Thank you. Good morning.

I’m Patrick Lynch, NTIC’s Chief Executive Officer, and I’m here with Matt Wolsfeld, NTIC’s Chief Financial Officer. Please note that our financial results for the first quarter of fiscal 2016 were included in a press release issued earlier this morning, a copy of which is now available at NTIC.com.

During this call, we will review various key aspects of our fiscal 2016 first quarter financial results, give a brief business update, comment on our sales and earnings guidance for the full fiscal year, and then conclude with a question and answer session. Several key factors in combination made the first quarter of fiscal 2016 a disappointing one.

These factors include a significant slowdown amongst some of our largest customers in heavy equipment manufacturing intended for agriculture, construction and mining use. Consequently, over the first three months of fiscal 2016, NTIC’s net sales of industrial Zerust products in North America have been sluggish when compared to the same quarter in fiscal 2015.

Fortunately, during this same period we continue to see strong demand from the automotive sector and anticipate that sales of our industrial Zerust products to new and existing customers in this market segment will continue to grow throughout the remainder of fiscal 2016. We have also started to see an uptick in our December sales that now leads us to believe our fiscal 2016 second quarter will be stronger than our first across all industrial Zerust markets.

Next, as we started to report in January 2015, the termination and transition away from our former joint venture in China, Tianjin Zerust, has been a difficult one. This in turn has had a significant adverse effect on our financial results for fiscal 2015 and significantly affected the financial results of our first quarter of fiscal 2016 as well.

However, we have now received the first of hopefully several favorable rulings from the Chinese courts in our litigation against our former joint venture partner while also enjoying good progress from a sales and operating standpoint at NTIC Shanghai Company Limited, our wholly owned subsidiary in China. This transition in China, while unavoidable and extremely difficult, has created a significant long-term opportunity for us to aggressively invest in and grow our business in this very important market.

In the short term, however, the direct expenses incurred through the first quarter of fiscal 2016 related to our transition in China amounted to $486,000, which includes the cost of litigation against our former Chinese joint venture partner in the courts of Tianjin and the formation and ongoing operations of NTIC China, and was partially offset by the gross margin contributed by NTIC China operations. During the remainder of fiscal 2016, we expect the growth of these expenses to slow substantially with the anticipated rise in profitability of NTIC China during fiscal 2016 and 2017.

We also believe that our future variable expenses related to NTIC China will be primarily dependent on the cost of the ongoing litigation. It is important to note that during the first quarter of fiscal 2016, NTIC did not record any royalty or equity income from Tianjin Zerust.

The net impact to NTIC after subtracting out the minority income was $376,000 as Tianjin Zerust contributed over $626,000 of royalties and equity income to NTIC during the first quarter of fiscal 2015 prior to the termination of the license agreement, compared to no royalties or equity income to NTIC during the first quarter of fiscal 2016. The pretax impact on NTIC earnings for the first quarter of fiscal 2016 of both the direct expenses associated with China and the absence of the royalty and equity income amounted to $862,000 or $0.19 per share.

This obviously caused a very significant impact to the earnings of NTIC for the first quarter and is a major reason why NTIC was not profitable compared to the first quarter of fiscal 2015. I want to again reassure all of NTIC’s shareholders that the decision to terminate our license agreement with our former Chinese joint venture partner and commence direct operations in China through NTIC China was necessary and appropriate.

We understand that it is taking us longer to reach certain milestones in China than we previously anticipated, but long term we continue to see opportunities to expand in China and believe our subsidiary in China will soon be a major contributor to NTIC. Lastly, sales by our joint ventures which are not consolidated with our financial results decreased by almost 25% to $21.9 million during the first quarter of fiscal 2016 compared to the same period last fiscal year.

This decrease was mostly attributable to the termination of our license agreement with Tianjin Zerust. Sales at Tianjin Zerust in the first quarter of fiscal 2015 were over $3.7 million compared to no sales during the first quarter of fiscal 2016.

The remainder of the decrease in sales at our joint ventures was primarily attributable to the weakening of key currencies, including the euro, compared to the U.S. dollar.

If we take out the negative impact of the China joint venture license termination as well as the various shifts in foreign currency exchange rates and compare sales by each joint venture to their respective local currency, then we see that total sales by our joint ventures only decreased by one-half of 1% when compared to the same period in fiscal 2015. All said, NTIC lost $0.05 per diluted common share during the first quarter of fiscal 2016 as opposed to earning $0.22 per diluted share during first quarter of fiscal 2015.

Regarding our oil and gas business, during the first quarter of fiscal 2016, our North American oil and gas team continued to focus its sales efforts primarily on protecting the bottom plates of oil storage tanks in North American from corrosion. At the same time, we have seen renewed uncertainties in this market segment as industry players have revised their infrastructure expansion and maintenance budgets to address the renewed half defluctuations in global oil prices over the past few months.

Despite these significant challenges, our oil and gas team has continued to receive orders from new and repeat customers in both the United States and other regions. Actual sales in North America were relatively flat in the first quarter compared to the same period last fiscal year; however, based on orders booked, we expect sales for fiscal 2016 to be higher than they were in fiscal 2015 as the number of scheduled installations picks up during the third and fourth quarters of fiscal 2016.

Nevertheless, as we have repeatedly mentioned, we expect that any associated benefits to our financial results from our sales of Zerust corrosion inhibiting products into the oil and gas industry will not be immediate and may be choppy, with spikes in sales as opportunities are converted and revenue is recognized over the next few years. Now turning to our Natur-Tec bio-plastics business, net sales of Natur-Tec products increased 7% during the first quarter of fiscal 2016 compared to the prior fiscal year.

This increase was due to increased sales of finished product through NTIC’s majority-owned subsidiary in India, as well as increased sales in North America through our domestic distribution network. We continued to see strong demand for our finished products, such as compostable bags and cutlery, in North America as a direct result of increases in zero-waste initiatives as well as favorable local and state-level waste management regulations.

We anticipate further adoption of our product lines by key customers in India and also several new customers coming online in North America in fiscal 2016. We expect both regions to continue to be strong growth areas and we intend to continue to target and convert additional manufacturers to use Natur-Tec sustainable packaging solutions in Asia and worldwide.

I will now turn the call over to Matt Wolsfeld to summarize in more detail our financial results for the first quarter of fiscal 2016.

Thanks Patrick. Sales of NTIC’s Zerust products decreased over 4% across our industrial market and oil and gas market segments during the first quarter of fiscal 2016 compared to the same period in fiscal 2015.

This decrease was due to lower demand in North America by existing customers, which was partially offset by increases in new sales at NTIC China. Sales of Zerust oil and gas solutions decreased by over 32% in the first quarter of 2016.

NTIC had sales of $340,000 during the first quarter of 2016 compared to $502,000 for the three months ended November 30, 2014. When evaluating this result, it’s important to remember that current global oil prices, coupled with political turmoil and a deep recession in Brazil as well as management restructuring at Brazil’s state-owned oil company, Petrobras, resulted in NTIC recognizing only $2,000 in oil and gas industry-related Zerust oil and gas solution sales in Brazil during the first quarter compared to almost $105,000 for the three months ended November 30, 2015.

Sales of Zerust corrosion inhibiting products to our joint ventures decreased over 29% during the first quarter of fiscal 2016 compared to fiscal 2015. Income provided by our joint venture operations decreased by 34% to almost $2.5 million during the first quarter of fiscal 2016 compared to just over $3.7 million the prior fiscal year period; however, that was mostly attributable to the termination of our joint venture license agreement with Tianjin Zerust, our former joint venture in China as previously discussed, and a significantly weakening of the various foreign currencies, including the euro, compared to the U.S.

dollar. We estimate that the pretax impact of foreign currency exchange rate shift of the euro and other countries compared to the U.S.

dollar on our joint venture operating income was approximately $176,000 or $0.04 per share in the first quarter of fiscal 2016. Lastly, sales of Natur-Tec products increased over 7% to $1 million during the first quarter of fiscal 2016 compared to the same period in fiscal 2015.

Our total operating expenses increased 4% to $4.7 million during the first quarter of fiscal ’16 compared to the first quarter of fiscal 2015, primarily due to an increase in selling, general and administrative expenses and expenses incurred in support of joint ventures, which as previously mentioned were related primarily to the changes in our Chinese operations. Overall, NTIC showed a net loss attributable to NTIC of $234,000 or $0.05 per diluted common share for the first quarter of fiscal 2016, compared to net income attributable to NTIC of $1 million or $0.22 per diluted common share during the first quarter of fiscal 2015.

As of November 30, 2015, our working capital was $14.8 million, including $3.1 million in cash and cash equivalents and $500,000 in available for sale securities, compared to $15.6 million, including $2.6 million in cash and cash equivalents and $2 million in available for sale securities as of August 31, 2015. Turning now to NTIC’s annual guidance, for the fiscal year ending August 31, 2016, NTIC now expects its net sales to range between $34 million and $37 million and expects net income of between $2 million and $3.2 million, or between $0.40 and $0.70 per diluted common share.

The large range of this guidance is due to significant risks and uncertainties facing our business, including without limitation risks and uncertainties related to change in NTIC’s China operations, pending litigation, and other risks and uncertainties. With that update, we’ll now answer any questions that you may have.

Hi guys. Can you just give me a little bit more color - you kind of went through the China legal piece pretty fast.

You said you had some kind of a favorable ruling. Just give us a little more color on what that was and what it means in terms of resolving the China issue.

It’s an initial hurdle where the former Chinese joint venture partner has now been compelled to turn over their books and records for further investigation into the liquidation, so they’ve been--it’s a Chinese procedural matter, but it sounds like it’s a good indicator that the courts are heading in our direction.

Okay. In terms of--is there a legal process going on in the United States too?

Yes, but that’s still in its early stages. Discovery hasn’t even been completed on that side.

How long would you expect that to resolve itself?

Without a settlement? In the interim, I’m told that discovery won’t conclude until August of this year.

Thereafter, you’re looking at trial schedule.

Okay. In terms of the business that you’re doing in the new Chinese wholly owned subsidiary that you guys have 100% of, what’s the status?

How’s that going?

At this time, we have sales that are--I’m looking at a chart right now, and sales are hovering right around 300 to 350 per month, which should put us at an annual run rate of around U.S. $4 million, and I think the expectation when we started the year were that we were going to be significantly higher than that.

That’s the primary reason for the change in the sales guidance. But it certainly has continued to increase, and when we look at the projects that are up for bid that we’re working on, and we look at the projects that we are currently in the evaluation process for, we certainly see--you know, it’s a long sales cycle, just like it is in North America, but there’s certainly an awful lot of things that, if they start happening, will be able to get us to the sales level that we wanted to be at, at this time before.

How much volume do you need to break even on that?

It kind of depends on how much money. Not to elusive on the answer, but it really depends on how much money we’re spending on ramping up activities outside of the primary region that we were previously operating in.

I would say that somewhere between the--you know, we would be profitable at over a $4 million annual run rate level, or very close to that; but as far as getting back to the kinds of profits that we were seeing from before, we would need to be probably double that.

Okay. All right, good.

That’s what I wanted to know right now. Thanks.

Good morning. You made reference in the Natur-Tec portion of your comments that you saw new engagements taking place, both in North America and in India.

Should we take that to mean that growth will accelerate there for the remainder of the year?

That’s our expectation, yes.

Okay, good. The other question I have is that does the Natur-Tec technological capabilities have any chance of benefiting from a ban placed on certain plastic nano particles in products?

You mean the plastic microbeads?

Yes.

In cosmetic products and all that? That’s not really where we were focused on, so we don’t anticipate that having any effect one way or the other on our business.

Okay, that does it for me. Thank you.

Yes, I have a question on the oil and gas space. On the last conference call a couple months ago, it was communicated that you had--you made a paraphrase that your teams in the field almost had more work in the storage tank area than they could comfortably handle, and that you were actually stretched in that area and were having to have outside help.

Now, it appears that over the--roughly since the last 60 days or so, that seems to have dramatically turned upside down. I guess one of the things I’m kind of curious about, my understanding was that most of your company’s customer base that you’re supposed to be going after, the oil and gas space are supposed to be more midstream and downstream companies and they’re not E&Ps, so these are companies that need to go under--you know, have basic ongoing maintenance to their infrastructure.

Why are you seeing such volatility?

Well, one factor I’m told is simply cold weather, where they have been pushing off certain projects to the spring for installation, which has nothing to do with more macro--

What cold weather? It’s been much warmer than normal.

I’m just repeating what I was told. We also had certain installations we’ve been doing in Canada and in the northern parts of North America, so it might not be record cold, but cold enough for them to tell us that that’s what they’re delaying until spring.

We’ve also been told in the meantime that since the oil prices have been fluctuating, that certain of the installations we had scheduled have been postponed until springtime, when they can re-evaluate some of their budgets.

All right. Is there some--are you hearing or are you factoring at some point--are you looking for somewhere--do you need to see some sort of nominal level in crude strip prices at a point of over a certain threshold before these customers are going to start increasing the volumes of the orders?

What do you expect that strip price to be?

I don’t think there is a direct correlation to be made like that, Charlie. Like you said, we’re more the midstream and downstream.

What is being affected is obviously a lot of these companies are restructuring, downsizing, what have you. They still have to maintain their maintenance and all that, but some of these decisions are being delayed as they are shuffling their internal teams, and that’s what we’re running into at this point.

So you said you’re continuing to receive new orders and new customers. How has the net change in--since you last communicated to us, how has that changed?

How many more sort of ongoing actual discrete customers do you have versus the prior quarter?

I don’t have that information readily in front of me right now.

Would it be a material change, or not?

Well, define material. We’re talking about a few--half a dozen additional customers.

Depending on their size and how many tank farms they’re operating, it could be substantial.

Okay. All right, that does it for me.

Thank you.

I’d like to thank everyone for participating today and for your interest in NTIC. Have a good day.