiscal year period. The 620-basis point improvement was primarily a result of successful actions taken by the company to address inflationary pressures and the increased sales of higher gross margin ZERUST Oil & Gas Solutions. Gross profit as a percentage of our net sales was 34.8% for fiscal year ended August 31, 2023, compared to 31.1% for the prior fiscal year. NTIC reported net income of $939,000 or $0.10 per diluted share for the fiscal 2023 fourth quarter compared to $648,000 or $0.07 per diluted share for the fiscal 2022 fourth quarter. For the full year, NTIC reported net income of $2.9 million or $0.30 per diluted share compared to $6.3 million or $0.66 per diluted share for the fiscal 2022 full year. For the fiscal 2023 fourth quarter, NTIC's non-GAAP adjusted income reduced primarily for the onetime gain related to the liquidation of Tianjin-Zerust, which was $280,000 or $0.03 per diluted share compared to non-GAAP adjusted income of $753,000 or $0.08 per diluted share for the fiscal 2022 fourth quarter. For fiscal 2023, non-GAAP adjusted income was $2.6 million or $0.27 per diluted share compared to $3 million or $0.32 per diluted share for fiscal 2022. For reconciliation of GAAP to non-GAAP financial measures is available in our fourth quarter and full year earnings press release that was issued this morning. As of August 31, 2023, working capital was $23 million, including $5.4 million in cash and cash equivalents compared to $23.2 million, including $5.3 million in cash and cash equivalents as of August 31, 2022. As of August 31, 2023, we had outstanding debt of $6.4 million. This included $3.6 million in borrowings under our existing revolving line of credit compared to $5.9 million as of August 31, 2022. We generated $5.5 million of operating cash flows for the 12 months ended August 31, 2023, including $2 million in the fourth quarter which was driven primarily by stronger core profitability, lower inventory levels, and the onetime gain from the liquidation of Tianjin-Zerust. On August 31, 2023, the company had $23.7 million of investments in joint ventures, of which 53.6% or $13.8 million was in cash, with the remaining balance primarily invested in other working capital. During the fiscal 2023 fourth quarter, NTIC's Board of Directors declared a quarterly cash dividend of $0.07 per common share that was payable on August 16, 2023, to stakeholders of the record on August 2, 2023. Before we turn the call over to questions, I want to address the 8-K filing we filed this morning and the amended 10-Qs restating our second and third quarter financial statements. At the start of fiscal 2023, we engaged Deloitte, our tax advisers to analyze NTIC's qualification for employee retention tax credits under the CARES Act. They determined that we qualified for $1.1 million in credit and provided detailed support for that position. As a result, NTIC filed for the payroll credits with the IRS and recorded the credits in second and third quarter based on the application date. During the year-end closing process, the accounting for the credits was scrutinized and we determined that under U.S. GAAP accounting, we did not allow for the recording of the credits. While we believe the employee retention credit that we applied for in fiscal Q2 and Q3 are more likely than not to be collected, we are unable to deem the receipt of the credits as probable under U.S. GAAP. As a result, we restated NTIC's previously issued Q2 and Q3 financial statements, reflecting a decrease in net income of $474,000 for Q2 and $466,000 for Q3. We filed with the SEC this morning amendments to our second and third quarter 10-Qs with the restated financials as well as an 8-K dealing all the line item changes, and we plan to update investors on the progress we are making collecting the employee retention tax credits. So with this overview and to conclude our prepared remarks, we continue navigating a fluid business environment, while continuing to pursue our product, end market and geographical diversification strategies. We're seeing stable North American demand trends and robust growth across our global oil and gas and bioplastics markets. While the economic environment remains uncertain, we believe fiscal 2024 will be another good year of sales and increased profitability for NTIC, and we're excited by our long-term prospects. With this overview, Patrick and I are happy to take your questions.

[Operator Instructions] Our first question comes from the line of Tim Clarkson from Van Clemens & Co. Inc.

It looks like it was a solid quarter again. Yes, I was trying to figure out why it was only $0.30. I was adding up the other quarters and it didn't add up. So that's the answer. Is this accounting snafu? So, there you go. I was just curious, how much expenses did we have in Taiwan for the fourth quarter?

I don't have it right in front of me as far as exactly in fourth quarter, but I can tell you that for the full fiscal year, we had expenses of about $660,000 of expenses in Taiwan that were included in operating expenses that were previously would be a part of the JV operations. So they're just new expenses that are related to the fact that Taiwan is now consolidated rather than previously being a joint venture.

Right. Do you feel good about the decision to consolidate it like that?

Yes, Taiwan is doing well. It was a pretty smooth continuation of the business. I don't think Taiwan is going to be -- I wouldn't call it a significant joint venture from the standpoint of the bottom-line income contribution, but I look at the revenues that are generated from that entity, probably contributed about $1 million to [ $1.2 million ] of income. So certainly, that level of expense that I talked about, a lot of it had to do with transactional expense of cleaning up the old entity and implementing the new entity. So that run rate of expense will go down in the future.

Right. On the oil and gas thing, on the deals that you've done so far, are customers pleased with what they're getting? G. Lynch: Yes. I mean, we've been very pleased. So getting repeat business in all the geographies where we're doing business. And we also have some very large projects going that should they come to fruition in the coming year, will make – maybe a significant difference.

Right. In terms of implementation, is it a pretty elegant technology? I mean, you guys can do it without having to worry about scrubs? G. Lynch: Well, we haven't had any problems so far. So, I think we've got a pretty good system going.

Good. On the compostable front, it looks like you had some decent growth again. Would you say things have normalized on the restaurant and in terms of the COVID stuff? G. Lynch: Yes.

Right. And is there any more innovation that needs to occur on the technology and to try to make this compostable thing a bigger deal, or is it at this point more on the governmental and mandating use of the product? G. Lynch: Well, it's a combination, but we certainly think that we continue to innovate and make R&D advances. In fact, we're working on several large projects in Europe, the United States and India at the moment. And again, if any of those come into fruition in the next 12 months, it'll make significant difference to our bottom line.

[Operator Instructions] Our next question comes from the line of Walter Ramsley from Walrus Partners.

I've got a couple of questions. The German joint venture, the results there were down quite a bit. Is that primarily a timing issue where you're going to catch up in future quarters, or has the business actually slowed down there? And if it has, what's going on? G. Lynch: Well, in Germany, in particularly, you're talking about several factors. One, because of the war in Ukraine and the sanctions that the West put on Russia, Russia in turn increased energy prices. So the cost of energy and plastics in Europe has gone up dramatically, which is good in putting a bit of a squeeze in our margins. In addition to that, Germany did lose one significant customer. And it's going to be a few months or actually maybe a couple of quarters before they can recover from that. So the economy in Germany also is being impacted again by the war that consumer optimism is not where it used to be, so the overall economy in Germany is facing downturn at the moment.

Okay. And the other question I have has to do with the liquidation of the old China joint venture. Did your company actually collect the money out of that liquidation process, or could you just explain what happened there actually? Is that just an accounting entry, or did the company actually get some money from that?

No, I'm glad to say that we actually did receive the cash out of China. The money has been sitting in the bank in China and was essentially being held by the government as part of the liquidation from when we terminated the joint venture in 2015. And it had been sitting there and we're going through a liquidation process since then. The company NTICN that owns Tianjin-Zerust received $2 million essentially from the tax authority and from the government in the first quarter, but we received an announcement in fourth quarter that everything was finalized. So you have some deductions from the $2 million that we received, that you have tax withholding that came out of it, legal expenses that came out of it. There's a minority interest from the standpoint that we own 60% of CN. And there's other expenses that came out of it. The net impact to NTIC was about $775,000 recognized in Q4.

Okay. And on the balance sheet, as of August 31, is the cash on there, or is that still showing as a receivable?

The cash is not on there. The cash is sitting as a receivable. It's listed as a joint venture dividend receivable in the current assets.

Thank you. I would now like to turn the conference back over to Patrick Lynch for closing remarks. G. Lynch: Just want to thank everybody for joining us this morning, and have a good week.

This concludes today's conference call. Thank you for participating. You may now disconnect.