XML 52 R12.htm IDEA: XBRL DOCUMENT

Note 6 - Investments in Joint Ventures

6 Months Ended

Feb. 28, 2013

Equity Method Investments and Joint Ventures Disclosure [Text Block]

6. 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), China, NTI Asean and all of the Company’s other joint ventures, are summarized as follows:

	At February 28, 2013
	Total		EXCOR		China		All Other
Current assets	$	61,997,739	$	22,196,110	$	12,442,364	$	27,359,265
Total assets		68,522,275		24,625,927		12,474,170		31,422,178
Current liabilities		19,532,691		3,848,126		5,094,516		10,590,049
Noncurrent liabilities		4,210,364		—		856,978		3,353,386
Joint ventures’ equity		44,779,219		20,777,801		6,522,675		17,478,742
Northern Technologies International Corporation’s share of joint ventures’ equity		22,189,562		10,388,902		3,261,338		8,539,322
Northern Technologies International Corporation’s share of joint ventures’ undistributed earnings	$	20,075,092	$	10,357,997	$	3,215,436	$	6,501,659

	At 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		—		1,055965		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

	Six Months Ended February 28, 2013
	Total		EXCOR		China		All Other
Net sales	$	54,247,135	$	17,451,153	$	6,929,260	$	29,866,722
Gross profit		25,852,537		9,105,579		3,290,660		13,456,298
Net income		4,728,680		3,260,575		524,546		943,559
Northern Technologies International Corporation’s share of equity in income of joint ventures	$	2,292,734	$	1,631,125	$	262,148	$	399,461

	Six Months Ended February 29, 2012
	Total		EXCOR		NTI ASEAN		All Other
Net sales	$	54,792,662	$	16,958,519	$	10,482,144	$	27,351,999
Gross profit		25,945,925		8,860,381		4,705,397		12,380,147
Net income		4,798,435		3,158,682		1,276,056		363,697
Northern Technologies International Corporation’s share of equity in income of joint ventures	$	2,582,355	$	1,576,496	$	692,115	$	313,744

*Prior to September 1, 2012, the Company owned 50% of NTI Asean, which included the joint venture in China, and disclosed its financial information accordingly. On September 1, 2012, the Company obtained an additional 10% ownership interest in NTI Asean and has consolidated the results of NTI Asean subsequent to that date. As a result the Company now discloses the financial information for only its joint venture in China and not all of NTI Asean accordingly.

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 other joint venture investments during the six months ended February 28, 2013 and February 29, 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.

+ References+ Details