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Note 7 - Investments in Joint Ventures

12 Months Ended

Aug. 31, 2013

Equity Method Investments and Joint Ventures [Abstract]

Equity Method Investments and Joint Ventures Disclosure [Text Block]

7. 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 conform with accounting principles generally accepted in the United States of America in all material respects. All material profits recorded on sales from the Company to its joint ventures 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), China, NTI Asean and all of the Company’s other joint ventures, are summarized as follows:

	August 31, 2013
	TOTAL		EXCOR		China		All Other
Current assets	$	63,052,410	$	25,955,136	$	11,200,355	$	25,896,919
Total assets		68,417,142		28,391,787		11,226,755		28,798,600
Current liabilities		16,107,597		3,572,004		3,080,118		9,455,475
Noncurrent liabilities		2,488,057		—		871,886		1,616,171
Joint ventures’ equity		49,821,488		24,819,783		7,274,751		17,726,954
Northern Technologies International Corporation’s share of joint ventures’ equity		24,702,981		12,409,893		3,637,375		8,655,713
Northern Technologies International Corporation's share of joint ventures' undistributed earnings	$	22,281,510	$	12,378,988	$	3,587,375	$	6,315,147

	August 31, 2012
	TOTAL		EXCOR		NTI ASEAN		All Other
Current assets	$	61,973,725	$	24,357,139	$	15,358,967	$	22,257,619
Total assets		68,585,974		26,620,589		15,522,456		26,442,929
Current liabilities		18,686,181		4,749,574		5,763,857		8,172,750
Noncurrent liabilities		4,700,458		—		1,055,965		3,644,493
Joint ventures’ equity		45,199,335		21,871,015		8,702,634		14,625,686
Northern Technologies International Corporation’s share of joint ventures’ equity		21,461,492		10,935,509		3,685,404		6,840,579
Northern Technologies International Corporation's share of joint ventures' undistributed earnings	$	19,403,150	$	10,904,604	$	3,314,445	$	5,184,101

	Fiscal Year Ended August 31, 2013
	TOTAL		EXCOR		China		All Other
Net sales	$	113,189,068	$	36,476,544	$	15,161,289	$	61,551,235
Gross profit		52,058,609		19,470,322		7,153,395		25,434,891
Net income		10,650,542		7,009,897		1,157,995		2,482,650
Northern Technologies International Corporation’s share of equity in income of joint ventures	$	5,237,711	$	3,507,057	$	579,376	$	1,151,278

	Fiscal Year Ended August 31, 2012
	TOTAL		EXCOR		NTI ASEAN		All Other
Net sales	$	111,830,961	$	36,027,979	$	22,035,035	$	53,767,947
Gross profit		50,679,875		18,667,848		9,621,930		22,390,097
Net income		11,987,323		6,656,298		3,585,476		1,745,549
Northern Technologies International Corporation’s share of equity in income of joint ventures	$	5,519,795	$	3,318,213	$	1,414,248	$	787,333

The Company records expenses that are directly attributable to the joint ventures on its consolidated statements of operations on the line “Expenses incurred in support of joint ventures”. The expenses include items such as employee compensation and benefits, travel, consulting, legal and laboratory supplies and testing expenses.

During fiscal 2013, the Company obtained an additional 10% ownership interest in NTI Asean in exchange for a license agreement. See Note 3 for additional information.

During fiscal 2012, both the Company and the other 50% owner in Harita NTI Limited agreed to receive additional equity interest in consideration for outstanding fees for services receivable of $484,545 due to each party.

The Company did not make any other joint venture investments during fiscal 2013 and fiscal 2012.

- Definition

The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group.

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