Note 6 - Investments in Joint Ventures

6 Months Ended

Feb. 28, 2023

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 February 28, 2023
	Total		EXCOR		All Other
Current assets	$	54,425,899	$	25,538,114	$	28,887,785
Total assets		57,924,227		27,376,219		30,548,008
Current liabilities		14,002,680		3,163,365		10,839,315
Noncurrent liabilities		346,645		-		346,645
Joint ventures’ equity		43,574,902		24,212,854		19,362,048
Northern Technologies International Corporation’s share of joint ventures’ equity		21,522,496		12,106,429		9,416,067
Northern Technologies International Corporation’s share of joint ventures’ undistributed earnings		20,493,861		12,075,524		8,418,337

	Three Months Ended February 28, 2023
	Total		EXCOR		All Other
Net sales	$	25,482,590	$	9,708,482	$	15,774,108
Gross profit		10,035,811		4,733,435		5,302,376
Net income		1,969,046		1,365,170		603,876
Northern Technologies International Corporation’s share of equity in income from joint ventures		1,128,731		676,800		451,931
Northern Technologies International Corporation's dividends received from joint ventures		422,048		—		422,048

	Six Months Ended February 28, 2023
	Total		EXCOR		All Other
Net sales	$	50,212,879	$	19,854,403	$	30,358,476
Gross profit		19,729,379		9,453,477		10,275,902
Net income		4,615,954		3,107,457		1,508,497
Northern Technologies International Corporation’s share of equity in income from joint ventures		2,318,135		1,547,944		770,191
Northern Technologies International Corporation's dividends received from joint ventures	$	3,464,736	$	2,459,500	$	1,005,236

	As of August 31, 2022
	Total		EXCOR		All Other
Current assets	$	52,428,831	$	26,047,914	$	26,380,917
Total assets		55,854,457		27,932,532		27,921,925
Current liabilities		10,981,833		2,943,895		8,037,938
Noncurrent liabilities		1,138,980		—		1,138,980
Joint ventures’ equity		43,733,644		24,988,637		18,745,007
Northern Technologies International Corporation’s share of joint ventures’ equity		21,814,754		12,494,320		9,320,434
Northern Technologies International Corporation’s share of joint ventures’ undistributed earnings	$	21,256,923	$	12,463,415	$	8,793,508

	Three Months Ended February 28, 2022
	Total		EXCOR		All Other
Net sales	$	24,601,767	$	9,312,434	$	15,289,333
Gross profit		9,845,002		4,658,450		5,186,552
Net income		1,851,591		1,170,187		681,404
Northern Technologies International Corporation’s share of equity in income from joint ventures		922,832		589,048		333,784
Northern Technologies International Corporation's dividends received from joint ventures	$	320,365		—	$	320,365

	Six Months Ended February 28, 2022
	Total		EXCOR		All Other
Net sales	$	51,624,762	$	20,612,662	$	31,012,100
Gross profit		20,877,961		10,127,436		10,750,525
Net income		4,629,196		2,991,734		1,637,462
Northern Technologies International Corporation’s share of equity in income from joint ventures		2,297,581		1,499,821		797,760
Northern Technologies International Corporation's dividends received from joint ventures	$	5,362,636	$	4,255,200	$	1,107,436