Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Nov. 30, 2022 | Jan. 12, 2023 | |
Document Information [Line Items] | ||
Entity Central Index Key | 0000875582 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --08-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Nov. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-11038 | |
Entity Registrant Name | NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 41-0857886 | |
Entity Address, Address Line One | 4201 Woodland Road | |
Entity Address, City or Town | Circle Pines | |
Entity Address, State or Province | MN | |
Entity Address, Postal Zip Code | 55014 | |
City Area Code | 763 | |
Local Phone Number | 225-6600 | |
Title of 12(b) Security | Common stock, par value $0.02 per share | |
Trading Symbol | NTIC | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 9,366,358 |
Consolidated Balance Sheets (Cu
Consolidated Balance Sheets (Current Period Unaudited) - USD ($) | Nov. 30, 2022 | Aug. 31, 2022 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 6,066,321 | $ 5,333,890 |
Available for sale securities | 5,590 | 5,590 |
Receivables: | ||
Trade, excluding joint ventures, less allowance for doubtful accounts of $439,000 as of November 30, 2022 and August 31, 2022 | 14,398,185 | 14,136,930 |
Trade, joint ventures | 593,601 | 697,861 |
Fees for services provided to joint ventures | 1,123,478 | 1,765,117 |
Income taxes | 226,731 | 0 |
Inventories | 15,236,496 | 16,341,729 |
Prepaid expenses | 2,241,664 | 1,953,764 |
Total current assets | 39,892,066 | 40,234,881 |
PROPERTY AND EQUIPMENT, NET | 12,145,152 | 12,170,493 |
OTHER ASSETS: | ||
Investments in joint ventures | 20,331,746 | 21,814,754 |
Intangible asset, net | 6,530,512 | 6,633,878 |
Goodwill | 4,782,376 | 4,782,376 |
Operating lease right of use asset | 440,921 | 557,571 |
Total other assets | 32,085,555 | 33,788,579 |
Total assets | 84,122,773 | 86,193,953 |
CURRENT LIABILITIES: | ||
Accounts payable | 6,032,918 | 7,796,494 |
Line of credit | 5,450,000 | 5,900,000 |
Income taxes payable | 12,210 | 30,742 |
Accrued liabilities: | ||
Payroll and related benefits | 1,601,033 | 2,297,543 |
Other | 1,069,489 | 667,292 |
Current portion of operating lease | 317,496 | 373,330 |
Total current liabilities | 14,483,146 | 17,065,401 |
LONG-TERM LIABILITIES: | ||
Deferred income tax, net | 1,643,007 | 1,700,015 |
Operating lease, less current portion | 123,425 | 184,241 |
Total long-term liabilities | 1,766,432 | 1,884,256 |
Commitments and contingencies | ||
EQUITY: | ||
Preferred stock, no par value; authorized 10,000 shares; none issued and outstanding | 0 | 0 |
Common stock, $0.02 par value per share; authorized 15,000,000 shares as of November 30, 2022 and August 31, 2022; issued and outstanding 9,366,358 and 9,232,483, respectively | 187,327 | 184,650 |
Additional paid-in capital | 20,721,235 | 19,939,131 |
Retained earnings | 50,563,210 | 50,716,613 |
Accumulated other comprehensive loss | (7,305,836) | (7,245,132) |
Stockholders’ equity | 64,165,936 | 63,595,262 |
Non-controlling interests | 3,707,259 | 3,649,034 |
Total equity | 67,873,195 | 67,244,296 |
Total liabilities and equity | $ 84,122,773 | $ 86,193,953 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Current Period Unaudited)-parentheticals (Parentheticals) - USD ($) | Nov. 30, 2022 | Aug. 31, 2022 |
Accounts Receivable, Allowance for Credit Loss, Current | $ 439,000 | $ 439,000 |
Preferred Stock, No 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, Ending Balance (in shares) | 0 | 0 |
Common Stock, Par or Stated Value Per Share (in dollars per share) | $ 0.02 | $ 0.02 |
Common Stock, Shares Authorized (in shares) | 15,000,000 | 15,000,000 |
Common Stock, Shares, Issued (in shares) | 9,366,358 | 9,232,483 |
Common Stock, Shares, Outstanding, Ending Balance (in shares) | 9,366,358 | 9,232,483 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Nov. 30, 2022 | Nov. 30, 2021 | |
NET SALES: | ||
Net sales | $ 19,952,766 | $ 18,193,413 |
Cost of goods sold | 13,599,642 | 12,490,483 |
Gross profit | 6,353,124 | 5,702,930 |
JOINT VENTURE OPERATIONS: | ||
Equity in income from joint ventures | 1,189,404 | 1,374,749 |
Fees for services provided to joint ventures | 1,181,805 | 1,258,858 |
Total joint venture operations | 2,371,209 | 2,633,607 |
OPERATING EXPENSES: | ||
Selling expenses | 3,507,434 | 3,237,758 |
General and administrative expenses | 3,130,599 | 2,596,347 |
Research and development expenses | 1,256,724 | 1,235,821 |
Total operating expenses | 7,894,757 | 7,069,926 |
OPERATING INCOME | 829,576 | 1,266,611 |
REMEASUREMENT GAIN ON ACQUISITION OF EQUITY METHOD INVESTEE | 0 | 3,951,550 |
INTEREST INCOME | 6,168 | 10,943 |
INTEREST EXPENSE | (91,331) | (2,891) |
INCOME BEFORE INCOME TAX EXPENSE | 744,413 | 5,226,213 |
INCOME TAX EXPENSE | 110,733 | 504,380 |
NET INCOME | 633,680 | 4,721,833 |
NET INCOME ATTRIBUTABLE TO NON-CONTROLLING INTERESTS | 131,438 | 228,074 |
NET INCOME ATTRIBUTABLE TO NTIC | $ 502,242 | $ 4,493,759 |
NET INCOME ATTRIBUTABLE TO NTIC PER COMMON SHARE: | ||
Basic (in dollars per share) | $ 0.05 | $ 0.49 |
Diluted (in dollars per share) | $ 0.05 | $ 0.46 |
WEIGHTED AVERAGE COMMON SHARES ASSUMED OUTSTANDING: | ||
Basic (in shares) | 9,317,680 | 9,199,976 |
Diluted (in shares) | 9,718,931 | 9,779,770 |
CASH DIVIDENDS DECLARED PER COMMON SHARE (in dollars per share) | $ 0.07 | $ 0.07 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) | 3 Months Ended | |
Nov. 30, 2022 | Nov. 30, 2021 | |
NET INCOME | $ 633,680 | $ 4,721,833 |
OTHER COMPREHENSIVE LOSS – FOREIGN CURRENCY TRANSLATION ADJUSTMENT | (53,917) | (409,064) |
COMPREHENSIVE INCOME | 579,763 | 4,312,769 |
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO NON-CONTROLLING INTERESTS | (138,225) | (156,065) |
COMPREHENSIVE INCOME ATTRIBUTABLE TO NTIC | $ 717,988 | $ 4,468,834 |
Consolidated Statements of Equi
Consolidated Statements of Equity (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | AOCI Attributable to Parent [Member] | Noncontrolling Interest [Member] | Total |
BALANCE AT AUGUST 31, 2021 (in shares) at Aug. 31, 2021 | 9,184,811 | |||||
BALANCE AT AUGUST 31, 2021 at Aug. 31, 2021 | $ 183,696 | $ 18,736,268 | $ 46,973,092 | $ (3,525,030) | $ 3,382,555 | $ 65,750,581 |
Stock options exercised (in shares) | 16,000 | |||||
Stock options exercised | $ 320 | 138,880 | 0 | 0 | 0 | 139,200 |
Stock issued for employee stock purchase plan (in shares) | 2,635 | |||||
Stock issued for employee stock purchase plan | $ 53 | 38,479 | 0 | 0 | 0 | 38,532 |
Investment by non-controlling interest | 0 | 0 | 0 | 0 | (200,000) | (200,000) |
Dividends paid to shareholders | 0 | 0 | (643,121) | 0 | 0 | (643,121) |
Net income | 0 | 0 | 4,493,759 | 0 | 228,074 | 4,721,833 |
Comprehensive loss | 0 | 0 | 0 | (337,055) | (72,009) | (409,064) |
Stock option expense | $ 0 | 232,883 | 0 | 0 | 0 | 232,883 |
BALANCE AT NOVEMBER 30, 2021 (in shares) at Nov. 30, 2021 | 9,203,446 | |||||
BALANCE AT NOVEMBER 30, 2021 at Nov. 30, 2021 | $ 184,069 | 19,146,510 | 50,823,730 | (3,862,085) | 3,338,620 | 69,630,844 |
BALANCE AT AUGUST 31, 2021 (in shares) at Aug. 31, 2022 | 9,232,483 | |||||
BALANCE AT AUGUST 31, 2021 at Aug. 31, 2022 | $ 184,650 | 19,939,131 | 50,716,613 | (7,245,132) | 3,649,034 | 67,244,296 |
Stock options exercised (in shares) | 130,254 | |||||
Stock options exercised | $ 2,605 | 413,958 | 0 | 0 | 0 | 416,563 |
Stock issued for employee stock purchase plan (in shares) | 3,620 | |||||
Stock issued for employee stock purchase plan | $ 72 | 38,624 | 0 | 0 | 0 | 38,696 |
Investment by non-controlling interest | 0 | 0 | 0 | 0 | (80,000) | (80,000) |
Dividends paid to shareholders | 0 | 0 | (655,645) | 0 | 0 | (655,645) |
Net income | 0 | 0 | 502,242 | 0 | 131,438 | 633,680 |
Comprehensive loss | 0 | 0 | 0 | (60,704) | 6,787 | (53,917) |
Stock option expense | $ 0 | 329,522 | 0 | 0 | 0 | 329,522 |
BALANCE AT NOVEMBER 30, 2021 (in shares) at Nov. 30, 2022 | 9,336,357 | |||||
BALANCE AT NOVEMBER 30, 2021 at Nov. 30, 2022 | $ 187,327 | $ 20,721,235 | $ 50,563,210 | $ (7,305,836) | $ 3,707,259 | $ 67,873,195 |
Consolidated Statements of Eq_2
Consolidated Statements of Equity (Unaudited)-parentheticals - USD ($) | 3 Months Ended | |
Nov. 30, 2022 | Nov. 30, 2021 | |
Common Stock [Member] | ||
Stock option expense | $ 0 | $ 0 |
Additional Paid-in Capital [Member] | ||
Stock option expense | 329,522 | 232,883 |
Retained Earnings [Member] | ||
Stock option expense | 0 | 0 |
AOCI Attributable to Parent [Member] | ||
Stock option expense | 0 | 0 |
Noncontrolling Interest [Member] | ||
Stock option expense | 0 | 0 |
Stock option expense | $ 329,522 | $ 232,883 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Nov. 30, 2022 | Nov. 30, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
NET INCOME | $ 633,680 | $ 4,721,833 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Stock-based compensation | 329,522 | 232,883 |
Depreciation expense | 262,876 | 215,306 |
Amortization expense | 147,811 | 119,894 |
Remeasurement gain on acquisition of equity method investee | 0 | (3,951,550) |
Equity in income from joint ventures | (1,189,404) | (1,374,749) |
Dividends received from joint ventures | 3,042,688 | 5,042,271 |
Deferred income taxes | (54,376) | 126,852 |
Changes in current assets and liabilities: | ||
Trade, excluding joint ventures | (539,925) | (308,325) |
Trade, joint ventures | 104,260 | (166,438) |
Fees for services provided to joint ventures | 641,639 | 304,258 |
Income taxes | (226,731) | (119,978) |
Inventories | 948,661 | 516,283 |
Prepaid expenses and other | (252,301) | (418,888) |
Accounts payable | (1,573,008) | 98,545 |
Income tax payable | (18,407) | (102,074) |
Accrued liabilities | (254,442) | (1,617,099) |
Net cash provided by operating activities | 2,002,543 | 3,319,024 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Acquisition of Zerust India business, net of cash acquired | 0 | (5,062,003) |
Purchases of property and equipment | (409,094) | (315,390) |
Investments in patents | (44,445) | (52,197) |
Net cash used in investing activities | (453,539) | (5,429,590) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Net proceeds from line of credit | (450,000) | 2,500,000 |
Dividends paid on NTIC common stock | (655,645) | (643,121) |
Proceeds from the exercise of stock options | 416,563 | 139,200 |
Dividends received by non-controlling interest | (80,000) | (200,000) |
Proceeds from employee stock purchase plan | 38,696 | 38,532 |
Net cash (used in) provided by financing activities | (730,386) | 1,834,611 |
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS: | (86,187) | 642,879 |
NET INCREASE IN CASH AND CASH EQUIVALENTS | 732,431 | 366,924 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 5,333,890 | 7,680,641 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ 6,066,321 | $ 8,047,565 |
Note 1 - Interim Financial Info
Note 1 - Interim Financial Information | 3 Months Ended |
Nov. 30, 2022 | |
Notes to Financial Statements | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | 1. INTERIM FINANCIAL INFORMATION 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 November 30, 2022 and August 31, 2022 and the results of the Company’s operations for the three months ended November 30, 2022 and 2021, the changes in stockholders’ equity for the three months ended November 30, 2022 and 2021 and the Company’s cash flows for the three months ended November 30, 2022 and 2021, in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP). 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-K for the fiscal year ended August 31, 2022. These consolidated financial statements also should be read in conjunction with the “ Management s Discussion and Analysis of Financial Condition and Results of Operations Operating results for the three months ended November 30, 2022 are not necessarily indicative of the results that may be expected for the full fiscal year ending August 31, 2023. The Company evaluates events occurring after the date of the consolidated financial statements requiring recording or disclosure in the consolidated financial statements. Impact of COVID-19 Pandemic As a result of the novel coronavirus (COVID-19) pandemic and related government mandated restrictions on the Company’s business, as well as the businesses of its joint ventures, customers and suppliers, disruption to the Company’s business and the manufacture and sale of its products and services continued to occur during the first quarter of fiscal 2023 and may continue during the remainder of fiscal 2023. In the first quarter of fiscal 2023, the Company continued to be impacted by shipping issues, including increased costs, supply chain issues, including longer lead times, and raw material cost increases. |
Note 2 - Accounting Pronounceme
Note 2 - Accounting Pronouncements | 3 Months Ended |
Nov. 30, 2022 | |
Notes to Financial Statements | |
Accounting Standards Update and Change in Accounting Principle [Text Block] | 2. ACCOUNTING PRONOUNCEMENTS Recently Adopted Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-13, Measurement of Credit Losses on Financial Instruments |
Note 3 - Inventories
Note 3 - Inventories | 3 Months Ended |
Nov. 30, 2022 | |
Notes to Financial Statements | |
Inventory Disclosure [Text Block] | 3. INVENTORIES Inventories consisted of the following: November 30, 2022 August 31, 2022 Production materials $ 5,340,632 $ 6,496,656 Finished goods 9,895,864 9,845,073 $ 15,236,496 $ 16,341,729 |
Note 4 - Property and Equipment
Note 4 - Property and Equipment, Net | 3 Months Ended |
Nov. 30, 2022 | |
Notes to Financial Statements | |
Property, Plant and Equipment Disclosure [Text Block] | 4. PROPERTY AND EQUIPMENT, NET Property and equipment, net consisted of the following: November 30, 2022 August 31, 2022 Land $ 310,365 $ 310,365 Buildings and improvements 14,927,540 14,778,759 Machinery and equipment 5,749,249 5,643,320 20,987,154 20,732,444 Less accumulated depreciation (8,842,002 ) (8,561,951 ) $ 12,145,152 $ 12,170,493 |
Note 5 - Intangible Assets, Net
Note 5 - Intangible Assets, Net | 3 Months Ended |
Nov. 30, 2022 | |
Notes to Financial Statements | |
Intangible Assets Disclosure [Text Block] | 5. INTANGIBLE ASSETS, NET Intangible assets, net consisted of the following: As of November 30, 2022 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Patents and trademarks $ 3,270,100 $ (2,557,670 ) $ 712,430 Customer relationships 6,347,000 (528,918 ) 5,818,082 Total intangible assets, net 9,617,100 (3,086,588 ) 6,530,512 As of August 31, 2022 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Patents and trademarks $ 3,225,655 $ (2,515,644 ) $ 710,011 Customer relationships 6,347,000 (423,133 ) 5,923,867 Total intangible assets, net 9,572,655 (2,938,777 ) 6,633,878 Amortization expense related to intangible assets was $147,811 and $119,894 for the three months ended November 30, 2022 and 2021, respectively. As of November 31, 2022, future amortization expense related to intangible assets for each of the next five years and thereafter was as follows: Remainder of 2023 $ 613,000 2024 613,000 2025 613,000 2026 613,000 2027 613,000 Thereafter 3,465,512 Total $ 6,530,512 |
Note 6 - Investments in Joint V
Note 6 - Investments in Joint Ventures | 3 Months Ended |
Nov. 30, 2022 | |
Notes to Financial Statements | |
Equity Method Investments and Joint Ventures Disclosure [Text Block] | 6. INVESTMENTS IN JOINT VENTURES The consolidated financial statements of the Company’s foreign joint ventures are initially prepared using the accounting principles accepted in the respective joint ventures’ countries of domicile. Amounts related to foreign joint ventures reported in the below tables and the accompanying consolidated financial statements have subsequently been adjusted to conform with U.S. GAAP in all material respects. All material profits on sales recorded that remain on the consolidated balance sheet from the Company to its joint ventures and from joint ventures to other joint ventures have been eliminated for financial reporting purposes. Financial information from the audited and unaudited financial statements of the Company’s joint venture in Germany, Excor Korrosionsschutz – Technologien und Produkte GmbH (EXCOR), and all the Company’s other joint ventures are summarized as follows: As of November 30, 2022 Total EXCOR All Other Current assets $ 50,644,203 $ 23,082,855 $ 27,561,348 Total assets 54,232,523 25,102,700 29,129,823 Current liabilities 12,684,139 2,848,920 9,835,219 Noncurrent liabilities 354,984 - 354,984 Joint ventures’ equity 41,193,400 22,253,780 18,939,620 Northern Technologies International Corporation’s share of joint ventures’ equity 20,331,746 11,126,892 9,204,854 Northern Technologies International Corporation’s share of joint ventures’ undistributed earnings 19,303,110 11,095,987 8,207,123 Three Months Ended November 30, 2022 Total EXCOR All Other Net sales $ 24,730,289 $ 10,145,921 $ 14,584,368 Gross profit 9,693,568 4,720,042 4,973,526 Net income 2,646,908 1,742,287 904,621 Northern Technologies International Corporation’s share of equity in income from joint ventures 1,189,400 871,144 318,260 Northern Technologies International Corporation's dividends received from joint ventures 3,042,688 2,459,500 583,188 As of August 31, 2022 Total EXCOR All Other Current assets $ 52,428,831 $ 26,047,914 $ 26,380,917 Total assets 55,854,457 27,932,532 27,921,925 Current liabilities 10,981,833 2,943,895 8,037,938 Noncurrent liabilities 1,138,980 — 1,138,980 Joint ventures’ equity 43,733,644 24,988,637 18,745,007 Northern Technologies International Corporation’s share of joint ventures’ equity 21,814,754 12,494,320 9,320,434 Northern Technologies International Corporation’s share of joint ventures’ undistributed earnings 21,256,923 12,463,415 8,793,508 Three Months Ended November 30, 2021 Total EXCOR All Other Net sales $ 27,022,995 $ 11,300,228 $ 15,722,767 Gross profit 11,032,959 5,468,986 5,563,973 Net income 2,777,605 1,821,547 956,058 Northern Technologies International Corporation’s share of equity in income from joint ventures 1,374,749 910,773 463,976 Northern Technologies International Corporation's dividends received from joint ventures 5,042,271 4,255,200 787,071 |
Note 7 - Corporate Debt
Note 7 - Corporate Debt | 3 Months Ended |
Nov. 30, 2022 | |
Notes to Financial Statements | |
Debt Disclosure [Text Block] | 7. CORPORATE DEBT The Company had a revolving line of credit with a bank of $7,000,000 as of November 30, 2022. The line of credit had a maturity date of January 7, 2023 and bore interest at an annual rate equal to the daily Bloomberg Short-Term Bank Yield (BSBY) Index plus 250 basis points (2.50%). Borrowings of $5,450,000 and $5,900,000 were outstanding under the line of credit as of November 30, 2022 and August 31, 2022, respectively. The average interest rate was 5.80% and 2.57% during the three months ended November 30, 2022 and 2021. The obligations of the Company under the loan agreement were secured by a lien on all of the Company’s personal property, excepting certain liens. The loan agreement contained 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. As of November 30, 2022, the Company was in compliance with all debt covenants. As of November 30, 2022 and August 31, 2022, the Company did not On January 6, 2023, the Company entered into a Credit Agreement with JPMorgan Chase Bank, N.A., which provides the Company with a senior secured revolving line of credit of up to $10.0 million, which includes a $5.0 million sublimit for standby letters of credit. In connection with the execution of the new Credit Agreement, the prior loan agreement was terminated. See Note 16 entitled “Subsequent Event.” |
Note 8 - Stockholders' Equity
Note 8 - Stockholders' Equity | 3 Months Ended |
Nov. 30, 2022 | |
Notes to Financial Statements | |
Stockholders' Equity Note Disclosure [Text Block] | 8. STOCKHOLDERS EQUITY On October 20, 2022, the Company’s Board of Directors declared a cash dividend of $0.07 per share of the Company’s common stock, payable on November 16, 2022 to stockholders of record on November 3, 2022. On October 20, 2021, the Company’s Board of Directors declared a cash dividend of $0.07 per share of the Company’s common stock, payable on November 17, 2021 to stockholders of record on November 3, 2021. During the three months ended November 30, 2022 and 2021, the Company repurchased no shares of its common stock. The Company issued 3,620 and 2,636 shares of common stock on September 1, 2022 and 2021, respectively, under the Northern Technologies International Corporation Employee Stock Purchase Plan (the ESPP). The ESPP is compensatory for financial reporting purposes. As of November 30, 2022, 65,600 shares of common stock remained available for sale under the ESPP. |
Note 9 - Net Income Per Common
Note 9 - Net Income Per Common Share | 3 Months Ended |
Nov. 30, 2022 | |
Notes to Financial Statements | |
Earnings Per Share [Text Block] | 9. NET INCOME PER COMMON SHARE 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 net income per share computation for the three months ended November 30, 2022 and 2021: Three Months Ended Numerator: November 30, 2022 November 30, 2021 Net income attributable to NTIC $ 502,242 $ 4,493,759 Denominator Basic – weighted shares outstanding 9,317,680 9,199,976 Weighted shares assumed upon exercise of stock options 401,251 579,794 Diluted – weighted shares outstanding 9,718,931 9,779,770 Basic net income per share: $ 0.05 $ 0.49 Diluted net income per share: $ 0.05 $ 0.46 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. Net income per common share was based on the weighted average number of common shares outstanding during the periods when computing basic net income per share. When dilutive, stock options are included as equivalents using the treasury stock market method when computing the diluted net income per share. Excluded from the computation of diluted net income per share for the three months ended November 30, 2022 were options outstanding to purchase 305,514 shares of common stock. Excluded from the computation of diluted net income per share for the three months ended November 30, 2021 were options outstanding to purchase 311,061 shares of common stock. |
Note 10 - Stock-based Compensat
Note 10 - Stock-based Compensation | 3 Months Ended |
Nov. 30, 2022 | |
Notes to Financial Statements | |
Share-Based Payment Arrangement [Text Block] | 10. STOCK-BASED COMPENSATION A summary of stock option activities under the Northern Technologies International Corporation Amended and Restated 2019 Stock Incentive Plan (the 2019 Plan) and the Northern Technologies International Corporation Amended and Restated 2007 Stock Incentive Plan (the 2007 Plan) is as follows: Number of Weighted Outstanding as of August 31, 2022 1,544,727 $ 10.23 Granted 272,102 $ 11.38 Exercised (178,331 ) $ 6.03 Cancelled/Forfeited - - Outstanding as of November 30, 2022 1,638,498 $ 10.88 The weighted average per share fair value of options granted during the three months ended November 30, 2022 and 2021 was $4.85 and $7.29, respectively. The weighted average remaining contractual life of the options outstanding as of November 30, 2022 and 2021 was 6.66 years and 6.41 years, respectively. The Company recognized compensation expense of $329,522 and $232,883 during the three months ended November 30, 2022 and 2021, respectively. As of November 30, 2022, there was $1,999,892 of unrecognized compensation expense. The amount is expected to be recognized over a period of 2.7 years. |
Note 11 - Segment and Geographi
Note 11 - Segment and Geographic Information | 3 Months Ended |
Nov. 30, 2022 | |
Notes to Financial Statements | |
Segment Reporting Disclosure [Text Block] | 11. SEGMENT AND GEOGRAPHIC INFORMATION Segment Information The Company’s chief operating decision maker is its Chief Executive Officer. The Company’s business is organized into two The following table sets forth the Company’s net sales for the three months ended November 30, 2022 and 2021 by segment: Three Months Ended November 30, 2022 November 30, 2021 ZERUST® net sales $ 15,370,001 $ 14,423,785 Natur-Tec® net sales 4,582,765 3,769,628 Total net sales $ 19,952,766 $ 18,193,413 The following table sets forth the Company’s cost of goods sold for the three months ended November 30, 2022 and 2021 by segment: November 30, 2022 % of November 30, % of Direct cost of goods sold ZERUST® $ 9,179,254 59.7 % $ 8,706,667 60.4 % Natur-Tec® 3,570,673 77.9 % 2,922,098 77.5 % Indirect cost of goods sold 849,715 NA 861,718 NA Total net cost of goods sold …. $ 13,599,642 $ 12,490,483 * 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 utilized in evaluating product performance, nor does such allocation occur for internal financial reporting. Geographic Information Net sales by geographic location for the three months ended November 30, 2022 and 2021 were as follows: Three Months Ended November 30, 2022 November 30, 2021 Inside the U.S.A. to unaffiliated customers $ 7,478,161 $ 6,156,322 Outside the U.S.A. to: Joint ventures in which the Company is a shareholder directly and indirectly 633,465 840,439 Unaffiliated customers 11,841,140 11,196,652 $ 19,952,766 $ 18,193,413 Net sales by geographic location are based on the location of the customer. Fees for services provided to joint ventures by geographic location as a percentage of total fees for services provided to joint ventures during the three months ended November 30, 2022 and 2021 were as follows: Three Months Ended November 30, 2022 % of Total Fees for Services Provided to Joint Ventures November 30, 2021 % of Total Fees for Services Provided to Joint Ventures Germany $ 193,828 16.4 % $ 218,430 17.4 % Poland 186,696 15.8 % 176,927 14.1 % Japan 147,920 12.5 % 166,807 13.3 % France 109,357 9.3 % 116,295 9.2 % Sweden 100,436 8.5 % 108,070 8.6 % Finland 90,432 7.7 % 80,173 6.4 % Thailand 82,956 7.0 % 87,554 7.0 % Czech Republic 80,332 6.8 % 70,098 5.6 % South Korea 63,395 5.4 % 62,626 5.0 % United Kingdom 57,691 4.9 % 94,927 7.5 % Other 68,762 5.7 % 76,951 5.9 % $ 1,181,805 100.0 % $ 1,258,858 100.0 % The geographical distribution of total property and equipment and net sales is as follows: At November 30, 2022 At August 31, 2022 China $ 5,740,401 $ 5,826,898 Other 631,835 565,022 United States 5,772,916 5,778,573 Total property and equipment, net $ 12,145,152 $ 12,170,493 Three Months Ended November 30, 2022 November 30, 2021 China $ 3,746,640 $ 4,057,853 Brazil 1,367,418 1,296,217 India 4,846,927 4,476,984 Other 2,513,620 2,206,037 United States 7,478,161 6,156,322 Total net sales $ 19,952,766 $ 18,193,413 Long-lived assets consist of property and equipment. These assets are periodically reviewed to assure the net realizable value from the estimated future production based on forecasted sales exceeds the carrying value of the assets. Sales to the Company’s joint ventures are included in the foregoing segment and geographic information; however, sales by the Company’s joint ventures to other parties are not included. The foregoing segment and geographic information represents only sales recognized directly by the Company and sold in that geographic territory. All joint venture operations, including equity in income, fees for services and related dividends, are primarily related to ZERUST® products and services. |
Note 12 - Commitments and Conti
Note 12 - Commitments and Contingencies | 3 Months Ended |
Nov. 30, 2022 | |
Notes to Financial Statements | |
Commitments and Contingencies Disclosure [Text Block] | 12. COMMITMENTS AND CONTINGENCIES Concentrations Two joint ventures (consisting of the Company’s joint ventures in Thailand and Japan) accounted for 47.4% of the Company’s trade joint venture receivables as of November 30, 2022, and two joint ventures (consisting of the Company’s joint ventures in South Korea and Japan) accounted for 42.4% of the Company’s trade joint venture receivables as of November 30, 2021. Legal Matters 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 amount within the range is a better estimate than any other amount. The Company discloses a contingent liability even if the liability is not probable or the amount is not estimable, or both, if there is a reasonable possibility that material loss may have been incurred. In the opinion of management, as of November 30, 2022, the amount of liability, if any, with respect to these matters, individually or in the aggregate, will not materially affect the Company’s consolidated results of operations, financial position or cash flows. |
Note 13 - Fair Value Measuremen
Note 13 - Fair Value Measurements | 3 Months Ended |
Nov. 30, 2022 | |
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, and the Company estimates that market value approximates costs. 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 November 30, 2022 Level 1 Level 2 Level 3 Available for sale securities $ 5,590 $ 5,590 $ — $ — Fair Value Measurements Using Inputs Considered as Fair value as of August 31, 2022 Level 1 Level 2 Level 3 Available for sale securities $ 5,590 $ 5,590 $ — $ — There were no transfers between Level 1, Level 2, or Level 3 during the three months ended November 30, 2022 or 2021. |
Note 14 - Supplemental Cash Flo
Note 14 - Supplemental Cash Flow Information | 3 Months Ended |
Nov. 30, 2022 | |
Notes to Financial Statements | |
Cash Flow, Supplemental Disclosures [Text Block] | 14. SUPPLEMENTAL CASH FLOW INFORMATION Supplemental disclosures of cash flow information consisted of: Three Months Ended November 30, 2022 November 30, 2021 Cash paid for interest $ 91,331 $ 2,891 |
Note 15 - Income Taxes
Note 15 - Income Taxes | 3 Months Ended |
Nov. 30, 2022 | |
Notes to Financial Statements | |
Income Tax Disclosure [Text Block] | 15. INCOME TAXES Income tax expense for the three months ended November 30, 2022 was $110,733 compared to $504,380 for the three months ended November 30, 2021. The expense was largely due to foreign operations. The Company has federal and state tax credit carry forwards, net operating loss carry forwards and foreign tax carry forwards. The Company has recorded a full valuation allowance against the U.S. deferred tax assets as of November 30, 2022 and August 31, 2022. |
Note 16 - Subsequent Event
Note 16 - Subsequent Event | 3 Months Ended |
Nov. 30, 2022 | |
Notes to Financial Statements | |
Subsequent Events [Text Block] | 16. SUBSEQUENT EVENT On January 6, 2023, Northern Technologies International Corporation entered into a Credit Agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A. (“JPM”), which provides NTIC with a senior secured revolving line of credit (the “Credit Facility”) of up to $10.0 million. The Credit Facility includes a $5.0 million sublimit for standby letters of credit. Unless terminated earlier, the Credit Facility will mature on January 6, 2024, and the principal amount thereunder, together with all accrued unpaid interest and other amounts owing thereunder, if any, will be payable in full on such date. Borrowings under the Credit Agreement bear interest at a floating rate, at the option of NTIC, equal to either the CB Floating Rate or the Adjusted SOFR Rate. The term “CB Floating Rate” means the greater of the Prime Rate in the United States or 2.50%. The term “Adjusted SOFR Rate” means the term secured overnight financing rate for either one, three or six months (depending on the interest period selected by NTIC) plus 0.10% per annum. With respect to any borrowings using an Adjusted SOFR Rate, there is an applicable margin of 2.15% applied per annum. There is no applicable margin with respect to borrowings using a CB Floating Rate. The Credit Agreement contains customary affirmative and negative covenants, including, among other matters, limitations on NTIC’s ability to incur additional debt, grant liens, engage in certain business operations and transactions, make certain investments, modify its organizational documents or form any new subsidiaries, subject to certain exceptions. Further, the Credit Agreement contains a negative covenant that restricts the ability of NTIC to redeem or repurchase its common stock or pay dividends if the result of which would cause an event of default under the Credit Agreement. The Credit Agreement also requires the Company to maintain a Fixed Charge Coverage Ratio of at least 1.25 to 1.00. The term “Fixed Charge Coverage Ratio” means the ratio, computed for the NTIC on a consolidated basis, of net income plus income tax expense, plus amortization expense, plus depreciation expense, plus interest expense, and plus dividends received from joint ventures, minus unfinanced capital expenditures and equity in income from joint ventures, all computed for the twelve month period then ending, to scheduled principal payments made, plus scheduled finance lease payments made, plus interest expense paid, plus income tax expense paid, and plus cash distributions and dividends paid, all computed for the same twelve month period then ending. The Credit Agreement also contains customary events of default, including, without limitation, payment defaults, material inaccuracy of representations and warranties, covenant defaults, bankruptcy and insolvency proceedings, cross-defaults to certain other agreements, breach of any financial covenant and change of control. Upon the occurrence and during the continuance of any event of default, JPM may accelerate the payment of the obligations thereunder and exercise various other customary default remedies. In connection with the execution of the Credit Agreement described above, on January 6, 2023, the Amended and Restated Loan Agreement dated August 31, 2021 between Northern Technologies International Corporation and PNC Bank, National Association was terminated. |
Note 3 - Inventories (Tables)
Note 3 - Inventories (Tables) | 3 Months Ended |
Nov. 30, 2022 | |
Notes Tables | |
Schedule of Inventory, Current [Table Text Block] | November 30, 2022 August 31, 2022 Production materials $ 5,340,632 $ 6,496,656 Finished goods 9,895,864 9,845,073 $ 15,236,496 $ 16,341,729 |
Note 4 - Property and Equipme_2
Note 4 - Property and Equipment, Net (Tables) | 3 Months Ended |
Nov. 30, 2022 | |
Notes Tables | |
Property, Plant and Equipment [Table Text Block] | November 30, 2022 August 31, 2022 Land $ 310,365 $ 310,365 Buildings and improvements 14,927,540 14,778,759 Machinery and equipment 5,749,249 5,643,320 20,987,154 20,732,444 Less accumulated depreciation (8,842,002 ) (8,561,951 ) $ 12,145,152 $ 12,170,493 |
Note 5 - Intangible Assets, N_2
Note 5 - Intangible Assets, Net (Tables) | 3 Months Ended |
Nov. 30, 2022 | |
Notes Tables | |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | Remainder of 2023 $ 613,000 2024 613,000 2025 613,000 2026 613,000 2027 613,000 Thereafter 3,465,512 Total $ 6,530,512 |
Customer Relationships and Assembled Workforce [Member] | |
Notes Tables | |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | As of November 30, 2022 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Patents and trademarks $ 3,270,100 $ (2,557,670 ) $ 712,430 Customer relationships 6,347,000 (528,918 ) 5,818,082 Total intangible assets, net 9,617,100 (3,086,588 ) 6,530,512 As of August 31, 2022 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Patents and trademarks $ 3,225,655 $ (2,515,644 ) $ 710,011 Customer relationships 6,347,000 (423,133 ) 5,923,867 Total intangible assets, net 9,572,655 (2,938,777 ) 6,633,878 |
Note 6 - Investments in Joint_2
Note 6 - Investments in Joint Ventures (Tables) | 3 Months Ended |
Nov. 30, 2022 | |
Notes Tables | |
Condensed Balance Sheet [Table Text Block] | As of November 30, 2022 Total EXCOR All Other Current assets $ 50,644,203 $ 23,082,855 $ 27,561,348 Total assets 54,232,523 25,102,700 29,129,823 Current liabilities 12,684,139 2,848,920 9,835,219 Noncurrent liabilities 354,984 - 354,984 Joint ventures’ equity 41,193,400 22,253,780 18,939,620 Northern Technologies International Corporation’s share of joint ventures’ equity 20,331,746 11,126,892 9,204,854 Northern Technologies International Corporation’s share of joint ventures’ undistributed earnings 19,303,110 11,095,987 8,207,123 As of August 31, 2022 Total EXCOR All Other Current assets $ 52,428,831 $ 26,047,914 $ 26,380,917 Total assets 55,854,457 27,932,532 27,921,925 Current liabilities 10,981,833 2,943,895 8,037,938 Noncurrent liabilities 1,138,980 — 1,138,980 Joint ventures’ equity 43,733,644 24,988,637 18,745,007 Northern Technologies International Corporation’s share of joint ventures’ equity 21,814,754 12,494,320 9,320,434 Northern Technologies International Corporation’s share of joint ventures’ undistributed earnings 21,256,923 12,463,415 8,793,508 |
Condensed Income Statement [Table Text Block] | Three Months Ended November 30, 2022 Total EXCOR All Other Net sales $ 24,730,289 $ 10,145,921 $ 14,584,368 Gross profit 9,693,568 4,720,042 4,973,526 Net income 2,646,908 1,742,287 904,621 Northern Technologies International Corporation’s share of equity in income from joint ventures 1,189,400 871,144 318,260 Northern Technologies International Corporation's dividends received from joint ventures 3,042,688 2,459,500 583,188 Three Months Ended November 30, 2021 Total EXCOR All Other Net sales $ 27,022,995 $ 11,300,228 $ 15,722,767 Gross profit 11,032,959 5,468,986 5,563,973 Net income 2,777,605 1,821,547 956,058 Northern Technologies International Corporation’s share of equity in income from joint ventures 1,374,749 910,773 463,976 Northern Technologies International Corporation's dividends received from joint ventures 5,042,271 4,255,200 787,071 |
Note 9 - Net Income Per Commo_2
Note 9 - Net Income Per Common Share (Tables) | 3 Months Ended |
Nov. 30, 2022 | |
Notes Tables | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | Three Months Ended Numerator: November 30, 2022 November 30, 2021 Net income attributable to NTIC $ 502,242 $ 4,493,759 Denominator Basic – weighted shares outstanding 9,317,680 9,199,976 Weighted shares assumed upon exercise of stock options 401,251 579,794 Diluted – weighted shares outstanding 9,718,931 9,779,770 Basic net income per share: $ 0.05 $ 0.49 Diluted net income per share: $ 0.05 $ 0.46 |
Note 10 - Stock-based Compens_2
Note 10 - Stock-based Compensation (Tables) | 3 Months Ended |
Nov. 30, 2022 | |
Notes Tables | |
Share-Based Payment Arrangement, Option, Activity [Table Text Block] | Number of Weighted Outstanding as of August 31, 2022 1,544,727 $ 10.23 Granted 272,102 $ 11.38 Exercised (178,331 ) $ 6.03 Cancelled/Forfeited - - Outstanding as of November 30, 2022 1,638,498 $ 10.88 |
Note 11 - Segment and Geograp_2
Note 11 - Segment and Geographic Information (Tables) | 3 Months Ended |
Nov. 30, 2022 | |
Notes Tables | |
Reconciliation of Revenue from Segments to Consolidated [Table Text Block] | Three Months Ended November 30, 2022 November 30, 2021 ZERUST® net sales $ 15,370,001 $ 14,423,785 Natur-Tec® net sales 4,582,765 3,769,628 Total net sales $ 19,952,766 $ 18,193,413 |
Reconciliation of Cost of Goods Sold from Segments to Consolidated [Table Text Block] | November 30, 2022 % of November 30, % of Direct cost of goods sold ZERUST® $ 9,179,254 59.7 % $ 8,706,667 60.4 % Natur-Tec® 3,570,673 77.9 % 2,922,098 77.5 % Indirect cost of goods sold 849,715 NA 861,718 NA Total net cost of goods sold …. $ 13,599,642 $ 12,490,483 |
Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area [Table Text Block] | Three Months Ended November 30, 2022 November 30, 2021 Inside the U.S.A. to unaffiliated customers $ 7,478,161 $ 6,156,322 Outside the U.S.A. to: Joint ventures in which the Company is a shareholder directly and indirectly 633,465 840,439 Unaffiliated customers 11,841,140 11,196,652 $ 19,952,766 $ 18,193,413 |
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas [Table Text Block] | At November 30, 2022 At August 31, 2022 China $ 5,740,401 $ 5,826,898 Other 631,835 565,022 United States 5,772,916 5,778,573 Total property and equipment, net $ 12,145,152 $ 12,170,493 |
Revenue from External Customers by Geographic Areas [Table Text Block] | Three Months Ended November 30, 2022 November 30, 2021 China $ 3,746,640 $ 4,057,853 Brazil 1,367,418 1,296,217 India 4,846,927 4,476,984 Other 2,513,620 2,206,037 United States 7,478,161 6,156,322 Total net sales $ 19,952,766 $ 18,193,413 |
Fees for Services Provided to Joint Ventures [Member] | |
Notes Tables | |
Reconciliation of Revenue from Segments to Consolidated [Table Text Block] | Three Months Ended November 30, 2022 % of Total Fees for Services Provided to Joint Ventures November 30, 2021 % of Total Fees for Services Provided to Joint Ventures Germany $ 193,828 16.4 % $ 218,430 17.4 % Poland 186,696 15.8 % 176,927 14.1 % Japan 147,920 12.5 % 166,807 13.3 % France 109,357 9.3 % 116,295 9.2 % Sweden 100,436 8.5 % 108,070 8.6 % Finland 90,432 7.7 % 80,173 6.4 % Thailand 82,956 7.0 % 87,554 7.0 % Czech Republic 80,332 6.8 % 70,098 5.6 % South Korea 63,395 5.4 % 62,626 5.0 % United Kingdom 57,691 4.9 % 94,927 7.5 % Other 68,762 5.7 % 76,951 5.9 % $ 1,181,805 100.0 % $ 1,258,858 100.0 % |
Note 13 - Fair Value Measurem_2
Note 13 - Fair Value Measurements (Tables) | 3 Months Ended |
Nov. 30, 2022 | |
Notes Tables | |
Fair Value Measurement Inputs and Valuation Techniques [Table Text Block] | Fair Value Measurements Using Inputs Considered as Fair value as of November 30, 2022 Level 1 Level 2 Level 3 Available for sale securities $ 5,590 $ 5,590 $ — $ — Fair Value Measurements Using Inputs Considered as Fair value as of August 31, 2022 Level 1 Level 2 Level 3 Available for sale securities $ 5,590 $ 5,590 $ — $ — |
Note 14 - Supplemental Cash F_2
Note 14 - Supplemental Cash Flow Information (Tables) | 3 Months Ended |
Nov. 30, 2022 | |
Notes Tables | |
Schedule of Cash Flow, Supplemental Disclosures [Table Text Block] | Three Months Ended November 30, 2022 November 30, 2021 Cash paid for interest $ 91,331 $ 2,891 |
Note 3 - Inventories - Inventor
Note 3 - Inventories - Inventories (Details) - USD ($) | Nov. 30, 2022 | Aug. 31, 2022 |
Production materials | $ 5,340,632 | $ 6,496,656 |
Finished goods | 9,895,864 | 9,845,073 |
Inventory, Net, Total | $ 15,236,496 | $ 16,341,729 |
Note 4 - Property and Equipme_3
Note 4 - Property and Equipment, Net - Components of Property and Equipment, Net (Details) - USD ($) | Nov. 30, 2022 | Aug. 31, 2022 |
Land | $ 310,365 | $ 310,365 |
Buildings and improvements | 14,927,540 | 14,778,759 |
Machinery and equipment | 5,749,249 | 5,643,320 |
Property, Plant and Equipment, Gross, Ending Balance | 20,987,154 | 20,732,444 |
Less accumulated depreciation | (8,842,002) | (8,561,951) |
Property, Plant and Equipment, Net, Total | $ 12,145,152 | $ 12,170,493 |
Note 5 - Intangible Assets, N_3
Note 5 - Intangible Assets, Net (Details Textual) - USD ($) | 3 Months Ended | |
Nov. 30, 2022 | Nov. 30, 2021 | |
Amortization of Intangible Assets | $ 147,811 | $ 119,894 |
Note 5 - Intangible Assets, N_4
Note 5 - Intangible Assets, Net - Intangible Assets, Net (Details) - USD ($) | Nov. 30, 2022 | Aug. 31, 2022 |
Gross carrying amount | $ 9,617,100 | $ 9,572,655 |
Accumulated amortization | (3,086,588) | (2,938,777) |
Net carrying amount | 6,530,512 | 6,633,878 |
Patents and Trademarks [Member] | ||
Gross carrying amount | 3,270,100 | 3,225,655 |
Accumulated amortization | (2,557,670) | (2,515,644) |
Net carrying amount | 712,430 | 710,011 |
Customer Relationships [Member] | ||
Gross carrying amount | 6,347,000 | 6,347,000 |
Accumulated amortization | (528,918) | (423,133) |
Net carrying amount | $ 5,818,082 | $ 5,923,867 |
Note 5 - Intangible Assets, N_5
Note 5 - Intangible Assets, Net - Future Amortization Expense (Details) - USD ($) | Nov. 30, 2022 | Aug. 31, 2022 |
Remainder of 2023 | $ 613,000 | |
2024 | 613,000 | |
2025 | 613,000 | |
2026 | 613,000 | |
2027 | 613,000 | |
Thereafter | 3,465,512 | |
Total | $ 6,530,512 | $ 6,633,878 |
Note 6 - Investments in Joint_3
Note 6 - Investments in Joint Ventures - Condensed Balance Sheet of EXCOR and All Other Joint Ventures (Details) - USD ($) | Nov. 30, 2022 | Aug. 31, 2022 |
Current assets | $ 39,892,066 | $ 40,234,881 |
Total assets | 84,122,773 | 86,193,953 |
Current liabilities | 14,483,146 | 17,065,401 |
Noncurrent liabilities | 1,766,432 | 1,884,256 |
Joint ventures’ equity | 64,165,936 | 63,595,262 |
Investments in joint ventures | 20,331,746 | 21,814,754 |
EXCOR and All Other Joint Venturs [Member] | ||
Investments in joint ventures | 20,331,746 | 21,814,754 |
Northern Technologies International Corporation’s share of joint ventures’ undistributed earnings | 19,303,110 | 21,256,923 |
EXCOR [Member] | ||
Investments in joint ventures | 11,126,892 | 12,494,320 |
Northern Technologies International Corporation’s share of joint ventures’ undistributed earnings | 11,095,987 | 12,463,415 |
All Other [Member] | ||
Investments in joint ventures | 9,204,854 | 9,320,434 |
Northern Technologies International Corporation’s share of joint ventures’ undistributed earnings | 8,207,123 | 8,793,508 |
Equity Method Investment, Nonconsolidated Investee or Group of Investees [Member] | ||
Current assets | 50,644,203 | 52,428,831 |
Total assets | 54,232,523 | 55,854,457 |
Current liabilities | 12,684,139 | 10,981,833 |
Noncurrent liabilities | 354,984 | 1,138,980 |
Joint ventures’ equity | 41,193,400 | 43,733,644 |
EXCOR [Member] | ||
Current assets | 23,082,855 | 26,047,914 |
Total assets | 25,102,700 | 27,932,532 |
Current liabilities | 2,848,920 | 2,943,895 |
Noncurrent liabilities | 0 | |
Joint ventures’ equity | 22,253,780 | 24,988,637 |
Joint Ventures in France [Member] | ||
Current assets | 26,380,917 | |
Total assets | 27,921,925 | |
Current liabilities | 8,037,938 | |
Noncurrent liabilities | 1,138,980 | |
Joint ventures’ equity | $ 18,745,007 | |
All Other [Member] | ||
Current assets | 27,561,348 | |
Total assets | 29,129,823 | |
Current liabilities | 9,835,219 | |
Noncurrent liabilities | 354,984 | |
Joint ventures’ equity | $ 18,939,620 |
Note 6 - Investments in Joint_4
Note 6 - Investments in Joint Ventures - Condensed Income Statement of EXCOR and All Other Joint Ventures (Details) - USD ($) | 3 Months Ended | |
Nov. 30, 2022 | Nov. 30, 2021 | |
Net sales | $ 19,952,766 | $ 18,193,413 |
Gross profit | 6,353,124 | 5,702,930 |
Net income | 502,242 | 4,493,759 |
Northern Technologies International Corporation’s share of equity in income from joint ventures | 1,189,404 | 1,374,749 |
EXCOR and All Other Joint Venturs [Member] | ||
Northern Technologies International Corporation’s share of equity in income from joint ventures | 1,189,400 | 1,374,749 |
Northern Technologies International Corporation's dividends received from joint ventures | 3,042,688 | 5,042,271 |
EXCOR [Member] | ||
Northern Technologies International Corporation’s share of equity in income from joint ventures | 871,144 | 910,773 |
Northern Technologies International Corporation's dividends received from joint ventures | 2,459,500 | 4,255,200 |
All Other [Member] | ||
Northern Technologies International Corporation’s share of equity in income from joint ventures | 318,260 | 463,976 |
Northern Technologies International Corporation's dividends received from joint ventures | 583,188 | 787,071 |
Equity Method Investment, Nonconsolidated Investee or Group of Investees [Member] | ||
Net sales | 24,730,289 | 27,022,995 |
Gross profit | 9,693,568 | 11,032,959 |
Net income | 2,646,908 | 2,777,605 |
EXCOR [Member] | ||
Net sales | 10,145,921 | 11,300,228 |
Gross profit | 4,720,042 | 5,468,986 |
Net income | 1,742,287 | 1,821,547 |
Joint Ventures in France [Member] | ||
Net sales | 15,722,767 | |
Gross profit | 5,563,973 | |
Net income | $ 956,058 | |
All Other [Member] | ||
Net sales | 14,584,368 | |
Gross profit | 4,973,526 | |
Net income | $ 904,621 |
Note 7 - Corporate Debt (Detail
Note 7 - Corporate Debt (Details Textual) - USD ($) | 3 Months Ended | |||
Nov. 30, 2022 | Nov. 30, 2021 | Jan. 06, 2023 | Aug. 31, 2022 | |
PNC Bank [Member] | Revolving Credit Facility [Member] | ||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 7,000,000 | |||
Long-Term Line of Credit, Total | $ 5,450,000 | $ 5,900,000 | ||
Debt, Weighted Average Interest Rate | 5.80% | 2.57% | ||
Letters of Credit Outstanding, Amount | $ 0 | $ 0 | ||
PNC Bank [Member] | Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||
Debt Instrument, Basis Spread on Variable Rate | 2.50% | |||
PNC Bank [Member] | Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) Swap Rate [Member] | ||||
Debt Instrument, Basis Spread on Variable Rate | 2.50% | |||
JP Morgan Chase Bank [Member] | Revolving Credit Facility [Member] | Subsequent Event [Member] | ||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 10,000,000 | |||
JP Morgan Chase Bank [Member] | Standby Letters of Credit [Member] | Subsequent Event [Member] | ||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 5,000,000 |
Note 8 - Stockholders' Equity (
Note 8 - Stockholders' Equity (Details Textual) - $ / shares | 3 Months Ended | |||||
Oct. 20, 2022 | Sep. 01, 2022 | Oct. 20, 2021 | Sep. 01, 2021 | Nov. 30, 2022 | Nov. 30, 2021 | |
Common Stock, Dividends, Per Share, Declared | $ 0.07 | $ 0.07 | $ 0.07 | $ 0.07 | ||
Dividends Payable, Date Declared | Nov. 16, 2022 | Nov. 17, 2021 | ||||
Stock Repurchased and Retired During Period, Shares (in shares) | 0 | 0 | ||||
Stock Issued During Period, Shares, Employee Stock Purchase Plans | 3,620 | 2,636 | ||||
ESPP [Member] | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Available for Grant | 65,600 |
Note 9 - Net Income Per Commo_3
Note 9 - Net Income Per Common Share (Details Textual) - shares | 3 Months Ended | |
Nov. 30, 2022 | Nov. 30, 2021 | |
Share-Based Payment Arrangement, Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 305,514 | 311,061 |
Note 9 - Net Income Per Commo_4
Note 9 - Net Income Per Common Share - Reconciliation of the Earnings Per Share Computations (Details) - USD ($) | 3 Months Ended | |
Nov. 30, 2022 | Nov. 30, 2021 | |
Net income | $ 502,242 | $ 4,493,759 |
Basic – weighted shares outstanding (in shares) | 9,317,680 | 9,199,976 |
Weighted shares assumed upon exercise of stock options (in shares) | 401,251 | 579,794 |
Diluted – weighted shares outstanding (in shares) | 9,718,931 | 9,779,770 |
Basic net income per share: (in dollars per share) | $ 0.05 | $ 0.49 |
Diluted net income per share: (in dollars per share) | $ 0.05 | $ 0.46 |
Note 10 - Stock-based Compens_3
Note 10 - Stock-based Compensation (Details Textual) - USD ($) | 3 Months Ended | |
Nov. 30, 2022 | Nov. 30, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 4.85 | $ 7.29 |
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term (Year) | 6 years 7 months 28 days | 6 years 4 months 28 days |
Share-Based Payment Arrangement, Expense | $ 329,522 | $ 232,883 |
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total | $ 1,999,892 | |
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition (Year) | 2 years 8 months 12 days |
Note 10 - Stock-based Compens_4
Note 10 - Stock-based Compensation - Stock Option Activity (Details) | 3 Months Ended |
Nov. 30, 2022 $ / shares shares | |
Number of shares, Outstanding (in shares) | shares | 1,544,727 |
Weighted average exercise price, Outstanding (in dollars per share) | $ / shares | $ 10.23 |
Number of shares, Options granted (in shares) | shares | 272,102 |
Weighted average exercise price, Options granted (in dollars per share) | $ / shares | $ 11.38 |
Number of shares, Options exercised (in shares) | shares | (178,331) |
Weighted average exercise price, Options exercised (in dollars per share) | $ / shares | $ 6.03 |
Number of shares, Options Forfeited (in shares) | shares | 0 |
Weighted average exercise price, Options forfeited (in dollars per share) | $ / shares | $ 0 |
Number of shares, Outstanding (in shares) | shares | 1,638,498 |
Weighted average exercise price, Outstanding (in dollars per share) | $ / shares | $ 10.88 |
Note 11 - Segment and Geograp_3
Note 11 - Segment and Geographic Information (Details Textual) | 3 Months Ended |
Nov. 30, 2022 | |
Number of Reportable Segments | 2 |
Note 11 - Segment and Geograp_4
Note 11 - Segment and Geographic Information - Net Sales by Segment (Details) - USD ($) | 3 Months Ended | |
Nov. 30, 2022 | Nov. 30, 2021 | |
Net sales | $ 19,952,766 | $ 18,193,413 |
ZERUST [Member] | ||
Net sales | 15,370,001 | 14,423,785 |
NaturTec [Member] | ||
Net sales | $ 4,582,765 | $ 3,769,628 |
Note 11 - Segment and Geograp_5
Note 11 - Segment and Geographic Information - Cost of Goods Sold by Segment (Details) - USD ($) | 3 Months Ended | |
Nov. 30, 2022 | Nov. 30, 2021 | |
ZERUST® | $ 13,599,642 | $ 12,490,483 |
Indirect Cost of Goods Sold [Member] | ||
ZERUST® | 849,715 | 861,718 |
ZERUST [Member] | Direct Cost of Goods Sold [Member] | ||
ZERUST® | $ 9,179,254 | $ 8,706,667 |
ZERUST® | 59.70% | 60.40% |
NaturTec [Member] | Direct Cost of Goods Sold [Member] | ||
ZERUST® | $ 3,570,673 | $ 2,922,098 |
ZERUST® | 77.90% | 77.50% |
Note 11 - Segment and Geograp_6
Note 11 - Segment and Geographic Information - Net Sales by Geographic Location (Details) - USD ($) | 3 Months Ended | |
Nov. 30, 2022 | Nov. 30, 2021 | |
Net sales | $ 19,952,766 | $ 18,193,413 |
Inside the USA to Unaffiliated Customers [Member] | ||
Net sales | 7,478,161 | 6,156,322 |
Joint Ventures in Which the Company is a Shareholder Directly and Indirectly Outside the USA [Member] | ||
Net sales | 633,465 | 840,439 |
Unaffiliated Customers Outside the USA [Member] | ||
Net sales | $ 11,841,140 | $ 11,196,652 |
Note 11 - Segment and Geograp_7
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 | |
Nov. 30, 2022 | Nov. 30, 2021 | |
Germany | $ 1,181,805 | $ 1,258,858 |
Germany | 100% | 100% |
GERMANY | ||
Germany | $ 193,828 | $ 218,430 |
Germany | 16.40% | 17.40% |
POLAND | ||
Germany | $ 186,696 | $ 176,927 |
Germany | 15.80% | 14.10% |
JAPAN | ||
Germany | $ 147,920 | $ 166,807 |
Germany | 12.50% | 13.30% |
FRANCE | ||
Germany | $ 109,357 | $ 116,295 |
Germany | 9.30% | 9.20% |
SWEDEN | ||
Germany | $ 100,436 | $ 108,070 |
Germany | 8.50% | 8.60% |
FINLAND | ||
Germany | $ 90,432 | $ 80,173 |
Germany | 7.70% | 6.40% |
THAILAND | ||
Germany | $ 82,956 | $ 87,554 |
Germany | 7% | 7% |
CZECHIA | ||
Germany | $ 80,332 | $ 70,098 |
Germany | 6.80% | 5.60% |
KOREA, REPUBLIC OF | ||
Germany | $ 63,395 | $ 62,626 |
Germany | 5.40% | 5% |
UNITED KINGDOM | ||
Germany | $ 57,691 | $ 94,927 |
Germany | 4.90% | 7.50% |
Other Countries [Member] | ||
Germany | $ 68,762 | $ 76,951 |
Germany | 5.70% | 5.90% |
Note 11 - Segment and Geograp_8
Note 11 - Segment and Geographic Information - Total Long-lived Assets by Geographic Distribution (Details) - USD ($) | Nov. 30, 2022 | Aug. 31, 2022 |
China | $ 12,145,152 | $ 12,170,493 |
CHINA | ||
China | 5,740,401 | 5,826,898 |
Other Countries [Member] | ||
China | 631,835 | 565,022 |
UNITED STATES | ||
China | $ 5,772,916 | $ 5,778,573 |
Note 11 - Segment and Geograp_9
Note 11 - Segment and Geographic Information - Total Net Sales by Geographic Distribution (Details) - USD ($) | 3 Months Ended | |
Nov. 30, 2022 | Nov. 30, 2021 | |
Net sales | $ 19,952,766 | $ 18,193,413 |
CHINA | ||
Net sales | 3,746,640 | 4,057,853 |
BRAZIL | ||
Net sales | 1,367,418 | 1,296,217 |
INDIA | ||
Net sales | 4,846,927 | 4,476,984 |
Other Countries [Member] | ||
Net sales | 2,513,620 | 2,206,037 |
UNITED STATES | ||
Net sales | $ 7,478,161 | $ 6,156,322 |
Note 12 - Commitments and Con_2
Note 12 - Commitments and Contingencies (Details Textual) | Nov. 30, 2022 | Nov. 30, 2021 |
Entity Wide Trade Joint Venture Receivables, Two Joint Ventures, Percentage | 47.40% | 42.40% |
Note 13 - Fair Value Measurem_3
Note 13 - Fair Value Measurements - Assets and Liabilities Measured at Fair Value Recurring Basis (Details) - Fair Value, Recurring [Member] - USD ($) | Nov. 30, 2022 | Aug. 31, 2022 |
Available for sale securities | $ 5,590 | $ 5,590 |
Fair Value, Inputs, Level 1 [Member] | ||
Available for sale securities | 5,590 | 5,590 |
Fair Value, Inputs, Level 2 [Member] | ||
Available for sale securities | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | ||
Available for sale securities | $ 0 | $ 0 |
Note 14 - Supplemental Cash F_3
Note 14 - Supplemental Cash Flow Information - Supplemental Disclosures of Cash Flow Information (Details) - USD ($) | 3 Months Ended | |
Nov. 30, 2022 | Nov. 30, 2021 | |
Cash paid for interest | $ 91,331 | $ 2,891 |
Note 15 - Income Taxes (Details
Note 15 - Income Taxes (Details Textual) - USD ($) | 3 Months Ended | |
Nov. 30, 2022 | Nov. 30, 2021 | |
Income Tax Expense (Benefit), Total | $ 110,733 | $ 504,380 |
Note 16 - Subsequent Event (Det
Note 16 - Subsequent Event (Details Textual) - JP Morgan Chase Bank [Member] - Subsequent Event [Member] $ in Millions | Jan. 06, 2023 USD ($) |
Revolving Credit Facility [Member] | |
Line of Credit Facility, Maximum Borrowing Capacity | $ 10 |
Debt Instrument, Covenants, Fixed Charge Coverage Ratio | 1.25 |
Revolving Credit Facility [Member] | Prime Rate [Member] | |
Debt Instrument, Floating Rate, Benchmark | 2.50% |
Revolving Credit Facility [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | |
Debt Instrument, Basis Spread on Variable Rate | 0.10% |
Revolving Credit Facility [Member] | Adjusted SOFR Rate [Member] | |
Debt Instrument, Basis Spread on Variable Rate | 2.15% |
Standby Letters of Credit [Member] | |
Line of Credit Facility, Maximum Borrowing Capacity | $ 5 |