Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | |
Feb. 28, 2015 | Mar. 31, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | CHASE CORP | |
Entity Central Index Key | 830524 | |
Document Type | 10-Q | |
Document Period End Date | 28-Feb-15 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -23 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 9,182,762 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q2 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Feb. 28, 2015 | Aug. 31, 2014 |
In Thousands, unless otherwise specified | ||
Current Assets: | ||
Cash & cash equivalents | $17,406 | $53,222 |
Accounts receivable, less allowance for doubtful accounts of $713 and $670 | 35,073 | 35,601 |
Inventories | 33,376 | 31,539 |
Prepaid expenses and other current assets | 2,607 | 2,437 |
Due from sale of product line | 739 | 739 |
Prepaid income taxes | 2,468 | |
Deferred income taxes | 2,314 | 2,315 |
Total current assets | 93,983 | 125,853 |
Property, plant and equipment, net | 43,183 | 44,085 |
Other Assets: | ||
Goodwill | 44,137 | 38,280 |
Intangible assets, less accumulated amortization of $25,077 and $22,941 | 49,137 | 27,215 |
Cash surrender value of life insurance | 7,256 | 7,249 |
Restricted investments | 1,377 | 1,256 |
Funded pension plan | 1,022 | 962 |
Deferred income taxes | 437 | 470 |
Other assets | 156 | 175 |
Total assets | 240,688 | 245,545 |
Current Liabilities: | ||
Accounts payable | 13,666 | 15,121 |
Accrued payroll and other compensation | 3,475 | 7,754 |
Accrued expenses | 4,880 | 4,842 |
Accrued income taxes | 1,030 | 1,377 |
Current portion of long-term debt | 9,700 | 7,000 |
Total current liabilities | 32,751 | 36,094 |
Long-term debt, less current portion | 47,600 | 51,800 |
Deferred compensation | 2,121 | 2,037 |
Accumulated pension obligation | 10,566 | 10,418 |
Other liabilities | 106 | 126 |
Deferred income taxes | 7,578 | 7,580 |
Commitments and Contingencies (Note 10) | ||
Equity: | ||
First Serial Preferred Stock, $1.00 par value: Authorized 100,000 shares; none issued | ||
Common stock, $.10 par value: Authorized 20,000,000 shares; 9,153,724 shares at February 28, 2015 and 9,103,292 shares at August 31, 2014 issued and outstanding | 915 | 910 |
Additional paid-in capital | 14,233 | 13,620 |
Accumulated other comprehensive loss | -6,948 | -4,250 |
Retained earnings | 131,766 | 126,272 |
Chase Corporation stockholders' equity | 139,966 | 136,552 |
Noncontrolling interest | 938 | |
Total equity | 139,966 | 137,490 |
Total liabilities and equity | $240,688 | $245,545 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Feb. 28, 2015 | Aug. 31, 2014 |
In Thousands, except Share data, unless otherwise specified | ||
CONSOLIDATED BALANCE SHEETS | ||
Accounts receivable, allowance for doubtful accounts (in dollars) | $713 | $670 |
Intangible assets, accumulated amortization (in dollars) | $25,077 | $22,941 |
First Serial Preferred Stock, par value (in dollars per share) | $1 | $1 |
First Serial Preferred Stock, Authorized shares | 100,000 | 100,000 |
First Serial Preferred Stock, issued shares | 0 | 0 |
Common stock, par value (in dollars per share) | $0.10 | $0.10 |
Common stock, Authorized shares | 20,000,000 | 20,000,000 |
Common stock, shares issued | 9,153,724 | 9,103,292 |
Common stock, shares outstanding | 9,153,724 | 9,103,292 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 |
Revenue | ||||
Sales | $51,380 | $50,412 | $106,670 | $104,067 |
Royalties and commissions | 924 | 779 | 1,567 | 1,307 |
Total revenues | 52,304 | 51,191 | 108,237 | 105,374 |
Costs and Expenses | ||||
Cost of products and services sold | 34,235 | 33,951 | 68,715 | 69,429 |
Selling, general and administrative expenses | 11,924 | 9,930 | 22,719 | 20,369 |
Operating income | 6,145 | 7,310 | 16,803 | 15,576 |
Interest expense | -270 | -285 | -544 | -588 |
Gain on sale of product line (Note 8) | 5,706 | |||
Other (expense) income | 381 | -125 | 766 | -230 |
Income before income taxes | 6,256 | 6,900 | 17,025 | 20,464 |
Income taxes | 2,190 | 2,415 | 5,959 | 7,162 |
Net income | 4,066 | 4,485 | 11,066 | 13,302 |
Net loss (gain) attributable to non-controlling | 35 | -95 | -7 | |
Net income attributable to Chase Corporation | $4,066 | $4,520 | $10,971 | $13,295 |
Net income available to common shareholders, per common and common equivalent share | ||||
Basic (in dollars per share) | $0.45 | $0.50 | $1.20 | $1.46 |
Diluted (in dollars per share) | $0.44 | $0.48 | $1.18 | $1.43 |
Weighted average shares outstanding | ||||
Basic (in shares) | 9,065,511 | 8,942,045 | 9,057,738 | 8,940,075 |
Diluted (in shares) | 9,224,985 | 9,166,370 | 9,213,431 | 9,158,527 |
Cash dividends paid per share (in dollars per share) | $0.60 | $0.45 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Net income | $4,066 | $4,485 | $11,066 | $13,302 |
Other comprehensive income: | ||||
Net unrealized (loss) gain on restricted investments, net | -20 | 2 | -8 | 73 |
Change in funded status of pension plans, net of tax | 109 | 48 | 219 | 96 |
Foreign currency translation adjustment | -818 | 605 | -2,909 | 2,183 |
Total other comprehensive (loss) income | -729 | 655 | -2,698 | 2,352 |
Comprehensive income | 3,337 | 5,140 | 8,368 | 15,654 |
Comprehensive (income) loss attributable to non-controlling interest | 35 | -95 | -7 | |
Comprehensive income attributable to Chase Corporation | $3,337 | $5,175 | $8,273 | $15,647 |
CONSOLIDATED_STATEMENTS_OF_EQU
CONSOLIDATED STATEMENTS OF EQUITY (USD $) | Chase Stockholders' Equity | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (loss) | Retained Earnings | Non-controlling Interest | Total |
In Thousands, except Share data, unless otherwise specified | |||||||
Balance at Aug. 31, 2014 | $136,552 | $910 | $13,620 | ($4,250) | $126,272 | $938 | $137,490 |
Balance (in shares) at Aug. 31, 2014 | 9,103,292 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Restricted stock grants, net of forfeitures | 1 | -1 | |||||
Restricted stock grants, net of forfeitures (in shares) | 13,785 | ||||||
Amortization of restricted stock grants | 411 | 411 | 411 | ||||
Amortization of stock option grants | 126 | 126 | 126 | ||||
Exercise of stock options | 1,767 | 12 | 1,755 | 1,767 | |||
Exercise of stock options (in shares) | 115,000 | ||||||
Common stock received for payment of stock option exercises | -1,767 | -5 | -1,762 | -1,767 | |||
Common stock received for payment of stock option exercises (in shares) | -47,486 | ||||||
Excess tax benefit (expense) from stock based compensation | 730 | 730 | 730 | ||||
Common stock retained to pay statutory minimum withholding taxes on common stock | -1,182 | -3 | -1,179 | -1,182 | |||
Common stock retained to pay statutory minimum withholding taxes on common stock (in shares) | -30,867 | ||||||
Annual cash dividend paid, $0.60 per share | -5,477 | -5,477 | -5,477 | ||||
Purchase of outstanding non-controlling interest | 533 | 533 | -1,033 | -500 | |||
Change in funded status of pension plan, net of tax of $118 | 219 | 219 | 219 | ||||
Foreign currency translation adjustment | -2,909 | -2,909 | -2,909 | ||||
Net unrealized gain on restricted investments, net of tax of $4 | -8 | -8 | -8 | ||||
Net income | 10,971 | 10,971 | 95 | 11,066 | |||
Balance at Feb. 28, 2015 | $139,966 | $915 | $14,233 | ($6,948) | $131,766 | $139,966 | |
Balance (in shares) at Feb. 28, 2015 | 9,153,724 |
CONSOLIDATED_STATEMENTS_OF_EQU1
CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) (USD $) | 6 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Feb. 28, 2015 |
CONSOLIDATED STATEMENT OF EQUITY | |
Cash dividends declared per share (in dollars per share) | $0.60 |
Change in funded status of pension plan, tax | $118 |
Net unrealized gain on restricted investments, tax | $4 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Feb. 28, 2015 | Feb. 28, 2014 |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | $11,066 | $13,302 |
Adjustments to reconcile net income to net cash provided by operating activities | ||
Gain on sale of assets | -4 | |
Gain on sale of product line | -5,706 | |
Depreciation | 2,812 | 2,852 |
Amortization | 2,884 | 2,386 |
Inventory step-up to fair value | 49 | |
Provision (recovery) for allowance for doubtful accounts | 64 | -12 |
Stock based compensation | 537 | 638 |
Realized gain on restricted investments | -75 | -37 |
Decrease in cash surrender value life insurance | 90 | 60 |
Excess tax benefit from stock based compensation | -730 | -34 |
Increase (decrease) from changes in assets and liabilities, net of effects of acquisitions | ||
Accounts receivable | -144 | -102 |
Inventories | -1,617 | -3,345 |
Prepaid expenses & other assets | -163 | -678 |
Accounts payable | -1,216 | 2,535 |
Accrued compensation and other expenses | -3,824 | -4,355 |
Accrued income taxes | -2,029 | -1,632 |
Deferred compensation | 85 | 161 |
Net cash provided by operating activities | 7,789 | 6,029 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchases of property, plant and equipment | -1,142 | -2,190 |
Cost to acquire intangible assets | -10 | -77 |
Contingent purchase price paid for acquisition | -156 | |
Payments for acquisitions | -33,285 | |
Proceeds from sale of fixed assets | 14 | |
Net proceeds from sale of product line | 9,179 | |
Contributions from restricted investments | -58 | -36 |
Payments for cash surrender value life insurance | -92 | -88 |
Net cash provided by (used in) investing activities | -34,587 | 6,646 |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Borrowings on debt | 2,000 | 2,104 |
Payments of principal on debt | -3,500 | -4,904 |
Payments of statutory minimum taxes on stock options and restricted stock | -1,182 | |
Dividend paid | -5,477 | -4,093 |
Proceeds from exercise of common stock options | 32 | |
Excess tax benefit from stock based compensation | 730 | 34 |
Net cash used in financing activities | -7,929 | -6,827 |
Payments of statutory minimum taxes on stock options and restricted stock | -500 | |
INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS | -34,727 | 5,848 |
Effect of foreign exchange rates on cash | -1,089 | 794 |
CASH & CASH EQUIVALENTS, BEGINNING OF PERIOD | 53,222 | 29,997 |
CASH & CASH EQUIVALENTS, END OF PERIOD | 17,406 | 36,639 |
Non-cash Investing and Financing Activities | ||
Property, plant & equipment additions included in accounts payable | $23 | $195 |
Basis_of_Presentation
Basis of Presentation | 6 Months Ended |
Feb. 28, 2015 | |
Basis of Presentation | |
Basis of Presentation | Note 1 - Basis of Presentation |
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial reporting and instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Therefore, they do not include all information and footnote disclosure necessary for a complete presentation of Chase Corporation’s financial position, results of operations and cash flows, in conformity with generally accepted accounting principles. Chase Corporation (the “Company,” “Chase,” “we,” or “us”) filed audited consolidated financial statements, which included all information and notes necessary for such complete presentation for the three years ended August 31, 2014 in conjunction with its 2014 Annual Report on Form 10-K. Certain immaterial reclassifications have been made to the prior year amounts to conform to the current year’s presentation. | |
The results of operations for the interim periods ended February 28, 2015 are not necessarily indicative of the results to be expected for any future period or the entire fiscal year. These interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended August 31, 2014, which are contained in the Company’s 2014 Annual Report on Form 10-K. | |
The accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of normal recurring items) which are, in the opinion of management, necessary for a fair statement of the Company’s financial position as of February 28, 2015, the results of operations, comprehensive income and cash flows for the interim periods ended February 28, 2015 and 2014, and changes in equity for the interim period ended February 28, 2015. | |
The financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. The Company uses the US dollar as the reporting currency for financial reporting. The financial position and results of operations of the Company’s UK-based operations are measured using the UK pound sterling as the functional currency and the financial position and results of operations of the Company’s operations based in France are measured using the euro as the functional currency. Foreign currency translation gains and losses are determined using current exchange rates for monetary items and historical exchange rates for other balance sheet items and are recorded as a change in other comprehensive income. Transaction gains and losses generated from the remeasurement of assets and liabilities denominated in currencies other than the functional currency of our foreign operations are included in Other (expense) / income on the consolidated statements of operations. | |
On January 30, 2015, the Company acquired two product lines from Henkel Corporation (the “Seller”). The product lines were acquired for a purchase price of $33,285, after initial working capital adjustments, subject to the finalization of purchase accounting, and excluding any acquisition related costs. As part of this transaction, Chase acquired the Seller’s microspheres product line, sold under the Dualite® brand, located in Greenville, SC, as well as obtained exclusive distribution rights and intellectual property related to the Seller’s polyurethane dispersions product line, operating in the Elgin, IL location. We refer to these collectively as the specialty chemical product lines. Under the agreement, Chase entered into a ten-year facility operating lease at the Seller’s Greenville, SC location, and the Seller will perform certain manufacturing and application services for Chase for the next three years. The purchase was funded entirely with available cash on hand. Since the effective date for this acquisition, the financial results of the specialty chemical product lines have been included in the Company’s financial statements within the Company’s Industrial Materials operating segment. | |
On October 31, 2014, the Company purchased the 50% non-controlling membership interest of NEPTCO JV LLC (the “JV”) owned by its now-former joint venture partner, an otherwise unrelated party. Because of the Company’s controlling financial interest, the JV’s assets, liabilities and results of operations have been consolidated within the Company’s consolidated financial statements since June 27, 2012, the date the Company acquired NEPTCO. The Company will continue to fully consolidate the assets, liabilities and results of operations of the JV, but will no longer record an offsetting amount for a non-controlling interest subsequent to October 31, 2014. The ($95) recorded in the Consolidated Statement of Operations as Net (gain) loss attributable to non-controlling interest for the six months ended February 28, 2015, represents the now-former joint venture partner’s share of the results of operations of the JV for the period from September 1, 2014 through October 31, 2014. | |
Recent_Accounting_Policies
Recent Accounting Policies | 6 Months Ended |
Feb. 28, 2015 | |
Recent Accounting Policies | |
Recent Accounting Policies | Note 2 — Recent Accounting Policies |
Recently Issued Accounting Pronouncements | |
In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers”, which will replace most of the existing revenue recognition guidance under U.S. Generally Accepted Accounting Principles. The core principle of the ASU is that an entity should recognize revenue for the transfer of goods or services equal to the amount that it expects to be entitled to receive for those goods or services. The ASU requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments. The ASU will be effective for the Company beginning September 1, 2017 (fiscal 2018), including interim periods in its fiscal year 2018, and allows for both retrospective and prospective methods of adoption. The Company is in the process of determining the method of adoption and assessing the impact of this ASU on the Company’s consolidated financial position, results of operations or cash flows. | |
In February 2015, the FASB issued ASU No. 2015-2, “Consolidation (Topic 820): Amendments to the Consolidation Analysis.” ASU 2015-2 provides a revised consolidation model for all reporting entities to use in evaluating whether they should consolidate certain legal entities. All legal entities will be subject to reevaluation under this revised consolidation model. The revised consolidation model, among other things, (i) modifies the evaluation of whether limited partnerships and similar legal entities are VIEs or voting interest entities, (ii) eliminates the presumption that a general partner should consolidate a limited partnership, and (iii) modifies the consolidation analysis of reporting entities that are involved with VIEs through fee arrangements and related party relationships. ASU 2015-2 is effective for fiscal years, and interim reporting periods within those fiscal years, beginning after September 1, 2016 (fiscal 2017). We are still evaluating what impact, if any, this ASU on the Company’s consolidated financial position, results of operations or cash flows. | |
Inventories
Inventories | 6 Months Ended | |||||||
Feb. 28, 2015 | ||||||||
Inventories | ||||||||
Inventories | Note 3 — Inventories | |||||||
Inventories consist of the following as of February 28, 2015 and August 31, 2014: | ||||||||
February 28, 2015 | August 31, 2014 | |||||||
Raw materials | $ | 13,232 | $ | 13,785 | ||||
Work in process | 7,434 | 7,359 | ||||||
Finished goods | 12,710 | 10,395 | ||||||
Total Inventories | $ | 33,376 | $ | 31,539 | ||||
Net_Income_Per_Share
Net Income Per Share | 6 Months Ended | |||||||||||||
Feb. 28, 2015 | ||||||||||||||
Net Income Per Share | ||||||||||||||
Net Income Per Share | Note 4 — Net Income Per Share | |||||||||||||
The Company has unvested share-based payment awards with a right to receive nonforfeitable dividends which are considered participating securities under ASC Topic 260, “Earnings Per Share”. The Company allocates earnings to participating securities and computes earnings per share using the two-class method. The determination of earnings per share under the two-class method is as follows: | ||||||||||||||
Three Months Ended February 28, | Six Months Ended February 28, | |||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||
Basic Earnings per Share | ||||||||||||||
Net income attributable to Chase Corporation | $ | 4,066 | $ | 4,520 | $ | 10,971 | $ | 13,295 | ||||||
Less: Allocated to participating securities | 30 | 77 | 81 | 228 | ||||||||||
Net income available to common shareholders | $ | 4,036 | $ | 4,443 | $ | 10,890 | $ | 13,067 | ||||||
Basic weighted average shares outstanding | 9,065,511 | 8,942,045 | 9,057,738 | 8,940,075 | ||||||||||
Net income per share - Basic | $ | 0.45 | $ | 0.50 | $ | 1.20 | $ | 1.46 | ||||||
Diluted Earnings per Share | ||||||||||||||
Net income attributable to Chase Corporation | $ | 4,066 | $ | 4,520 | $ | 10,971 | $ | 13,295 | ||||||
Less: Allocated to participating securities | 30 | 75 | 81 | 223 | ||||||||||
Net income available to common shareholders | $ | 4,036 | $ | 4,445 | $ | 10,890 | $ | 13,072 | ||||||
Basic weighted average shares outstanding | 9,065,511 | 8,942,045 | 9,057,738 | 8,940,075 | ||||||||||
Additional dilutive common stock equivalents | 159,474 | 224,325 | 155,693 | 218,452 | ||||||||||
Diluted weighted average shares outstanding | 9,224,985 | 9,166,370 | 9,213,431 | 9,158,527 | ||||||||||
Net income per share - Diluted | $ | 0.44 | $ | 0.48 | $ | 1.18 | $ | 1.43 | ||||||
For the three and six months ended February 28, 2015, stock options to purchase 22,750 and 27,863 shares of common stock were outstanding, respectively, but were not included in the calculation of diluted income per share because their inclusion would be anti-dilutive. For the three and six months ended February 28, 2014, stock options to purchase 25,969 and 18,222 shares of common stock were outstanding, respectively, but were not included in the calculation of diluted income per share because their inclusion would be anti-dilutive. Included in the calculation of dilutive common stock equivalents are the unvested portion of restricted stock and stock options. | ||||||||||||||
StockBased_Compensation
Stock-Based Compensation | 6 Months Ended |
Feb. 28, 2015 | |
Stock-Based Compensation | |
Stock Based Compensation | Note 5 — Stock-Based Compensation |
In September 2013, the Board of Directors of the Company approved the fiscal year 2014 Long Term Incentive Plan (“2014 LTIP”) for the executive officers and other members of management. The 2014 LTIP is an equity based plan with a grant date of September 1, 2013 and contains a performance and service based restricted stock grant of 7,529 shares in the aggregate, subject to adjustment, with a vesting date of August 31, 2016. Based on the fiscal year 2014 financial results, 5,485 additional shares of restricted stock (total of 13,014 shares) were earned and granted subsequent to the end of fiscal year 2014 in accordance with the performance measurement criteria. No further performance-based measurements apply to this award. Compensation expense is being recognized on a ratable basis over the vesting period. | |
In August 2014, the Board of Directors of the Company approved the fiscal year 2015 Long Term Incentive Plan (“2015 LTIP”) for the executive officers and other members of management. The 2015 LTIP is an equity based plan with a grant date of September 1, 2014 and contains the following equity components: | |
Restricted Shares — (a) performance and service based restricted stock grant of 6,993 shares in the aggregate, subject to adjustment based on fiscal 2015 results, with a vesting date of August 31, 2017. Compensation expense is recognized on a ratable basis over the vesting period based on quarterly probability assessments with a vesting date of August 31, 2017; (b) time-based restricted stock grant of 8,132 shares in the aggregate, with a vesting date of August 31, 2017. Compensation expense is recognized on a ratable basis over the vesting period. | |
Stock options — options to purchase 22,750 shares of common stock in the aggregate with an exercise price of $35.50 per share. The options will vest in three equal annual installments beginning on August 31, 2015 and ending on August 31, 2017. Of the options granted, 7,438 will expire on August 31, 2024 and 15,312 will expire on September 1, 2024. Compensation expense is recognized over the period of the award on an annual basis consistent with the vesting terms. | |
As part of their annual retainer, non-employee members of the Board of Directors receive a combined total of $194 of Chase Corporation common stock, in the form of restricted stock valued in conjunction with the start of the new year of Board service which generally coincides with the Company’s annual shareholder meeting. The stock award vests one year from the date of grant. In February 2015, non-employee members of the Board received a total grant of 5,361 shares of restricted stock for service for the period from January 31, 2015 through January 31, 2016. The shares of restricted stock will vest at the conclusion of this service period. Compensation is being recognized on a ratable basis over the twelve month vesting period. | |
Segment_Data_and_Foreign_Opera
Segment Data and Foreign Operations | 6 Months Ended | |||||||||||||
Feb. 28, 2015 | ||||||||||||||
Segment Data and Foreign Operations | ||||||||||||||
Segment Data and Foreign Operations | Note 6 — Segment Data and Foreign Operations | |||||||||||||
The Company is organized into two operating segments, an Industrial Materials segment and a Construction Materials segment. The segments are distinguished by the nature of the products and how they are delivered to their respective markets. | ||||||||||||||
The Industrial Materials segment reflects specified products that are used in, or integrated into, another company’s product with demand typically dependent upon general economic conditions. Industrial Materials products include insulating and conducting materials for wire and cable manufacturers, moisture protective coatings for electronics and printing services, laminated durable papers, laminates for the packaging and industrial laminate markets, pulling and detection tapes used in the installation, measurement and location of fiber optic cables and water and natural gas lines, cover tapes essential to delivering semiconductor components via tape and reel packaging, wind energy composite materials and elements and glass-based strength elements products, designed to allow fiber optic cables to withstand mechanical and environmental strain and stress and which we operated as a joint venture prior to October 31, 2014. Further, beginning January 30, 2015, the Industrial Materials segment includes microspheres, sold under the Dualite brand, and polyurethane dispersions; both obtained through acquisition, and included in the Company’s specialty chemical product line. | ||||||||||||||
The Construction Materials segment comprises of typically project-oriented product offerings that are primarily sold and used as “Chase” branded products. Construction Materials products include protective coatings for pipeline applications, coating and lining systems for use in liquid storage and containment applications, adhesives and sealants used in architectural and building envelope water proofing applications, high performance polymeric asphalt additives, and expansion and control joint systems for use in the transportation and architectural markets. | ||||||||||||||
The following tables summarize financial information about the Company’s reportable segments: | ||||||||||||||
Three Months Ended February 28, | Six Months Ended February 28, | |||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||
Revenue from external customers | ||||||||||||||
Industrial Materials | $ | 40,330 | $ | 39,920 | $ | 82,725 | $ | 81,590 | ||||||
Construction Materials | 11,974 | 11,271 | 25,512 | 23,784 | ||||||||||
Total | $ | 52,304 | $ | 51,191 | $ | 108,237 | $ | 105,374 | ||||||
Income (loss) before income taxes | ||||||||||||||
Industrial Materials | $ | 10,213 | (a) | $ | 10,075 | (c) | $ | 22,828 | $ | 26,817 | (c), (d) | |||
Construction Materials | 2,592 | 1,507 | (c) | 6,465 | 3,944 | (c) | ||||||||
Total for reportable segments | 12,805 | 11,582 | 29,293 | 30,761 | ||||||||||
Corporate and Common Costs | (6,549 | )(b) | (4,682 | )(c) | (12,268 | )(b) | (10,297 | )(c) | ||||||
Total | $ | 6,256 | $ | 6,900 | $ | 17,025 | $ | 20,464 | ||||||
Includes the following costs by segment: | ||||||||||||||
Industrial Materials | ||||||||||||||
Interest | $ | 225 | $ | 237 | $ | 455 | $ | 484 | ||||||
Depreciation | 976 | 998 | 1,953 | 1,981 | ||||||||||
Amortization | 1,283 | 766 | 2,053 | 1,520 | ||||||||||
Construction Materials | ||||||||||||||
Interest | $ | 45 | $ | 48 | $ | 89 | $ | 104 | ||||||
Depreciation | 280 | 286 | 569 | 577 | ||||||||||
Amortization | 418 | 427 | 831 | 866 | ||||||||||
(a) | Includes $49 of expenses related to inventory step-up in fair value related to the January 2015 acquisition of the specialty chemical product lines | |||||||||||||
(b) | Includes $584 in expenses related to the January 2015 acquisition of the specialty chemical product lines | |||||||||||||
(c) | Includes the reclassification of $2,367, $640, $5,502 and $1,486 of Selling, general and administrative expense from Industrial Materials and Construction Materials segments, respectively, into Corporate and Common Costs for the second fiscal quarter of 2014 and year to date February 28, 2014, respectively. The reclassification reflects the methodology with which the Company internally reviews expenses in the current year | |||||||||||||
(d) | Includes $5,706 gain on sale of Insulfab product line, for the year to date period ended February 28, 2014 | |||||||||||||
The Company’s products are sold world-wide. For the quarters ended February 28, 2015 and 2014, sales from its operations located in the United Kingdom accounted for 14% and 12% of consolidated revenue, respectively. In the fiscal year to date period, sales from its operations located in the United Kingdom accounted for 12% of total Company revenue compared to 10% in the same period in fiscal 2014. No other foreign geographic area accounted for more than 10% of consolidated revenue for the three or six month periods ended February 28, 2015 or 2014. | ||||||||||||||
February 28, 2015 | August 31, 2014 | |||||||||||||
Total assets | ||||||||||||||
Industrial Materials | $ | $ | ||||||||||||
155,878 | 127,820 | |||||||||||||
Construction Materials | 50,269 | 50,972 | ||||||||||||
Total for reportable segments | 206,147 | 178,792 | ||||||||||||
Corporate and Common Assets | 34,541 | 66,753 | ||||||||||||
Total | $ | $ | ||||||||||||
240,688 | 245,545 | |||||||||||||
As of February 28, 2015 and August 31, 2014, the Company had long-lived assets (that will provide a future economic benefit beyond the current year or operating period, including buildings, equipment and leasehold improvements) of $4,064 and $4,349, respectively, located in the United Kingdom. These balances exclude goodwill and intangibles of $9,873 and $9,924, as of February 28, 2015 and August 31, 2014, respectively, associated with its operations in the United Kingdom. | ||||||||||||||
Goodwill_and_Other_Intangibles
Goodwill and Other Intangibles | 6 Months Ended | ||||||||||||
Feb. 28, 2015 | |||||||||||||
Goodwill and Other Intangibles | |||||||||||||
Goodwill and Other Intangibles | Note 7 — Goodwill and Other Intangibles | ||||||||||||
The changes in the carrying value of goodwill are as follows: | |||||||||||||
Industrial | Construction | Consolidated | |||||||||||
Materials | Materials | ||||||||||||
Balance at August 31, 2014 | $ | 27,528 | $ | 10,752 | $ | 38,280 | |||||||
Acquisition of specialty chemical product lines | 6,371 | 6,371 | |||||||||||
Foreign currency translation adjustment | (495 | ) | (19 | ) | (514 | ) | |||||||
Balance at February 28, 2015 | $ | 33,404 | $ | 10,733 | $ | 44,137 | |||||||
The Company’s goodwill is allocated to each reporting unit based on the nature of the products manufactured by the respective business combinations that originally created the goodwill. The Company identified several reporting units within each of its two operating segments that are used to evaluate the possible impairment of goodwill. Goodwill impairment exists when the carrying amount of goodwill exceeds its fair value. Assessments of possible impairment of goodwill are made when events or changes in circumstances indicate that the carrying value of the asset may not be recoverable through future operations. Additionally, testing for possible impairment of recorded goodwill balances is required annually. The amount and timing of any impairment charges based on these assessments require the estimation of future cash flows and the fair market value of the related assets based on management’s best estimates of certain key factors, including future selling prices and volumes, operating, raw material and energy costs, and various other projected operating and economic factors. When testing, fair values of the reporting units and the related implied fair values of their respective goodwill are established using public company analysis and discounted cash flows. The Company evaluates the possible impairment of goodwill annually each fourth quarter and whenever events or circumstances indicate the carrying value of goodwill may not be recoverable. | |||||||||||||
Intangible assets subject to amortization consist of the following as of February 28, 2015 and August 31, 2014: | |||||||||||||
Weighted-Average | Gross Carrying | Accumulated | Net Carrying | ||||||||||
Amortization Period | Value | Amortization | Value | ||||||||||
February 28, 2015 | |||||||||||||
Patents and agreements | 12.0 years | $ | 3,036 | $ | 2,301 | $ | 735 | ||||||
Formulas and technology | 8.4 years | 8,455 | 3,084 | 5,371 | |||||||||
Trade names | 5.9 years | 7,242 | 3,601 | 3,641 | |||||||||
Customer lists and relationships | 9.3 years | 55,481 | 16,091 | 39,390 | |||||||||
$ | 74,214 | $ | 25,077 | $ | 49,137 | ||||||||
August 31, 2014 | |||||||||||||
Patents and agreements | 11.9 years | $ | 3,104 | $ | 2,281 | $ | 823 | ||||||
Formulas and technology | 9.1 years | 5,849 | 2,851 | 2,998 | |||||||||
Trade names | 5.7 years | 6,406 | 3,153 | 3,253 | |||||||||
Customer lists and relationships | 10.2 years | 34,797 | 14,656 | 20,141 | |||||||||
$ | 50,156 | $ | 22,941 | $ | 27,215 | ||||||||
Aggregate amortization expense related to intangible assets for the six months ended February 28, 2015 and 2014 was $2,884 and $2,386, respectively. Estimated amortization expense for the remainder of fiscal year 2015 and for future periods is as follows: | |||||||||||||
Years ending August 31, | |||||||||||||
2015 (remaining 6 months) | $ | 3,991 | |||||||||||
2016 | 7,848 | ||||||||||||
2017 | 7,411 | ||||||||||||
2018 | 7,180 | ||||||||||||
2019 | 6,481 | ||||||||||||
2020 | 5,613 | ||||||||||||
$ | 38,524 | ||||||||||||
Sale_of_Insulfab_Product_Line
Sale of Insulfab Product Line | 6 Months Ended |
Feb. 28, 2015 | |
Sale of Insulfab Product Line | |
Sale of Insulfab Product Line | Note 8 — Sale of Insulfab Product Line |
On October 7, 2013, the Company sold substantially all of the property and assets, including intellectual property, comprising the Insulfab® product line, to an unrelated third party (“Buyer”). The Insulfab product line is primarily focused on manufacturing high quality, engineered barrier laminates used in aerospace applications. The sale proceeds of $7,394 were subject to certain post-closing adjustments based on the change in the final net book value compared to the bid date net book value. In the quarter ending November 30, 2013, management determined these post-closing adjustments resulted in an increase in the sale proceeds of $2,516 based on the increase of inventory sold to the Buyer at closing. This adjustment was settled and paid by the Buyer to the Company in the quarter ending February 28, 2014, net of amounts held in escrow. The net proceeds from the sale are available for debt reduction, investment in the Company’s core businesses and future acquisitions. | |
This transaction resulted in a pre-tax book gain of $5,706 ($3,709 after-tax gain) which was recorded in the quarter ending November 30, 2013. The portion of the sale price held in escrow of $739 is recorded as a current asset (Due from sale of product line) as of both February 28, 2015 and August 31, 2014, and is available to resolve any submitted claims or adjustments up to 18 months from the closing date of the Insulfab sale. | |
Joint_Venture
Joint Venture | 6 Months Ended |
Feb. 28, 2015 | |
Joint Venture | |
Joint Venture | Note 9 — Joint Venture |
On October 31, 2014, the Company purchased the 50% non-controlling membership interest of NEPTCO JV LLC (the “JV”) owned by its now-former joint venture partner, an otherwise unrelated party. The purchase consideration is subject to certain contingent adjustments based on certain future events related to the JV. The purchase price, including these contingent adjustments, was not, nor will be, material to the Company. Because of the Company’s controlling financial interest, the JV’s assets, liabilities and results of operations have been consolidated within the Company’s consolidated financial statements since June 27, 2012, the date the Company acquired NEPTCO. The Company will continue to fully consolidate the assets, liabilities and results of operations of the JV, but will no longer record an offsetting amount for a non-controlling interest. The ($95) recorded in the Consolidated Statement of Operations as Net (gain) loss attributable to non-controlling interest for the six months ended February 28, 2015, represents the now-former joint venture partner’s share of the results of operations of the JV for the period from September 1, 2014 through October 31, 2014. | |
The Company accounted for the joint venture partner’s non-controlling interest in the JV under ASC Topic 810 “Consolidations” (“ASC 810”). Based on the criteria in ASC 810, the Company had determined that the JV qualified as a variable interest entity (“VIE”). | |
Under the JV agreement, which terminated with the Company’s October 2014 acquisition of the 50% outstanding non-controlling membership interest in the JV, the JV had agreed to purchase a minimum of 80% of its total glass fiber requirements from the now-former joint venture partner. Additionally, the JV agreed to purchase private-label products exclusively from an affiliate of the now-former joint venture partner; however, the JV was not subject to a minimum purchase requirement on private-label products. Purchases from the now-former joint venture partner totaled $332 for the period from September 1, 2014 through October 31, 2014 and $300 and $767 for the three and six month periods ended February 28, 2014, respectively. The JV had amounts due to the now-former joint venture partner of $385 and $394 at February 28, 2015 and August 31, 2014, respectively. | |
Commitments_and_Contingencies
Commitments and Contingencies | 6 Months Ended |
Feb. 28, 2015 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 10 — Commitments and Contingencies |
The Company is involved from time to time in litigation incidental to the conduct of its business. Although the Company does not expect that the outcome in any of these matters, individually or collectively, will have a material adverse effect on its financial condition, results of operations or cashflows, litigation is inherently unpredictable. Therefore, judgments could be rendered or settlements entered, that could adversely affect the Company’s operating results or cash flows in a particular period. The Company routinely assesses all of its litigation and threatened litigation as to the probability of ultimately incurring a liability, and records its best estimate of the ultimate loss in situations where the Company assesses the likelihood of loss as probable. | |
Pensions_and_Other_PostRetirem
Pensions and Other Post-Retirement Benefits | 6 Months Ended | |||||||||||||
Feb. 28, 2015 | ||||||||||||||
Pensions and Other Post-Retirement Benefits | ||||||||||||||
Pensions and Other Post Retirement Benefits | Note 11 - Pensions and Other Post-Retirement Benefits | |||||||||||||
The components of net periodic benefit cost for the three and six months ended February 28, 2015 and 2014 are as follows: | ||||||||||||||
Three Months Ended February 28, | Six Months Ended February 28, | |||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||
Service cost | $ | 91 | $ | 81 | $ | 181 | $ | 161 | ||||||
Interest cost | 170 | 161 | 339 | 321 | ||||||||||
Expected return on plan assets | (153 | ) | (178 | ) | (306 | ) | (355 | ) | ||||||
Amortization of prior service cost | 1 | 1 | 2 | 2 | ||||||||||
Amortization of unrecognized loss | 167 | 73 | 335 | 147 | ||||||||||
Net periodic benefit cost | $ | 276 | $ | 138 | $ | 551 | $ | 276 | ||||||
When funding is required, the Company’s policy is to contribute amounts that are deductible for federal income tax purposes. As of February 28, 2015, the Company has made contributions of $115 in the current fiscal year to fund its obligations under its pension plan, and plans to make the necessary contributions over the remainder of fiscal 2015 to ensure the qualified plan continues to be adequately funded given the current market conditions. The Company made contributions of $200 in the first six months of the prior year. | ||||||||||||||
Fair_Value_Measurements
Fair Value Measurements | 6 Months Ended | |||||||||||||||
Feb. 28, 2015 | ||||||||||||||||
Fair Value Measurements | ||||||||||||||||
Fair Value Measurements | Note 12 — Fair Value Measurements | |||||||||||||||
The Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability (exit price) in an orderly transaction between market participants at the measurement date. The Company uses a three-tier fair value hierarchy, which classifies the inputs used in measuring fair values. These tiers include: Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. | ||||||||||||||||
The Company utilizes the best available information in measuring fair value. Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The financial assets classified as Level 1 and Level 2 as of February 28, 2015 and August 31, 2014 represent investments that are restricted for use in a nonqualified retirement savings plan for certain key employees and directors. | ||||||||||||||||
The following table sets forth the Company’s financial assets that were accounted for at fair value on a recurring basis as of February 28, 2015 and August 31, 2014: | ||||||||||||||||
Fair value measurement category | ||||||||||||||||
Fair value | Total | Quoted prices | Significant other | Significant | ||||||||||||
measurement date | in active | observable inputs | unobservable | |||||||||||||
markets | (Level 2) | inputs | ||||||||||||||
(Level 1) | (Level 3) | |||||||||||||||
Assets: | ||||||||||||||||
Restricted investments | February 28, 2015 | $ | 1,377 | $ | 1,339 | $ | 38 | $ | — | |||||||
Restricted investments | August 31, 2014 | $ | 1,256 | $ | 1,216 | $ | 40 | $ | — | |||||||
The following table presents the fair value of the Company’s long-term debt as of February 28, 2015 and August 31, 2014, which is recorded at its carrying value: | ||||||||||||||||
Fair value measurement category | ||||||||||||||||
Fair value | Total | Quoted prices | Significant other | Significant | ||||||||||||
measurement date | in active | observable inputs | unobservable | |||||||||||||
markets | (Level 2) | inputs | ||||||||||||||
(Level 1) | (Level 3) | |||||||||||||||
Liabilities: | ||||||||||||||||
Long-term debt | February 28, 2015 | $ | 57,300 | $ | — | $ | 57,300 | $ | — | |||||||
Long-term debt | August 31, 2014 | $ | 58,800 | $ | — | $ | 58,800 | $ | — | |||||||
The carrying value of the long-term debt approximates its fair value, as the monthly interest rate is set based on the movement of the underlying market rates. | ||||||||||||||||
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Income | 6 Months Ended | |||||||||||||||
Feb. 28, 2015 | ||||||||||||||||
Accumulated Other Comprehensive Income | ||||||||||||||||
Accumulated Other Comprehensive Income | Note 13 — Accumulated Other Comprehensive Income | |||||||||||||||
The changes in accumulated other comprehensive income (loss), net of tax, were as follows: | ||||||||||||||||
Restricted | Change in Funded | Foreign Currency | Total | |||||||||||||
Investments | Status of Pension | Translation | ||||||||||||||
Plan | Adjustment | |||||||||||||||
Balance at August 31, 2014 | $ | 209 | $ | (4,785 | ) | $ | 326 | $ | (4,250 | ) | ||||||
Other comprehensive gains (losses) before reclassifications (1) | 40 | — | (2,909 | ) | (2,869 | ) | ||||||||||
Reclassifications to net income of previously deferred (gains) losses (2) | (48 | ) | 219 | — | 171 | |||||||||||
Other comprehensive income (loss) | (8 | ) | 219 | (2,909 | ) | (2,698 | ) | |||||||||
Balance at February 28, 2015 | $ | 201 | $ | (4,566 | ) | $ | (2,583 | ) | $ | (6,948 | ) | |||||
-1 | Net of tax benefit of $22, $0, $0, respectively. | |||||||||||||||
-2 | Net of tax expense of $26, tax benefit of $118, $0, respectively. | |||||||||||||||
The following table summarizes the reclassifications from accumulated other comprehensive income (loss) to the unaudited condensed consolidated statements of income: | ||||||||||||||||
Amount of Gain (Loss) Reclassified from Accumulated Other | ||||||||||||||||
Comprehensive Income (Loss) into Income | ||||||||||||||||
Three Months Ended February 28, | Six Months Ended February 28, | Location of Gain (Loss) Reclassified from Accumulated Other | ||||||||||||||
2015 | 2014 | 2015 | 2014 | Comprehensive Income (Loss) into Income | ||||||||||||
Gains on Restricted Investments: | ||||||||||||||||
Realized gain on sale of restricted investments | $ | (75 | ) | $ | (32 | ) | $ | (76 | ) | $ | (37 | ) | Selling, general and administrative expenses | |||
Tax expense (benefit) | 26 | 11 | 27 | 13 | ||||||||||||
Gain net of tax | $ | (48 | ) | $ | (21 | ) | $ | (48 | ) | $ | (24 | ) | ||||
Loss on Funded Pension Plan adjustments: | ||||||||||||||||
Amortization of prior pension service costs and unrecognized losses | $ | 5 | $ | 20 | $ | 10 | $ | 40 | Cost of products and services sold | |||||||
Amortization of prior pension service costs and unrecognized losses | 163 | 54 | 326 | 108 | Selling, general and administrative expenses | |||||||||||
Tax expense (benefit) | -59 | (26 | ) | (118 | ) | (52 | ) | |||||||||
Loss net of tax | $ | 109 | $ | 48 | $ | 219 | $ | 96 | ||||||||
Total net loss reclassified for the period | $ | 62 | $ | 27 | $ | 171 | $ | 72 | ||||||||
Note: Gains on Restricted Investments and losses on funded pension plan adjustments may not sum for the quarter end or year to date period due to rounding. | ||||||||||||||||
Acquisition_of_Specialty_Chemi
Acquisition of Specialty Chemical Product Lines | 6 Months Ended | |||||||||||||
Feb. 28, 2015 | ||||||||||||||
Acquisition of Specialty Chemical Product Lines | ||||||||||||||
Acquisition of Specialty Chemical Product Lines | Note 14 — Acquisition of Specialty Chemical Product Lines | |||||||||||||
On January 30, 2015, the Company acquired two product lines from Henkel Corporation (the “Seller”). The product lines were acquired for a purchase price of $33,285, after initial working capital adjustments, and excluding any acquisition related costs. As part of this transaction, which was completed to expand the products and service offerings of the Company, Chase acquired the Seller’s microspheres product line, sold under the Dualite brand, located in Greenville, SC, as well as obtained exclusive distribution rights and intellectual property related to the Seller’s polyurethane dispersions product line, operating in the Elgin, IL location. Under the agreement, Chase entered into a ten-year facility operating lease at the Seller’s Greenville, SC location, and the Seller will perform certain manufacturing and application services, at the Seller’s Elgin, IL location for Chase for the next three years. The purchase was funded entirely with available cash on hand. | ||||||||||||||
Since the effective date for this acquisition, January 30, 2015, the financial results of the specialty chemical product lines, have been included in the Company’s financial statements within the Industrial Materials operating segment. The acquisition was accounted for as a business combination under ASC Topic 805, “Business Combinations.” In accordance with this accounting standard, the Company expensed $584 of acquisition related costs during both the three and six month periods ended February 28, 2015 to selling, general and administrative expenses. | ||||||||||||||
Management is currently in the process of finalizing purchase accounting pending final valuation of customer relationships. The purchase price has been initially allocated to the acquired tangible and identifiable intangible assets assumed based on their fair values as of the date of the acquisition: | ||||||||||||||
Assets & Liabilities | Amount | |||||||||||||
Inventory | $ | 610 | ||||||||||||
Property, plant & equipment | 1,064 | |||||||||||||
Goodwill | 6,371 | |||||||||||||
Intangible assets | 25,240 | |||||||||||||
Total purchase price | $ | 33,285 | ||||||||||||
The excess of the purchase price over the net tangible and intangible assets acquired resulted in goodwill of $6,371 that is largely attributable to the synergies and economies of scale from combining the operations and technologies of Chase and the two product lines, particularly as it pertains to the expansion of the Company’s product and service offerings, the established workforce, and marketing efforts. This goodwill is not deductible for income tax purposes. | ||||||||||||||
All assets, including goodwill, acquired as part of the specialty chemical product lines are included in the Industrial Materials operating segment. Identifiable intangible assets purchased with this transaction are as follows: | ||||||||||||||
Intangible Asset | Amount | Useful life | ||||||||||||
Customer relationships | $ | 21,300 | 8 years | |||||||||||
Technology | 2,700 | 7 years | ||||||||||||
Trade name | 910 | 7 years | ||||||||||||
Backlog | 330 | 2 months | ||||||||||||
Total intangible assets | $ | 25,240 | ||||||||||||
Supplemental Pro Forma Data | ||||||||||||||
The following table presents the pro forma results of the Company for the three and six month periods ended February 28, 2015 and 2014, as though the specialty chemical product lines acquisition described above occurred on September 1, 2013. The actual revenue and expenses for the specialty chemical product lines acquisition are included in the Company’s fiscal 2015 consolidated results beginning on January 30, 2015. Revenue and net loss attributable to Chase Corporation for the specialty chemicals product lines since the acquisition date included in the consolidated statement of operations were $1,462 and $445, respectively, inclusive of the effects of the $584 in acquisition costs, $49 in sale of inventory step-up cost and additional amortization expense recognized as part of the transaction. The pro forma results include adjustments for the estimated amortization of intangibles, acquisition related costs, sale of inventory step-up cost and the income tax impact of the pro forma adjustments at the statutory rate of 35%. The following pro forma information is not necessarily indicative of the results that would have been achieved if the acquisition had been effective on September 1, 2013. | ||||||||||||||
Three Months Ended February 28, | Six Months Ended February 28, | |||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||
Revenue | $ | 55,873 | $ | 56,291 | $ | 116,766 | $ | 114,929 | ||||||
Net income | 4,955 | 4,923 | 12,329 | 13,405 | ||||||||||
Net income attributable to Chase Corporation | 4,955 | 4,958 | 12,234 | 13,398 | ||||||||||
Net income available to common shareholders, per common and common equivalent share | ||||||||||||||
Basic earnings per share | $ | 0.54 | $ | 0.55 | $ | 1.34 | $ | 1.47 | ||||||
Diluted earnings per share | $ | 0.53 | $ | 0.53 | $ | 1.32 | $ | 1.44 | ||||||
Inventories_Tables
Inventories (Tables) | 6 Months Ended | |||||||
Feb. 28, 2015 | ||||||||
Inventories | ||||||||
Schedule of inventories | ||||||||
February 28, 2015 | August 31, 2014 | |||||||
Raw materials | $ | 13,232 | $ | 13,785 | ||||
Work in process | 7,434 | 7,359 | ||||||
Finished goods | 12,710 | 10,395 | ||||||
Total Inventories | $ | 33,376 | $ | 31,539 | ||||
Net_Income_Per_Share_Tables
Net Income Per Share (Tables) | 6 Months Ended | |||||||||||||
Feb. 28, 2015 | ||||||||||||||
Net Income Per Share | ||||||||||||||
Schedule of determination of earnings per share under the two-class method | ||||||||||||||
Three Months Ended February 28, | Six Months Ended February 28, | |||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||
Basic Earnings per Share | ||||||||||||||
Net income attributable to Chase Corporation | $ | 4,066 | $ | 4,520 | $ | 10,971 | $ | 13,295 | ||||||
Less: Allocated to participating securities | 30 | 77 | 81 | 228 | ||||||||||
Net income available to common shareholders | $ | 4,036 | $ | 4,443 | $ | 10,890 | $ | 13,067 | ||||||
Basic weighted average shares outstanding | 9,065,511 | 8,942,045 | 9,057,738 | 8,940,075 | ||||||||||
Net income per share - Basic | $ | 0.45 | $ | 0.50 | $ | 1.20 | $ | 1.46 | ||||||
Diluted Earnings per Share | ||||||||||||||
Net income attributable to Chase Corporation | $ | 4,066 | $ | 4,520 | $ | 10,971 | $ | 13,295 | ||||||
Less: Allocated to participating securities | 30 | 75 | 81 | 223 | ||||||||||
Net income available to common shareholders | $ | 4,036 | $ | 4,445 | $ | 10,890 | $ | 13,072 | ||||||
Basic weighted average shares outstanding | 9,065,511 | 8,942,045 | 9,057,738 | 8,940,075 | ||||||||||
Additional dilutive common stock equivalents | 159,474 | 224,325 | 155,693 | 218,452 | ||||||||||
Diluted weighted average shares outstanding | 9,224,985 | 9,166,370 | 9,213,431 | 9,158,527 | ||||||||||
Net income per share - Diluted | $ | 0.44 | $ | 0.48 | $ | 1.18 | $ | 1.43 | ||||||
Segment_Data_and_Foreign_Opera1
Segment Data and Foreign Operations (Tables) | 6 Months Ended | |||||||||||||
Feb. 28, 2015 | ||||||||||||||
Segment Data and Foreign Operations | ||||||||||||||
Summary of information about the Company's segments | ||||||||||||||
Three Months Ended February 28, | Six Months Ended February 28, | |||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||
Revenue from external customers | ||||||||||||||
Industrial Materials | $ | 40,330 | $ | 39,920 | $ | 82,725 | $ | 81,590 | ||||||
Construction Materials | 11,974 | 11,271 | 25,512 | 23,784 | ||||||||||
Total | $ | 52,304 | $ | 51,191 | $ | 108,237 | $ | 105,374 | ||||||
Income (loss) before income taxes | ||||||||||||||
Industrial Materials | $ | 10,213 | (a) | $ | 10,075 | (c) | $ | 22,828 | $ | 26,817 | (c), (d) | |||
Construction Materials | 2,592 | 1,507 | (c) | 6,465 | 3,944 | (c) | ||||||||
Total for reportable segments | 12,805 | 11,582 | 29,293 | 30,761 | ||||||||||
Corporate and Common Costs | (6,549 | )(b) | (4,682 | )(c) | (12,268 | )(b) | (10,297 | )(c) | ||||||
Total | $ | 6,256 | $ | 6,900 | $ | 17,025 | $ | 20,464 | ||||||
Includes the following costs by segment: | ||||||||||||||
Industrial Materials | ||||||||||||||
Interest | $ | 225 | $ | 237 | $ | 455 | $ | 484 | ||||||
Depreciation | 976 | 998 | 1,953 | 1,981 | ||||||||||
Amortization | 1,283 | 766 | 2,053 | 1,520 | ||||||||||
Construction Materials | ||||||||||||||
Interest | $ | 45 | $ | 48 | $ | 89 | $ | 104 | ||||||
Depreciation | 280 | 286 | 569 | 577 | ||||||||||
Amortization | 418 | 427 | 831 | 866 | ||||||||||
(a) | Includes $49 of expenses related to inventory step-up in fair value related to the January 2015 acquisition of the specialty chemical product lines | |||||||||||||
(b) | Includes $584 in expenses related to the January 2015 acquisition of the specialty chemical product lines | |||||||||||||
(c) | Includes the reclassification of $2,367, $640, $5,502 and $1,486 of Selling, general and administrative expense from Industrial Materials and Construction Materials segments, respectively, into Corporate and Common Costs for the second fiscal quarter of 2014 and year to date February 28, 2014, respectively. The reclassification reflects the methodology with which the Company internally reviews expenses in the current year | |||||||||||||
(d) | Includes $5,706 gain on sale of Insulfab product line, for the year to date period ended February 28, 2014 | |||||||||||||
Schedule of total assets for the Company's reportable segments | ||||||||||||||
February 28, 2015 | August 31, 2014 | |||||||||||||
Total assets | ||||||||||||||
Industrial Materials | $ | $ | ||||||||||||
155,878 | 127,820 | |||||||||||||
Construction Materials | 50,269 | 50,972 | ||||||||||||
Total for reportable segments | 206,147 | 178,792 | ||||||||||||
Corporate and Common Assets | 34,541 | 66,753 | ||||||||||||
Total | $ | $ | ||||||||||||
240,688 | 245,545 | |||||||||||||
Goodwill_and_Other_Intangibles1
Goodwill and Other Intangibles (Tables) | 6 Months Ended | ||||||||||||
Feb. 28, 2015 | |||||||||||||
Goodwill and Other Intangibles | |||||||||||||
Schedule of changes in the carrying value of goodwill by operating segment | |||||||||||||
Industrial | Construction | Consolidated | |||||||||||
Materials | Materials | ||||||||||||
Balance at August 31, 2014 | $ | 27,528 | $ | 10,752 | $ | 38,280 | |||||||
Acquisition of specialty chemical product lines | 6,371 | 6,371 | |||||||||||
Foreign currency translation adjustment | (495 | ) | (19 | ) | (514 | ) | |||||||
Balance at February 28, 2015 | $ | 33,404 | $ | 10,733 | $ | 44,137 | |||||||
Schedule of intangible assets subject to amortization | |||||||||||||
Weighted-Average | Gross Carrying | Accumulated | Net Carrying | ||||||||||
Amortization Period | Value | Amortization | Value | ||||||||||
February 28, 2015 | |||||||||||||
Patents and agreements | 12.0 years | $ | 3,036 | $ | 2,301 | $ | 735 | ||||||
Formulas and technology | 8.4 years | 8,455 | 3,084 | 5,371 | |||||||||
Trade names | 5.9 years | 7,242 | 3,601 | 3,641 | |||||||||
Customer lists and relationships | 9.3 years | 55,481 | 16,091 | 39,390 | |||||||||
$ | 74,214 | $ | 25,077 | $ | 49,137 | ||||||||
August 31, 2014 | |||||||||||||
Patents and agreements | 11.9 years | $ | 3,104 | $ | 2,281 | $ | 823 | ||||||
Formulas and technology | 9.1 years | 5,849 | 2,851 | 2,998 | |||||||||
Trade names | 5.7 years | 6,406 | 3,153 | 3,253 | |||||||||
Customer lists and relationships | 10.2 years | 34,797 | 14,656 | 20,141 | |||||||||
$ | 50,156 | $ | 22,941 | $ | 27,215 | ||||||||
Schedule of estimated amortization expense related to intangible assets | |||||||||||||
Years ending August 31, | |||||||||||||
2015 (remaining 6 months) | $ | 3,991 | |||||||||||
2016 | 7,848 | ||||||||||||
2017 | 7,411 | ||||||||||||
2018 | 7,180 | ||||||||||||
2019 | 6,481 | ||||||||||||
2020 | 5,613 | ||||||||||||
$ | 38,524 | ||||||||||||
Pensions_and_Other_PostRetirem1
Pensions and Other Post-Retirement Benefits (Tables) | 6 Months Ended | |||||||||||||
Feb. 28, 2015 | ||||||||||||||
Pensions and Other Post-Retirement Benefits | ||||||||||||||
Schedule of components of net periodic benefit cost | ||||||||||||||
Three Months Ended February 28, | Six Months Ended February 28, | |||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||
Service cost | $ | 91 | $ | 81 | $ | 181 | $ | 161 | ||||||
Interest cost | 170 | 161 | 339 | 321 | ||||||||||
Expected return on plan assets | (153 | ) | (178 | ) | (306 | ) | (355 | ) | ||||||
Amortization of prior service cost | 1 | 1 | 2 | 2 | ||||||||||
Amortization of unrecognized loss | 167 | 73 | 335 | 147 | ||||||||||
Net periodic benefit cost | $ | 276 | $ | 138 | $ | 551 | $ | 276 | ||||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 6 Months Ended | |||||||||||||||
Feb. 28, 2015 | ||||||||||||||||
Fair Value Measurements | ||||||||||||||||
Schedule of financial assets that were accounted for at fair value on a recurring basis | ||||||||||||||||
Fair value measurement category | ||||||||||||||||
Fair value | Total | Quoted prices | Significant other | Significant | ||||||||||||
measurement date | in active | observable inputs | unobservable | |||||||||||||
markets | (Level 2) | inputs | ||||||||||||||
(Level 1) | (Level 3) | |||||||||||||||
Assets: | ||||||||||||||||
Restricted investments | February 28, 2015 | $ | 1,377 | $ | 1,339 | $ | 38 | $ | — | |||||||
Restricted investments | August 31, 2014 | $ | 1,256 | $ | 1,216 | $ | 40 | $ | — | |||||||
Schedule of fair values of the Company's long-term debt | ||||||||||||||||
Fair value measurement category | ||||||||||||||||
Fair value | Total | Quoted prices | Significant other | Significant | ||||||||||||
measurement date | in active | observable inputs | unobservable | |||||||||||||
markets | (Level 2) | inputs | ||||||||||||||
(Level 1) | (Level 3) | |||||||||||||||
Liabilities: | ||||||||||||||||
Long-term debt | February 28, 2015 | $ | 57,300 | $ | — | $ | 57,300 | $ | — | |||||||
Long-term debt | August 31, 2014 | $ | 58,800 | $ | — | $ | 58,800 | $ | — | |||||||
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Income (Tables) | 6 Months Ended | |||||||||||||||
Feb. 28, 2015 | ||||||||||||||||
Accumulated Other Comprehensive Income | ||||||||||||||||
Schedule of components of accumulated other comprehensive income (loss) | ||||||||||||||||
Restricted | Change in Funded | Foreign Currency | Total | |||||||||||||
Investments | Status of Pension | Translation | ||||||||||||||
Plan | Adjustment | |||||||||||||||
Balance at August 31, 2014 | $ | 209 | $ | (4,785 | ) | $ | 326 | $ | (4,250 | ) | ||||||
Other comprehensive gains (losses) before reclassifications (1) | 40 | — | (2,909 | ) | (2,869 | ) | ||||||||||
Reclassifications to net income of previously deferred (gains) losses (2) | (48 | ) | 219 | — | 171 | |||||||||||
Other comprehensive income (loss) | (8 | ) | 219 | (2,909 | ) | (2,698 | ) | |||||||||
Balance at February 28, 2015 | $ | 201 | $ | (4,566 | ) | $ | (2,583 | ) | $ | (6,948 | ) | |||||
-1 | Net of tax benefit of $22, $0, $0, respectively. | |||||||||||||||
-2 | Net of tax expense of $26, tax benefit of $118, $0, respectively. | |||||||||||||||
Summary of the reclassifications from accumulated other comprehensive income (loss) to the unaudited condensed consolidated statements of income | ||||||||||||||||
Amount of Gain (Loss) Reclassified from Accumulated Other | ||||||||||||||||
Comprehensive Income (Loss) into Income | ||||||||||||||||
Three Months Ended February 28, | Six Months Ended February 28, | Location of Gain (Loss) Reclassified from Accumulated Other | ||||||||||||||
2015 | 2014 | 2015 | 2014 | Comprehensive Income (Loss) into Income | ||||||||||||
Gains on Restricted Investments: | ||||||||||||||||
Realized gain on sale of restricted investments | $ | (75 | ) | $ | (32 | ) | $ | (76 | ) | $ | (37 | ) | Selling, general and administrative expenses | |||
Tax expense (benefit) | 26 | 11 | 27 | 13 | ||||||||||||
Gain net of tax | $ | (48 | ) | $ | (21 | ) | $ | (48 | ) | $ | (24 | ) | ||||
Loss on Funded Pension Plan adjustments: | ||||||||||||||||
Amortization of prior pension service costs and unrecognized losses | $ | 5 | $ | 20 | $ | 10 | $ | 40 | Cost of products and services sold | |||||||
Amortization of prior pension service costs and unrecognized losses | 163 | 54 | 326 | 108 | Selling, general and administrative expenses | |||||||||||
Tax expense (benefit) | (59 | ) | (26 | ) | -118 | (52 | ) | |||||||||
Loss net of tax | $ | 109 | $ | 48 | $ | 219 | $ | 96 | ||||||||
Total net loss reclassified for the period | $ | 62 | $ | 27 | $ | 171 | $ | 72 | ||||||||
Note: Gains on Restricted Investments and losses on funded pension plan adjustments may not sum for the quarter end or year to date period due to rounding. | ||||||||||||||||
Acquisition_of_Specialty_Chemi1
Acquisition of Specialty Chemical Product Lines (Tables) | 6 Months Ended | |||||||||||||
Feb. 28, 2015 | ||||||||||||||
Schedule of pro forma information | The following pro forma information is not necessarily indicative of the results that would have been achieved if the acquisition had been effective on September 1, 2013. | |||||||||||||
Three Months Ended February 28, | Six Months Ended February 28, | |||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||
Revenue | $ | 55,873 | $ | 56,291 | $ | 116,766 | $ | 114,929 | ||||||
Net income | 4,955 | 4,923 | 12,329 | 13,405 | ||||||||||
Net income attributable to Chase Corporation | 4,955 | 4,958 | 12,234 | 13,398 | ||||||||||
Net income available to common shareholders, per common and common equivalent share | ||||||||||||||
Basic earnings per share | $ | 0.54 | $ | 0.55 | $ | 1.34 | $ | 1.47 | ||||||
Diluted earnings per share | $ | 0.53 | $ | 0.53 | $ | 1.32 | $ | 1.44 | ||||||
Henkel Corporation ( Seller) | ||||||||||||||
Schedule of allocation of acquisition cost to the acquired tangible and identifiable intangible assets and liabilities assumed based on their fair values as of the date of the acquisition | ||||||||||||||
Assets & Liabilities | Amount | |||||||||||||
Inventory | $ | 610 | ||||||||||||
Property, plant & equipment | 1,064 | |||||||||||||
Goodwill | 6,371 | |||||||||||||
Intangible assets | 25,240 | |||||||||||||
Total purchase price | $ | 33,285 | ||||||||||||
Schedule of identifiable intangible assets purchased as part of business acquisition | ||||||||||||||
Intangible Asset | Amount | Useful life | ||||||||||||
Customer relationships | $ | 21,300 | 8 years | |||||||||||
Technology | 2,700 | 7 years | ||||||||||||
Trade name | 910 | 7 years | ||||||||||||
Backlog | 330 | 2 months | ||||||||||||
Total intangible assets | $ | 25,240 | ||||||||||||
Basis_of_Presentation_Details
Basis of Presentation (Details) (USD $) | 3 Months Ended | 6 Months Ended | 2 Months Ended | 0 Months Ended | |
In Thousands, unless otherwise specified | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | Oct. 31, 2014 | Jan. 30, 2015 |
item | |||||
Basis of Presentation | |||||
Net (gain) loss attributable to non-controlling interest | ($35) | $95 | $7 | ||
NEPTCO | |||||
Basis of Presentation | |||||
Net (gain) loss attributable to non-controlling interest | -95 | ||||
NEPTCO | JV | Joint venture partner | |||||
Basis of Presentation | |||||
Membership interest purchased | 50.00% | ||||
Henkel Corporation ( Seller) | |||||
Basis of Presentation | |||||
Number Of Product Lines Acquired | 2 | ||||
Purchase price | $33,285 | ||||
Lease term | 10 years | ||||
Period to perform certain manufacturing and application services | 3 years |
Inventories_Details
Inventories (Details) (USD $) | Feb. 28, 2015 | Aug. 31, 2014 |
In Thousands, unless otherwise specified | ||
Inventories | ||
Raw materials | $13,232 | $13,785 |
Work in process | 7,434 | 7,359 |
Finished goods | 12,710 | 10,395 |
Total Inventories | $33,376 | $31,539 |
Net_Income_Per_Share_Details
Net Income Per Share (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 |
Basic Earnings per Share | ||||
Net income attributable to Chase Corporation | $4,066 | $4,520 | $10,971 | $13,295 |
Less: Allocated to participating securities | 30 | 77 | 81 | 228 |
Net income available to common shareholders | 4,036 | 4,443 | 10,890 | 13,067 |
Basic weighted average shares outstanding | 9,065,511 | 8,942,045 | 9,057,738 | 8,940,075 |
Net income per share - Basic (in dollars per share) | $0.45 | $0.50 | $1.20 | $1.46 |
Diluted Earnings per Share | ||||
Net income attributable to Chase Corporation | 4,066 | 4,520 | 10,971 | 13,295 |
Less: Allocated to participating securities | 30 | 75 | 81 | 223 |
Net income available to common shareholders | $4,036 | $4,445 | $10,890 | $13,072 |
Basic weighted average shares outstanding | 9,065,511 | 8,942,045 | 9,057,738 | 8,940,075 |
Additional dilutive common stock equivalents (in shares) | 159,474 | 224,325 | 155,693 | 218,452 |
Diluted weighted average shares outstanding | 9,224,985 | 9,166,370 | 9,213,431 | 9,158,527 |
Net income per share - Diluted (in dollars per share) | $0.44 | $0.48 | $1.18 | $1.43 |
Antidilutive securities | ||||
Antidilutive stock options excluded from computation of earnings per share amount (in shares) | 22,750 | 25,969 | 27,863 | 18,222 |
StockBased_Compensation_Detail
Stock-Based Compensation (Details) (USD $) | 12 Months Ended | 0 Months Ended | 1 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Aug. 31, 2014 | Sep. 01, 2013 | Sep. 01, 2014 | Sep. 02, 2014 | Feb. 28, 2015 |
item | |||||
2014 LTIP | Performance and service based restricted stock | Executive officers | |||||
Stock Based Compensation | |||||
Shares granted | 5,485 | ||||
Cumulative shares granted | 13,014 | ||||
2014 LTIP | Performance and service based restricted stock | Executive officers | August 31, 2016 vesting date | |||||
Stock Based Compensation | |||||
Shares granted | 7,529 | ||||
2014 LTIP | Stock options | Executive officers and other members of management | |||||
Stock Based Compensation | |||||
Number Options Outstanding (in shares) | 22,750 | ||||
Weighted Average Exercise Price (in dollars per share) | $35.50 | ||||
Number of equal annual allotments in which awards will vest | 3 | ||||
Stock options expiring August 31, 2024 | 7,438 | ||||
Stock options expiring on September 1, 2024 | 15,312 | ||||
2015 LTIP | Non-employee members of BOD | |||||
Stock Based Compensation | |||||
Value of common stock issued in the form of restricted stock as part of annual retainer | $194 | ||||
Vesting period | 1 year | ||||
2015 LTIP | Performance and service based restricted stock | Executive officers and other members of management | August 31, 2017 vesting date | |||||
Stock Based Compensation | |||||
Shares granted | 6,993 | ||||
2015 LTIP | Time-based restricted stock | Executive officers and other members of management | August 31, 2017 vesting date | |||||
Stock Based Compensation | |||||
Shares granted | 8,132 | ||||
2015 LTIP | Service based restricted stock | Non-employee members of BOD | |||||
Stock Based Compensation | |||||
Shares granted | 5,361 | ||||
Period over which unrecognized expense related to all stock based compensation will be recognized | 12 months |
Segment_Data_and_Foreign_Opera2
Segment Data and Foreign Operations (Details) (USD $) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
In Thousands, unless otherwise specified | Feb. 28, 2015 | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | Aug. 31, 2014 |
item | ||||||
Segment data | ||||||
Revenue from external customers | $52,304 | $51,191 | $108,237 | $105,374 | ||
Income (loss) before income taxes | 6,256 | 6,900 | 17,025 | 20,464 | ||
Total assets | 240,688 | 240,688 | 240,688 | 245,545 | ||
Interest | 270 | 285 | 544 | 588 | ||
Depreciation | 2,812 | 2,852 | ||||
Amortization | 2,884 | 2,386 | ||||
Inventory step-up to fair value | 49 | |||||
Business Combination, Acquisition Related Costs | 584 | |||||
Gain on sale | 5,706 | |||||
Number of operating segments | 2 | |||||
Henkel Corporation ( Seller) | ||||||
Segment data | ||||||
Inventory step-up to fair value | 49 | |||||
Henkel Corporation ( Seller) | Selling, General and Administrative Expenses | ||||||
Segment data | ||||||
Business Combination, Acquisition Related Costs | 584 | 584 | ||||
Insulfab product line | ||||||
Segment data | ||||||
Gain on sale | 5,706 | |||||
Industrial Materials | ||||||
Segment data | ||||||
Revenue from external customers | 40,330 | 39,920 | 82,725 | 81,590 | ||
Income (loss) before income taxes | 10,213 | 10,075 | 22,828 | 26,817 | ||
Total assets | 155,878 | 155,878 | 155,878 | 127,820 | ||
Interest | 225 | 237 | 455 | 484 | ||
Depreciation | 976 | 998 | 1,953 | 1,981 | ||
Amortization | 1,283 | 766 | 2,053 | 1,520 | ||
Industrial Materials | Selling, General and Administrative Expenses | ||||||
Segment data | ||||||
Income (loss) before income taxes | 2,367 | 5,502 | ||||
Construction Materials | ||||||
Segment data | ||||||
Revenue from external customers | 11,974 | 11,271 | 25,512 | 23,784 | ||
Income (loss) before income taxes | 2,592 | 1,507 | 6,465 | 3,944 | ||
Total assets | 50,269 | 50,269 | 50,269 | 50,972 | ||
Interest | 45 | 48 | 89 | 104 | ||
Depreciation | 280 | 286 | 569 | 577 | ||
Amortization | 418 | 427 | 831 | 866 | ||
Construction Materials | Selling, General and Administrative Expenses | ||||||
Segment data | ||||||
Income (loss) before income taxes | 640 | 1,486 | ||||
Reportable segments | ||||||
Segment data | ||||||
Income (loss) before income taxes | 12,805 | 11,582 | 29,293 | 30,761 | ||
Total assets | 206,147 | 206,147 | 206,147 | 178,792 | ||
Corporate and common costs | ||||||
Segment data | ||||||
Income (loss) before income taxes | -6,549 | -4,682 | -12,268 | -10,297 | ||
Total assets | $34,541 | $34,541 | $34,541 | $66,753 |
Segment_Data_and_Foreign_Opera3
Segment Data and Foreign Operations (Details 2) (USD $) | 3 Months Ended | 6 Months Ended | |||
In Thousands, unless otherwise specified | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | Aug. 31, 2014 |
Concentration risk | |||||
Long-lived assets | 43,183 | 43,183 | $44,085 | ||
United Kingdom | |||||
Concentration risk | |||||
Goodwill and intangible assets | 9,873 | 9,873 | 9,924 | ||
Revenue | Geographic concentration risk | United Kingdom | |||||
Concentration risk | |||||
Percentage of concentration risk | 14.00% | 12.00% | 12.00% | 10.00% | |
Long-lived assets | Geographic concentration risk | United Kingdom | |||||
Concentration risk | |||||
Long-lived assets | 4,064 | 4,064 | $4,349 |
Goodwill_and_Other_Intangibles2
Goodwill and Other Intangibles (Details) (USD $) | 6 Months Ended |
In Thousands, unless otherwise specified | Feb. 28, 2015 |
item | |
Changes in the carrying value of goodwill | |
Balance at the beginning of the period | $38,280 |
Acquisition of Speciality Chemical Intermediates businesses | 6,371 |
Foreign currency translation adjustment | -514 |
Balance at the end of the period | 44,137 |
Number of operating segments | 2 |
Construction Materials | |
Changes in the carrying value of goodwill | |
Balance at the beginning of the period | 10,752 |
Foreign currency translation adjustment | -19 |
Balance at the end of the period | 10,733 |
Industrial Materials | |
Changes in the carrying value of goodwill | |
Balance at the beginning of the period | 27,528 |
Acquisition of Speciality Chemical Intermediates businesses | 6,371 |
Foreign currency translation adjustment | -495 |
Balance at the end of the period | $33,404 |
Goodwill_and_Other_Intangibles3
Goodwill and Other Intangibles (Details 2) (USD $) | 6 Months Ended | 12 Months Ended | |
In Thousands, unless otherwise specified | Feb. 28, 2015 | Feb. 28, 2014 | Aug. 31, 2014 |
Intangible assets | |||
Gross Carrying Value | $74,214 | $50,156 | |
Accumulated Amortization | 25,077 | 22,941 | |
Net Carrying Value | 49,137 | 27,215 | |
Aggregate amortization expense | 2,884 | 2,386 | |
Estimated amortization expense | |||
2015 (remaining 6 months) | 3,991 | ||
2016 | 7,848 | ||
2017 | 7,411 | ||
2018 | 7,180 | ||
2019 | 6,481 | ||
2020 | 5,613 | ||
Net Carrying Value | 38,524 | ||
Patents and agreements | |||
Intangible assets | |||
Weighted-Average Amortization Period | 12 years | 11 years 10 months 24 days | |
Gross Carrying Value | 3,036 | 3,104 | |
Accumulated Amortization | 2,301 | 2,281 | |
Net Carrying Value | 735 | 823 | |
Formulas and technology | |||
Intangible assets | |||
Weighted-Average Amortization Period | 8 years 4 months 24 days | 9 years 1 month 6 days | |
Gross Carrying Value | 8,455 | 5,849 | |
Accumulated Amortization | 3,084 | 2,851 | |
Net Carrying Value | 5,371 | 2,998 | |
Trade names | |||
Intangible assets | |||
Weighted-Average Amortization Period | 5 years 10 months 24 days | 5 years 8 months 12 days | |
Gross Carrying Value | 7,242 | 6,406 | |
Accumulated Amortization | 3,601 | 3,153 | |
Net Carrying Value | 3,641 | 3,253 | |
Customer lists and relationships | |||
Intangible assets | |||
Weighted-Average Amortization Period | 9 years 3 months 18 days | 10 years 2 months 12 days | |
Gross Carrying Value | 55,481 | 34,797 | |
Accumulated Amortization | 16,091 | 14,656 | |
Net Carrying Value | $39,390 | $20,141 |
Sale_of_Insulfab_Product_Line_
Sale of Insulfab Product Line (Details) (USD $) | 6 Months Ended | 0 Months Ended | 3 Months Ended | 6 Months Ended | |
In Thousands, unless otherwise specified | Feb. 28, 2014 | Oct. 07, 2013 | Nov. 30, 2013 | Feb. 28, 2015 | Aug. 31, 2014 |
Sale of Insulfab product line | |||||
Proceeds from the sale of property and assets | $9,179 | ||||
Insulfab product line | |||||
Sale of Insulfab product line | |||||
Proceeds from the sale of property and assets | 7,394 | ||||
Increase in sale proceeds resulting from post-closing adjustments | 2,516 | ||||
Pre-tax book gain from the sale of property and assets | 5,706 | ||||
After-tax book gain from the sale of property and assets | 3,709 | ||||
Sale price held in escrow | $739 | $739 | |||
Term of Escrow Deposit | 18 months |
Joint_Venture_Details
Joint Venture (Details) (USD $) | 3 Months Ended | 6 Months Ended | 2 Months Ended | ||
In Thousands, unless otherwise specified | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | Oct. 31, 2014 | Aug. 31, 2014 |
Joint Venture | |||||
Net (gain) loss attributable to non-controlling interest | ($35) | $95 | $7 | ||
JV | Joint venture partner | |||||
Joint Venture | |||||
Purchases made | 300 | 767 | 332 | ||
Amounts due for purchases made | 385 | 394 | |||
NEPTCO | |||||
Joint Venture | |||||
Net (gain) loss attributable to non-controlling interest | ($95) | ||||
NEPTCO | Joint venture partner | |||||
Joint Venture | |||||
Ownership interest (as a percent) | 50.00% | ||||
NEPTCO | Joint venture partner | Minimum | |||||
Joint Venture | |||||
Percentage of total glass fiber requirements agreed to be purchased | 80.00% | ||||
NEPTCO | JV | Joint venture partner | |||||
Joint Venture | |||||
Membership interest purchased | 50.00% |
Pensions_and_Other_PostRetirem2
Pensions and Other Post-Retirement Benefits (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 |
Components of net periodic benefit cost | ||||
Service cost | $91 | $81 | $181 | $161 |
Interest cost | 170 | 161 | 339 | 321 |
Expected return on plan assets | -153 | -178 | -306 | -355 |
Amortization of prior service cost | 1 | 1 | 2 | 2 |
Amortization of unrecognized loss | 167 | 73 | 335 | 147 |
Net periodic benefit cost | 276 | 138 | 551 | 276 |
Employer contribution | $115 |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (Recurring basis, USD $) | Feb. 28, 2015 | Aug. 31, 2014 |
In Thousands, unless otherwise specified | ||
Total | ||
Fair value measurements | ||
Restricted investments | $1,377 | $1,256 |
Long-term debt | 57,300 | 58,800 |
Quoted prices in active markets (Level 1) | ||
Fair value measurements | ||
Restricted investments | 1,339 | 1,216 |
Significant other observable inputs (Level 2) | ||
Fair value measurements | ||
Restricted investments | 38 | 40 |
Long-term debt | $57,300 | $58,800 |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Income (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 |
Accumulated other comprehensive income | ||||
Balance at the beginning of the period | ($4,250) | |||
Other comprehensive gains (losses) before reclassifications | -2,869 | |||
Reclassifications to net income of previously deferred (gains) losses | 171 | |||
Total other comprehensive (loss) income | -729 | 655 | -2,698 | 2,352 |
Balance at the ending of the period | -6,948 | -6,948 | ||
Restricted investments, other comprehensive gains (losses) before reclassifications, tax benefit | 22 | |||
Change in funded status of pension plan, other comprehensive gains (losses) before reclassifications, tax benefit | 0 | |||
Foreign currency translation adjustment, other comprehensive gains (losses) before reclassifications, tax benefit | 0 | |||
Restricted investments, reclassifications to net income of previously deferred (gains) losses, tax (expense) benefit | 26 | |||
Change in funded status of pension plan, reclassifications to net income of previously deferred (gains) losses, tax (expense) benefit | 118 | |||
Foreign currency translation adjustment, reclassifications to net income of previously deferred (gains) losses, tax (expense) benefit | 0 | |||
Unrealized gains on restricted investments, net of tax | ||||
Accumulated other comprehensive income | ||||
Balance at the beginning of the period | 209 | |||
Other comprehensive gains (losses) before reclassifications | 40 | |||
Reclassifications to net income of previously deferred (gains) losses | -48 | |||
Total other comprehensive (loss) income | -8 | |||
Balance at the ending of the period | 201 | 201 | ||
Pension and postretirement plan liabilities, net of tax benefit | ||||
Accumulated other comprehensive income | ||||
Balance at the beginning of the period | -4,785 | |||
Reclassifications to net income of previously deferred (gains) losses | 219 | |||
Total other comprehensive (loss) income | 219 | |||
Balance at the ending of the period | -4,566 | -4,566 | ||
Foreign currency translation adjustment | ||||
Accumulated other comprehensive income | ||||
Balance at the beginning of the period | 326 | |||
Other comprehensive gains (losses) before reclassifications | -2,909 | |||
Total other comprehensive (loss) income | -2,909 | |||
Balance at the ending of the period | ($2,583) | ($2,583) |
Accumulated_Other_Comprehensiv3
Accumulated Other Comprehensive Income (Details 2) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 |
Accumulated other comprehensive income | ||||
Cost of products and services sold | $34,235 | $33,951 | $68,715 | $69,429 |
Selling, general and administrative expenses | 11,924 | 9,930 | 22,719 | 20,369 |
Tax expense (benefit) | 2,190 | 2,415 | 5,959 | 7,162 |
Net income | 4,066 | 4,485 | 11,066 | 13,302 |
Reclassification out of accumulated other comprehensive income (loss) | ||||
Accumulated other comprehensive income | ||||
Net income | 62 | 27 | 171 | 72 |
Unrealized gains on restricted investments, net of tax | Reclassification out of accumulated other comprehensive income (loss) | ||||
Accumulated other comprehensive income | ||||
Selling, general and administrative expenses | -75 | -32 | -76 | -37 |
Tax expense (benefit) | 26 | 11 | 27 | 13 |
Net income | -48 | -21 | -48 | -24 |
Pension and postretirement plan liabilities, net of tax benefit | Reclassification out of accumulated other comprehensive income (loss) | ||||
Accumulated other comprehensive income | ||||
Cost of products and services sold | 5 | 20 | 10 | 40 |
Selling, general and administrative expenses | 163 | 54 | 326 | 108 |
Tax expense (benefit) | -59 | -26 | -118 | -52 |
Net income | $109 | $48 | $219 | $96 |
Acquisition_of_Specialty_Chemi2
Acquisition of Specialty Chemical Product Lines (Details) (USD $) | 1 Months Ended | 0 Months Ended | 3 Months Ended | 6 Months Ended | |
In Thousands, unless otherwise specified | Feb. 28, 2015 | Jan. 30, 2015 | Feb. 28, 2015 | Feb. 28, 2015 | Aug. 31, 2014 |
item | |||||
Acquisitions | |||||
Acquisition related costs | $584 | ||||
Acquisition cost has been allocated to the acquired tangible and identifiable intangible assets and liabilities assumed based on their fair values | |||||
Goodwill | 44,137 | 44,137 | 44,137 | 38,280 | |
Henkel Corporation ( Seller) | |||||
Acquisitions | |||||
Number of product lines acquired | 2 | ||||
Purchase price | 33,285 | ||||
Lease term | 10 years | ||||
Period to perform certain manufacturing and application services | 3 years | ||||
Acquisition cost has been allocated to the acquired tangible and identifiable intangible assets and liabilities assumed based on their fair values | |||||
Inventory | 610 | ||||
Property, plant & equipment | 1,064 | ||||
Goodwill | 6,371 | ||||
Intangible assets | 25,240 | ||||
Total purchase price | 33,285 | ||||
Henkel Corporation ( Seller) | Selling, General and Administrative Expenses | |||||
Acquisitions | |||||
Acquisition related costs | $584 | $584 |
Acquisition_of_Specialty_Chemi3
Acquisition of Specialty Chemical Product Lines (Details 2) (USD $) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 0 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Feb. 28, 2015 | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | Jan. 30, 2015 |
Business Acquisition, Pro Forma Information [Abstract] | ||||||
Revenue since acquisition date | $1,462 | |||||
Net loss since acquisition date | 445 | |||||
Statutory tax rate (as a percent) | 35.00% | |||||
Acquisition related costs | 584 | |||||
Inventory step-up costs | 49 | |||||
Net income | 4,066 | 4,485 | 11,066 | 13,302 | ||
Henkel Corporation ( Seller) | ||||||
Acquisition of Specialty Chemical Intermediates Businesses | ||||||
Intangible assets | 25,240 | |||||
Henkel Corporation ( Seller) | Customer Relationships | ||||||
Acquisition of Specialty Chemical Intermediates Businesses | ||||||
Intangible assets | 21,300 | |||||
Useful life | 8 years | |||||
Henkel Corporation ( Seller) | Technology | ||||||
Acquisition of Specialty Chemical Intermediates Businesses | ||||||
Intangible assets | 2,700 | |||||
Useful life | 7 years | |||||
Henkel Corporation ( Seller) | Trade names | ||||||
Acquisition of Specialty Chemical Intermediates Businesses | ||||||
Intangible assets | 910 | |||||
Useful life | 7 years | |||||
Henkel Corporation ( Seller) | Backlog | ||||||
Acquisition of Specialty Chemical Intermediates Businesses | ||||||
Intangible assets | 330 | |||||
Useful life | 2 months | |||||
Pro Forma | ||||||
Business Acquisition, Pro Forma Information [Abstract] | ||||||
Revenue | 55,873 | 56,291 | 116,766 | 114,929 | ||
Net income | 4,955 | 4,923 | 12,329 | 13,405 | ||
Net income attributable to Chase Corporation | $4,955 | $4,958 | $12,234 | $13,398 | ||
Basic (in dollars per share) | $0.54 | $0.55 | $1.34 | $1.47 | ||
Diluted (in dollars per share) | $0.53 | $0.53 | $1.32 | $1.44 |