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Note 12 - Geographic and Segment Information
 6 Months Ended
Feb. 29, 2016
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]
12. SEGMENT AND GEOGRAPHIC INFORMATION
 
Segment Information
 
The Company’s chief operating decision maker is its Chief Executive Officer. The Company’s business is organized into two reportable segments: ZERUST® and Natur-Tec®. The Company has been selling its proprietary ZERUST® rust and corrosion inhibiting products and services to the automotive, electronics, electrical, mechanical, military and retail consumer markets for over 40 years, and more recently, has targeted and expanded into the oil and gas industry. The Company also sells a portfolio of bio-based and compostable (fully biodegradable) polymer resins and finished products under the Natur-Tec® brand.
 
The following table sets forth the Company’s net sales for the three and six months ended February 29, 2016 and February 28, 2015 by segment:
 
    Three Months Ended   Six Months Ended
    February 29,
2016		   February 28,
2015		   February 29,
2016		   February 28,
2015
ZERUST® net sales   $ 6,385,337     $ 5,783,985     $ 12,363,019     $ 12,022,056  
Natur-Tec® net sales     1,319,597       944,724       2,366,352       1,920,748  
Total net sales   $ 7,704,934     $ 6,728,709     $ 14,729,371     $ 13,942,804  
 
 
The following table sets forth the Company’s cost of goods sold for the three and six months ended February 29, 2016 and February 28, 2015 by segment:
 
    Three Months Ended   Six Months Ended
   
February

29, 2016
   % of
Segment
Sales*		  
February

28, 2015
   % of
Segment
Sales*		  
February
29, 2016
   % of
Segment
Sales*		  
February
28, 2015
   % of
Segment
Sales*
Direct cost of goods sold                                
ZERUST®   $ 3,576,073       56.0 %   $ 3,171,103       54.8 %   $ 6,940,628       56.1 %   $ 6,509,691       54.1 %
Natur-Tec®     984,938       74.6 %     719,048       76.1 %     1,819,197       76.9 %     1,501,623       78.2 %
Indirect cost of goods sold     707,213       —       767,589       —       1,383,822       —       1,453,037       —  
Total net cost of goods sold   $ 5,268,224             $ 4,657,740             $ 10,143,647             $ 9,464,351          
___________________
* The percent of segment sales is calculated by dividing the direct cost of goods sold for each individual segment category by the net sales for each segment category.
 
The Company utilizes product net sales and direct and indirect cost of goods sold for each product in reviewing the financial performance of a product type. Further allocation of Company expenses or assets, aside from amounts presented in the tables above, is not utilized in evaluating product performance, nor does such allocation occur for internal financial reporting.
 
Geographic Information
 
Net sales by geographic location for the three and six months ended February 29, 2016 and February 28, 2015 were as follows:
 
    Three Months Ended   Six Months Ended
    February 29,
2016		   February 28,
2015		   February 29,
2016		   February 28,
2015
Inside the U.S.A. to unaffiliated customers   $ 2,344,406     $ 1,544,964     $ 4,006,037     $ 3,071,894  
Outside the U.S.A to:                                
Joint ventures in which the Company is a shareholder directly and indirectly     971,501       1,198,892       1,521,047       2,007,879  
Unaffiliated customers     4,389,027       3,984,853       9,202,287       8,863,031  
    $ 7,704,934     $ 6,728,709     $ 14,729,371     $ 13,942,804  
 
Net sales by geographic location are based on the location of the customer. Fees for services provided to joint ventures by geographic location as a percentage of total fees for services provided to joint ventures during the three and six months ended February 29, 2016 and February 28, 2015 were as follows:
 
    Three Months Ended
   
February 29,

2016
   % of Total Fees
for Services
Provided to
Joint Ventures		  
February 28,

2015
  
% of Total Fees
for Services
Provided to
Joint Ventures
Germany   $ 192,869       19.9 %   $ 202,633       20.4 %
Poland     145,765       15.0 %     116,612       11.7 %
Japan     137,476       14.2 %     124,202       12.5 %
France     73,112       7.5 %     76,518       7.7 %
India     72,077       7.4 %     73,971       7.4 %
United Kingdom     64,735       6.7 %     115,000       11.6 %
Finland     52,896       5.5 %     52,693       5.3 %
Sweden     50,356       5.2 %     72,297       7.3 %
Thailand     39,322       4.0 %     156,519       15.7 %
Other     142,434       14.6 %     4,415       0.1 %
    $ 971,042       100.0 %   $ 994,860       100.0 %
 
    Six Months Ended
   
February 29,

2016
   % of Total Fees
for Services
Provided to
Joint Ventures		  
February 28,

2015
  
% of Total Fees
for Services
Provided to
Joint Ventures
Germany   $ 422,654       17.2 %   $ 440,954       14.1 %
Poland     285,023       11.6 %     287,836       9.2 %
Japan     268,149       10.9 %     284,544       9.1 %
Thailand     263,063       10.7 %     297,152       9.5 %
United Kingdom     173,646       7.1 %     211,371       6.8 %
France     162,785       6.6 %     209,898       6.7 %
India     152,527       6.2 %     143,262       4.6 %
Sweden     123,317       5.0 %     159,217       5.1 %
Czech Republic     121,933       5.0 %     108,649       3.4 %
Finland     121,829       5.0 %     146,215       4.7 %
China     —       0.0 %     516,139       16.5 %
Other     361,545       14.7 %     323,293       10.3 %
    $ 2,456,471       100.0 %   $ 3,128,530       100.0 %
 
Sales to the Company’s joint ventures are included in the foregoing segment and geographic information, however, sales by the Company’s joint ventures to other parties are not included. The foregoing segment and geographic information represents only sales and cost of goods sold recognized directly by the Company.
 
The geographical distribution of key financial statement data is as follows:
   
February 29,
2016
  
August 31,
2015
Brazil   $ 52,764     $ 46,918  
India     15,114       16,402  
China     136,825       45,220  
United States     7,106,123       7,184,623  
Total long-lived assets   $ 7,310,826     $ 7,293,163  
 
 
    Six Months Ended
    February 29,
2016		   February 28,
2015
Brazil   $ 997,636     $ 1,418,236  
India     549,402       416,772  
China     1,439,754       20,732  
United States     11,742,579       12,087,064  
Total net sales   $ 14,729,371     $ 13,942,804  
 
Total assets located in Brazil, India and China primarily consist of cash and cash equivalents, customer receivables and inventory. These assets are periodically reviewed to assure the net realizable value from the estimated future production based on forecasted sales exceeds the carrying value of the assets. Total assets located in the United States include the Company’s investments in joint ventures.