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Note 6 - Investments in Joint Ventures

12 Months Ended

Aug. 31, 2021

Notes to Financial Statements

Equity Method Investments and Joint Ventures Disclosure [Text Block]

6. INVESTMENTS IN JOINT VENTURES

The consolidated 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 conform with accounting principles generally accepted in the United States of America in all material respects. All material profits on sales recorded that remain on the consolidated balance sheet from the Company to its joint ventures and from joint ventures to other joint ventures have been eliminated for financial reporting purposes.

The Company considers the Company’s joint venture in Germany, Excor Korrosionsschutz – Technologien und Produkte GmbH (EXCOR) to be individually significant to the Company’s consolidated assets and income as of August 31, 2021. The Company considers the Company’s joint venture EXCOR and the following other joint ventures in France, Finland, India and Thailand, respectively, to be individually significant to the Company’s consolidated assets and income as of August 31, 2020: ACOBAL SAS, ZERUST OY, HARITA-NTI LIMITED and ZERUST SPECIALTY TECH CO. LTD. Harita-NTI Limited became a wholly owned subsidiary of the Company effective as of September 1, 2021. Financial information from the audited and unaudited financial statements of EXCOR and the Company’s joint ventures in France, Finland, India and Thailand, as well as all the Company’s other joint ventures, are summarized as follows:

		As of August 31, 2021
		Total				EXCOR				OTHER
Current assets		$	69,394,796			$	33,886,655			$	35,508,141
Total assets			73,814,402				36,211,520				37,602,882
Current liabilities			16,366,398				5,386,377				10,980,021
Noncurrent liabilities			1,455,524				-				1,455,524
Joint ventures’ equity			55,992,480				30,825,144				25,167,336
Northern Technologies International Corporation’s share of joint ventures’ equity			27,623,768				15,412,574				12,211,194
Northern Technologies International Corporation’s share of joint ventures’ undistributed earnings			24,702,778				14,697,490				10,005,288

		Fiscal Year Ended August 31, 2021
		Total				EXCOR				OTHER
Net sales		$	120,954,550			$	46,522,688			$	74,431,862
Gross profit			53,371,610				25,389,981				27,981,629
Net income			14,921,531				8,798,995				6,122,536
Northern Technologies International Corporation’s share of equity in income of joint ventures			7,465,214				4,400,403				3,064,811
Northern Technologies International Corporation’s dividends received from joint ventures			3,665,365				1,809,900				1,855,465

		As of August 31, 2020
		Total				EXCOR				FRANCE				FINLAND				INDIA				THAILAND				OTHER
Current assets		$	55,825,418			$	25,742,619			$	4,099,160			$	1,955,879			$	4,010,855			$	4,022,399			$	15,994,506
Total assets			60,295,587				28,449,772				4,873,484				2,261,147				4,242,660				4,055,451				16,413,073
Current liabilities			11,002,867				2,424,565				2,073,710				415,496				1,007,529				993,332				4,088,235
Noncurrent liabilities			365,274				—				—				—				32,999				—				332,275
Joint ventures’ equity			48,927,446				26,025,207				2,799,774				1,845,651				3,202,132				3,062,119				11,992,563
Northern Technologies International Corporation’s share of joint ventures’ equity			24,090,826				13,012,606				1,399,887				922,814				1,603,013				1,531,060				5,621,446
Northern Technologies International Corporation’s share of joint ventures’ undistributed earnings			21,855,747				12,981,701				1,399,887				902,814				738,191				1,429,060				4,404,094

		Fiscal Year Ended August 31, 2020
		Total				EXCOR				FRANCE				FINLAND				INDIA				THAILAND				OTHER
Net sales		$	87,030,062			$	32,546,402			$	8,133,294			$	3,088,865			$	5,481,303			$	6,471,831			$	31,308,367
Gross profit			39,532,750				18,739,471				3,061,433				1,916,001				2,498,196				2,046,478				11,271,171
Net income			8,545,473				5,266,541				473,137				419,728				697,349				503,884				1,184,834
Northern Technologies International Corporation’s share of equity in income of joint ventures			4,270,327				2,622,423				237,490				209,972				349,218				253,192				598,032
Northern Technologies International Corporation’s dividends received from joint ventures			5,672,099				4,675,850				—				325,635				261,220				160,074				249,320

The Company did not make any joint venture investments during fiscal 2021 or fiscal 2020.