Note 5 - Investments in Joint Ventures

9 Months Ended

May 31, 2012

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 consolidated 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 of goods 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:

	May 31, 2012
	Total		EXCOR		NTI ASEAN		All Other
Current assets	$	59,125,651	$	20,895,752	$	14,699,407	$	23,530,492
Total assets		65,526,514		23,359,024		14,835,666		27,331,824
Current liabilities		19,144,766		3,652,576		5,515,678		9,976,512
Noncurrent liabilities		4,608,886		—		1,027,686		3,581,200
Joint ventures’ equity	$	41,772,862	$	19,706,448	$	8,292,302	$	13,774,112
Northern Technologies International Corporation’s share of joint ventures’ equity	$	19,568,795	$	9,853,226	$	3,331,153	$	6,383,771

	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	$	43,837,524	$	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

	Nine Months Ended May 31, 2012
	Total		EXCOR		NTI ASEAN		All Other
Net sales	$	83,746,872	$	25,785,840	$	16,366,258	$	41,594,775
Gross profit		40,201,265		13,423,067		7,183,786		19,594,413
Net income		8,165,791		4,830,477		1,941,417		1,393,897
Northern Technologies International Corporation’s share of equity in income of joint ventures	$	4,405,327	$	2,396,596	$	1,076,230	$	932,501

	Nine Months Ended May 31, 2011
	Total		EXCOR		NTI ASEAN		All Other
Net sales	$	86,744,626	$	28,036,295	$	13,549,082	$	45,159,249
Gross profit		40,134,048		14,027,762		6,477,234		19,629,052
Net income		8,781,500		5,311,273		1,160,579		2,309,648
Northern Technologies International Corporation’s share of equity in income of joint ventures	$	4,549,267	$	2,550,188	$	912,449	$	1,086,630

The Company records expenses that are directly attributable to the joint ventures on the consolidated 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 nine months ended May 31, 2012 and 2011, except as set forth below.

In December 2010, the Company invested $38,217 in its joint venture in Russia to specifically engage in the oil and gas industry. The Company has a 50% ownership interest in such joint venture.

- 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).

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