Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Aug. 31, 2018 | Oct. 31, 2018 | Feb. 28, 2018 | |
Document and Entity Information | |||
Entity Registrant Name | CHASE CORP | ||
Entity Central Index Key | 830,524 | ||
Document Type | 10-K | ||
Document Period End Date | Aug. 31, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --08-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 608,967,000 | ||
Entity Common Stock, Shares Outstanding | 9,402,134 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Aug. 31, 2018 | Aug. 31, 2017 |
Current Assets | ||
Cash and cash equivalents | $ 34,828 | $ 47,354 |
Accounts receivable, less allowance for doubtful accounts of $559 and $456 | 44,610 | 38,051 |
Inventory | 39,699 | 25,618 |
Prepaid expenses and other current assets | 2,595 | 3,112 |
Due from sale of businesses | 400 | |
Prepaid income taxes | 4,100 | |
Total current assets | 126,232 | 114,135 |
Property, plant and equipment, less accumulated depreciation of $49,212 and $44,277 | 32,845 | 34,760 |
Other Assets | ||
Goodwill | 84,696 | 50,784 |
Intangible assets, less accumulated amortization of $54,039 and $42,206 | 65,330 | 46,846 |
Cash surrender value of life insurance | 4,530 | 4,530 |
Restricted investments | 1,090 | 964 |
Funded pension plan | 301 | 566 |
Deferred income taxes | 1,347 | 1,614 |
Other assets | 98 | 539 |
Total assets | 316,469 | 254,738 |
Current Liabilities | ||
Accounts payable | 17,810 | 14,455 |
Accrued payroll and other compensation | 6,639 | 6,500 |
Accrued expenses | 4,486 | 4,052 |
Accrued income taxes | 2,333 | |
Total current liabilities | 28,935 | 27,340 |
Long-term debt | 25,000 | |
Deferred compensation | 1,105 | 979 |
Accumulated pension obligation | 10,736 | 12,666 |
Other liabilities | 283 | 1,567 |
Accrued income taxes | 3,654 | 1,257 |
Commitments and Contingencies (Notes 6, 8, 21) | ||
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; 9,396,947 shares at August 31, 2018 and 9,354,136 shares at August 31, 2017 issued and outstanding | 939 | 935 |
Additional paid-in capital | 13,104 | 14,060 |
Accumulated other comprehensive loss | (12,336) | (13,469) |
Retained earnings | 245,049 | 209,403 |
Total equity | 246,756 | 210,929 |
Total liabilities and equity | $ 316,469 | $ 254,738 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Aug. 31, 2018 | Aug. 31, 2017 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Accounts receivable, allowance for doubtful accounts (in dollars) | $ 559 | $ 456 |
Property, plant and equipment, accumulated depreciation (in dollars) | 49,212 | 44,277 |
Intangible assets, accumulated amortization (in dollars) | $ 54,039 | $ 42,206 |
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 | 9,396,947 | 9,354,136 |
Common stock, shares outstanding | 9,396,947 | 9,354,136 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 31, 2018 | Aug. 31, 2017 | Aug. 31, 2016 | |
Revenue | |||
Sales | $ 278,962 | $ 247,877 | $ 234,450 |
Royalties and commissions | 5,226 | 4,683 | 3,644 |
Total revenues | 284,188 | 252,560 | 238,094 |
Costs and Expenses | |||
Cost of products and services sold | 175,136 | 146,036 | 144,438 |
Selling, general and administrative expenses | 52,297 | 47,736 | 44,574 |
Exit costs related to idle facility (Note 20) | 1,272 | 70 | 935 |
Acquisition-related costs (Note 14) | 393 | 584 | |
Write-down of certain assets under construction (Note 18) | 365 | ||
Operating income | 55,090 | 58,134 | 47,782 |
Interest expense | (1,172) | (839) | (1,054) |
Gain on sale of real estate (Note 19) | 860 | ||
Gain on sale of license (Note 15) | 1,085 | ||
Gain on sale of businesses (Note 18) | 1,480 | 2,013 | 1,031 |
Other income (expense) | 482 | 724 | 2,351 |
Income before income taxes | 56,965 | 60,892 | 50,110 |
Income taxes (Note 7) | 13,822 | 18,878 | 17,303 |
Net income | $ 43,143 | $ 42,014 | $ 32,807 |
Net income available to common shareholders, per common and common equivalent share (Note 17) | |||
Basic (in dollars per share) | $ 4.60 | $ 4.49 | $ 3.55 |
Diluted (in dollars per share) | $ 4.56 | $ 4.44 | $ 3.50 |
Weighted average shares outstanding | |||
Basic (in shares) | 9,296,648 | 9,249,343 | 9,167,333 |
Diluted (in shares) | 9,366,071 | 9,357,414 | 9,294,077 |
Annual cash dividends declared per share | $ 0.80 | $ 0.70 | $ 0.65 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 31, 2018 | Aug. 31, 2017 | Aug. 31, 2016 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
Net income | $ 43,143 | $ 42,014 | $ 32,807 |
Other comprehensive income (loss): | |||
Net unrealized gain on restricted investments, net of tax of $2, $30 and $4 | 5 | 67 | 7 |
Change in funded status of pension plans, net of tax $130, $519 and ($738) | 385 | 1,155 | (1,402) |
Foreign currency translation adjustment | 743 | 788 | (6,098) |
Total other comprehensive income (loss) | 1,133 | 2,010 | (7,493) |
Comprehensive income | $ 44,276 | $ 44,024 | $ 25,314 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 31, 2018 | Aug. 31, 2017 | Aug. 31, 2016 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
Net unrealized gain (loss) on restricted investments, tax | $ 2 | $ 30 | $ 4 |
Change in funded status of pension plans, tax | $ 130 | $ 519 | $ (738) |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Total |
Balance at Aug. 31, 2015 | $ 919 | $ 14,296 | $ (7,986) | $ 147,113 | $ 154,342 |
Balance (in shares) at Aug. 31, 2015 | 9,191,958 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Restricted stock grants, net of forfeitures | $ 3 | (3) | |||
Restricted stock grants, net of forfeitures (in shares) | 29,884 | ||||
Amortization of restricted stock grants | 1,049 | 1,049 | |||
Amortization of stock option grants | 283 | 283 | |||
Exercise of stock options | $ 14 | 2,125 | 2,139 | ||
Exercise of stock options (in shares) | 140,113 | ||||
Common stock received for payment of stock option exercises | $ (3) | (2,012) | (2,015) | ||
Common stock received for payment of stock option exercises (in shares) | (35,932) | ||||
Excess tax benefit from stock-based compensation | 1,784 | 1,784 | |||
Common stock retained to pay statutory minimum withholding taxes on common stock | $ (5) | (2,803) | (2,808) | ||
Common stock retained to pay statutory minimum withholding taxes on common stock (in shares) | (47,537) | ||||
Cash dividend paid, $0.80 ,$0.70 and $0.65 per share | (5,999) | (5,999) | |||
Change in funded status of pension plans, net of tax $130, $519 and ($738) | (1,402) | (1,402) | |||
Foreign currency translation adjustment | (6,098) | (6,098) | |||
Net unrealized gain on restricted investments, net of tax of $2, $30 and $4 | 7 | 7 | |||
Net income | 32,807 | 32,807 | |||
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 | 1,712 | 1,712 | |||
Amortization of stock option grants | 500 | 500 | |||
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 | $ (3) | (2,956) | (2,959) | ||
Common stock retained to pay statutory minimum withholding taxes on common stock (in shares) | (34,006) | ||||
Cash dividend paid, $0.80 ,$0.70 and $0.65 per share | (6,532) | (6,532) | |||
Change in funded status of pension plans, net of tax $130, $519 and ($738) | 1,155 | 1,155 | |||
Foreign currency translation adjustment | 788 | 788 | |||
Net unrealized gain on restricted investments, net of tax of $2, $30 and $4 | 67 | 67 | |||
Net income | 42,014 | 42,014 | |||
Balance at Aug. 31, 2017 | $ 935 | 14,060 | (13,469) | 209,403 | 210,929 |
Balance (in shares) at Aug. 31, 2017 | 9,354,136 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Restricted stock grants, net of forfeitures | $ 2 | (2) | |||
Restricted stock grants, net of forfeitures (in shares) | 16,701 | ||||
Amortization of restricted stock grants | 1,669 | 1,669 | |||
Amortization of stock option grants | 459 | 459 | |||
Exercise of stock options | $ 6 | 1,214 | 1,220 | ||
Exercise of stock options (in shares) | 64,012 | ||||
Common stock received for payment of stock option exercises | $ (1) | (1,027) | (1,028) | ||
Common stock received for payment of stock option exercises (in shares) | (9,693) | ||||
Common stock retained to pay statutory minimum withholding taxes on common stock | $ (3) | (3,269) | (3,272) | ||
Common stock retained to pay statutory minimum withholding taxes on common stock (in shares) | (28,209) | ||||
Cash dividend paid, $0.80 ,$0.70 and $0.65 per share | (7,497) | (7,497) | |||
Change in funded status of pension plans, net of tax $130, $519 and ($738) | 385 | 385 | |||
Foreign currency translation adjustment | 743 | 743 | |||
Net unrealized gain on restricted investments, net of tax of $2, $30 and $4 | 5 | 5 | |||
Net income | 43,143 | 43,143 | |||
Balance at Aug. 31, 2018 | $ 939 | $ 13,104 | $ (12,336) | $ 245,049 | $ 246,756 |
Balance (in shares) at Aug. 31, 2018 | 9,396,947 |
CONSOLIDATED STATEMENTS OF EQ_2
CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 31, 2018 | Aug. 31, 2017 | Aug. 31, 2016 | |
CONSOLIDATED STATEMENT OF EQUITY | |||
Annual cash dividends declared per share | $ 0.80 | $ 0.70 | $ 0.65 |
Change in funded status of pension plans, tax | $ 130 | $ 519 | $ (738) |
Net unrealized gain (loss) on restricted investments, tax | $ 2 | $ 30 | $ 4 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 31, 2018 | Aug. 31, 2017 | Aug. 31, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net income | $ 43,143 | $ 42,014 | $ 32,807 |
Adjustments to reconcile net income to net cash provided by operating activities | |||
Gain on sale of real estate | (860) | ||
Gain on sale of license | (1,085) | ||
Gain on sale of businesses | (1,480) | (2,013) | (1,031) |
Loss on write-down of certain assets under construction | 365 | ||
Depreciation | 5,817 | 5,130 | 5,606 |
Amortization | 11,807 | 9,127 | 7,836 |
Cost of sale of inventory step-up | 1,070 | 190 | |
Provision (recovery) of allowance for doubtful accounts | 101 | (359) | 169 |
Stock-based compensation | 2,128 | 2,212 | 1,333 |
Realized gain on restricted investments | (97) | (127) | (67) |
Decrease in cash surrender value of life insurance | 103 | ||
Pension curtailment and settlement loss | 14 | 13 | |
Excess tax expense from stock-based compensation | (1,784) | ||
Deferred taxes | (2,473) | (2,263) | (2,590) |
Increase (decrease) from changes in assets and liabilities | |||
Accounts receivable | (2,968) | (1,003) | 3,312 |
Inventory | (8,845) | 116 | 3,124 |
Prepaid expenses and other assets | 569 | (878) | (475) |
Accounts payable | 2,847 | 1,420 | (2,821) |
Accrued compensation and other expenses | (501) | (825) | 1,490 |
Accrued income taxes | (3,962) | 37 | 1,443 |
Net cash provided by operating activities | 46,071 | 51,932 | 48,833 |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Purchases of property, plant and equipment | (3,488) | (3,199) | (2,046) |
Cost to acquire intangible assets | (18) | (71) | (64) |
Payments for acquisitions, net of cash acquired | (73,469) | (30,270) | (1,161) |
Proceeds from sale of real estate | 2,122 | ||
Proceeds from sale of license | 1,000 | ||
Proceeds from sale of businesses | 2,232 | 3,915 | 1,729 |
Changes in restricted investments | (23) | 897 | (149) |
Proceeds from settlement of life insurance policies | 1,504 | 1,238 | |
Payments for cash surrender value life insurance | (159) | ||
Net cash used in investing activities | (73,766) | (25,102) | (612) |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Borrowings on debt | 65,000 | ||
Payments of principal on debt | (40,000) | (43,400) | (8,400) |
Dividend paid | (7,497) | (6,532) | (5,999) |
Proceeds from exercise of common stock options | 192 | 95 | 124 |
Payments of taxes on stock options and restricted stock | (3,272) | (2,959) | (2,808) |
Excess tax benefit from stock-based compensation | 1,784 | ||
Net cash provided by (used in) financing activities | 14,423 | (52,796) | (15,299) |
INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS | (13,272) | (25,966) | 32,922 |
Effect of foreign exchange rates on cash | 746 | (91) | (3,330) |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 47,354 | 73,411 | 43,819 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ 34,828 | $ 47,354 | $ 73,411 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Aug. 31, 2018 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Not The principal accounting policies of Chase Corporation (the “Company”) and its subsidiaries are as follows: Products and Markets Our principal products are specialty tapes, laminates, adhesives, sealants, coatings and chemical intermediates that are sold by our salespeople, manufacturers' representatives and distributors. In our Industrial Materials segment, these products consist of: (i) insulating and conducting materials for the manufacture of electrical and telephone wire and cable, electrical splicing, and terminating and repair tapes, which are marketed to wire and cable manufacturers; (ii) laminated film foils, including EMI/RFI shielding tapes, used in communication and local area network (LAN) cables; (iii) moisture protective coatings, which are sold to the electronics industry for circuitry manufacturing, including circuitry used in automobiles, industrial controls and home appliances; (iv) laminated durable papers, including laminated paper with an inner security barrier used in personal and mail‑stream privacy protection, which are sold primarily to the envelope converting and commercial printing industries; (v) pulling and detection tapes used in the installation, measurement and location of fiber optic cables, water and natural gas lines, and power, data and video cables for commercial buildings; (vi) cover tapes with reliable adhesive and anti‑static properties essential to delivering semiconductor components via tape and reel packaging; (vii) advanced adhesives, sealants, and coatings for automotive and industrial applications that require specialized bonding, encapsulating, environmental protection, or thermal management functionality; (viii) polymeric microspheres utilized by various industries to allow for weight and density reduction and sound dampening; (ix) water-based polyurethane dispersions utilized for various coating products; and (x) superabsorbent polymers, which are utilized for water and liquid management, remediation and protection in diverse markets including wire and cable, medical, environmental, infrastructure, energy and consumer products. In the Company’s Construction Materials segment, these products consist of: (i) protective pipe coating tapes and other protectants for valves, regulators, casings, joints, metals, concrete and wood, which are sold to oil companies, gas utilities, and pipeline companies for utilization in both the construction and maintenance of oil and gas, water and wastewater pipelines; (ii) waterproofing membranes for highway bridge deck metal supported surfaces, which are sold to municipal transportation authorities, and high-performance polymeric asphalt additives; (iii) fluid applied coating and lining systems for use in the water and wastewater industry; and (iv) expansion and control joint systems designed for roads, bridges, stadiums and airport runways. Basis of Presentation The financial statements include the accounts of the Company and its wholly‑owned subsidiaries. Investments in unconsolidated companies which are at least 20% owned are carried under the equity method since acquisition or investment. All intercompany transactions and balances have been eliminated in consolidation. The Company uses the U.S. dollar as the functional currency for financial reporting. Certain reclassifications have been made to the prior year amounts to conform to the current year’s presentation. On June 25, 2018, the Company announced to its employees the planned closing of its Pawtucket, RI manufacturing facility effective August 31, 2018. This is in line with the Company’s ongoing efforts to consolidate its manufacturing plants and streamline its existing processes. The manufacturing of products previously produced in the Pawtucket, RI facility was moved to Company facilities in Oxford, MA and Lenoir, NC during a two-month transition period. Company expensed $1,272 in the fourth quarter of fiscal 2018 related to the closure, including: (a) cash-related employee-related, logistics and uncapitalized facility improvement costs of $590; and (b) non-cash-related accelerated depreciation expense of $682. Future costs related to this move are not anticipated to be significant to the consolidated financial statements. On April 20, 2018, Chase finalized an agreement with an unrelated party to sell all inventory, operational machinery and equipment and intangible assets of the Company’s structural composites rod business, as well as a license related to the production and sale of rod, for proceeds of $2,232, net of transaction costs and following certain working capital adjustments. This business, which was part of the structural composites product line within the Industrial Materials segment, had limited growth and profitability prospects as part of the Company, and was outside the areas Chase has identified for strategic emphasis. The resulting pre-tax gain on sale of $1,480 was recognized in the third quarter of fiscal 2018 as a gain on sale of businesses within the consolidated statement of operations. Chase received $2,075, net of transaction costs, in the third quarter of fiscal 2018, with the remaining $157 received in the fourth quarter of fiscal 2018 as a result of a working capital true-up. Chase will provide certain transitional manufacturing and administrative support to the purchaser for which the Company will receive additional consideration upon the performance of services. The purchaser also entered into a royalty agreement with the Company. The purchaser will make royalty payments to Chase based on future sales of certain structural composite material manufactured by the purchaser. On December 29, 2017, Chase entered an agreement to acquire Stewart Superabsorbents, LLC (“SSA, LLC”), an advanced superabsorbent polymer (SAP) formulator and solutions provider, with operations located in Hickory and McLeansville, NC. The transaction closed on December 31, 2017. In the most recently completed fiscal year, SSA, LLC, and its recently-acquired Zappa-Tec business (collectively “Zappa Stewart”) had combined revenue in excess of $24,000. This acquisition proved to be immediately accretive to its earnings, after adjusting for nonrecurring costs associated with the transaction and financing cost. The business was acquired for a purchase price of $73,469, after final working capital adjustments and excluding acquisition-related costs. As part of this transaction, Chase acquired all assets of the business, and entered multiyear leases at both locations. The Company expensed $393 of acquisition-related costs associated with this acquisition during the second quarter of fiscal 2018. The purchase was funded from a combination of Chase’s existing revolving credit facility and available cash on hand. Zappa Stewart’s protective materials technology complements Chase’s current specialty chemicals offerings. This acquisition is aligned with the Company’s core strategies and extends its reach into growing medical, environmental and consumer applications. The Company is currently in the process of finalizing purchase accounting, with regard to a final allocation of the purchase price to tangible and identifiable intangible assets assumed, and anticipates completion within the first quarter of fiscal 2019. Following the effective date of the acquisition the financial results of Zappa Stewart’s operations have been included in the Company’s financial statements in the specialty chemical intermediates product line, contained within the Industrial Materials operating segment. On April 3, 2017, Chase executed an agreement with an unrelated 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 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 certain transitional 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. 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. 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. Purchase accounting was completed in the fourth quarter of fiscal 2017 with no material adjustments made to the initial amounts recorded. On June 23, 2016, the Company acquired all the capital stock of Spray Products (India) Private Limited for $1,161, net of cash acquired. The 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. 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 operating segment. The Company has evaluated events and transactions subsequent to the balance sheet date. Based on this evaluation, and other than: (a) the cash dividend announced on November 13, 2018 of $0.80 per share to shareholders of record on November 23, 2018 payable on December 5, 2018; (b) the September 2018 payment of $10,000 against the outstanding balance of our revolving debt facility; and (c) the October 2018 collection of the $400 escrow related to the April 2017 sale of the fiber optics cable components business, the Company is not aware of any other events or transactions that occurred subsequent to the balance sheet date, but prior to filing, that would require recognition or disclosure in its Consolidated Financial Statements. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Cash and Cash Equivalents Cash and cash equivalents consist primarily of demand deposit accounts or investment instruments that meet high credit quality standards such as money market funds, government securities, or commercial paper. The Company considers all highly liquid debt instruments purchased with a maturity of three months or less from date of purchase to be cash equivalents. Accounts Receivable The Company evaluates the collectability of accounts receivable balances based on a combination of factors. In cases where the Company is aware of circumstances that may impair a specific customer’s ability to meet its financial obligations to it, a specific allowance against amounts due to the Company is recorded, and thereby reduces the net recognized receivable to the amount the Company reasonably believes will be collected. For all other customers, the Company recognizes allowances for doubtful accounts based on the length of time the receivables are past due, industry and geographic factors, the current business environment and its historical experience. Receivables are written off against these reserves in the period they are determined to be uncollectable. Inventory The Company values inventory at the lower of cost or net realizable value using the first in, first out (FIFO) method. Management assesses the recoverability of inventory based on types and levels of inventory held, forecasted demand and changes in technology. These assessments require management judgments and estimates, and valuation adjustments for excess and obsolete inventory may be recorded based on these assessments. The Company estimates excess and obsolescence exposures based upon assumptions about future demand, product transitions and market conditions, and records reserves to reduce inventories to their estimated net realizable value. The failure to accurately forecast demand may lead to additional excess and obsolete inventory and future charges. Goodwill The Company accounts for goodwill in accordance with ASC Topic 350, “Intangibles — Goodwill and Other.” The Company identified a total of twelve reporting units within its two operating segments. The reporting units are evaluated for possible impairment of goodwill annually each fourth quarter and whenever events or circumstances indicate the carrying value of goodwill may not be recoverable. In fiscal 2017, the Company early adopted ASU No. 2017-04 “Intangibles - Goodwill and Other Topics (Topic 350): Simplifying the Test for Goodwill Impairment.” We assess goodwill for impairment by comparing the fair value of the reporting unit to its carrying amount. If the fair value of a reporting unit is less than its carrying value, an impairment loss, limited to the amount of goodwill allocated to that reporting unit, is recorded. Fair values for reporting units are determined based on the income approach (discounted cash flow method). Intangible Assets Intangible assets consist of patents, agreements, formulas, trade names, customer relationships and trademarks. The Company capitalizes costs related to patent applications and technology agreements. The costs of these assets are amortized over the lesser of the useful life of the asset or its statutory life. Capitalized costs are periodically reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Property, Plant and Equipment Property, plant and equipment are stated at cost and depreciated using the straight‑line method over the assets’ estimated useful lives. Expenditures for maintenance repairs and minor renewals are charged to expense as incurred. Betterments and major renewals are capitalized. Upon retirement or other disposition of assets, related allowances for depreciation and amortization are eliminated from the accounts and any resulting gain or loss is included in the determination of income or loss. The estimated useful lives of property, plant and equipment are as follows: Buildings and improvements 15 to 40 years Machinery and equipment 3 to 10 years Leasehold improvements are depreciated over the lesser of the useful life or the term of the lease. Restricted Investments and Deferred Compensation The Company has a non-qualified deferred savings plan that covers its Board of Directors and a separate plan covering selected employees. Participants may elect to defer a portion of their compensation for payment in a future tax year. The plans are funded by trusteed assets that are restricted to the payment of deferred compensation or satisfaction of the Company’s general creditors. The Company’s restricted investments and corresponding deferred compensation liability under the plans were $1,090 and $964 at August 31, 2018 and 2017, respectively. The Company accounts for the restricted investments as available for sale by recording unrealized gains or losses in other comprehensive income as a component of stockholders’ equity. Split-Dollar Life Insurance Arrangements The liability related to these postretirement benefits was calculated as the present value of future premiums to be paid by the Company reduced by the present value of the expected proceeds to be returned to the Company upon the insured’s death. For August 31, 2018 and 2017, the Company did not recognize a liability related to these postretirement obligations as no future premium payments were anticipated. Revenue The Company recognizes revenue when persuasive evidence of an arrangement exists, performance of its obligation is complete, its price to the buyer is fixed or determinable, and the Company is reasonably assured of collecting. These four transaction elements are typically met at the time of shipment or upon receipt by the customer, based on contractual terms. Revenue recognition involves judgments and assessments of expected returns, and the likelihood of nonpayment by customers. The Company analyzes various factors, including a review of specific customer contracts and shipment terms, historical experience, creditworthiness of customers and current market and economic conditions in determining when to recognize revenue. Changes in judgments on these factors could impact the timing and amount of revenue recognized with a resulting impact on the timing and amount of operating income. For certain products, consigned inventory is maintained at customer locations, and revenue is typically recognized in the period that the consigned inventory is consumed. Royalty revenue is recognized based on licensee production statements received from the authorized manufacturers. Billed shipping and handling fees are recorded as sales revenue with the associated costs recorded within cost of products and services sold. The Company’s warranty policy provides that the products (or materials) delivered will meet its standard specifications for the products or any other specifications as may be expressly agreed to at time of purchase. All warranty claims must be received within 90 days from the date of delivery, unless some other period has been expressly agreed to within the terms of the sales agreement. The Company’s warranty costs have historically been insignificant. The Company records a current liability for estimated warranty claims with a corresponding charge to cost of products and services sold based upon current and historical experience and upon specific claims issues as they arise. In addition, the Company offers certain sales incentives based on sales levels as they are earned. For discussion of 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 and the Company’s planned adoption of the ASU in fiscal 2019 see “Recently Issued Accounting Standards” below. Research and Product Development Costs Research and product development costs are expensed as incurred and include primarily engineering salaries, overhead and materials used in connection with research and development projects. Research and development expense amounted to $3,940, $3,696 and $2,792 for the years ended August 31, 2018, 2017 and 2016, respectively, and was recorded within selling, general and administrative expenses. Pension Plan The Company accounts for its pension plans following the requirements of ASC Topic 715, “Compensation —Retirement Benefits” (“ASC 715”). ASC 715 requires an employer to: (a) recognize in its statement of financial position the funded status of a benefit plan; (b) measure defined benefit plan assets and obligations as of the end of the employer’s fiscal year (with limited exceptions); and (c) recognize as a component of other comprehensive income, net of tax, the gains or losses and prior service costs or credits that arise but are not recognized as components of net periodic benefit costs pursuant to prior existing guidance. Stock-Based Compensation In accordance with the accounting for stock-based compensation guidance, ASC Topic 718 “Compensation – Stock Compensation” (“ASC 718”), the Company measures and recognizes compensation expense for all share‑based payment awards made to employees and directors based on estimated fair values. This includes restricted stock, restricted stock units and stock options. The guidance allows for the continued use of the simplified method as the Company has concluded that its historical share option exercise experience does not provide a reasonable basis for estimating expected term. Stock‑based compensation expense recognized in fiscal years 2018, 2017 and 2016 was $2,128, $2,212 and $1,333, respectively. The fair value of options granted was estimated on the date of grant using the Black‑Scholes option pricing model with the following weighted average assumptions for the years ending August 31, 2018, 2017 and 2016: 2018 2017 2016 Expected dividend yield % % % Expected life 6.0 years 6.0 years 6.0 years Expected volatility % % % Risk-free interest rate 1.9 % 1.3 % 1.7 % Expected volatility is determined by looking at a combination of historical volatility over the past six years as well as implied future volatility. Translation of Foreign Currency The financial position and results of operations of the Company’s HumiSeal Europe Ltd and Chase Protective Coatings Ltd businesses are measured using the British pound as the functional currency. The financial position and results of operations of the Company’s HumiSeal Europe SARL business in France are measured using euros as the functional currency. The financial position and results of the Company’s HumiSeal India Private Limited business in India are measured using the Indian rupee as the functional currency. The functional currency for all our other operations is the U.S. dollar. Revenue and expenses of these international businesses have been translated at average exchange rates. 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 (a component of shareholders’ equity). Transaction gains and losses generated from the remeasurement of assets and liabilities denominated in currencies other than the functional currency of these international operations are included in other income (expense) on the consolidated statements of operations and were gains of $85, $307 and $2,152 for the fiscal years ended August 31, 2018, 2017 and 2016, respectively. Income Taxes The Company accounts for income taxes under the asset and liability method. Under this method, a deferred tax asset or liability is determined based upon the differences between the financial statement and tax bases of assets and liabilities as measured by the enacted tax rates that will be in effect when these differences reverse. Tax credits are recorded as a reduction in income taxes. Valuation allowances are provided if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company estimates contingent income tax liabilities based on the guidance for accounting for uncertain tax positions as prescribed in ASC Topic 740, “Income Taxes.” See Note 7 for more information on the Company’s income taxes, including information on the effects of the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) on our financial position and results of operations, including adjustments that were recorded during fiscal 2018 related to the Tax Act. Net Income Per Share The Company has unvested share‑based payment awards with a right to receive nonforfeitable dividends, which are considered participating securities under ASC Topic 260, “Earnings Per Share” (“ASC 260”). The Company allocates earnings to participating securities and computes earnings per share using the two-class method. Comprehensive Income Comprehensive income is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non‑owner sources, including foreign currency translation adjustments, unrealized gains and losses on marketable securities and adjustments related to the change in the funded status of the pension plans. Segments ASC Topic 280 “Segment Reporting” of the Financial Accounting Standards Board (“FASB”) codification establishes standards for reporting information about operating segments. The Company is organized into two reportable operating segments, an Industrial Materials segment and a Construction Materials segment. The segments are distinguished by the nature of the products we manufacture 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 and customized sealant and adhesive systems 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, polyurethane dispersions and superabsorbent polymers. Beginning June 23, 2016, September 30, 2016 and December 31, 2017, the Industrial Materials segment includes the acquired operations of HumiSeal India Private Limited, Resin Designs, LLC and Zappa Stewart, respectively. Each were obtained through acquisition. The operations of both HumiSeal India Private Limited and Resin Designs, LLC are included in the Company’s electronic and industrial coatings product line and the operations of Zappa Stewart are included in the Company’s specialty chemicals intermediates 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. Following the April 20, 2018 sale of the structural composites rod business, future product sales of composite materials and elements are not anticipated to be significant to the consolidated financial statements. 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. Recently Issued Accounting Standards 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. Given the scope of work required to implement the recognition and disclosure requirements under the ASU, we began our assessment process during fiscal 2017. Chase continues to evaluate the impact of ASU No. 2014-09 on our consolidated financial statements and anticipates the new disclosure requirements and changes to process and controls will be significant. We expect revenue recognition for most of our products, which are shipments to OEMs based on individual purchase orders received, to remain largely unchanged. From a timing of revenue recognition standpoint (point in time versus over time), it is anticipated that certain products will be more affected than other products sold, since these certain products contain assets that a customer controls. Chase has considered customized products sold to customers having no alternative use and enforceable right to payment relating to those sales, and expects minimal impact on these types of orders. Guided by our scoping and risk assessment, we continue to conduct an ongoing comprehensive contract review in applying the guidance in Topic 606 focusing on the major steps in the five-step model outlined in the ASU. Chase will continue assessing system impacts, enhancing internal controls and financial reporting policies to address this standard’s requirements and risks, and finalizing our understanding of the financial impact of this standard on our consolidated financial statements, including the cumulative effect adjustment to be recorded upon implementation of this standard. The Company will utilize the modified retrospective method of adoption, coinciding with the start of fiscal 2019. At the adoption date, Chase anticipates the cumulative impact of revenue that would have been recognized over time will not be material to the consolidated financial statements, nor is the effect on retained earnings anticipated to be material to the consolidated financial statements. We will finalize the evaluation, quantify the impact and incorporate the disclosure requirements of ASU No. 2014-09 in our reporting process in the first fiscal quarter of 2019, for inclusion in our Quarterly Report on Form 10-Q for the period ending November 30, 2018. 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. 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 financia |
Inventories
Inventories | 12 Months Ended |
Aug. 31, 2018 | |
Inventories | |
Inventories | Note 2—Inventories Inventories consist of the following as of August 31, 2018 and 2017: 2018 2017 Raw materials $ 21,998 $ 11,636 Work in process 7,653 6,877 Finished goods 10,048 7,105 Total Inventory $ 39,699 $ 25,618 |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Aug. 31, 2018 | |
Property, Plant and Equipment | |
Property, Plant and Equipment | Note 3—Property, Plant and Equipment Property, plant and equipment consist of the following as of August 31, 2018 and 2017: 2018 2017 Land and improvements $ 6,499 $ 6,478 Buildings 19,484 19,447 Machinery and equipment 52,259 49,211 Leasehold improvements 1,612 1,049 Construction in progress 2,203 2,852 82,057 79,037 Accumulated depreciation (49,212) (44,277) Property, plant and equipment, net $ 32,845 $ 34,760 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Aug. 31, 2018 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | Note 4—Goodwill and Intangible Assets The changes in the carrying value of goodwill, by operating segment, are as follows: Industrial Construction Materials Consolidated Balance at August 31, 2016 $ $ $ Acquisition of Resin Designs, LLC 7,592 — Sale of the fiber optic cable components business (409) — (409) Foreign currency translation adjustment 28 (3) 25 Balance at August 31, 2017 $ 40,091 $ 10,693 $ 50,784 Acquisition of Zappa Stewart 34,138 — 34,138 Sale of structural composites rod business (230) — (230) Foreign currency translation adjustment 3 1 4 Balance at August 31, 2018 $ 74,002 $ 10,694 $ 84,696 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 twelve reporting units in total within its two reportable operating segments that are used to evaluate the possible impairment of goodwill. Goodwill impairment exists when the carrying amount of goodwill exceeds its fair value. Assessments of possible impairment of goodwill are made when events or changes in circumstances indicate that the carrying value of the asset may not be recoverable through future operations. Additionally, testing for possible impairment of recorded goodwill 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 performs impairment reviews annually each fourth quarter and whenever events or circumstances indicate the carrying value of goodwill may not be recoverable. For fiscal 2018, the Company’s review indicated no impairment of goodwill, or at-risk reporting units. As of August 31, 2018, the Company had a total goodwill balance of $84,696 related to its acquisitions, of which $35,055 remains deductible for income taxes. Intangible assets subject to amortization consist of the following as of August 31, 2018 and 2017: Weighted Average Gross Carrying Accumulated Net Carrying Amortization Period Value Amortization Value August 31, 2018 Patents and agreements years $ 1,863 $ 1,681 $ 182 Formulas and technology years 10,225 6,690 3,535 Trade names years 8,554 6,866 1,688 Customer lists and relationships years 98,727 38,802 59,925 $ 119,369 $ 54,039 $ 65,330 August 31, 2017 Patents and agreements years $ 1,845 $ 1,671 $ 174 Formulas and technology years 9,318 5,387 3,931 Trade names years 7,709 5,813 1,896 Customer lists and relationships years 70,180 29,335 40,845 $ 89,052 $ 42,206 $ 46,846 Aggregate amortization expense related to intangible assets for the years ended August 31, 2018, 2017 and 2016 was $11,807, $9,127 and $7,836, respectively. As of August 31, 2018 estimated amortization expense for the next five fiscal years is as follows: Years ending August 31, 2019 12,451 2020 11,583 2021 11,054 2022 10,032 2023 6,768 |
Cash Surrender Value of Life In
Cash Surrender Value of Life Insurance | 12 Months Ended |
Aug. 31, 2018 | |
Cash Surrender Value of Life Insurance. | |
Cash Surrender Value of Life Insurance | Note 5—Cash Surrender Value of Life Insurance Life insurance is provided under split dollar life insurance agreements whereby the Company will recover the premiums paid from the proceeds of the policies. The Company recognized cash surrender value of life insurance policies, net of loans of $5 at August 31, 2018 and 2017, secured by the policies, with the following carriers as of August 31, 2018 and 2017: 2018 2017 John Hancock $ 4,450 $ 4,450 Other life insurance carriers 80 80 Cash surrender value of life insurance policies $ 4,530 $ 4,530 All policies are subject to periodic review. The Company currently intends to maintain the existing policies through the lives or retirements of the insureds. See Note 22 for related party information on the cash surrender value of certain life insurance policies held by the Company during the first quarter of fiscal 2017. |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Aug. 31, 2018 | |
Long-Term Debt. | |
Long-Term Debt | Note 6—Long-Term Debt Long‑term debt consists of the following at August 31, 2018 and 2017: 2018 2017 All-revolving credit facility with a borrowing capacity of $150,000 $ 25,000 $ — Long-term debt $ 25,000 $ — On December 15, 2016, the Company entered an Amended and Restated Credit Agreement (the “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 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 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 August 31, 2018. The Credit Agreement is guaranteed by all of Chase’s direct and indirect domestic subsidiaries, including NEPTCO, which collectively had a carrying value of $203,622 at August 31, 2018. The 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 Credit Agreement (the “Revolving Facility”) and any 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 August 31, 2018, the applicable interest rate was 3.25% per annum and the outstanding principal amount was $25,000. The 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 (as such no portion of the debt is classified as short-term as of August 31, 2018 or 2017). In addition, the Company may elect a base rate option for all or a portion of the Revolving Facility, in which case, interest payments shall be due with respect to such portion of the Revolving Facility on the last business day of each quarter. Subject to certain conditions set forth in the Credit Agreement, the Company may elect to convert all or a portion of the outstanding Revolving Facility into a term loan (each, a “Term Loan”), which shall be payable quarterly in equal installments sufficient to amortize the original principal amount of such 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 Credit Agreement at any time during the term of the agreement, subject to customary notice requirements. In connection with entry into the 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. In December 2017, the Company utilized $65,000 of the Credit Agreement to finance the majority of the acquisition cost of Zappa Stewart. See Note 14 for additional information on this acquisition. Subsequent to December 2017 and during fiscal 2018, the Company paid down $40,000 of the outstanding balance, resulting in a principal debt balance of $25,000 at August 31, 2018. In September 2018, subsequent to fiscal 2018, the Company made an additional principal payment of $10,000. |
Income Taxes
Income Taxes | 12 Months Ended |
Aug. 31, 2018 | |
Income Taxes | |
Income Taxes | Note 7—Income Taxes On December 22, 2017, President Trump signed into law the Tax Cuts and Jobs Act of 2017 (the "Tax Act"). The Tax Act impacted the U.S. statutory Federal tax rate that the Company will use going forward, reducing it from 35% to 21%. As the Company has an August 31 fiscal year-end, the lower corporate income tax rate will be phased in, resulting in a U.S. statutory Federal rate of 25.7% for our fiscal year ending August 31, 2018, and 21% for subsequent fiscal years. The Tax Act also includes items that the Company expects could increase its tax expense in future periods such as the elimination of the domestic production deduction (Section 199) and increased limitations on expensing executive compensation for tax purposes (Section 162(m)). In addition, the actual effective tax rate may be materially different than the statutory Federal tax rate (including being higher) based on the availability and impact of various other adjustments such as state taxes, Federal research and development credits, discrete tax benefits related to stock compensation, and the inclusion or exclusion of various items in taxable income which may differ from U.S. GAAP income. To transition to the reduced U.S. corporate tax rate, an adjustment was required to be made to our net U.S. deferred tax assets. During fiscal 2018, predominately in the three months ended February 28, 2018 (the second fiscal quarter of 2018) and with further adjustments in the third and fourth quarters, the Company recorded initial provisional adjustments to the U.S. deferred tax assets and liabilities and uncertain tax position resulting in a net tax expense of $681 recorded to the consolidated statement of operations. This net discrete tax expense is the result of the following: (a) a $379 tax benefit resulting from the remeasurement and reclassification of our existing deferred tax liability related to unrepatriated foreign earnings to accrued income tax balance (discussed in more detail below); (b) a $917 tax expense for the remeasurement of the remaining net U.S. deferred tax assets in recognition of the new lower Federal rate; and (c) a $143 tax expense recorded as the result of remeasuring the Federal benefit on our uncertain tax positions. The Tax Act includes a transition tax or “toll charge”, which is a one-time tax charge on unrepatriated foreign earnings. The calculation of accumulated foreign earnings requires an analysis of each foreign entity’s financial results going back to 1986. During fiscal 2018, the Company recorded a transition tax adjustment associated with its accumulated unrepatriated foreign earnings reducing long-term deferred tax liabilities by $2,298 and increasing short- and long-term accrued income taxes by $153 and $1,766, respectively (the short-term payable representing eight percent of the total amount due, the amount payable within the first year as per the Tax Act). The difference between the decrease in the deferred tax liabilities for unrepatriated foreign earnings and the increase in accrued income taxes, $379, was recorded as a discrete tax benefit in fiscal 2018. Under the guidance set forth in the SEC's Staff Accounting Bulletin No. 118 (“SAB 118”), the Company recorded provisional amounts for the impact of the Tax Act in fiscal 2018. For the second quarter of fiscal 2018, the Company made a provisional and reasonable estimate of the effects of the Tax Act on its existing deferred tax balances, including a provisional adjustment for the toll charge, and made provisional adjustments to these initially recorded amounts in the third and fourth quarters. The Company anticipates making complete and final adjustments during the quarter ending February 28, 2019 (the second quarter of fiscal 2019), which may differ from the initially recorded amounts, due to, among other things, changes in interpretations and assumptions the Company has made and subsequent guidance that may be issued. In accordance with SAB 118, adjustments to the provisional numbers recorded in the third and fourth quarter were treated as discrete adjustments to income tax expense in the period in which those adjustments become estimable and finalized. The Company continues to examine the potential impact of certain other provisions of the Tax Act that will become applicable in fiscal year 2019, including tax on global intangible low-taxed income (“GILTI”) and Base Erosion and Anti Abuse Tax (“BEAT”) that could affect its effective tax rate in the future. The Company is still evaluating whether to make a policy election to treat the GILTI tax as a period expense or to provide U.S. deferred taxes on foreign temporary differences that are expected to generate GILTI income when they reverse in future years. During the second quarter of fiscal 2018, the Company provisionally recorded all known and estimable impacts of the Tax Act that are effective for fiscal year 2018 and no material adjustments were made to these provisionally recorded amounts during the third and fourth fiscal quarters of 2018. Domestic and foreign pre‑tax income for the years ended August 31, 2018, 2017 and 2016 was: Year Ended August 31, 2018 2017 2016 United States $ 48,962 $ 52,723 $ 40,928 Foreign 8,003 8,169 9,182 $ 56,965 $ 60,892 $ 50,110 The provision (benefit) for income taxes for the years ended August 31, 2018, 2017 and 2016 was: Year Ended August 31, 2018 2017 2016 Current: Federal $ 12,872 $ 17,714 $ 14,777 State 1,662 1,872 1,821 Foreign 1,761 1,555 2,023 Total current income tax provision 16,295 21,141 18,621 Deferred: Federal (2,214) (1,984) (879) State (263) (453) (324) Foreign 4 174 (115) Total deferred income tax benefit (2,473) (2,263) (1,318) Total income tax provision $ 13,822 $ 18,878 $ 17,303 The provision (benefit) for income taxes differs from the amount computed by applying the Federal statutory income tax rate to income before income taxes. The Company’s combined federal, state and foreign effective tax rate as a percentage of income before taxes for fiscal 2018, 2017 and 2016, net of offsets generated by federal, state and foreign tax benefits, was 24.3%, 31.0% and 34.5%, respectively. The following is a reconciliation of the effective income tax rate with the U.S. Federal statutory income tax rate for the years ended August 31, 2018, 2017 and 2016: Year Ended August 31, 2018 2017 2016 Federal statutory rates 25.7 % 35.0 % 35.0 % Adjustment resulting from the tax effect of: State and local taxes, net of federal benefit % % % Domestic production deduction % % % Foreign tax rate differential % % % Adjustment to uncertain tax position % % % Research credit generated % % % Stock Compensation % % % Permanent items % % % Tax effect of undistributed earnings % % % Other % % % Change in valuation allowance % % % Deferred income tax remeasurement % % % Effective income tax rate 24.3 % 31.0 % 34.5 % The following table summarizes the tax effect of temporary differences on the Company’s income tax provision: Year Ended August 31, 2018 2017 2016 Current income tax provision $ 16,295 $ 21,141 $ 18,621 Deferred provision (benefit): Allowance for doubtful accounts 74 8 34 Inventories 390 139 (80) Pension expense 2,358 (39) (542) Deferred compensation 98 250 272 Loan finance costs — 5 5 Accruals 216 (270) (95) Warranty reserve 70 (89) 19 Depreciation and amortization (3,726) (2,714) (2,166) Restricted stock grant 244 (214) (8) Unrepatriated earnings (2,395) 832 1,338 Valuation allowance 60 24 — Foreign amortization 17 (2) (21) Other accrued expenses 121 (193) (74) Total deferred income tax benefit (2,473) (2,263) (1,318) Total income tax provision $ 13,822 $ 18,878 $ 17,303 The following table summarizes the tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities: As of August 31, 2018 2017 Deferred tax assets: Allowance for doubtful accounts $ 154 $ 228 Inventories 982 1,462 Accruals 584 800 Warranty reserve 50 120 Pension accrual 2,567 5,078 Deferred compensation 260 358 Deferred revenue — 334 Foreign currency loss on previously taxed income 96 — Loan finance costs 27 27 Restricted stock grants 547 792 Non-qualified stock options 94 26 Other 296 280 5,657 9,505 Deferred tax liabilities: Prepaid liabilities (25) (29) Unrepatriated earnings — (2,298) Unrealized gain/loss on restricted investments (112) (177) Depreciation and amortization (4,173) (5,362) Other — (25) (4,310) (7,891) Net deferred tax assets (liabilities) $ 1,347 $ 1,614 During fiscal 2018, the Company recorded a transition tax adjustment associated with its accumulated unrepatriated foreign earnings reducing long-term deferred tax liabilities by $2,298 and increasing short- and long-term accrued income taxes by $153 and $1,766, respectively. Consistent to prior to the passage of the Tax Act, we do not currently take the position that undistributed foreign subsidiaries’ earnings are considered to be permanently reinvested. A summary of the Company’s adjustments to its uncertain tax positions in fiscal years ended August 31, 2018, 2017 and 2016 are as follows: 2018 2017 2016 Balance, at beginning of the year $ 1,257 $ 1,229 $ 1,249 Increase for tax positions related to the current year 47 65 37 Increase for tax positions related to prior years 595 16 98 Increase for interest and penalties 71 6 102 Decreases for lapses of statute of limitations (81) (59) (257) Balance, at end of year $ 1,889 $ 1,257 $ 1,229 The unrecognized tax benefits mentioned above include an aggregate of $751 of accrued interest and penalty balances related to uncertain tax positions. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. An increase in accrued interest and penalty charges of approximately $71, net of Federal tax expense, was recorded as a tax expense during the current fiscal year. The Company does not anticipate that its accrual for uncertain tax positions will change by a material amount over the next twelve-month period, as it does not expect to settle any potential disputed items with the appropriate taxing authorities nor does it expect the statute of limitations to expire for any items. The Company is subject to U.S. Federal income tax, as well as to income tax of multiple state, local and foreign tax jurisdictions. The statute of limitations for all material U.S. Federal, state, and local tax filings remains open for fiscal years subsequent to 2014. For foreign jurisdictions, the statute of limitations remains open in the U.K. for fiscal years subsequent to 2014 and in France for fiscal years subsequent to 2017. |
Operating Leases
Operating Leases | 12 Months Ended |
Aug. 31, 2018 | |
Operating Leases | |
Operating Leases | Note 8—Operating Leases The Company is obligated under various operating leases, primarily for real property and equipment. Future minimum lease payments under noncancelable operating leases (with initial or remaining lease terms in excess of one year) as of August 31, 2018, are as follows: Future Operating Year ending August 31, Lease Payments 2019 $ 2,144 2020 2,054 2021 1,865 2022 1,284 2023 1,128 2024 and thereafter 3,302 Total future minimum lease payments $ 11,777 Total rental expense for all operating leases amounted to $3,114, $2,516 and $1,631 for the years ended August 31, 2018, 2017 and 2016, respectively. |
Benefits and Pension Plans
Benefits and Pension Plans | 12 Months Ended |
Aug. 31, 2018 | |
Benefits and Pension Plans | |
Benefits and Pension Plans | Note 9—Benefits and Pension Plans 401(k) Plans The Company has a defined contribution plan adopted pursuant to section 401(k) of the Internal Revenue Code of 1986 (the “Chase 401(k) Plan”). Any qualified employee who has attained age 21 and has been employed by the Company for at least six months may contribute a portion of his or her salary to the plan and the Company will match 100% of the first one percent of salary contributed and 50% thereafter, up to an amount equal to three and one-half percent of such employee’s annual salary. Through our wholly-owned subsidiary NEPTCO, the Company has two additional 401(k) savings plans, one for union employees and one for nonunion employees (the nonunion plan was merged into the Chase 401(k) Plan effective January 1, 2018). Under these plans, substantially all employees of NEPTCO are eligible to participate by making pre‑tax contributions to these plans. Participants may elect to defer between 1% and 10% of their annual compensation. The Company may contribute $0.75 for each $1.00 of participant deferrals up to 6% of the non‑union participant’s compensation. The Company may match union employee contributions by $0.50 for each $1.00 of participant deferrals up to 6% of the participant’s compensation. The Company’s contribution expense for all 401(k) plans was $702, $519 and $571 for the years ended August 31, 2018, 2017 and 2016, respectively. Non-Qualified Deferred Savings Plans The Company has a non-qualified deferred savings plan covering the Board of Directors and a separate plan covering selected employees. Participants may elect to defer a portion of their compensation for future payment. The plans are funded by trusteed assets that are restricted to the payment of deferred compensation or satisfaction of the Company’s general creditors. The Company’s liability under the plans was $1,105 and $979 at August 31, 2018 and 2017, respectively. Pension Plans The Company has noncontributory defined benefit pension plans covering employees of certain divisions of the Company. The Company has a funded, qualified plan (“Qualified Plan”) and an unfunded supplemental plan (“Supplemental Plan”) designed to maintain benefits for certain employees at the plan formula level. The plans provide for pension benefits determined by a participant’s years of service and final average compensation. The Qualified Plan assets consist of separate pooled investment accounts with a trust company. The measurement date for the plans is August 31, 2018. Effective December 1, 2008, a “soft freeze” in the Qualified Plan was adopted whereby no new employees hired will be admitted to the Qualified Plan, with the exception of employees who are members of the International Association of Machinists and Aerospace Workers Union whose contract was amended in June 2012 to include a soft freeze with an effective date of July 15, 2012. All eligible participants who were admitted to the plan prior to the applicable soft freeze dates will continue to accrue benefits as detailed in the plan agreements. Through our wholly-owned subsidiary NEPTCO, the Company has a third defined benefit pension plan (“NEPTCO Pension Plan”) covering our union employees at our Pawtucket facility. This plan was frozen effective October 31, 2006, and as a result, no new participants can enter the plan and the benefits of current participants were frozen as of that date. The benefits are based on years of service and the employee’s average compensation during the earlier of five years before retirement, or October 31, 2006. The NEPTCO Pension Plan assets consist of separate pooled investment accounts with a trust company. The measurement date for the NEPTCO Pension Plan is August 31, 2018. The following tables reflect the status of the Company’s pension plans for the years ended August 31, 2018, 2017 and 2016: Year Ended August 31, 2018 2017 2016 Change in benefit obligation Projected benefit obligation at beginning of year $ 22,673 $ 23,636 $ 20,401 Service cost 283 288 295 Interest cost 629 681 728 Actuarial (gain) loss 17 (533) 2,636 Settlements — (313) (376) Benefits paid (1,742) (1,086) (48) Projected benefit obligation at end of year $ 21,860 $ 22,673 $ 23,636 Change in plan assets Fair value of plan assets at beginning of year $ 9,003 $ 8,440 $ 8,120 Actual return on plan assets 509 757 422 Employer contribution 2,085 1,205 322 Settlements — (313) (376) Benefits paid (1,742) (1,086) (48) Fair value of plan assets at end of year $ 9,855 $ 9,003 $ 8,440 Funded status at end of year $ (12,005) $ (13,670) $ (15,196) Year Ended August 31, 2018 2017 2016 Amounts recognized in consolidated balance sheets Noncurrent assets $ 301 $ 566 $ 382 Current liabilities (1,570) (1,570) (15) Noncurrent liabilities (10,736) (12,666) (15,563) Net amount recognized in consolidated balance sheets $ (12,005) $ (13,670) $ (15,196) Actuarial present value of benefit obligation and funded status Accumulated benefit obligations $ 20,075 $ 21,007 $ 22,023 Projected benefit obligations $ 21,858 $ 22,673 $ 23,636 Plan assets at fair value $ 9,855 $ 9,003 $ 8,440 Amounts recognized in accumulated other comprehensive income Prior service cost $ 54 $ 54 $ 57 Net actuarial loss 9,377 9,890 11,561 Adjustment to pre-tax accumulated other comprehensive income $ 9,431 $ 9,944 $ 11,618 Year Ended August 31, 2018 2017 2016 Other changes in plan assets and benefit obligations recognized in other comprehensive income Net (gain)/loss $ (704) $ 1,277 $ 511 Amortization of loss (484) (895) (574) Supplemental plan assumption change 676 (2,038) 2,219 Amortization of prior service cost (3) (3) (3) Effect of settlement on accumulated other comprehensive income — (14) (13) Total recognized in other comprehensive income (515) (1,673) 2,140 Net periodic pension cost 937 1,353 1,097 Total recognized in net periodic pension cost and other comprehensive income $ 422 $ (320) $ 3,237 Estimated amounts that will be amortized from accumulated comprehensive income over the next fiscal year Prior service cost $ 3 $ 3 $ 3 Net actuarial loss 475 485 895 Prior service cost arose from the amendment of the plan’s benefit schedules to comply with the Tax Reform Act of 1986 and adoption of the unfunded supplemental pension plan. Components of net periodic pension cost for the fiscal years ended August 31, 2018, 2017 and 2016 included the following: 2018 2017 2016 Components of net periodic benefit cost Service cost $ 283 $ 288 $ 295 Interest cost 629 681 728 Expected return on plan assets (462) (528) (516) Amortization of prior service cost 3 3 3 Amortization of accumulated loss 484 895 574 Settlement and curtailment loss — 14 13 Net periodic benefit cost $ 937 $ 1,353 $ 1,097 Weighted average assumptions used to determine benefit obligations as of August 31, 2018, 2017 and 2016 are as follows: 2018 2017 2016 Discount rate Qualified plan 3.80 % 3.30 % 2.90 % Supplemental plan 3.57 % 2.73 % 2.97 % NEPTCO plan 3.59 % 2.95 % 2.55 % Rate of compensation increase Qualified and Supplemental plan 3.50 % 3.50 % 3.50 % NEPTCO plan — % — % — % Weighted average assumptions used to determine net periodic benefit cost for the years ended August 31, 2018, 2017 and 2016 are as follows: 2018 2017 2016 Discount rate Qualified plan 3.30 % 2.90 % 4.16 % Supplemental plan 2.73 % 2.97 % 3.22 % NEPTCO plan 2.95 % 2.55 % 4.30 % Expected long-term return on plan assets Qualified plan 5.40 % 6.50 % 6.50 % Supplemental plan — % — % — % NEPTCO plan 5.20 % 6.50 % 6.50 % Rate of compensation increase Qualified and Supplemental plan 3.50 % 3.50 % 3.50 % NEPTCO plan — % — % — % It is the Company’s policy to evaluate, on an annual basis, the discount rate used to determine the projected benefit obligation to approximate rates on high quality, long-term obligations. The Moody’s Corporate Aa Bond index has generally been used as a benchmark for this purpose, with adjustments made if the duration of the index differed from that of the plan. For periods since August 31, 2008, the discount rate has been determined by matching the expected payouts from the respective plans to the spot rates inherent in the Citigroup Pension Discount Curve. A single rate is then developed, that when applied to the expected cash flows, results in the same present value as determined using the various spot rates. The Company believes that this approach produces the most appropriate approximation of the plan liability. The Company estimates that each 100-basis point reduction in the discount rate would result in additional net periodic pension cost, the Company’s primary pension obligation, of approximately $42 for the Qualified Plan and $69 for the Supplemental Plan. For the current fiscal year, the NEPTCO Pension Plan expense is insignificant so sensitivity disclosure is not presented. The expected return on plan assets is derived from a periodic study of long-term historical rates of return on the various asset classes included in the Company’s targeted pension plan asset allocation. The Company estimates that each 100-basis point reduction in the expected return on plan assets would result in additional net periodic pension cost of approximately $73 for the Qualified Plan. No rate of return is assumed for the Supplemental Plan since that plan is currently not funded. The rate of compensation increase is also evaluated and is adjusted by the Company, if necessary, periodically. Qualified Plan Assets The investment policy for the Qualified Plan is based on ERISA standards for prudent investing. The fundamental goal underlying the investment policy is to ensure that the assets of the plans are invested in a prudent manner to meet the obligations of the plans as these obligations come due. The primary investment objectives include providing a total return which will promote the goal of benefit security by attaining an appropriate ratio of plan assets to plan obligations, to provide for real asset growth while also tracking plan obligations, to diversify investments across and within asset classes, to reduce the impact of losses in single investments, and to follow investment practices that comply with applicable laws and regulations. The primary policy objectives will be met by investing assets to achieve a reasonable tradeoff between return and risk relative to the plan’s obligations. This includes investing a portion of the assets in funds selected in part to hedge the interest rate sensitivity to plan obligations. The Qualified Plan assets are invested in a diversified mix of both domestic and foreign equity investments and fixed income securities. Asset manager performance is reviewed at least annually and benchmarked against the peer universe for the given investment style. The Company’s expected return for the Qualified Plan is 5.4%. To determine the expected long‑term rate of return on the assets for the Qualified Plan, the Company considered the historical and expected return on the plan assets, as well as the current and expected allocation of the plan assets. Asset allocation is monitored on an ongoing basis relative to the established asset class targets. The interaction between plan assets and benefit obligations is periodically studied to assist in the establishment of strategic asset allocation targets. The investment policy permits variances from the targets within certain parameters. Asset rebalancing occurs when the underlying asset class allocations move outside these parameters, at which time the asset allocation is rebalanced back to the policy target weight. The Qualified Plan has the following target allocation and weighted average asset allocations as of August 31, 2018, 2017 and 2016: Target Allocation Percentage of Plan Assets as of August 31, Asset Category Range 2018 2017 2016 Equity securities 10-80 % 46 % 39 % 46 % Debt securities 20-70 % 54 % 61 % 54 % Other 0-100 % — % — % — % Total 100 % 100 % 100 % 100 % NEPTCO Pension Plan Assets The investment policy for the NEPTCO Pension Plan is based on ERISA standards for prudent investing. The fundamental goal underlying the investment policy is to ensure that the assets of the plans are invested in a prudent manner to meet the obligations of the plan as these obligations come due. The primary investment objectives include maximization of return within reasonable and prudent levels of risk, provision of returns comparable to returns for similar investment options, provision of exposure to a wide range of investment opportunities in various asset classes and vehicles, control administrative and management costs, provision of appropriate diversification within investment vehicles, and govern investment manager’s adherence to stated investment objectives and style. The primary policy objectives will be met by investing assets to achieve a reasonable tradeoff between return and risk relative to the plan’s obligations. This includes investing a portion of the assets in funds selected in part to hedge the interest rate sensitivity to plan obligations. The NEPTCO Pension Plan assets are invested in a diversified mix of fixed income, and both domestic and foreign equity investments. The ongoing monitoring of investments is a regular and disciplined process and confirms that the criteria remain satisfied. The process of monitoring investment performance relative to specified guidelines is consistently applied. The Company’s expected return for the NEPTCO Pension Plan is 5.2%. To determine the expected long‑term rate of return on the assets for the NEPTCO Pension Plan, the Company considered the historical and expected return on the plan assets, as well as the current and expected allocation of the plan assets. The NEPTCO Pension Plan has the following target allocation and weighted average asset allocations as of August 31, 2018, 2017 and 2016: Target Allocation Percentage of Plan Assets as of August 31, Asset Category Range 2018 2017 2016 Equity securities 10-80 % 46 % 43 % 43 % Debt securities 20-70 % 54 % 51 % 50 % Other 0-100 % — % 6 % 7 % Total 100 % 100 % 100 % 100 % Fair Market Value of Pension Plan Assets The Company is required to categorize pension plan assets using a three‑tier fair value hierarchy, which classifies the inputs used in measuring fair values. These tiers include: Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. The following table presents the Company’s pension plan assets at August 31, 2018 and 2017 by asset category: Fair value measurements at Fair value measurements at August 31, 2018 August 31, 2017 Significant Significant Quoted prices other Significant Quoted prices other Significant in active observable unobservable in active observable unobservable August 31, markets inputs inputs August 31, markets inputs inputs 2018 (Level 1) (Level 2) (Level 3) 2017 (Level 1) (Level 2) (Level 3) Asset Category Equity securities $ 4,533 $ 4,533 $ — $ — $ 3,589 $ 3,589 $ — $ — Debt securities 5,322 5,322 — — 5,336 5,336 — — Other — — — — 78 78 — — Total $ 9,855 $ 9,855 $ — $ — $ 9,003 $ 9,003 $ — $ — Level 1 Assets: The fair values of the common stocks, corporate bonds and U.S. Government securities included in this tier are based on the closing price reported on the active market where the individual securities are traded. Estimated Future Benefit Payments The following pension benefit payments (which include expected future service) are assumed to be paid in each of the following fiscal years based on the participants’ normal retirement age: Year ending August 31, Pension Benefits 2019 $ 4,724 2020 2,132 2021 1,773 2022 1,751 2023 2,524 2024-2028 $ 7,647 The Company contributed $2,085, $1,205 and $322 to fund its obligations under the pension plans for the years ended August 31, 2018, 2017 and 2016, respectively. The Company plans to make the necessary contributions during fiscal 2019 to ensure its pension plans continue to be adequately funded given the current market conditions and does not anticipate a material change from amounts contributed during the current fiscal year. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Aug. 31, 2018 | |
Stockholders' Equity | |
Stockholders' Equity | Note 10—Stockholders’ Equity 2013 Equity Incentive Plan In October 2012, the Company adopted, and the stockholders subsequently approved, the 2013 Equity Incentive Plan (the “2013 Plan”). The 2013 Plan permits the grant of restricted stock, stock options, deferred stock, stock payments or other awards to employees, participating officers, directors, consultants and advisors who are linked directly to increases in shareholder value. The aggregate number of shares available for grant under the 2013 Plan was initially 1,200,000. Additional shares may become available in connection with share splits, share dividends or similar transactions. As of August 31, 2018, 1,063,370 shares remained available for future grant under the 2013 Plan. 2005 Incentive Plan In November 2005, the Company adopted, and the stockholders subsequently approved, the 2005 Incentive Plan (the “2005 Plan”). The 2005 Plan permits the grant of restricted stock, stock options, deferred stock, stock payments or other awards to employees, participating officers, directors, consultants and advisors who are linked directly to increases in shareholder value. The aggregate number of shares available for grant under the 2005 Plan was initially 1,000,000. The Company is no longer granting equity awards under the 2005 Plan. Restricted Stock Employees and Executive Management In September 2013, the Board of Directors of the Company approved the fiscal year 2014 LTIP for the executive officers and other members of management. The 2014 LTIP was an equity-based plan with a grant date of September 1, 2013. In addition to the stock option component described below, the plan contained the following restricted stock components: (a) performance and service-based restricted stock grant of 7,529 shares in the aggregate, subject to adjustment, with a vesting date of August 31, 2016, for which 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 8,323 and 1,040 shares in the aggregate, with vesting dates of August 31, 2016 and August 31, 2014, respectively. Compensation expense was recognized on a ratable basis over the vesting period. Based on the fiscal year 2014 financial results, 5,485 additional shares of restricted stock (total of 13,014 shares) were earned and granted subsequent to the end of fiscal year 2014 in accordance with the performance measurement criteria. No further performance-based measurements apply to this award. In August 2014, the Board of Directors of the Company approved the fiscal year 2015 LTIP for the executive officers and other members of management. The 2015 LTIP was an equity-based plan with a grant date of September 1, 2014. In addition to the stock option component described below, the plan contained the following restricted stock components: (a) a performance and service-based restricted stock grant of 6,993 shares in the aggregate, subject to adjustment based on fiscal 2015 results, with a vesting date of August 31, 2017, for which 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 7,005 and 1,127 shares (total of 8,132 shares) in the aggregate, with vesting dates of August 31, 2017 and September 1, 2014, respectively. Compensation expense was being recognized on a ratable basis over the vesting period. Based on the fiscal year 2015 financial results, 5,685 additional shares of restricted stock (total of 12,678 shares) were earned and granted subsequent to the end of fiscal year 2015 in accordance with the performance measurement criteria. No further performance-based measurements apply to this award. During the third quarter of fiscal 2015, an additional 16,000 restricted shares were issued to non-executive members of management; 15,000 with a vesting date of April 16, 2020 and 1,000 with a vesting date of January 31, 2018. Compensation expense is being recognized on a ratable basis over the vesting period. In August 2015, the Board of Directors of the Company approved the fiscal year 2016 LTIP for the executive officers and other members of management. The 2016 LTIP was an equity-based plan with a grant date of September 1, 2015. In addition to the stock option component described below, the plan contains the following restricted stock components: (a) a performance and service-based restricted stock grant of 6,962 shares in the aggregate, subject to adjustment based on fiscal 2016 results, with a vesting date of August 31, 2018 for which 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 7,683 shares in the aggregate, with a vesting date of August 31, 2018. Compensation expense was recognized on a ratable basis over the vesting period. 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. During the first quarter of fiscal 2016, an additional grant of 5,000 restricted shares was made to a non-executive member of management with a vesting date of October 20, 2020. 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 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. In addition to the stock option component described below, the plan contains the following restricted stock components: (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, for which compensation expense being 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 being recognized on a ratable basis over the vesting period. Based on the fiscal year 2017 financial results, 5,399 additional shares of restricted stock (total of 10,798 shares) were earned and granted subsequent to the end of fiscal year 2017 in accordance with the performance measurement criteria. No further performance-based measurements apply to this award. 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. In addition to the stock option component described below, the equity retention agreements contain 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 initially having a vesting date of August 31, 2021, which was amended in August 2017 to vest in five equal annual installments over the five-year period following the grant date. Compensation expense is being 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 being recognized on a ratable basis over the vesting period. In August 2017, the Board of Directors of the Company approved the fiscal year 2018 LTIP for the executive officers and other members of management. The 2018 LTIP is an equity-based plan with a grant date of September 1, 2017. In addition to the stock option component described below, the plan contains the following restricted stock components: (a) a performance and service-based restricted stock grant of 4,249 shares in the aggregate, subject to adjustment based on fiscal 2018 results, with a vesting date of August 31, 2020, for which compensation expense is being recognized on a ratable basis over the vesting period based on quarterly probability assessments; and (b) a time-based restricted stock grant of 3,473 shares in the aggregate, with a vesting date of August 31, 2020. Compensation expense is being recognized on a ratable basis over the vesting period. During the third quarter of fiscal 2018, an additional grant totaling 192 shares of restricted stock was issued to a non-executive member of management with a vesting date of August 31, 2020. Compensation expense is being recognized on a ratable basis over the vesting period. During the fourth quarter of fiscal 2018, an additional grant totaling 609 shares of restricted stock was issued to an executive member of management with a vesting date of August 20, 2019. Compensation expense is being recognized on a ratable basis over the vesting period. Non-employee Board of Directors In February 2015, as part of their standard compensation for board service, non-employee members of the Board received a total grant of 5,361 shares of restricted stock for service for the period from January 31, 2015 through January 31, 2016. The shares of restricted stock vested at the conclusion of this service period. Compensation expense was recognized on a ratable basis over the twelve-month vesting period. In February 2016, as part of their standard compensation for board service, non-employee members of the Board received a total grant of 4,554 shares of restricted stock for service for the period from January 31, 2016 through January 31, 2017. The shares of restricted stock vested at the conclusion of this service period. Compensation expense was recognized on a ratable basis over the twelve-month vesting period. In February 2017, as part of their standard compensation for board service, non-employee members of the Board received a total grant of 2,407 shares of restricted stock for service for the period from January 31, 2017 through January 31, 2018. The shares of restricted stock vested at the conclusion of this service period. Compensation expense was recognized on a ratable basis over the twelve-month vesting period. In February 2018, as part of their standard compensation for board service, non-employee members of the Board received a total grant of 2,779 shares of restricted stock for service for the period from January 31, 2018 through January 31, 2019. 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. A summary of the transactions of the Company’s restricted stock plans for the years ended August 31, 2018, 2017 and 2016 is presented below: Non Employee Weighted Average Officers Weighted Average Unvested restricted stock at August 31, 2015 5,361 $ 36.19 48,269 $ 35.68 Granted 4,554 $ 48.12 25,330 $ 39.07 Vested (5,361) $ 36.19 (18,271) $ 29.72 Forfeited or cancelled — — Unvested restricted stock at August 31, 2016 4,554 $ 48.12 55,328 $ 39.20 Granted 2,407 $ 91.05 42,160 $ 60.67 Vested (4,554) $ 48.12 (23,516) $ 38.81 Forfeited or cancelled — — Unvested restricted stock at August 31, 2017 2,407 $ 91.05 73,972 $ 51.56 Granted 2,779 $ 101.05 13,922 $ 83.65 Vested (2,407) $ 91.05 (22,315) $ 41.35 Forfeited or cancelled — — Unvested restricted stock at August 31, 2018 2,779 $ 101.05 65,579 $ 61.85 Stock Options In September 2013, the Board of Directors of the Company approved the fiscal year 2014 LTIP for the executive officers and other members of management. The 2014 LTIP was an equity-based plan with a grant date of September 1, 2013 and included options to purchase 25,969 shares of common stock in the aggregate with an exercise price of $29.72 per share. The options vested in three equal annual allotments ending on August 31, 2016. The options will expire on August 31, 2023. Compensation expense was recognized over the period of the award on an annual basis consistent with the vesting terms. In August 2014, the Board of Directors of the Company approved the fiscal year 2015 LTIP for the executive officers and other members of management. The 2015 LTIP was an equity-based plan with a grant date of September 1, 2014 and included options to purchase 22,750 shares of common stock in the aggregate with an exercise price of $35.50 per share. The options vested in three equal annual installments ending on August 31, 2017. Of the options granted, 7,438 will expire on August 31, 2024 and 15,312 will expire on September 1, 2024. Compensation expense was recognized over the period of the award on an annual basis consistent with the vesting terms. In August 2015, the Board of Directors of the Company approved the fiscal year 2016 LTIP for the executive officers and other members of management. The 2016 LTIP was an equity-based plan with a grant date of September 1, 2015 and included options to purchase 21,275 shares of common stock in the aggregate with an exercise price of $39.50 per share. The options vest in three equal annual installments ending on August 31, 2018. The options granted will expire on September 1, 2025. Compensation expense was recognized over the period of the award consistent with the vesting terms. In August 2016, the Board of Directors of the Company approved the fiscal year 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 included options to purchase 15,028 shares of common stock in the aggregate with an exercise price of $64.37 per share. The options vest in three equal annual installments 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 included 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 is recognized over the period of the award consistent with the vesting terms. In August 2017, the Board of Directors of the Company approved the fiscal year 2018 LTIP for the executive officers and other members of management. The 2018 LTIP is an equity-based plan with a grant date of September 1, 2017 and included options to purchase 9,622 shares of common stock in the aggregate with an exercise price of $93.50 per share. The options vest in three equal annual installments ending on August 31, 2020. Of the options granted, 4,591 options will expire on August 31, 2027, and 5,031 options will expire on September 1, 2027. Compensation expense is recognized over the period of the award consistent with the vesting terms. During the third quarter of fiscal 2018, an additional grant of options to purchase 606 shares of common stock in the aggregate with an exercise price of $104.00 was issued to a non-executive member of management. The options vest in three equal annual installments ending on August 31, 2020 and will expire on March 1, 2028. Compensation expense is being recognized on a ratable basis over the vesting period. The following table summarizes information about stock options outstanding as of August 31, 2018: Options Outstanding Options Exercisable Exercise Prices Number Weighted Avg. Weighted Aggregate Number Weighted Aggregate $ 16.00 7,597 4.1 $ 16.00 $ 820 7,597 $ 16.00 $ 820 $ 29.72 14,609 5.0 $ 29.72 $ 1,377 14,609 $ 29.72 $ 1,377 $ 35.50 15,571 6.0 $ 35.50 $ 1,377 15,571 $ 35.50 $ 1,377 $ 39.50 15,671 7.0 $ 39.50 $ 1,323 15,671 $ 39.50 $ 1,323 $ 64.37 35,514 8.0 $ 64.37 $ 2,116 7,756 $ 64.37 $ 462 $ 93.50 9,622 9.0 $ 93.50 $ 293 3,206 $ 93.50 $ 98 $ 104.00 606 9.5 $ 104.00 $ 12 202 $ 104.00 $ 4 99,190 6.9 $ 50.17 $ 7,318 64,612 $ 39.43 $ 5,461 Options are granted with an exercise price that is equal to the closing market value of the Company’s common stock on the day preceding the grant date, which is determined not to be materially different from the opening market value on the date of grant. A summary of the transactions of the Company’s stock option plans for the years ended August 31, 2018, 2017 and 2016 is presented below: Officers Weighted Options outstanding at August 31, 2015 313,389 $ 16.92 Granted 21,275 $ 39.50 Exercised (140,113) $ 15.27 Forfeited or cancelled — Options outstanding at August 31, 2016 194,551 $ 20.57 Granted 38,591 $ 64.37 Exercised (80,168) $ 15.62 Forfeited or cancelled — Options outstanding at August 31, 2017 152,974 $ 34.21 Granted 10,228 $ 94.12 Exercised (64,012) $ 19.06 Forfeited or cancelled — Options outstanding at August 31, 2018 99,190 $ 50.17 Options exercisable at August 31, 2018 64,612 $ 39.43 The weighted average grant date fair value of options granted in the years ended August 31, 2018, 2017 and 2016 was $30.99, $21.22 and $13.80 per share, respectively. The total pretax intrinsic value of stock options exercised was $6,714, $6,243 and $6,880 for the years ended August 31, 2018, 2017, and 2016, respectively. Excluding the common stock reserved for issuance upon exercise of the 99,190 outstanding options, there were 1,063,370 shares of common stock available for future issuance under the Company’s 2013 Equity Incentive Plan on August 31, 2018. Based on historic experience, management estimates all outstanding stock options will vest. The income tax benefit realized from stock options exercised, vesting of restricted stock and issuance of stock pursuant to grants of restricted stock units was $1,921, $1,917 and $1,784 for the years ended August 31, 2018, 2017 and 2016, respectively. As of August 31, 2018, unrecognized expense related to all stock-based compensation described above was $2,504 (including $2,182 for restricted stock and $322 for stock options), which will be recognized over the next three fiscal years. |
Segment Data
Segment Data | 12 Months Ended |
Aug. 31, 2018 | |
Segment Data | |
Segment Data | Note 11—Segment Data The Company is organized into two reportable operating segments, an Industrial Materials segment and a Construction Materials segment. The segments are distinguished by the nature of the products we manufacture 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 and customized sealant and adhesive systems 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, polyurethane dispersions and superabsorbent polymers. Beginning June 23, 2016, September 30, 2016 and December 31, 2017, the Industrial Materials segment includes the acquired operations of HumiSeal India Private Limited, Resin Designs, LLC and Zappa Stewart, respectively. The operations of both HumiSeal India Private Limited and Resin Designs, LLC are included in the Company’s electronic and industrial coatings product line and the operations of Zappa Stewart are included in the Company’s specialty chemicals intermediates 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. Following the April 20, 2018 sale of the structural composites rod business, future product sales of composite materials and elements are not anticipated to be significant to the consolidated financial statements. 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 segments: Years Ended August 31, 2018 2017 2016 Revenue Industrial Materials $ 232,288 $ 202,956 $ 181,728 Construction Materials 51,900 49,604 56,366 Total $ 284,188 $ 252,560 $ 238,094 Income before taxes Industrial Materials $ 66,076 (a) $ 67,561 (c) $ 53,530 (e) Construction Materials 18,178 18,205 19,967 Total for reportable segments 84,254 85,766 73,497 Corporate and common costs (27,289) (b) (24,874) (d) (23,387) (f) Total $ 56,965 $ 60,892 $ 50,110 Includes the following costs by segment: Industrial Materials Interest $ 938 $ 629 $ 791 Depreciation 4,033 3,423 3,918 Amortization 10,499 7,839 6,427 Construction Materials Interest $ 234 $ 210 $ 263 Depreciation 753 718 761 Amortization 1,308 1,288 1,409 (a) Includes $1,070 of expenses related to inventory step-up in fair value attributable to the December 2017 acquisition of Zappa Stewart, $1,085 on the gain on sale of license related to the structural composites product line recorded in the second quarter of fiscal 2018, $1,480 gain on sale of business related to the April 2018 sale of the structural composites rod business and $1,272 of expense related to the closure and exit of our Pawtucket, RI location in the fourth quarter of fiscal 2018 (b) Includes $393 in acquisition-related expenses attributable to the December 2017 acquisition of Zappa Stewart (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 (d) Includes $584 in acquisition-related expenses attributable to the September 2016 acquisition of certain assets of Resin Designs, facility exit and demolition costs of $70 related to the Company’s Randolph, MA location, a $792 gain related to the November 2016 sale of the Company’s Paterson, NJ location, a $68 gain related to the December 2016 sale of the Company’s former corporate headquarters in Bridgewater, MA and $14 of pension-related settlement costs due to the timing of lump sum distributions (e) Includes 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 (f) Includes $935 in Randolph, MA facility exit and demolition costs, a $877 gain on the write-down of an annuity and $13 of pension-related settlement costs due to the timing of lump sum distributions As of August 31, 2018 2017 Total Assets Industrial Materials $ 229,559 $ 156,263 Construction Materials 36,757 38,162 Total for reportable segments 266,316 194,425 Corporate and common assets 50,153 60,313 Total $ 316,469 $ 254,738 |
Export Sales and Foreign Operat
Export Sales and Foreign Operations | 12 Months Ended |
Aug. 31, 2018 | |
Export Sales and Foreign Operations | |
Export Sales and Foreign Operations | Note 12—Export Sales and Foreign Operations Export sales from continuing domestic operations to unaffiliated third parties were $42,883, $36,719 and $28,826 for the years ended August 31, 2018, 2017 and 2016, respectively. The increase in export sales in fiscal 2018 against both fiscal 2017 and 2016 resulted from increased export sales into China and Europe. The Company’s products are sold worldwide. Revenue for the years ended August 31, 2018, 2017 and 2016, are attributed to operations located in the following countries: Years Ended August 31, 2018 2017 2016 Revenue United States $ 244,225 $ 217,745 $ 197,776 United Kingdom 20,598 16,691 24,048 All other foreign (1) 19,365 18,124 16,270 Total $ 284,188 $ 252,560 $ 238,094 (1) Inclusive of sales originated from our Paris, France location, royalty revenue attributable to our licensed manufacturer in Asia, and Chase foreign manufacturing operations. As of August 31, 2018 and 2017, 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: As of August 31, 2018 2017 Long-Lived Assets United States Property, plant and equipment, net $ 28,770 $ 30,253 Goodwill and Intangible assets, less accumulated amortization 143,539 90,673 United Kingdom Property, plant and equipment, net 2,911 3,184 Goodwill and Intangible assets, less accumulated amortization 5,239 5,685 All other foreign Property, plant and equipment, net 1,164 1,323 Goodwill and Intangible assets, less accumulated amortization 1,248 1,272 Total Property, plant and equipment, net $ 32,845 $ 34,760 Goodwill and Intangible assets, less accumulated amortization $ 150,026 $ 97,630 |
Supplemental Cash Flow Data
Supplemental Cash Flow Data | 12 Months Ended |
Aug. 31, 2018 | |
Supplemental Cash Flow Data | |
Supplemental Cash Flow Data | Note 13—Supplemental Cash Flow Data Supplemental cash flow information for the years ended August 31, 2018, 2017 and 2016 is as follows: 2018 2017 2016 Income taxes paid $ 20,142 $ 21,025 $ 17,550 Interest paid $ 915 $ 786 $ 1,059 Noncash Investing and Financing Activities Common stock received for payment of stock option exercises $ 1,028 $ 1,158 $ 2,015 Property, plant and equipment additions included in accounts payable $ 197 $ 220 $ 22 Supplemental cash flow information as related to acquisitions and divestitures for the years ended August 31, 2018, 2017 and 2016 is as follows: 2018 2017 2016 Acquisition of Zappa Stewart Current assets $ 10,478 Property, plant & equipment 1,872 Goodwill and Intangible assets 64,378 Deferred tax liability (2,626) Accounts payable and accrued liabilities (633) Payments for acquisitions (73,469) Sale of Structural Composites Rod Business Inventory $ (522) Goodwill (230) Gain on sale of business (1,480) Cash received from sale of business, net of transaction costs 2,232 Sale of Structural Composites License Property and equipment $ (26) Gain on sale of license (1,085) Accrued income taxes 111 Cash received from sale of license 1,000 Acquisition of Resin Designs Current assets $ 3,240 Property, plant & equipment 623 Goodwill and Intangible assets 27,042 Accounts payable and accrued liabilities (635) Payments for acquisitions (30,270) Sale of Fiber Optic Cable Components product line Inventory $ (1,167) Property, plant and equipment (166) Goodwill and Intangible assets (512) Gain on sale of business (2,013) Due from sale of business 400 Cash received from sale of product line, net of transaction costs 3,458 Acquisition of HumiSeal India Private Limited Current assets (excluding cash) $ 55 Property, equipment and goodwill 1,134 Accounts payable and accrued liabilities (28) Payments for acquisitions, net of cash acquired (1,161) Sale of RodPack Business Property, plant and equipment $ (846) Intangible assets (309) Gain on sale of business (1,031) Due from sale of business $ (457) 457 Cash received from sale of business 457 1,729 |
Acquisitions
Acquisitions | 12 Months Ended |
Aug. 31, 2018 | |
Acquisitions | |
Acquisitions | Note 14—Acquisitions Acquisition of Zappa Stewart On December 31, 2017, the Company acquired Zappa Stewart, an advanced superabsorbent polymer (SAP) formulator and solutions provider, with operations located in Hickory and McLeansville, NC. The business was acquired for a purchase price of $73,469, after final working capital adjustments and excluding acquisition-related costs. Chase acquired all equity of the business and entered multiyear leases at both locations. The purchase was funded by a combination of a $65,000 draw on Chase’s existing revolving credit facility and available cash on hand. Zappa Stewart’s protective materials technology is complementary to Chase’s current specialty chemicals offerings. This acquisition is in line with our core strategies and extends our reach into growing medical and consumer applications. Since the effective date for this acquisition, December 31, 2017, the financial results of the acquired business have been included in the Company’s financial statements within the Industrial Materials operating segment, in the specialty chemicals intermediates 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 $393 of acquisition-related costs during the second quarter of 2018 to acquisition-related costs. The Company is currently in the process of finalizing purchase accounting, with regard to a final allocation of the purchase price to tangible and identifiable intangible assets assumed and anticipates completion within the first quarter of fiscal 2019. In the third quarter of fiscal 2018, an adjustment to increase goodwill by $2,035 was made to the initial amounts recorded at the end of the second fiscal quarter; the increase relates to additional consideration paid by the Company to the seller as part of the final working capital adjustment. In the fourth quarter of fiscal 2018, a net adjustment to decrease goodwill by $1,214 was made to the amount recorded at the end of the third fiscal quarter; the net decrease relates to: (a) the recording of a $2,626 deferred tax liability associated with the acquired company (of which $311 related to an error in the initial amounts recorded); (b) the allocation of a net additional $4,300 of the purchase price to the customer relationships intangible assets (comprising a $4,800 increase in intangible assets based on information available as of the acquisition date, and as such representing an error, and a $500 reduction based on a change in estimate during the measurement period); and (c) the reduction of the purchase price allocated to inventory step-up costs totaling $460 (comprising a $360 decrease based on information available as of the acquisition date, and as such representing an error, and a $100 reduction based on a change in estimate during the measurement period). The impact of the noted errors was not material to the consolidated financial statements and the Company did not consider the amount material to prior periods. See Item 9A - Management’s Report on Internal Control over Financial Reporting of this current report on Form 10-K for additional information and considerations related to these fourth quarter business combination adjustments representing errors. Giving effect to these adjustments, the purchase price has been preliminarily 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 $ 3,670 Inventory 6,796 Prepaid expenses and other current assets 12 Property, plant & equipment 1,872 Goodwill 34,138 Intangible assets 30,240 Deferred tax liability (2,626) Accounts payable and accrued liabilities (633) Total purchase price $ 73,469 The excess of the purchase price over the net tangible and intangible assets acquired resulted in goodwill of $34,138 that is largely attributable to the synergies and economies of scale from combining the operations, technologies and research and development capabilities of Zappa Stewart and Chase, particularly as it pertains to the expansion of the Company's product and service offerings, the established workforce and marketing efforts. A portion of this goodwill, $23,990, is deductible for income tax purposes. All assets, including goodwill, acquired as part of the Zappa Stewart acquisition are included in the Industrial Materials operating segment. Identifiable intangible assets purchased with this transaction are as follows: Weighted Average Intangible Asset Amount Useful life Customer relationships $ 28,500 7.9 years Technology 900 7 years Trade names 840 4 years Total intangible assets $ 30,240 Supplemental Pro Forma Data (unaudited) The following table presents the pro forma results of the Company for the years ended August 31, 2018 and 2017 as though the Zappa Stewart acquisition described above occurred on September 1, 2016 (the first day of fiscal 2017). The actual revenue and expenses for the acquired business are included in the Company’s consolidated results beginning on December 31, 2017. From the date of acquisition (December 31, 2017) through August 31, 2018, revenue and net income for the Zappa Stewart operations included in the consolidated statement of operations were $16,324 and $578, respectively, with results inclusive of sale of $1,070 in inventory step-up cost, $393 in acquisition-related costs and amortization expense of $2,672 recognized related to intangible assets recorded as part of the transaction, but not inclusive of any interest or financing costs. The pro forma results include adjustments for the estimated amortization of intangibles, acquisition-related costs, sale of inventory step-up cost, interest expense assuming the entire $65,000 draw remained outstanding through December 31, 2017 (at the interest rate effective at the date of borrowing) and the income tax impact of the pro forma adjustments at the statutory rate of 35% for fiscal 2017 and 26% for fiscal 2018. 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, 2016. Years Ended August 31, 2018 2017 Revenue $ $ Net income Net income available to common shareholders, per common and common equivalent share Basic earnings per share $ 4.75 $ 4.45 Diluted earnings per share $ 4.70 $ 4.40 Acquisition of Resin Designs, LLC On September 30, 2016, the Company acquired certain assets of Resin Designs, LLC, 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. Purchase accounting was completed in the fourth quarter of fiscal 2017 with no material adjustments made to the initial amounts recorded. 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 (unaudited) The following table presents the pro forma results of the Company for the year ended August 31, 2017 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 August 31, 2017, revenue and net income for the Resin Designs operations included in the consolidated statement of operations were $14,868 and $669, 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. Year Ended August 31, 2017 Revenue $ Net income Net income available to common shareholders, per common and common equivalent share Basic earnings per share $ 4.56 Diluted earnings per share $ 4.51 Acquisition of HumiSeal 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. |
Sale of License
Sale of License | 12 Months Ended |
Aug. 31, 2018 | |
Sale of License | |
Sale of License | Note 15—Sale of License In November 2017, the Company entered a license agreement with an unrelated party to sell a license, including intellectual property, and certain construction in process assets, with a net book value of $26 and all related to the manufacturing of certain structural composite materials. In the second fiscal quarter of 2018, the transaction was finalized for gross consideration of $1,111 comprising cash proceeds of $1,000 and $111 in foreign tax consideration paid by the buyer on Chase’s behalf. This transaction resulted in a gain of $1,085, which was recorded in the Company’s consolidated statement of operations as a gain on sale of license during the fiscal quarter ended February 28, 2018. In relation to this license agreement, the purchaser also entered into a royalty agreement with the Company. The purchaser will make royalty payments to Chase based on the volume of future sales of certain structural composite material manufactured by the purchaser. Revenue recognized related to this royalty agreement was not material in fiscal 2018. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Aug. 31, 2018 | |
Fair Value Measurements | |
Fair Value Measurements | Note 16—Fair Value Measurements The Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability (exit price) in an orderly transaction between market participants at the measurement date. The Company uses a three‑tier fair value hierarchy, which classifies the inputs used in measuring fair values. These tiers include: Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company has determined that it does not have any financial liabilities measured at fair value other than long‑term debt and that its financial assets are currently all classified within Level 1 or Level 2 in the fair value hierarchy. The financial assets classified as Level 1 and Level 2 as of August 31, 2018 and 2017 represent investments which are restricted for use in non-qualified retirement savings plans 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 August 31, 2018 and 2017: 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 August 31, 2018 $ 1,090 $ 961 129 — Restricted investments August 31, 2017 $ 964 $ 926 38 — The following table presents the fair values of the Company’s long‑term debt as of August 31, 2018 and 2017 which is recorded at its carrying amount: 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 August 31, 2018 $ 25,000 $ — 25,000 — Long-term debt August 31, 2017 $ — $ — — — 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 6 for additional information on long-term debt. |
Net Income Per Share
Net Income Per Share | 12 Months Ended |
Aug. 31, 2018 | |
Net Income Per Share | |
Net Income Per Share | Note 17—Net Income Per Share The determination of earnings per share under the two‑class method is as follows: Years Ended August 31, 2018 2017 2016 Net income attributable to Chase Corporation $ 43,143 $ 42,014 $ 32,807 Less: Allocated to participating securities 410 454 266 Available to common shareholders $ 42,733 $ 41,560 $ 32,541 Basic weighted average shares outstanding 9,296,648 9,249,343 9,167,333 Additional dilutive common stock equivalents 69,423 108,071 126,744 Diluted weighted average shares outstanding 9,366,071 9,357,414 9,294,077 Net income available to common shareholders, per common and common equivalent share Basic $ 4.60 $ 4.49 $ 3.55 Diluted $ 4.56 $ 4.44 $ 3.50 For the year ended August 31, 2018 and 2016, stock options to purchase 404 and 9,354 shares of common stock were outstanding but were not included in the calculation of diluted net income per share because their inclusion would be antidilutive. No stock options were excluded from the calculation for the year ended August 31, 2017. Included in the calculation of dilutive common stock equivalents are the unvested portion of restricted stock and stock options. |
Sale of Businesses
Sale of Businesses | 12 Months Ended |
Aug. 31, 2018 | |
Sale of Businesses | |
Sale of Businesses | Note 18—Sale of Businesses Sale of Structural Composites Rod Business On April 20, 2018, Chase finalized an agreement with an unrelated party to sell all inventory, operational machinery and equipment and intangible assets of the Company’s structural composites rod business, as well as a license related to the production and sale of rod, for proceeds of $2,232, net of transaction costs and following all working capital adjustments. This business, which was part of the structural composites product line within the Industrial Materials segment, had limited growth and profitability prospects as part of the Company, and was outside the areas Chase has identified for strategic emphasis. The divestiture 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 $1,480 was recognized in the third quarter of fiscal 2018 as a gain on sale of businesses within the consolidated statement of operations. Chase received $2,075, net of transaction costs, in the third quarter of fiscal 2018, with the remaining $157 received in the fourth quarter of fiscal 2018 as a result of a working capital true-up. Related to this transaction, the purchaser entered into a royalty agreement with the Company. The purchaser will make royalty payments to Chase based on future sales of certain structural composite material manufactured by the purchaser. Royalty revenue recognized in the second half of fiscal 2018 related to this agreement was not material. The sale of the structural components rod business follows the Company’s sale of the RodPack ® wind blade components business in November 2015 (as further discussed below), and the licensing of certain composite technologies during the second quarter of fiscal 2018 (see further discussion in Note 15 to the consolidated financial statements). Subsequent to the third quarter of fiscal 2018, Chase will include the results of its remaining structural composites wind energy business (inclusive of the royalties and the custom manufacturing services further discussed below) within the specialty products product line. Sale of Fiber Optic Cable Components Product Line On April 3, 2017, Chase executed an agreement with an unrelated 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. Given its low-growth and low-margin prospects, and a customer, supplier and equipment base separate from the Company’s 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 fiscal 2017 as gain on sale of businesses within the 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 August 31, 2017, and as a current asset (Due from sale of business) as of August 31, 2018, and was available to resolve any submitted claims or adjustments up to 18 months from the closing date of the sale. Chase collected the full $400 escrow amount in October 2018, subsequent to fiscal 2018. Post-Sale Services Provided to the Buyer of the Structural Composites Rod Business and the Fiber Optic Cable Components Product Line The structural composites rod business and the fiber optic cable components product line, which both operated out of the Company’s Granite Falls, NC facility, were both sold to the same otherwise unrelated purchaser. Subsequent to the sales, Chase will provide certain transitional manufacturing and administrative support to the purchaser for which the Company will receive additional consideration upon the performance of services. In the year ended August 31, 2018, Chase charged the purchaser $2,186 for manufacturing services, which the Company recognized as revenue within the Industrial Materials segment, and $275 for selling and administrative services, which the Company recognized as an offset to selling, general and administrative expenses. In the year ended August 31, 2017, Chase charged the purchaser $740 for manufacturing services, and $100 for selling and administrative services. Further, the purchaser entered a multiyear lease for a portion of the manufacturing space at the Company’s Granite Falls, NC facility. Chase received $130 and $54, respectively, in rental income during the years ended August 31, 2018 and 2017 related to this lease, which the Company recognized within other income (expense) on the consolidated statements 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 sale resulted in a pre-tax book gain of $1,031, which was recorded within the consolidated statement of operations as gain on sale of businesses in fiscal 2016. The Company received $1,500 of the proceeds in the first quarter of fiscal 2016, and received three additional payments each for $229 during the quarters ended May 31, 2016, November 30, 2016 and August 31, 2017. 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 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 | 12 Months Ended |
Aug. 31, 2018 | |
Sale of Real Estate | |
Sale of Real Estate | Note 19—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 consolidated statement of operations as a gain on sale of real estate during the fiscal quarter ended November 30, 2016. During the second quarter of fiscal 2016, as part of its ongoing facility consolidation and rationalization initiative, the Company committed to a plan to actively market the Paterson, NJ property for sale. At that time, Chase owned the building and leased the land from the landowner. Prior to the sale in fiscal 2017, the building was being leased to a tenant and the land was being sub-leased. Upon commitment to a plan to sell the property, the Company reclassified the net book value of the related assets to assets held for sale. 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 of 2017, the sale was finalized for gross cash proceeds in the amount of $740, resulting in a gain on sale of $68. See Note 22 of the consolidated financial statements for additional information on the sale of the Bridgewater, MA location. |
Exit Costs Related to Idle Faci
Exit Costs Related to Idle Facility | 12 Months Ended |
Aug. 31, 2018 | |
Exit Costs Related to Idle Facility | |
Exit Costs Related to Idle Facility | Note 20—Exit Costs Related to Idle Facility Closure of Pawtucket, RI Facility On June 25, 2018, the Company announced to its employees the planned closing of its Pawtucket, RI manufacturing facility effective August 31, 2018. This is in line with the Company’s ongoing efforts to consolidate its manufacturing plants and streamline its existing processes. The manufacturing of products previously produced in the Pawtucket, RI facility was moved to Company facilities in Oxford, MA and Lenoir, NC during a two-month transition period. The Company expensed $1,272 in the fourth quarter of fiscal 2018 related to the closure, including: (a) cash-related employee-related, logistics and uncapitalized facilities improvement costs of $590; and (b) non-cash-related accelerated depreciation expense of $682. Future costs related to this move are not anticipated to be significant to the consolidated financial statements. Demolition of Idle Randolph, MA Facility In fiscal 2017 and 2016, the Company recognized $70 and $935, respectively, in expenses to raze its Randolph, MA facility, which has been idle regarding production for several years. The Company began marketing the site for sale during the second quarter of fiscal 2016. These actions were taken as part of the Company’s on-going facility consolidation and rationalization initiative. The Company substantially completed the demolition of the structure in the fourth fiscal quarter of 2016, and completed other environmental aspects of the project during fiscal 2017. The sale of the property is anticipated to follow in a subsequent period, and any future expenses related to the project are not anticipated to be material. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Aug. 31, 2018 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 21—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. |
Related Party Agreements
Related Party Agreements | 12 Months Ended |
Aug. 31, 2018 | |
Related Party Agreements | |
Related Party Agreements | Note 22—Related Party Agreements Reimbursements Related to Life Insurance Policies 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 them. In August 2016 (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 (fiscal 2017), the Company received $1,504 related to the Metropolitan Life Insurance policy, its then cash surrender value, plus an additional prepaid 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. See Note 5 of the consolidated financial statements for additional information on the cash surrender value of life insurance policies held by the Company at August 31, 2018 and 2017. Settlement of a Life Annuity During the fourth quarter of fiscal 2016, the Company recognized a gain of $877 to selling, general and administrative expenses related to a life annuity payable to Barbara A. Chase (deceased). Upon Ms. Chase’s passing in August 2016, the Company’s payment obligation ceased, and the previously recorded liability was written down. Barbara A. Chase is the spouse of a former executive of the Company, Francis M. Chase (deceased) and who are in each case the respective aunt and uncle of Peter R. Chase and Mary Claire Chase and respective great-aunt and great-uncle of Adam P. Chase. 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, Peter R. Chase 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. |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended |
Aug. 31, 2018 | |
Selected Quarterly Financial Data (Unaudited) | |
Selected Quarterly Financial Data (Unaudited) | Note 23—Selected Quarterly Financial Data (Unaudited) The following table presents unaudited operating results for each of the Company’s quarters in the years ended August 31, 2018 and 2017: Fiscal Year 2018 Quarters First Second Third Fourth Year Net Sales $ 60,577 $ 64,735 $ 77,653 $ 75,997 $ 278,962 Gross Profit on Sales 23,682 22,744 29,401 27,999 103,826 Net income $ 8,315 $ 10,122 $ 13,543 $ 11,163 $ 43,143 Net income available to common shareholders, per common and common equivalent share: Basic $ 0.89 $ 1.08 $ 1.44 $ 1.19 $ 4.60 Diluted $ 0.88 $ 1.07 $ 1.43 $ 1.18 $ 4.56 Fiscal Year 2017 Quarters First Second Third Fourth Year Net Sales $ 60,269 $ 56,288 $ 63,641 $ 67,679 $ 247,877 Gross Profit on Sales 24,980 23,430 26,130 27,301 101,841 Net income $ 10,363 $ 8,383 $ 11,855 $ 11,413 $ 42,014 Net income available to common shareholders, per common and common equivalent share: Basic $ 1.11 $ 0.90 $ 1.27 $ 1.22 $ 4.49 Diluted $ 1.10 $ 0.89 $ 1.26 $ 1.21 $ 4.44 Note: Quarterly earnings per share amounts may not sum to earnings per share for the year due to rounding. |
Valuation and Qualifying Accoun
Valuation and Qualifying Accounts | 12 Months Ended |
Aug. 31, 2018 | |
Valuation and Qualifying Accounts | |
Valuation and Qualifying Accounts | Note 24—Valuation and Qualifying Accounts The following table sets forth activity in the Company’s accounts receivable and sales return reserve: Year ended Balance at Charges to Deductions to Balance at August 31, 2018 $ 456 $ 1,138 $ (1,035) $ 559 August 31, 2017 $ 830 $ 197 $ (571) $ 456 August 31, 2016 $ 705 $ 196 $ (71) $ 830 The following table sets forth activity in the Company’s warranty reserve: Year ended Balance at Charges to Deductions to Balance at August 31, 2018 $ 220 $ — $ (220) $ — August 31, 2017 $ — $ 220 $ — $ 220 August 31, 2016 $ 230 $ 143 $ (373) $ — |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 12 Months Ended |
Aug. 31, 2018 | |
Accumulated Other Comprehensive Income | |
Accumulated Other Comprehensive Income | Note 25 — 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 Plans Adjustment Total Balance at August 31, 2016 $ 54 $ (7,336) $ (8,197) $ (15,479) Other comprehensive gains (losses) before reclassifications 155 221 788 1,164 Reclassifications to net income of previously deferred (gains) losses (88) 934 — 846 Other comprehensive income (loss) 67 1,155 788 2,010 Balance at August 31, 2017 $ 121 $ (6,181) $ (7,409) $ (13,469) Other comprehensive gains (losses) before reclassifications 77 (314) 743 506 Reclassifications to net income of previously deferred (gains) losses (72) 699 — 627 Other comprehensive income (loss) 5 385 743 1,133 Balance at August 31, 2018 $ 126 $ (5,796) $ (6,666) $ (12,336) The following table summarizes the reclassifications from accumulated other comprehensive income (loss) to the consolidated statements of income: Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income Year Ended Year Ended Location of Gain (Loss) Reclassified from Accumulated August 31, 2018 August 31, 2017 Other Comprehensive Income (Loss) into Income Gains on Restricted Investments: Realized gain on sale of restricted investments $ (97) $ (127) Selling, general and administrative expenses Tax expense (benefit) 25 39 Gain net of tax $ (72) $ (88) Loss on Funded Pension Plan adjustments: Change in funded status of pension plans $ 117 $ 98 Cost of products and services sold Change in funded status of pension plans $ 820 $ 1,255 Selling, general and administrative expenses Tax expense (benefit) (238) (419) Loss net of tax $ 699 $ 934 Total net loss reclassified for the period $ 627 $ 846 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Aug. 31, 2018 | |
Summary of Significant Accounting Policies | |
Products and Markets | Products and Markets Our principal products are specialty tapes, laminates, adhesives, sealants, coatings and chemical intermediates that are sold by our salespeople, manufacturers' representatives and distributors. In our Industrial Materials segment, these products consist of: (i) insulating and conducting materials for the manufacture of electrical and telephone wire and cable, electrical splicing, and terminating and repair tapes, which are marketed to wire and cable manufacturers; (ii) laminated film foils, including EMI/RFI shielding tapes, used in communication and local area network (LAN) cables; (iii) moisture protective coatings, which are sold to the electronics industry for circuitry manufacturing, including circuitry used in automobiles, industrial controls and home appliances; (iv) laminated durable papers, including laminated paper with an inner security barrier used in personal and mail‑stream privacy protection, which are sold primarily to the envelope converting and commercial printing industries; (v) pulling and detection tapes used in the installation, measurement and location of fiber optic cables, water and natural gas lines, and power, data and video cables for commercial buildings; (vi) cover tapes with reliable adhesive and anti‑static properties essential to delivering semiconductor components via tape and reel packaging; (vii) advanced adhesives, sealants, and coatings for automotive and industrial applications that require specialized bonding, encapsulating, environmental protection, or thermal management functionality; (viii) polymeric microspheres utilized by various industries to allow for weight and density reduction and sound dampening; (ix) water-based polyurethane dispersions utilized for various coating products; and (x) superabsorbent polymers, which are utilized for water and liquid management, remediation and protection in diverse markets including wire and cable, medical, environmental, infrastructure, energy and consumer products. In the Company’s Construction Materials segment, these products consist of: (i) protective pipe coating tapes and other protectants for valves, regulators, casings, joints, metals, concrete and wood, which are sold to oil companies, gas utilities, and pipeline companies for utilization in both the construction and maintenance of oil and gas, water and wastewater pipelines; (ii) waterproofing membranes for highway bridge deck metal supported surfaces, which are sold to municipal transportation authorities, and high-performance polymeric asphalt additives; (iii) fluid applied coating and lining systems for use in the water and wastewater industry; and (iv) expansion and control joint systems designed for roads, bridges, stadiums and airport runways. |
Basis of Presentation | Basis of Presentation The financial statements include the accounts of the Company and its wholly‑owned subsidiaries. Investments in unconsolidated companies which are at least 20% owned are carried under the equity method since acquisition or investment. All intercompany transactions and balances have been eliminated in consolidation. The Company uses the U.S. dollar as the functional currency for financial reporting. Certain reclassifications have been made to the prior year amounts to conform to the current year’s presentation. On June 25, 2018, the Company announced to its employees the planned closing of its Pawtucket, RI manufacturing facility effective August 31, 2018. This is in line with the Company’s ongoing efforts to consolidate its manufacturing plants and streamline its existing processes. The manufacturing of products previously produced in the Pawtucket, RI facility was moved to Company facilities in Oxford, MA and Lenoir, NC during a two-month transition period. Company expensed $1,272 in the fourth quarter of fiscal 2018 related to the closure, including: (a) cash-related employee-related, logistics and uncapitalized facility improvement costs of $590; and (b) non-cash-related accelerated depreciation expense of $682. Future costs related to this move are not anticipated to be significant to the consolidated financial statements. On April 20, 2018, Chase finalized an agreement with an unrelated party to sell all inventory, operational machinery and equipment and intangible assets of the Company’s structural composites rod business, as well as a license related to the production and sale of rod, for proceeds of $2,232, net of transaction costs and following certain working capital adjustments. This business, which was part of the structural composites product line within the Industrial Materials segment, had limited growth and profitability prospects as part of the Company, and was outside the areas Chase has identified for strategic emphasis. The resulting pre-tax gain on sale of $1,480 was recognized in the third quarter of fiscal 2018 as a gain on sale of businesses within the consolidated statement of operations. Chase received $2,075, net of transaction costs, in the third quarter of fiscal 2018, with the remaining $157 received in the fourth quarter of fiscal 2018 as a result of a working capital true-up. Chase will provide certain transitional manufacturing and administrative support to the purchaser for which the Company will receive additional consideration upon the performance of services. The purchaser also entered into a royalty agreement with the Company. The purchaser will make royalty payments to Chase based on future sales of certain structural composite material manufactured by the purchaser. On December 29, 2017, Chase entered an agreement to acquire Stewart Superabsorbents, LLC (“SSA, LLC”), an advanced superabsorbent polymer (SAP) formulator and solutions provider, with operations located in Hickory and McLeansville, NC. The transaction closed on December 31, 2017. In the most recently completed fiscal year, SSA, LLC, and its recently-acquired Zappa-Tec business (collectively “Zappa Stewart”) had combined revenue in excess of $24,000. This acquisition proved to be immediately accretive to its earnings, after adjusting for nonrecurring costs associated with the transaction and financing cost. The business was acquired for a purchase price of $73,469, after final working capital adjustments and excluding acquisition-related costs. As part of this transaction, Chase acquired all assets of the business, and entered multiyear leases at both locations. The Company expensed $393 of acquisition-related costs associated with this acquisition during the second quarter of fiscal 2018. The purchase was funded from a combination of Chase’s existing revolving credit facility and available cash on hand. Zappa Stewart’s protective materials technology complements Chase’s current specialty chemicals offerings. This acquisition is aligned with the Company’s core strategies and extends its reach into growing medical, environmental and consumer applications. The Company is currently in the process of finalizing purchase accounting, with regard to a final allocation of the purchase price to tangible and identifiable intangible assets assumed, and anticipates completion within the first quarter of fiscal 2019. Following the effective date of the acquisition the financial results of Zappa Stewart’s operations have been included in the Company’s financial statements in the specialty chemical intermediates product line, contained within the Industrial Materials operating segment. On April 3, 2017, Chase executed an agreement with an unrelated 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 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 certain transitional 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. 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. 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. Purchase accounting was completed in the fourth quarter of fiscal 2017 with no material adjustments made to the initial amounts recorded. On June 23, 2016, the Company acquired all the capital stock of Spray Products (India) Private Limited for $1,161, net of cash acquired. The 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. 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 operating segment. The Company has evaluated events and transactions subsequent to the balance sheet date. Based on this evaluation, and other than: (a) the cash dividend announced on November 13, 2018 of $0.80 per share to shareholders of record on November 23, 2018 payable on December 5, 2018; (b) the September 2018 payment of $10,000 against the outstanding balance of our revolving debt facility; and (c) the October 2018 collection of the $400 escrow related to the April 2017 sale of the fiber optics cable components business, the Company is not aware of any other events or transactions that occurred subsequent to the balance sheet date, but prior to filing, that would require recognition or disclosure in its Consolidated Financial Statements. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist primarily of demand deposit accounts or investment instruments that meet high credit quality standards such as money market funds, government securities, or commercial paper. The Company considers all highly liquid debt instruments purchased with a maturity of three months or less from date of purchase to be cash equivalents. |
Accounts Receivable | Accounts Receivable The Company evaluates the collectability of accounts receivable balances based on a combination of factors. In cases where the Company is aware of circumstances that may impair a specific customer’s ability to meet its financial obligations to it, a specific allowance against amounts due to the Company is recorded, and thereby reduces the net recognized receivable to the amount the Company reasonably believes will be collected. For all other customers, the Company recognizes allowances for doubtful accounts based on the length of time the receivables are past due, industry and geographic factors, the current business environment and its historical experience. Receivables are written off against these reserves in the period they are determined to be uncollectable. |
Inventory | Inventory The Company values inventory at the lower of cost or net realizable value using the first in, first out (FIFO) method. Management assesses the recoverability of inventory based on types and levels of inventory held, forecasted demand and changes in technology. These assessments require management judgments and estimates, and valuation adjustments for excess and obsolete inventory may be recorded based on these assessments. The Company estimates excess and obsolescence exposures based upon assumptions about future demand, product transitions and market conditions, and records reserves to reduce inventories to their estimated net realizable value. The failure to accurately forecast demand may lead to additional excess and obsolete inventory and future charges. |
Goodwill | Goodwill The Company accounts for goodwill in accordance with ASC Topic 350, “Intangibles — Goodwill and Other.” The Company identified a total of twelve reporting units within its two operating segments. The reporting units are evaluated for possible impairment of goodwill annually each fourth quarter and whenever events or circumstances indicate the carrying value of goodwill may not be recoverable. In fiscal 2017, the Company early adopted ASU No. 2017-04 “Intangibles - Goodwill and Other Topics (Topic 350): Simplifying the Test for Goodwill Impairment.” We assess goodwill for impairment by comparing the fair value of the reporting unit to its carrying amount. If the fair value of a reporting unit is less than its carrying value, an impairment loss, limited to the amount of goodwill allocated to that reporting unit, is recorded. Fair values for reporting units are determined based on the income approach (discounted cash flow method). |
Intangible Assets | Intangible Assets Intangible assets consist of patents, agreements, formulas, trade names, customer relationships and trademarks. The Company capitalizes costs related to patent applications and technology agreements. The costs of these assets are amortized over the lesser of the useful life of the asset or its statutory life. Capitalized costs are periodically reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment are stated at cost and depreciated using the straight‑line method over the assets’ estimated useful lives. Expenditures for maintenance repairs and minor renewals are charged to expense as incurred. Betterments and major renewals are capitalized. Upon retirement or other disposition of assets, related allowances for depreciation and amortization are eliminated from the accounts and any resulting gain or loss is included in the determination of income or loss. The estimated useful lives of property, plant and equipment are as follows: Buildings and improvements 15 to 40 years Machinery and equipment 3 to 10 years Leasehold improvements are depreciated over the lesser of the useful life or the term of the lease. |
Restricted Investments and Deferred Compensation | Restricted Investments and Deferred Compensation The Company has a non-qualified deferred savings plan that covers its Board of Directors and a separate plan covering selected employees. Participants may elect to defer a portion of their compensation for payment in a future tax year. The plans are funded by trusteed assets that are restricted to the payment of deferred compensation or satisfaction of the Company’s general creditors. The Company’s restricted investments and corresponding deferred compensation liability under the plans were $1,090 and $964 at August 31, 2018 and 2017, respectively. The Company accounts for the restricted investments as available for sale by recording unrealized gains or losses in other comprehensive income as a component of stockholders’ equity. |
Split-Dollar Life Insurance Arrangements | Split-Dollar Life Insurance Arrangements The liability related to these postretirement benefits was calculated as the present value of future premiums to be paid by the Company reduced by the present value of the expected proceeds to be returned to the Company upon the insured’s death. For August 31, 2018 and 2017, the Company did not recognize a liability related to these postretirement obligations as no future premium payments were anticipated. |
Revenues | Revenue The Company recognizes revenue when persuasive evidence of an arrangement exists, performance of its obligation is complete, its price to the buyer is fixed or determinable, and the Company is reasonably assured of collecting. These four transaction elements are typically met at the time of shipment or upon receipt by the customer, based on contractual terms. Revenue recognition involves judgments and assessments of expected returns, and the likelihood of nonpayment by customers. The Company analyzes various factors, including a review of specific customer contracts and shipment terms, historical experience, creditworthiness of customers and current market and economic conditions in determining when to recognize revenue. Changes in judgments on these factors could impact the timing and amount of revenue recognized with a resulting impact on the timing and amount of operating income. For certain products, consigned inventory is maintained at customer locations, and revenue is typically recognized in the period that the consigned inventory is consumed. Royalty revenue is recognized based on licensee production statements received from the authorized manufacturers. Billed shipping and handling fees are recorded as sales revenue with the associated costs recorded within cost of products and services sold. The Company’s warranty policy provides that the products (or materials) delivered will meet its standard specifications for the products or any other specifications as may be expressly agreed to at time of purchase. All warranty claims must be received within 90 days from the date of delivery, unless some other period has been expressly agreed to within the terms of the sales agreement. The Company’s warranty costs have historically been insignificant. The Company records a current liability for estimated warranty claims with a corresponding charge to cost of products and services sold based upon current and historical experience and upon specific claims issues as they arise. In addition, the Company offers certain sales incentives based on sales levels as they are earned. For discussion of 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 and the Company’s planned adoption of the ASU in fiscal 2019 see “Recently Issued Accounting Standards” below. |
Research and Product Development Costs | Research and Product Development Costs Research and product development costs are expensed as incurred and include primarily engineering salaries, overhead and materials used in connection with research and development projects. Research and development expense amounted to $3,940, $3,696 and $2,792 for the years ended August 31, 2018, 2017 and 2016, respectively, and was recorded within selling, general and administrative expenses. |
Pension Plan | Pension Plan The Company accounts for its pension plans following the requirements of ASC Topic 715, “Compensation —Retirement Benefits” (“ASC 715”). ASC 715 requires an employer to: (a) recognize in its statement of financial position the funded status of a benefit plan; (b) measure defined benefit plan assets and obligations as of the end of the employer’s fiscal year (with limited exceptions); and (c) recognize as a component of other comprehensive income, net of tax, the gains or losses and prior service costs or credits that arise but are not recognized as components of net periodic benefit costs pursuant to prior existing guidance. |
Stock Based Compensation | Stock-Based Compensation In accordance with the accounting for stock-based compensation guidance, ASC Topic 718 “Compensation – Stock Compensation” (“ASC 718”), the Company measures and recognizes compensation expense for all share‑based payment awards made to employees and directors based on estimated fair values. This includes restricted stock, restricted stock units and stock options. The guidance allows for the continued use of the simplified method as the Company has concluded that its historical share option exercise experience does not provide a reasonable basis for estimating expected term. Stock‑based compensation expense recognized in fiscal years 2018, 2017 and 2016 was $2,128, $2,212 and $1,333, respectively. The fair value of options granted was estimated on the date of grant using the Black‑Scholes option pricing model with the following weighted average assumptions for the years ending August 31, 2018, 2017 and 2016: 2018 2017 2016 Expected dividend yield % % % Expected life 6.0 years 6.0 years 6.0 years Expected volatility % % % Risk-free interest rate 1.9 % 1.3 % 1.7 % Expected volatility is determined by looking at a combination of historical volatility over the past six years as well as implied future volatility. |
Translation of Foreign Currency | Translation of Foreign Currency The financial position and results of operations of the Company’s HumiSeal Europe Ltd and Chase Protective Coatings Ltd businesses are measured using the British pound as the functional currency. The financial position and results of operations of the Company’s HumiSeal Europe SARL business in France are measured using euros as the functional currency. The financial position and results of the Company’s HumiSeal India Private Limited business in India are measured using the Indian rupee as the functional currency. The functional currency for all our other operations is the U.S. dollar. Revenue and expenses of these international businesses have been translated at average exchange rates. 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 (a component of shareholders’ equity). Transaction gains and losses generated from the remeasurement of assets and liabilities denominated in currencies other than the functional currency of these international operations are included in other income (expense) on the consolidated statements of operations and were gains of $85, $307 and $2,152 for the fiscal years ended August 31, 2018, 2017 and 2016, respectively. |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method. Under this method, a deferred tax asset or liability is determined based upon the differences between the financial statement and tax bases of assets and liabilities as measured by the enacted tax rates that will be in effect when these differences reverse. Tax credits are recorded as a reduction in income taxes. Valuation allowances are provided if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company estimates contingent income tax liabilities based on the guidance for accounting for uncertain tax positions as prescribed in ASC Topic 740, “Income Taxes.” See Note 7 for more information on the Company’s income taxes, including information on the effects of the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) on our financial position and results of operations, including adjustments that were recorded during fiscal 2018 related to the Tax Act. |
Net Income Per Share | Net Income Per Share The Company has unvested share‑based payment awards with a right to receive nonforfeitable dividends, which are considered participating securities under ASC Topic 260, “Earnings Per Share” (“ASC 260”). The Company allocates earnings to participating securities and computes earnings per share using the two-class method. |
Comprehensive Income | Comprehensive Income Comprehensive income is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non‑owner sources, including foreign currency translation adjustments, unrealized gains and losses on marketable securities and adjustments related to the change in the funded status of the pension plans. |
Segments | Segments ASC Topic 280 “Segment Reporting” of the Financial Accounting Standards Board (“FASB”) codification establishes standards for reporting information about operating segments. The Company is organized into two reportable operating segments, an Industrial Materials segment and a Construction Materials segment. The segments are distinguished by the nature of the products we manufacture 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 and customized sealant and adhesive systems 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, polyurethane dispersions and superabsorbent polymers. Beginning June 23, 2016, September 30, 2016 and December 31, 2017, the Industrial Materials segment includes the acquired operations of HumiSeal India Private Limited, Resin Designs, LLC and Zappa Stewart, respectively. Each were obtained through acquisition. The operations of both HumiSeal India Private Limited and Resin Designs, LLC are included in the Company’s electronic and industrial coatings product line and the operations of Zappa Stewart are included in the Company’s specialty chemicals intermediates 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. Following the April 20, 2018 sale of the structural composites rod business, future product sales of composite materials and elements are not anticipated to be significant to the consolidated financial statements. 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. |
Recently Issued Accounting Standards and Recently Adopted Accounting Standards | Recently Issued Accounting Standards 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. Given the scope of work required to implement the recognition and disclosure requirements under the ASU, we began our assessment process during fiscal 2017. Chase continues to evaluate the impact of ASU No. 2014-09 on our consolidated financial statements and anticipates the new disclosure requirements and changes to process and controls will be significant. We expect revenue recognition for most of our products, which are shipments to OEMs based on individual purchase orders received, to remain largely unchanged. From a timing of revenue recognition standpoint (point in time versus over time), it is anticipated that certain products will be more affected than other products sold, since these certain products contain assets that a customer controls. Chase has considered customized products sold to customers having no alternative use and enforceable right to payment relating to those sales, and expects minimal impact on these types of orders. Guided by our scoping and risk assessment, we continue to conduct an ongoing comprehensive contract review in applying the guidance in Topic 606 focusing on the major steps in the five-step model outlined in the ASU. Chase will continue assessing system impacts, enhancing internal controls and financial reporting policies to address this standard’s requirements and risks, and finalizing our understanding of the financial impact of this standard on our consolidated financial statements, including the cumulative effect adjustment to be recorded upon implementation of this standard. The Company will utilize the modified retrospective method of adoption, coinciding with the start of fiscal 2019. At the adoption date, Chase anticipates the cumulative impact of revenue that would have been recognized over time will not be material to the consolidated financial statements, nor is the effect on retained earnings anticipated to be material to the consolidated financial statements. We will finalize the evaluation, quantify the impact and incorporate the disclosure requirements of ASU No. 2014-09 in our reporting process in the first fiscal quarter of 2019, for inclusion in our Quarterly Report on Form 10-Q for the period ending November 30, 2018. 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. 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 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. The impact of the application of this ASU on our consolidated financial statements and disclosures thereto will be dependent on the nature of acquisitions the Company may enter in fiscal 2019, and beyond. 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. The Company currently estimates that upon adoption in fiscal 2019, operating income will increase by $654 and $1,065 for the years ended August 31, 2018 and 2017, respectively, with offsetting expenses recorded to Other income (expense). The adoption of ASU 2017-07 is not anticipated to have any effect on the historically stated consolidated balance sheets or consolidated statement of cash flows. In May 2017, the FASB issued ASU No. 2017-09, "Scope of Modification Accounting." This ASU provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. ASU 2017-09 is effective for fiscal years beginning after December 15, 2017 (our fiscal year 2019), including interim periods within that reporting period. The impact of this ASU will be dependent on the nature and occurrence of such changes to the terms or conditions of a share-based payment award during the future effective period. In February 2018, the FASB issued ASU No. 2018-02, “Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” Under previously existing U.S. GAAP, the effects of changes in tax rates and laws on deferred tax balances are recorded as a component of income tax expense in the period in which the law was enacted. When deferred tax balances related to items originally recorded in accumulated other comprehensive income are adjusted, certain tax effects become stranded in accumulated other comprehensive income. The amendments in ASU 2018-02 allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017 (the “Tax Act”). The amendments in this ASU also require certain disclosures about stranded tax effects. The guidance is required for fiscal years beginning after December 15, 2018 (our fiscal year 2020), and interim periods within those fiscal years. Early adoption in any period is permitted. The Company is currently evaluating the effect that ASU No. 2018-02 will have on its financial statements and related disclosures. See Note 7 for additional information on the effects of the Tax Act on our financial position and result of operations, including adjustments that were recorded during fiscal 2018 related to the Tax Act. Recently Adopted Accounting Standards 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 stock-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 was 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 years ended August 31, 2018 and 2017 recognized an excess tax benefit from stock-based compensation of $1,921 and $1,917, respectively, within income tax expense on the 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 fiscal 2017 and 2018 (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. The Company anticipates the potential for increased periodic volatility in future effective tax rates based on the continued application of ASU No. 2016-09. Following the adoption of the new standard, the Company has elected to account for forfeitures as they occur. The Company did not adopt any new accounting standards in fiscal 2018. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Aug. 31, 2018 | |
Summary of Significant Accounting Policies | |
Schedule of estimated useful lives of property, plant and equipment | Buildings and improvements 15 to 40 years Machinery and equipment 3 to 10 years |
Schedule of weighted average assumptions used to estimate the fair value of options granted on the date of grant using the Black-Scholes option pricing model | 2018 2017 2016 Expected dividend yield % % % Expected life 6.0 years 6.0 years 6.0 years Expected volatility % % % Risk-free interest rate 1.9 % 1.3 % 1.7 % |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Aug. 31, 2018 | |
Inventories | |
Schedule of Inventories | 2018 2017 Raw materials $ 21,998 $ 11,636 Work in process 7,653 6,877 Finished goods 10,048 7,105 Total Inventory $ 39,699 $ 25,618 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Aug. 31, 2018 | |
Property, Plant and Equipment | |
Schedule of property, plant and equipment | 2018 2017 Land and improvements $ 6,499 $ 6,478 Buildings 19,484 19,447 Machinery and equipment 52,259 49,211 Leasehold improvements 1,612 1,049 Construction in progress 2,203 2,852 82,057 79,037 Accumulated depreciation (49,212) (44,277) Property, plant and equipment, net $ 32,845 $ 34,760 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Aug. 31, 2018 | |
Goodwill and Intangible Assets | |
Schedule of changes in the carrying value of goodwill | Industrial Construction Materials Consolidated Balance at August 31, 2016 $ $ $ Acquisition of Resin Designs, LLC 7,592 — Sale of the fiber optic cable components business (409) — (409) Foreign currency translation adjustment 28 (3) 25 Balance at August 31, 2017 $ 40,091 $ 10,693 $ 50,784 Acquisition of Zappa Stewart 34,138 — 34,138 Sale of structural composites rod business (230) — (230) Foreign currency translation adjustment 3 1 4 Balance at August 31, 2018 $ 74,002 $ 10,694 $ 84,696 |
Schedule of intangible assets subject to amortization | Weighted Average Gross Carrying Accumulated Net Carrying Amortization Period Value Amortization Value August 31, 2018 Patents and agreements years $ 1,863 $ 1,681 $ 182 Formulas and technology years 10,225 6,690 3,535 Trade names years 8,554 6,866 1,688 Customer lists and relationships years 98,727 38,802 59,925 $ 119,369 $ 54,039 $ 65,330 August 31, 2017 Patents and agreements years $ 1,845 $ 1,671 $ 174 Formulas and technology years 9,318 5,387 3,931 Trade names years 7,709 5,813 1,896 Customer lists and relationships years 70,180 29,335 40,845 $ 89,052 $ 42,206 $ 46,846 |
Schedule of estimated amortization expense related to intangible assets | Years ending August 31, 2019 12,451 2020 11,583 2021 11,054 2022 10,032 2023 6,768 |
Cash Surrender Value of Life _2
Cash Surrender Value of Life Insurance (Tables) | 12 Months Ended |
Aug. 31, 2018 | |
Cash Surrender Value of Life Insurance. | |
Schedule of cash surrender value of life insurance policies | 2018 2017 John Hancock $ 4,450 $ 4,450 Other life insurance carriers 80 80 Cash surrender value of life insurance policies $ 4,530 $ 4,530 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Aug. 31, 2018 | |
Long-Term Debt. | |
Schedule of long-term debt | 2018 2017 All-revolving credit facility with a borrowing capacity of $150,000 $ 25,000 $ — Long-term debt $ 25,000 $ — |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Aug. 31, 2018 | |
Income Taxes | |
Schedule of domestic and foreign pre-tax income | Year Ended August 31, 2018 2017 2016 United States $ 48,962 $ 52,723 $ 40,928 Foreign 8,003 8,169 9,182 $ 56,965 $ 60,892 $ 50,110 |
Schedule of provision (benefit) for income taxes | Year Ended August 31, 2018 2017 2016 Current: Federal $ 12,872 $ 17,714 $ 14,777 State 1,662 1,872 1,821 Foreign 1,761 1,555 2,023 Total current income tax provision 16,295 21,141 18,621 Deferred: Federal (2,214) (1,984) (879) State (263) (453) (324) Foreign 4 174 (115) Total deferred income tax benefit (2,473) (2,263) (1,318) Total income tax provision $ 13,822 $ 18,878 $ 17,303 |
Schedule of reconciliation of the effective income tax rate with the U.S. federal statutory income tax rate | Year Ended August 31, 2018 2017 2016 Federal statutory rates 25.7 % 35.0 % 35.0 % Adjustment resulting from the tax effect of: State and local taxes, net of federal benefit % % % Domestic production deduction % % % Foreign tax rate differential % % % Adjustment to uncertain tax position % % % Research credit generated % % % Stock Compensation % % % Permanent items % % % Tax effect of undistributed earnings % % % Other % % % Change in valuation allowance % % % Deferred income tax remeasurement % % % Effective income tax rate 24.3 % 31.0 % 34.5 % |
Summary of the tax effect of temporary differences on the Company's income tax provision | Year Ended August 31, 2018 2017 2016 Current income tax provision $ 16,295 $ 21,141 $ 18,621 Deferred provision (benefit): Allowance for doubtful accounts 74 8 34 Inventories 390 139 (80) Pension expense 2,358 (39) (542) Deferred compensation 98 250 272 Loan finance costs — 5 5 Accruals 216 (270) (95) Warranty reserve 70 (89) 19 Depreciation and amortization (3,726) (2,714) (2,166) Restricted stock grant 244 (214) (8) Unrepatriated earnings (2,395) 832 1,338 Valuation allowance 60 24 — Foreign amortization 17 (2) (21) Other accrued expenses 121 (193) (74) Total deferred income tax benefit (2,473) (2,263) (1,318) Total income tax provision $ 13,822 $ 18,878 $ 17,303 |
Summary of tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities | As of August 31, 2018 2017 Deferred tax assets: Allowance for doubtful accounts $ 154 $ 228 Inventories 982 1,462 Accruals 584 800 Warranty reserve 50 120 Pension accrual 2,567 5,078 Deferred compensation 260 358 Deferred revenue — 334 Foreign currency loss on previously taxed income 96 — Loan finance costs 27 27 Restricted stock grants 547 792 Non-qualified stock options 94 26 Other 296 280 5,657 9,505 Deferred tax liabilities: Prepaid liabilities (25) (29) Unrepatriated earnings — (2,298) Unrealized gain/loss on restricted investments (112) (177) Depreciation and amortization (4,173) (5,362) Other — (25) (4,310) (7,891) Net deferred tax assets (liabilities) $ 1,347 $ 1,614 |
Summary of the Company's adjustments to its uncertain tax positions | 2018 2017 2016 Balance, at beginning of the year $ 1,257 $ 1,229 $ 1,249 Increase for tax positions related to the current year 47 65 37 Increase for tax positions related to prior years 595 16 98 Increase for interest and penalties 71 6 102 Decreases for lapses of statute of limitations (81) (59) (257) Balance, at end of year $ 1,889 $ 1,257 $ 1,229 |
Operating Leases (Tables)
Operating Leases (Tables) | 12 Months Ended |
Aug. 31, 2018 | |
Operating Leases | |
Schedule of future minimum lease payments under noncancelable operating leases | Future Operating Year ending August 31, Lease Payments 2019 $ 2,144 2020 2,054 2021 1,865 2022 1,284 2023 1,128 2024 and thereafter 3,302 Total future minimum lease payments $ 11,777 |
Benefits and Pension Plans (Tab
Benefits and Pension Plans (Tables) | 12 Months Ended |
Aug. 31, 2018 | |
Pensions and Other Postretirement Benefits | |
Schedule of the status of the Company's pension plans | Year Ended August 31, 2018 2017 2016 Change in benefit obligation Projected benefit obligation at beginning of year $ 22,673 $ 23,636 $ 20,401 Service cost 283 288 295 Interest cost 629 681 728 Actuarial (gain) loss 17 (533) 2,636 Settlements — (313) (376) Benefits paid (1,742) (1,086) (48) Projected benefit obligation at end of year $ 21,860 $ 22,673 $ 23,636 Change in plan assets Fair value of plan assets at beginning of year $ 9,003 $ 8,440 $ 8,120 Actual return on plan assets 509 757 422 Employer contribution 2,085 1,205 322 Settlements — (313) (376) Benefits paid (1,742) (1,086) (48) Fair value of plan assets at end of year $ 9,855 $ 9,003 $ 8,440 Funded status at end of year $ (12,005) $ (13,670) $ (15,196) Year Ended August 31, 2018 2017 2016 Amounts recognized in consolidated balance sheets Noncurrent assets $ 301 $ 566 $ 382 Current liabilities (1,570) (1,570) (15) Noncurrent liabilities (10,736) (12,666) (15,563) Net amount recognized in consolidated balance sheets $ (12,005) $ (13,670) $ (15,196) Actuarial present value of benefit obligation and funded status Accumulated benefit obligations $ 20,075 $ 21,007 $ 22,023 Projected benefit obligations $ 21,858 $ 22,673 $ 23,636 Plan assets at fair value $ 9,855 $ 9,003 $ 8,440 Amounts recognized in accumulated other comprehensive income Prior service cost $ 54 $ 54 $ 57 Net actuarial loss 9,377 9,890 11,561 Adjustment to pre-tax accumulated other comprehensive income $ 9,431 $ 9,944 $ 11,618 Year Ended August 31, 2018 2017 2016 Other changes in plan assets and benefit obligations recognized in other comprehensive income Net (gain)/loss $ (704) $ 1,277 $ 511 Amortization of loss (484) (895) (574) Supplemental plan assumption change 676 (2,038) 2,219 Amortization of prior service cost (3) (3) (3) Effect of settlement on accumulated other comprehensive income — (14) (13) Total recognized in other comprehensive income (515) (1,673) 2,140 Net periodic pension cost 937 1,353 1,097 Total recognized in net periodic pension cost and other comprehensive income $ 422 $ (320) $ 3,237 Estimated amounts that will be amortized from accumulated comprehensive income over the next fiscal year Prior service cost $ 3 $ 3 $ 3 Net actuarial loss 475 485 895 |
Schedule of components of net periodic benefit cost | 2018 2017 2016 Components of net periodic benefit cost Service cost $ 283 $ 288 $ 295 Interest cost 629 681 728 Expected return on plan assets (462) (528) (516) Amortization of prior service cost 3 3 3 Amortization of accumulated loss 484 895 574 Settlement and curtailment loss — 14 13 Net periodic benefit cost $ 937 $ 1,353 $ 1,097 |
Schedule of weighted-average assumptions used to determine benefit obligations | 2018 2017 2016 Discount rate Qualified plan 3.80 % 3.30 % 2.90 % Supplemental plan 3.57 % 2.73 % 2.97 % NEPTCO plan 3.59 % 2.95 % 2.55 % Rate of compensation increase Qualified and Supplemental plan 3.50 % 3.50 % 3.50 % NEPTCO plan — % — % — % |
Schedule of weighted-average assumptions used to determine net periodic benefit cost | 2018 2017 2016 Discount rate Qualified plan 3.30 % 2.90 % 4.16 % Supplemental plan 2.73 % 2.97 % 3.22 % NEPTCO plan 2.95 % 2.55 % 4.30 % Expected long-term return on plan assets Qualified plan 5.40 % 6.50 % 6.50 % Supplemental plan — % — % — % NEPTCO plan 5.20 % 6.50 % 6.50 % Rate of compensation increase Qualified and Supplemental plan 3.50 % 3.50 % 3.50 % NEPTCO plan — % — % — % |
Schedule of pension plans' assets by asset category | Fair value measurements at Fair value measurements at August 31, 2018 August 31, 2017 Significant Significant Quoted prices other Significant Quoted prices other Significant in active observable unobservable in active observable unobservable August 31, markets inputs inputs August 31, markets inputs inputs 2018 (Level 1) (Level 2) (Level 3) 2017 (Level 1) (Level 2) (Level 3) Asset Category Equity securities $ 4,533 $ 4,533 $ — $ — $ 3,589 $ 3,589 $ — $ — Debt securities 5,322 5,322 — — 5,336 5,336 — — Other — — — — 78 78 — — Total $ 9,855 $ 9,855 $ — $ — $ 9,003 $ 9,003 $ — $ — |
Schedule of pension benefit payments (which include expected future service) expected to be paid | Year ending August 31, Pension Benefits 2019 $ 4,724 2020 2,132 2021 1,773 2022 1,751 2023 2,524 2024-2028 $ 7,647 |
Qualified Plan | |
Pensions and Other Postretirement Benefits | |
Schedule of target allocation and weighted-average asset allocations | Target Allocation Percentage of Plan Assets as of August 31, Asset Category Range 2018 2017 2016 Equity securities 10-80 % 46 % 39 % 46 % Debt securities 20-70 % 54 % 61 % 54 % Other 0-100 % — % — % — % Total 100 % 100 % 100 % 100 % |
NEPTCO | Qualified Plan | |
Pensions and Other Postretirement Benefits | |
Schedule of target allocation and weighted-average asset allocations | Target Allocation Percentage of Plan Assets as of August 31, Asset Category Range 2018 2017 2016 Equity securities 10-80 % 46 % 43 % 43 % Debt securities 20-70 % 54 % 51 % 50 % Other 0-100 % — % 6 % 7 % Total 100 % 100 % 100 % 100 % |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Aug. 31, 2018 | |
Stockholders' Equity | |
Summary of restricted stock plan | Non Employee Weighted Average Officers Weighted Average Unvested restricted stock at August 31, 2015 5,361 $ 36.19 48,269 $ 35.68 Granted 4,554 $ 48.12 25,330 $ 39.07 Vested (5,361) $ 36.19 (18,271) $ 29.72 Forfeited or cancelled — — Unvested restricted stock at August 31, 2016 4,554 $ 48.12 55,328 $ 39.20 Granted 2,407 $ 91.05 42,160 $ 60.67 Vested (4,554) $ 48.12 (23,516) $ 38.81 Forfeited or cancelled — — Unvested restricted stock at August 31, 2017 2,407 $ 91.05 73,972 $ 51.56 Granted 2,779 $ 101.05 13,922 $ 83.65 Vested (2,407) $ 91.05 (22,315) $ 41.35 Forfeited or cancelled — — Unvested restricted stock at August 31, 2018 2,779 $ 101.05 65,579 $ 61.85 |
Summary of information about stock options outstanding | Options Outstanding Options Exercisable Exercise Prices Number Weighted Avg. Weighted Aggregate Number Weighted Aggregate $ 16.00 7,597 4.1 $ 16.00 $ 820 7,597 $ 16.00 $ 820 $ 29.72 14,609 5.0 $ 29.72 $ 1,377 14,609 $ 29.72 $ 1,377 $ 35.50 15,571 6.0 $ 35.50 $ 1,377 15,571 $ 35.50 $ 1,377 $ 39.50 15,671 7.0 $ 39.50 $ 1,323 15,671 $ 39.50 $ 1,323 $ 64.37 35,514 8.0 $ 64.37 $ 2,116 7,756 $ 64.37 $ 462 $ 93.50 9,622 9.0 $ 93.50 $ 293 3,206 $ 93.50 $ 98 $ 104.00 606 9.5 $ 104.00 $ 12 202 $ 104.00 $ 4 99,190 6.9 $ 50.17 $ 7,318 64,612 $ 39.43 $ 5,461 |
Summary of the transactions of the Company's stock option plans | Officers Weighted Options outstanding at August 31, 2015 313,389 $ 16.92 Granted 21,275 $ 39.50 Exercised (140,113) $ 15.27 Forfeited or cancelled — Options outstanding at August 31, 2016 194,551 $ 20.57 Granted 38,591 $ 64.37 Exercised (80,168) $ 15.62 Forfeited or cancelled — Options outstanding at August 31, 2017 152,974 $ 34.21 Granted 10,228 $ 94.12 Exercised (64,012) $ 19.06 Forfeited or cancelled — Options outstanding at August 31, 2018 99,190 $ 50.17 Options exercisable at August 31, 2018 64,612 $ 39.43 |
Segment Data (Tables)
Segment Data (Tables) | 12 Months Ended |
Aug. 31, 2018 | |
Segment Data | |
Summary of information about the Company's reportable segments | Years Ended August 31, 2018 2017 2016 Revenue Industrial Materials $ 232,288 $ 202,956 $ 181,728 Construction Materials 51,900 49,604 56,366 Total $ 284,188 $ 252,560 $ 238,094 Income before taxes Industrial Materials $ 66,076 (a) $ 67,561 (c) $ 53,530 (e) Construction Materials 18,178 18,205 19,967 Total for reportable segments 84,254 85,766 73,497 Corporate and common costs (27,289) (b) (24,874) (d) (23,387) (f) Total $ 56,965 $ 60,892 $ 50,110 Includes the following costs by segment: Industrial Materials Interest $ 938 $ 629 $ 791 Depreciation 4,033 3,423 3,918 Amortization 10,499 7,839 6,427 Construction Materials Interest $ 234 $ 210 $ 263 Depreciation 753 718 761 Amortization 1,308 1,288 1,409 (a) Includes $1,070 of expenses related to inventory step-up in fair value attributable to the December 2017 acquisition of Zappa Stewart, $1,085 on the gain on sale of license related to the structural composites product line recorded in the second quarter of fiscal 2018, $1,480 gain on sale of business related to the April 2018 sale of the structural composites rod business and $1,272 of expense related to the closure and exit of our Pawtucket, RI location in the fourth quarter of fiscal 2018 (b) Includes $393 in acquisition-related expenses attributable to the December 2017 acquisition of Zappa Stewart (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 (d) Includes $584 in acquisition-related expenses attributable to the September 2016 acquisition of certain assets of Resin Designs, facility exit and demolition costs of $70 related to the Company’s Randolph, MA location, a $792 gain related to the November 2016 sale of the Company’s Paterson, NJ location, a $68 gain related to the December 2016 sale of the Company’s former corporate headquarters in Bridgewater, MA and $14 of pension-related settlement costs due to the timing of lump sum distributions (e) Includes 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 (f) Includes $935 in Randolph, MA facility exit and demolition costs, a $877 gain on the write-down of an annuity and $13 of pension-related settlement costs due to the timing of lump sum distributions |
Schedule of total assets for the Company's reportable segments | As of August 31, 2018 2017 Total Assets Industrial Materials $ 229,559 $ 156,263 Construction Materials 36,757 38,162 Total for reportable segments 266,316 194,425 Corporate and common assets 50,153 60,313 Total $ 316,469 $ 254,738 |
Export Sales and Foreign Oper_2
Export Sales and Foreign Operations (Tables) | 12 Months Ended |
Aug. 31, 2018 | |
Export Sales and Foreign Operations | |
Schedule of revenue by country | Years Ended August 31, 2018 2017 2016 Revenue United States $ 244,225 $ 217,745 $ 197,776 United Kingdom 20,598 16,691 24,048 All other foreign (1) 19,365 18,124 16,270 Total $ 284,188 $ 252,560 $ 238,094 |
Schedule of long-lived assets by country | As of August 31, 2018 2017 Long-Lived Assets United States Property, plant and equipment, net $ 28,770 $ 30,253 Goodwill and Intangible assets, less accumulated amortization 143,539 90,673 United Kingdom Property, plant and equipment, net 2,911 3,184 Goodwill and Intangible assets, less accumulated amortization 5,239 5,685 All other foreign Property, plant and equipment, net 1,164 1,323 Goodwill and Intangible assets, less accumulated amortization 1,248 1,272 Total Property, plant and equipment, net $ 32,845 $ 34,760 Goodwill and Intangible assets, less accumulated amortization $ 150,026 $ 97,630 |
Supplemental Cash Flow Data (Ta
Supplemental Cash Flow Data (Tables) | 12 Months Ended |
Aug. 31, 2018 | |
Supplemental Cash Flow Data | |
Schedule of supplemental cash flow information | 2018 2017 2016 Income taxes paid $ 20,142 $ 21,025 $ 17,550 Interest paid $ 915 $ 786 $ 1,059 Noncash Investing and Financing Activities Common stock received for payment of stock option exercises $ 1,028 $ 1,158 $ 2,015 Property, plant and equipment additions included in accounts payable $ 197 $ 220 $ 22 Supplemental cash flow information as related to acquisitions and divestitures for the years ended August 31, 2018, 2017 and 2016 is as follows: 2018 2017 2016 Acquisition of Zappa Stewart Current assets $ 10,478 Property, plant & equipment 1,872 Goodwill and Intangible assets 64,378 Deferred tax liability (2,626) Accounts payable and accrued liabilities (633) Payments for acquisitions (73,469) Sale of Structural Composites Rod Business Inventory $ (522) Goodwill (230) Gain on sale of business (1,480) Cash received from sale of business, net of transaction costs 2,232 Sale of Structural Composites License Property and equipment $ (26) Gain on sale of license (1,085) Accrued income taxes 111 Cash received from sale of license 1,000 Acquisition of Resin Designs Current assets $ 3,240 Property, plant & equipment 623 Goodwill and Intangible assets 27,042 Accounts payable and accrued liabilities (635) Payments for acquisitions (30,270) Sale of Fiber Optic Cable Components product line Inventory $ (1,167) Property, plant and equipment (166) Goodwill and Intangible assets (512) Gain on sale of business (2,013) Due from sale of business 400 Cash received from sale of product line, net of transaction costs 3,458 Acquisition of HumiSeal India Private Limited Current assets (excluding cash) $ 55 Property, equipment and goodwill 1,134 Accounts payable and accrued liabilities (28) Payments for acquisitions, net of cash acquired (1,161) Sale of RodPack Business Property, plant and equipment $ (846) Intangible assets (309) Gain on sale of business (1,031) Due from sale of business $ (457) 457 Cash received from sale of business 457 1,729 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Aug. 31, 2018 | |
Zappa Stewart | |
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 $ 3,670 Inventory 6,796 Prepaid expenses and other current assets 12 Property, plant & equipment 1,872 Goodwill 34,138 Intangible assets 30,240 Deferred tax liability (2,626) Accounts payable and accrued liabilities (633) Total purchase price $ 73,469 |
Schedule of identifiable intangible assets purchased as part of business acquisition | Weighted Average Intangible Asset Amount Useful life Customer relationships $ 28,500 7.9 years Technology 900 7 years Trade names 840 4 years Total intangible assets $ 30,240 |
Schedule of pro forma information | Years Ended August 31, 2018 2017 Revenue $ $ Net income Net income available to common shareholders, per common and common equivalent share Basic earnings per share $ 4.75 $ 4.45 Diluted earnings per share $ 4.70 $ 4.40 |
Resin Designs | |
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 | Year Ended August 31, 2017 Revenue $ Net income Net income available to common shareholders, per common and common equivalent share Basic earnings per share $ 4.56 Diluted earnings per share $ 4.51 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Aug. 31, 2018 | |
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 August 31, 2018 $ 1,090 $ 961 129 — Restricted investments August 31, 2017 $ 964 $ 926 38 — |
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 August 31, 2018 $ 25,000 $ — 25,000 — Long-term debt August 31, 2017 $ — $ — — — |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 12 Months Ended |
Aug. 31, 2018 | |
Net Income Per Share | |
Schedule of determination of earnings per share under the two-class method | Years Ended August 31, 2018 2017 2016 Net income attributable to Chase Corporation $ 43,143 $ 42,014 $ 32,807 Less: Allocated to participating securities 410 454 266 Available to common shareholders $ 42,733 $ 41,560 $ 32,541 Basic weighted average shares outstanding 9,296,648 9,249,343 9,167,333 Additional dilutive common stock equivalents 69,423 108,071 126,744 Diluted weighted average shares outstanding 9,366,071 9,357,414 9,294,077 Net income available to common shareholders, per common and common equivalent share Basic $ 4.60 $ 4.49 $ 3.55 Diluted $ 4.56 $ 4.44 $ 3.50 |
Selected Quarterly Financial _2
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Aug. 31, 2018 | |
Selected Quarterly Financial Data (Unaudited) | |
Schedule of unaudited operating results for each of the Company's quarters | Fiscal Year 2018 Quarters First Second Third Fourth Year Net Sales $ 60,577 $ 64,735 $ 77,653 $ 75,997 $ 278,962 Gross Profit on Sales 23,682 22,744 29,401 27,999 103,826 Net income $ 8,315 $ 10,122 $ 13,543 $ 11,163 $ 43,143 Net income available to common shareholders, per common and common equivalent share: Basic $ 0.89 $ 1.08 $ 1.44 $ 1.19 $ 4.60 Diluted $ 0.88 $ 1.07 $ 1.43 $ 1.18 $ 4.56 Fiscal Year 2017 Quarters First Second Third Fourth Year Net Sales $ 60,269 $ 56,288 $ 63,641 $ 67,679 $ 247,877 Gross Profit on Sales 24,980 23,430 26,130 27,301 101,841 Net income $ 10,363 $ 8,383 $ 11,855 $ 11,413 $ 42,014 Net income available to common shareholders, per common and common equivalent share: Basic $ 1.11 $ 0.90 $ 1.27 $ 1.22 $ 4.49 Diluted $ 1.10 $ 0.89 $ 1.26 $ 1.21 $ 4.44 |
Valuation and Qualifying Acco_2
Valuation and Qualifying Accounts (Tables) | 12 Months Ended |
Aug. 31, 2018 | |
Valuation and Qualifying Accounts | |
Schedule of Company's accounts receivable reserve | Year ended Balance at Charges to Deductions to Balance at August 31, 2018 $ 456 $ 1,138 $ (1,035) $ 559 August 31, 2017 $ 830 $ 197 $ (571) $ 456 August 31, 2016 $ 705 $ 196 $ (71) $ 830 |
Schedule of Company's warranty reserve | Year ended Balance at Charges to Deductions to Balance at August 31, 2018 $ 220 $ — $ (220) $ — August 31, 2017 $ — $ 220 $ — $ 220 August 31, 2016 $ 230 $ 143 $ (373) $ — |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Tables) | 12 Months Ended |
Aug. 31, 2018 | |
Accumulated Other Comprehensive Income | |
Schedule of changes in accumulated other comprehensive income (loss), net of tax | Change in Funded Foreign Currency Restricted Status of Translation Investments Pension Plans Adjustment Total Balance at August 31, 2016 $ 54 $ (7,336) $ (8,197) $ (15,479) Other comprehensive gains (losses) before reclassifications 155 221 788 1,164 Reclassifications to net income of previously deferred (gains) losses (88) 934 — 846 Other comprehensive income (loss) 67 1,155 788 2,010 Balance at August 31, 2017 $ 121 $ (6,181) $ (7,409) $ (13,469) Other comprehensive gains (losses) before reclassifications 77 (314) 743 506 Reclassifications to net income of previously deferred (gains) losses (72) 699 — 627 Other comprehensive income (loss) 5 385 743 1,133 Balance at August 31, 2018 $ 126 $ (5,796) $ (6,666) $ (12,336) |
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 Year Ended Year Ended Location of Gain (Loss) Reclassified from Accumulated August 31, 2018 August 31, 2017 Other Comprehensive Income (Loss) into Income Gains on Restricted Investments: Realized gain on sale of restricted investments $ (97) $ (127) Selling, general and administrative expenses Tax expense (benefit) 25 39 Gain net of tax $ (72) $ (88) Loss on Funded Pension Plan adjustments: Change in funded status of pension plans $ 117 $ 98 Cost of products and services sold Change in funded status of pension plans $ 820 $ 1,255 Selling, general and administrative expenses Tax expense (benefit) (238) (419) Loss net of tax $ 699 $ 934 Total net loss reclassified for the period $ 627 $ 846 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Acquisition (Details) - USD ($) $ / shares in Units, $ in Thousands | Nov. 13, 2018 | Jun. 25, 2018 | Apr. 20, 2018 | Apr. 03, 2017 | Sep. 30, 2016 | Jun. 23, 2016 | Oct. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | Nov. 30, 2015 | Aug. 31, 2018 | May 31, 2018 | Feb. 28, 2018 | May 31, 2017 | Nov. 30, 2016 | May 31, 2016 | Nov. 30, 2015 | Aug. 31, 2018 | Aug. 31, 2017 | Aug. 31, 2016 |
Basis of Presentation | ||||||||||||||||||||
Minimum percentage of ownership interest in investments in unconsolidated entities under the equity method | 20.00% | |||||||||||||||||||
Exit costs | $ 1,272 | $ 70 | $ 935 | |||||||||||||||||
Annual cash dividends declared per share | $ 0.80 | $ 0.70 | $ 0.65 | |||||||||||||||||
Principal payment | $ 40,000 | $ 43,400 | $ 8,400 | |||||||||||||||||
Sale | ||||||||||||||||||||
Proceeds from sale of businesses | 2,232 | $ 3,915 | $ 1,729 | |||||||||||||||||
Subsequent Events | ||||||||||||||||||||
Basis of Presentation | ||||||||||||||||||||
Annual cash dividends declared per share | $ 0.80 | |||||||||||||||||||
Principal payment | $ 10,000 | |||||||||||||||||||
Resin Designs | ||||||||||||||||||||
Basis of Presentation | ||||||||||||||||||||
Purchase price | $ 30,270 | |||||||||||||||||||
Acquisition | ||||||||||||||||||||
Contingent purchase price paid for acquisition | $ 30,270 | |||||||||||||||||||
Acquisition related expenses | $ 584 | |||||||||||||||||||
Spray Products Private Limited | ||||||||||||||||||||
Basis of Presentation | ||||||||||||||||||||
Purchase price | $ 1,161 | |||||||||||||||||||
Zappa Stewart | ||||||||||||||||||||
Basis of Presentation | ||||||||||||||||||||
Purchase price | $ 73,469 | |||||||||||||||||||
Acquisition | ||||||||||||||||||||
Acquisition related expenses | $ 393 | |||||||||||||||||||
Credit Agreement | Subsequent Events | ||||||||||||||||||||
Basis of Presentation | ||||||||||||||||||||
Principal payment | $ 10,000 | |||||||||||||||||||
Fiber Optic Cable Components Product Line | ||||||||||||||||||||
Basis of Presentation | ||||||||||||||||||||
Total proceeds received or to be received | $ 3,858 | |||||||||||||||||||
Sale | ||||||||||||||||||||
Proceeds from sale of businesses | $ 3,458 | |||||||||||||||||||
Gain on assets sold | $ 2,013 | |||||||||||||||||||
Fiber Optic Cable Components Product Line | Subsequent Events | ||||||||||||||||||||
Sale | ||||||||||||||||||||
Proceeds from sale of businesses | $ 400 | |||||||||||||||||||
RodPack Business | ||||||||||||||||||||
Sale | ||||||||||||||||||||
Proceeds from sale of businesses | $ 2,186 | $ 229 | $ 1,500 | |||||||||||||||||
Structural Composites Rod Business | ||||||||||||||||||||
Basis of Presentation | ||||||||||||||||||||
Total proceeds received or to be received | $ 2,232 | |||||||||||||||||||
Sale | ||||||||||||||||||||
Proceeds from sale of businesses | $ 157 | $ 2,075 | ||||||||||||||||||
Gain on assets sold | $ 1,480 | |||||||||||||||||||
Pawtucket, RI Manufacturing Facility | ||||||||||||||||||||
Basis of Presentation | ||||||||||||||||||||
Restructuring Period | 2 months | |||||||||||||||||||
Exit costs | 1,272 | $ 1,272 | ||||||||||||||||||
Cash-related employee-related, logistics and uncapitalized facility improvement costs | 590 | |||||||||||||||||||
Non-cash-related accelerated depreciation expense | $ 682 | |||||||||||||||||||
Minimum | Zappa Stewart | ||||||||||||||||||||
Basis of Presentation | ||||||||||||||||||||
Combined revenue | $ 24 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - PPE (Details) - 12 months ended Aug. 31, 2018 | Total | segment | item |
Segment Information | |||
Number of Operating Segments | 2 | ||
Number of Reporting Units | 12 | 12 | |
Buildings and improvements | Minimum | |||
Property, plant and equipment | |||
Estimated useful life | 15 years | ||
Buildings and improvements | Maximum | |||
Property, plant and equipment | |||
Estimated useful life | 40 years | ||
Machinery and equipment | Minimum | |||
Property, plant and equipment | |||
Estimated useful life | 3 years | ||
Machinery and equipment | Maximum | |||
Property, plant and equipment | |||
Estimated useful life | 10 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Restricted Investments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 31, 2018 | Aug. 31, 2017 | Aug. 31, 2016 | |
Restricted Investments and Deferred Compensation | |||
Restricted investments | $ 1,090 | $ 964 | |
Revenue Recognition | |||
Period during which warranty claims must be received from the date of delivery | 90 days | ||
Research and Product Development Costs | |||
Research and development expense | $ 3,940 | 3,696 | $ 2,792 |
Stock Based Compensation | |||
Stock-based compensation expense | $ 2,128 | $ 2,212 | $ 1,333 |
Weighted average assumptions used to estimate the fair value of options granted | |||
Expected Dividend yield (as a percent) | 0.90% | 1.50% | 1.70% |
Expected life | 6 years | 6 years | 6 years |
Expected volatility (as a percent) | 34.70% | 38.70% | 41.20% |
Risk-free interest rate (as a percent) | 1.90% | 1.30% | 1.70% |
Historical volatility period used to determine expected volatility rate | 6 years |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - AOCI (Details) $ in Thousands | 12 Months Ended | ||
Aug. 31, 2018USD ($)segment | Aug. 31, 2017USD ($) | Aug. 31, 2016USD ($) | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Number of Operating Segments | segment | 2 | ||
Foreign currency translation adjustment | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Foreign currency translation adjustment | $ | $ 85 | $ 307 | $ 2,152 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - ASU update (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 31, 2018 | Aug. 31, 2017 | Aug. 31, 2016 | |
Recent Accounting Pronouncements | |||
Retained earnings | $ 245,049 | $ 209,403 | |
Operating income | 55,090 | 58,134 | $ 47,782 |
ASU No. 2016-09 | |||
Recent Accounting Pronouncements | |||
Excess tax benefit | 1,921 | 1,917 | |
ASU 2017-07 | |||
Recent Accounting Pronouncements | |||
Operating income | $ 654 | $ 1,065 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Aug. 31, 2018 | Aug. 31, 2017 |
Inventories | ||
Raw materials | $ 21,998 | $ 11,636 |
Work in process | 7,653 | 6,877 |
Finished goods | 10,048 | 7,105 |
Total Inventory | $ 39,699 | $ 25,618 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Aug. 31, 2018 | Aug. 31, 2017 |
Property, plant and equipment | ||
Property, plant and equipment, gross | $ 82,057 | $ 79,037 |
Accumulated depreciation | (49,212) | (44,277) |
Property, plant and equipment, net | 32,845 | 34,760 |
Land and improvements | ||
Property, plant and equipment | ||
Property, plant and equipment, gross | 6,499 | 6,478 |
Buildings | ||
Property, plant and equipment | ||
Property, plant and equipment, gross | 19,484 | 19,447 |
Machinery and equipment | ||
Property, plant and equipment | ||
Property, plant and equipment, gross | 52,259 | 49,211 |
Leasehold improvements | ||
Property, plant and equipment | ||
Property, plant and equipment, gross | 1,612 | 1,049 |
Construction in progress | ||
Property, plant and equipment | ||
Property, plant and equipment, gross | $ 2,203 | $ 2,852 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Goodwill (Details) | 12 Months Ended | ||||
Aug. 31, 2018USD ($)segment | Aug. 31, 2018USD ($)item | Aug. 31, 2018USD ($) | Aug. 31, 2017USD ($) | Sep. 30, 2016USD ($) | |
Changes in the carrying value of goodwill | |||||
Balance at the beginning of the period | $ 50,784,000 | $ 43,576,000 | |||
Acquisition of Zappa Stewart | 34,138,000 | ||||
Sale of the fiber optic cable components business | (230,000) | (409,000) | |||
Foreign currency translation adjustment | 4,000 | 25,000 | |||
Balance at the end of the period | 84,696,000 | 50,784,000 | |||
Number of operating segments | segment | 2 | ||||
Number of reporting units | 12 | 12 | |||
Impairment of goodwill | 0 | ||||
Goodwill deductible for income tax purposes | $ 35,055,000 | $ 35,055,000 | 35,055,000 | ||
Resin Designs | |||||
Changes in the carrying value of goodwill | |||||
Acquisition of Zappa Stewart | 7,592,000 | ||||
Goodwill deductible for income tax purposes | $ 7,592,000 | ||||
Industrial Materials | |||||
Changes in the carrying value of goodwill | |||||
Balance at the beginning of the period | 40,091,000 | 32,880,000 | |||
Acquisition of Zappa Stewart | 34,138,000 | ||||
Sale of the fiber optic cable components business | (230,000) | (409,000) | |||
Foreign currency translation adjustment | 3,000 | 28,000 | |||
Balance at the end of the period | 74,002,000 | 40,091,000 | |||
Industrial Materials | Resin Designs | |||||
Changes in the carrying value of goodwill | |||||
Acquisition of Zappa Stewart | 7,592,000 | ||||
Construction Materials | |||||
Changes in the carrying value of goodwill | |||||
Balance at the beginning of the period | 10,693,000 | 10,696,000 | |||
Foreign currency translation adjustment | 1,000 | (3,000) | |||
Balance at the end of the period | $ 10,694,000 | $ 10,693,000 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 31, 2018 | Aug. 31, 2017 | Aug. 31, 2016 | |
Goodwill and intangible assets | |||
Gross Carrying Value | $ 119,369 | $ 89,052 | |
Accumulated Amortization | 54,039 | 42,206 | |
Net Carrying Value | 65,330 | 46,846 | |
Aggregate amortization expense | 11,807 | $ 9,127 | $ 7,836 |
Estimated amortization expense | |||
2,019 | 12,451 | ||
2,020 | 11,583 | ||
2,021 | 11,054 | ||
2,022 | 10,032 | ||
2,023 | $ 6,768 | ||
Patents and agreements | |||
Goodwill and intangible assets | |||
Weighted-Average Amortization Period | 14 years 4 months 24 days | 14 years 4 months 24 days | |
Gross Carrying Value | $ 1,863 | $ 1,845 | |
Accumulated Amortization | 1,681 | 1,671 | |
Net Carrying Value | $ 182 | $ 174 | |
Formulas and technology | |||
Goodwill and intangible assets | |||
Weighted-Average Amortization Period | 7 years 9 months 18 days | 7 years 9 months 18 days | |
Gross Carrying Value | $ 10,225 | $ 9,318 | |
Accumulated Amortization | 6,690 | 5,387 | |
Net Carrying Value | $ 3,535 | $ 3,931 | |
Trade names | |||
Goodwill and intangible assets | |||
Weighted-Average Amortization Period | 5 years 9 months 18 days | 6 years | |
Gross Carrying Value | $ 8,554 | $ 7,709 | |
Accumulated Amortization | 6,866 | 5,813 | |
Net Carrying Value | $ 1,688 | $ 1,896 | |
Customer lists and relationships | |||
Goodwill and intangible assets | |||
Weighted-Average Amortization Period | 9 years 1 month 6 days | 9 years 7 months 6 days | |
Gross Carrying Value | $ 98,727 | $ 70,180 | |
Accumulated Amortization | 38,802 | 29,335 | |
Net Carrying Value | $ 59,925 | $ 40,845 |
Cash Surrender Value of Life _3
Cash Surrender Value of Life Insurance (Details) - USD ($) $ in Thousands | Aug. 31, 2018 | Aug. 31, 2017 |
Cash Surrender Value of Life Insurance | ||
Loans related to life insurance policies | $ 5 | $ 5 |
Cash surrender value of life insurance | 4,530 | 4,530 |
John Hancock | ||
Cash Surrender Value of Life Insurance | ||
Cash surrender value of life insurance, gross | 4,450 | 4,450 |
Other life insurance carriers | ||
Cash Surrender Value of Life Insurance | ||
Cash surrender value of life insurance, gross | $ 80 | $ 80 |
Long-Term Debt (Details)
Long-Term Debt (Details) $ in Thousands | Dec. 15, 2016USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2017USD ($) | Aug. 31, 2018USD ($) | Aug. 31, 2018USD ($) | Aug. 31, 2017USD ($) | Aug. 31, 2016USD ($) |
Long-term debt | |||||||
Principal payment | $ 40,000 | $ 43,400 | $ 8,400 | ||||
Subsequent Events | |||||||
Long-term debt | |||||||
Principal payment | $ 10,000 | ||||||
Zappa Stewart | |||||||
Long-term debt | |||||||
Amount drew in relation to acquisition | $ 65,000 | ||||||
Credit Agreement | |||||||
Long-term debt | |||||||
Outstanding balance | $ 25,000 | 25,000 | |||||
Maximum borrowing capacity | $ 150,000 | 150,000 | 150,000 | ||||
Additional borrowing capacity | $ 50,000 | ||||||
Carrying value of direct and indirect domestic subsidiaries | $ 203,622 | $ 203,622 | |||||
Applicable interest rate (as a percent) | 3.25% | 3.25% | |||||
Term of debt | 5 years | ||||||
Term of potential debt | 7 years | ||||||
Amount drew in relation to acquisition | $ 65,000 | ||||||
Repayments of debt | $ 40,000 | ||||||
Credit Agreement | Subsequent Events | |||||||
Long-term debt | |||||||
Principal payment | $ 10,000 | ||||||
Credit Agreement | Minimum | |||||||
Long-term debt | |||||||
Consolidated fixed charge coverage ratio | 1.25 | ||||||
Credit Agreement | Maximum | |||||||
Long-term debt | |||||||
Net leverage ratio | 3.25 | ||||||
Credit Agreement | London Interbank Offered Rate (LIBOR) | Minimum | |||||||
Long-term debt | |||||||
Interest rate margin on variable rate basis (as a percent) | 1.00% | ||||||
Credit Agreement | London Interbank Offered Rate (LIBOR) | Maximum | |||||||
Long-term debt | |||||||
Interest rate margin on variable rate basis (as a percent) | 1.75% |
Income Taxes (Details)
Income Taxes (Details) $ in Thousands | 3 Months Ended | 4 Months Ended | 8 Months Ended | 12 Months Ended | ||||
Aug. 31, 2018USD ($) | Feb. 28, 2018USD ($) | Dec. 31, 2017 | Aug. 31, 2018 | Aug. 31, 2019 | Aug. 31, 2018USD ($) | Aug. 31, 2017USD ($) | Aug. 31, 2016USD ($) | |
Effective income tax rate | ||||||||
Statutory tax rate (as a percent) | 35.00% | 21.00% | 25.70% | 35.00% | 35.00% | |||
Net discrete tax expense | $ 681 | |||||||
Tax benefit resulting from remeasurement and reclassification of existing deferred tax liability | 379 | |||||||
Tax expense from the remeasurement of deferred tax assets | 917 | |||||||
Tax expense from remeasuring uncertain tax positions | $ 143 | |||||||
Transition tax adjustment associated with its accumulated, undistributed foreign earnings | $ 2,298 | |||||||
Short term payable | 153 | |||||||
Long taxes payable | $ 1,766 | |||||||
Transition tax payment percentage | 8 | |||||||
Discrete tax benefit | $ 379 | |||||||
Income taxes (Note 7) | $ 13,822 | $ 18,878 | $ 17,303 | |||||
Income before income taxes | $ 56,965 | $ 60,892 | $ 50,110 | |||||
Effective income tax rate | 24.30% | 31.00% | 34.50% | |||||
Forecast | ||||||||
Effective income tax rate | ||||||||
Statutory tax rate (as a percent) | 21.00% |
Income Taxes - Reconciliation (
Income Taxes - Reconciliation (Details) - USD ($) $ in Thousands | 4 Months Ended | 8 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Aug. 31, 2018 | Aug. 31, 2018 | Aug. 31, 2017 | Aug. 31, 2016 | |
Domestic and foreign pre-tax income | |||||
United States | $ 48,962 | $ 52,723 | $ 40,928 | ||
Foreign | 8,003 | 8,169 | 9,182 | ||
Income before income taxes | 56,965 | 60,892 | 50,110 | ||
Current: | |||||
Federal | 12,872 | 17,714 | 14,777 | ||
State | 1,662 | 1,872 | 1,821 | ||
Foreign | 1,761 | 1,555 | 2,023 | ||
Total current income tax provision | 16,295 | 21,141 | 18,621 | ||
Deferred: | |||||
Federal | (2,214) | (1,984) | (879) | ||
State | (263) | (453) | (324) | ||
Foreign | 4 | 174 | (115) | ||
Total deferred income tax provision (benefit) | (2,473) | (2,263) | (1,318) | ||
Total income tax provision | $ 13,822 | $ 18,878 | $ 17,303 | ||
Reconciliation of the effective income tax rate on continuing operations with the U.S. federal statutory income tax rate | |||||
Federal statutory rates (as a percent) | 35.00% | 21.00% | 25.70% | 35.00% | 35.00% |
Adjustment resulting from the tax effect of: | |||||
State and local taxes, net of federal benefit (as a percent) | 1.90% | 1.50% | 1.90% | ||
Domestic production deduction (as a percent) | (1.60%) | (2.50%) | (2.90%) | ||
Foreign tax rate differential (as a percent) | (0.30%) | (1.40%) | (2.50%) | ||
Adjustment to uncertain tax position (as a percent) | (1.10%) | (0.00%) | (0.00%) | ||
Research credit generated (as a percent) | (0.20%) | (0.30%) | (0.30%) | ||
Stock Compensation (as a percent) | (3.40%) | (3.10%) | 0.00% | ||
Permanent items (as a percent) | 0.90% | 1.60% | 0.00% | ||
Tax effect of undistributed earnings (as a percent) | (0.80%) | 1.40% | 2.70% | ||
Other (as a percent) | (0.80%) | (1.20%) | 0.60% | ||
Change in valuation allowance (as a percent) | 0.10% | 0.00% | 0.00% | ||
Deferred income tax remeasurement (as a percent) | 1.70% | 0.00% | 0.00% | ||
Effective income tax rate (as a percent) | 24.30% | 31.00% | 34.50% |
Income Taxes - Deferred Taxes (
Income Taxes - Deferred Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 31, 2018 | Aug. 31, 2017 | Aug. 31, 2016 | |
Income Taxes | |||
Current income tax provision | $ 16,295 | $ 21,141 | $ 18,621 |
Deferred provision (benefit): | |||
Allowance for doubtful accounts | 74 | 8 | 34 |
Inventories | 390 | 139 | (80) |
Pension expense | 2,358 | (39) | (542) |
Deferred compensation | 98 | 250 | 272 |
Loan finance costs | 5 | 5 | |
Accruals | 216 | (270) | (95) |
Warranty reserve | 70 | (89) | 19 |
Depreciation and amortization | (3,726) | (2,714) | (2,166) |
Restricted stock grant | 244 | (214) | (8) |
Unrepatriated earnings | (2,395) | 832 | 1,338 |
Valuation allowance | 60 | 24 | |
Foreign amortization | 17 | (2) | (21) |
Other accrued expenses | 121 | (193) | (74) |
Total deferred income tax provision (benefit) | (2,473) | (2,263) | (1,318) |
Total income tax provision | $ 13,822 | $ 18,878 | $ 17,303 |
Income Taxes - Uncertain Tax Po
Income Taxes - Uncertain Tax Positions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 31, 2018 | Aug. 31, 2017 | Aug. 31, 2016 | |
Deferred tax assets: | |||
Allowance for doubtful accounts | $ 154 | $ 228 | |
Inventories | 982 | 1,462 | |
Accruals | 584 | 800 | |
Warranty reserve | 50 | 120 | |
Pension accrual | 2,567 | 5,078 | |
Deferred compensation | 260 | 358 | |
Deferred revenue | 334 | ||
Foreign currency loss on previously taxed income | 96 | ||
Loan finance costs | 27 | 27 | |
Restricted stock grants | 547 | 792 | |
Non-qualified stock options | 94 | 26 | |
Other | 296 | 280 | |
Deferred tax assets, net | 5,657 | 9,505 | |
Deferred tax liabilities: | |||
Prepaid liabilities | 25 | 29 | |
Unrepatriated earnings | 2,298 | ||
Unrealized gain/loss on restricted investments | (112) | (177) | |
Depreciation and amortization | 4,173 | 5,362 | |
Other | 25 | ||
Noncurrent deferred tax liabilities | (4,310) | (7,891) | |
Net deferred tax assets | 1,347 | 1,614 | |
Adjustments to uncertain tax positions | |||
Balance, at beginning of the year | 1,257 | 1,229 | $ 1,249 |
Increase for tax positions related to the current year | 47 | 65 | 37 |
Increase for tax positions related to prior years | 595 | 16 | 98 |
Increase for interest and penalties | 71 | 6 | 102 |
Decrease for lapses of statute of limitations | (81) | (59) | (257) |
Balance, at end of year | 1,889 | $ 1,257 | $ 1,229 |
Accrued balances related to uncertain tax positions | |||
Accrued interest and penalty | 751 | ||
Increase in accrued interest and penalty charges recorded as tax benefit | $ 71 |
Operating Leases (Details)
Operating Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 31, 2018 | Aug. 31, 2017 | Aug. 31, 2016 | |
Future minimum payments due under operating leases | |||
2,019 | $ 2,144 | ||
2,020 | 2,054 | ||
2,021 | 1,865 | ||
2,022 | 1,284 | ||
2,023 | 1,128 | ||
2024 and thereafter | 3,302 | ||
Total future minimum lease payments | 11,777 | ||
Operating Leases | |||
Rental expense | $ 3,114 | $ 2,516 | $ 1,631 |
Benefits and Pension Plans (Det
Benefits and Pension Plans (Details) | 12 Months Ended | ||
Aug. 31, 2018USD ($)item | Aug. 31, 2017USD ($) | Aug. 31, 2016USD ($) | |
401(k) Plan | |||
Percent of participant's compensation | 3.50% | ||
401(k) Plan | |||
Eligibility age for defined contribution plan | 21 years | ||
Minimum eligibility service period | 6 months | ||
Employer match of employee contributions of first percent of eligible compensation (as a percent) | 100.00% | ||
Percentage of eligible compensation, matched 100% by employer | 1.00% | ||
Employer match of employee contributions after the first percent of eligible compensation (as a percent) | 50.00% | ||
Maximum percentage of employee's annual salary, matched by employer | 3.50% | ||
Contribution expense | $ 702,000 | $ 519,000 | $ 571,000 |
Non-Qualified Deferred Savings Plan | |||
Recorded liability for Board of Directors and selected employees savings plan | $ 1,105,000 | $ 979,000 | |
NEPTCO | |||
401(k) Plan | |||
Number of 401(k) savings plans | item | 2 | ||
NEPTCO | Union Employees | |||
401(k) Plan | |||
Number of 401(k) savings plans | item | 1 | ||
Amount for each $1.00 of participant deferrals the company may contribute | $ 0.50 | ||
Base amount of participant deferrals for company contributions | $ 1 | ||
Percent of participant's compensation | 6.00% | ||
401(k) Plan | |||
Maximum percentage of employee's annual salary, matched by employer | 6.00% | ||
NEPTCO | Non-union Employees | |||
401(k) Plan | |||
Number of 401(k) savings plans | item | 1 | ||
Amount for each $1.00 of participant deferrals the company may contribute | $ 0.75 | ||
Base amount of participant deferrals for company contributions | $ 1 | ||
Percent of participant's compensation | 6.00% | ||
401(k) Plan | |||
Maximum percentage of employee's annual salary, matched by employer | 6.00% | ||
Maximum | NEPTCO | |||
401(k) Plan | |||
Percent of annual compensation participants may defer | 10.00% | ||
Minimum | NEPTCO | |||
401(k) Plan | |||
Percent of annual compensation participants may defer | 1.00% |
Benefits and Pension Plans - Ch
Benefits and Pension Plans - Changes in Plan Components (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 31, 2018 | Aug. 31, 2017 | Aug. 31, 2016 | |
Change in benefit obligation | |||
Projected benefit obligation at beginning of year | $ 22,673 | $ 23,636 | $ 20,401 |
Service cost | 283 | 288 | 295 |
Interest cost | 629 | 681 | 728 |
Actuarial (gain) loss | 17 | (533) | 2,636 |
Settlements | (313) | (376) | |
Benefits paid | (1,742) | (1,086) | (48) |
Projected benefit obligation at end of year | 21,860 | 22,673 | 23,636 |
Change in plan assets | |||
Fair value of plan assets at beginning of year | 9,003 | 8,440 | 8,120 |
Actual return on plan assets | 509 | 757 | 422 |
Employer contribution | 2,085 | 1,205 | 322 |
Settlements | (313) | (376) | |
Benefits paid | (1,742) | (1,086) | (48) |
Fair value of plan assets at end of year | 9,855 | 9,003 | 8,440 |
Funded status | |||
Funded status at end of year | (12,005) | (13,670) | (15,196) |
Amounts recognized in consolidated balance sheets | |||
Non-current assets | 301 | 566 | 382 |
Current liabilities | (1,570) | (1,570) | (15) |
Non-current liabilities | (10,736) | (12,666) | (15,563) |
Net amounts recognized in Consolidated Balance Sheets | (12,005) | (13,670) | (15,196) |
Actuarial present value of benefit obligation and funded status | |||
Accumulated benefit obligation | 20,075 | 21,007 | 22,023 |
Projected benefit obligation | 21,858 | 22,673 | 23,636 |
Plan assets at fair value | 9,855 | 9,003 | 8,440 |
Amounts recognized in accumulated other comprehensive Income | |||
Prior service cost | 54 | 54 | 57 |
Net actuarial loss | 9,377 | 9,890 | 11,561 |
Adjustment to pre-tax accumulated other comprehensive income | 9,431 | 9,944 | 11,618 |
Other changes in plan assets and benefit obligations recognized in other comprehensive income | |||
Net (gain)/loss | (704) | 1,277 | 511 |
Amortization of loss | (484) | (895) | (574) |
Assumption change | 676 | (2,038) | 2,219 |
Amortization of prior service cost | (3) | (3) | (3) |
Effect of settlement on accumulated other comprehensive income | (14) | (13) | |
Total recognized in other comprehensive income | (515) | (1,673) | 2,140 |
Net periodic pension cost | 937 | 1,353 | 1,097 |
Total recognized in net periodic pension cost and other comprehensive income | 422 | (320) | 3,237 |
Estimated amounts that will be amortized from accumulated comprehensive income over the next fiscal year | |||
Prior service cost | 3 | 3 | 3 |
Net actuarial loss | 475 | 485 | 895 |
Components of net periodic benefit cost | |||
Service cost | 283 | 288 | 295 |
Interest cost | 629 | 681 | 728 |
Expected return on plan assets | (462) | (528) | (516) |
Amortization of prior service cost | 3 | 3 | 3 |
Amortization of accumulated loss | 484 | 895 | 574 |
Settlement and curtailment loss | 14 | 13 | |
Net periodic benefit cost | $ 937 | $ 1,353 | $ 1,097 |
NEPTCO | Union Employees | |||
Pensions and Other Postretirement Benefits | |||
Period before retirement for determination of employee's average compensation | 5 years |
Benefits and Pension Plans - We
Benefits and Pension Plans - Weighted Average Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 31, 2018 | Aug. 31, 2017 | Aug. 31, 2016 | |
Weighted-average assumptions used to determine benefit obligations | |||
Rate of compensation increase (as a percent) | 3.50% | 3.50% | 3.50% |
Weighted-average assumptions used to determine net periodic benefit cost | |||
Rate of compensation increase (as a percent) | 3.50% | 3.50% | 3.50% |
Qualified Plan | |||
Weighted-average assumptions used to determine benefit obligations | |||
Discount rate (as a percent) | 3.80% | 3.30% | 2.90% |
Weighted-average assumptions used to determine net periodic benefit cost | |||
Discount rate (as a percent) | 3.30% | 2.90% | 4.16% |
Expected long term return on plan assets (as a percent) | 5.40% | 6.50% | 6.50% |
Reduction in discount rate used to estimate additional net periodic pension cost (as a percent) | 1.00% | ||
Additional net periodic pension cost from each 100 basis point reduction in the discount rate | $ 42 | ||
Reduction in expected return on plan assets used to estimate the increase in net periodic pension cost (as a percent) | 1.00% | ||
Additional net periodic pension cost from each 100 basis point reduction in the expected return on plan assets | $ 73 | ||
Supplemental plan | |||
Weighted-average assumptions used to determine benefit obligations | |||
Discount rate (as a percent) | 3.57% | 2.73% | 2.97% |
Weighted-average assumptions used to determine net periodic benefit cost | |||
Discount rate (as a percent) | 2.73% | 2.97% | 3.22% |
Additional net periodic pension cost from each 100 basis point reduction in the discount rate | $ 69 | ||
NEPTCO | Qualified Plan | |||
Weighted-average assumptions used to determine benefit obligations | |||
Discount rate (as a percent) | 3.59% | 2.95% | 2.55% |
Weighted-average assumptions used to determine net periodic benefit cost | |||
Discount rate (as a percent) | 2.95% | 2.55% | 4.30% |
Expected long term return on plan assets (as a percent) | 5.20% | 6.50% | 6.50% |
Benefits and Pension Plans - As
Benefits and Pension Plans - Asset Categories (Details) - Qualified Plan | 12 Months Ended | ||
Aug. 31, 2018 | Aug. 31, 2017 | Aug. 31, 2016 | |
Target allocation and weighted-average asset allocations | |||
Total target allocation (as a percent) | 100.00% | 100.00% | 100.00% |
Percentage of Plan Assets | 100.00% | 100.00% | 100.00% |
Expected long term return on plan assets (as a percent) | 5.40% | 6.50% | 6.50% |
NEPTCO | |||
Target allocation and weighted-average asset allocations | |||
Total target allocation (as a percent) | 100.00% | 100.00% | 100.00% |
Percentage of Plan Assets | 100.00% | 100.00% | 100.00% |
Expected long term return on plan assets (as a percent) | 5.20% | 6.50% | 6.50% |
Equity securities | |||
Target allocation and weighted-average asset allocations | |||
Percentage of Plan Assets | 46.00% | 39.00% | 46.00% |
Equity securities | Minimum | |||
Target allocation and weighted-average asset allocations | |||
Total target allocation (as a percent) | 10.00% | 10.00% | 10.00% |
Equity securities | Maximum | |||
Target allocation and weighted-average asset allocations | |||
Total target allocation (as a percent) | 80.00% | 80.00% | 80.00% |
Equity securities | NEPTCO | |||
Target allocation and weighted-average asset allocations | |||
Percentage of Plan Assets | 46.00% | 43.00% | 43.00% |
Equity securities | NEPTCO | Minimum | |||
Target allocation and weighted-average asset allocations | |||
Total target allocation (as a percent) | 10.00% | 10.00% | 10.00% |
Equity securities | NEPTCO | Maximum | |||
Target allocation and weighted-average asset allocations | |||
Total target allocation (as a percent) | 80.00% | 80.00% | 80.00% |
Debt securities | |||
Target allocation and weighted-average asset allocations | |||
Percentage of Plan Assets | 54.00% | 61.00% | 54.00% |
Debt securities | Minimum | |||
Target allocation and weighted-average asset allocations | |||
Total target allocation (as a percent) | 20.00% | 20.00% | 20.00% |
Debt securities | Maximum | |||
Target allocation and weighted-average asset allocations | |||
Total target allocation (as a percent) | 70.00% | 70.00% | 70.00% |
Debt securities | NEPTCO | |||
Target allocation and weighted-average asset allocations | |||
Percentage of Plan Assets | 54.00% | 51.00% | 50.00% |
Debt securities | NEPTCO | Minimum | |||
Target allocation and weighted-average asset allocations | |||
Total target allocation (as a percent) | 20.00% | 20.00% | 20.00% |
Debt securities | NEPTCO | Maximum | |||
Target allocation and weighted-average asset allocations | |||
Total target allocation (as a percent) | 70.00% | 70.00% | 70.00% |
Other | Minimum | |||
Target allocation and weighted-average asset allocations | |||
Total target allocation (as a percent) | 0.00% | 0.00% | 0.00% |
Other | Maximum | |||
Target allocation and weighted-average asset allocations | |||
Total target allocation (as a percent) | 100.00% | 100.00% | 100.00% |
Other | NEPTCO | |||
Target allocation and weighted-average asset allocations | |||
Percentage of Plan Assets | 6.00% | 7.00% | |
Other | NEPTCO | Minimum | |||
Target allocation and weighted-average asset allocations | |||
Total target allocation (as a percent) | 0.00% | 0.00% | 0.00% |
Other | NEPTCO | Maximum | |||
Target allocation and weighted-average asset allocations | |||
Total target allocation (as a percent) | 100.00% | 100.00% | 100.00% |
Benefits and Pension Plans - Fa
Benefits and Pension Plans - Fair Value (Details) - USD ($) $ in Thousands | Aug. 31, 2018 | Aug. 31, 2017 | Aug. 31, 2016 | Aug. 31, 2015 |
Pensions and Other Postretirement Benefits | ||||
Fair value of plan assets | $ 9,855 | $ 9,003 | $ 8,440 | $ 8,120 |
Equity securities | ||||
Pensions and Other Postretirement Benefits | ||||
Fair value of plan assets | 4,533 | 3,589 | ||
Debt securities | ||||
Pensions and Other Postretirement Benefits | ||||
Fair value of plan assets | 5,322 | 5,336 | ||
Other | ||||
Pensions and Other Postretirement Benefits | ||||
Fair value of plan assets | 78 | |||
Quoted prices in active markets (Level 1) | ||||
Pensions and Other Postretirement Benefits | ||||
Fair value of plan assets | 9,003 | |||
Quoted prices in active markets (Level 1) | Equity securities | ||||
Pensions and Other Postretirement Benefits | ||||
Fair value of plan assets | 3,589 | |||
Quoted prices in active markets (Level 1) | Debt securities | ||||
Pensions and Other Postretirement Benefits | ||||
Fair value of plan assets | 5,336 | |||
Quoted prices in active markets (Level 1) | Other | ||||
Pensions and Other Postretirement Benefits | ||||
Fair value of plan assets | $ 78 | |||
Significant other observable inputs (Level 2) | ||||
Pensions and Other Postretirement Benefits | ||||
Fair value of plan assets | 9,855 | |||
Significant other observable inputs (Level 2) | Equity securities | ||||
Pensions and Other Postretirement Benefits | ||||
Fair value of plan assets | 4,533 | |||
Significant other observable inputs (Level 2) | Debt securities | ||||
Pensions and Other Postretirement Benefits | ||||
Fair value of plan assets | $ 5,322 |
Benefits and Pension Plans - Fu
Benefits and Pension Plans - Future Benefit Payments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 31, 2018 | Aug. 31, 2017 | Aug. 31, 2016 | |
Estimated future pension benefit payments | |||
2,019 | $ 4,724 | ||
2,020 | 2,132 | ||
2,021 | 1,773 | ||
2,022 | 1,751 | ||
2,023 | 2,524 | ||
2024-2028 | 7,647 | ||
Employer contribution | $ 2,085 | $ 1,205 | $ 322 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||||||||||
Feb. 28, 2018shares | Aug. 31, 2017installment$ / sharesshares | Feb. 28, 2017shares | Aug. 31, 2016installment$ / sharesshares | Feb. 29, 2016shares | Aug. 31, 2015installment$ / sharesshares | Feb. 28, 2015shares | Aug. 31, 2014item$ / sharesshares | Sep. 30, 2013item$ / sharesshares | Aug. 31, 2018$ / sharesshares | May 31, 2018installment$ / sharesshares | Nov. 30, 2016$ / sharesshares | Nov. 30, 2015$ / sharesshares | May 31, 2015shares | Aug. 31, 2018$ / sharesshares | Aug. 31, 2017$ / sharesshares | Aug. 31, 2016$ / sharesshares | Aug. 31, 2015$ / sharesshares | Aug. 31, 2014$ / sharesshares | Oct. 31, 2012shares | Nov. 30, 2005shares | |
Non-employee members of BOD | |||||||||||||||||||||
Stock Based Compensation | |||||||||||||||||||||
Shares granted | 2,779 | 2,407 | 4,554 | ||||||||||||||||||
Number of Shares | |||||||||||||||||||||
Unvested restricted stock, beginning balance (in shares) | 4,554 | 5,361 | 2,407 | 4,554 | 5,361 | ||||||||||||||||
Granted (in shares) | 2,779 | 2,407 | 4,554 | ||||||||||||||||||
Vested (in shares) | (2,407) | (4,554) | (5,361) | ||||||||||||||||||
Unvested restricted stock, ending balance (in shares) | 2,407 | 4,554 | 5,361 | 2,779 | 2,779 | 2,407 | 4,554 | 5,361 | |||||||||||||
Weighted Average Grant Date Fair Value | |||||||||||||||||||||
Unvested restricted stock, beginning balance (in dollars per share) | $ / shares | $ 48.12 | $ 36.19 | $ 91.05 | $ 48.12 | $ 36.19 | ||||||||||||||||
Granted (in dollars per share) | $ / shares | 101.05 | 91.05 | 48.12 | ||||||||||||||||||
Vested (in dollars per share) | $ / shares | 91.05 | 48.12 | 36.19 | ||||||||||||||||||
Unvested restricted stock, ending balance (in dollars per share) | $ / shares | $ 91.05 | $ 48.12 | $ 36.19 | $ 101.05 | $ 101.05 | $ 91.05 | $ 48.12 | $ 36.19 | |||||||||||||
Officers and employees | |||||||||||||||||||||
Stock Based Compensation | |||||||||||||||||||||
Shares granted | 13,922 | 42,160 | 25,330 | ||||||||||||||||||
Exercise price (in dollar per share) | $ / shares | $ 34.21 | $ 20.57 | $ 16.92 | $ 50.17 | $ 50.17 | $ 34.21 | $ 20.57 | $ 16.92 | |||||||||||||
Number of Shares | |||||||||||||||||||||
Unvested restricted stock, beginning balance (in shares) | 55,328 | 48,269 | 73,972 | 55,328 | 48,269 | ||||||||||||||||
Granted (in shares) | 13,922 | 42,160 | 25,330 | ||||||||||||||||||
Vested (in shares) | (22,315) | (23,516) | (18,271) | ||||||||||||||||||
Unvested restricted stock, ending balance (in shares) | 73,972 | 55,328 | 48,269 | 65,579 | 65,579 | 73,972 | 55,328 | 48,269 | |||||||||||||
Weighted Average Grant Date Fair Value | |||||||||||||||||||||
Unvested restricted stock, beginning balance (in dollars per share) | $ / shares | $ 39.20 | $ 35.68 | $ 51.56 | $ 39.20 | $ 35.68 | ||||||||||||||||
Granted (in dollars per share) | $ / shares | 83.65 | 60.67 | 39.07 | ||||||||||||||||||
Vested (in dollars per share) | $ / shares | 41.35 | 38.81 | 29.72 | ||||||||||||||||||
Unvested restricted stock, ending balance (in dollars per share) | $ / shares | $ 51.56 | $ 39.20 | $ 35.68 | $ 61.85 | $ 61.85 | $ 51.56 | $ 39.20 | $ 35.68 | |||||||||||||
Stock options | |||||||||||||||||||||
Stock Based Compensation | |||||||||||||||||||||
Common stock available for future issuance (in shares) | 1,063,370 | 1,063,370 | |||||||||||||||||||
Stock options | Executive officers | August 31, 2019 vesting date | |||||||||||||||||||||
Stock Based Compensation | |||||||||||||||||||||
Shares authorized | 23,563 | 23,563 | |||||||||||||||||||
Exercise price (in dollar per share) | $ / shares | $ 64.37 | $ 64.37 | |||||||||||||||||||
Restricted stock | Non-employee members of BOD | |||||||||||||||||||||
Stock Based Compensation | |||||||||||||||||||||
Vesting period | 12 months | 12 months | 12 months | 12 months | |||||||||||||||||
Shares granted | 2,779 | 2,407 | 4,554 | 5,361 | |||||||||||||||||
Number of Shares | |||||||||||||||||||||
Granted (in shares) | 2,779 | 2,407 | 4,554 | 5,361 | |||||||||||||||||
Time-based restricted stock | Executive officers | |||||||||||||||||||||
Stock Based Compensation | |||||||||||||||||||||
Number of equal annual installments | installment | 5 | ||||||||||||||||||||
Vesting period | 5 years | ||||||||||||||||||||
Shares granted | 16,312 | ||||||||||||||||||||
Number of Shares | |||||||||||||||||||||
Granted (in shares) | 16,312 | ||||||||||||||||||||
Time-based restricted stock | Executive officers | August 31, 2019 vesting date | |||||||||||||||||||||
Stock Based Compensation | |||||||||||||||||||||
Shares granted | 7,768 | ||||||||||||||||||||
Number of Shares | |||||||||||||||||||||
Granted (in shares) | 7,768 | ||||||||||||||||||||
Time-based restricted stock | Executive officers | August 31, 2021 vesting date | |||||||||||||||||||||
Stock Based Compensation | |||||||||||||||||||||
Shares granted | 8,544 | ||||||||||||||||||||
Number of Shares | |||||||||||||||||||||
Granted (in shares) | 8,544 | ||||||||||||||||||||
2013 Plan | |||||||||||||||||||||
Stock Based Compensation | |||||||||||||||||||||
Shares authorized | 1,200,000 | ||||||||||||||||||||
Common stock available for future issuance (in shares) | 1,063,370 | 1,063,370 | |||||||||||||||||||
2005 Incentive Plan | |||||||||||||||||||||
Stock Based Compensation | |||||||||||||||||||||
Shares authorized | 1,000,000 | ||||||||||||||||||||
2014 LTIP | Stock options | Executive officers and other members of management | |||||||||||||||||||||
Stock Based Compensation | |||||||||||||||||||||
Shares granted | 25,969 | ||||||||||||||||||||
Number of equal annual allotments in which awards will vest | item | 3 | ||||||||||||||||||||
Exercise price (in dollar per share) | $ / shares | $ 29.72 | ||||||||||||||||||||
Number of Shares | |||||||||||||||||||||
Granted (in shares) | 25,969 | ||||||||||||||||||||
2014 LTIP | Performance and service based restricted stock | Executive officers and other members of management | |||||||||||||||||||||
Stock Based Compensation | |||||||||||||||||||||
Shares granted | 7,529 | 5,485 | |||||||||||||||||||
Cumulative shares granted | 13,014 | ||||||||||||||||||||
Number of Shares | |||||||||||||||||||||
Granted (in shares) | 7,529 | 5,485 | |||||||||||||||||||
2014 LTIP | Time-based restricted stock | Executive officers and other members of management | August 31, 2014 vesting date | |||||||||||||||||||||
Stock Based Compensation | |||||||||||||||||||||
Shares forfeited | 1,040 | ||||||||||||||||||||
Number of Shares | |||||||||||||||||||||
Forfeited or cancelled (in shares) | (1,040) | ||||||||||||||||||||
2014 LTIP | Time-based restricted stock | Executive officers and other members of management | August 31, 2016 vesting date | |||||||||||||||||||||
Stock Based Compensation | |||||||||||||||||||||
Shares forfeited | 8,323 | ||||||||||||||||||||
Number of Shares | |||||||||||||||||||||
Forfeited or cancelled (in shares) | (8,323) | ||||||||||||||||||||
2015 LTIP | Executive officers and other members of management | |||||||||||||||||||||
Stock Based Compensation | |||||||||||||||||||||
Adjusted shares | 5,685 | ||||||||||||||||||||
Cumulative shares granted | 12,678 | ||||||||||||||||||||
2015 LTIP | Stock options | Executive officers and other members of management | |||||||||||||||||||||
Stock Based Compensation | |||||||||||||||||||||
Cumulative shares granted | 22,750 | ||||||||||||||||||||
Number of equal annual allotments in which awards will vest | item | 3 | ||||||||||||||||||||
Exercise price (in dollar per share) | $ / shares | $ 35.50 | $ 35.50 | |||||||||||||||||||
2015 LTIP | Stock options | Executive officers and other members of management | August 31, 2024 vesting date | |||||||||||||||||||||
Stock Based Compensation | |||||||||||||||||||||
Shares forfeited | 7,438 | ||||||||||||||||||||
Number of Shares | |||||||||||||||||||||
Forfeited or cancelled (in shares) | (7,438) | ||||||||||||||||||||
2015 LTIP | Stock options | Executive officers and other members of management | September 1, 2024 vesting date | |||||||||||||||||||||
Stock Based Compensation | |||||||||||||||||||||
Shares forfeited | 15,312 | ||||||||||||||||||||
Number of Shares | |||||||||||||||||||||
Forfeited or cancelled (in shares) | (15,312) | ||||||||||||||||||||
2015 LTIP | Performance and service based restricted stock | Executive officers and other members of management | August 31, 2017 vesting date | |||||||||||||||||||||
Stock Based Compensation | |||||||||||||||||||||
Shares granted | 6,993 | ||||||||||||||||||||
Number of Shares | |||||||||||||||||||||
Granted (in shares) | 6,993 | ||||||||||||||||||||
2015 LTIP | Time-based restricted stock | Non-executive members of management | |||||||||||||||||||||
Stock Based Compensation | |||||||||||||||||||||
Shares granted | 16,000 | ||||||||||||||||||||
Number of Shares | |||||||||||||||||||||
Granted (in shares) | 16,000 | ||||||||||||||||||||
2015 LTIP | Time-based restricted stock | Non-executive members of management | April 16, 2020 vesting date | |||||||||||||||||||||
Stock Based Compensation | |||||||||||||||||||||
Shares granted | 15,000 | ||||||||||||||||||||
Number of Shares | |||||||||||||||||||||
Granted (in shares) | 15,000 | ||||||||||||||||||||
2015 LTIP | Time-based restricted stock | Non-executive members of management | January 31, 2018 vesting date | |||||||||||||||||||||
Stock Based Compensation | |||||||||||||||||||||
Shares granted | 1,000 | ||||||||||||||||||||
Number of Shares | |||||||||||||||||||||
Granted (in shares) | 1,000 | ||||||||||||||||||||
2015 LTIP | Time-based restricted stock | Executive officers and other members of management | |||||||||||||||||||||
Stock Based Compensation | |||||||||||||||||||||
Shares granted | 8,132 | ||||||||||||||||||||
Number of Shares | |||||||||||||||||||||
Granted (in shares) | 8,132 | ||||||||||||||||||||
2015 LTIP | Time-based restricted stock | Executive officers and other members of management | August 31, 2017 vesting date | |||||||||||||||||||||
Stock Based Compensation | |||||||||||||||||||||
Shares granted | 7,005 | ||||||||||||||||||||
Number of Shares | |||||||||||||||||||||
Granted (in shares) | 7,005 | ||||||||||||||||||||
2015 LTIP | Time-based restricted stock | Executive officers and other members of management | September 1, 2024 vesting date | |||||||||||||||||||||
Stock Based Compensation | |||||||||||||||||||||
Shares granted | 1,127 | ||||||||||||||||||||
Number of Shares | |||||||||||||||||||||
Granted (in shares) | 1,127 | ||||||||||||||||||||
2016 LTIP | Executive officers and other members of management | |||||||||||||||||||||
Stock Based Compensation | |||||||||||||||||||||
Adjusted shares | 6,277 | ||||||||||||||||||||
Cumulative shares granted | 13,239 | ||||||||||||||||||||
2016 LTIP | Stock options | Executive officers and other members of management | August 31, 2018 vesting date | |||||||||||||||||||||
Stock Based Compensation | |||||||||||||||||||||
Shares granted | 21,275 | ||||||||||||||||||||
Number of equal annual allotments in which awards will vest | installment | 3 | ||||||||||||||||||||
Exercise price (in dollar per share) | $ / shares | $ 39.50 | $ 39.50 | |||||||||||||||||||
Number of Shares | |||||||||||||||||||||
Granted (in shares) | 21,275 | ||||||||||||||||||||
2016 LTIP | Restricted stock | Non-executive members of management | October 20, 2020 Vesting date | |||||||||||||||||||||
Stock Based Compensation | |||||||||||||||||||||
Shares granted | 5,000 | ||||||||||||||||||||
Number of Shares | |||||||||||||||||||||
Granted (in shares) | 5,000 | ||||||||||||||||||||
2016 LTIP | Performance and service based restricted stock | Executive officers and other members of management | August 31, 2018 vesting date | |||||||||||||||||||||
Stock Based Compensation | |||||||||||||||||||||
Shares granted | 6,962 | ||||||||||||||||||||
Number of Shares | |||||||||||||||||||||
Granted (in shares) | 6,962 | ||||||||||||||||||||
2016 LTIP | Time-based restricted stock | Executive officers and other members of management | August 31, 2018 vesting date | |||||||||||||||||||||
Stock Based Compensation | |||||||||||||||||||||
Shares granted | 7,683 | ||||||||||||||||||||
Number of Shares | |||||||||||||||||||||
Granted (in shares) | 7,683 | ||||||||||||||||||||
2017 LTIP | Executive officers and other members of management | |||||||||||||||||||||
Stock Based Compensation | |||||||||||||||||||||
Adjusted shares | 5,399 | ||||||||||||||||||||
2017 LTIP | Non-employee members of BOD | |||||||||||||||||||||
Stock Based Compensation | |||||||||||||||||||||
Cumulative shares granted | 10,798 | ||||||||||||||||||||
2017 LTIP | Stock options | Executive officers and other members of management | |||||||||||||||||||||
Stock Based Compensation | |||||||||||||||||||||
Shares authorized | 15,028 | 15,028 | |||||||||||||||||||
Stock options expiring earlier (in shares) | 5,596 | ||||||||||||||||||||
Stock options expiring later (in shares) | 9,432 | ||||||||||||||||||||
Number of equal annual allotments in which awards will vest | installment | 3 | ||||||||||||||||||||
Exercise price (in dollar per share) | $ / shares | $ 64.37 | $ 64.37 | |||||||||||||||||||
2017 LTIP | Restricted stock | Non-executive members of management | August 31, 2021 vesting date | |||||||||||||||||||||
Stock Based Compensation | |||||||||||||||||||||
Shares granted | 8,805 | ||||||||||||||||||||
Number of Shares | |||||||||||||||||||||
Granted (in shares) | 8,805 | ||||||||||||||||||||
2017 LTIP | Performance and service based restricted stock | Executive officers and other members of management | August 31, 2019 vesting date | |||||||||||||||||||||
Stock Based Compensation | |||||||||||||||||||||
Shares granted | 5,399 | ||||||||||||||||||||
Number of Shares | |||||||||||||||||||||
Granted (in shares) | 5,399 | ||||||||||||||||||||
2017 LTIP | Time-based restricted stock | Executive officers and other members of management | August 31, 2019 vesting date | |||||||||||||||||||||
Stock Based Compensation | |||||||||||||||||||||
Shares granted | 5,367 | ||||||||||||||||||||
Number of Shares | |||||||||||||||||||||
Granted (in shares) | 5,367 | ||||||||||||||||||||
2018 LTIP | Stock options | Non-executive members of management | |||||||||||||||||||||
Stock Based Compensation | |||||||||||||||||||||
Shares authorized | 606 | ||||||||||||||||||||
Number of equal annual allotments in which awards will vest | installment | 3 | ||||||||||||||||||||
Exercise price (in dollar per share) | $ / shares | $ 104 | ||||||||||||||||||||
2018 LTIP | Stock options | Executive officers and other members of management | |||||||||||||||||||||
Stock Based Compensation | |||||||||||||||||||||
Shares authorized | 9,622 | 9,622 | |||||||||||||||||||
Number of equal annual installments | installment | 3 | ||||||||||||||||||||
Stock options expiring earlier (in shares) | 4,591 | ||||||||||||||||||||
Stock options expiring later (in shares) | 5,031 | ||||||||||||||||||||
Exercise price (in dollar per share) | $ / shares | $ 93.50 | $ 93.50 | |||||||||||||||||||
2018 LTIP | Restricted stock | Non-executive members of management | 31 August, 2020 vesting date | |||||||||||||||||||||
Stock Based Compensation | |||||||||||||||||||||
Shares granted | 192 | ||||||||||||||||||||
Number of Shares | |||||||||||||||||||||
Granted (in shares) | 192 | ||||||||||||||||||||
2018 LTIP | Restricted stock | Executive officers | August 20, 2019 vesting date | |||||||||||||||||||||
Stock Based Compensation | |||||||||||||||||||||
Shares granted | 609 | ||||||||||||||||||||
Number of Shares | |||||||||||||||||||||
Granted (in shares) | 609 | ||||||||||||||||||||
2018 LTIP | Performance and service based restricted stock | Executive officers and other members of management | 31 August, 2020 vesting date | |||||||||||||||||||||
Stock Based Compensation | |||||||||||||||||||||
Shares granted | 4,249 | ||||||||||||||||||||
Number of Shares | |||||||||||||||||||||
Granted (in shares) | 4,249 | ||||||||||||||||||||
2018 LTIP | Time-based restricted stock | Executive officers and other members of management | 31 August, 2020 vesting date | |||||||||||||||||||||
Stock Based Compensation | |||||||||||||||||||||
Shares granted | 3,473 | ||||||||||||||||||||
Number of Shares | |||||||||||||||||||||
Granted (in shares) | 3,473 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Disclosures (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | Feb. 28, 2015 | Aug. 31, 2018 | Aug. 31, 2017 | Aug. 31, 2016 | Aug. 31, 2015 | |
Additional disclosures | ||||||||
Tax (expense) / benefit realized from stock options exercised, vesting of restricted stock and issuance of stock pursuant to grants of restricted stock units (in dollars) | $ 1,784 | |||||||
Unrecognized expense related to all stock-based compensation (in dollars) | $ 2,504 | |||||||
Period over which unrecognized expense related to all stock based compensation will be recognized | 3 years | |||||||
Non-employee members of BOD | ||||||||
Additional disclosures | ||||||||
Outstanding at the end of the period (in shares) | 2,779 | 2,407 | 4,554 | 5,361 | ||||
Officers and employees | ||||||||
Options Exercisable | ||||||||
Number Exercisable (in shares) | 64,612 | |||||||
Weighted Average Exercise Price (in dollars per share) | $ 39.43 | |||||||
Options outstanding | ||||||||
Options outstanding at the beginning of the period (in shares) | 152,974 | 194,551 | 313,389 | |||||
Granted (in shares) | 10,228 | 38,591 | 21,275 | |||||
Exercised (in shares) | (64,012) | (80,168) | (140,113) | |||||
Options outstanding at the end of the period (in shares) | 99,190 | 152,974 | 194,551 | |||||
Weighted Average Exercise Price | ||||||||
Options outstanding at the beginning of the period (in dollars per share) | $ 34.21 | $ 20.57 | $ 16.92 | |||||
Granted (in dollars per share) | 94.12 | 64.37 | 39.50 | |||||
Exercised (in dollars per share) | 19.06 | 15.62 | 15.27 | |||||
Options outstanding at the end of the period (in dollars per share) | $ 50.17 | $ 34.21 | $ 20.57 | |||||
Additional disclosures | ||||||||
Outstanding at the end of the period (in shares) | 65,579 | 73,972 | 55,328 | 48,269 | ||||
Stock options | ||||||||
Options Outstanding | ||||||||
Number Outstanding (in shares) | 99,190 | |||||||
Weighted Avg. Remaining Contractual Life | 6 years 10 months 24 days | |||||||
Weighted Average Exercise Price (in dollars per share) | $ 50.17 | |||||||
Aggregate Intrinsic Value (in dollars) | $ 7,318 | |||||||
Options Exercisable | ||||||||
Number Exercisable (in shares) | 64,612 | |||||||
Weighted Average Exercise Price (in dollars per share) | $ 39.43 | |||||||
Aggregate Intrinsic Value (in dollars) | $ 5,461 | |||||||
Additional disclosures | ||||||||
Weighted average grant date fair value of options granted (in dollars per share) | $ 30.99 | $ 21.22 | $ 13.80 | |||||
Total pretax intrinsic value of stock options exercised (in dollars) | $ 6,714 | $ 6,243 | $ 6,880 | |||||
Common stock available for future issuance (in shares) | 1,063,370 | |||||||
Tax (expense) / benefit realized from stock options exercised, vesting of restricted stock and issuance of stock pursuant to grants of restricted stock units (in dollars) | $ 1,921 | $ 1,917 | $ 1,784 | |||||
Unrecognized expense related to all stock-based compensation (in dollars) | $ 322 | |||||||
Stock options | $16.00 | ||||||||
Options Outstanding | ||||||||
Number Outstanding (in shares) | 7,597 | |||||||
Weighted Avg. Remaining Contractual Life | 4 years 1 month 6 days | |||||||
Weighted Average Exercise Price (in dollars per share) | $ 16 | |||||||
Aggregate Intrinsic Value (in dollars) | $ 820 | |||||||
Options Exercisable | ||||||||
Number Exercisable (in shares) | 7,597 | |||||||
Weighted Average Exercise Price (in dollars per share) | $ 16 | |||||||
Aggregate Intrinsic Value (in dollars) | $ 820 | |||||||
Stock options | $29.72 | ||||||||
Options Outstanding | ||||||||
Number Outstanding (in shares) | 14,609 | |||||||
Weighted Avg. Remaining Contractual Life | 5 years | |||||||
Weighted Average Exercise Price (in dollars per share) | $ 29.72 | |||||||
Aggregate Intrinsic Value (in dollars) | $ 1,377 | |||||||
Options Exercisable | ||||||||
Number Exercisable (in shares) | 14,609 | |||||||
Weighted Average Exercise Price (in dollars per share) | $ 29.72 | |||||||
Aggregate Intrinsic Value (in dollars) | $ 1,377 | |||||||
Stock options | $35.50 | ||||||||
Options Outstanding | ||||||||
Number Outstanding (in shares) | 15,571 | |||||||
Weighted Avg. Remaining Contractual Life | 6 years | |||||||
Weighted Average Exercise Price (in dollars per share) | $ 35.50 | |||||||
Aggregate Intrinsic Value (in dollars) | $ 1,377 | |||||||
Options Exercisable | ||||||||
Number Exercisable (in shares) | 15,571 | |||||||
Weighted Average Exercise Price (in dollars per share) | $ 35.50 | |||||||
Aggregate Intrinsic Value (in dollars) | $ 1,377 | |||||||
Stock options | $39.50 | ||||||||
Options Outstanding | ||||||||
Number Outstanding (in shares) | 15,671 | |||||||
Weighted Avg. Remaining Contractual Life | 7 years | |||||||
Weighted Average Exercise Price (in dollars per share) | $ 39.50 | |||||||
Aggregate Intrinsic Value (in dollars) | $ 1,323 | |||||||
Options Exercisable | ||||||||
Number Exercisable (in shares) | 15,671 | |||||||
Weighted Average Exercise Price (in dollars per share) | $ 39.50 | |||||||
Aggregate Intrinsic Value (in dollars) | $ 1,323 | |||||||
Stock options | $64.37 | ||||||||
Options Outstanding | ||||||||
Number Outstanding (in shares) | 35,514 | |||||||
Weighted Avg. Remaining Contractual Life | 8 years | |||||||
Weighted Average Exercise Price (in dollars per share) | $ 64.37 | |||||||
Aggregate Intrinsic Value (in dollars) | $ 2,116 | |||||||
Options Exercisable | ||||||||
Number Exercisable (in shares) | 7,756 | |||||||
Weighted Average Exercise Price (in dollars per share) | $ 64.37 | |||||||
Aggregate Intrinsic Value (in dollars) | $ 462 | |||||||
Stock options | $93.50 | ||||||||
Options Outstanding | ||||||||
Number Outstanding (in shares) | 9,622 | |||||||
Weighted Avg. Remaining Contractual Life | 9 years | |||||||
Weighted Average Exercise Price (in dollars per share) | $ 93.50 | |||||||
Aggregate Intrinsic Value (in dollars) | $ 293 | |||||||
Options Exercisable | ||||||||
Number Exercisable (in shares) | 3,206 | |||||||
Weighted Average Exercise Price (in dollars per share) | $ 93.50 | |||||||
Aggregate Intrinsic Value (in dollars) | $ 98 | |||||||
Stock options | $104.00 | ||||||||
Options Outstanding | ||||||||
Number Outstanding (in shares) | 606 | |||||||
Weighted Avg. Remaining Contractual Life | 9 years 6 months | |||||||
Weighted Average Exercise Price (in dollars per share) | $ 104 | |||||||
Aggregate Intrinsic Value (in dollars) | $ 12 | |||||||
Options Exercisable | ||||||||
Number Exercisable (in shares) | 202 | |||||||
Weighted Average Exercise Price (in dollars per share) | $ 104 | |||||||
Aggregate Intrinsic Value (in dollars) | $ 4 | |||||||
Restricted stock | ||||||||
Additional disclosures | ||||||||
Unrecognized expense related to all stock-based compensation (in dollars) | $ 2,182 | |||||||
Restricted stock | Non-employee members of BOD | ||||||||
Stockholders' Equity | ||||||||
Vesting period | 12 months | 12 months | 12 months | 12 months |
Segment Data (Details)
Segment Data (Details) $ in Thousands | 3 Months Ended | 8 Months Ended | 11 Months Ended | 12 Months Ended | |||||||
Aug. 31, 2018USD ($) | May 31, 2018USD ($) | Feb. 28, 2018USD ($) | May 31, 2017USD ($) | Nov. 30, 2016USD ($) | Aug. 31, 2018USD ($) | Aug. 31, 2017USD ($) | Aug. 31, 2018USD ($)segment | Aug. 31, 2017USD ($) | Aug. 31, 2016USD ($) | Aug. 31, 2015USD ($) | |
Segment data | |||||||||||
Revenues | $ 284,188 | $ 252,560 | $ 238,094 | ||||||||
Income before income taxes | 56,965 | 60,892 | 50,110 | ||||||||
Total assets | $ 316,469 | $ 316,469 | $ 254,738 | 316,469 | 254,738 | ||||||
Interest | 1,172 | 839 | 1,054 | ||||||||
Depreciation | 5,817 | 5,130 | 5,606 | ||||||||
Amortization | $ 11,807 | 9,127 | 7,836 | ||||||||
Number of operating segments | segment | 2 | ||||||||||
Inventory Step up to Fair Value | $ 1,070 | 190 | |||||||||
Gain on sale of license | 1,085 | ||||||||||
Write-down of certain assets under construction | 365 | ||||||||||
Expenses related to acquisition | 393 | 584 | |||||||||
Income before income taxes | 56,965 | 60,892 | 50,110 | ||||||||
Gain on sale of real estate (Note 19) | 860 | ||||||||||
Exit costs | 1,272 | 70 | 935 | ||||||||
Resin Designs | |||||||||||
Segment data | |||||||||||
Acquisition related expenses | $ 584 | ||||||||||
Expenses related to acquisition | $ 584 | 584 | |||||||||
Zappa Stewart | |||||||||||
Segment data | |||||||||||
Acquisition related expenses | $ 393 | ||||||||||
Expenses related to acquisition | $ 393 | 393 | |||||||||
Paterson NJ | |||||||||||
Segment data | |||||||||||
Gain on sale of business | 792 | ||||||||||
Pawtucket, RI Manufacturing Facility | |||||||||||
Segment data | |||||||||||
Exit costs | 1,272 | 1,272 | |||||||||
Industrial Materials | |||||||||||
Segment data | |||||||||||
Revenues | 232,288 | 202,956 | 181,728 | ||||||||
Gain on sale of license | 1,085 | ||||||||||
Industrial Materials | Resin Designs | |||||||||||
Segment data | |||||||||||
Inventory Step up to Fair Value | 190 | ||||||||||
Industrial Materials | Zappa Stewart | |||||||||||
Segment data | |||||||||||
Inventory Step up to Fair Value | 1,070 | ||||||||||
Industrial Materials | Fiber Optic Cable Components Product Line | |||||||||||
Segment data | |||||||||||
Gain on sale of business | 2,013 | ||||||||||
Industrial Materials | Structural Composites Rod Business | |||||||||||
Segment data | |||||||||||
Gain on sale of business | $ 1,480 | ||||||||||
Industrial Materials | RodPack Business | |||||||||||
Segment data | |||||||||||
Gain on sale of business | 1,031 | ||||||||||
Write-down of certain assets under construction | 365 | ||||||||||
Construction Materials | |||||||||||
Segment data | |||||||||||
Revenues | 51,900 | 49,604 | 56,366 | ||||||||
Reportable segments | |||||||||||
Segment data | |||||||||||
Income before income taxes | 84,254 | 85,766 | 73,497 | ||||||||
Total assets | 266,316 | 266,316 | 194,425 | 266,316 | 194,425 | ||||||
Income before income taxes | 84,254 | 85,766 | 73,497 | ||||||||
Reportable segments | Industrial Materials | |||||||||||
Segment data | |||||||||||
Income before income taxes | 66,076 | 67,561 | 53,530 | ||||||||
Total assets | 229,559 | 229,559 | 156,263 | 229,559 | 156,263 | ||||||
Interest | 938 | 629 | 791 | ||||||||
Depreciation | 4,033 | 3,423 | 3,918 | ||||||||
Amortization | 10,499 | 7,839 | 6,427 | ||||||||
Income before income taxes | 66,076 | 67,561 | 53,530 | ||||||||
Reportable segments | Construction Materials | |||||||||||
Segment data | |||||||||||
Total assets | 36,757 | 36,757 | 38,162 | 36,757 | 38,162 | ||||||
Interest | 234 | 210 | 263 | ||||||||
Depreciation | 753 | 718 | 761 | ||||||||
Amortization | 1,308 | 1,288 | 1,409 | ||||||||
Corporate and common costs | |||||||||||
Segment data | |||||||||||
Income before income taxes | (27,289) | (24,874) | (23,387) | ||||||||
Total assets | $ 50,153 | $ 50,153 | $ 60,313 | 50,153 | 60,313 | ||||||
Income before income taxes | (27,289) | (24,874) | (23,387) | ||||||||
Corporate and common costs | Resin Designs | |||||||||||
Segment data | |||||||||||
Acquisition related expenses | $ 584 | ||||||||||
Corporate and common costs | Zappa Stewart | |||||||||||
Segment data | |||||||||||
Acquisition related expenses | 393 | ||||||||||
Corporate and common costs | Specialty chemical intermediates product line | |||||||||||
Segment data | |||||||||||
Pension related settlement costs | $ 14 | ||||||||||
Corporate and common costs | Randolph MA | |||||||||||
Segment data | |||||||||||
Exit costs | 70 | 935 | |||||||||
Plant closing expenses | 877 | ||||||||||
Pension settlement costs | 13 | ||||||||||
Corporate and common costs | Construction Materials | |||||||||||
Segment data | |||||||||||
Income before income taxes | 18,178 | 18,205 | 19,967 | ||||||||
Income before income taxes | $ 18,178 | $ 18,205 | $ 19,967 |
Export Sales and Foreign Oper_3
Export Sales and Foreign Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 31, 2018 | Aug. 31, 2017 | Aug. 31, 2016 | |
Concentration risk | |||
Export sales | $ 42,883 | $ 36,719 | $ 28,826 |
Revenues | 284,188 | 252,560 | 238,094 |
Property, plant and equipment, net | 32,845 | 34,760 | |
Goodwill and Intangible assets, less accumulated amortization | 150,026 | 97,630 | |
United States | |||
Concentration risk | |||
Revenues | 244,225 | 217,745 | 197,776 |
Property, plant and equipment, net | 28,770 | 30,253 | |
Goodwill and Intangible assets, less accumulated amortization | 143,539 | 90,673 | |
United Kingdom | |||
Concentration risk | |||
Revenues | 20,598 | 16,691 | 24,048 |
Property, plant and equipment, net | 2,911 | 3,184 | |
Goodwill and Intangible assets, less accumulated amortization | 5,239 | 5,685 | |
All other Foreign | |||
Concentration risk | |||
Revenues | 19,365 | 18,124 | $ 16,270 |
Property, plant and equipment, net | 1,164 | 1,323 | |
Goodwill and Intangible assets, less accumulated amortization | $ 1,248 | $ 1,272 |
Supplemental Cash Flow Data (De
Supplemental Cash Flow Data (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 31, 2018 | Aug. 31, 2017 | Aug. 31, 2016 | |
Supplemental Cash Flow Data | |||
Income taxes paid | $ 20,142 | $ 21,025 | $ 17,550 |
Interest paid | 915 | 786 | 1,059 |
Common stock received for payment of stock option exercises | 1,028 | 1,158 | 2,015 |
Property, plant and equipment additions included in accounts payable | 197 | 220 | 22 |
Zappa Stewart | |||
Acquisition of certain assets | |||
Current assets (excluding cash) | 10,478 | ||
Property, plant and equipment | 1,872 | ||
Goodwill and Intangible assets | (64,378) | ||
Accounts payable and accrued liabilities | (633) | ||
Deferred tax liability | (2,626) | ||
Payments for acquisitions, net of cash acquired | (73,469) | ||
Resin Designs | |||
Acquisition of certain assets | |||
Current assets (excluding cash) | 3,240 | ||
Property, plant and equipment | 623 | ||
Goodwill and Intangible assets | 27,042 | ||
Accounts payable and accrued liabilities | (635) | ||
Payments for acquisitions, net of cash acquired | (30,270) | ||
HumiSeal India Private Limited | |||
Acquisition of certain assets | |||
Current assets (excluding cash) | 55 | ||
Property, equipment and goodwill | 1,134 | ||
Accounts payable and accrued liabilities | (28) | ||
Payments for acquisitions, net of cash acquired | (1,161) | ||
Structural Composites Rod Business | |||
Sale of business | |||
Inventory | (522) | ||
Goodwill and Intangible assets | (230) | ||
Gain on sale of business | (1,480) | ||
Cash received from sale of business, net of transaction costs | 2,232 | ||
Structural Composites License | |||
Sale of business | |||
Property and equipment | (26) | ||
Gain on sale of business | (1,085) | ||
Accrued income taxes | 111 | ||
Cash received from sale of business, net of transaction costs | $ 1,000 | ||
Fiber Optic Cable Components Product Line | |||
Sale of business | |||
Inventory | (1,167) | ||
Property and equipment | (166) | ||
Goodwill and Intangible assets | (512) | ||
Gain on sale of business | (2,013) | ||
Due from sale of business | 400 | ||
Cash received from sale of business, net of transaction costs | 3,458 | ||
RodPack Business | |||
Sale of business | |||
Property and equipment | (846) | ||
Intangible assets | (309) | ||
Gain on sale of business | (1,031) | ||
Due from sale of business | (457) | 457 | |
Cash received from sale of business, net of transaction costs | $ 457 | $ 1,729 |
Acquisitions (Details)
Acquisitions (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Jun. 23, 2016 | Dec. 31, 2017 | Aug. 31, 2018 | May 31, 2018 | Feb. 28, 2018 | Nov. 30, 2016 | Aug. 31, 2018 | Aug. 31, 2017 | Aug. 31, 2018 | Aug. 31, 2017 | Aug. 31, 2016 |
Acquisitions | ||||||||||||
Expenses related to acquisition | $ 393 | $ 584 | ||||||||||
Goodwill deductible for income tax purposes | $ 35,055 | $ 35,055 | 35,055 | |||||||||
Acquisition cost has been allocated to the acquired tangible and identifiable intangible assets assumed based on their fair values | ||||||||||||
Goodwill | 84,696 | 84,696 | $ 50,784 | 84,696 | $ 50,784 | $ 43,576 | ||||||
New Credit Agreement | ||||||||||||
Acquisitions | ||||||||||||
Goodwill deductible for income tax purposes | 23,990 | 23,990 | $ 23,990 | |||||||||
Zappa Stewart | ||||||||||||
Acquisitions | ||||||||||||
Purchase price | $ 73,469 | |||||||||||
Amount drew in relation to acquisition | 65,000 | |||||||||||
Expenses related to acquisition | $ 393 | 393 | ||||||||||
Adjustment to initial amount of goodwill | (1,214) | $ 2,035 | ||||||||||
Error in recording deferred tax liability | 311 | |||||||||||
Inventory step-up costs | (460) | $ 1,070 | ||||||||||
Gross inventory step up adjustment | (360) | |||||||||||
Adjustment to estimate inventory step up costs | (100) | |||||||||||
Acquisition cost has been allocated to the acquired tangible and identifiable intangible assets assumed based on their fair values | ||||||||||||
Accounts receivable | 3,670 | |||||||||||
Inventory | 6,796 | |||||||||||
Prepaid expenses and other current assets | 12 | |||||||||||
Property, plant and equipment | 1,872 | |||||||||||
Goodwill | 34,138 | |||||||||||
Intangible assets | 30,240 | |||||||||||
Accounts payable and accrued liabilities | (633) | |||||||||||
Deferred tax liability | (2,626) | |||||||||||
Total purchase price | 73,469 | |||||||||||
Zappa Stewart | Customer Relationships | ||||||||||||
Acquisitions | ||||||||||||
Net adjustment to intangible assets | 4,300 | |||||||||||
Gross adjustment to intangible assets | 4,800 | |||||||||||
Adjustment to estimate for intangible assets | $ (500) | |||||||||||
Acquisition cost has been allocated to the acquired tangible and identifiable intangible assets assumed based on their fair values | ||||||||||||
Intangible assets | $ 28,500 | |||||||||||
Resin Designs | ||||||||||||
Acquisitions | ||||||||||||
Purchase price | $ 30,270 | |||||||||||
Expenses related to acquisition | $ 584 | 584 | ||||||||||
Inventory step-up costs | $ 190 | |||||||||||
Goodwill deductible for income tax purposes | 7,592 | |||||||||||
Acquisition cost has been allocated to the acquired tangible and identifiable intangible assets assumed based on their fair values | ||||||||||||
Accounts receivable | 1,877 | |||||||||||
Inventory | 1,300 | |||||||||||
Prepaid expenses and other current assets | 63 | |||||||||||
Property, plant and equipment | 623 | |||||||||||
Goodwill | 7,592 | |||||||||||
Intangible assets | 19,450 | |||||||||||
Accounts payable and accrued liabilities | (635) | |||||||||||
Total purchase price | 30,270 | |||||||||||
Resin Designs | Customer Relationships | ||||||||||||
Acquisition cost has been allocated to the acquired tangible and identifiable intangible assets assumed based on their fair values | ||||||||||||
Intangible assets | $ 17,500 | |||||||||||
Spray Products Private Limited | ||||||||||||
Acquisitions | ||||||||||||
Purchase price | $ 1,161 |
Acquisitions - Intangible asset
Acquisitions - Intangible assets purchase transaction (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2017 |
Zappa Stewart | ||
Identifiable intangible assets purchased | ||
Intangible assets | $ 30,240 | |
Resin Designs | ||
Identifiable intangible assets purchased | ||
Intangible assets | $ 19,450 | |
Customer Relationships | Zappa Stewart | ||
Identifiable intangible assets purchased | ||
Intangible assets | $ 28,500 | |
Useful life | 7 years 10 months 24 days | |
Customer Relationships | Resin Designs | ||
Identifiable intangible assets purchased | ||
Intangible assets | $ 17,500 | |
Useful life | 10 years | |
Technology | Zappa Stewart | ||
Identifiable intangible assets purchased | ||
Intangible assets | $ 900 | |
Useful life | 7 years | |
Technology | Resin Designs | ||
Identifiable intangible assets purchased | ||
Intangible assets | $ 1,200 | |
Useful life | 4 years | |
Trade names | Zappa Stewart | ||
Identifiable intangible assets purchased | ||
Intangible assets | $ 840 | |
Useful life | 4 years | |
Trade names | Resin Designs | ||
Identifiable intangible assets purchased | ||
Intangible assets | $ 750 | |
Useful life | 7 years |
Acquisitions - Supplemental Pro
Acquisitions - Supplemental Pro Forma Data (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 4 Months Ended | 8 Months Ended | 11 Months Ended | 12 Months Ended | |||||
Aug. 31, 2018 | Feb. 28, 2018 | Nov. 30, 2016 | Dec. 31, 2017 | Aug. 31, 2018 | Aug. 31, 2017 | Aug. 31, 2019 | Aug. 31, 2018 | Aug. 31, 2017 | Aug. 31, 2016 | |
Acquisition of Specialty Chemical Intermediates Businesses | ||||||||||
Acquisition-related costs (Note 14) | $ 393 | $ 584 | ||||||||
Statutory tax rate (as a percent) | 35.00% | 21.00% | 25.70% | 35.00% | 35.00% | |||||
Forecast | ||||||||||
Acquisition of Specialty Chemical Intermediates Businesses | ||||||||||
Statutory tax rate (as a percent) | 21.00% | |||||||||
Zappa Stewart | ||||||||||
Acquisition of Specialty Chemical Intermediates Businesses | ||||||||||
Revenue since acquisition date | $ 16,324 | |||||||||
Net income (loss) since acquisition date | 578 | |||||||||
Inventory step-up costs | $ (460) | 1,070 | ||||||||
Acquisition-related costs (Note 14) | $ 393 | 393 | ||||||||
Amortization expense | 2,672 | |||||||||
Amount drawn remained outstanding | $ 65,000 | $ 65,000 | $ 65,000 | |||||||
Statutory tax rate (as a percent) | 26.00% | 35.00% | ||||||||
Pro Forma Information | ||||||||||
Revenue | 292,609 | $ 276,646 | ||||||||
Net income | $ 44,508 | $ 41,603 | ||||||||
Net income available to common shareholders, per common and common equivalent share | ||||||||||
Basic earnings per share (in dollars per share) | $ 4.75 | $ 4.45 | ||||||||
Diluted earning per share (in dollars per share) | $ 4.70 | $ 4.40 | ||||||||
Resin Designs | ||||||||||
Acquisition of Specialty Chemical Intermediates Businesses | ||||||||||
Revenue since acquisition date | $ 14,868 | |||||||||
Net income (loss) since acquisition date | 669 | |||||||||
Inventory step-up costs | 190 | |||||||||
Acquisition-related costs (Note 14) | $ 584 | $ 584 | ||||||||
Statutory tax rate (as a percent) | 35.00% | |||||||||
Pro Forma Information | ||||||||||
Revenue | $ 254,145 | |||||||||
Net income | $ 42,685 | |||||||||
Net income available to common shareholders, per common and common equivalent share | ||||||||||
Basic earnings per share (in dollars per share) | $ 4.56 | |||||||||
Diluted earning per share (in dollars per share) | $ 4.51 |
Sale of License (Details)
Sale of License (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Feb. 28, 2018 | Aug. 31, 2018 | Nov. 30, 2017 | Aug. 31, 2017 | |
Sale of License | ||||
Net book value | $ 65,330 | $ 46,846 | ||
Proceeds from sale of license | 1,000 | |||
Gain on sale of license | $ 1,085 | |||
Unrelated Party | ||||
Sale of License | ||||
Net book value | $ 26 | |||
Gross consideration | $ 1,111 | |||
Proceeds from sale of license | 1,000 | |||
Foreign tax consideration paid by buyer | 111 | |||
Gain on sale of license | $ 1,085 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Recurring basis - USD ($) $ in Thousands | Aug. 31, 2018 | Aug. 31, 2017 |
Fair value measurements | ||
Restricted investments | $ 1,090 | $ 964 |
Long-term debt | 25,000 | |
Quoted prices in active markets (Level 1) | ||
Fair value measurements | ||
Restricted investments | 961 | 926 |
Significant other observable inputs (Level 2) | ||
Fair value measurements | ||
Restricted investments | 129 | $ 38 |
Long-term debt | $ 25,000 |
Net Income Per Share (Details)
Net Income Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Aug. 31, 2018 | May 31, 2018 | Feb. 28, 2018 | Nov. 30, 2017 | Aug. 31, 2017 | May 31, 2017 | Feb. 28, 2017 | Nov. 30, 2016 | Aug. 31, 2018 | Aug. 31, 2017 | Aug. 31, 2016 | |
Basic Earnings per Share | |||||||||||
Net income attributable to Chase Corporation | $ 11,163 | $ 13,543 | $ 10,122 | $ 8,315 | $ 11,413 | $ 11,855 | $ 8,383 | $ 10,363 | $ 43,143 | $ 42,014 | $ 32,807 |
Less: Allocated to participating securities | 410 | 454 | 266 | ||||||||
Available to common shareholders | $ 42,733 | $ 41,560 | $ 32,541 | ||||||||
Basic weighted average shares outstanding | 9,296,648 | 9,249,343 | 9,167,333 | ||||||||
Net income per share - Basic (in dollars per share) | $ 1.19 | $ 1.44 | $ 1.08 | $ 0.89 | $ 1.22 | $ 1.27 | $ 0.90 | $ 1.11 | $ 4.60 | $ 4.49 | $ 3.55 |
Diluted Earnings per Share | |||||||||||
Net income attributable to Chase Corporation | $ 11,163 | $ 13,543 | $ 10,122 | $ 8,315 | $ 11,413 | $ 11,855 | $ 8,383 | $ 10,363 | $ 43,143 | $ 42,014 | $ 32,807 |
Basic weighted average shares outstanding | 9,296,648 | 9,249,343 | 9,167,333 | ||||||||
Additional dilutive common stock equivalents (in shares) | 69,423 | 108,071 | 126,744 | ||||||||
Diluted weighted average shares outstanding | 9,366,071 | 9,357,414 | 9,294,077 | ||||||||
Net income per share - Diluted (in dollars per share) | $ 1.18 | $ 1.43 | $ 1.07 | $ 0.88 | $ 1.21 | $ 1.26 | $ 0.89 | $ 1.10 | $ 4.56 | $ 4.44 | $ 3.50 |
Antidilutive securities | |||||||||||
Antidilutive stock options excluded from computation of earnings per share amount (in shares) | 404 | 0 | 9,354 |
Sale of Businesses (Details)
Sale of Businesses (Details) $ in Thousands | Apr. 03, 2017USD ($) | Oct. 31, 2018USD ($) | Nov. 30, 2015USD ($) | Aug. 31, 2018USD ($) | May 31, 2018USD ($) | May 31, 2017USD ($) | May 31, 2016USD ($)installment | Nov. 30, 2015USD ($) | Aug. 31, 2018USD ($) | Aug. 31, 2017USD ($) | Aug. 31, 2016USD ($) | Apr. 20, 2018USD ($) |
Sale of Businesses | ||||||||||||
Proceeds from the sale of property and assets | $ 2,232 | $ 3,915 | $ 1,729 | |||||||||
Gain on sale | 1,480 | 2,013 | 1,031 | |||||||||
Write-down of certain assets under construction (Note 18) | $ 365 | 365 | ||||||||||
Revenue | ||||||||||||
Sale of Businesses | ||||||||||||
Manufacturing services | 2,186 | 740 | ||||||||||
Selling, General and Administrative Expenses | ||||||||||||
Sale of Businesses | ||||||||||||
Administrative expense fees | 275 | 100 | ||||||||||
Other Income (Expense) | ||||||||||||
Sale of Businesses | ||||||||||||
Rental income | $ 130 | 54 | ||||||||||
Structural Composites Rod Business | ||||||||||||
Sale of Businesses | ||||||||||||
Total proceeds received or to be received | $ 2,232 | |||||||||||
Pre-tax book gain from the sale of property and assets | $ 1,480 | |||||||||||
Proceeds from the sale of property and assets | $ 157 | $ 2,075 | ||||||||||
Fiber Optic Cable Components Product Line | ||||||||||||
Sale of Businesses | ||||||||||||
Total proceeds received or to be received | $ 3,858 | |||||||||||
Proceeds from the sale of property and assets | $ 3,458 | |||||||||||
Gain on sale | $ 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 | |||||||||||
Fiber Optic Cable Components Product Line | Subsequent Events | ||||||||||||
Sale of Businesses | ||||||||||||
Proceeds from the sale of property and assets | $ 400 | |||||||||||
RodPack Business | ||||||||||||
Sale of Businesses | ||||||||||||
Pre-tax book gain from the sale of property and assets | $ 1,031 | |||||||||||
Proceeds from the sale of property and assets | $ 2,186 | $ 229 | $ 1,500 | |||||||||
Number of installments | installment | 3 |
Sale of Real Estate (Details)
Sale of Real Estate (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Nov. 30, 2016 | May 31, 2018 | Feb. 28, 2017 | Nov. 30, 2016 | Aug. 31, 2017 | |
Assets held for sale | |||||
Gain on sale of assets | $ 860 | ||||
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 |
Exit Costs Related to Idle Fa_2
Exit Costs Related to Idle Facility (Details) - USD ($) $ in Thousands | Jun. 25, 2018 | Aug. 31, 2018 | Aug. 31, 2018 | Aug. 31, 2017 | Aug. 31, 2016 |
Exit Costs Related to Idle Facility | |||||
Exit costs | $ 1,272 | $ 70 | $ 935 | ||
Pawtucket, RI Manufacturing Facility | |||||
Exit Costs Related to Idle Facility | |||||
Restructuring Period | 2 months | ||||
Exit costs | $ 1,272 | $ 1,272 | |||
Non-cash-related accelerated depreciation expense | 682 | ||||
Cash-related employee-related, logistics and uncapitalized facility improvement costs | $ 590 | ||||
Randolph MA | |||||
Exit Costs Related to Idle Facility | |||||
Exit costs | $ 935 | ||||
RodPack Business | |||||
Exit Costs Related to Idle Facility | |||||
Exit costs | $ 70 |
Related Party Agreements (Detai
Related Party Agreements (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||
Dec. 31, 2016USD ($)individual | Sep. 30, 2016USD ($) | Aug. 31, 2016USD ($) | May 31, 2018USD ($) | Feb. 28, 2017USD ($) | Aug. 31, 2016USD ($) | Aug. 31, 2017USD ($) | Aug. 31, 2016USD ($) | Aug. 31, 2018policy | |
Related party transactions | |||||||||
Proceeds from settlement of life insurance policies | $ 1,504 | $ 1,238 | |||||||
Gain on sale of assets | $ 860 | ||||||||
John Hancock (formerly Manufacturers' Life Insurance Company) | |||||||||
Related party transactions | |||||||||
Proceeds from settlement of life insurance policies | $ 1,238 | ||||||||
Gain recorded in selling, general, and administrative expenses | $ 877 | ||||||||
Metropolitan Life Insurance | |||||||||
Related party transactions | |||||||||
Proceeds from settlement of life insurance policies | $ 1,504 | ||||||||
Trust | |||||||||
Related party transactions | |||||||||
Number of insurance policies | policy | 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 | |||||||||
Proceeds from the sale of property | $ 740 | ||||||||
Gain on sale of assets | $ 68 | ||||||||
Number of board members | individual | 2 |
Selected Quarterly Financial _3
Selected Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Aug. 31, 2018 | May 31, 2018 | Feb. 28, 2018 | Nov. 30, 2017 | Aug. 31, 2017 | May 31, 2017 | Feb. 28, 2017 | Nov. 30, 2016 | Aug. 31, 2018 | Aug. 31, 2017 | Aug. 31, 2016 | |
Selected Quarterly Financial Data (Unaudited) | |||||||||||
Net Sales | $ 75,997 | $ 77,653 | $ 64,735 | $ 60,577 | $ 67,679 | $ 63,641 | $ 56,288 | $ 60,269 | $ 278,962 | $ 247,877 | $ 234,450 |
Gross Profit on Sales | 27,999 | 29,401 | 22,744 | 23,682 | 27,301 | 26,130 | 23,430 | 24,980 | 103,826 | 101,841 | |
Net income | $ 11,163 | $ 13,543 | $ 10,122 | $ 8,315 | $ 11,413 | $ 11,855 | $ 8,383 | $ 10,363 | $ 43,143 | $ 42,014 | $ 32,807 |
Net income available to common shareholders, per common and common equivalent share: | |||||||||||
Basic (in dollars per share) | $ 1.19 | $ 1.44 | $ 1.08 | $ 0.89 | $ 1.22 | $ 1.27 | $ 0.90 | $ 1.11 | $ 4.60 | $ 4.49 | $ 3.55 |
Diluted (in dollars per share) | $ 1.18 | $ 1.43 | $ 1.07 | $ 0.88 | $ 1.21 | $ 1.26 | $ 0.89 | $ 1.10 | $ 4.56 | $ 4.44 | $ 3.50 |
Valuation and Qualifying Acco_3
Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 31, 2018 | Aug. 31, 2017 | Aug. 31, 2016 | |
Accounts receivable reserve | |||
Changes in valuation allowances and reserves | |||
Balance at Beginning of Year | $ 456 | $ 830 | $ 705 |
Charges to Operations | 1,138 | 197 | 196 |
Deductions to Reserves | (1,035) | (571) | (71) |
Balance at End of Year | 559 | 456 | 830 |
Warranty reserve | |||
Changes in valuation allowances and reserves | |||
Balance at Beginning of Year | 220 | 0 | 230 |
Charges to Operations | 220 | 143 | |
Deductions to Reserves | (220) | (373) | |
Balance at End of Year | $ 0 | $ 220 | $ 0 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 31, 2018 | Aug. 31, 2017 | Aug. 31, 2016 | |
Accumulated other comprehensive income | |||
Balance at the beginning of the period | $ (13,469) | $ (15,479) | |
Other comprehensive gains (losses) before reclassifications | 506 | 1,164 | |
Reclassifications to net income of previously deferred (gains) losses | 627 | 846 | |
Total other comprehensive income (loss) | 1,133 | 2,010 | $ (7,493) |
Balance at the ending of the period | (12,336) | (13,469) | (15,479) |
Restricted investments | |||
Accumulated other comprehensive income | |||
Balance at the beginning of the period | 121 | 54 | |
Other comprehensive gains (losses) before reclassifications | 77 | 155 | |
Reclassifications to net income of previously deferred (gains) losses | (72) | (88) | |
Total other comprehensive income (loss) | 5 | 67 | |
Balance at the ending of the period | 126 | 121 | 54 |
Change in funded status of pension plan | |||
Accumulated other comprehensive income | |||
Balance at the beginning of the period | (6,181) | (7,336) | |
Other comprehensive gains (losses) before reclassifications | (314) | 221 | |
Reclassifications to net income of previously deferred (gains) losses | 699 | 934 | |
Total other comprehensive income (loss) | 385 | 1,155 | |
Balance at the ending of the period | (5,796) | (6,181) | (7,336) |
Foreign currency translation adjustment | |||
Accumulated other comprehensive income | |||
Balance at the beginning of the period | (7,409) | (8,197) | |
Other comprehensive gains (losses) before reclassifications | 743 | 788 | |
Total other comprehensive income (loss) | 743 | 788 | |
Balance at the ending of the period | $ (6,666) | $ (7,409) | $ (8,197) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income - Reclassifications (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Aug. 31, 2018 | May 31, 2018 | Feb. 28, 2018 | Nov. 30, 2017 | Aug. 31, 2017 | May 31, 2017 | Feb. 28, 2017 | Nov. 30, 2016 | Aug. 31, 2018 | Aug. 31, 2017 | Aug. 31, 2016 | |
Accumulated other comprehensive income | |||||||||||
Selling, general and administrative expenses | $ (52,297) | $ (47,736) | $ (44,574) | ||||||||
Cost of products and services sold | (175,136) | (146,036) | (144,438) | ||||||||
Tax expense (benefit) | (13,822) | (18,878) | (17,303) | ||||||||
Net income attributable to Chase Corporation | $ 11,163 | $ 13,543 | $ 10,122 | $ 8,315 | $ 11,413 | $ 11,855 | $ 8,383 | $ 10,363 | 43,143 | 42,014 | 32,807 |
Net income (loss) | 43,143 | 42,014 | $ 32,807 | ||||||||
Reclassification out of accumulated other comprehensive income (loss) | |||||||||||
Accumulated other comprehensive income | |||||||||||
Net income (loss) | 627 | 846 | |||||||||
Restricted investments | Reclassification out of accumulated other comprehensive income (loss) | |||||||||||
Accumulated other comprehensive income | |||||||||||
Selling, general and administrative expenses | (97) | (127) | |||||||||
Tax expense (benefit) | 25 | 39 | |||||||||
Net income (loss) | (72) | (88) | |||||||||
Change in funded status of pension plan | Reclassification out of accumulated other comprehensive income (loss) | |||||||||||
Accumulated other comprehensive income | |||||||||||
Selling, general and administrative expenses | 820 | 1,255 | |||||||||
Cost of products and services sold | 117 | 98 | |||||||||
Tax expense (benefit) | (238) | (419) | |||||||||
Net income (loss) | $ 699 | $ 934 |