北方科技国际- NTIC -2026年第三季度业绩电话会

00:00:01 Good day and welcome to ncic's third quarter 2026 earnings conference call and webcast atthe sum of participants on the listen only mode. After this speaker's presentation, there willbe a question and answer session. Instructions will be given at that time. 00:00:16 Today's conference is being recorded. As part of the discussion today, the representativesfrom ntic will be making certain forward looking statements regarding ntic's futurefinancial and operating results as well as their business plans, objectives and expectations. 00:00:32 Please be advised that these forward looking statements are covered under the safe harborprovisions of the private securities litigation reform act of 1995, and that ndic decides toavail itself of the protections of the safe harbor for these statements. 00:00:48 Please also be advised that actual results could differ materially from those stated orimplied by the forward looking statements. 00:00:55 Due to firmness and uncertainties,including those described in ndic's most recent annualreport on form10k subsequent quarterly.Reports on form10q and recent press releases. 00:01:08 Please read these reports and other future filings that ntic will make with the SEC.And c itdisclaims any duty to update or revise its forward looking statements. 00:01:21I will now hand the call over to Mr Patrick Lynch, mdic CEO. Please go ahead sir. 00:01:31Good morning, I'm Patrick Lynch, ntsc's CEO, and I'm here with Matt willsfeld, ntsc's CFO. 00:01:40 Please note that a press release regarding our third quarter fiscal2026financial results wasissued earlier this morning.And is available at nt com. 00:01:50 During today's call, we will review various key aspects of our fiscal 2026 third quarterfinancial results, provide a brief business updates, and then conclude with aquestionanswer session. 00:02:01 Please note that when we discuss yearoveryear performance, we are referring to the thirdquarter of our fiscal 2026 in comparison to the third quarter of last fiscal year. 00:02:12 Strong global demand and increasing adoptions of our xeruss corrosion prevention andnattech bioplasstics solutions drove quarterly consolidated sales to new record highs. 00:02:23 Disruptions to shipping through the strait of Hormuz during the quarter, caused by recentincreased conflict levels in the Middle East, contributed to a significant increase in our rawmaterial costs. 00:02:34Higher input costs reduced our gross margin. 00:02:36 By approximately 477 basis points yearoveryear, and we estimate that gross profit wasnegatively affected by approximately 1 billion dollars based on gross margin levels prior tothe increase in us Iran hostilities. 00:02:49 We believe that the third quarter cost pressure was temporary.And we are pursuing pricingand procurement initiatives that we expect will improve gross margin and profitability inthe fourth quarter. 00:03:03 Since reaching the profitability levels we plan for is taking longer than expected.We believentsc must remain focused on the initiatives within our control to drive more profitablegrowth. 00:03:15 Including expanding sales of our higher margin xeruss oil and gas solutions and broadeningmatritech applications globally. 00:03:22 Our liquidity and financial flexibility remains solid, supported by significant capital withinour joint venture network and anticipated proceeds of more than 1 million dollars from thepending sale of our beechwood, Ohio facility. 00:03:35Which is expected to close in fiscal2027?The resilience of our business model,continueddemand for our technologies and our focus on execution give us confidence instronger,more profitable fourth quarter results. 00:03:50So with this overview,let's examine the drivers for the third quarter in more detail.For thethird quarter ended may thirty one twenty twenty six. 00:03:59 Our total consolidated net sales increased 12.6% to 24.2 million dollars as compared to thethird quarter ended may thirty one twenty twenty five. 00:04:11Broken down by business unit, this included a 72.3% increase in xis oil and gas net sales, a10.3% increase in xeris industrial net sales and a 5% increase in naturetech sales. 00:04:29Turning to our joint venture sales, which we do not consolidate in our financial statements. 00:04:34Total net sales for the fiscal 2026 third quarter by our joint ventures increasedyearoveryear by 15.1% to 26.7 million dollars, reflecting improved yearoveryear demandacross many of our joint ventures. 00:04:50 We continue to closely monitor trends across our European markets for signs ofstabilization following years of subdued demand as governments begin to implementtargeted economic stimulus packages. 00:05:01 We expect that any economic recovery from these stimulus packages will lead to a positiveimpact on our joint venture operating income in future periods, especially In Germany. 00:05:14Stable sales trends continued at our wholly owned ense China subsidiar