Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Feb. 28, 2018 | Apr. 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) | 4,537,408 | |
Document Type | 10-Q | |
Document Period End Date | Feb. 28, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Consolidated Balance Sheets (Cu
Consolidated Balance Sheets (Current Period Unaudited) - USD ($) | Feb. 28, 2018 | Aug. 31, 2017 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 5,067,087 | $ 6,360,201 |
Available for sale securities | 3,268,426 | 3,766,984 |
Receivables: | ||
Trade excluding joint ventures, less allowance for doubtful accounts of $50,000 at February 28, 2018 and $40,000 at August 31, 2017 | 8,310,043 | 5,912,631 |
Trade joint ventures | 447,380 | 691,752 |
Fees for services provided to joint ventures | 1,365,325 | 1,302,944 |
Income taxes | 309,379 | 137,256 |
Inventories | 9,126,171 | 7,456,552 |
Prepaid expenses | 1,024,652 | 439,298 |
Total current assets | 28,918,463 | 26,067,618 |
PROPERTY AND EQUIPMENT, NET | 7,155,946 | 7,359,662 |
OTHER ASSETS: | ||
Investments in joint ventures | 22,259,526 | 20,035,074 |
Deferred income taxes | 1,056,565 | 1,756,565 |
Patents and trademarks, net | 1,241,618 | 1,322,089 |
Other | 71,685 | |
Total other assets | 24,557,709 | 23,185,413 |
Total assets | 60,632,118 | 56,612,693 |
CURRENT LIABILITIES: | ||
Accounts payable | 4,266,257 | 2,676,610 |
Income taxes payable | 342,853 | |
Accrued liabilities: | ||
Payroll and related benefits | 1,437,921 | 1,540,386 |
Other | 677,126 | 677,621 |
Total current liabilities | 6,724,157 | 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 February 28, 2018 and 10,000,000 shares as of August 31, 2017; issued and outstanding 4,537,408 and 4,535,018, respectively | 90,748 | 90,700 |
Additional paid-in capital | 14,397,851 | 14,163,509 |
Retained earnings | 38,586,704 | 37,077,483 |
Accumulated other comprehensive loss | (2,070,752) | (2,471,064) |
Stockholders’ equity | 51,004,551 | 48,860,628 |
Non-controlling interest | 2,903,410 | 2,857,448 |
Total equity | 53,907,961 | 51,718,076 |
Total liabilities and equity | $ 60,632,118 | $ 56,612,693 |
Consolidated Balance Sheets (C3
Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) | Feb. 28, 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 |
Common stock, par value (in dollars per share) | $ 0.02 | $ 0.02 |
Common stock, shares authorized (in shares) | 15,000,000 | 10,000,000 |
Common stock, shares issued (in shares) | 4,537,408 | 4,535,018 |
Common stock, shares outstanding (in shares) | 4,537,408 | 4,535,018 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 28, 2018 | Feb. 28, 2017 | |
NET SALES: | ||||
Net sales, excluding joint ventures | $ 11,399,853 | $ 8,309,586 | $ 22,435,260 | $ 17,191,551 |
Net sales, to joint ventures | 814,122 | 433,317 | 1,321,753 | 1,253,375 |
Total net sales | 12,213,975 | 8,742,903 | 23,757,013 | 18,444,926 |
Cost of goods sold | 8,012,836 | 5,870,186 | 15,901,306 | 12,482,952 |
Gross profit | 4,201,139 | 2,872,717 | 7,855,707 | 5,961,974 |
JOINT VENTURE OPERATIONS: | ||||
Equity in income from joint ventures | 1,805,997 | 1,383,139 | 3,547,325 | 2,657,143 |
Fees for services provided to joint ventures | 1,608,890 | 1,184,028 | 3,116,032 | 2,499,619 |
Total joint venture operations | 3,414,887 | 2,567,167 | 6,663,357 | 5,156,762 |
OPERATING EXPENSES: | ||||
Selling expenses | 2,643,636 | 2,246,482 | 5,243,585 | 4,285,566 |
General and administrative expenses | 1,805,216 | 1,842,528 | 4,024,961 | 4,314,308 |
Research and development expenses | 922,746 | 742,037 | 1,721,477 | 1,384,559 |
Total operating expenses | 5,371,598 | 4,831,047 | 10,990,023 | 9,984,433 |
OPERATING INCOME | 2,244,428 | 608,837 | 3,529,041 | 1,134,303 |
INTEREST INCOME | 24,883 | 4,516 | 48,939 | 8,079 |
INTEREST EXPENSE | (5,779) | (3,470) | (10,868) | (8,093) |
INCOME BEFORE INCOME TAX EXPENSE | 2,263,532 | 609,883 | 3,567,112 | 1,134,289 |
INCOME TAX EXPENSE | 841,909 | 124,909 | 946,900 | 242,622 |
NET INCOME | 1,421,623 | 484,974 | 2,620,212 | 891,667 |
NET INCOME ATTRIBUTABLE TO NON-CONTROLLING INTERESTS | 88,776 | 98,008 | 203,739 | 207,062 |
NET INCOME ATTRIBUTABLE TO NTIC | $ 1,332,847 | $ 386,966 | $ 2,416,473 | $ 684,605 |
NET INCOME ATTRIBUTABLE TO NTIC PER COMMON SHARE: | ||||
Basic (in dollars per share) | $ 0.29 | $ 0.09 | $ 0.53 | $ 0.15 |
Diluted (in dollars per share) | $ 0.29 | $ 0.09 | $ 0.52 | $ 0.15 |
WEIGHTED AVERAGE COMMON SHARES ASSUMED OUTSTANDING: | ||||
Basic (in shares) | 4,537,408 | 4,525,091 | 4,537,368 | 4,527,555 |
Diluted (in shares) | 4,673,338 | 4,562,024 | 4,641,042 | 4,559,485 |
CASH DIVIDENDS DECLARED PER COMMON SHARE (in dollars per share) | $ 0.10 | $ 0 | $ 0.20 | $ 0 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 28, 2018 | Feb. 28, 2017 | |
NET INCOME | $ 1,421,623 | $ 484,974 | $ 2,620,212 | $ 891,667 |
OTHER COMPREHENSIVE INCOME (LOSS) – FOREIGN CURRENCY TRANSLATION ADJUSTMENT | 467,761 | 230,991 | 442,535 | (1,019,821) |
COMPREHENSIVE INCOME (LOSS) | 1,889,384 | 715,965 | 3,062,747 | (128,154) |
COMPREHENSIVE INCOME ATTRIBUTABLE TO NON-CONTROLLING INTERESTS | 109,046 | 132,829 | 245,962 | 193,200 |
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO NTIC | $ 1,780,338 | $ 583,136 | $ 2,816,785 | $ (321,354) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Feb. 28, 2018 | Feb. 28, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 2,620,212 | $ 891,667 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Stock-based compensation | 206,534 | 195,832 |
Depreciation expense | 418,562 | 385,583 |
Amortization expense | 125,092 | 59,517 |
Equity in income from joint ventures | (3,547,325) | (2,657,143) |
Deferred income taxes | 700,000 | 24,987 |
Dividends received from joint ventures | 1,770,116 | 564,934 |
Changes in current assets and liabilities: | ||
Trade, excluding joint ventures | (2,292,004) | (1,177,496) |
Trade, joint ventures | 244,372 | 329,321 |
Fees for services provided to joint ventures | (62,381) | 164,018 |
Income taxes | (178,998) | (16,484) |
Inventories | (1,631,734) | (349,600) |
Prepaid expenses and other | (504,848) | (103,671) |
Accounts payable | 1,669,859 | 915,538 |
Income tax payable | 139,991 | (91,282) |
Accrued liabilities | (193,647) | 40,854 |
Net cash used in operating activities | (516,199) | (823,425) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Proceeds from the sale of available for sale securities | 498,558 | 1,495,610 |
Additions to property and equipment | (207,350) | (599,063) |
Additions to patents | (44,621) | (85,959) |
Net cash provided by investing activities | 246,587 | 810,588 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Dividend received by non-controlling interest | (200,000) | (200,000) |
Repurchase of common stock | (148,162) | |
Dividends paid on NTIC common stock | (907,252) | |
Proceeds from option exercises | 15,375 | |
Proceeds from employee stock purchase plan | 12,481 | 32,955 |
Net cash used in financing activities | (1,079,396) | (315,207) |
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS: | 55,894 | (18,282) |
NET DECREASE IN CASH AND CASH EQUIVALENTS | (1,293,114) | (346,326) |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 6,360,201 | 3,395,274 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ 5,067,087 | $ 3,048,948 |
Note 1 - Interim Financial Info
Note 1 - Interim Financial Information | 6 Months Ended |
Feb. 28, 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 February 28, 2018 August 31, 2017 three six February 28, 2018 2017 six February 28, 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 six February 28, 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 | 6 Months Ended |
Feb. 28, 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, Revenue from Contracts with Customers, Topic 606 No. 2014 09 2018. July 2015, one first 2019. 2014 09 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. 2016 15 zero 2016 15 December 15, 2017. 2016 15 In February 2018, No. 2018 02, Income Statement – Reporting Comprehensive Income (Topic 220 2018 2, not 2018 02 2020, In December 2017, No. 118 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 | 6 Months Ended |
Feb. 28, 2018 | |
Notes to Financial Statements | |
Inventory Disclosure [Text Block] | 3. Inventories consisted of the following: February 28, 2018 August 31, 2017 Production materials $ 1,820,942 $ 1,747,189 Finished goods 7,305,229 5,709,363 $ 9,126,171 $ 7,456,552 |
Note 4 - Property and Equipment
Note 4 - Property and Equipment, Net | 6 Months Ended |
Feb. 28, 2018 | |
Notes to Financial Statements | |
Property, Plant and Equipment Disclosure [Text Block] | 4. Property and equipment, net consisted of the following: February 28, 2018 August 31, 2017 Land $ 310,365 $ 310,365 Buildings and improvements 6,815,771 6,847,177 Machinery and equipment 4,414,136 4,171,387 11,540,272 11,328,929 Less accumulated depreciation (4,384,326 ) (3,969,267 ) $ 7,155,946 $ 7,359,662 |
Note 5 - Patents and Trademarks
Note 5 - Patents and Trademarks, Net | 6 Months Ended |
Feb. 28, 2018 | |
Notes to Financial Statements | |
Intangible Assets Disclosure [Text Block] | 5. Patents and trademarks, net consisted of the following: February 28, 2018 August 31, 2017 Patents and trademarks $ 2,782,580 $ 2,737,959 Less accumulated amortization (1,540,962 ) (1,415,870 ) $ 1,241,618 $ 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 | 6 Months Ended |
Feb. 28, 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 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 February 28, 2018 Total EXCOR All Other Current assets $ 57,427,392 $ 25,206,550 $ 32,220,842 Total assets 61,497,315 27,326,727 34,170,588 Current liabilities 16,468,617 4,148,371 12,320,246 Noncurrent liabilities 120,481 — 120,481 Joint ventures’ equity 44,908,217 23,178,356 21,729,861 Northern Technologies International Corporation’s share of joint ventures’ equity 22,259,526 11,589,180 10,670,346 Northern Technologies International Corporation’s share of joint ventures’ undistributed earnings $ 20,230,286 $ 11,558,275 $ 8,672,011 Northern Technologies International Corporation’s dividends received from joint ventures $ 1,770,116 $ 1,199,142 $ 570,974 Three Months Ended February 28, 2018 Total EXCOR All Other Net sales $ 30,220,550 $ 12,204,736 $ 18,015,814 Gross profit 13,531,276 6,557,964 6,973,312 Net income 3,712,684 2,674,777 1,037,907 Northern Technologies International Corporation’s share of equity in income from joint ventures $ 1,805,997 $ 1,338,671 $ 467,326 Six Months Ended February 28, 2018 Total EXCOR All Other Net sales $ 58,719,261 $ 23,231,250 $ 35,488,011 Gross profit 26,319,398 12,491,490 13,827,908 Net income 7,212,499 5,158,577 2,053,922 Northern Technologies International Corporation’s share of equity in income from joint ventures $ 3,547,325 $ 2,580,571 $ 966,754 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 February 28, 2017 Total EXCOR All Other Net sales $ 22,962,599 $ 9,076,908 $ 13,885,691 Gross profit 10,161,509 4,867,517 5,293,992 Net income 2,774,943 2,161,408 613,535 Northern Technologies International Corporation’s share of equity in income from joint ventures $ 1,383,139 $ 1,078,272 $ 304,867 Six Months Ended February 28, 2017 Total EXCOR All Other Net sales $ 47,163,046 $ 18,285,432 $ 28,877,614 Gross profit 20,858,536 9,761,696 11,096,840 Net income 5,182,951 4,017,746 1,165,205 Northern Technologies International Corporation’s share of equity in income from joint ventures $ 2,657,143 $ 2,006,441 $ 650,702 The Company did not six February 28, 2018 2017. |
Note 7 - Corporate Debt
Note 7 - Corporate Debt | 6 Months Ended |
Feb. 28, 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 February 28, 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. February 28, 2018, The revolving credit facility allows the Company to request that PNC Bank issue letters of credit up to $1,200,000. not February 28, 2018 August 31, 2017 not As of February 28, 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 | 6 Months Ended |
Feb. 28, 2018 | |
Notes to Financial Statements | |
Stockholders' Equity Note Disclosure [Text Block] | 8. During the six February 28, 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 During the six February 28, 2018, no six February 28, 2018, 1,500 $10.25 The Company granted stock options under the Northern Technologies International Corporation Amended and Restated 2007 2007 47,252 six February 28, 2018. $18.35, The Company issued 891 3,029 September 1, 2017 2016, 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 six February 28, 2017, 11,475 $12.92 No six February 28, 2017. The Company granted stock options under the 2007 56,677 six February 28, 2017. $13.40, |
Note 9 - Net Income Per Common
Note 9 - Net Income Per Common Share | 6 Months Ended |
Feb. 28, 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 Six Months Ended Numerators: February 28, February 28, February 28, February 28, Net income attributable to NTIC $ 1,332,847 $ 386,966 $ 2,416,473 $ 684,605 Denominators: Basic – weighted shares outstanding 4,537,408 4,525,091 4,537,368 4,527,555 Weighted shares assumed upon exercise of stock options 135,930 36,933 103,674 31,930 Diluted – weighted shares outstanding 4,673,338 4,562,024 4,641,042 4,559,485 Basic income per share: $ 0.29 $ 0.09 $ 0.53 $ 0.15 Diluted income per share: $ 0.29 $ 0.09 $ 0.52 $ 0.15 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 six February 28, 2018. three six February 28, 2017 48,067 |
Note 10 - Stock-based Compensat
Note 10 - Stock-based Compensation | 6 Months Ended |
Feb. 28, 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 February 28, 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 six February 28, 2018 2017, $206,534 $195,832 six February 28, 2018 2017, February 28, 2018, not $425,669. $206,534 2018, $153,901 $65,234 2019 2020, February 28, 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: Three and Six months ended February 28, February 28, Dividend yield 2.18% 0.00% Expected volatility 45.9% 46.4% Expected life of option (in years) 10 10 Average risk-free interest rate 1.87% 1.63% The weighted average per share fair value of options granted during the six February 28, 2018 2017 $7.75 $7.69, February 28, 2018 2017 6.75 6.91 |
Note 11 - Segment and Geographi
Note 11 - Segment and Geographical Information | 6 Months Ended |
Feb. 28, 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 six February 28, 2018 2017 Three Months Ended Six Months Ended February 28, February 28, February 28, February 28, ZERUST® net sales $ 10,191,459 $ 7,228,027 $ 19,719,196 $ 15,312,705 Natur-Tec® net sales 2,022,516 1,514,876 4,037,817 3,132,221 Total net sales $ 12,213,975 $ 8,742,903 $ 23,757,013 $ 18,444,926 The following table sets forth the Company’s cost of goods sold for the three six February 28, 2018 2017 Three Months Ended Six Months Ended February 28, % of February 28, % of February 28, % of February 28, % of Direct cost of goods sold ZERUST® $ 6,005,262 58.9 % $ 4,254,524 58.9 % $ 11,809,242 59.9 % $ 8,954,061 58.5 % Natur-Tec® 1,447,240 71.6 % 1,068,231 70.5 % 2,926,439 72.5 % 2,281,399 72.8 % Indirect cost of goods sold 560,334 — 547,431 — 1,165,625 — 1,247,492 — Total net cost of goods sold $ 8,012,836 $ 5,870,186 $ 15,901,306 $ 12,482,952 ___________________________________ * 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 six February 28, 2018 2017 Three Months Ended Six Months Ended February 28, February 28, February 28, February 28, Inside the U.S.A. to unaffiliated customers $ 6,079,835 $ 5,245,092 $ 12,336,040 $ 10,395,832 Outside the U.S.A to: Joint ventures in which the Company is shareholder directly and indirectly 814,122 433,317 1,321,753 1,253,375 Unaffiliated customers 5,320,018 3,064,494 10,099,220 6,795,719 $ 12,213,975 $ 8,742,903 $ 23,757,013 $ 18,444,926 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 six February 28, 2018 2017 Three Months Ended February 28, % of Total Fees February 28, % of Total Fees for Germany $ 236,700 14.7 % $ 199,509 16.8 % Poland 207,038 12.9 % 153,453 13.0 % Japan 172,032 10.7 % 145,722 12.3 % Sweden 165,165 10.3 % 77,464 6.5 % India 138,437 8.6 % 74,196 6.3 % France 130,323 8.1 % 83,112 7.0 % Thailand 111,779 6.9 % 87,627 7.4 % Korea 99,574 6.2 % 86,103 7.3 % Czech Republic 98,726 6.1 % 73,286 6.2 % United Kingdom 82,432 5.1 % 53,241 4.5 % Finland 76,546 4.8 % 66,946 5.7 % Other 90,138 5.6 % 83,369 7.0 % $ 1,608,890 100.0 % $ 1,184,028 100.0 % Six Months Ended February 28, % of Total Fees February 28, % of Total Fees Germany $ 456,574 14.7 % $ 402,509 16.1 % Poland 413,114 13.3 % 302,657 12.1 % Japan 346,077 11.1 % 291,759 11.7 % Sweden 293,119 9.4 % 164,525 6.6 % France 269,964 8.7 % 180,785 7.2 % India 225,200 7.2 % 138,731 5.6 % Thailand 214,311 6.9 % 235,081 9.4 % United Kingdom 194,207 6.2 % 139,372 5.6 % Korea 183,062 5.9 % 191,481 7.6 % Czech Republic 182,951 5.8 % 144,114 5.8 % Finland 166,172 5.3 % 143,282 5.7 % Other 171,281 5.5 % 165,323 6.6 % $ 3,116,032 100.0 % $ 2,499,619 100.0 % The geographical distribution of key financial statement data is as follows: At February 28, 2018 At August 31, 2017 China $ 222,089 $ 228,458 Brazil 49,748 54,646 Germany 13,813 14,171 India 13,186 14,712 United States 6,857,110 7,047,675 Total property and equipment $ 7,155,946 $ 7,359,662 Six Months Ended February 28, 2018 February 28, 2017 China $ 6,106,942 $ 3,296,299 Brazil 1,456,456 1,118,166 India 1,078,294 733,581 Germany 244,802 217,496 Other 1,363,151 1,531,759 United States 13,507,368 11,547,625 Total net sales $ 23,757,013 $ 18,444,926 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 ® |
Note 12 - Commitments and Conti
Note 12 - Commitments and Contingencies | 6 Months Ended |
Feb. 28, 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. $880,000 six February 28, 2018 $185,000 six February 28, 2017. Three joint ventures (consisting of the Company’s joint ventures in South Korea, India and United States) accounted for 69.8% February 28, 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 February 28, 2018, not |
Note 13 - Fair Value Measuremen
Note 13 - Fair Value Measurements | 6 Months Ended |
Feb. 28, 2018 | |
Notes to Financial Statements | |
Fair Value, Measurement Inputs, Disclosure [Text Block] | 13. 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 Using Inputs Considered as Fair value as of February 28, 2018 Level 1 Level 2 Level 3 Available for sale securities $ 3,268,426 $ 3,268,426 $ — $ — Fair Value Measurements Using Inputs Considered as Fair value as of August 31, 2017 Level 1 Level 2 Level 3 Available for sale securities $ 3,766,984 $ 3,766,984 $ — $ — There were no 1, 2, 3 three six February 28, 2018 2017. |
Note 14 - Supplemental Cash Flo
Note 14 - Supplemental Cash Flow Information | 6 Months Ended |
Feb. 28, 2018 | |
Notes to Financial Statements | |
Cash Flow, Supplemental Disclosures [Text Block] | 14. Supplemental disclosures of cash flow information consisted of: Three Months Ended February 28, 2018 February 28, Cash paid for interest $ 5,779 $ 3,470 Cash paid for income taxes $ 45,000 — Six Months Ended February 28, 2018 February 28, Cash paid for interest $ 10,868 $ 8,093 Cash paid for income taxes $ 45,000 — |
Note 15 - Income Taxes
Note 15 - Income Taxes | 6 Months Ended |
Feb. 28, 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 six February 28, 2018 $841,909 $946,900, $124,909 $242,622 three six February 28, 2017. three six February 28, 2018 37.2% 26.5%, 20.5% 21.3% three six February 28, 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 three February 28, 2018 $700,000 February 28, 2018. $700,000 may The one $489,000, not zero three February 28, 2018. $489,000 one December 2017 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) | 6 Months Ended |
Feb. 28, 2018 | |
Notes Tables | |
Schedule of Inventory, Current [Table Text Block] | February 28, 2018 August 31, 2017 Production materials $ 1,820,942 $ 1,747,189 Finished goods 7,305,229 5,709,363 $ 9,126,171 $ 7,456,552 |
Note 4 - Property and Equipme23
Note 4 - Property and Equipment, Net (Tables) | 6 Months Ended |
Feb. 28, 2018 | |
Notes Tables | |
Property, Plant and Equipment [Table Text Block] | February 28, 2018 August 31, 2017 Land $ 310,365 $ 310,365 Buildings and improvements 6,815,771 6,847,177 Machinery and equipment 4,414,136 4,171,387 11,540,272 11,328,929 Less accumulated depreciation (4,384,326 ) (3,969,267 ) $ 7,155,946 $ 7,359,662 |
Note 5 - Patents and Trademar24
Note 5 - Patents and Trademarks, Net (Tables) | 6 Months Ended |
Feb. 28, 2018 | |
Notes Tables | |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | February 28, 2018 August 31, 2017 Patents and trademarks $ 2,782,580 $ 2,737,959 Less accumulated amortization (1,540,962 ) (1,415,870 ) $ 1,241,618 $ 1,322,089 |
Note 6 - Investments in Joint25
Note 6 - Investments in Joint Ventures (Tables) | 6 Months Ended |
Feb. 28, 2018 | |
Notes Tables | |
Condensed Balance Sheet [Table Text Block] | As of February 28, 2018 Total EXCOR All Other Current assets $ 57,427,392 $ 25,206,550 $ 32,220,842 Total assets 61,497,315 27,326,727 34,170,588 Current liabilities 16,468,617 4,148,371 12,320,246 Noncurrent liabilities 120,481 — 120,481 Joint ventures’ equity 44,908,217 23,178,356 21,729,861 Northern Technologies International Corporation’s share of joint ventures’ equity 22,259,526 11,589,180 10,670,346 Northern Technologies International Corporation’s share of joint ventures’ undistributed earnings $ 20,230,286 $ 11,558,275 $ 8,672,011 Northern Technologies International Corporation’s dividends received from joint ventures $ 1,770,116 $ 1,199,142 $ 570,974 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 February 28, 2018 Total EXCOR All Other Net sales $ 30,220,550 $ 12,204,736 $ 18,015,814 Gross profit 13,531,276 6,557,964 6,973,312 Net income 3,712,684 2,674,777 1,037,907 Northern Technologies International Corporation’s share of equity in income from joint ventures $ 1,805,997 $ 1,338,671 $ 467,326 Six Months Ended February 28, 2018 Total EXCOR All Other Net sales $ 58,719,261 $ 23,231,250 $ 35,488,011 Gross profit 26,319,398 12,491,490 13,827,908 Net income 7,212,499 5,158,577 2,053,922 Northern Technologies International Corporation’s share of equity in income from joint ventures $ 3,547,325 $ 2,580,571 $ 966,754 Three Months Ended February 28, 2017 Total EXCOR All Other Net sales $ 22,962,599 $ 9,076,908 $ 13,885,691 Gross profit 10,161,509 4,867,517 5,293,992 Net income 2,774,943 2,161,408 613,535 Northern Technologies International Corporation’s share of equity in income from joint ventures $ 1,383,139 $ 1,078,272 $ 304,867 Six Months Ended February 28, 2017 Total EXCOR All Other Net sales $ 47,163,046 $ 18,285,432 $ 28,877,614 Gross profit 20,858,536 9,761,696 11,096,840 Net income 5,182,951 4,017,746 1,165,205 Northern Technologies International Corporation’s share of equity in income from joint ventures $ 2,657,143 $ 2,006,441 $ 650,702 |
Note 8 - Stockholders' Equity (
Note 8 - Stockholders' Equity (Tables) | 6 Months Ended |
Feb. 28, 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 |
Note 9 - Net Income Per Commo27
Note 9 - Net Income Per Common Share (Tables) | 6 Months Ended |
Feb. 28, 2018 | |
Notes Tables | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | Three Months Ended Six Months Ended Numerators: February 28, February 28, February 28, February 28, Net income attributable to NTIC $ 1,332,847 $ 386,966 $ 2,416,473 $ 684,605 Denominators: Basic – weighted shares outstanding 4,537,408 4,525,091 4,537,368 4,527,555 Weighted shares assumed upon exercise of stock options 135,930 36,933 103,674 31,930 Diluted – weighted shares outstanding 4,673,338 4,562,024 4,641,042 4,559,485 Basic income per share: $ 0.29 $ 0.09 $ 0.53 $ 0.15 Diluted income per share: $ 0.29 $ 0.09 $ 0.52 $ 0.15 |
Note 10 - Stock-based Compens28
Note 10 - Stock-based Compensation (Tables) | 6 Months Ended |
Feb. 28, 2018 | |
Notes Tables | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | Three and Six months ended February 28, February 28, Dividend yield 2.18% 0.00% Expected volatility 45.9% 46.4% Expected life of option (in years) 10 10 Average risk-free interest rate 1.87% 1.63% |
Note 11 - Segment and Geograp29
Note 11 - Segment and Geographical Information (Tables) | 6 Months Ended |
Feb. 28, 2018 | |
Notes Tables | |
Reconciliation of Revenue from Segments to Consolidated [Table Text Block] | Three Months Ended Six Months Ended February 28, February 28, February 28, February 28, ZERUST® net sales $ 10,191,459 $ 7,228,027 $ 19,719,196 $ 15,312,705 Natur-Tec® net sales 2,022,516 1,514,876 4,037,817 3,132,221 Total net sales $ 12,213,975 $ 8,742,903 $ 23,757,013 $ 18,444,926 |
Reconciliation of Cost of Goods Sold from Segments to Consolidated [Table Text Block] | Three Months Ended Six Months Ended February 28, % of February 28, % of February 28, % of February 28, % of Direct cost of goods sold ZERUST® $ 6,005,262 58.9 % $ 4,254,524 58.9 % $ 11,809,242 59.9 % $ 8,954,061 58.5 % Natur-Tec® 1,447,240 71.6 % 1,068,231 70.5 % 2,926,439 72.5 % 2,281,399 72.8 % Indirect cost of goods sold 560,334 — 547,431 — 1,165,625 — 1,247,492 — Total net cost of goods sold $ 8,012,836 $ 5,870,186 $ 15,901,306 $ 12,482,952 |
Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area [Table Text Block] | Three Months Ended Six Months Ended February 28, February 28, February 28, February 28, Inside the U.S.A. to unaffiliated customers $ 6,079,835 $ 5,245,092 $ 12,336,040 $ 10,395,832 Outside the U.S.A to: Joint ventures in which the Company is shareholder directly and indirectly 814,122 433,317 1,321,753 1,253,375 Unaffiliated customers 5,320,018 3,064,494 10,099,220 6,795,719 $ 12,213,975 $ 8,742,903 $ 23,757,013 $ 18,444,926 |
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas [Table Text Block] | At February 28, 2018 At August 31, 2017 China $ 222,089 $ 228,458 Brazil 49,748 54,646 Germany 13,813 14,171 India 13,186 14,712 United States 6,857,110 7,047,675 Total property and equipment $ 7,155,946 $ 7,359,662 |
Revenue from External Customers by Geographic Areas [Table Text Block] | Six Months Ended February 28, 2018 February 28, 2017 China $ 6,106,942 $ 3,296,299 Brazil 1,456,456 1,118,166 India 1,078,294 733,581 Germany 244,802 217,496 Other 1,363,151 1,531,759 United States 13,507,368 11,547,625 Total net sales $ 23,757,013 $ 18,444,926 |
Fees for Services Provided to Joint Ventures [Member] | |
Notes Tables | |
Reconciliation of Revenue from Segments to Consolidated [Table Text Block] | Three Months Ended February 28, % of Total Fees February 28, % of Total Fees for Germany $ 236,700 14.7 % $ 199,509 16.8 % Poland 207,038 12.9 % 153,453 13.0 % Japan 172,032 10.7 % 145,722 12.3 % Sweden 165,165 10.3 % 77,464 6.5 % India 138,437 8.6 % 74,196 6.3 % France 130,323 8.1 % 83,112 7.0 % Thailand 111,779 6.9 % 87,627 7.4 % Korea 99,574 6.2 % 86,103 7.3 % Czech Republic 98,726 6.1 % 73,286 6.2 % United Kingdom 82,432 5.1 % 53,241 4.5 % Finland 76,546 4.8 % 66,946 5.7 % Other 90,138 5.6 % 83,369 7.0 % $ 1,608,890 100.0 % $ 1,184,028 100.0 % Six Months Ended February 28, % of Total Fees February 28, % of Total Fees Germany $ 456,574 14.7 % $ 402,509 16.1 % Poland 413,114 13.3 % 302,657 12.1 % Japan 346,077 11.1 % 291,759 11.7 % Sweden 293,119 9.4 % 164,525 6.6 % France 269,964 8.7 % 180,785 7.2 % India 225,200 7.2 % 138,731 5.6 % Thailand 214,311 6.9 % 235,081 9.4 % United Kingdom 194,207 6.2 % 139,372 5.6 % Korea 183,062 5.9 % 191,481 7.6 % Czech Republic 182,951 5.8 % 144,114 5.8 % Finland 166,172 5.3 % 143,282 5.7 % Other 171,281 5.5 % 165,323 6.6 % $ 3,116,032 100.0 % $ 2,499,619 100.0 % |
Note 13 - Fair Value Measurem30
Note 13 - Fair Value Measurements (Tables) | 6 Months Ended |
Feb. 28, 2018 | |
Notes Tables | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Table Text Block] | Fair Value Measurements Using Inputs Considered as Fair value as of February 28, 2018 Level 1 Level 2 Level 3 Available for sale securities $ 3,268,426 $ 3,268,426 $ — $ — Fair Value Measurements Using Inputs Considered as Fair value as of August 31, 2017 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) | 6 Months Ended |
Feb. 28, 2018 | |
Notes Tables | |
Schedule of Cash Flow, Supplemental Disclosures [Table Text Block] | Three Months Ended February 28, 2018 February 28, Cash paid for interest $ 5,779 $ 3,470 Cash paid for income taxes $ 45,000 — Six Months Ended February 28, 2018 February 28, Cash paid for interest $ 10,868 $ 8,093 Cash paid for income taxes $ 45,000 — |
Note 3 - Inventories - Inventor
Note 3 - Inventories - Inventories (Details) - USD ($) | Feb. 28, 2018 | Aug. 31, 2017 |
Production materials | $ 1,820,942 | $ 1,747,189 |
Finished goods | 7,305,229 | 5,709,363 |
Total inventory | $ 9,126,171 | $ 7,456,552 |
Note 4 - Property and Equipme33
Note 4 - Property and Equipment, Net - Components of Property and Equipment, Net (Details) - USD ($) | Feb. 28, 2018 | Aug. 31, 2017 |
Land | $ 310,365 | $ 310,365 |
Buildings and improvements | 6,815,771 | 6,847,177 |
Machinery and equipment | 4,414,136 | 4,171,387 |
Gross | 11,540,272 | 11,328,929 |
Less accumulated depreciation | (4,384,326) | (3,969,267) |
Net | $ 7,155,946 | $ 7,359,662 |
Note 5 - Patents and Trademar34
Note 5 - Patents and Trademarks, Net (Details Textual) - Patents and Trademarks [Member] | 6 Months Ended |
Feb. 28, 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 Five | 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 |
Note 5 - Patents and Trademar35
Note 5 - Patents and Trademarks, Net - Patents and Trademarks, Net (Details) - USD ($) | Feb. 28, 2018 | Aug. 31, 2017 |
Patents and trademarkes, net | $ 1,241,618 | $ 1,322,089 |
Patents and Trademarks [Member] | ||
Patents and trademarks | 2,782,580 | 2,737,959 |
Less accumulated amortization | (1,540,962) | (1,415,870) |
Patents and trademarkes, net | $ 1,241,618 | $ 1,322,089 |
Note 6 - Investments in Joint36
Note 6 - Investments in Joint Ventures (Details Textual) - USD ($) $ in Thousands | 6 Months Ended | |
Feb. 28, 2018 | Feb. 28, 2017 | |
Payments to Acquire Interest in Joint Venture | $ 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 ($) | 6 Months Ended | 12 Months Ended |
Feb. 28, 2018 | Aug. 31, 2017 | |
Current assets | $ 57,427,392 | $ 51,518,210 |
Total assets | 61,497,315 | 55,633,891 |
Current liabilities | 16,468,617 | 15,118,074 |
Noncurrent liabilities | 120,481 | 181,210 |
Joint ventures’ equity | 44,908,217 | 40,334,607 |
Northern Technologies International Corporation’s share of joint ventures’ equity | 22,259,526 | 20,035,074 |
Northern Technologies International Corporation’s share of joint ventures’ undistributed earnings | 20,230,286 | 17,960,860 |
Northern Technologies International Corporation’s dividends received from joint ventures | 1,770,116 | 6,377,054 |
EXCOR [Member] | ||
Current assets | 25,206,550 | 22,142,514 |
Total assets | 27,326,727 | 24,301,194 |
Current liabilities | 4,148,371 | 4,469,567 |
Noncurrent liabilities | ||
Joint ventures’ equity | 23,178,356 | 19,831,627 |
Northern Technologies International Corporation’s share of joint ventures’ equity | 11,589,180 | 9,915,816 |
Northern Technologies International Corporation’s share of joint ventures’ undistributed earnings | 11,558,275 | 9,884,911 |
Northern Technologies International Corporation’s dividends received from joint ventures | 1,199,142 | 5,379,062 |
All Other [Member] | ||
Current assets | 32,220,842 | 29,375,696 |
Total assets | 34,170,588 | 31,332,697 |
Current liabilities | 12,320,246 | 10,648,507 |
Noncurrent liabilities | 120,481 | 181,210 |
Joint ventures’ equity | 21,729,861 | 20,502,980 |
Northern Technologies International Corporation’s share of joint ventures’ equity | 10,670,346 | 10,119,258 |
Northern Technologies International Corporation’s share of joint ventures’ undistributed earnings | 8,672,011 | 8,075,949 |
Northern Technologies International Corporation’s dividends received from joint ventures | $ 570,974 | $ 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 | 6 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 28, 2018 | Feb. 28, 2017 | |
Net sales | $ 30,220,550 | $ 22,962,599 | $ 58,719,261 | $ 47,163,046 |
Gross profit | 13,531,276 | 10,161,509 | 26,319,398 | 20,858,536 |
Net income | 3,712,684 | 2,774,943 | 7,212,499 | 5,182,951 |
Northern Technologies International Corporation’s share of equity in income from joint ventures | 1,805,997 | 1,383,139 | 3,547,325 | 2,657,143 |
EXCOR [Member] | ||||
Net sales | 12,204,736 | 9,076,908 | 23,231,250 | 18,285,432 |
Gross profit | 6,557,964 | 4,867,517 | 12,491,490 | 9,761,696 |
Net income | 2,674,777 | 2,161,408 | 5,158,577 | 4,017,746 |
Northern Technologies International Corporation’s share of equity in income from joint ventures | 1,338,671 | 1,078,272 | 2,580,571 | 2,006,441 |
All Other [Member] | ||||
Net sales | 18,015,814 | 13,885,691 | 35,488,011 | 28,877,614 |
Gross profit | 6,973,312 | 5,293,992 | 13,827,908 | 11,096,840 |
Net income | 1,037,907 | 613,535 | 2,053,922 | 1,165,205 |
Northern Technologies International Corporation’s share of equity in income from joint ventures | $ 467,326 | $ 304,867 | $ 966,754 | $ 650,702 |
Note 7 - Corporate Debt (Detail
Note 7 - Corporate Debt (Details Textual) | 6 Months Ended | |
Feb. 28, 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 | $ 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 | Sep. 01, 2017 | Sep. 01, 2016 | Feb. 28, 2018 | Feb. 28, 2018 | Feb. 28, 2017 | Jan. 15, 2018 | Aug. 31, 2017 |
Stock Repurchased and Retired During Period, Shares | 0 | 11,475 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 1,500 | 0 | |||||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price | $ 10.25 | ||||||
Stock Issued During Period, Shares, Employee Stock Purchase Plans | 891 | 3,029 | |||||
Common Stock, Shares Authorized | 15,000,000 | 15,000,000 | 10,000,000 | 10,000,000 | |||
Common Stock, Additional Shares Authorized | 5,000,000 | ||||||
Treasury Stock Acquired, Average Cost Per Share | $ 12.92 | ||||||
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 | Jan. 24, 2018 | Nov. 20, 2017 | Feb. 28, 2018 | Feb. 28, 2017 | Feb. 28, 2018 | Feb. 28, 2017 |
Declaration Date | Jan. 24, 2018 | Nov. 20, 2017 | ||||
Amount (in dollars per share) | $ 0.10 | $ 0.10 | $ 0.10 | $ 0 | $ 0.20 | $ 0 |
Record Date | Feb. 8, 2018 | Dec. 8, 2017 | ||||
Payable Date | 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 | 6 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 28, 2018 | Feb. 28, 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 | 6 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 28, 2018 | Feb. 28, 2017 | |
Net income attributable to NTIC | $ 1,332,847 | $ 386,966 | $ 2,416,473 | $ 684,605 |
Basic – weighted shares outstanding (in shares) | 4,537,408 | 4,525,091 | 4,537,368 | 4,527,555 |
Weighted shares assumed upon exercise of stock options (in shares) | 135,930 | 36,933 | 103,674 | 31,930 |
Diluted – weighted shares outstanding (in shares) | 4,673,338 | 4,562,024 | 4,641,042 | 4,559,485 |
Basic income per share: (in dollars per share) | $ 0.29 | $ 0.09 | $ 0.53 | $ 0.15 |
Diluted income per share: (in dollars per share) | $ 0.29 | $ 0.09 | $ 0.52 | $ 0.15 |
Note 10 - Stock-based Compens44
Note 10 - Stock-based Compensation (Details Textual) | 6 Months Ended | |
Feb. 28, 2018USD ($)$ / sharesshares | Feb. 28, 2017USD ($)$ / sharesshares | |
Number of Stock-based Compensation Plans | 2 | |
Stock or Unit Option Plan Expense | $ 206,534 | $ 195,832 |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options | 425,669 | |
Allocated Share-based Compensation Expense, Estimate Remainder of Fiscal Year | 206,534 | |
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 273 days | 6 years 332 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) | 6 Months Ended | |
Feb. 28, 2018 | Feb. 28, 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 Geographical Information (Details Textual) | 6 Months Ended |
Feb. 28, 2018 | |
Number of Reportable Segments | 2 |
Note 11 - Segment and Geograp47
Note 11 - Segment and Geographical Information - Net Sales by Segment (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 28, 2018 | Feb. 28, 2017 | |
Net sales by segment | $ 12,213,975 | $ 8,742,903 | $ 23,757,013 | $ 18,444,926 |
ZERUST [Member] | ||||
Net sales by segment | 10,191,459 | 7,228,027 | 19,719,196 | 15,312,705 |
NaturTec [Member] | ||||
Net sales by segment | $ 2,022,516 | $ 1,514,876 | $ 4,037,817 | $ 3,132,221 |
Note 11 - Segment and Geograp48
Note 11 - Segment and Geographical Information - Cost of Goods Sold by Segment (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 28, 2018 | Feb. 28, 2017 | ||
ZERUST® | $ 8,012,836 | $ 5,870,186 | $ 15,901,306 | $ 12,482,952 | |
ZERUST® | [1] | ||||
Direct Cost of Goods Sold [Member] | ZERUST [Member] | |||||
ZERUST® | $ 6,005,262 | $ 4,254,524 | $ 11,809,242 | $ 8,954,061 | |
ZERUST® | [1] | 58.90% | 58.90% | 59.90% | 58.50% |
Direct Cost of Goods Sold [Member] | NaturTec [Member] | |||||
ZERUST® | $ 1,447,240 | $ 1,068,231 | $ 2,926,439 | $ 2,281,399 | |
ZERUST® | [1] | 71.60% | 70.50% | 72.50% | 72.80% |
Indirect Cost of Goods Sold [Member] | |||||
ZERUST® | $ 560,334 | $ 547,431 | $ 1,165,625 | $ 1,247,492 | |
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 Geographical Information - Net Sales by Geographic Location (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 28, 2018 | Feb. 28, 2017 | |
Net sales by segment | $ 12,213,975 | $ 8,742,903 | $ 23,757,013 | $ 18,444,926 |
Inside the USA to Unaffiliated Customers [Member] | ||||
Net sales by segment | 6,079,835 | 5,245,092 | 12,336,040 | 10,395,832 |
Joint Ventures in Which the Company is a Shareholder Directly and Indirectly Outside the USA [Member] | ||||
Net sales by segment | 814,122 | 433,317 | 1,321,753 | 1,253,375 |
Unaffiliated Customers Outside the USA [Member] | ||||
Net sales by segment | $ 5,320,018 | $ 3,064,494 | $ 10,099,220 | $ 6,795,719 |
Note 11 - Segment and Geograp50
Note 11 - Segment and Geographical Information - Fees for Services Provided to Joint Ventures by Geographic Location as a Percentage of Total Fees (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 28, 2018 | Feb. 28, 2017 | |
Fees | $ 1,608,890 | $ 1,184,028 | $ 3,116,032 | $ 2,499,619 |
Percentage of total fees | 100.00% | 100.00% | 100.00% | 100.00% |
GERMANY | ||||
Fees | $ 236,700 | $ 199,509 | $ 456,574 | $ 402,509 |
Percentage of total fees | 14.70% | 16.80% | 14.70% | 16.10% |
POLAND | ||||
Fees | $ 207,038 | $ 153,453 | $ 413,114 | $ 302,657 |
Percentage of total fees | 12.90% | 13.00% | 13.30% | 12.10% |
JAPAN | ||||
Fees | $ 172,032 | $ 145,722 | $ 346,077 | $ 291,759 |
Percentage of total fees | 10.70% | 12.30% | 11.10% | 11.70% |
SWEDEN | ||||
Fees | $ 165,165 | $ 77,464 | $ 293,119 | $ 164,525 |
Percentage of total fees | 10.30% | 6.50% | 9.40% | 6.60% |
INDIA | ||||
Fees | $ 138,437 | $ 74,196 | $ 225,200 | $ 138,731 |
Percentage of total fees | 8.60% | 6.30% | 7.20% | 5.60% |
FRANCE | ||||
Fees | $ 130,323 | $ 83,112 | $ 269,964 | $ 180,785 |
Percentage of total fees | 8.10% | 7.00% | 8.70% | 7.20% |
THAILAND | ||||
Fees | $ 111,779 | $ 87,627 | $ 214,311 | $ 235,081 |
Percentage of total fees | 6.90% | 7.40% | 6.90% | 9.40% |
KOREA, REPUBLIC OF | ||||
Fees | $ 99,574 | $ 86,103 | $ 183,062 | $ 191,481 |
Percentage of total fees | 6.20% | 7.30% | 5.90% | 7.60% |
UNITED KINGDOM | ||||
Fees | $ 82,432 | $ 53,241 | $ 194,207 | $ 139,372 |
Percentage of total fees | 5.10% | 4.50% | 6.20% | 5.60% |
CZECH REPUBLIC | ||||
Fees | $ 98,726 | $ 73,286 | $ 182,951 | $ 144,114 |
Percentage of total fees | 6.10% | 6.20% | 5.80% | 5.80% |
FINLAND | ||||
Fees | $ 76,546 | $ 66,946 | $ 166,172 | $ 143,282 |
Percentage of total fees | 4.80% | 5.70% | 5.30% | 5.70% |
Other Countries [Member] | ||||
Fees | $ 90,138 | $ 83,369 | $ 171,281 | $ 165,323 |
Percentage of total fees | 5.60% | 7.00% | 5.50% | 6.60% |
Note 11 - Segment and Geograp51
Note 11 - Segment and Geographical Information - Total Long-lived Assets by Geographic Distribution (Details) - USD ($) | Feb. 28, 2018 | Aug. 31, 2017 |
China | $ 7,155,946 | $ 7,359,662 |
CHINA | ||
China | 222,089 | 228,458 |
BRAZIL | ||
China | 49,748 | 54,646 |
GERMANY | ||
China | 13,813 | 14,171 |
INDIA | ||
China | 13,186 | 14,712 |
UNITED STATES | ||
China | $ 6,857,110 | $ 7,047,675 |
Note 11 - Segment and Geograp52
Note 11 - Segment and Geographical Information - Total Net Sales by Geographic Distribution (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 28, 2018 | Feb. 28, 2017 | |
Net sales by segment | $ 12,213,975 | $ 8,742,903 | $ 23,757,013 | $ 18,444,926 |
CHINA | ||||
Net sales by segment | 6,106,942 | 3,296,299 | ||
BRAZIL | ||||
Net sales by segment | 1,456,456 | 1,118,166 | ||
INDIA | ||||
Net sales by segment | 1,078,294 | 733,581 | ||
GERMANY | ||||
Net sales by segment | 244,802 | 217,496 | ||
Other Countries [Member] | ||||
Net sales by segment | 1,363,151 | 1,531,759 | ||
UNITED STATES | ||||
Net sales by segment | $ 13,507,368 | $ 11,547,625 |
Note 12 - Commitments and Con53
Note 12 - Commitments and Contingencies (Details Textual) - USD ($) | 6 Months Ended | ||
Feb. 28, 2018 | Aug. 31, 2017 | Feb. 28, 2017 | |
Accrued Bonuses | $ 880,000 | $ 185,000 | |
Entity Wide Trade Joint Venture Receivables, Three Joint Ventures,Percentage | 69.80% | 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 ($) | Feb. 28, 2018 | Aug. 31, 2017 |
Available for sale securities | $ 3,268,426 | $ 3,766,984 |
Fair Value, Inputs, Level 1 [Member] | ||
Available for sale securities | 3,268,426 | 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 | 6 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 28, 2018 | Feb. 28, 2017 | |
Cash paid for interest | $ 5,779 | $ 3,470 | $ 10,868 | $ 8,093 |
Cash paid for income taxes | $ 45,000 | $ 45,000 |
Note 15 - Income Taxes (Details
Note 15 - Income Taxes (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 28, 2018 | Feb. 28, 2017 | Aug. 31, 2018 | |
Income Tax Expense (Benefit) | $ 841,909 | $ 124,909 | $ 946,900 | $ 242,622 | |
Effective Income Tax Rate Reconciliation, Percent | 37.20% | 20.50% | 26.50% | 21.30% | |
Income Tax Expense (Benefit), Continuing Operations, Adjustment of Deferred Tax (Asset) Liability | $ 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% |