Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
May 31, 2017 | Jun. 30, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | CHASE CORP | |
Entity Central Index Key | 830,524 | |
Document Type | 10-Q | |
Document Period End Date | May 31, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --08-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 9,364,250 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | May 31, 2017 | Aug. 31, 2016 |
Current Assets: | ||
Cash and cash equivalents | $ 54,130 | $ 73,411 |
Accounts receivable, less allowance for doubtful accounts of $683 and $830 | 35,262 | 34,835 |
Inventory | 28,266 | 25,814 |
Prepaid expenses and other current assets | 3,203 | 3,728 |
Due from sale of business | 229 | 457 |
Assets held for sale | 14 | 604 |
Total current assets | 121,104 | 138,849 |
Property, plant and equipment, less accumulated depreciation of $42,999 and $41,409 | 34,885 | 36,742 |
Other Assets: | ||
Goodwill | 50,688 | 43,576 |
Intangible assets, less accumulated amortization of $39,795 and $33,352 | 49,138 | 36,580 |
Cash surrender value of life insurance, less current portion | 4,529 | 4,530 |
Restricted investments | 1,949 | 1,637 |
Funded pension plan | 445 | 382 |
Deferred income taxes | 426 | 441 |
Other assets | 551 | 82 |
Total assets | 263,715 | 262,819 |
Current Liabilities: | ||
Current portion of long-term debt | 43,400 | |
Accounts payable | 13,280 | 12,352 |
Accrued payroll and other compensation | 3,690 | 6,553 |
Accrued expenses | 3,643 | 3,892 |
Accrued income taxes | 3,723 | 2,317 |
Total current liabilities | 24,336 | 68,514 |
Long-term debt, less current portion | 20,000 | |
Deferred compensation | 1,963 | 1,649 |
Accumulated pension obligation | 15,817 | 15,563 |
Other liabilities | 1,194 | 328 |
Accrued income taxes | 1,163 | 1,229 |
Deferred income taxes | 1,447 | 1,447 |
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; 9,364,250 shares at May 31, 2017 and 9,278,486 shares at August 31, 2016 issued and outstanding | 936 | 928 |
Additional paid-in capital | 14,451 | 14,719 |
Accumulated other comprehensive loss | (15,582) | (15,479) |
Retained earnings | 197,990 | 173,921 |
Total equity | 197,795 | 174,089 |
Total liabilities and equity | $ 263,715 | $ 262,819 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | May 31, 2017 | Aug. 31, 2016 |
CONSOLIDATED BALANCE SHEETS | ||
Accounts receivable, allowance for doubtful accounts (in dollars) | $ 683 | $ 830 |
Property, plant and equipment, accumulated depreciation (in dollars) | 42,999 | 41,409 |
Intangible assets, accumulated amortization (in dollars) | $ 39,795 | $ 33,352 |
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 | 9,364,250 | 9,278,486 |
Common stock, shares outstanding | 9,350,880 | 9,278,486 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2017 | May 31, 2016 | |
Revenue | ||||
Sales | $ 63,641 | $ 63,480 | $ 180,198 | $ 173,932 |
Royalties and commissions | 1,260 | 756 | 3,368 | 2,706 |
Total revenues | 64,901 | 64,236 | 183,566 | 176,638 |
Costs and Expenses | ||||
Cost of products and services sold | 37,511 | 38,542 | 105,658 | 108,154 |
Selling, general and administrative expenses | 12,297 | 11,770 | 35,567 | 33,506 |
Exit costs related to idle facility (Note 15) | 662 | 50 | 871 | |
Acquisition related costs (Note 14) | 584 | |||
Write-down of certain assets under construction (Note 8) | 365 | |||
Operating income | 15,093 | 13,262 | 41,707 | 33,742 |
Interest expense | (158) | (284) | (711) | (794) |
Gain on sale of real estate (Note 9) | 860 | |||
Gain on sale of business (Note 8) | (2,013) | (2,013) | (1,031) | |
Other income (expense) | 164 | (512) | 536 | 876 |
Income before income taxes | 17,112 | 12,466 | 44,405 | 34,855 |
Income taxes | 5,257 | 4,935 | 13,804 | 12,903 |
Net income | $ 11,855 | $ 7,531 | $ 30,601 | $ 21,952 |
Net income available to common shareholders, per common and common equivalent share | ||||
Basic (in dollars per share) | $ 1.27 | $ 0.81 | $ 3.27 | $ 2.38 |
Diluted (in dollars per share) | $ 1.26 | $ 0.80 | $ 3.24 | $ 2.34 |
Weighted average shares outstanding | ||||
Basic (in shares) | 9,258,219 | 9,173,252 | 9,244,237 | 9,156,805 |
Diluted (in shares) | 9,336,725 | 9,311,798 | 9,331,470 | 9,287,809 |
Cash dividends paid per share (in dollars per share) | $ 0.70 | $ 0.65 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2017 | May 31, 2016 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Net Income | $ 11,855 | $ 7,531 | $ 30,601 | $ 21,952 |
Other comprehensive income: | ||||
Net unrealized gain (loss) on restricted investments, net of tax | 41 | 75 | 87 | (24) |
Change in funded status of pension plans, net of tax | 147 | 94 | 441 | 281 |
Foreign currency translation adjustment | 1,504 | 2,093 | (631) | (1,917) |
Total other comprehensive income (loss) | 1,692 | 2,262 | (103) | (1,660) |
Comprehensive income | $ 13,547 | $ 9,793 | $ 30,498 | $ 20,292 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - 9 months ended May 31, 2017 - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (loss) | Retained Earnings | Total |
Balance at Aug. 31, 2016 | $ 928 | $ 14,719 | $ (15,479) | $ 173,921 | $ 174,089 |
Balance (in shares) at Aug. 31, 2016 | 9,278,486 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Restricted stock grants, net of forfeitures | $ 4 | (4) | |||
Restricted stock grants, net of forfeitures (in shares) | 44,567 | ||||
Amortization of restricted stock grants | 1,285 | 1,285 | |||
Amortization of stock option grants | 374 | 374 | |||
Exercise of stock options | $ 8 | 1,245 | 1,253 | ||
Exercise of stock options (in shares) | 80,168 | ||||
Common stock received for payment of stock option exercises | $ (2) | (1,156) | (1,158) | ||
Common stock received for payment of stock option exercises (in shares) | (15,079) | ||||
Common stock retained to pay statutory minimum withholding taxes on common stock | $ (2) | (2,012) | (2,014) | ||
Common stock retained to pay statutory minimum withholding taxes on common stock (in shares) | (23,892) | ||||
Cash dividend paid, $0.70 per share (per share) | (6,532) | (6,532) | |||
Change in funded status of pension plan, net of tax $234 | 441 | 441 | |||
Foreign currency translation adjustment | (631) | (631) | |||
Net unrealized gain on restricted investments, net of tax $48 | 87 | 87 | |||
Net Income | 30,601 | 30,601 | |||
Balance at May. 31, 2017 | $ 936 | $ 14,451 | $ (15,582) | $ 197,990 | $ 197,795 |
Balance (in shares) at May. 31, 2017 | 9,364,250 |
CONSOLIDATED STATEMENTS OF EQU7
CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) $ in Thousands | 9 Months Ended |
May 31, 2017USD ($)$ / shares | |
CONSOLIDATED STATEMENT OF EQUITY | |
Annual cash dividends declared per share | $ / shares | $ 0.70 |
Change in funded status of pension plans, tax | $ 234 |
Net unrealized gain (loss) on restricted investments, tax | $ 48 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
May 31, 2017 | May 31, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net Income | $ 30,601 | $ 21,952 |
Adjustments to reconcile net income to net cash provided by operating activities | ||
Gain on sale of real estate | (860) | |
Loss on write-down of certain assets under construction | 365 | |
Gain on sale of businesses | (2,013) | (1,031) |
Depreciation | 3,859 | 4,282 |
Amortization | 6,816 | 5,774 |
Cost of sale of inventory step-up | 190 | |
Provision for (recovery of) allowance for doubtful accounts | (129) | 235 |
Stock-based compensation | 1,659 | 941 |
Realized gain on restricted investments | (55) | (65) |
Decrease in cash surrender value of life insurance | 135 | |
Excess tax expense from stock-based compensation | (855) | |
Deferred taxes | 8 | |
Increase (decrease) from changes in assets and liabilities | ||
Accounts receivable | 1,448 | 306 |
Inventory | (2,550) | 2,659 |
Prepaid expenses and other assets | (1,003) | (643) |
Accounts payable | 409 | (1,045) |
Accrued compensation and other expenses | (1,369) | (1,455) |
Accrued income taxes | 1,325 | 287 |
Net cash provided by operating activities | 38,336 | 31,842 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchases of property, plant and equipment | (2,198) | (1,377) |
(Cost to acquire) retirements of intangible assets | (81) | 13 |
Payment for acquisition | (30,270) | |
Proceeds from sale of real estate | 2,122 | |
Net proceeds from sale of businesses | 3,687 | 1,729 |
Increase in restricted investments | (123) | (109) |
Proceeds from settlement of life insurance policy | 1,504 | |
Payments for cash surrender value life insurance | (137) | |
Net cash (used in) provided by investing activities | (25,359) | 119 |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Payments of principal on debt | (23,400) | (6,300) |
Dividend paid | (6,532) | (5,999) |
Proceeds from exercise of common stock options | 95 | 124 |
Payments of taxes on stock options and restricted stock | (2,014) | (1,219) |
Excess tax benefit from stock-based compensation | 855 | |
Net cash used in financing activities | (31,851) | (12,539) |
INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS | (18,874) | 19,422 |
Effect of foreign exchange rates on cash | (407) | (894) |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 73,411 | 43,819 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | 54,130 | 62,347 |
Non-cash Investing and Financing Activities | ||
Common stock received for payment of stock option exercises | 1,158 | 1,317 |
Property, plant & equipment additions included in accounts payable | $ 65 | $ 218 |
Basis of Financial Statement Pr
Basis of Financial Statement Presentation | 9 Months Ended |
May 31, 2017 | |
Basis of Financial Statement Presentation | |
Basis of Financial Statement Presentation | Note 1 — Basis of Financial Statement Presentatio Description of Business Chase Corporation (the “Company,” “Chase,” “we,” or “us”), founded in 1946, is a leading manufacturer of protective materials for high-reliability applications. Our strategy is to maximize the performance of our core businesses and brands while seeking future opportunities through strategic acquisitions. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with United States of America generally accepted accounting principles (“US GAAP”) 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 disclosures 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 filed audited consolidated financial statements, which included all information and notes necessary for such complete presentation, for the three years ended August 31, 2016, in conjunction with its 2016 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 period ended May 31, 2017 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, 2016, which are contained in the Company’s 2016 Annual Report on Form 10-K. The accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of normal recurring items) that are, in the opinion of management, necessary for a fair statement of the Company’s financial position as of May 31, 2017, the results of its operations, comprehensive income and cash flows for the interim periods ended May 31, 2017 and 2016, and changes in equity for the interim period ended May 31, 2017. 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 U.S. dollar as the reporting currency for financial reporting. The financial position and results of operations of the Company’s U.K.-based operations are measured using the British Pound Sterling as the functional currency. The financial position and results of operations of the Company’s operations based in France are measured using the euro as the functional currency. The financial position and results of the Company’s Spray Products (India) Private Limited business in India (which was renamed HumiSeal India Private Limited, effective December 2016) are measured using the Indian rupee as the functional currency. The functional currency for all our other operations is the U.S. dollar. 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 each applicable operation are included in other income (expense) on the condensed consolidated statements of operations and were ($188) and $173 for the three-month and nine-month periods ended May 31, 2017, respectively, and ($552) and $731 for the three-month and nine-month periods ended May 31, 2016, respectively. Other Business Developments On April 3, 2017, Chase executed an agreement with an unrelated third party to sell all inventory, machinery and equipment and intangible assets of the Company’s fiber optic cable components product line for proceeds of $3,858, net of transaction costs and following certain working capital adjustments. The resulting pre-tax gain on sale of $2,013 was recognized in the third quarter of fiscal 2017 as gain on sale of businesses within the condensed consolidated statement of operations. Further, the purchaser entered a multiyear lease for a portion of the manufacturing space at the Company’s Granite Falls, NC facility. Chase will provide ongoing manufacturing and administrative support to the purchaser for which the Company will receive additional consideration upon the performance of services. The Company’s fiber optic cable components product line was formerly a part of the Company’s Industrial Materials operating segment. See Note 8 to the condensed consolidated financial statements for additional information on the sale of the fiber optic cable components product line. On September 30, 2016, the Company acquired certain assets of Resin Designs, LLC (“Resin Designs”), an advanced adhesives and sealants manufacturer, with locations in Woburn, MA and Newark, CA. The business was acquired for a purchase price of $30,270, after final working capital adjustments and excluding acquisition-related costs. As part of this transaction, Chase acquired all working capital and fixed assets of the business, and entered multiyear leases at both locations. The Company expensed $584 of acquisition-related costs during the first quarter of fiscal 2017 associated with this acquisition. The purchase was funded entirely with available cash on hand. Resin Designs is a formulator of customized adhesive and sealant systems used in high-reliability electronic applications. The acquisition broadens the Company’s adhesives and sealants product offering and manufacturing capabilities, and expands its market reach. The Company is currently in the process of finalizing purchase accounting, and anticipates completion within the fourth quarter of fiscal 2017; no adjustments were made in the third quarter to the initial amounts recorded at the end of the second fiscal quarter. Since the effective date of the acquisition, the financial results of Resin Designs’ operations have been included in the Company’s financial statements within the electronic and industrial coatings product line, contained within the Industrial Materials operating segment. See Note 14 to the condensed consolidated financial statements for additional information on the acquisition of the assets and operations of Resin Designs. On June 23, 2016, the Company acquired all the capital stock of Spray Products (India) Private Limited for $1,161, net of cash acquired. This acquired business works closely with our HumiSeal ® coating manufacturing operation in Winnersh, Wokingham, England. The acquisition in India enhances the Company’s ability to provide technical, sales, manufacturing, chemical handling, and packaging services in the region. Since the effective date for this acquisition, the financial results of the business have been included in the Company's financial statements within the Company’s Industrial Materials operating segment in the electronic and industrial coatings product line. Purchase accounting was completed in the quarter ended August 31, 2016. Effective December 2016, Spray Products (India) Private Limited was renamed HumiSeal India Private Limited. See Note 14 to the condensed consolidated financial statements for additional information on the acquisition of the Spray Products (India) Private Limited. In November 2015 (the first quarter of fiscal 2016), the Company sold its RodPack ® wind energy business, contained within its structural composites product line, to an otherwise unrelated party for proceeds of $2,186. The Company’s structural composites product line is a part of the Company’s Industrial Materials operating segment. See Note 8 to the condensed consolidated financial statements for additional information on the sale of the RodPack wind energy business. |
Recent Accounting Standards
Recent Accounting Standards | 9 Months Ended |
May 31, 2017 | |
Recent Accounting Standards | |
Recent Accounting Standards | Note 2 — Recent Accounting Standards 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. GAAP. 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. In March, April and May 2016, the FASB issued ASU 2016-08 “Principal versus Agent Considerations (Reporting Revenue Gross versus Net),” ASU 2016-10 “Identifying Performance Obligations and Licensing,” and ASU 2016-12, “Revenue from Contracts with Customers (Topic 606), Narrow-Scope Improvements and Practical Expedients” all of which provide further clarification to be considered when implementing ASU 2014-09. The ASU will be effective for the Company beginning September 1, 2018 (fiscal 2019), including interim periods in its fiscal year 2019, and allows for either retrospective or modified retrospective 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 and cash flows; preliminary indications are that Chase will utilize the modified retrospective method of adoption. In August 2014, the FASB issued ASU No. 2014-15 “Presentation of Financial Statements: Going Concern (Subtopic 205-40)” which provides guidance on determining when and how to disclose going-concern uncertainties in the financial statements. The new standard requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued. An entity must provide certain disclosures if “conditions or events raise substantial doubt about the entity’s ability to continue as a going concern.” The guidance applies to all entities and is effective for annual periods ending after December 15, 2016, and interim periods thereafter (fiscal year 2017 for the Company). The adoption of ASU 2014-15, which occurred in the first quarter of fiscal 2017, did not have a material effect on the Company’s consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-03, "Simplifying the Presentation of Debt Issuance Costs," which requires that debt issue costs related to a recognized debt liability be presented on the balance sheet as a direct deduction from the amount of the debt liability, consistent with debt discounts and premiums. Amortization of such costs is still reported as interest expense. ASU 2015-03 is effective for fiscal years, and interim periods therein, beginning after December 15, 2015 (fiscal year 2017 for the Company). In August 2015, the FASB issued ASU 2015-15, "Presentation and Subsequent Measurement of Debt Issue Costs Associated with Line-of-Credit Arrangements." ASU 2015-15 supplements the requirements of ASU 2015-03 by allowing an entity to defer and present debt issue costs related to a line of credit arrangement as an asset and subsequently amortize the deferred costs ratably over the term of the line of credit arrangement. The adoption of ASU 2015-03 and ASU 2015-15, which occurred in the first quarter of fiscal 2017, did not have a material effect on the Company’s consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” Under the new guidance, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: (a) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (b) a right-of-use asset, which represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Changes were made to align lessor accounting with the lessee accounting model and ASU No. 2014-09, “Revenue from Contracts with Customers.” The ASU will be effective for the Company beginning September 1, 2019 (fiscal 2020). Early application is permitted. Lessees must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company is currently evaluating the impact of the application of this ASU on our consolidated financial statements and disclosures thereto. In March 2016, the FASB issued ASU No. 2016-09, “Compensation – Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting.” This ASU simplifies the accounting for share-based payment transactions including the accounting for income taxes, forfeitures, statutory tax withholding requirements and classification in the statement of cash flows. The required effective date for adoption of this guidance will be our fiscal year beginning September 1, 2017 (fiscal 2018), with early adoption allowed. The updated standard no longer requires cash flows related to excess tax benefits to be presented as a financing activity separate from other income tax cash flows. The update also allows entities to repurchase more of an employee's shares for tax withholding purposes without triggering liability accounting, clarifies that all cash payments to taxing authorities made on an employee's behalf for withheld shares should be presented as a financing activity on the statement of cash flows, and provides for an accounting policy election to account for forfeitures as they occur. The Company early adopted this standard as of September 1, 2016 and during the three-month and nine-month periods ended May 31, 2017 recognized an excess tax benefit from stock-based compensation of $787 and $1,655, respectively, within income tax expense on the condensed consolidated statement of operations (adopted prospectively). The adoption did not impact the existing classification of the awards. Excess tax benefits from stock based compensation are now classified in net income in the statement of cash flows instead of being separately stated in financing activities for the nine months ended May 31, 2017 (adopted prospectively). Given the Company’s historical practice of including employee withholding taxes paid within financing activities in the statement of cash flows, no prior period reclassifications are required by the clarifications on classification provided by ASU No. 2016-09. Due primarily to the inclusion of the excess tax benefit, the effective tax rates for the three and nine months ended May 31, 2017 decreased to 30.7% and 31.1%, respectively, compared to effective tax rates of 39.6% and 37.0% recognized for the third quarter and year-to-date periods of fiscal 2016, respectively; further, the Company anticipates the potential for increased periodic volatility in future effective tax rates based on the continued application of the ASU No. 2016-09. Following the adoption of the new standard, the Company has elected to account for forfeitures as they occur. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230).” This ASU provides guidance on the presentation and classification of specific cash flow items to improve consistency within the statement of cash flows. The effective date for adoption of this guidance will be our fiscal year beginning September 1, 2018 (fiscal 2019), with early adoption permitted. The Company is currently evaluating the effect that ASU No. 2016-15 will have on its financial statements and related disclosures. In January 2017, the FASB issued ASU No. 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business.” The new guidance dictates that, when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, it should be treated as an acquisition or disposal of an asset. The guidance will be effective for the fiscal year beginning on September 1, 2018 (fiscal 2019), including interim periods within that year, with early adoption permitted. In January 2017, the FASB issued ASU No. 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” This ASU simplifies the subsequent measurement of goodwill and eliminates Step 2 from the goodwill impairment test. Per ASU No. 2017-04, the annual, or interim, goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount, and an impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. In addition, income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit should be considered when measuring the goodwill impairment loss, if applicable. The amendments also eliminate the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The amendments are to be applied on a prospective basis. The required effective date for adoption of this guidance for the Company will be our fiscal year beginning September 1, 2020 (fiscal 2021), with early adoption permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company early adopted this standard during the second quarter of fiscal 2017; the adoption did not have a material effect on the Company’s consolidated financial statements or related disclosures. In March 2017, the FASB issued ASU No. 2017-07, “Compensation — Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.” This ASU applies to all employers that offer to their employees defined benefit pension plans, other postretirement benefit plans, or other types of benefits accounted for under Topic 715, Compensation — Retirement Benefits. The ASU requires that an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. If a separate line item or items are used to present the other components of net benefit cost, that line item or items must be appropriately described. If a separate line item or items are not used, the line item or items used in the income statement to present the other components of net benefit cost must be disclosed. The ASU also allows only the service cost component to be eligible for capitalization when applicable (e.g., as a cost of internally manufactured inventory or a self-constructed asset). The required effective date for adoption of this guidance for the Company will be our fiscal year beginning September 1, 2018 (fiscal 2019), including interim periods within that annual period. Early adoption is permitted as of the beginning of an annual period for which financial statements (interim or annual) have not been issued or made available for issuance. The Company is currently evaluating the effect that ASU No. 2017-07 will have on its financial statements and related disclosures. |
Inventory
Inventory | 9 Months Ended |
May 31, 2017 | |
Inventory | |
Inventory | Note 3 — Inventory Inventory consisted of the following as of May 31, 2017 and August 31, 2016: May 31, August 31, 2017 2016 Raw materials $ 13,014 $ 12,879 Work in process 7,774 6,019 Finished goods 7,478 6,916 Total Inventory $ 28,266 $ 25,814 |
Net Income Per Share
Net Income Per Share | 9 Months Ended |
May 31, 2017 | |
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 non-forfeitable 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 May 31, Nine Months Ended May 31, 2017 2016 2017 2016 Basic Earnings per Share Net income $ 11,855 $ 7,531 $ 30,601 $ 21,952 Less: Allocated to participating securities Net income available to common shareholders $ 11,728 $ 7,462 $ 30,269 $ 21,755 Basic weighted average shares outstanding Net income per share - Basic $ 1.27 $ 0.81 $ 3.27 $ 2.38 Diluted Earnings per Share Net income $ 11,855 $ 7,531 $ 30,601 $ 21,952 Less: Allocated to participating securities Net income available to common shareholders $ 11,728 $ 7,462 $ 30,269 $ 21,755 Basic weighted average shares outstanding Additional dilutive common stock equivalents Diluted weighted average shares outstanding Net income per share - Diluted $ 1.26 $ 0.80 $ 3.24 $ 2.34 For the nine months ended May 31, 2016, stock options to purchase 18,860 shares of common stock were outstanding, but were not included in the calculation of diluted income per share because their inclusion would be anti-dilutive; no shares were excluded for the three-month period ended May 31, 2016 or for either the three-month or nine-month periods ended May 31, 2017. Included in the calculation of dilutive common stock equivalents are the unvested portion of restricted stock and stock options. |
Stock Based Compensation
Stock Based Compensation | 9 Months Ended |
May 31, 2017 | |
Stock Based Compensation | |
Stock Based Compensation | Note 5 — Stock-Based Compensation In August 2015, the Board of Directors of the Company approved the fiscal year 2016 Long Term Incentive Plan (“2016 LTIP”) for the executive officers and other members of management. The 2016 LTIP is an equity-based plan with a grant date of September 1, 2015 and contains a performance and service-based restricted stock grant of 6,962 shares in the aggregate, subject to adjustment, with a vesting date of August 31, 2018. Based on the fiscal year 2016 financial results, 6,277 additional shares of restricted stock (total of 13,239 shares) were earned and granted subsequent to the end of fiscal year 2016 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 2016, the Board of Directors of the Company approved the fiscal year 2017 Long Term Incentive Plan (“2017 LTIP”) for the executive officers and other members of management. The 2017 LTIP is an equity-based plan with a grant date of September 1, 2016 and contains the following equity components: Restricted Shares — (a) a performance and service-based restricted stock grant of 5,399 shares in the aggregate, subject to adjustment based on fiscal 2017 results, with a vesting date of August 31, 2019. Compensation expense is recognized on a ratable basis over the vesting period based on quarterly probability assessments; and (b) a time-based restricted stock grant of 5,367 shares in the aggregate, with a vesting date of August 31, 2019. Compensation expense is recognized on a ratable basis over the vesting period. Stock options — options to purchase 15,028 shares of common stock in the aggregate with an exercise price of $64.37 per share. The options will vest in three equal annual installments beginning on August 31, 2017 and ending on August 31, 2019. Of the options granted, 5,596 options will expire on August 31, 2026, and 9,432 options will expire on September 1, 2026. Compensation expense is recognized over the period of the award consistent with the vesting terms. In August 2016, the Board of Directors of the Company approved equity retention agreements with certain executive officers. The equity-based retention agreements have a grant date of September 1, 2016 and contain the following equity components: (a) time-based restricted stock grant of 16,312 shares in the aggregate, with 7,768 shares having a vesting date of August 31, 2019, and 8,544 shares having a vesting date of August 31, 2021; and (b) options to purchase 23,563 shares of common stock in the aggregate with an exercise price of $64.37 per share. These options will cliff vest on August 31, 2019 and will expire on August 31, 2026. Compensation expense for both the restricted stock and the stock option components of the equity retention agreements is recognized on a ratable basis over the vesting period. During the first quarter of fiscal 2017, additional grants totaling 8,805 shares of restricted stock were issued to non-executive members of management with a vesting date of August 31, 2021. Compensation expense is recognized on a ratable basis over the vesting period. In February 2017, as part of their standard compensation for board service, non-employee members of the Board of Directors received a total grant of 2,407 shares of restricted stock ($219 grant date value) for service for the period from January 31, 2017 through January 31, 2018. The shares of restricted stock will vest at the conclusion of this service period. Compensation is recognized on a ratable basis over the twelve-month vesting period. |
Segment Data and Foreign Operat
Segment Data and Foreign Operations | 9 Months Ended |
May 31, 2017 | |
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 includes 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, laminated durable papers, laminates for the packaging and industrial laminate markets, custom manufacturing services, 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, composite materials and elements, polymeric microspheres, and polyurethane dispersions. Beginning June 23, 2016, and September 30, 2016, respectively, the Industrial Materials segment includes the acquired operations of HumiSeal India Private Limited and of Resin Designs, LLC. Both were obtained through acquisition and included in the Company’s electronic and industrial coatings product line. Prior to the April 3, 2017 sale of the business, the segment’s products also included glass-based strength elements, designed to allow fiber optic cables to withstand mechanical and environmental strain and stress. The Construction Materials segment is principally composed of 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 waterproofing applications, high-performance polymeric asphalt additives, and expansion and control joint systems for use in the transportation and architectural markets. The following tables summarize information about the Company’s reportable segments: Three Months Ended May 31, Nine Months Ended May 31, 2017 2016 2017 2016 Revenue Industrial Materials $ 53,292 $ 47,185 $ 149,708 $ 134,253 Construction Materials 11,609 17,051 33,858 42,385 Total $ 64,901 $ 64,236 $ 183,566 $ 176,638 Income before taxes Industrial Materials $ 20,259 (a) $ 14,191 $ 52,364 (c) $ 40,391 (e) Construction Materials 3,647 5,662 12,411 14,785 Total for reportable segments 23,906 19,853 64,775 55,176 Corporate and common costs (6,794) (7,387) (b) (20,370) (d) (20,321) (b) Total $ 17,112 $ 12,466 $ 44,405 $ 34,855 Includes the following costs by segment: Industrial Materials Interest $ 119 $ 213 $ 533 $ 595 Depreciation 959 1,007 3,023 2,952 Amortization 1,990 1,587 5,859 4,716 Construction Materials Interest $ 39 $ 71 $ 178 $ 199 Depreciation 209 240 560 764 Amortization 320 351 957 1,058 (a) Includes a $2,013 gain on sale of our fiber optic cable components business (b) Includes Randolph, MA facility exit and demolition costs of $662 and $871 incurred during the quarterly and year-to-date periods, respectively (c) Includes a $2,013 gain on sale of our fiber optic cable components business and $190 of expenses related to inventory step-up in fair value attributable to the September 2016 acquisition of certain assets of Resin Designs, LLC (d) Includes $584 in acquisition-related expenses attributable to the September 2016 acquisition of certain assets of Resin Designs, LLC, facility exit and demolition costs of $50 related to the Company’s Randolph, MA location, a $792 gain related to the November 2016 sale of the Company’s Paterson, NJ location and a $68 gain related to the December 2016 sale of the Company’s former corporate headquarters in Bridgewater, MA (e) Includes both a $1,031 gain on sale of our RodPack wind energy business contained within our structural composites product line and a $365 write-down on certain other structural composites assets based on usage constraints following the sale, both recognized in November 2015 Total assets for the Company’s reportable segments as of May 31, 2017 and August 31, 2016 were: May 31, August 31, 2017 2016 Total Assets Industrial Materials $ 160,163 $ 136,003 Construction Materials 36,399 38,983 Total for reportable segments 196,562 174,986 Corporate and common assets 67,153 87,833 Total $ 263,715 $ 262,819 The Company’s products are sold worldwide. Revenue for the three-month and nine-month periods ended May 31, 2017 and 2016 are attributed to operations located in the following countries: Three Months Ended May 31, Nine Months Ended May 31, 2017 2016 2017 2016 Revenue United States $ 56,281 $ 52,571 $ 158,379 $ 145,998 United Kingdom 4,230 7,484 11,923 18,515 All other foreign (1) 4,390 4,181 13,264 12,125 Total $ 64,901 $ 64,236 $ 183,566 $ 176,638 (1) Comprises sales originated from our Paris, France location, royalty revenue attributable to our licensed manufacturer in Asia, and Chase foreign manufacturing operations. As of May 31, 2017 and August 31, 2016, the Company had long-lived assets ( defined as tangible assets providing the Company with a future economic benefit beyond the current year or operating period, including buildings, equipment and leasehold improvements) and goodwill and intangible assets, less accumulated amortization, in the following countries: May 31, August 31, 2017 2016 Long-lived Assets United States Property, plant and equipment, net $ 30,459 $ 32,176 Goodwill and Intangible assets, less accumulated amortization 92,858 72,653 United Kingdom Property, plant and equipment, net 3,089 3,214 Goodwill and Intangible assets, less accumulated amortization 5,769 6,270 All other foreign Property, plant and equipment, net 1,337 1,352 Goodwill and Intangible assets, less accumulated amortization 1,199 1,233 Total Property, plant and equipment, net $ 34,885 $ 36,742 Goodwill and Intangible assets, less accumulated amortization $ 99,826 $ 80,156 |
Goodwill and Other Intangibles
Goodwill and Other Intangibles | 9 Months Ended |
May 31, 2017 | |
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 Materials Consolidated Balance at August 31, 2016 $ 32,880 $ 10,696 $ 43,576 Acquisition of Resin Designs, LLC 7,592 — Sale of the fiber optic cable components business (409) — (409) Foreign currency translation adjustment (67) (4) (71) Balance at May 31, 2017 $ 39,996 $ 10,692 $ 50,688 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 has identified eleven reporting units within its two operating segments that are used to evaluate the possible impairment of goodwill. Goodwill impairment exists when the carrying value 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 and certain intangible asset 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 discounted cash flows. The Company evaluates the possible impairment of goodwill annually during the 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 May 31, 2017 and August 31, 2016: Weighted Average Gross Carrying Accumulated Net Carrying Amortization Period Value Amortization Value May 31, 2017 Patents and agreements years $ 1,816 $ 1,669 $ 147 Formulas and technology years 9,312 5,079 4,233 Trade names years 7,704 5,548 2,156 Customer lists and relationships years 70,101 27,499 42,602 $ 88,933 $ 39,795 $ 49,138 August 31, 2016 Patents and agreements years $ 1,805 $ 1,663 $ 142 Formulas and technology years 8,248 4,310 3,938 Trade names years 7,137 4,909 2,228 Customer lists and relationships years 52,742 22,470 30,272 $ 69,932 $ 33,352 $ 36,580 Aggregate amortization expense related to intangible assets for the nine months ended May 31, 2017 and 2016 was $6,816 and $5,774, respectively. Estimated amortization expense for the remainder of fiscal year 2017 and for the next five years is as follows: Years ending August 31, 2017 (remaining 3 months) $ 2,297 2018 9,152 2019 8,459 2020 7,586 2021 7,042 2022 6,163 |
Sale of Businesses
Sale of Businesses | 9 Months Ended |
May 31, 2017 | |
Sale of Businesses | |
Sale of Businesses | Note 8 — Sale of Businesses Sale of Fiber Optic Cable Components Product Line On April 3, 2017, Chase executed an agreement with an unrelated third party, Roblon A/S (“Roblon”), to sell all inventory, machinery and equipment and intangible assets of the Company’s fiber optic cable components product line for proceeds of $3,858, net of transaction costs and following certain working capital adjustments. Given its low-growth and low-margin prospects, and a customer, supplier and equipment base separate from our other businesses, the fiber optic cable components product line, which was formerly part of the Company’s Industrial Materials segment, was determined to not be part of Chase’s long-term strategy. The divesture was accounted for under ASC Topic 360, “Disclosure - Impairment or Disposal of Long-Lived Assets.” In accordance with this accounting standard, the resulting pre-tax gain on sale of $2,013 was recognized in the third quarter of fiscal 2017 as gain on sale of businesses within the condensed consolidated statement of operations. Chase received $3,458, net of transaction costs, in the third quarter of fiscal 2017, with the remaining $400 placed in escrow; the portion of the sale price held in escrow was recorded as a non-current asset within other assets as of May 31, 2017, and is available to resolve any submitted claims or adjustments up to 18 months from the closing date of the sale. Subsequent to the sale, Chase will provide ongoing manufacturing and administrative support to the purchaser for which the Company will receive additional consideration upon the performance of services; this arrangement is anticipated to last for multiple years. In the quarter ended May 31, 2017, Chase charged Roblon $301 for manufacturing services, which the Company recognized as revenue, within the Industrial Materials segment, and $40 for selling and administrative expenses, which the Company recognized as an offset to selling, general and administrative expenses. Further, the purchaser entered a multiyear lease for a portion of the manufacturing space at the Company’s Granite Falls, NC facility. Chase received $22 in rental income during the third quarter related to this lease, which the Company recognized within other income (expense) on the condensed consolidated statement of operations Sale of RodPack Business In November 2015, the Company sold its RodPack wind energy business, contained within its structural composites product line, to an otherwise unrelated party for proceeds of $2,186. The Company’s structural composites product line is a part of the Company’s Industrial Materials segment. The Company is not restricted in its use of the net proceeds from the sale. The sale resulted in a pre-tax book gain of $1,031, which was recorded within the condensed consolidated statement of operations as gain on sale of businesses in the quarter ended November 30, 2015. The Company received $1,500 of the proceeds in the first quarter of fiscal 2016, and received two additional payments each for $229 during the quarters ended May 31, 2016 and November 30, 2016. The Company received the final installment payment in June 2017, subsequent to the third quarter of fiscal 2017, and as such, recorded the balance as a current asset (Due from sale of business) as of May 31, 2017. The Company will provide ongoing development support to the buyer for which it will receive additional consideration upon the completion of services. The sale of this business prompted the Company to perform a review of other long-lived assets within the structural composites product line, as the sale of the related intangible assets resulted in a limitation of the Company’s capacity to sell certain other goods produced by the product line. This review resulted in the identification of construction in progress assets with a net book value of $365, which the Company fully wrote down. This charge was recorded within the condensed consolidated statement of operations as write-down of certain assets under construction during the first quarter of fiscal 2016. |
Sale of Real Estate
Sale of Real Estate | 9 Months Ended |
May 31, 2017 | |
Sale of Real Estate | |
Sale of Real Estate | Note 9 — Sale of Real Estate Sale of Paterson, NJ Location In November 2016, the Company finalized the sale of its Paterson, NJ property for cash proceeds in the amount of $1,382. This transaction resulted in a gain of $792, which was recorded in the Company’s condensed consolidated statement of operations as a gain on sale of real estate during the fiscal quarter ended November 30, 2016. The Company had previously reclassified the related long-lived assets to assets held for sale after committing to a plan in the second quarter of fiscal 2016 to actively market the property. The assets held for sale had been reported within Corporate and Common assets as of August 31, 2016. Sale of Former Corporate Headquarters in Bridgewater, MA In October 2016, Chase entered into an agreement to sell its former corporate headquarters and executive offices in Bridgewater, MA. In December 2016, during the second fiscal quarter, the sale was finalized for gross cash proceeds in the amount of $740, resulting in a gain on sale of $68. See Note 17 to the condensed consolidated financial statements for additional information on the sale of the Bridgewater, MA location. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
May 31, 2017 | |
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 cash flows, litigation is inherently unpredictable. Therefore, judgments could be rendered or settlements agreed to that could adversely affect the Company’s operating results or cash flows in a particular period. The Company routinely assesses all 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 we assess the likelihood of loss as probable. |
Pensions and Other Postretireme
Pensions and Other Postretirement Benefits | 9 Months Ended |
May 31, 2017 | |
Pensions and Other Postretirement Benefits | |
Pensions and Other Postretirement Benefits | Note 11 — Pensions and Other Postretirement Benefits The components of net periodic benefit cost for the three and nine months ended May 31, 2017 and 2016 are as follows: Three Months Ended May 31, Nine Months Ended May 31, 2017 2016 2017 2016 Components of net periodic benefit cost Service cost $ 72 $ 74 $ 216 $ 222 Interest cost 170 182 510 546 Expected return on plan assets (132) (129) (396) (387) Amortization of prior service cost 1 1 3 3 Amortization of accumulated loss 224 143 672 429 Net periodic benefit cost $ 335 $ 271 $ 1,005 $ 813 When funding is required, the Company’s policy is to contribute amounts that are deductible for federal income tax purposes. As of May 31, 2017, the Company has made contributions of $127 in the current fiscal year to fund its obligations under its pension plans, and plans to make the necessary contributions over the remainder of fiscal 2017 to ensure the qualified plan continues to be adequately funded given the current market conditions. The Company made contributions of $233 in the first nine months of the prior year. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
May 31, 2017 | |
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 are: 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 May 31, 2017 and August 31, 2016 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 May 31, 2017 and August 31, 2016: Fair value measurement category Quoted prices Significant other Significant Fair value in active markets observable inputs unobservable inputs measurement date Total (Level 1) (Level 2) (Level 3) Assets: Restricted investments May 31,2017 $ 1,949 $ 1,906 43 — Restricted investments August 31, 2016 $ 1,637 $ 1,610 27 — The following table presents the fair value of the Company’s long-term debt (including current portion of long-term debt) as of May 31, 2017 and August 31, 2016, which is recorded at its carrying value: Fair value measurement category Quoted prices Significant other Significant Fair value in active markets observable inputs unobservable inputs measurement date Total (Level 1) (Level 2) (Level 3) Liabilities: Long-term debt May 31, 2017 $ 20,000 $ — 20,000 — Long-term debt August 31, 2016 $ 43,400 $ — 43,400 — The carrying value of the long-term debt approximates its fair value, as the interest rate is set based on the movement of the underlying market rates. In December 2016, Chase refinanced its term debt with a new credit agreement. See Note 18 to the condensed consolidated financial statements for additional information on the refinancing. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 9 Months Ended |
May 31, 2017 | |
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: Change in Funded Foreign Currency Restricted Status of Translation Investments Pension Plan Adjustment Total Balance at August 31, 2015 $ 47 $ (5,934) $ (2,099) $ (7,986) Other comprehensive gains (losses) before reclassifications (1) 18 — (1,917) (1,899) Reclassifications to net income of previously deferred (gains) losses (2) (42) 281 — 239 Other comprehensive income (loss) (24) 281 (1,917) (1,660) Balance at May 31, 2016 $ 23 $ (5,653) $ (4,016) $ (9,646) Balance at August 31, 2016 $ 54 $ (7,336) $ (8,197) $ (15,479) Other comprehensive gains (losses) before reclassifications (3) 123 — (631) (508) Reclassifications to net income of previously deferred (gains) losses (4) (36) 441 — 405 Other comprehensive income (loss) 87 441 (631) (103) Balance at May 31, 2017 $ 141 $ (6,895) $ (8,828) $ (15,582) (1) Net of tax benefit of $10, $0, $0, respectively. (2) Net of tax expense of $23, tax benefit of $153, $0, respectively. (3) Net of tax benefit of $64, $0, $0, respectively. (4) Net of tax expense of $16, tax benefit of $234, $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 May 31, Nine Months Ended May 31, Location of Gain (Loss) Reclassified from Accumulated 2017 2016 2017 2016 Other Comprehensive Income (Loss) into Income Gains on Restricted Investments: Realized gain on sale of restricted investments $ (1) $ (2) $ (55) $ (65) Selling, general and administrative expenses Tax expense (benefit) 1 1 19 23 Gain net of tax $ — $ (1) $ (36) $ (42) Loss on Funded Pension Plan adjustments: Amortization of prior pension service costs and unrecognized losses $ 26 $ 6 $ 78 $ 18 Cost of products and services sold Amortization of prior pension service costs and unrecognized losses 199 139 597 416 Selling, general and administrative expenses Tax expense (benefit) (78) (51) (234) (153) Loss net of tax $ 147 $ 94 $ 441 $ 281 Total net loss reclassified for the period $ 147 $ 93 $ 405 $ 239 |
Acquisitions
Acquisitions | 9 Months Ended |
May 31, 2017 | |
Acquisitions | |
Acquisitions | Note 14 — Acquisitions Acquisition of Resin Designs, LLC On September 30, 2016, the Company acquired certain assets of Resin Designs, LLC (“Resin Designs”), an advanced adhesives and sealants manufacturer, with locations in Woburn, MA and Newark, CA. This business was acquired for a purchase price of $30,270, after final working capital adjustments and excluding acquisition-related costs. As part of this transaction, Chase acquired all working capital and fixed assets of the business, and entered into multiyear leases at both locations. Resin Designs is a formulator of customized adhesive and sealant systems used in high-reliability electronic applications. The acquisition broadens the Company’s adhesives and sealants product offering and manufacturing capabilities, and expands its market reach. The purchase was funded entirely with available cash on hand. Since the effective date for this acquisition, September 30, 2016, the financial results of the acquired business have been included in the Company’s financial statements within the Industrial Materials operating segment, within the electronic and industrial coatings product line. 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 the first fiscal quarter of 2017 to acquisition-related costs. The Company is currently in the process of finalizing purchase accounting, and anticipates completion within the fourth quarter of fiscal 2017; no adjustments were made in the third quarter to the initial amounts recorded at the end of the second fiscal quarter. The purchase price has been 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 Accounts receivable $ 1,877 Inventory 1,300 Prepaid expenses and other current assets 63 Property, plant & equipment 623 Goodwill 7,592 Intangible assets 19,450 Accounts payable and accrued liabilities (635) Total purchase price $ 30,270 The excess of the purchase price over the net tangible and intangible assets acquired resulted in goodwill of $7,592 that is largely attributable to the synergies and economies of scale from combining the operations, technologies and research and development capabilities of Resin Designs and Chase, particularly as it pertains to the expansion of the Company's product and service offerings, the established workforce and marketing efforts. This goodwill is deductible for income tax purposes. All assets, including goodwill, acquired as part of the Resin Designs acquisition 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 $ 17,500 10 years Technology 1,200 4 years Trade names 750 7 years Total intangible assets $ 19,450 Supplemental Pro Forma Data The following table presents the pro forma results of the Company for the nine-month period ended May 31, 2017 and for the three-month and nine-month periods ended May 31, 2016 as though the Resin Designs acquisition described above occurred on September 1, 2015 (the first day of fiscal 2016). The actual revenue and expenses for the acquired business are included in the Company’s fiscal 2017 consolidated results beginning on September 30, 2016. From the date of acquisition (September 30, 2016) through May 31, 2017, revenue and net income for the Resin Designs operations included in the condensed consolidated statement of operations were $10,399 and $316, respectively, including the effects of $584 in acquisition-related costs, $190 in sale of inventory step-up cost, and additional amortization expense recognized related to intangible assets recorded 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, 2015. Three Months Ended Nine Months Ended May 31, 2016 May 31, 2017 May 31, 2016 Revenue $ 67,358 $ $ Net income 7,551 Net income available to common shareholders, per common and common equivalent share Basic earnings per share $ 0.81 $ 3.34 $ 2.31 Diluted earnings per share $ 0.80 $ 3.31 $ 2.27 Acquisition of Spray Products (India) Private Limited On June 23, 2016, the Company acquired all the capital stock of Spray Products (India) Private Limited for $1,161, net of cash acquired. This acquired business works closely with our HumiSeal manufacturing operation in Winnersh, Wokingham, England. The acquisition in India enhances the Company’s ability to provide technical, sales, manufacturing, chemical handling, and packaging services in the region. Since the effective date for this acquisition, the financial results of the business have been included in the Company's financial statements within the Company’s Industrial Materials operating segment in the electronic and industrial coatings product line. Purchase accounting was completed in the quarter ended August 31, 2016. Effective December 2016, Spray Products (India) Private Limited was renamed HumiSeal India Private Limited. |
Exit Costs Related to Idle Faci
Exit Costs Related to Idle Facility | 9 Months Ended |
May 31, 2017 | |
Exit Costs Related to Idle Facility | |
Exit Costs Related to Idle Facility | Note 15 — Exit Costs Related to Idle Facility In the nine-month period ended May 31, 2017, the Company recognized $50 in expenses, to raze and exit its Randolph, MA facility, which had been idle regarding production for several years; no expense was recognized in the quarter ended May 31, 2017. The Company began marketing the site for sale and reclassified the net book value of the facility to assets held for sale in the second quarter of fiscal 2016, and recognized $662 and $871 in expenses associated with the project during the quarter and nine-month period ended May 31, 2016, respectively. These actions were taken as part of the Company’s on-going facility consolidation and rationalization initiative. The Company has updated its initial estimate and currently anticipates future expenses associated with completing the project will not be material, and expects work to be completed during fiscal 2017, with the sale of the property to follow. The Company recognized $935 in total expenses in fiscal 2016 (during the second, third and fourth quarters) bringing the project to near completion. See Note 16 to the condensed consolidated financial statements for additional information on assets held for sale. |
Assets Held for Sale
Assets Held for Sale | 9 Months Ended |
May 31, 2017 | |
Assets Held for Sale | |
Assets Held for Sale | Note 16 — Assets Held for Sale The Company periodically reviews long-lived assets against its plans to retain or ultimately dispose of these assets. If the Company decides to dispose of an asset and commits to a plan to actively market and sell the asset, it will be moved to assets held for sale. The Company analyzes market conditions each reporting period, and, if applicable, records additional impairments due to declines in market values of like assets. The fair value of the asset is determined by observable inputs such as appraisals and prices of comparable assets in active markets for assets like the Company's. Gains are not recognized until the assets are sold. Assets held for sale as of May 31, 2017 and August 31, 2016 were: May 31, 2017 August 31, 2016 Randolph, MA - Property (1) $ 14 $ 14 Paterson, NJ - Building and leasehold improvements (2) — 590 Total $ 14 $ 604 (1) See Note 15 to the condensed consolidated financial statements for additional information on Randolph, MA location assets held for sale as of May 31, 2017 and August 31, 2016. (2) See Note 9 to the condensed consolidated financial statements for additional information on the sale of the Paterson, NJ location in the nine-month period ended May 31, 2017. |
Related Party Agreements
Related Party Agreements | 9 Months Ended |
May 31, 2017 | |
Related Party Agreements | |
Related Party Agreements | Note 17 — Related Party Agreements Reimbursements Related to Life Insurance Policies During the fourth quarter of fiscal 2016 and the first quarter of fiscal 2017, the Edward L. Chase Trust (the “Trust”), owners of two insurance policies on the life of Claire E. Chase, reimbursed the Company for premiums paid on the policies in exchange for the Company’s release of any claims on the policies. In August 2016 (the fourth quarter of fiscal 2016), the Company received $1,238 related to the John Hancock (formerly Manufacturers’ Life Insurance Company) policy, the full value of premiums paid to date by the Company. In September 2016 (the first quarter of fiscal 2017), the Company received $1,504 related to the Metropolitan Life Insurance policy, its then cash surrender value, plus an additional prepaid premium related to the policy. Claire E. Chase is the spouse of a former executive of the Company, Edward L. Chase (deceased), and who in each case are the parents of Peter R. Chase (the Executive Chairman of the Company) and Mary Claire Chase (Director) and the grandparents of Adam P. Chase (the President and CEO of the Company). The Trust is the beneficial owner of more than 5% of the Company’s common stock. Terms and conditions of these transactions were reviewed and approved by the independent members of the Company's Board of Directors in advance. Sale of Former Corporate Headquarters in Bridgewater, MA In October 2016, Chase entered an agreement to sell its former corporate headquarters and executive offices in Bridgewater, MA. In December 2016, the sale was finalized for gross proceeds of $740, resulting in a gain on sale of $68, which was recognized in the second quarter of fiscal 2017. The buyer, Bridgewater State University Foundation, Inc., was deemed a related party because of previously existing professional connections between it and two members of the Company’s Board of Directors, including Peter R. Chase (the Executive Chairman of the Company) and Dana Mohler-Faria (Director). The terms and conditions of the proposed transaction were reviewed and approved by all members of the Company's Board of Directors who were not parties related to the potential buyer, prior to entering the October 2016 agreement. They concluded that the sale price was appropriate, after considering a recent market appraisal of the land and building performed by an independent third party valuation firm. |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
May 31, 2017 | |
Long-Term Debt | |
Long-Term Debt | Note 18 — Long-Term Debt On December 15, 2016, the Company entered an Amended and Restated Credit Agreement (the “New Credit Agreement”) with Bank of America, acting as administrative agent, and with participation from Citizens Bank and JPMorgan Chase Bank (collectively with Bank of America, the “Lenders”). The New Credit Agreement is initially an all-revolving credit facility with a borrowing capacity of $150,000, which can be increased by an additional $50,000 at the request of the Company and the individual or collective option of any of the Lenders. The New Credit Agreement contains customary affirmative and negative covenants that, among other things, restrict our ability to incur additional indebtedness and require certain lender approval for acquisitions by the Company and its subsidiaries over a certain size. It also requires us to maintain certain financial ratios on a consolidated basis, including a consolidated net leverage ratio (as defined in the facility) of no more than 3.25 to 1.00, and a consolidated fixed charge coverage ratio (as defined in the facility) of at least 1.25 to 1.00. We were in compliance with our debt covenants as of May 31, 2017. The New Credit Agreement is guaranteed by all of Chase’s direct and indirect domestic subsidiaries, including NEPTCO, which had a carrying value of $151,938 at May 31, 2017. The New Credit Agreement was entered both to refinance our previously existing term loan and revolving line of credit, and to provide for additional liquidity to finance potential acquisitions, working capital, capital expenditures, and for other general corporate purposes. The applicable interest rate for the revolver portion of the New Credit Agreement (the “New Revolving Facility”) and any New Term Loan (defined below) is based on the effective London Interbank Offered Rate (LIBOR) plus an additional amount in the range of 1.00% to 1.75%, depending on the consolidated net leverage ratio of Chase and its subsidiaries. At May 31, 2017, the applicable interest rate was 2.34% per annum and the outstanding principal amount was $20,000. The New Credit Agreement has a five-year term with interest payments due at the end of the applicable LIBOR period (but in no event less frequently than the three-month anniversary of the commencement of such LIBOR period) and principal payment due at the expiration of the agreement, December 15, 2021. In addition, the Company may elect a base rate option for all or a portion of the New Revolving Facility, in which case, interest payments shall be due with respect to such portion of the New Revolving Facility on the last business day of each quarter. Subject to certain conditions set forth in the New Credit Agreement, the Company may elect to convert all or a portion of the outstanding New Revolving Facility into a term loan (each, a “New Term Loan”), which shall be payable quarterly in equal installments sufficient to amortize the original principal amount of such New Term Loan on a seven year amortization schedule; provided, however, that the final principal repayment installment shall be repaid on December 15, 2021 and in any event shall be in an amount equal to the aggregate principal amount of all Term Loans outstanding on such date. Prepayment is allowed by the New Credit Agreement at any time during the term of the agreement, subject to customary notice requirements. In connection with entry into the New Credit Agreement, Chase applied proceeds to refinance in full the outstanding principal balance of its preexisting term debt, simultaneously terminating both our previously existing term loan agreement and the previously existing revolving line of credit, which was fully available as of December 15, 2016. As payment of the principal amount of the New Revolving Facility is due at the expiration of the agreement, December 15, 2021, we have classified the outstanding balance as noncurrent on the condensed consolidated balance sheet as of May 31, 2017. |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
May 31, 2017 | |
Inventory | |
Schedule of inventory | May 31, August 31, 2017 2016 Raw materials $ 13,014 $ 12,879 Work in process 7,774 6,019 Finished goods 7,478 6,916 Total Inventory $ 28,266 $ 25,814 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 9 Months Ended |
May 31, 2017 | |
Net Income Per Share | |
Schedule of determination of earnings per share under the two-class method | Three Months Ended May 31, Nine Months Ended May 31, 2017 2016 2017 2016 Basic Earnings per Share Net income $ 11,855 $ 7,531 $ 30,601 $ 21,952 Less: Allocated to participating securities Net income available to common shareholders $ 11,728 $ 7,462 $ 30,269 $ 21,755 Basic weighted average shares outstanding Net income per share - Basic $ 1.27 $ 0.81 $ 3.27 $ 2.38 Diluted Earnings per Share Net income $ 11,855 $ 7,531 $ 30,601 $ 21,952 Less: Allocated to participating securities Net income available to common shareholders $ 11,728 $ 7,462 $ 30,269 $ 21,755 Basic weighted average shares outstanding Additional dilutive common stock equivalents Diluted weighted average shares outstanding Net income per share - Diluted $ 1.26 $ 0.80 $ 3.24 $ 2.34 |
Segment Data and Foreign Oper29
Segment Data and Foreign Operations (Tables) | 9 Months Ended |
May 31, 2017 | |
Segment Data and Foreign Operations | |
Summary of information about the Company's reportable segments | Three Months Ended May 31, Nine Months Ended May 31, 2017 2016 2017 2016 Revenue Industrial Materials $ 53,292 $ 47,185 $ 149,708 $ 134,253 Construction Materials 11,609 17,051 33,858 42,385 Total $ 64,901 $ 64,236 $ 183,566 $ 176,638 Income before taxes Industrial Materials $ 20,259 (a) $ 14,191 $ 52,364 (c) $ 40,391 (e) Construction Materials 3,647 5,662 12,411 14,785 Total for reportable segments 23,906 19,853 64,775 55,176 Corporate and common costs (6,794) (7,387) (b) (20,370) (d) (20,321) (b) Total $ 17,112 $ 12,466 $ 44,405 $ 34,855 Includes the following costs by segment: Industrial Materials Interest $ 119 $ 213 $ 533 $ 595 Depreciation 959 1,007 3,023 2,952 Amortization 1,990 1,587 5,859 4,716 Construction Materials Interest $ 39 $ 71 $ 178 $ 199 Depreciation 209 240 560 764 Amortization 320 351 957 1,058 (a) Includes a $2,013 gain on sale of our fiber optic cable components business (b) Includes Randolph, MA facility exit and demolition costs of $662 and $871 incurred during the quarterly and year-to-date periods, respectively (c) Includes a $2,013 gain on sale of our fiber optic cable components business and $190 of expenses related to inventory step-up in fair value attributable to the September 2016 acquisition of certain assets of Resin Designs, LLC (d) Includes $584 in acquisition-related expenses attributable to the September 2016 acquisition of certain assets of Resin Designs, LLC, facility exit and demolition costs of $50 related to the Company’s Randolph, MA location, a $792 gain related to the November 2016 sale of the Company’s Paterson, NJ location and a $68 gain related to the December 2016 sale of the Company’s former corporate headquarters in Bridgewater, MA (e) Includes both a $1,031 gain on sale of our RodPack wind energy business contained within our structural composites product line and a $365 write-down on certain other structural composites assets based on usage constraints following the sale, both recognized in November 2015 Total assets for the Company’s reportable segments as of May 31, 2017 and August 31, 2016 were: May 31, August 31, 2017 2016 Total Assets Industrial Materials $ 160,163 $ 136,003 Construction Materials 36,399 38,983 Total for reportable segments 196,562 174,986 Corporate and common assets 67,153 87,833 Total $ 263,715 $ 262,819 The Company’s products are sold worldwide. Revenue for the three-month and nine-month periods ended May 31, 2017 and 2016 are attributed to operations located in the following countries: Three Months Ended May 31, Nine Months Ended May 31, 2017 2016 2017 2016 Revenue United States $ 56,281 $ 52,571 $ 158,379 $ 145,998 United Kingdom 4,230 7,484 11,923 18,515 All other foreign (1) 4,390 4,181 13,264 12,125 Total $ 64,901 $ 64,236 $ 183,566 $ 176,638 (1) Comprises sales originated from our Paris, France location, royalty revenue attributable to our licensed manufacturer in Asia, and Chase foreign manufacturing operations. |
Schedule of total assets for the Company's reportable segments | May 31, August 31, 2017 2016 Long-lived Assets United States Property, plant and equipment, net $ 30,459 $ 32,176 Goodwill and Intangible assets, less accumulated amortization 92,858 72,653 United Kingdom Property, plant and equipment, net 3,089 3,214 Goodwill and Intangible assets, less accumulated amortization 5,769 6,270 All other foreign Property, plant and equipment, net 1,337 1,352 Goodwill and Intangible assets, less accumulated amortization 1,199 1,233 Total Property, plant and equipment, net $ 34,885 $ 36,742 Goodwill and Intangible assets, less accumulated amortization $ 99,826 $ 80,156 |
Goodwill and Other Intangibles
Goodwill and Other Intangibles (Tables) | 9 Months Ended |
May 31, 2017 | |
Goodwill and Other Intangibles | |
Schedule of changes in the carrying value of goodwill by operating segment | Industrial Construction Materials Consolidated Balance at August 31, 2016 $ 32,880 $ 10,696 $ 43,576 Acquisition of Resin Designs, LLC 7,592 — Sale of the fiber optic cable components business (409) — (409) Foreign currency translation adjustment (67) (4) (71) Balance at May 31, 2017 $ 39,996 $ 10,692 $ 50,688 |
Schedule of intangible assets subject to amortization | Weighted Average Gross Carrying Accumulated Net Carrying Amortization Period Value Amortization Value May 31, 2017 Patents and agreements years $ 1,816 $ 1,669 $ 147 Formulas and technology years 9,312 5,079 4,233 Trade names years 7,704 5,548 2,156 Customer lists and relationships years 70,101 27,499 42,602 $ 88,933 $ 39,795 $ 49,138 August 31, 2016 Patents and agreements years $ 1,805 $ 1,663 $ 142 Formulas and technology years 8,248 4,310 3,938 Trade names years 7,137 4,909 2,228 Customer lists and relationships years 52,742 22,470 30,272 $ 69,932 $ 33,352 $ 36,580 |
Schedule of estimated amortization expense related to intangible assets | Years ending August 31, 2017 (remaining 3 months) $ 2,297 2018 9,152 2019 8,459 2020 7,586 2021 7,042 2022 6,163 |
Pensions and Other Postretire31
Pensions and Other Postretirement Benefits (Tables) | 9 Months Ended |
May 31, 2017 | |
Pensions and Other Postretirement Benefits | |
Schedule of components of net periodic benefit cost | Three Months Ended May 31, Nine Months Ended May 31, 2017 2016 2017 2016 Components of net periodic benefit cost Service cost $ 72 $ 74 $ 216 $ 222 Interest cost 170 182 510 546 Expected return on plan assets (132) (129) (396) (387) Amortization of prior service cost 1 1 3 3 Amortization of accumulated loss 224 143 672 429 Net periodic benefit cost $ 335 $ 271 $ 1,005 $ 813 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
May 31, 2017 | |
Fair Value Measurements | |
Schedule of financial assets that were accounted for at fair value on a recurring basis | Fair value measurement category Quoted prices Significant other Significant Fair value in active markets observable inputs unobservable inputs measurement date Total (Level 1) (Level 2) (Level 3) Assets: Restricted investments May 31,2017 $ 1,949 $ 1,906 43 — Restricted investments August 31, 2016 $ 1,637 $ 1,610 27 — |
Schedule of fair values of the Company's long-term debt | Fair value measurement category Quoted prices Significant other Significant Fair value in active markets observable inputs unobservable inputs measurement date Total (Level 1) (Level 2) (Level 3) Liabilities: Long-term debt May 31, 2017 $ 20,000 $ — 20,000 — Long-term debt August 31, 2016 $ 43,400 $ — 43,400 — |
Accumulated Other Comprehensi33
Accumulated Other Comprehensive Income (Tables) | 9 Months Ended |
May 31, 2017 | |
Accumulated Other Comprehensive Income | |
Schedule of components of accumulated other comprehensive income (loss) | Change in Funded Foreign Currency Restricted Status of Translation Investments Pension Plan Adjustment Total Balance at August 31, 2015 $ 47 $ (5,934) $ (2,099) $ (7,986) Other comprehensive gains (losses) before reclassifications (1) 18 — (1,917) (1,899) Reclassifications to net income of previously deferred (gains) losses (2) (42) 281 — 239 Other comprehensive income (loss) (24) 281 (1,917) (1,660) Balance at May 31, 2016 $ 23 $ (5,653) $ (4,016) $ (9,646) Balance at August 31, 2016 $ 54 $ (7,336) $ (8,197) $ (15,479) Other comprehensive gains (losses) before reclassifications (3) 123 — (631) (508) Reclassifications to net income of previously deferred (gains) losses (4) (36) 441 — 405 Other comprehensive income (loss) 87 441 (631) (103) Balance at May 31, 2017 $ 141 $ (6,895) $ (8,828) $ (15,582) (1) Net of tax benefit of $10, $0, $0, respectively. (2) Net of tax expense of $23, tax benefit of $153, $0, respectively. (3) Net of tax benefit of $64, $0, $0, respectively. Net of tax expense of $16, tax benefit of $234, $0, respectively. |
Summary of the reclassifications from accumulated other comprehensive income (loss) to the condensed consolidated statements of income | Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income Three Months Ended May 31, Nine Months Ended May 31, Location of Gain (Loss) Reclassified from Accumulated 2017 2016 2017 2016 Other Comprehensive Income (Loss) into Income Gains on Restricted Investments: Realized gain on sale of restricted investments $ (1) $ (2) $ (55) $ (65) Selling, general and administrative expenses Tax expense (benefit) 1 1 19 23 Gain net of tax $ — $ (1) $ (36) $ (42) Loss on Funded Pension Plan adjustments: Amortization of prior pension service costs and unrecognized losses $ 26 $ 6 $ 78 $ 18 Cost of products and services sold Amortization of prior pension service costs and unrecognized losses 199 139 597 416 Selling, general and administrative expenses Tax expense (benefit) (78) (51) (234) (153) Loss net of tax $ 147 $ 94 $ 441 $ 281 Total net loss reclassified for the period $ 147 $ 93 $ 405 $ 239 |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
May 31, 2017 | |
Acquisitions | |
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 Accounts receivable $ 1,877 Inventory 1,300 Prepaid expenses and other current assets 63 Property, plant & equipment 623 Goodwill 7,592 Intangible assets 19,450 Accounts payable and accrued liabilities (635) Total purchase price $ 30,270 |
Schedule of identifiable intangible assets purchased as part of business acquisition | Intangible Asset Amount Useful life Customer relationships $ 17,500 10 years Technology 1,200 4 years Trade names 750 7 years Total intangible assets $ 19,450 |
Schedule of pro forma information | Three Months Ended Nine Months Ended May 31, 2016 May 31, 2017 May 31, 2016 Revenue $ 67,358 $ $ Net income 7,551 Net income available to common shareholders, per common and common equivalent share Basic earnings per share $ 0.81 $ 3.34 $ 2.31 Diluted earnings per share $ 0.80 $ 3.31 $ 2.27 |
Assets Held for Sale (Tables)
Assets Held for Sale (Tables) | 9 Months Ended |
May 31, 2017 | |
Assets Held for Sale | |
Summary of information about assets held for sale | Assets held for sale as of May 31, 2017 and August 31, 2016 were: May 31, 2017 August 31, 2016 Randolph, MA - Property (1) $ 14 $ 14 Paterson, NJ - Building and leasehold improvements (2) — 590 Total $ 14 $ 604 (1) See Note 15 to the condensed consolidated financial statements for additional information on Randolph, MA location assets held for sale as of May 31, 2017 and August 31, 2016. (2) See Note 9 to the condensed consolidated financial statements for additional information on the sale of the Paterson, NJ location in the nine-month period ended May 31, 2017. |
Basis of Financial Statement 36
Basis of Financial Statement Presentation (Details) - USD ($) $ in Thousands | Apr. 03, 2017 | Sep. 30, 2016 | Jun. 23, 2016 | Nov. 30, 2015 | May 31, 2017 | May 31, 2016 | May 31, 2017 | May 31, 2016 |
Accrued compensation and other expenses | $ (1,369) | $ (1,455) | ||||||
Contingent purchase price paid for acquisition | 30,270 | |||||||
Net proceeds from sale of businesses | 3,687 | 1,729 | ||||||
Foreign currency translation gain (loss) | $ (188) | $ (552) | 173 | $ 731 | ||||
Resin Designs | ||||||||
Contingent purchase price paid for acquisition | $ 30,270 | |||||||
Acquisition related expenses | $ 584 | |||||||
Spray Products Private Limited | ||||||||
Purchase price | $ 1,161 | |||||||
RodPack Business | ||||||||
Net proceeds from sale of businesses | $ 2,186 | |||||||
Fiber Optic Cable Components Product Line | ||||||||
Net proceeds from sale of businesses | $ 3,458 | |||||||
Sales price of assets sold | $ 3,858 | |||||||
Gain on assets sold | $ 2,013 |
Recent Accounting Standards (De
Recent Accounting Standards (Details) - Early Adoption - ASU No. 2016-09 - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2017 | May 31, 2016 | |
Recent Accounting Pronouncements | ||||
Excess tax benefit from stock-based compensation | $ 787 | $ 1,655 | ||
Effective income tax rate | 30.70% | 39.60% | 31.10% | 37.00% |
Inventory (Details)
Inventory (Details) - USD ($) $ in Thousands | May 31, 2017 | Aug. 31, 2016 |
Inventory | ||
Raw materials | $ 13,014 | $ 12,879 |
Work in process | 7,774 | 6,019 |
Finished goods | 7,478 | 6,916 |
Total Inventory | $ 28,266 | $ 25,814 |
Net Income Per Share (Details)
Net Income Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2017 | May 31, 2016 | |
Basic Earnings per Share | ||||
Net Income | $ 11,855 | $ 7,531 | $ 30,601 | $ 21,952 |
Less: Allocated to participating securities | 127 | 69 | 332 | 197 |
Net income available to common shareholders | $ 11,728 | $ 7,462 | $ 30,269 | $ 21,755 |
Basic weighted average shares outstanding | 9,258,219 | 9,173,252 | 9,244,237 | 9,156,805 |
Net income per share - Basic (in dollars per share) | $ 1.27 | $ 0.81 | $ 3.27 | $ 2.38 |
Diluted Earnings per Share | ||||
Net Income | $ 11,855 | $ 7,531 | $ 30,601 | $ 21,952 |
Less: Allocated to participating securities | 127 | 69 | 332 | 197 |
Net income available to common shareholders | $ 11,728 | $ 7,462 | $ 30,269 | $ 21,755 |
Basic weighted average shares outstanding | 9,258,219 | 9,173,252 | 9,244,237 | 9,156,805 |
Additional dilutive common stock equivalents (in shares) | 78,506 | 138,546 | 87,233 | 131,004 |
Diluted weighted average shares outstanding | 9,336,725 | 9,311,798 | 9,331,470 | 9,287,809 |
Net income per share - Diluted (in dollars per share) | $ 1.26 | $ 0.80 | $ 3.24 | $ 2.34 |
Antidilutive securities | ||||
Antidilutive stock options excluded from computation of earnings per share amount (in shares) | 0 | 0 | 0 | 18,860 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) $ / shares in Units, $ in Thousands | Sep. 01, 2015shares | Feb. 28, 2017USD ($)shares | Aug. 31, 2016$ / sharesshares | Nov. 30, 2016shares | May 31, 2017item$ / sharesshares |
Restricted stock | Non-employee members of BOD | |||||
Stock Based Compensation | |||||
Shares granted | 2,407 | ||||
Grant date value | $ | $ 219 | ||||
Time-based restricted stock | Executive officers | |||||
Stock Based Compensation | |||||
Cumulative shares granted | 16,312 | ||||
Time-based restricted stock | Executive officers | August 31, 2019 vesting date | |||||
Stock Based Compensation | |||||
Shares granted | 7,768 | ||||
Time-based restricted stock | Executive officers | August 31, 2021 vesting date | |||||
Stock Based Compensation | |||||
Shares granted | 8,544 | ||||
Stock options | Executive officers | August 31, 2019 vesting date | |||||
Stock Based Compensation | |||||
Weighted Average Exercise Price (in dollars per share) | $ / shares | $ 64.37 | ||||
Shares authorized | 23,563 | ||||
RSU | Non-executive members of management | August 31, 2021 vesting date | |||||
Stock Based Compensation | |||||
Shares granted | 8,805 | ||||
2015 LTIP | Performance and service based restricted stock | Executive officers | |||||
Stock Based Compensation | |||||
Shares granted | 6,277 | ||||
Cumulative shares granted | 13,239 | ||||
2015 LTIP | Performance and service based restricted stock | Executive officers | August 31, 2017 vesting date | |||||
Stock Based Compensation | |||||
Shares granted | 6,962 | ||||
2017 LTIP | Performance and service based restricted stock | Executive officers and other members of management | August 31, 2018 vesting date | |||||
Stock Based Compensation | |||||
Shares granted | 5,399 | ||||
2017 LTIP | Time-based restricted stock | Executive officers and other members of management | August 31, 2018 vesting date | |||||
Stock Based Compensation | |||||
Shares granted | 5,367 | ||||
2017 LTIP | Stock options | Executive officers and other members of management | |||||
Stock Based Compensation | |||||
Number Options Outstanding (in shares) | 15,028 | ||||
Weighted Average Exercise Price (in dollars per share) | $ / shares | $ 64.37 | ||||
Number of equal annual allotments in which awards will vest | item | 3 | ||||
Stock options expiring on August 31, 2026 (in shares) | 5,596 | ||||
Stock options expiring on September 1, 2026 (in shares) | 9,432 |
Segment Data and Foreign Oper41
Segment Data and Foreign Operations (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Dec. 31, 2016USD ($) | May 31, 2017USD ($) | May 31, 2016USD ($) | Nov. 30, 2015USD ($) | May 31, 2017USD ($)segment | May 31, 2016USD ($) | Aug. 31, 2016USD ($) | |
Segment data | |||||||
Number of operating segments | segment | 2 | ||||||
Revenue | $ 64,901,000 | $ 64,236,000 | $ 183,566,000 | $ 176,638,000 | |||
Income before income taxes | 17,112,000 | 12,466,000 | 44,405,000 | 34,855,000 | |||
Total assets | 263,715,000 | 263,715,000 | $ 262,819,000 | ||||
Interest | 158,000 | 284,000 | 711,000 | 794,000 | |||
Depreciation | 3,859,000 | 4,282,000 | |||||
Amortization | 6,816,000 | 5,774,000 | |||||
Cost of sale of inventory step-up | 190,000 | ||||||
Gain on sale of business | 2,013,000 | 2,013,000 | 1,031,000 | ||||
Asset Impairment Charges | 365,000 | ||||||
Exit and demolition costs | 662,000 | 50,000 | 871,000 | ||||
Paterson NJ | |||||||
Segment data | |||||||
Gain on sale of business | 792,000 | ||||||
RodPack Business | |||||||
Segment data | |||||||
Gain on sale of business | $ 1,031,000 | ||||||
Asset Impairment Charges | 365,000 | ||||||
Bridgewater MA location | |||||||
Segment data | |||||||
Gain on sale of assets | $ 68,000 | 68,000 | |||||
Industrial Materials | |||||||
Segment data | |||||||
Revenue | 53,292,000 | 47,185,000 | 149,708,000 | 134,253,000 | |||
Income before income taxes | 20,259,000 | 14,191,000 | 52,364,000 | 40,391,000 | |||
Total assets | 160,163,000 | 160,163,000 | 136,003,000 | ||||
Interest | 119,000 | 213,000 | 533,000 | 595,000 | |||
Depreciation | 959,000 | 1,007,000 | 3,023,000 | 2,952,000 | |||
Amortization | 1,990,000 | 1,587,000 | 5,859,000 | 4,716,000 | |||
Asset Impairment Charges | $ 365,000 | ||||||
Industrial Materials | Resin Designs | |||||||
Segment data | |||||||
Cost of sale of inventory step-up | 190,000 | ||||||
Industrial Materials | Fiber Optic Cable Components Product Line | |||||||
Segment data | |||||||
Income before income taxes | 2,013 | ||||||
Gain on sale of business | 2,013 | ||||||
Construction Materials | |||||||
Segment data | |||||||
Revenue | 11,609,000 | 17,051,000 | 33,858,000 | 42,385,000 | |||
Income before income taxes | 3,647,000 | 5,662,000 | 12,411,000 | 14,785,000 | |||
Total assets | 36,399,000 | 36,399,000 | 38,983,000 | ||||
Interest | 39,000 | 71,000 | 178,000 | 199,000 | |||
Depreciation | 209,000 | 240,000 | 560,000 | 764,000 | |||
Amortization | 320,000 | 351,000 | 957,000 | 1,058,000 | |||
Reportable segments | |||||||
Segment data | |||||||
Income before income taxes | 23,906,000 | 19,853,000 | 64,775,000 | 55,176,000 | |||
Total assets | 196,562,000 | 196,562,000 | 174,986,000 | ||||
Corporate and common costs | |||||||
Segment data | |||||||
Income before income taxes | (6,794,000) | (7,387,000) | (20,370,000) | (20,321,000) | |||
Total assets | $ 67,153,000 | 67,153,000 | $ 87,833,000 | ||||
Corporate and common costs | Resin Designs | |||||||
Segment data | |||||||
Acquisition related expenses | 584,000 | ||||||
Corporate and common costs | Randolph MA | |||||||
Segment data | |||||||
Exit and demolition costs | $ 662,000 | $ 50,000 | $ 871,000 |
Segment Data and Foreign Oper42
Segment Data and Foreign Operations - Revenue and Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
May 31, 2017 | May 31, 2016 | May 31, 2017 | May 31, 2016 | Aug. 31, 2016 | |
Concentration risk | |||||
Revenues | $ 64,901 | $ 64,236 | $ 183,566 | $ 176,638 | |
Long-lived assets | 34,885 | 34,885 | $ 36,742 | ||
Goodwill and Intangible assets, less accumulated amortization | 99,826 | 99,826 | 80,156 | ||
United States | |||||
Concentration risk | |||||
Revenues | 56,281 | 52,571 | 158,379 | 145,998 | |
Long-lived assets | 30,459 | 30,459 | 32,176 | ||
Goodwill and Intangible assets, less accumulated amortization | 92,858 | 92,858 | 72,653 | ||
United Kingdom | |||||
Concentration risk | |||||
Revenues | 4,230 | 7,484 | 11,923 | 18,515 | |
Long-lived assets | 3,089 | 3,089 | 3,214 | ||
Goodwill and Intangible assets, less accumulated amortization | 5,769 | 5,769 | 6,270 | ||
All other Foreign | |||||
Concentration risk | |||||
Revenues | 4,390 | $ 4,181 | 13,264 | $ 12,125 | |
Long-lived assets | 1,337 | 1,337 | 1,352 | ||
Goodwill and Intangible assets, less accumulated amortization | $ 1,199 | $ 1,199 | $ 1,233 |
Goodwill and Other Intangible43
Goodwill and Other Intangibles - Segments (Details) $ in Thousands | 9 Months Ended |
May 31, 2017USD ($)segment | |
Changes in the carrying value of goodwill | |
Balance at the beginning of the period | $ 43,576 |
Acquisition of Resin Designs, LLC | 7,592 |
Sale of the fiber optic cable components business | (409) |
Foreign currency translation adjustment | (71) |
Balance at the end of the period | $ 50,688 |
Number of reportable segments | segment | 11 |
Number of operating segments | segment | 2 |
Construction Materials | |
Changes in the carrying value of goodwill | |
Balance at the beginning of the period | $ 10,696 |
Foreign currency translation adjustment | (4) |
Balance at the end of the period | 10,692 |
Industrial Materials | |
Changes in the carrying value of goodwill | |
Balance at the beginning of the period | 32,880 |
Acquisition of Resin Designs, LLC | 7,592 |
Sale of the fiber optic cable components business | (409) |
Foreign currency translation adjustment | (67) |
Balance at the end of the period | $ 39,996 |
Goodwill and Other Intangible44
Goodwill and Other Intangibles - By Class (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
May 31, 2017 | May 31, 2016 | Aug. 31, 2016 | |
Goodwill and intangible assets | |||
Gross Carrying Value | $ 88,933 | $ 69,932 | |
Accumulated Amortization | 39,795 | 33,352 | |
Net Carrying Value | 49,138 | $ 36,580 | |
Aggregate amortization expense | 6,816 | $ 5,774 | |
Estimated amortization expense | |||
2017 (remaining 3 months) | 2,297 | ||
2,018 | 9,152 | ||
2,019 | 8,459 | ||
2,020 | 7,586 | ||
2,021 | 7,042 | ||
2,022 | $ 6,163 | ||
Patents and agreements | |||
Goodwill and intangible assets | |||
Weighted-Average Amortization Period | 14 years 6 months | 14 years 6 months | |
Gross Carrying Value | $ 1,816 | $ 1,805 | |
Accumulated Amortization | 1,669 | 1,663 | |
Net Carrying Value | $ 147 | $ 142 | |
Formulas and technology | |||
Goodwill and intangible assets | |||
Weighted-Average Amortization Period | 7 years 9 months 18 days | 8 years 4 months 24 days | |
Gross Carrying Value | $ 9,312 | $ 8,248 | |
Accumulated Amortization | 5,079 | 4,310 | |
Net Carrying Value | $ 4,233 | $ 3,938 | |
Trade names | |||
Goodwill and intangible assets | |||
Weighted-Average Amortization Period | 6 years | 5 years 10 months 24 days | |
Gross Carrying Value | $ 7,704 | $ 7,137 | |
Accumulated Amortization | 5,548 | 4,909 | |
Net Carrying Value | $ 2,156 | $ 2,228 | |
Customer lists and relationships | |||
Goodwill and intangible assets | |||
Weighted-Average Amortization Period | 9 years 7 months 6 days | 9 years 4 months 24 days | |
Gross Carrying Value | $ 70,101 | $ 52,742 | |
Accumulated Amortization | 27,499 | 22,470 | |
Net Carrying Value | $ 42,602 | $ 30,272 |
Sale of Businesses (Details)
Sale of Businesses (Details) $ in Thousands | Apr. 03, 2017USD ($) | May 31, 2017USD ($) | Nov. 30, 2016USD ($)installment | May 31, 2016USD ($)installment | Nov. 30, 2015USD ($) | May 31, 2017USD ($) | May 31, 2016USD ($) |
Sale of Businesses | |||||||
Proceeds from the sale of property and assets | $ 3,687 | $ 1,729 | |||||
Acquisition related costs (Note 14) | $ 365 | ||||||
Revenue | |||||||
Sale of Businesses | |||||||
Manufacturing services | $ 301 | ||||||
Selling, General and Administrative Expenses | |||||||
Sale of Businesses | |||||||
Administrative expense fees | 40 | ||||||
Other Income (Expense) | |||||||
Sale of Businesses | |||||||
Rental income | 22 | ||||||
Fiber Optic Cable Components Product Line | |||||||
Sale of Businesses | |||||||
Total proceeds to be received | $ 3,858 | ||||||
Proceeds from the sale of property and assets | 3,458 | ||||||
Pre-tax book gain from the sale of property and assets | 2,013 | ||||||
Term of Escrow Deposit | 18 months | ||||||
Fiber Optic Cable Components Product Line | Other Noncurrent Asset | |||||||
Sale of Businesses | |||||||
Sale price held in escrow | $ 400 | $ 400 | |||||
RodPack Business | |||||||
Sale of Businesses | |||||||
Total proceeds to be received | $ 2,186 | ||||||
Proceeds from the sale of property and assets | $ 229 | $ 229 | 1,500 | ||||
Pre-tax book gain from the sale of property and assets | 1,031 | ||||||
Number of installments | installment | 2 | 2 | |||||
Acquisition related costs (Note 14) | $ 365 |
Sale of Real Estate (Details)
Sale of Real Estate (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | |
Dec. 31, 2016 | Nov. 30, 2016 | May 31, 2017 | |
Paterson NJ | |||
Assets held for sale | |||
Proceeds from the sale of property | $ 1,382 | ||
Gain on sale of assets | $ 792 | ||
Bridgewater MA location | |||
Assets held for sale | |||
Proceeds from the sale of property | $ 740 | ||
Gain on sale of assets | $ 68 | $ 68 |
Pensions and Other Postretire47
Pensions and Other Postretirement Benefits (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2017 | May 31, 2016 | |
Components of net periodic benefit cost | ||||
Service cost | $ 72 | $ 74 | $ 216 | $ 222 |
Interest cost | 170 | 182 | 510 | 546 |
Expected return on plan assets | (132) | (129) | (396) | (387) |
Amortization of prior service cost | 1 | 1 | 3 | 3 |
Amortization of accumulated loss | 224 | 143 | 672 | 429 |
Net periodic benefit cost | $ 335 | $ 271 | 1,005 | 813 |
Employer contribution | $ 127 | $ 233 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Recurring basis - USD ($) $ in Thousands | May 31, 2017 | Aug. 31, 2016 |
Fair value measurements | ||
Restricted investments | $ 1,949 | $ 1,637 |
Long-term debt | 20,000 | 43,400 |
Quoted prices in active markets (Level 1) | ||
Fair value measurements | ||
Restricted investments | 1,906 | 1,610 |
Significant other observable inputs (Level 2) | ||
Fair value measurements | ||
Restricted investments | 43 | 27 |
Long-term debt | $ 20,000 | $ 43,400 |
Accumulated Other Comprehensi49
Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2017 | May 31, 2016 | |
Accumulated other comprehensive income | ||||
Balance at the beginning of the period | $ (15,479) | $ (7,986) | ||
Other comprehensive gains (losses) before reclassifications | (508) | (1,899) | ||
Reclassifications to net income of previously deferred (gains) losses | 405 | 239 | ||
Total other comprehensive income (loss) | $ 1,692 | $ 2,262 | (103) | (1,660) |
Balance at the ending of the period | (15,582) | (9,646) | (15,582) | (9,646) |
Restricted investments, other comprehensive gains (losses) before reclassifications, tax benefit | 64 | 10 | ||
Change in funded status of pension plan, other comprehensive gains (losses) before reclassifications, tax benefit | 0 | 0 | ||
Foreign currency translation adjustment, other comprehensive gains (losses) before reclassifications, tax benefit | 0 | 0 | ||
Restricted investments, reclassifications to net income of previously deferred (gains) losses, tax (expense) benefit | 16 | 23 | ||
Change in funded status of pension plan, reclassifications to net income of previously deferred (gains) losses, tax (expense) benefit | 234 | 153 | ||
Foreign currency translation adjustment, reclassifications to net income of previously deferred (gains) losses, tax (expense) benefit | 0 | 0 | ||
Restricted investments | ||||
Accumulated other comprehensive income | ||||
Balance at the beginning of the period | 54 | 47 | ||
Other comprehensive gains (losses) before reclassifications | 123 | 18 | ||
Reclassifications to net income of previously deferred (gains) losses | (36) | (42) | ||
Total other comprehensive income (loss) | 87 | (24) | ||
Balance at the ending of the period | 141 | 23 | 141 | 23 |
Change in funded status of pension plan | ||||
Accumulated other comprehensive income | ||||
Balance at the beginning of the period | (7,336) | (5,934) | ||
Reclassifications to net income of previously deferred (gains) losses | 441 | 281 | ||
Total other comprehensive income (loss) | 441 | 281 | ||
Balance at the ending of the period | (6,895) | (5,653) | (6,895) | (5,653) |
Foreign currency translation adjustment | ||||
Accumulated other comprehensive income | ||||
Balance at the beginning of the period | (8,197) | (2,099) | ||
Other comprehensive gains (losses) before reclassifications | (631) | (1,917) | ||
Total other comprehensive income (loss) | (631) | (1,917) | ||
Balance at the ending of the period | $ (8,828) | $ (4,016) | $ (8,828) | $ (4,016) |
Accumulated Other Comprehensi50
Accumulated Other Comprehensive Income - Reclassifications (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2017 | May 31, 2016 | |
Accumulated other comprehensive income | ||||
Selling, general and administrative expenses | $ (12,297) | $ (11,770) | $ (35,567) | $ (33,506) |
Cost of products and services sold | (37,511) | (38,542) | (105,658) | (108,154) |
Tax expense (benefit) | (5,257) | (4,935) | (13,804) | (12,903) |
Net Income | 11,855 | 7,531 | 30,601 | 21,952 |
Reclassification out of accumulated other comprehensive income (loss) | ||||
Accumulated other comprehensive income | ||||
Net Income | 147 | 93 | 405 | 239 |
Restricted investments | Reclassification out of accumulated other comprehensive income (loss) | ||||
Accumulated other comprehensive income | ||||
Selling, general and administrative expenses | (1) | (2) | (55) | (65) |
Tax expense (benefit) | 1 | 1 | 19 | 23 |
Net Income | (1) | (36) | (42) | |
Change in funded status of pension plan | Reclassification out of accumulated other comprehensive income (loss) | ||||
Accumulated other comprehensive income | ||||
Selling, general and administrative expenses | 199 | 139 | 597 | 416 |
Cost of products and services sold | 26 | 6 | 78 | 18 |
Tax expense (benefit) | (78) | (51) | (234) | (153) |
Net Income | $ 147 | $ 94 | $ 441 | $ 281 |
Acquisitions (Details)
Acquisitions (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Jun. 23, 2016 | Nov. 30, 2016 | May 31, 2017 | May 31, 2017 | Aug. 31, 2016 |
Acquisitions | ||||||
Expenses related to acquisition | $ 584 | |||||
Acquisition cost has been allocated to the acquired tangible and identifiable intangible assets and liabilities assumed based on their fair values | ||||||
Goodwill | $ 50,688 | 50,688 | $ 43,576 | |||
Resin Designs | ||||||
Acquisitions | ||||||
Purchase price | $ 30,270 | |||||
Expenses related to acquisition | $ 584 | 584 | ||||
Acquisition cost has been allocated to the acquired tangible and identifiable intangible assets and liabilities assumed based on their fair values | ||||||
Accounts receivable | 1,877 | |||||
Inventory | 1,300 | |||||
Prepaid expenses and other current assets | 63 | |||||
Property, plant & equipment | 623 | |||||
Goodwill | 7,592 | |||||
Intangible assets | 19,450 | 19,450 | 19,450 | |||
Accounts payable and accrued expenses | (635) | |||||
Total purchase price | $ 30,270 | |||||
Goodwill related to acquisitions that is deductible for income taxes | 7,592 | 7,592 | ||||
Industrial Materials | ||||||
Acquisition cost has been allocated to the acquired tangible and identifiable intangible assets and liabilities assumed based on their fair values | ||||||
Goodwill | $ 39,996 | $ 39,996 | $ 32,880 | |||
Industrial Materials | Spray Products Private Limited | ||||||
Acquisitions | ||||||
Purchase price | $ 1,161 |
Acquisitions - By Acquiree (Det
Acquisitions - By Acquiree (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 8 Months Ended | 9 Months Ended | |||
Nov. 30, 2016 | May 31, 2016 | May 31, 2017 | May 31, 2017 | May 31, 2016 | Sep. 30, 2016 | |
Pro Forma Information | ||||||
Expenses related to acquisition | $ 584 | |||||
Resin Designs | ||||||
Acquisition of Specialty Chemical Intermediates Businesses | ||||||
Intangible assets | $ 19,450 | $ 19,450 | $ 19,450 | |||
Pro Forma Information | ||||||
Revenue since acquisition date | 10,399 | |||||
Net gain since acquisition date | 316 | |||||
Expenses related to acquisition | $ 584 | 584 | ||||
Inventory step-up costs | 190 | |||||
Statutory tax rate (as a percent) | 35.00% | |||||
Revenue | $ 67,358 | $ 185,151 | $ 185,275 | |||
Net income | $ 7,551 | $ 31,272 | $ 21,268 | |||
Net income available to common shareholders, per common and common equivalent share | ||||||
Basic earnings per share (in dollars per share) | $ 0.81 | $ 3.34 | $ 2.31 | |||
Diluted earning per share (in dollars per share) | $ 0.80 | $ 3.31 | $ 2.27 | |||
Resin Designs | Customer Relationships | ||||||
Acquisition of Specialty Chemical Intermediates Businesses | ||||||
Intangible assets | 17,500 | $ 17,500 | ||||
Useful life | 10 years | |||||
Resin Designs | Technology | ||||||
Acquisition of Specialty Chemical Intermediates Businesses | ||||||
Intangible assets | 1,200 | $ 1,200 | ||||
Useful life | 4 years | |||||
Resin Designs | Trade names | ||||||
Acquisition of Specialty Chemical Intermediates Businesses | ||||||
Intangible assets | $ 750 | $ 750 | ||||
Useful life | 7 years |
Exit Costs Related to Idle Fa53
Exit Costs Related to Idle Facility (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2017 | May 31, 2016 | Aug. 31, 2016 | |
Exit Costs Related to Idle Facility | |||||
Acquisition related costs (Note 14) | $ 365 | ||||
Exit and demolition costs | $ 662 | $ 50 | 871 | ||
Randolph MA | |||||
Exit Costs Related to Idle Facility | |||||
Exit and demolition costs | $ 0 | $ 662 | $ 50 | $ 871 | $ 935 |
Assets Held for Sale (Details)
Assets Held for Sale (Details) - USD ($) $ in Thousands | May 31, 2017 | Aug. 31, 2016 |
Assets held for sale | ||
Assets Held for sale | $ 14 | $ 604 |
Property, Plant, and Equipment | Randolph MA | ||
Assets held for sale | ||
Assets Held for sale | $ 14 | 14 |
Patents And Other Intangible Assets | Paterson NJ | ||
Assets held for sale | ||
Assets Held for sale | $ 590 |
Related Party Agreements (Detai
Related Party Agreements (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2016USD ($)individual | Sep. 30, 2016USD ($) | Aug. 31, 2016USD ($)policy | May 31, 2017USD ($) | Nov. 30, 2016policy | |
Related party transactions | |||||
Proceeds from settlement of life insurance policy | $ 1,504 | ||||
Original book value | $ 69,932 | 88,933 | |||
Net book value | 36,580 | $ 49,138 | |||
John Hancock (formerly Manufacturers' Life Insurance Company) | |||||
Related party transactions | |||||
Proceeds from settlement of life insurance policy | $ 1,238 | ||||
Metropolitan Life Insurance | |||||
Related party transactions | |||||
Proceeds from settlement of life insurance policy | $ 1,504 | ||||
Trust | |||||
Related party transactions | |||||
Number of insurance policies | policy | 2 | 2 | |||
Trust | Minimum | |||||
Related party transactions | |||||
Ownership interest (as a percent) | 5.00% | ||||
Bridgewater MA location | |||||
Related party transactions | |||||
Proceeds from the sale of property | $ 740 | ||||
Gain on sale of assets | $ 68 | $ 68 | |||
Bridgewater MA location | Bridgewater State University Foundation | |||||
Related party transactions | |||||
Number of board members | individual | 2 | ||||
Proceeds from the sale of property | $ 740 | ||||
Gain on sale of assets | $ 68 |
Long-Term Debt (Details)
Long-Term Debt (Details) $ in Thousands | Dec. 15, 2016USD ($) | May 31, 2017USD ($) | May 31, 2016USD ($) |
Long-term debt | |||
Principal payment | $ 23,400 | $ 6,300 | |
New Credit Agreement | |||
Long-term debt | |||
Maximum borrowing capacity | $ 150,000 | ||
Additional borrowing capacity | $ 50,000 | ||
Carrying value of direct and indirect domestic subsidiaries | $ 151,938 | ||
Weighted average interest rate (as a percent) | 2.34% | ||
Outstanding balance | $ 20,000 | ||
Term of debt | 5 years | ||
Term of potential debt | 7 years | ||
New Credit Agreement | Minimum | |||
Long-term debt | |||
Consolidated fixed charge coverage ratio | 1.25 | ||
New Credit Agreement | Maximum | |||
Long-term debt | |||
Net leverage ratio | 3.25 | ||
New Credit Agreement | London Interbank Offered Rate (LIBOR) | |||
Long-term debt | |||
Interest payment due | 3 months | ||
New Credit Agreement | London Interbank Offered Rate (LIBOR) | Minimum | |||
Long-term debt | |||
Interest rate margin on variable rate basis (as a percent) | 1.00% | ||
New Credit Agreement | London Interbank Offered Rate (LIBOR) | Maximum | |||
Long-term debt | |||
Interest rate margin on variable rate basis (as a percent) | 1.75% |