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Note 6 - Investments in Joint Ventures | 12 Months Ended
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Aug. 31, 2024
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 U.S. GAAP 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. Financial information from the audited and unaudited financial statements of the Company’s joint venture in Germany, Excor Korrosionsschutz – Technologien und Produkte GmbH (EXCOR), and all the Company’s other joint ventures are summarized as follows:
|  | As of August 31, 2024 |
|  | Total |  |  | EXCOR |  |  | OTHER |
Current assets |  | $ | 56,420,503 |  |  | $ | 26,234,664 |  |  | $ | 30,185,839 |
Total assets |  |  | 64,183,071 |  |  |  | 31,513,288 |  |  |  | 32,669,783 |
Current liabilities |  |  | 12,553,716 |  |  |  | 2,221,726 |  |  |  | 10,331,990 |
Noncurrent liabilities |  |  | 323,199 |  |  |  | — |  |  |  | 323,199 |
Joint ventures’ equity |  |  | 51,306,156 |  |  |  | 29,291,562 |  |  |  | 22,014,594 |
NTIC’s share of joint ventures’ equity |  |  | 25,397,287 |  |  |  | 14,645,783 |  |  |  | 10,751,504 |
NTIC’s share of joint ventures’ undistributed earnings |  |  | 23,645,685 |  |  |  | 14,614,878 |  |  |  | 9,030,807 |
|  | Fiscal Year Ended August 31, 2024 |
|  | Total |  |  | EXCOR |  |  | OTHER |
Net sales |  | $ | 95,940,014 |  |  | $ | 35,720,889 |  |  | $ | 60,219,125 |
Gross profit |  |  | 41,247,036 |  |  |  | 18,288,258 |  |  |  | 22,958,778 |
Net income |  |  | 8,450,411 |  |  |  | 4,599,088 |  |  |  | 3,851,323 |
NTIC’s share of equity in income of joint ventures |  |  | 4,223,296 |  |  |  | 2,299,274 |  |  |  | 1,924,022 |
NTIC’s dividends received from joint ventures |  |  | 2,997,164 |  |  |  | 1,624,950 |  |  |  | 1,372,214 |
|  | As of August 31, 2023 |
|  | Total |  |  | EXCOR |  |  | OTHER |
Current assets |  | $ | 55,339,662 |  |  | $ | 27,862,458 |  |  | $ | 27,477,204 |
Total assets |  |  | 59,729,348 |  |  |  | 30,054,277 |  |  |  | 29,675,071 |
Current liabilities |  |  | 11,464,247 |  |  |  | 2,687,064 |  |  |  | 8,777,183 |
Noncurrent liabilities |  |  | 323,762 |  |  |  | — |  |  |  | 323,762 |
Joint ventures’ equity |  |  | 47,941,339 |  |  |  | 27,367,213 |  |  |  | 20,574,126 |
NTIC’s share of joint ventures’ equity |  |  | 23,705,714 |  |  |  | 13,683,608 |  |  |  | 10,022,106 |
NTIC’s share of joint ventures’ undistributed earnings |  |  | 20,493,861 |  |  |  | 12,075,524 |  |  |  | 8,418,337 |
|  | Fiscal Year Ended August 31, 2023 |
|  | Total |  |  | EXCOR |  |  | OTHER |
Net sales |  | $ | 100,682,316 |  |  | $ | 39,642,380 |  |  | $ | 61,039,936 |
Gross profit |  |  | 40,096,561 |  |  |  | 19,016,389 |  |  |  | 21,080,172 |
Net income |  |  | 8,934,198 |  |  |  | 5,730,311 |  |  |  | 3,203,887 |
NTIC’s share of equity in income of joint ventures |  |  | 6,452,719 |  |  |  | 2,852,229 |  |  |  | 3,600,490 |
NTIC’s dividends received from joint ventures |  |  | 5,639,198 |  |  |  | 2,459,500 |  |  |  | 3,179,698 |
In August 2023, Tianjin Zerust (NTI ASEAN’s previously written-off joint venture in China) was deregistered and the remaining cash was cleared by the Chinese authorities to be paid out to shareholders. Subsequent to August 31, 2023, NTI Asean received a final liquidation of its ownership interest in the former joint venture of $1,986,027. This one-time equity gain on the liquidation of previously written-off investment in Tianjin Zerust is included in joint venture operations in fiscal 2023. The final liquidation payment was subject to withholding tax of $198,603 and minority income of $676,614 as NTIC owns 60% of NTI ASEAN. The transaction also resulted in legal fees of $95,890, and a management bonus expense of $250,000.

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- 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. + References Reference 1: http://www.xbrl.org/2003/role/recommendedDisclosureRef -Topic 740 -SubTopic 323 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147478156/740-323-50-2 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 323 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 3 -Subparagraph (a)(3) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481687/323-10-50-3 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 323 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 3 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481687/323-10-50-3 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Topic 323 -Publisher FASB -URI https://asc.fasb.org/323/tableOfContent + Details
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