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Note 12 - Segment and Geographic Information
 9 Months Ended
May 31, 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 nine months ended May 31, 2016 and 2015 by segment:
 
    Three Months Ended   Nine Months Ended
    May 31, 2016   May 31, 2015   May 31, 2016   May 31, 2015
ZERUST® net sales   $ 7,185,955     $ 7,076,760     $ 19,548,974     $ 19,098,816  
Natur-Tec® net sales     1,500,620       1,200,815       3,866,972       3,121,563  
Total net sales   $ 8,686,575     $ 8,277,575     $ 23,415,946     $ 22,220,379  
 
The following table sets forth the Company’s cost of goods sold for the three and nine months ended May 31, 2016 and 2015 by segment:
 
    Three Months Ended   Nine Months Ended
    May 31,
2016		   % of Segment Sales*   May 31,
2015		   % of
Segment
Sales*		   May 31,
2016		   % of
Segment
Sales*		   May 31,
2015		   % of
Segment
Sales*
Direct cost of goods sold                                
ZERUST®   $ 4,028,114       56.1 %   $ 3,942,776       55.7 %   $ 10,968,742       56.1 %   $ 10,452,467       54.7 %
Natur-Tec®     1,119,730       74.6 %     889,976       74.1 %     2,938,927       76.0 %     2,391,599       76.6 %
Indirect cost of goods sold     629,405       —       762,455       —       2,013,227       —       2,215,492       —  
Total net cost of goods sold   $ 5,777,249             $ 5,595,207             $ 15,920,896             $ 15,059,558          
__________________________
* 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 nine months ended May 31, 2016 and 2015 were as follows:
 
    Three Months Ended   Nine Months Ended
    May 31, 2016   May 31, 2015   May 31, 2016   May 31, 2015
Inside the U.S.A. to unaffiliated customers   $ 5,559,885     $ 5,337,090     $ 14,762,170     $ 14,200,121  
Outside the U.S.A to:                                
Joint ventures in which the Company is a shareholder directly and indirectly     446,322       580,622       1,967,370       2,588,501  
Unaffiliated customers     2,680,368       2,359,863       6,686,406       5,431,757  
    $ 8,686,575     $ 8,277,575     $ 23,415,946     $ 22,220,379  
 
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 nine months ended May 31, 2016 and 2015 were as follows:
 
    Three Months Ended
    May 31,
2016		   % of Total Fees for Services Provided to Joint Ventures   May 31,
2015		   % of Total Fees for Services Provided to Joint Ventures
Germany   $ 242,158       17.9 %   $ 219,182       16.8 %
Poland     167,237       12.4 %     149,771       11.5 %
Japan     148,091       11.0 %     124,772       9.6 %
United Kingdom     135,068       10.0 %     93,229       7.2 %
Thailand     132,548       9.8 %     128,164       9.8 %
France     87,588       6.5 %     108,788       8.4 %
Korea     74,085       5.5 %     70,984       5.4 %
India     70,610       5.2 %     72,285       5.5 %
Sweden     66,239       4.9 %     103,234       7.9 %
Finland     55,876       4.1 %     74,711       5.7 %
Czech Republic     54,537       4.0 %     56,843       4.3 %
Other     117,876       8.7 %     102,001       7.8 %
    $ 1,351,913       100.0 %   $ 1,303,964       100.0 %
 
    Nine Months Ended
    May 31,
2016		   % of Total Fees for Services Provided to Joint Ventures   May 31,
2015		   % of Total Fees for Services Provided to Joint Ventures
Germany   $ 664,812       17.4 %   $ 660,135       14.9 %
Poland     452,260       11.8 %     437,607       9.9 %
Japan     416,241       10.9 %     409,316       9.2 %
Thailand     395,611       10.4 %     425,316       9.6 %
United Kingdom     292,216       7.7 %     304,600       6.9 %
France     250,373       6.6 %     318,686       7.2 %
Korea     247,730       6.5 %     133,405       3.0 %
India     223,137       5.9 %     215,548       4.9 %
Sweden     189,556       5.0 %     262,451       5.9 %
Finland     177,704       4.7 %     220,926       5.0 %
Czech Republic     176,470       4.6 %     165,492       3.7 %
China     —       0.0 %     516,139       11.6 %
Other     322,274       8.5 %     362,872       8.2 %
    $ 3,808,384       100.0 %   $ 4,432,494       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:
 
    May 31, 2016   August 31, 2015
Brazil   $ 64,050     $ 46,918  
India     13,664       16,402  
China     164,765       45,220  
United States     7,055,557       7,184,623  
Total long-lived assets   $ 7,298,036     $ 7,293,163  
 
    Nine Months Ended
    May 31, 2016   May 31, 2015
Brazil   $ 1,509,659     $ 2,103,589  
India     911,227       708,635  
China     2,473,733       442,262  
United States     18,521,327       18,965,893  
Total net sales   $ 23,415,946     $ 22,220,379  
 
Total long-lived assets located in Brazil, India and China primarily consist of property, plant and equipment. 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.