Exhibit 99.2
PROFORMA FINANCIAL DATA
CHASE CORPORATION UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENTS
The following unaudited pro forma condensed financial statements have been prepared to reflect Chase Corporation’s (the “Company”) June 30, 2010 sale of its electronic manufacturing services business (Chase EMS) which is to be accounted for as a discontinued operation. The unaudited pro forma condensed balance sheet assumes the sale of Chase EMS on May 31, 2010, the date of the Company’s most recently completed interim period. Pro forma information is based upon the historical balance sheet data of Chase Corporation and Chase EMS as of that date. The unaudited pro forma condensed statements of operations for the nine months ended May 31, 2010 and 2009, and fiscal years ended August 31, 2009, 2008 and 2007 give effect to the sale of Chase EMS as if the sale occurred on September 1, 2006. These unaudited pro forma condensed financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto included in its Quarterly Report on Form 10-Q for the quarter ended May 31, 2010 and its Annual Report on Form 10-K for the year ended August 31, 2009.
These unaudited pro forma condensed financial statements are for informational purposes only. They do not purport to indicate the results that would have actually been obtained had the sale been completed on the assumed date or for the periods presented, or which may be realized in the future.
The unaudited pro forma condensed financial statements presented are based on the assumptions and adjustments described in the accompanying notes and do not reflect any adjustments for non-recurring items or changes in operating strategies arising as a result of the sale. However, actual adjustments may differ materially from the information presented. These pro forma financial statements include no assumptions regarding the use of proceeds, which are presented as additional retained cash on the unaudited pro forma condensed balance sheet. The anticipated nonrecurring after-tax gain on the sale is not reflected in the pro forma condensed statements of operations. Accordingly, the actual effect of the sale, due to this and other factors, could differ from the pro forma adjustments presented herein. However, management believes that the assumptions used and the adjustments made are reasonable under the circumstances and given the information available.
CHASE CORPORATION
UNAUDITED PRO FORMA CONDENSED BALANCE SHEET
AS OF MAY 31, 2010
In thousands
| | Historical | | Pro Forma
Adjustments | (A) | Pro Forma | |
ASSETS | | | | | | | |
Current Assets: | | | | | | | |
Cash & cash equivalents | | $ | 4,321 | | $ | 13,531 | (B) | $ | 17,852 | |
Accounts receivable, net | | 21,805 | | (3,295 | ) | 18,510 | |
Inventories, net | | 18,476 | | (4,356 | ) | 14,120 | |
Prepaid expenses and other current assets | | 1,002 | | (103 | ) | 899 | |
Deferred income taxes | | 368 | | — | | 368 | |
Total current assets | | 45,972 | | 5,777 | | 51,749 | |
| | | | | | | |
Property, plant and equipment, net | | 28,082 | | (878 | ) | 27,204 | |
| | | | | | | |
Other Assets: | | | | | | | |
Goodwill | | 22,973 | | (5,999 | ) | 16,974 | |
Intangible assets, net | | 18,145 | | — | | 18,145 | |
Cash surrender value of life insurance | | 5,827 | | — | | 5,827 | |
Other assets | | 720 | | — | | 720 | |
| | $ | 121,719 | | $ | (1,100 | ) | $ | 120,619 | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | |
Current Liabilities: | | | | | | | |
Accounts payable | | $ | 8,175 | | (1,364 | ) | $ | 6,811 | |
Accrued expenses | | 8,008 | | (208 | )(C) | 7,800 | |
Current portion of long-term debt | | 4,400 | | — | | 4,400 | |
Total current liabilities | | 20,583 | | (1,572 | ) | 19,011 | |
| | | | | | | |
Long-term debt, less current portion | | 13,683 | | — | | 13,683 | |
Deferred compensation | | 1,549 | | — | | 1,549 | |
Accumulated pension obligation | | 6,162 | | — | | 6,162 | |
Other liabilities | | 580 | | — | | 580 | |
Deferred income taxes | | 2,167 | | — | | 2,167 | |
| | | | | | | |
Stockholders’ Equity: | | | | | | | |
Common stock | | 883 | | — | | 883 | |
Additional paid-in capital | | 9,478 | | — | | 9,478 | |
Accumulated other comprehensive loss | | (5,171 | ) | — | | (5,171 | ) |
Retained earnings | | 71,805 | | 472 | (D) | 72,277 | |
Total stockholders’ equity | | 76,995 | | 472 | | 77,467 | |
Total liabilities and stockholders’ equity | | $ | 121,719 | | $ | (1,100 | ) | $ | 120,619 | |
See accompanying notes to unaudited pro forma condensed financial statements.
CHASE CORPORATION
UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED MAY 31, 2010
In thousands, except share and per share amounts
| | Historical | | Pro Forma
Adjustments | (A) | Pro Forma | |
| | | | | | | |
Revenues | | $ | 99,746 | | $ | (16,438 | ) | $ | 83,308 | |
| | | | | | | |
Costs and Expenses | | | | | | | |
Cost of products and services sold | | 65,536 | | (13,076 | ) | 52,460 | |
Selling, general and administrative expenses | | 21,253 | | (934 | )(E) | 20,319 | |
| | | | | | | |
Operating income | | 12,957 | | (2,428 | ) | 10,529 | |
| | | | | | | |
Other income (expense) | | (185 | ) | — | | (185 | ) |
| | | | | | | |
Income before income taxes | | 12,772 | | (2,428 | ) | 10,344 | |
| | | | | | | |
Income taxes | | 4,624 | | (947 | )(F) | 3,677 | |
| | | | | | | |
Income from continuing operations | | $ | 8,148 | | $ | (1,481 | ) | $ | 6,667 | |
| | | | | | | |
Income from continuing operations available to Common shareholders, per common and common equivalent share (G) | | | | | | | |
Basic | | $ | 0.91 | | | | $ | 0.74 | |
Diluted | | $ | 0.90 | | | | $ | 0.74 | |
| | | | | | | |
Weighted average shares outstanding (G) | | | | | | | |
Basic | | 8,720,258 | | | | 8,720,258 | |
Diluted | | 8,793,176 | | | | 8,793,176 | |
See accompanying notes to unaudited pro forma condensed financial statements.
CHASE CORPORATION
UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED MAY 31, 2009
In thousands, except share and per share amounts
| | Historical | | Pro Forma
Adjustments | (A) | Pro Forma | |
| | | | | | | |
Revenues | | $ | 79,162 | | $ | (12,326 | ) | $ | 66,836 | |
| | | | | | | |
Costs and Expenses | | | | | | | |
Cost of products and services sold | | 56,836 | | (10,282 | ) | 46,554 | |
Selling, general and administrative expenses | | 16,463 | | (600 | )(E) | 15,863 | |
Loss on impairment of assets | | 499 | | — | | 499 | |
| | | | | | | |
Operating income | | 5,364 | | (1,444 | ) | 3,920 | |
| | | | | | | |
Other income (expense) | | 313 | | — | | 313 | |
| | | | | | | |
Income before income taxes | | 5,677 | | (1,444 | ) | 4,233 | |
| | | | | | | |
Income taxes | | 2,100 | | (563 | )(F) | 1,537 | |
| | | | | | | |
Income from continuing operations | | $ | 3,577 | | $ | (881 | ) | $ | 2,696 | |
| | | | | | | |
Income from continuing operations available to Common shareholders, per common and common equivalent share (G) | | | | | | | |
Basic | | $ | 0.42 | | | | $ | 0.31 | |
Diluted | | $ | 0.40 | | | | $ | 0.30 | |
| | | | | | | |
Weighted average shares outstanding (G) | | | | | | | |
Basic | | 8,406,158 | | | | 8,406,158 | |
Diluted | | 8,679,983 | | | | 8,679,983 | |
See accompanying notes to unaudited pro forma condensed financial statements.
CHASE CORPORATION
UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED AUGUST 31, 2009
In thousands, except share and per share amounts
| | Historical | | Pro Forma
Adjustments | (A) | Pro Forma | |
| | | | | | | |
Revenues | | $ | 107,606 | | $ | (16,370 | ) | $ | 91,236 | |
| | | | | | | |
Costs and Expenses | | | | | | | |
Cost of products and services sold | | 75,742 | | (13,481 | ) | 62,261 | |
Selling, general and administrative expenses | | 21,985 | | (802 | )(E) | 21,183 | |
Loss on impairment of assets | | 499 | | — | | 499 | |
| | | | | | | |
Operating income | | 9,380 | | (2,087 | ) | 7,293 | |
| | | | | | | |
Other income (expense) | | 441 | | — | | 441 | |
| | | | | | | |
Income before income taxes | | 9,821 | | (2,087 | ) | 7,734 | |
| | | | | | | |
Income taxes | | 3,436 | | (814 | )(F) | 2,622 | |
| | | | | | | |
Income from continuing operations | | $ | 6,385 | | $ | (1,273 | ) | $ | 5,112 | |
| | | | | | | |
Income from continuing operations available to Common shareholders, per common and common equivalent share (G) | | | | | | | |
Basic | | $ | 0.74 | | | | $ | 0.60 | |
Diluted | | $ | 0.72 | | | | $ | 0.58 | |
| | | | | | | |
Weighted average shares outstanding (G) | | | | | | | |
Basic | | 8,589,200 | | | | 8,589,200 | |
Diluted | | 8,872,331 | | | | 8,872,331 | |
See accompanying notes to unaudited pro forma condensed financial statements.
CHASE CORPORATION
UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED AUGUST 31, 2008
In thousands, except share and per share amounts
| | Historical | | Pro Forma
Adjustments | (A) | Pro Forma | |
| | | | | | | |
Revenues | | $ | 132,478 | | $ | (19,301 | ) | $ | 113,177 | |
| | | | | | | |
Costs and Expenses | | | | | | | |
Cost of products and services sold | | 89,680 | | (15,912 | ) | 73,768 | |
Selling, general and administrative expenses | | 23,951 | | (987 | )(E) | 22,964 | |
| | | | | | | |
Operating income | | 18,847 | | (2,402 | ) | 16,445 | |
| | | | | | | |
Other income (expense) | | 437 | | — | | 437 | |
| | | | | | | |
Income before income taxes | | 19,284 | | (2,402 | ) | 16,882 | |
| | | | | | | |
Income taxes | | 6,910 | | (937 | )(F) | 5,973 | |
| | | | | | | |
Income from continuing operations | | $ | 12,374 | | $ | (1,465 | ) | $ | 10,909 | |
| | | | | | | |
Income from continuing operations available to Common shareholders, per common and common equivalent share (G) | | | | | | | |
Basic | | $ | 1.48 | | | | $ | 1.30 | |
Diluted | | $ | 1.42 | | | | $ | 1.25 | |
| | | | | | | |
Weighted average shares outstanding (G) | | | | | | | |
Basic | | 8,366,658 | | | | 8,366,658 | |
Diluted | | 8,737,605 | | | | 8,737,605 | |
See accompanying notes to unaudited pro forma condensed financial statements.
CHASE CORPORATION
UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED AUGUST 31, 2007
In thousands, except share and per share amounts
| | Historical | | Pro Forma
Adjustments | (A) | Pro Forma | |
| | | | | | | |
Revenues | | $ | 127,460 | | $ | (18,265 | ) | $ | 109,195 | |
| | | | | | | |
Costs and Expenses | | | | | | | |
Cost of products and services sold | | 87,890 | | (14,994 | ) | 72,896 | |
Selling, general and administrative expenses | | 22,421 | | (1,032 | )(E) | 21,389 | |
Loss on impairment of assets | | 311 | | — | | 311 | |
| | | | | | | |
Operating income | | 16,838 | | (2,239 | ) | 14,599 | |
| | | | | | | |
Other income (expense) | | (659 | ) | — | | (659 | ) |
| | | | | | | |
Income before income taxes | | 16,179 | | (2,239 | ) | 13,940 | |
| | | | | | | |
Income taxes | | 5,986 | | (873 | )(F) | 5,113 | |
| | | | | | | |
Income from continuing operations | | $ | 10,193 | | $ | (1,366 | ) | $ | 8,827 | |
| | | | | | | |
Income from continuing operations available to Common shareholders, per common and common equivalent share (G) | | | | | | | |
Basic | | $ | 1.26 | | | | $ | 1.09 | |
Diluted | | $ | 1.22 | | | | $ | 1.06 | |
| | | | | | | |
Weighted average shares outstanding (G) | | | | | | | |
Basic | | 8,080,770 | | | | 8,080,770 | |
Diluted | | 8,354,375 | | | | 8,354,375 | |
See accompanying notes to unaudited pro forma condensed financial statements.
CHASE CORPORATION
NOTES TO PRO FORMA CONDENSED FINANCIAL STATEMENTS
In thousands
(A) The Pro Forma Adjustments columns represent the elimination of historical results of operations, assets, and liabilities of the Chase EMS business. All other notes below explain adjustments other than those related to eliminating historical balances.
(B) Represents estimated adjusted sales proceeds less cash paid for transaction costs.
(C) Represents elimination of Chase EMS historical accrued expenses of $513 less income tax payable of $305 on the estimated net gain on the sale of the Chase EMS business.
(D) Adjustment reflects the estimated net gain on the sale of the Chase EMS business.
(E) Chase Corporation has historically incurred certain fixed administrative costs, of which a portion has been allocated to the Chase EMS business. These fixed costs have been eliminated from the adjustment as it is assumed these costs would have been incurred by Chase Corporation regardless.
(F) Adjustment at the statutory rate of 39% for the estimated tax effect of the adjustments discussed above.
(G) The calculation of earnings per share has been amended to reflect the recently issued guidance within ASC Topic 260, Earnings Per Share. Accordingly, historical shares and earnings per share may not agree to previously reported amounts.
