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Note 12 - Segment and Geographic Information | 3 Months Ended
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Nov. 30, 2024
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 50 years and, more recently, has also expanded into the oil and gas industry. The Company also sells a portfolio of proprietary 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 months ended November 30, 2024 and 2023 by segment:
|  | Three Months Ended November 30, |
|  | 2024 |  |  | 2023 |
ZERUST® net sales |  | $ | 15,475,803 |  |  | $ | 15,405,745 |
Natur-Tec® net sales |  |  | 5,862,590 |  |  |  | 4,775,930 |
Total net sales |  | $ | 21,338,393 |  |  | $ | 20,181,675 |
The following table sets forth the Company’s cost of goods sold for the three months ended November 30, 2024 and 2023 by segment:
|  | November 30, 2024 |  |  | % of Product Sales* |  |  | November 30, 2023 |  |  | % of Product Sales* |
Direct cost of goods sold |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
ZERUST® |  | $ | 8,678,706 |  |  |  | 56.1 | % |  | $ | 8,744,024 |  |  |  | 56.8 | %
Natur-Tec® |  |  | 3,689,183 |  |  |  | 62.9 | % |  |  | 3,228,583 |  |  |  | 67.6 | %
Indirect cost of goods sold |  |  | 807,551 |  |  | NA |  |  |  | 874,794 |  |  | NA |
Total net cost of goods sold |  | $ | 13,175,440 |  |  |  |  |  |  | $ | 12,847,401 |  |  |  |  |
* | The percent of product 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 months ended November 30, 2024 and 2023 were as follows:
|  | Three Months Ended November 30, |
|  | 2024 |  |  | 2023 |
Inside the U.S. to unaffiliated customers |  | $ | 13,088,319 |  |  | $ | 12,097,843 |
Outside the U.S. to: |  |  |  |  |  |  |  |
Joint ventures in which the Company is a shareholder directly and indirectly |  |  | 767,456 |  |  |  | 851,452 |
Unaffiliated customers |  |  | 7,482,618 |  |  |  | 7,232,380 |
|  | $ | 21,338,393 |  |  | $ | 20,181,675 |
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 months ended November 30, 2024 and 2023 were as follows:
|  | Three Months Ended November 30, |
|  | 2024 |  |  | % of Total Fees for Services Provided to Joint Ventures |  |  | 2023 |  |  | % of Total Fees for Services Provided to Joint Ventures |
Poland |  | $ | 220,010 |  |  |  | 17.1 | % |  | $ | 198,017 |  |  |  | 15.9 | %
Germany |  |  | 206,329 |  |  |  | 16.1 | % |  |  | 205,643 |  |  |  | 16.5 | %
Japan |  |  | 148,538 |  |  |  | 11.6 | % |  |  | 136,081 |  |  |  | 10.9 | %
Finland |  |  | 131,460 |  |  |  | 10.2 | % |  |  | 103,744 |  |  |  | 8.3 | %
United Kingdom |  |  | 116,226 |  |  |  | 9.1 | % |  |  | 63,149 |  |  |  | 5.1 | %
Thailand |  |  | 94,165 |  |  |  | 7.3 | % |  |  | 79,438 |  |  |  | 6.4 | %
France |  |  | 79,064 |  |  |  | 6.2 | % |  |  | 121,966 |  |  |  | 9.8 | %
Czech Republic |  |  | 72,631 |  |  |  | 5.7 | % |  |  | 77,812 |  |  |  | 6.2 | %
South Korea |  |  | 67,701 |  |  |  | 5.3 | % |  |  | 74,957 |  |  |  | 6.0 | %
Sweden |  |  | 66,928 |  |  |  | 5.2 | % |  |  | 110,536 |  |  |  | 8.9 | %
Other |  |  | 81,067 |  |  |  | 6.3 | % |  |  | 77,615 |  |  |  | 6.2 | %
|  | $ | 1,284,119 |  |  |  | 100.0 | % |  | $ | 1,248,958 |  |  |  | 100.0 | %
The geographical distribution of total property and equipment and net sales is as follows:
|  | At November 30, 2024 |  |  | At August 31, 2024 |
China |  | $ | 5,453,786 |  |  | $ | 5,627,202 |
Other |  |  | 1,212,917 |  |  |  | 1,217,400 |
United States |  |  | 10,386,536 |  |  |  | 9,421,051 |
Total property and equipment, net |  | $ | 17,053,239 |  |  | $ | 16,265,653 |
|  | Three Months Ended November 30, |
|  | 2024 |  |  | 2023 |
China |  | $ | 3,994,769 |  |  | $ | 3,678,523 |
Brazil |  |  | 1,385,194 |  |  |  | 1,529,623 |
India |  |  | 6,045,735 |  |  |  | 5,180,391 |
Other |  |  | 2,430,077 |  |  |  | 2,560,757 |
United States |  |  | 7,482,618 |  |  |  | 7,232,381 |
Total net sales |  | $ | 21,338,393 |  |  | $ | 20,181,675 |
Long-lived assets consist of property 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. 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 recognized directly by the Company and sold in that geographic territory. All joint venture operations, including equity in income, fees for services and related dividends, are primarily related to ZERUST® products and services.

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- Definition The entire disclosure for reporting segments including data and tables. 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