Note 5 - Investments in Joint Ventures

3 Months Ended

Nov. 30, 2011

5. INVESTMENTS IN JOINT VENTURES

The financial statements of the Company’s foreign joint ventures are initially prepared using the accounting principles accepted in the respective joint ventures’ countries of domicile. Amounts related to foreign joint ventures reported in the below tables and the accompanying financial statements have subsequently been adjusted to approximate U.S. GAAP in all material respects. All material profits recorded on sales from the Company to its joint ventures, that remain in inventory, have been eliminated for financial reporting purposes.

Financial information from the audited and unaudited financial statements of the Company’s joint venture in Germany, Excor Korrosionsschutz – Technologien und Produkte GmbH (EXCOR), the Company’s joint venture holding company in the Association of Southeast Asian Nations, or ASEAN, region, NTI ASEAN, LLC (NTI ASEAN), and all of the Company’s other joint ventures, are summarized as follows:

	November 30, 2011
	TOTAL		EXCOR		NTI ASEAN		All Other
Current assets	$	63,235,064	$	19,816,458	$	15,616,441	$	27,802,165
Total assets		69,351,206		22,372,432		15,767,688		31,211,086
Current liabilities		24,888,418		4,321,772		7,200,800		13,365,846
Noncurrent liabilities		4,709,307		—		983,009		3,726,298
Joint ventures’ equity		39,753,481		18,050,660		7,583,879		14,118,942
Northern Technologies International Corporation’s share of joint ventures’ equity		18,763,038		9,025,332		3,138,696		6,599,010

	August 31, 2011
	TOTAL		EXCOR		NTI ASEAN		All Other
Current assets	$	66,956,061	$	24,411,880	$	14,565,219	$	27,978,962
Total assets		73,155,916		27,093,874		14,759,582		31,302,460
Current liabilities		24,712,555		5,145,239		6,123,684		13,443,632
Noncurrent liabilities		4,605,837		—		1,020,034		3,585,803
Joint ventures’ equity		43,752,524		21,948,635		7,615,864		14,273,025
Northern Technologies International Corporation’s share of joint ventures’ equity		20,559,509		10,931,819		2,803,194		6,824,496

	Three Months Ended November 30, 2011
	TOTAL		EXCOR		NTI ASEAN		All Other
Net sales	$	28,795,232	$	8,542,250	$	5,022,328	$	15,230,654
Gross profit		13,339,072		4,325,802		2,286,705		6,726,565
Net income		2,538,769		1,457,055		392,366		689,348
Northern Technologies International Corporation’s share of equity in income of joint ventures	$	1,357,680	$	728,528	$	369,462	$	259,690

	Three Months Ended November 30, 2010
	TOTAL		EXCOR		NTI ASEAN		All Other
Net sales	$	27,101,587	$	8,886,252	$	4,321,308	$	13,894,027
Gross profit		12,706,289		4,490,864		2,051,640		6,163,785
Net income		3,169,841		1,876,545		374,049		919,337
Northern Technologies International Corporation’s share of equity in income of joint ventures	$	1,695,131	$	938,227	$	320,607	$	436,298

The Company records expenses that are directly attributable to the joint ventures on the statements of operations on the line “Expenses incurred in support of joint ventures”. The expenses include items such as employee compensation and benefit expenses, travel expense and consulting expense.

The Company did not make any joint venture investments during the three months ended November 30, 2011 and 2010.

- Definition

The entire disclosure for investment holdings. This includes the long positions of investments for the entity. It contains investments in affiliated and unaffiliated issuers. The investments include securities and non securities (i.e. commodities and futures contracts).

+ References+ Details