Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
May 31, 2018 | Jul. 13, 2018 | |
Document Information [Line Items] | ||
Entity Registrant Name | Northern Technologies International Corporation | |
Entity Central Index Key | 875,582 | |
Trading Symbol | ntic | |
Current Fiscal Year End Date | --08-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Well-known Seasoned Issuer | No | |
Entity Common Stock, Shares Outstanding (in shares) | 4,541,304 | |
Document Type | 10-Q | |
Document Period End Date | May 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Consolidated Balance Sheets (Cu
Consolidated Balance Sheets (Current Period Unaudited) - USD ($) | May 31, 2018 | Aug. 31, 2017 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 4,610,325 | $ 6,360,201 |
Available for sale securities | 3,282,915 | 3,766,984 |
Receivables: | ||
Trade excluding joint ventures, less allowance for doubtful accounts of $50,000 at May 31, 2018 and $40,000 at August 31, 2017 | 8,692,708 | 5,912,631 |
Trade joint ventures | 597,805 | 691,752 |
Fees for services provided to joint ventures | 1,352,249 | 1,302,944 |
Income taxes | 369,136 | 137,256 |
Inventories | 9,174,743 | 7,456,552 |
Prepaid expenses | 1,081,190 | 439,298 |
Total current assets | 29,161,071 | 26,067,618 |
PROPERTY AND EQUIPMENT, NET | 7,233,307 | 7,359,662 |
OTHER ASSETS: | ||
Investments in joint ventures | 22,412,792 | 20,035,074 |
Deferred income taxes | 1,056,565 | 1,756,565 |
Patents and trademarks, net | 1,196,222 | 1,322,089 |
Other | 153,846 | 71,685 |
Total other assets | 24,819,425 | 23,185,413 |
Total assets | 61,213,803 | 56,612,693 |
CURRENT LIABILITIES: | ||
Accounts payable | 3,316,169 | 2,676,610 |
Income taxes payable | 112,686 | |
Accrued liabilities: | ||
Payroll and related benefits | 1,804,451 | 1,540,386 |
Other | 1,115,595 | 677,621 |
Total current liabilities | 6,348,901 | 4,894,617 |
COMMITMENTS AND CONTINGENCIES (Note 12) | ||
EQUITY: | ||
Preferred stock, no par value; authorized 10,000 shares; none issued and outstanding | ||
Common stock, $0.02 par value per share; authorized 15,000,000 shares as of May 31, 2018 and 10,000,000 shares as of August 31, 2017; issued and outstanding 4,541,304 and 4,535,018, respectively | 90,826 | 90,700 |
Additional paid-in capital | 14,516,510 | 14,163,509 |
Retained earnings | 40,275,326 | 37,077,483 |
Accumulated other comprehensive loss | (3,058,672) | (2,471,064) |
Stockholders’ equity | 51,823,990 | 48,860,628 |
Non-controlling interest | 3,040,912 | 2,857,448 |
Total equity | 54,864,902 | 51,718,076 |
Total liabilities and equity | $ 61,213,803 | $ 56,612,693 |
Consolidated Balance Sheets (C3
Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ / shares in Thousands | May 31, 2018 | Aug. 31, 2017 |
Trade allowance | $ 50,000 | $ 40,000 |
Preferred stock, par value (in dollars per share) | $ 0 | $ 0 |
Preferred stock, shares authorized (in shares) | 10,000 | 10,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
May 31, 2018 | May 31, 2017 | May 31, 2018 | May 31, 2017 | |
NET SALES: | ||||
Net sales, excluding joint ventures | $ 12,044,513 | $ 9,360,883 | $ 34,479,773 | $ 26,552,434 |
Net sales, to joint ventures | 879,324 | 862,136 | 2,201,077 | 2,115,511 |
Total net sales | 12,923,837 | 10,223,019 | 36,680,850 | 28,667,945 |
Cost of goods sold | 8,592,366 | 6,774,001 | 24,493,672 | 19,256,953 |
Gross profit | 4,331,471 | 3,449,018 | 12,187,178 | 9,410,992 |
JOINT VENTURE OPERATIONS: | ||||
Equity in income from joint ventures | 2,246,066 | 1,686,016 | 5,793,391 | 4,343,159 |
Fees for services provided to joint ventures | 1,508,500 | 1,442,048 | 4,624,532 | 3,941,667 |
Total joint venture operations | 3,754,566 | 3,128,064 | 10,417,923 | 8,284,826 |
OPERATING EXPENSES: | ||||
Selling expenses | 2,784,694 | 2,430,824 | 8,028,279 | 6,716,390 |
General and administrative expenses | 1,987,785 | 1,682,669 | 6,012,746 | 5,996,977 |
Research and development expenses | 860,347 | 733,651 | 2,581,824 | 2,118,210 |
Total operating expenses | 5,632,826 | 4,847,144 | 16,622,849 | 14,831,577 |
OPERATING INCOME | 2,453,211 | 1,729,938 | 5,982,252 | 2,864,241 |
INTEREST INCOME | 35,630 | 10,996 | 84,569 | 19,075 |
INTEREST EXPENSE | (3,139) | (7,409) | (14,007) | (15,502) |
INCOME BEFORE INCOME TAX EXPENSE | 2,485,702 | 1,733,525 | 6,052,814 | 2,867,814 |
INCOME TAX EXPENSE | 181,683 | 237,801 | 1,128,583 | 480,423 |
NET INCOME | 2,304,019 | 1,495,724 | 4,924,231 | 2,387,391 |
NET INCOME ATTRIBUTABLE TO NON-CONTROLLING INTERESTS | 161,267 | 143,308 | 365,006 | 350,370 |
NET INCOME ATTRIBUTABLE TO NTIC | $ 2,142,752 | $ 1,352,416 | $ 4,559,225 | $ 2,037,021 |
NET INCOME ATTRIBUTABLE TO NTIC PER COMMON SHARE: | ||||
Basic (in dollars per share) | $ 0.47 | $ 0.30 | $ 1 | $ 0.45 |
Diluted (in dollars per share) | $ 0.46 | $ 0.30 | $ 0.98 | $ 0.45 |
WEIGHTED AVERAGE COMMON SHARES ASSUMED OUTSTANDING: | ||||
Basic (in shares) | 4,539,353 | 4,526,771 | 4,538,838 | 4,528,523 |
Diluted (in shares) | 4,707,032 | 4,591,527 | 4,663,847 | 4,571,395 |
CASH DIVIDENDS DECLARED PER COMMON SHARE (in dollars per share) | $ 0.10 | $ 0 | $ 0.30 | $ 0 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
May 31, 2018 | May 31, 2017 | May 31, 2018 | May 31, 2017 | |
NET INCOME | $ 2,304,019 | $ 1,495,724 | $ 4,924,231 | $ 2,387,391 |
OTHER COMPREHENSIVE INCOME (LOSS) – FOREIGN CURRENCY TRANSLATION ADJUSTMENT | (1,011,686) | 780,726 | (569,151) | (239,095) |
COMPREHENSIVE INCOME | 1,292,333 | 2,276,450 | 4,355,080 | 2,148,296 |
COMPREHENSIVE INCOME ATTRIBUTABLE TO NON-CONTROLLING INTERESTS | 137,501 | 160,223 | 383,463 | 353,423 |
COMPREHENSIVE INCOME ATTRIBUTABLE TO NTIC | $ 1,154,832 | $ 2,116,227 | $ 3,971,617 | $ 1,794,873 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
May 31, 2018 | May 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 4,924,231 | $ 2,387,391 |
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | ||
Stock-based compensation | 309,743 | 293,748 |
Depreciation expense | 631,399 | 580,962 |
Amortization expense | 188,460 | 89,274 |
Gain on disposal of assets | (11,662) | |
Equity in income from joint ventures | (5,793,391) | (4,343,159) |
Dividends received from joint ventures | 2,941,807 | 5,179,786 |
Deferred income taxes | 700,000 | 24,939 |
Changes in current assets and liabilities: | ||
Trade, excluding joint ventures | (2,827,606) | (1,442,714) |
Trade, joint ventures | 93,947 | (503,863) |
Fees for services provided to joint ventures | (49,305) | 181,610 |
Income taxes | (267,131) | (154,171) |
Inventories | (1,773,085) | (155,011) |
Prepaid expenses and other | (718,839) | 19,197 |
Accounts payable | 728,657 | 816,845 |
Income tax payable | 104,643 | (3,466) |
Accrued liabilities | 676,138 | (145,202) |
Net cash (used in) provided by operating activities | (141,994) | 2,826,166 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of available for sale securities | (1,018,596) | (3,013,572) |
Proceeds from the sale of available for sale securities | 1,502,665 | 1,500,756 |
Additions to property and equipment | (500,924) | (760,847) |
Additions to patents | (62,594) | (124,780) |
Net cash used in investing activities | (79,449) | (2,398,443) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Dividend received by non-controlling interest | (200,000) | (200,000) |
Repurchase of common stock | (196,164) | |
Dividends paid on NTIC common stock | (1,361,382) | |
Proceeds from employee stock purchase plan | 27,951 | 46,475 |
Proceeds from option exercises | 15,433 | 41,000 |
Net cash used in financing activities | (1,517,998) | (308,689) |
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS: | (10,435) | (14,144) |
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (1,749,876) | 104,890 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 6,360,201 | 3,395,274 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ 4,610,325 | $ 3,500,164 |
Note 1 - Interim Financial Info
Note 1 - Interim Financial Information | 9 Months Ended |
May 31, 2018 | |
Notes to Financial Statements | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | 1. In the opinion of management, the accompanying unaudited consolidated financial statements contain all necessary adjustments, which are of a normal recurring nature, and present fairly the consolidated financial position of Northern Technologies International Corporation and its subsidiaries (the Company) as of May 31, 2018 August 31, 2017 three nine May 31, 2018 2017 nine May 31, 2018 2017, These consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes contained in the Company’s annual report on Form 10 August 31, 2017. Operating results for the three nine May 31, 2018 not may August 31, 2018. The Company evaluates events occurring after the date of the consolidated financial statements requiring recording or disclosure in the consolidated financial statements. |
Note 2 - Accounting Pronounceme
Note 2 - Accounting Pronouncements | 9 Months Ended |
May 31, 2018 | |
Notes to Financial Statements | |
Description of New Accounting Pronouncements Not yet Adopted [Text Block] | 2. Accounting PronouncementS Recently Issued Accounting Pronouncements In May 2014, 606, Revenue from Contracts with Customers 606. five September 1, 2018. 606, not During February 2016, No. 2016 02, Leases No. 2016 02 12 No. 2016 02 December 15, 2018, first 2020. No. 2016 02 In August 2016, No. 2016 15, Statement of Cash Flows, Classification of Certain Cash Receipts and Cash Payments. No. 2016 15 zero No. 2016 15 December 15, 2017. No. 2016 15 In February 2018, No. 2018 02, Income Statement – Reporting Comprehensive Income (Topic 220 No. 2018 02, not No. 2018 02 2020, In December 2017, No. 118 No. 2018 05, Income Taxes 740 No. 118” may not December 22, 2017. No. 118 one No. 118 not no No. 118 15 Although there are several other new accounting pronouncements issued or proposed by the FASB, which the Company has adopted or will adopt, as applicable, the Company does not |
Note 3 - Inventories
Note 3 - Inventories | 9 Months Ended |
May 31, 2018 | |
Notes to Financial Statements | |
Inventory Disclosure [Text Block] | 3. Inventories consisted of the following: May 31, 2018 August 31, 2017 Production materials $ 1,296,106 $ 1,747,189 Finished goods 7,878,637 5,709,363 $ 9,174,743 $ 7,456,552 |
Note 4 - Property and Equipment
Note 4 - Property and Equipment, Net | 9 Months Ended |
May 31, 2018 | |
Notes to Financial Statements | |
Property, Plant and Equipment Disclosure [Text Block] | 4. Property and equipment, net consisted of the following: May 31, 2018 August 31, 2017 Land $ 310,365 $ 310,365 Buildings and improvements 6,903,231 6,847,177 Machinery and equipment 4,554,692 4,171,387 11,768,288 11,328,929 Less accumulated depreciation (4,534,981 ) (3,969,267 ) $ 7,233,307 $ 7,359,662 |
Note 5 - Patents and Trademarks
Note 5 - Patents and Trademarks, Net | 9 Months Ended |
May 31, 2018 | |
Notes to Financial Statements | |
Intangible Assets Disclosure [Text Block] | 5. Patents and trademarks, net consisted of the following: May 31, 2018 August 31, 2017 Patents and trademarks $ 2,800,553 $ 2,737,959 Less accumulated amortization (1,604,331 ) (1,415,870 ) $ 1,196,222 $ 1,322,089 Patent and trademark costs are amortized over seven $ 240,000 five |
Note 6 - Investments in Joint V
Note 6 - Investments in Joint Ventures | 9 Months Ended |
May 31, 2018 | |
Notes to Financial Statements | |
Equity Method Investments and Joint Ventures Disclosure [Text Block] | 6. 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 recorded that remain on the consolidated balance sheet on sales 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 May 31, 2018 Total EXCOR All Other Current assets $ 58,113,904 $ 25,734,914 $ 32,378,990 Total assets 62,004,849 27,838,358 34,166,491 Current liabilities 16,622,611 3,830,246 12,792,365 Noncurrent liabilities 110,926 - 110,926 Joint ventures’ equity 45,271,314 24,008,112 21,263,202 Northern Technologies International Corporation’s share of joint ventures’ equity 22,412,792 12,004,058 10,408,734 Northern Technologies International Corporation’s share of joint ventures’ undistributed earnings 20,383,580 11,973,153 8,410,427 Three Months Ended May 31, 2018 Total EXCOR All Other Net sales $ 31,480,885 $ 12,219,414 $ 19,261,471 Gross profit 14,209,819 6,823,609 7,386,210 Net income 4,540,968 3,113,660 1,427,308 Northern Technologies International Corporation’s share of equity in income from joint ventures $ 2,246,066 $ 1,558,243 $ 687,823 Nine Months Ended May 31, 2018 Total EXCOR All Other Net sales $ 90,200,146 $ 35,450,664 $ 54,749,482 Gross profit 40,529,217 19,315,099 21,214,118 Net income 11,753,467 8,272,237 3,481,230 Northern Technologies International Corporation’s share of equity in income from joint ventures $ 5,793,391 $ 4,138,814 $ 1,654,577 Northern Technologies International Corporation’s dividends received from joint ventures $ 2,941,807 $ 1,780,392 $ 1,161,415 As of August 31, 2017 Total EXCOR All Other Current assets $ 51,518,210 $ 22,142,514 $ 29,375,696 Total assets 55,633,891 24,301,194 31,332,697 Current liabilities 15,118,074 4,469,567 10,648,507 Noncurrent liabilities 181,210 — 181,210 Joint ventures’ equity 40,334,607 19,831,627 20,502,980 Northern Technologies International Corporation’s share of joint ventures’ equity 20,035,074 9,915,816 10,119,258 Northern Technologies International Corporation’s share of joint ventures’ undistributed earnings 17,960,860 9,884,911 8,075,949 Northern Technologies International Corporation’s dividends received from joint ventures $ 6,377,054 $ 5,379,062 $ 997,992 Three Months Ended May 31, 2017 Total EXCOR All Other Net sales $ 25,935,169 $ 9,884,546 $ 16,050,623 Gross profit 11,517,711 5,271,028 6,246,683 Net income 3,379,883 2,166,435 1,213,448 Northern Technologies International Corporation’s share of equity in income from joint ventures $ 1,686,016 $ 1,083,494 $ 602,522 Nine Months Ended May 31, 2017 Total EXCOR All Other Net sales $ 73,098,215 $ 28,169,978 $ 44,928,237 Gross profit 32,376,247 15,032,724 17,343,523 Net income 8,562,834 6,184,181 2,378,653 Northern Technologies International Corporation’s share of equity in income from joint ventures 4,343,159 3,089,935 1,253,224 Northern Technologies International Corporation’s dividends received from joint ventures $ 5,179,786 $ 4,240,400 $ 939,386 The Company did not three nine May 31, 2018 2017. |
Note 7 - Corporate Debt
Note 7 - Corporate Debt | 9 Months Ended |
May 31, 2018 | |
Notes to Financial Statements | |
Debt Disclosure [Text Block] | 7. The Company has a revolving line of credit with PNC Bank, National Association (PNC Bank) of $3,000,000. No May 31, 2018 August 31, 2017. 2.15% The line of credit is governed under a loan agreement. The loan agreement contains standard covenants, including affirmative financial covenants, such as the maintenance of a minimum fixed charge coverage ratio, and negative covenants, which, among other things, limit the incurrence of additional indebtedness, loans and equity investments, disposition of assets, mergers and consolidations and other matters customarily restricted in such agreements. Under the loan agreement, the Company is subject to a minimum fixed charge coverage ratio of 1.10:1.00. May 31, 2018, The revolving credit facility allows the Company to request that PNC Bank issue letters of credit up to $1,200,000. not May 31, 2018 August 31, 2017 not As of May 31, 2018, August 31, 2017, $88,831 $89,543, 2020 2022. On January 5, 2018, January 7, 2019. |
Note 8 - Stockholders' Equity
Note 8 - Stockholders' Equity | 9 Months Ended |
May 31, 2018 | |
Notes to Financial Statements | |
Stockholders' Equity Note Disclosure [Text Block] | 8. During the nine May 31, 2018, Declaration Date Amount Record Date Payable Date November 20, 2017 $0.10 December 8, 2017 December 21, 2017 January 24, 2018 $0.10 February 8, 2018 February 21, 2018 April 25, 2018 $0.10 May 9, 2018 May 23, 2018 During the nine May 31, 2018, no During the nine May 31, 2018, 4,410 $11.59 The Company granted stock options under the Northern Technologies International Corporation Amended and Restated 2007 2007 47,252 nine May 31, 2018. $18.35, The Company issued 891 3,029 September 1, 2017 2016, 985 1098 March 1, 2018 2017, The Company held its 2018 2018 January 12, 2018. 2018 10,000,000 15,000,000 January 16, 2018 may 2018 14A November 27, 2017 ( 2018 not 2018 may 2018 not not 5,000,000 During the nine May 31, 2017, 14,525 $13.51 During the nine May 31, 2017, 4,000 $10.25 During the nine May 31, 2017, 2007 56,677 $13.40, |
Note 9 - Net Income Per Common
Note 9 - Net Income Per Common Share | 9 Months Ended |
May 31, 2018 | |
Notes to Financial Statements | |
Earnings Per Share [Text Block] | 9. Basic net income per common share is computed by dividing net income by the weighted average number of common shares outstanding. Diluted net income per share assumes the exercise of stock options using the treasury stock method, if dilutive. The following is a reconciliation of the earnings per share computation: Three Months Ended Nine Months Ended Numerators: May 31, 2018 May 31, 2017 May 31, 2018 May 31, 2017 Net income attributable to NTIC $ 2,142,752 $ 1,352,416 $ 4,559,225 $ 2,037,021 Denominators: Basic – weighted shares outstanding 4,539,353 4,526,771 4,538,838 4,528,523 Weighted shares assumed upon exercise of stock options 167,679 64,756 125,009 42,872 Diluted – weighted shares outstanding 4,707,032 4,591,527 4,663,847 4,571,395 Basic income per share: $ 0.47 $ 0.30 $ 1.00 $ 0.45 Diluted income per share: $ 0.46 $ 0.30 $ 0.98 $ 0.45 The dilutive impact summarized above relates to the periods when the average market price of the Company’s common stock exceeded the exercise price of the potentially dilutive option securities granted. Earnings per common share were based on the weighted average number of common shares outstanding during the periods when computing the basic earnings per share. When dilutive, stock options are included as equivalents using the treasury stock market method when computing the diluted earnings per share. There were no three nine May 31, 2018. three nine May 31, 2017 48,067 |
Note 10 - Stock-based Compensat
Note 10 - Stock-based Compensation | 9 Months Ended |
May 31, 2018 | |
Notes to Financial Statements | |
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | 10. The Company has two 2007 The 2007 2007 800,000 2007 2007 ten three four one May 31, 2018, 2007 The maximum number of shares of common stock of the Company available for issuance under the ESPP is 100,000 six September 1 March 1 90% may not 423 1986, The Company granted options to purchase an aggregate of 47,252 56,677 nine May 31, 2018 2017, $309,473 $293,748 nine May 31, 2018 2017, May 31, 2018, not $322,402. $103,267 2018, $153,901 $65,234 2019 2020, May 31, 2018. The fair value of each option grant is estimated on the grant date using the Black-Scholes option-pricing model with the following assumptions and results for the grants: Nine Months Ended May 31, 2018 May 31, 2017 Dividend yield 2.18% 0.00% Expected volatility 45.9% 46.4% Expected life of option 10 years 10 years Average risk-free interest rate 1.87% 1.63% The weighted average per share fair value of options granted during the nine May 31, 2018 2017 $7.75 $7.69, May 31, 2018 2017 6.52 6.73 |
Note 11 - Segment and Geographi
Note 11 - Segment and Geographic Information | 9 Months Ended |
May 31, 2018 | |
Notes to Financial Statements | |
Segment Reporting Disclosure [Text Block] | 11. Segment Information The Company’s chief operating decision maker (CODM) is its Chief Executive Officer. The Company’s business is organized into two 40 The following table sets forth the Company’s net sales for the three nine May 31, 2018 2017 Three Months Ended Nine Months Ended May 31, 2018 May 31, 2017 May 31, 2018 May 31, 2017 ZERUST® net sales $ 10,382,884 $ 8,368,487 $ 30,102,080 $ 23,681,192 Natur-Tec® net sales 2,540,953 1,854,532 6,578,770 4,986,753 Total net sales $ 12,923,837 $ 10,223,019 $ 36,680,850 $ 28,667,945 The following table sets forth the Company’s cost of goods sold for the three nine May 31, 2018 2017 Three Months Ended Nine Months Ended May 31, 2018 % of Segment Sales* May 31, 2017 % of Segment Sales* May 31, 2018 % of Segment Sales* May 31, 2017 % of Segment Sales* Direct cost of goods sold ZERUST® $ 6,139,699 59.1 % $ 4,834,355 57.8 % $ 17,948,941 59.6 % $ 13,788,416 58.2 % Natur-Tec® 1,812,084 71.3 % 1,327,323 71.6 % 4,738,523 72.0 % 3,608,722 72.4 % Indirect cost of goods sold 640,583 — 612,323 — 1,806,208 — 1,859,815 — Total net cost of goods sold $ 8,592,366 $ 6,774,001 $ 24,493,672 $ 19,256,953 ______________________________________ * The percent of segment 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 Geographic Information Net sales by geographic location for the three nine May 31, 2018 2017 Three Months Ended Nine Months Ended May 31, 2018 May 31, 2017 May 31, 2018 May 31, 2017 Inside the U.S.A. to unaffiliated customers $ 7,434,991 $ 5,967,459 $ 19,771,031 $ 16,363,291 Outside the U.S.A. to: Joint ventures in which the Company is a shareholder directly and indirectly 879,324 862,136 2,201,077 2,115,511 Unaffiliated customers 4,609,522 3,393,424 14,708,742 10,189,143 $ 12,923,837 $ 10,223,019 $ 36,680,850 $ 28,667,945 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 nine May 31, 2018 2017 Three Months Ended May 31, 2018 % of Total Fees for Services Provided to Joint Ventures May 31, 2017 % of Total Fees for Services Provided to Joint Ventures Germany $ 224,366 14.9 % $ 212,257 14.7 % Poland 185,107 12.3 % 180,969 12.6 % Japan 183,335 12.2 % 153,903 10.7 % Sweden 155,588 10.3 % 150,139 10.4 % France 146,949 9.7 % 112,455 7.8 % Thailand 110,894 7.4 % 104,771 7.3 % Czech Republic 100,131 6.6 % 74,135 5.1 % Korea 96,574 6.4 % 92,954 6.4 % Finland 81,402 5.4 % 78,012 5.4 % United Kingdom 80,931 5.4 % 87,768 6.1 % India 49,778 3.3 % 90,469 6.3 % Other 93,445 6.1 % 104,216 7.2 % $ 1,508,500 100.0 % $ 1,442,048 100.0 % Nine Months Ended May 31, 2018 % of Total Fees for Services Provided to Joint Ventures May 31, 2017 % of Total Fees for Services Provided to Joint Ventures Germany $ 680,939 14.7 % $ 614,766 15.6 % Poland 598,221 13.0 % 483,626 12.3 % Japan 529,412 11.4 % 445,662 11.3 % Sweden 448,707 9.7 % 314,664 8.0 % France 416,913 9.0 % 293,240 7.4 % Thailand 325,205 7.0 % 339,852 8.6 % Czech Republic 283,193 6.1 % 218,249 5.5 % Korea 279,524 6.0 % 284,435 7.2 % United Kingdom 275,137 6.0 % 227,140 5.8 % India 274,980 5.9 % 229,200 5.8 % Finland 247,574 5.4 % 221,294 5.6 % Other 264,727 5.8 % 269,539 6.9 % $ 4,624,532 100.0 % $ 3,941,667 100.0 % The geographical distribution of key financial statement data is as follows: At May 31, 2018 At August 31, 2017 China $ 251,848 $ 228,458 Brazil 81,161 54,646 Germany 10,155 14,171 India 21,628 14,712 United States 6,868,515 7,047,675 Total property and equipment $ 7,233,307 $ 7,359,662 Three Months Ended Nine Months Ended May 31, 2018 May 31, 2017 May 31, 2018 May 31, 2017 China $ 3,069,232 $ 1,695,508 $ 9,176,174 $ 4,991,807 Brazil 853,675 565,089 2,310,131 1,683,255 India 564,339 323,551 1,642,633 1,057,132 Germany 312,057 161,139 556,859 378,635 Other 955,418 583,752 2,318,569 2,115,511 United States 7,169,116 6,893,980 20,676,484 18,441,605 Total net sales $ 12,923,837 $ 10,223,019 $ 36,680,850 $ 28,667,945 Total property and equipment 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 All joint venture operations, including equity in income, fees for services and related dividends, are primarily related to ZERUST® products and services. |
Note 12 - Commitments and Conti
Note 12 - Commitments and Contingencies | 9 Months Ended |
May 31, 2018 | |
Notes to Financial Statements | |
Commitments and Contingencies Disclosure [Text Block] | 12. On August 31, 2017, August 31, 2018. 2018 75% 2018 2018 25% may 2018. $1,380,000 nine May 31, 2018 $600,000 nine May 31, 2017. Three joint ventures (consisting of the Company’s joint ventures in South Korea, India and United States) accounted for 51.8% May 31, 2018, three 60.7% August 31, 2017. From time to time, the Company is subject to various other claims and legal actions in the ordinary course of its business. The Company records a liability in its consolidated financial statements for costs related to claims, including future legal costs, settlements and judgments, where the Company has assessed that a loss is probable and an amount could be reasonably estimated. If the reasonable estimate of a probable loss is a range, the Company records the most probable estimate of the loss or the minimum amount when no not not may May 31, 2018, not |
Note 13 - Fair Value Measuremen
Note 13 - Fair Value Measurements | 9 Months Ended |
May 31, 2018 | |
Notes to Financial Statements | |
Fair Value Measurement and Measurement Inputs, Recurring and Nonrecurring [Text Block] | 13. Fair Value Measurements Assets and liabilities that are measured at fair value on a recurring basis primarily relate to marketable equity securities. These items are marked-to-market at each reporting period. The following tables provide information by level for assets and liabilities that are measured at fair value on a recurring basis: Fair Value Measurements Fair value as of Level 1 Level 2 Level 3 Available for sale securities $ 3,282,915 $ 3,282,915 $ — $ — Fair Value Measurements Fair value as of Level 1 Level 2 Level 3 Available for sale securities $ 3,766,984 $ 3,766,984 $ — $ — There were no 1, 2, 3 three nine May 31, 2018 2017. |
Note 14 - Supplemental Cash Flo
Note 14 - Supplemental Cash Flow Information | 9 Months Ended |
May 31, 2018 | |
Notes to Financial Statements | |
Cash Flow, Supplemental Disclosures [Text Block] | 14. Supplemental disclosures of cash flow information consisted of: Three Months Ended May 31, 2018 May 31, 2017 Cash paid for interest $ 3,139 $ 7,409 Cash paid for income taxes 45,000 — Nine Months Ended May 31, 2018 May 31, 2017 Cash paid for interest $ 14,007 $ 15,502 Cash paid for income taxes 45,000 — |
Note 15 - Income Taxes
Note 15 - Income Taxes | 9 Months Ended |
May 31, 2018 | |
Notes to Financial Statements | |
Income Tax Disclosure [Text Block] | 15. On December 22, 2017, August 31 2018, not 35% 21% January 1, 2018, December 31, 2017, one 25.7% August 31, 2018 35% 21% January 1, 2018. The Company recognized the income tax effects of the Tax Reform Act in its 2018 No. 118, 740, Income Taxes 740 740 The Company recorded income tax expense during the three nine May 31, 2018 $181,683 $1,128,583, $237,801 $480,423 three nine May 31, 2017. The Company measures deferred tax assets and liabilities using enacted tax rates that will apply in the years in which the temporary differences are expected to be recovered or paid. Accordingly, the Company’s deferred tax assets and liabilities were re-measured to reflect the reduction in the U.S. corporate income tax rate from 35% 21% January 1, 2018, $700,000 nine May 31, 2018 $700,000 May 31, 2018 August 31, 2017. $700,000 may No three May 31, 2018. The one $489,000, not zero nine May 31, 2018. $489,000 one December 2017 No three May 31, 2018. The Company continues to analyze the impact of other provisions of the Tax Reform Act on its financial statements and operations, including the impact of the global intangible low-taxed income (GILTI) rules, and the impact of the Tax Reform Act on the Company’s indefinite reinvestment assertion with respect to the undistributed earnings of certain foreign subsidiaries and joint ventures. Any additional impacts from the enactment of the Tax Reform Act will be recorded as they are identified during the measurement period as provided for in accordance with SAB No. 118. |
Note 3 - Inventories (Tables)
Note 3 - Inventories (Tables) | 9 Months Ended |
May 31, 2018 | |
Notes Tables | |
Schedule of Inventory, Current [Table Text Block] | May 31, 2018 August 31, 2017 Production materials $ 1,296,106 $ 1,747,189 Finished goods 7,878,637 5,709,363 $ 9,174,743 $ 7,456,552 |
Note 4 - Property and Equipme23
Note 4 - Property and Equipment, Net (Tables) | 9 Months Ended |
May 31, 2018 | |
Notes Tables | |
Property, Plant and Equipment [Table Text Block] | May 31, 2018 August 31, 2017 Land $ 310,365 $ 310,365 Buildings and improvements 6,903,231 6,847,177 Machinery and equipment 4,554,692 4,171,387 11,768,288 11,328,929 Less accumulated depreciation (4,534,981 ) (3,969,267 ) $ 7,233,307 $ 7,359,662 |
Note 5 - Patents and Trademar24
Note 5 - Patents and Trademarks, Net (Tables) | 9 Months Ended |
May 31, 2018 | |
Notes Tables | |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | May 31, 2018 August 31, 2017 Patents and trademarks $ 2,800,553 $ 2,737,959 Less accumulated amortization (1,604,331 ) (1,415,870 ) $ 1,196,222 $ 1,322,089 |
Note 6 - Investments in Joint25
Note 6 - Investments in Joint Ventures (Tables) | 9 Months Ended |
May 31, 2018 | |
Notes Tables | |
Condensed Balance Sheet [Table Text Block] | As of May 31, 2018 Total EXCOR All Other Current assets $ 58,113,904 $ 25,734,914 $ 32,378,990 Total assets 62,004,849 27,838,358 34,166,491 Current liabilities 16,622,611 3,830,246 12,792,365 Noncurrent liabilities 110,926 - 110,926 Joint ventures’ equity 45,271,314 24,008,112 21,263,202 Northern Technologies International Corporation’s share of joint ventures’ equity 22,412,792 12,004,058 10,408,734 Northern Technologies International Corporation’s share of joint ventures’ undistributed earnings 20,383,580 11,973,153 8,410,427 As of August 31, 2017 Total EXCOR All Other Current assets $ 51,518,210 $ 22,142,514 $ 29,375,696 Total assets 55,633,891 24,301,194 31,332,697 Current liabilities 15,118,074 4,469,567 10,648,507 Noncurrent liabilities 181,210 — 181,210 Joint ventures’ equity 40,334,607 19,831,627 20,502,980 Northern Technologies International Corporation’s share of joint ventures’ equity 20,035,074 9,915,816 10,119,258 Northern Technologies International Corporation’s share of joint ventures’ undistributed earnings 17,960,860 9,884,911 8,075,949 Northern Technologies International Corporation’s dividends received from joint ventures $ 6,377,054 $ 5,379,062 $ 997,992 |
Condensed Income Statement [Table Text Block] | Three Months Ended May 31, 2018 Total EXCOR All Other Net sales $ 31,480,885 $ 12,219,414 $ 19,261,471 Gross profit 14,209,819 6,823,609 7,386,210 Net income 4,540,968 3,113,660 1,427,308 Northern Technologies International Corporation’s share of equity in income from joint ventures $ 2,246,066 $ 1,558,243 $ 687,823 Nine Months Ended May 31, 2018 Total EXCOR All Other Net sales $ 90,200,146 $ 35,450,664 $ 54,749,482 Gross profit 40,529,217 19,315,099 21,214,118 Net income 11,753,467 8,272,237 3,481,230 Northern Technologies International Corporation’s share of equity in income from joint ventures $ 5,793,391 $ 4,138,814 $ 1,654,577 Northern Technologies International Corporation’s dividends received from joint ventures $ 2,941,807 $ 1,780,392 $ 1,161,415 Three Months Ended May 31, 2017 Total EXCOR All Other Net sales $ 25,935,169 $ 9,884,546 $ 16,050,623 Gross profit 11,517,711 5,271,028 6,246,683 Net income 3,379,883 2,166,435 1,213,448 Northern Technologies International Corporation’s share of equity in income from joint ventures $ 1,686,016 $ 1,083,494 $ 602,522 Nine Months Ended May 31, 2017 Total EXCOR All Other Net sales $ 73,098,215 $ 28,169,978 $ 44,928,237 Gross profit 32,376,247 15,032,724 17,343,523 Net income 8,562,834 6,184,181 2,378,653 Northern Technologies International Corporation’s share of equity in income from joint ventures 4,343,159 3,089,935 1,253,224 Northern Technologies International Corporation’s dividends received from joint ventures $ 5,179,786 $ 4,240,400 $ 939,386 |
Note 8 - Stockholders' Equity (
Note 8 - Stockholders' Equity (Tables) | 9 Months Ended |
May 31, 2018 | |
Notes Tables | |
Dividends Declared [Table Text Block] | Declaration Date Amount Record Date Payable Date November 20, 2017 $0.10 December 8, 2017 December 21, 2017 January 24, 2018 $0.10 February 8, 2018 February 21, 2018 April 25, 2018 $0.10 May 9, 2018 May 23, 2018 |
Note 9 - Net Income Per Commo27
Note 9 - Net Income Per Common Share (Tables) | 9 Months Ended |
May 31, 2018 | |
Notes Tables | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | Three Months Ended Nine Months Ended Numerators: May 31, 2018 May 31, 2017 May 31, 2018 May 31, 2017 Net income attributable to NTIC $ 2,142,752 $ 1,352,416 $ 4,559,225 $ 2,037,021 Denominators: Basic – weighted shares outstanding 4,539,353 4,526,771 4,538,838 4,528,523 Weighted shares assumed upon exercise of stock options 167,679 64,756 125,009 42,872 Diluted – weighted shares outstanding 4,707,032 4,591,527 4,663,847 4,571,395 Basic income per share: $ 0.47 $ 0.30 $ 1.00 $ 0.45 Diluted income per share: $ 0.46 $ 0.30 $ 0.98 $ 0.45 |
Note 10 - Stock-based Compens28
Note 10 - Stock-based Compensation (Tables) | 9 Months Ended |
May 31, 2018 | |
Notes Tables | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | Nine Months Ended May 31, 2018 May 31, 2017 Dividend yield 2.18% 0.00% Expected volatility 45.9% 46.4% Expected life of option 10 years 10 years Average risk-free interest rate 1.87% 1.63% |
Note 11 - Segment and Geograp29
Note 11 - Segment and Geographic Information (Tables) | 9 Months Ended |
May 31, 2018 | |
Notes Tables | |
Reconciliation of Revenue from Segments to Consolidated [Table Text Block] | Three Months Ended Nine Months Ended May 31, 2018 May 31, 2017 May 31, 2018 May 31, 2017 ZERUST® net sales $ 10,382,884 $ 8,368,487 $ 30,102,080 $ 23,681,192 Natur-Tec® net sales 2,540,953 1,854,532 6,578,770 4,986,753 Total net sales $ 12,923,837 $ 10,223,019 $ 36,680,850 $ 28,667,945 |
Reconciliation of Cost of Goods Sold from Segments to Consolidated [Table Text Block] | Three Months Ended Nine Months Ended May 31, 2018 % of Segment Sales* May 31, 2017 % of Segment Sales* May 31, 2018 % of Segment Sales* May 31, 2017 % of Segment Sales* Direct cost of goods sold ZERUST® $ 6,139,699 59.1 % $ 4,834,355 57.8 % $ 17,948,941 59.6 % $ 13,788,416 58.2 % Natur-Tec® 1,812,084 71.3 % 1,327,323 71.6 % 4,738,523 72.0 % 3,608,722 72.4 % Indirect cost of goods sold 640,583 — 612,323 — 1,806,208 — 1,859,815 — Total net cost of goods sold $ 8,592,366 $ 6,774,001 $ 24,493,672 $ 19,256,953 |
Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area [Table Text Block] | Three Months Ended Nine Months Ended May 31, 2018 May 31, 2017 May 31, 2018 May 31, 2017 Inside the U.S.A. to unaffiliated customers $ 7,434,991 $ 5,967,459 $ 19,771,031 $ 16,363,291 Outside the U.S.A. to: Joint ventures in which the Company is a shareholder directly and indirectly 879,324 862,136 2,201,077 2,115,511 Unaffiliated customers 4,609,522 3,393,424 14,708,742 10,189,143 $ 12,923,837 $ 10,223,019 $ 36,680,850 $ 28,667,945 |
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas [Table Text Block] | At May 31, 2018 At August 31, 2017 China $ 251,848 $ 228,458 Brazil 81,161 54,646 Germany 10,155 14,171 India 21,628 14,712 United States 6,868,515 7,047,675 Total property and equipment $ 7,233,307 $ 7,359,662 |
Revenue from External Customers by Geographic Areas [Table Text Block] | Three Months Ended Nine Months Ended May 31, 2018 May 31, 2017 May 31, 2018 May 31, 2017 China $ 3,069,232 $ 1,695,508 $ 9,176,174 $ 4,991,807 Brazil 853,675 565,089 2,310,131 1,683,255 India 564,339 323,551 1,642,633 1,057,132 Germany 312,057 161,139 556,859 378,635 Other 955,418 583,752 2,318,569 2,115,511 United States 7,169,116 6,893,980 20,676,484 18,441,605 Total net sales $ 12,923,837 $ 10,223,019 $ 36,680,850 $ 28,667,945 |
Fees for Services Provided to Joint Ventures [Member] | |
Notes Tables | |
Reconciliation of Revenue from Segments to Consolidated [Table Text Block] | Three Months Ended May 31, 2018 % of Total Fees for Services Provided to Joint Ventures May 31, 2017 % of Total Fees for Services Provided to Joint Ventures Germany $ 224,366 14.9 % $ 212,257 14.7 % Poland 185,107 12.3 % 180,969 12.6 % Japan 183,335 12.2 % 153,903 10.7 % Sweden 155,588 10.3 % 150,139 10.4 % France 146,949 9.7 % 112,455 7.8 % Thailand 110,894 7.4 % 104,771 7.3 % Czech Republic 100,131 6.6 % 74,135 5.1 % Korea 96,574 6.4 % 92,954 6.4 % Finland 81,402 5.4 % 78,012 5.4 % United Kingdom 80,931 5.4 % 87,768 6.1 % India 49,778 3.3 % 90,469 6.3 % Other 93,445 6.1 % 104,216 7.2 % $ 1,508,500 100.0 % $ 1,442,048 100.0 % Nine Months Ended May 31, 2018 % of Total Fees for Services Provided to Joint Ventures May 31, 2017 % of Total Fees for Services Provided to Joint Ventures Germany $ 680,939 14.7 % $ 614,766 15.6 % Poland 598,221 13.0 % 483,626 12.3 % Japan 529,412 11.4 % 445,662 11.3 % Sweden 448,707 9.7 % 314,664 8.0 % France 416,913 9.0 % 293,240 7.4 % Thailand 325,205 7.0 % 339,852 8.6 % Czech Republic 283,193 6.1 % 218,249 5.5 % Korea 279,524 6.0 % 284,435 7.2 % United Kingdom 275,137 6.0 % 227,140 5.8 % India 274,980 5.9 % 229,200 5.8 % Finland 247,574 5.4 % 221,294 5.6 % Other 264,727 5.8 % 269,539 6.9 % $ 4,624,532 100.0 % $ 3,941,667 100.0 % |
Note 13 - Fair Value Measurem30
Note 13 - Fair Value Measurements (Tables) | 9 Months Ended |
May 31, 2018 | |
Notes Tables | |
Fair Value Measurement Inputs and Valuation Techniques [Table Text Block] | Fair Value Measurements Fair value as of Level 1 Level 2 Level 3 Available for sale securities $ 3,282,915 $ 3,282,915 $ — $ — Fair Value Measurements Fair value as of Level 1 Level 2 Level 3 Available for sale securities $ 3,766,984 $ 3,766,984 $ — $ — |
Note 14 - Supplemental Cash F31
Note 14 - Supplemental Cash Flow Information (Tables) | 9 Months Ended |
May 31, 2018 | |
Notes Tables | |
Schedule of Cash Flow, Supplemental Disclosures [Table Text Block] | Three Months Ended May 31, 2018 May 31, 2017 Cash paid for interest $ 3,139 $ 7,409 Cash paid for income taxes 45,000 — Nine Months Ended May 31, 2018 May 31, 2017 Cash paid for interest $ 14,007 $ 15,502 Cash paid for income taxes 45,000 — |
Note 3 - Inventories - Inventor
Note 3 - Inventories - Inventories (Details) - USD ($) | May 31, 2018 | Aug. 31, 2017 |
Production materials | $ 1,296,106 | $ 1,747,189 |
Finished goods | 7,878,637 | 5,709,363 |
Total inventory | $ 9,174,743 | $ 7,456,552 |
Note 4 - Property and Equipme33
Note 4 - Property and Equipment, Net - Components of Property and Equipment, Net (Details) - USD ($) | May 31, 2018 | Aug. 31, 2017 |
Land | $ 310,365 | $ 310,365 |
Buildings and improvements | 6,903,231 | 6,847,177 |
Machinery and equipment | 4,554,692 | 4,171,387 |
Gross | 11,768,288 | 11,328,929 |
Less accumulated depreciation | (4,534,981) | (3,969,267) |
Net | $ 7,233,307 | $ 7,359,662 |
Note 5 - Patents and Trademar34
Note 5 - Patents and Trademarks, Net (Details Textual) - Patents and Trademarks [Member] | 9 Months Ended |
May 31, 2018USD ($) | |
Finite-Lived Intangible Asset, Useful Life | 7 years |
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months | $ 240,000 |
Finite-Lived Intangible Assets, Amortization Expense, Year Two | 240,000 |
Finite-Lived Intangible Assets, Amortization Expense, Year Three | 240,000 |
Finite-Lived Intangible Assets, Amortization Expense, Year Four | 240,000 |
Finite-Lived Intangible Assets, Amortization Expense, Year Five | $ 240,000 |
Note 5 - Patents and Trademar35
Note 5 - Patents and Trademarks, Net - Patents and Trademarks, Net (Details) - USD ($) | May 31, 2018 | Aug. 31, 2017 |
Patents and trademarkes, net | $ 1,196,222 | $ 1,322,089 |
Patents and Trademarks [Member] | ||
Patents and trademarks | 2,800,553 | 2,737,959 |
Less accumulated amortization | (1,604,331) | (1,415,870) |
Patents and trademarkes, net | $ 1,196,222 | $ 1,322,089 |
Note 6 - Investments in Joint36
Note 6 - Investments in Joint Ventures (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 31, 2018 | May 31, 2017 | May 31, 2018 | May 31, 2017 | |
Payments to Acquire Interest in Joint Venture | $ 0 | $ 0 | $ 0 | $ 0 |
Note 6 - Investments in Joint37
Note 6 - Investments in Joint Ventures - Condensed Balance Sheet of EXCOR and All Other Joint Ventures (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | Aug. 31, 2017 | |
Current assets | $ 58,113,904 | $ 51,518,210 | |
Total assets | 62,004,849 | 55,633,891 | |
Current liabilities | 16,622,611 | 15,118,074 | |
Noncurrent liabilities | 110,926 | 181,210 | |
Joint ventures’ equity | 45,271,314 | 40,334,607 | |
Northern Technologies International Corporation’s share of joint ventures’ equity | 22,412,792 | 20,035,074 | |
Northern Technologies International Corporation’s share of joint ventures’ undistributed earnings | 20,383,580 | 17,960,860 | |
Northern Technologies International Corporation’s dividends received from joint ventures | 2,941,807 | $ 5,179,786 | 6,377,054 |
EXCOR [Member] | |||
Current assets | 25,734,914 | 22,142,514 | |
Total assets | 27,838,358 | 24,301,194 | |
Current liabilities | 3,830,246 | 4,469,567 | |
Noncurrent liabilities | |||
Joint ventures’ equity | 24,008,112 | 19,831,627 | |
Northern Technologies International Corporation’s share of joint ventures’ equity | 12,004,058 | 9,915,816 | |
Northern Technologies International Corporation’s share of joint ventures’ undistributed earnings | 11,973,153 | 9,884,911 | |
Northern Technologies International Corporation’s dividends received from joint ventures | 1,780,392 | 4,240,400 | 5,379,062 |
All Other [Member] | |||
Current assets | 32,378,990 | 29,375,696 | |
Total assets | 34,166,491 | 31,332,697 | |
Current liabilities | 12,792,365 | 10,648,507 | |
Noncurrent liabilities | 110,926 | 181,210 | |
Joint ventures’ equity | 21,263,202 | 20,502,980 | |
Northern Technologies International Corporation’s share of joint ventures’ equity | 10,408,734 | 10,119,258 | |
Northern Technologies International Corporation’s share of joint ventures’ undistributed earnings | 8,410,427 | 8,075,949 | |
Northern Technologies International Corporation’s dividends received from joint ventures | $ 1,161,415 | $ 939,386 | $ 997,992 |
Note 6 - Investments in Joint38
Note 6 - Investments in Joint Ventures - Condensed Income Statement of EXCOR and All Other Joint Ventures (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
May 31, 2018 | May 31, 2017 | May 31, 2018 | May 31, 2017 | Aug. 31, 2017 | |
Net sales | $ 31,480,885 | $ 25,935,169 | $ 90,200,146 | $ 73,098,215 | |
Gross profit | 14,209,819 | 11,517,711 | 40,529,217 | 32,376,247 | |
Net income | 4,540,968 | 3,379,883 | 11,753,467 | 8,562,834 | |
Northern Technologies International Corporation’s share of equity in income from joint ventures | 2,246,066 | 1,686,016 | 5,793,391 | 4,343,159 | |
Northern Technologies International Corporation’s dividends received from joint ventures | 2,941,807 | 5,179,786 | $ 6,377,054 | ||
EXCOR [Member] | |||||
Net sales | 12,219,414 | 9,884,546 | 35,450,664 | 28,169,978 | |
Gross profit | 6,823,609 | 5,271,028 | 19,315,099 | 15,032,724 | |
Net income | 3,113,660 | 2,166,435 | 8,272,237 | 6,184,181 | |
Northern Technologies International Corporation’s share of equity in income from joint ventures | 1,558,243 | 1,083,494 | 4,138,814 | 3,089,935 | |
Northern Technologies International Corporation’s dividends received from joint ventures | 1,780,392 | 4,240,400 | 5,379,062 | ||
All Other [Member] | |||||
Net sales | 19,261,471 | 16,050,623 | 54,749,482 | 44,928,237 | |
Gross profit | 7,386,210 | 6,246,683 | 21,214,118 | 17,343,523 | |
Net income | 1,427,308 | 1,213,448 | 3,481,230 | 2,378,653 | |
Northern Technologies International Corporation’s share of equity in income from joint ventures | $ 687,823 | $ 602,522 | 1,654,577 | 1,253,224 | |
Northern Technologies International Corporation’s dividends received from joint ventures | $ 1,161,415 | $ 939,386 | $ 997,992 |
Note 7 - Corporate Debt (Detail
Note 7 - Corporate Debt (Details Textual) | 9 Months Ended | |
May 31, 2018USD ($) | Aug. 31, 2017USD ($) | |
Term Loan and Line of Credit, Agreements, Loan Agreements [Member] | ||
Debt Instrument, Covenants, Fixed Charge Coverage Ratio | 1.1 | |
PNC Bank [Member] | ||
Letters of Credit Outstanding, Amount | $ 0 | $ 0 |
PNC Bank [Member] | Revolving Credit Facility [Member] | ||
Line of Credit Facility, Maximum Borrowing Capacity | 3,000,000 | |
Long-term Line of Credit, Total | $ 0 | 0 |
PNC Bank [Member] | Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||
Debt Instrument, Basis Spread on Variable Rate | 2.15% | |
PNC Bank [Member] | Letter of Credit [Member] | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 1,200,000 | |
JP Morgan Chase Bank [Member] | ||
Letters of Credit Outstanding, Amount | $ 88,831 | $ 89,543 |
Note 8 - Stockholders' Equity40
Note 8 - Stockholders' Equity (Details Textual) - $ / shares | Mar. 01, 2018 | Sep. 01, 2017 | Mar. 01, 2017 | Sep. 01, 2016 | May 31, 2018 | May 31, 2018 | May 31, 2017 | Jan. 15, 2018 |
Stock Repurchased and Retired During Period, Shares | 0 | 14,525 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 4,410 | 4,000 | ||||||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price | $ 11.59 | $ 10.25 | ||||||
Stock Issued During Period, Shares, Employee Stock Purchase Plans | 985 | 891 | 1,098 | 3,029 | ||||
Common Stock, Shares Authorized | 15,000,000 | 15,000,000 | 10,000,000 | |||||
Common Stock, Additional Shares Authorized | 5,000,000 | |||||||
Treasury Stock Acquired, Average Cost Per Share | $ 13.51 | |||||||
The 2007 Plan [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 47,252 | 56,677 | ||||||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ 18.35 | $ 13.40 |
Note 8 - Stockholders' Equity -
Note 8 - Stockholders' Equity - Schedule of Dividends Payable (Details) - $ / shares | Apr. 25, 2018 | Jan. 24, 2018 | Nov. 20, 2017 | May 31, 2018 | May 31, 2017 | May 31, 2018 | May 31, 2017 |
Declaration date | Apr. 25, 2018 | Jan. 24, 2018 | Nov. 20, 2017 | ||||
Amount (in dollars per share) | $ 0.10 | $ 0.10 | $ 0.10 | $ 0.10 | $ 0 | $ 0.30 | $ 0 |
Record date | May 9, 2018 | Feb. 8, 2018 | Dec. 8, 2017 | ||||
Payable date | May 23, 2018 | Feb. 21, 2018 | Dec. 21, 2017 |
Note 9 - Net Income Per Commo42
Note 9 - Net Income Per Common Share (Details Textual) - shares | 3 Months Ended | 9 Months Ended | ||
May 31, 2018 | May 31, 2017 | May 31, 2018 | May 31, 2017 | |
Employee Stock Option [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 0 | 48,067 | 0 | 48,067 |
Note 9 - Net Income Per Commo43
Note 9 - Net Income Per Common Share - Reconciliation of the Earnings Per Share Computations (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
May 31, 2018 | May 31, 2017 | May 31, 2018 | May 31, 2017 | |
Net income attributable to NTIC | $ 2,142,752 | $ 1,352,416 | $ 4,559,225 | $ 2,037,021 |
Basic – weighted shares outstanding (in shares) | 4,539,353 | 4,526,771 | 4,538,838 | 4,528,523 |
Weighted shares assumed upon exercise of stock options (in shares) | 167,679 | 64,756 | 125,009 | 42,872 |
Diluted – weighted shares outstanding (in shares) | 4,707,032 | 4,591,527 | 4,663,847 | 4,571,395 |
Basic income per share: (in dollars per share) | $ 0.47 | $ 0.30 | $ 1 | $ 0.45 |
Diluted income per share: (in dollars per share) | $ 0.46 | $ 0.30 | $ 0.98 | $ 0.45 |
Note 10 - Stock-based Compens44
Note 10 - Stock-based Compensation (Details Textual) | 9 Months Ended | |
May 31, 2018USD ($)$ / sharesshares | May 31, 2017USD ($)$ / sharesshares | |
Number of Stock-based Compensation Plans | 2 | |
Stock or Unit Option Plan Expense | $ 309,473 | $ 293,748 |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options | 322,402 | |
Allocated Share-based Compensation Expense, Estimate Remainder of Fiscal Year | 103,267 | |
Allocated Share-based Compensation Expense, Estimate, Next Fiscal Year | 153,901 | |
Allocated Share-based Compensation Expense, Estimate, Fiscal Year Two | $ 65,234 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ / shares | $ 7.75 | $ 7.69 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 6 years 189 days | 6 years 266 days |
The 2007 Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | shares | 800,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 10 years | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | shares | 47,252 | 56,677 |
The 2007 Plan [Member] | One Year after Date of Grant [Member] | Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years | |
The 2007 Plan [Member] | One Year after Date of Grant [Member] | Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 4 years | |
ESPP [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | shares | 100,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent | 90.00% |
Note 10 - Stock-based Compens45
Note 10 - Stock-based Compensation - Black-scholes Option-pricing Model Assumptions (Details) | 9 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Dividend yield | 2.18% | 0.00% |
Expected volatility | 45.90% | 46.40% |
Expected life of option (Year) | 10 years | 10 years |
Average risk-free interest rate | 1.87% | 1.63% |
Note 11 - Segment and Geograp46
Note 11 - Segment and Geographic Information (Details Textual) | 9 Months Ended |
May 31, 2018 | |
Number of Reportable Segments | 2 |
Note 11 - Segment and Geograp47
Note 11 - Segment and Geographic Information - Net Sales by Segment (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
May 31, 2018 | May 31, 2017 | May 31, 2018 | May 31, 2017 | |
Total net sales | $ 12,923,837 | $ 10,223,019 | $ 36,680,850 | $ 28,667,945 |
ZERUST [Member] | ||||
Total net sales | 10,382,884 | 8,368,487 | 30,102,080 | 23,681,192 |
NaturTec [Member] | ||||
Total net sales | $ 2,540,953 | $ 1,854,532 | $ 6,578,770 | $ 4,986,753 |
Note 11 - Segment and Geograp48
Note 11 - Segment and Geographic Information - Cost of Goods Sold by Segment (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
May 31, 2018 | May 31, 2017 | May 31, 2018 | May 31, 2017 | ||
Cost of goods sold | $ 8,592,366 | $ 6,774,001 | $ 24,493,672 | $ 19,256,953 | |
ZERUST® | [1] | ||||
Direct Cost of Goods Sold [Member] | ZERUST [Member] | |||||
Cost of goods sold | $ 6,139,699 | $ 4,834,355 | $ 17,948,941 | $ 13,788,416 | |
ZERUST® | [1] | 59.10% | 57.80% | 59.60% | 58.20% |
Direct Cost of Goods Sold [Member] | NaturTec [Member] | |||||
Cost of goods sold | $ 1,812,084 | $ 1,327,323 | $ 4,738,523 | $ 3,608,722 | |
ZERUST® | [1] | 71.30% | 71.60% | 72.00% | 72.40% |
Indirect Cost of Goods Sold [Member] | |||||
Cost of goods sold | $ 640,583 | $ 612,323 | $ 1,806,208 | $ 1,859,815 | |
ZERUST® | [1] | ||||
[1] | The percent of segment sales is calculated by dividing the direct cost of goods sold for each individual segment category by the net sales for each segment category. |
Note 11 - Segment and Geograp49
Note 11 - Segment and Geographic Information - Net Sales by Geographic Location (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
May 31, 2018 | May 31, 2017 | May 31, 2018 | May 31, 2017 | |
Total net sales | $ 12,923,837 | $ 10,223,019 | $ 36,680,850 | $ 28,667,945 |
Inside the USA to Unaffiliated Customers [Member] | ||||
Total net sales | 7,434,991 | 5,967,459 | 19,771,031 | 16,363,291 |
Joint Ventures in Which the Company is a Shareholder Directly and Indirectly Outside the USA [Member] | ||||
Total net sales | 879,324 | 862,136 | 2,201,077 | 2,115,511 |
Unaffiliated Customers Outside the USA [Member] | ||||
Total net sales | $ 4,609,522 | $ 3,393,424 | $ 14,708,742 | $ 10,189,143 |
Note 11 - Segment and Geograp50
Note 11 - Segment and Geographic Information - Fees for Services Provided to Joint Ventures by Geographic Location as a Percentage of Total Fees (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
May 31, 2018 | May 31, 2017 | May 31, 2018 | May 31, 2017 | |
Fees | $ 1,508,500 | $ 1,442,048 | $ 4,624,532 | $ 3,941,667 |
Percentage of total fees | 100.00% | 100.00% | 100.00% | 100.00% |
GERMANY | ||||
Fees | $ 224,366 | $ 212,257 | $ 680,939 | $ 614,766 |
Percentage of total fees | 14.90% | 14.70% | 14.70% | 15.60% |
POLAND | ||||
Fees | $ 185,107 | $ 180,969 | $ 598,221 | $ 483,626 |
Percentage of total fees | 12.30% | 12.60% | 13.00% | 12.30% |
JAPAN | ||||
Fees | $ 183,335 | $ 153,903 | $ 529,412 | $ 445,662 |
Percentage of total fees | 12.20% | 10.70% | 11.40% | 11.30% |
SWEDEN | ||||
Fees | $ 155,588 | $ 150,139 | $ 448,707 | $ 314,664 |
Percentage of total fees | 10.30% | 10.40% | 9.70% | 8.00% |
FRANCE | ||||
Fees | $ 146,949 | $ 112,455 | $ 416,913 | $ 293,240 |
Percentage of total fees | 9.70% | 7.80% | 9.00% | 7.40% |
THAILAND | ||||
Fees | $ 110,894 | $ 104,771 | $ 325,205 | $ 339,852 |
Percentage of total fees | 7.40% | 7.30% | 7.00% | 8.60% |
CZECH REPUBLIC | ||||
Fees | $ 100,131 | $ 74,135 | $ 283,193 | $ 218,249 |
Percentage of total fees | 6.60% | 5.10% | 6.10% | 5.50% |
KOREA, REPUBLIC OF | ||||
Fees | $ 96,574 | $ 92,954 | $ 279,524 | $ 284,435 |
Percentage of total fees | 6.40% | 6.40% | 6.00% | 7.20% |
FINLAND | ||||
Fees | $ 81,402 | $ 78,012 | $ 247,574 | $ 221,294 |
Percentage of total fees | 5.40% | 5.40% | 5.40% | 5.60% |
UNITED KINGDOM | ||||
Fees | $ 80,931 | $ 87,768 | $ 275,137 | $ 227,140 |
Percentage of total fees | 5.40% | 6.10% | 6.00% | 5.80% |
INDIA | ||||
Fees | $ 49,778 | $ 90,469 | $ 274,980 | $ 229,200 |
Percentage of total fees | 3.30% | 6.30% | 5.90% | 5.80% |
Other Countries [Member] | ||||
Fees | $ 93,445 | $ 104,216 | $ 264,727 | $ 269,539 |
Percentage of total fees | 6.10% | 7.20% | 5.80% | 6.90% |
Note 11 - Segment and Geograp51
Note 11 - Segment and Geographic Information - Total Long-lived Assets by Geographic Distribution (Details) - USD ($) | May 31, 2018 | Aug. 31, 2017 |
Property and equipment | $ 7,233,307 | $ 7,359,662 |
CHINA | ||
Property and equipment | 251,848 | 228,458 |
BRAZIL | ||
Property and equipment | 81,161 | 54,646 |
GERMANY | ||
Property and equipment | 10,155 | 14,171 |
INDIA | ||
Property and equipment | 21,628 | 14,712 |
UNITED STATES | ||
Property and equipment | $ 6,868,515 | $ 7,047,675 |
Note 11 - Segment and Geograp52
Note 11 - Segment and Geographic Information - Total Net Sales by Geographic Distribution (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
May 31, 2018 | May 31, 2017 | May 31, 2018 | May 31, 2017 | |
Total net sales | $ 12,923,837 | $ 10,223,019 | $ 36,680,850 | $ 28,667,945 |
CHINA | ||||
Total net sales | 3,069,232 | 1,695,508 | 9,176,174 | 4,991,807 |
BRAZIL | ||||
Total net sales | 853,675 | 565,089 | 2,310,131 | 1,683,255 |
INDIA | ||||
Total net sales | 564,339 | 323,551 | 1,642,633 | 1,057,132 |
GERMANY | ||||
Total net sales | 312,057 | 161,139 | 556,859 | 378,635 |
Other Countries [Member] | ||||
Total net sales | 955,418 | 583,752 | 2,318,569 | 2,115,511 |
UNITED STATES | ||||
Total net sales | $ 7,169,116 | $ 6,893,980 | $ 20,676,484 | $ 18,441,605 |
Note 12 - Commitments and Con53
Note 12 - Commitments and Contingencies (Details Textual) - USD ($) | 9 Months Ended | ||
May 31, 2018 | Aug. 31, 2017 | May 31, 2017 | |
Accrued Bonuses | $ 1,380,000 | $ 600,000 | |
Entity Wide Trade Joint Venture Receivables, Three Joint Ventures,Percentage | 51.80% | 60.70% | |
Fiscal 2018 Bonus Plan [Member] | Executive Officer [Member] | |||
Percentage of Individual Bonus Payout Determined by Actual Versus Targeted EBITOI Results | 75.00% | ||
Percentage of Individuals Payout Determined Upon Achievement of Certain Pre-Established Individual Performance Objectives | 25.00% |
Note 13 - Fair Value Measurem54
Note 13 - Fair Value Measurements - Assets and Liabilities Measured at Fair Value Recurring Basis (Details) - USD ($) | May 31, 2018 | Aug. 31, 2017 |
Available for sale securities | $ 3,282,915 | $ 3,766,984 |
Fair Value, Inputs, Level 1 [Member] | ||
Available for sale securities | 3,282,915 | 3,766,984 |
Fair Value, Inputs, Level 2 [Member] | ||
Available for sale securities | ||
Fair Value, Inputs, Level 3 [Member] | ||
Available for sale securities |
Note 14 - Supplemental Cash F55
Note 14 - Supplemental Cash Flow Information - Supplemental Disclosures of Cash Flow Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
May 31, 2018 | May 31, 2017 | May 31, 2018 | May 31, 2017 | |
Cash paid for interest | $ 3,139 | $ 7,409 | $ 14,007 | $ 15,502 |
Cash paid for income taxes | $ 45,000 | $ 45,000 |
Note 15 - Income Taxes (Details
Note 15 - Income Taxes (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
May 31, 2018 | May 31, 2017 | May 31, 2018 | May 31, 2017 | Aug. 31, 2018 | Aug. 31, 2017 | |
Income Tax Expense (Benefit), Total | $ 181,683 | $ 237,801 | $ 1,128,583 | $ 480,423 | ||
Income Tax Expense (Benefit), Continuing Operations, Adjustment of Deferred Tax (Asset) Liability | 700,000 | $ 700,000 | ||||
Provisional Adjustments Related to Transition of Tax on Deemed Repatriation of Accumulated Foreign Income | $ 489,000 | |||||
Scenario, Forecast [Member] | ||||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 25.70% |