Note 7 - Investments in Joint Ventures

12 Months Ended

Aug. 31, 2014

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), joint venture in China and all of the Company’s other joint ventures, are summarized as follows:

	August 31, 2014
	TOTAL		EXCOR		China		All Other
Current assets	$	61,491,957	$	24,361,157	$	9,774,680	$	27,356,120
Total assets		65,466,964		26,652,165		9,793,803		29,020,996
Current liabilities		17,542,634		3,512,143		4,438,380		9,592,111
Noncurrent liabilities		1,929,488		—		868,377		1,061,111
Joint ventures’ equity		45,994,842		23,140,022		4,487,046		18,367,775
Northern Technologies International Corporation’s share of joint ventures’ equity		22,961,989		11,570,013		2,243,524		9,148,452
Northern Technologies International Corporation's share of joint ventures’ undistributed earnings	$	20,540,523	$	11,539,108	$	2,193,524	$	6,807,891

	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

	Fiscal Year Ended August 31, 2014
	TOTAL		EXCOR		China		All Other
Net sales	$	118,848,890	$	39,944,812	$	15,920,685	$	62,983,393
Gross profit		56,960,918		21,045,091		7,463,168		28,452,659
Net income		11,842,338		7,906,693		1,274,487		2,661,158
Northern Technologies International Corporation’s share of equity in income from joint ventures	$	5,920,603	$	3,950,915	$	626,763	$	1,342,925

	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 from joint ventures	$	5,237,711	$	3,507,057	$	579,376	$	1,151,278

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 2014, NTI Asean invested $100,988 in its joint venture in Singapore. The Company did not make any other joint venture investments during fiscal 2014.

During fiscal 2014, the Company agreed to sell its indirect ownership interest in Mütec GmbH (Mütec), one of the Company’s joint ventures in Germany which manufactures proprietary electronic sensing instruments. As of August 31, 2014, $156,854 is due to the Company related to this transaction.

During fiscal 2013, the Company obtained an additional 10% ownership interest in NTI Asean in exchange for a license agreement. The Company accounted for the transaction resulting in the additional ownership as a business combination. Beginning in the first quarter of fiscal 2013, the Company consolidated the results of NTI Asean. Immediately prior to the transaction, the Company re-measured the fair value of NTI Asean and determined that there was no difference between the fair value and the book value of the entity. As a result, there was no accounting impact related to the business combination in the consolidated statements of operations. The Company did not make any other joint venture investments during fiscal 2013.

- 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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