Note 5 - Investments in Joint Ventures

6 Months Ended

Feb. 28, 2014

Equity Method Investments and Joint Ventures [Abstract]

Equity Method Investments and Joint Ventures Disclosure [Text Block]

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

	At February 28, 2014
	Total		EXCOR		China		All Other
Current assets	$	60,798,447	$	21,138,250	$	12,498,369	$	27,161,828
Total assets		66,244,262		23,578,234		12,520,341		30,145,687
Current liabilities		17,443,151		3,486,865		3,860,391		10,095,895
Noncurrent liabilities		2,126,033		—		868,005		1,258,028
Joint ventures’ equity		46,675,076		20,091,369		7,791,945		18,791,762
Company’s share of joint ventures’ equity		22,653,729		10,045,687		3,895,973		8,712,069
Company’s share of joint ventures’ undistributed earnings	$	20,232,259	$	10,014,782	$	3,845,973	$	6,371,504

	At 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
Company’s share of joint ventures’ equity		24,702,981		12,409,893		3,637,375		8,655,713
Company’s share of joint ventures’ undistributed earnings	$	22,281,510	$	12,378,988	$	3,587,375	$	6,315,147

	Six Months Ended February 28, 2014
	Total		EXCOR		China		All Other
Net sales	$	58,050,376	$	18,963,579	$	8,257,630	$	30,829,167
Gross profit		27,600,668		10,072,948		3,834,419		13,693,301
Net income		5,479,724		3,763,017		553,963		1,162,744
Company’s share of equity in income of joint ventures	$	2,823,199	$	1,881,705	$	276,948	$	664,546

	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
Company’s share of equity in income of joint ventures	$	2,292,734	$	1,631,125	$	262,148	$	399,461

The Company records expenses that are directly attributable to the joint ventures on its consolidated statements of operations in the line item “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 six months ended February 28, 2014 and 2013.

On November 30, 2013, 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 February 28, 2014, $177,273 is due to the Company related to this transaction.

- 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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