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Note 6 - Investments in Joint Ventures

12 Months Ended

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.