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Note 5 - Investments in Joint Ventures

9 Months Ended

May 31, 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 May 31, 2014
	Total		EXCOR		China		All Other
Current assets	$	58,975,346	$	22,560,299	$	8,541,897	$	27,873,150
Total assets		63,172,232		24,920,587		8,561,641		29,690,004
Current liabilities		14,208,070		1,956,574		1,926,986		10,324,510
Noncurrent liabilities		3,373,373		1,321,199		853,839		1,198,335
Joint ventures’ equity		45,590,789		21,642,814		5,780,816		18,167,159
Company’s share of joint ventures’ equity		22,103,275		10,821,409		2,225,409		9,056,460
Company’s share of joint ventures’ undistributed earnings	$	19,681,808	$	10,790,504	$	2,175,409	$	6,715,895

	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

	Nine Months Ended May 31, 2014
	Total		EXCOR		China		All Other
Net sales	$	88,213,101	$	29,020,416	$	11,952,115	$	47,240,570
Gross profit		41,609,619		15,000,023		5,550,166		21,059,430
Net income		9,960,639		5,574,387		1,543,155		1,913,097
Company’s share of equity in income of joint ventures	$	4,416,664	$	2,787,048	$	659,684	$	969,932

	Nine Months Ended May 31, 2013
	Total		EXCOR		China		All Other
Net sales	$	82,788,711	$	26,043,775	$	10,802,206	$	45,942,730
Gross profit		39,447,084		13,624,792		5,134,820		20,687,472
Net income		7,626,711		4,954,595		815,664		1,856,452
Company’s share of equity in income of joint ventures	$	3,733,069	$	2,478,109	$	407,809	$	847,151

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.

On May 31, 2014, NTI Asean bought out the other 50% owner in its joint venture in Singapore for $110,988, thereby increasing NTI Asean’s ownership in the joint venture from 50% to 100%. The Company did not make any other joint venture investments during the nine months ended May 31, 2014 and did not make any joint venture investments during the nine months ended May 31, 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 May 31, 2014, $163,499 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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