Revenue of $67.2 Million, Earnings Per Diluted
Share of $1.14
Acquires ABchimie, Proves Immediately
Accretive
Realizes Revenue Improvement in International
Markets
Chase Corporation (NYSE American: CCF), a global specialty
chemicals company that is a leading manufacturer of protective
materials for high-reliability applications across diverse market
sectors, today announced financial results for the quarter ended
November 30, 2020, the first quarter of its fiscal year 2021.
Fiscal First Quarter Key Highlights
- Total Revenue of $67.2 million, up compared to $66.8 million in
the prior year
- Gross Margin of 41%, up compared to 37% in the prior year
- Net Income of $10.8 million, up compared to $7.4 million in the
prior year
- Adjusted EBITDA of $18.1 million, up compared to $14.7 million
in the prior year
- Free Cash Flow of $13.4 million, lower compared to $17.5
million in the prior year
- Ended fiscal first quarter of 2021 with a cash balance of $90.1
million
- Acquired ABchimie for $22.2 million using cash on hand on
September 1, 2020 (fiscal 2021)
“Our first quarter results demonstrated the resiliency of our
business model and solid execution of our core strategic growth
drivers,” said Adam P. Chase, President and Chief Executive Officer
of Chase Corporation. “The ABchimie acquisition, utilizing our
excess cash, provided immediate margin accretion with business
integration on track with expectations.”
Mr. Chase continued, “We were pleased to experience a strong
rebound in Asian demand benefiting our Adhesives, Sealants and
Additives segment. Renewable energy related applications provided
an additional boost, not only for this segment, but also for our
Industrial Tapes segment. However, continued oil and gas market
headwinds negatively affected both our Industrial Tapes and
Corrosion Protection and Waterproofing segments’ revenue. Helping
to counteract these effects on Corrosion Protection and
Waterproofing was pent up demand from architectural project delays.
Despite the broad-based global effects of the COVID-19 pandemic,
all our domestic and international operating facilities remain
open, servicing our customers and adhering to CDC and local
guidelines.”
“Cost structure improvements from last year’s first quarter
facility consolidation and ongoing operations optimization efforts
helped to drive operational income pull through, producing an
Adjusted EBITDA improvement over the pre-pandemic comparative
period.”
Added Mr. Chase, “I am pleased with our success in continuing to
improve gross margin and operating margin while driving strong
healthy adjusted EBITDA growth. The growth of our business is
directly attributable to the dedication of our employees around the
world, whom I am honored to work with and lead through this
unprecedented period.”
Fiscal First Quarter Financial Highlights
- Total Revenue grew 1% to $67.2 million, compared to Q1
FY20
- Gross Margin of 41%, compared to 37% in Q1 FY20, due in part to
sales mix and operational efficiencies, including site
consolidation
- Selling, General and Administrative expenses decreased 3% to
$12.3 million from the year-ago period
- Effective Income Tax Rate of 22.5%, compared to 26.9% in the
year-ago period
- Net Income for the fiscal first quarter of 2021 was $10.8
million, or $1.14 per diluted share, compared to a Net Income of
$7.4 million, or $0.77 per diluted share, for the fiscal first
quarter of 2020
- Adjusted EBITDA for the fiscal first quarter of 2021 was $18.1
million, compared to Adjusted EBITDA of $14.7 million in the
prior-year quarter. The reconciliation of Net Income to Adjusted
EBITDA is included at the end of this news release
- Free Cash Flow in the fiscal first quarter of 2021 was $13.4
million, compared to Free Cash Flow of $17.5 million in the
prior-year quarter
“The strength of our underlying business and ability to capture
organic opportunities continues to deliver meaningful cash flow
generation and support our overall performance. We are pleased with
the early integration of our cash investment to acquire ABchimie
and its immediate accretion, and we remain confident this business
will further support our international marketing opportunities
within the Adhesives, Sealants and Additives segment,” said
Christian J. Talma, Treasurer and Chief Financial Officer of Chase
Corporation. “We are committed to prudently using our available
cash and our credit facility, if necessary, to drive revenue growth
across our business while consistently generating meaningful total
shareholder returns. Our $150 million revolving credit facility is
set to mature in December 2021, and the Company expects to renew
this facility prior to its expiration to maintain our ability to
support our strategic initiatives.”
Adhesives, Sealants and Additives
For the Three Months Ended
November 30,
2020
2019
Revenue
$
30,071
$
25,822
Cost of products and services sold
16,613
14,532
Gross Margin
$
13,458
$
11,290
Gross Margin %
45%
44%
Revenue in the Company’s Adhesives, Sealants and Additives
segment increased $4.2 million or 16% in the first fiscal quarter.
The increase in revenue was primarily due to a $4.6 million
increase in revenue from both organic and inorganic growth in the
Company’s electronic and industrial coatings product line. The
operations of ABchimie proved immediately accretive to the
Company’s results, while strong organic gains were seen
internationally. Negatively impacting the segment’s sales was a
decrease in revenue from the North American focused functional
additives product line totaling $0.3 million in the first fiscal
quarter.
Industrial Tapes
For the Three Months Ended
November 30,
2020
2019
Revenue
$
26,491
$
30,124
Cost of products and services sold
17,117
21,319
Gross Margin
$
9,374
$
8,805
Gross Margin %
35%
29%
Revenue in the Industrial Tapes segment decreased $3.6 million
or 12% in the current quarter. The decrease in revenue was largely
due to a volume demand decrease of $2.5 million from the North
American-focused cable materials product line; a reduction of $0.7
million for the specialty products product line; a $0.4 million
volume reduction from the pulling and detection tapes product line;
and an all volume-driven decline of $0.1 million for the electronic
materials product line.
Corrosion Protection and Waterproofing
For the Three Months Ended
November 30,
2020
2019
Revenue
$
10,614
$
10,856
Cost of products and services sold
5,875
5,932
Gross Margin
$
4,739
$
4,924
Gross Margin %
45%
45%
Revenue from the Corrosion Protection and Waterproofing segment
decreased $0.2 million or 2% compared to the year ago period. The
decrease was predominantly driven by a $0.5 million decline in the
building envelope product line; the pipeline coatings product
line’s $0.2 million decrease, which was primarily impacted by a
decline in worldwide oil and gas prices; and the bridge and highway
product line’s $0.1 million year-over-year volume reduction. The
Company’s coating and lining systems product line increased $0.6
million over the prior year, with gains seen in both domestic and
international areas.
More information on COVID-19 updates can be found at the Company
website: www.chasecorp.com
About Chase Corporation
Chase Corporation, a global specialty chemicals company that was
founded in 1946, is a leading manufacturer of protective materials
for high-reliability applications throughout the world. More
information can be found on our website https://chasecorp.com/
Use of Non-GAAP Financial Measures
The Company has used non-GAAP financial measures in this press
release. Adjusted net income, Adjusted diluted EPS, EBITDA,
Adjusted EBITDA and Free cash flow are non-GAAP financial measures.
The Company believes that Adjusted net income, Adjusted diluted
EPS, EBITDA, Adjusted EBITDA and Free cash flow are useful
performance measures as they are used by its executive management
team to measure operating performance, to allocate resources to
enhance the financial performance of its business, to evaluate the
effectiveness of its business strategies and to communicate with
its board of directors and investors concerning its financial
performance. The Company believes Adjusted net income, Adjusted
diluted EPS, EBITDA, Adjusted EBITDA and Free cash flow are
commonly used by financial analysts and others in the industries in
which the Company operates, and thus provide useful information to
investors. However, Chase’s calculation of Adjusted net income,
Adjusted diluted EPS, EBITDA, Adjusted EBITDA and Free cash flow
may not be comparable to similarly-titled measures published by
others. Non-GAAP financial measures should be considered in
addition to, and not as an alternative to, the Company’s reported
results prepared in accordance with GAAP. This press release
provides reconciliations from the most directly comparable
financial measure presented in accordance with U.S. GAAP to each
non-GAAP financial measure.
Cautionary Note Concerning Forward-Looking Statements
Certain statements in this press release are forward-looking.
These may be identified by the use of forward-looking words or
phrases such as “believe”; “expect”; “anticipate”; “should”;
“planned”; “estimated” and “potential”, among others. These
forward-looking statements are based on Chase Corporation’s current
expectations. The Private Securities Litigation Reform Act of 1995
provides a “safe harbor” for such forward-looking statements. To
comply with the terms of the safe harbor, the Company cautions
investors that any forward-looking statements made by the Company
are not guarantees of future performance and that a variety of
factors could cause the Company's actual results and experience to
differ materially from the anticipated results or other
expectations expressed in the Company's forward-looking statements.
The risks and uncertainties which may affect the operations,
performance, development and results of the Company's business
include, but are not limited to, the following: uncertainties
relating to economic conditions; uncertainties relating to customer
plans and commitments; the pricing and availability of equipment,
materials and inventories; technological developments; performance
issues with suppliers and subcontractors; economic growth; delays
in testing of new products; the Company’s ability to successfully
integrate acquired operations; the effectiveness of cost-reduction
plans; rapid technology changes; the highly competitive environment
in which the Company operates; as well as expected impact of the
coronavirus disease (COVID-19) pandemic on the Company's
businesses. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date
the statement was made.
The following table summarizes the Company’s unaudited financial
results for the three months and years ended November 30, 2020 and
2019.
For the Three Months Ended
November 30,
All figures in thousands, except per
share figures
2020
2019
Revenue
$
67,176
$
66,802
Costs and Expenses
Cost of products and services sold
39,605
41,783
Selling, general and administrative
expenses
12,260
12,622
Research and product development costs
1,051
1,018
Operations optimization costs
—
649
Operating income
14,260
10,730
Interest expense
(69)
(55)
Other income (expense)
(214)
(604)
Income before income taxes
13,977
10,071
Income taxes
3,140
2,709
Net income
$
10,837
$
7,362
Net income per diluted share
$
1.14
$
0.77
Weighted average diluted shares
outstanding
9,419
9,434
Reconciliation of net income to EBITDA and
adjusted EBITDA
Net income
$
10,837
$
7,362
Interest expense
69
55
Income taxes
3,140
2,709
Depreciation expense
1,003
1,053
Amortization expense
3,071
2,914
EBITDA
$
18,120
$
14,093
Operations optimization costs
—
649
Adjusted EBITDA
$
18,120
$
14,742
For the Three Months Ended
November 30,
2020
2019
Reconciliation of net income to adjusted
net income
Net income
$
10,837
$
7,362
Operations optimization costs
—
649
Income taxes *
—
(136)
Adjusted net income
$
10,837
$
7,875
Adjusted net income per diluted share
(Adjusted diluted EPS)
$
1.14
$
0.83
* For the three months ended November 30, 2020 and 2019
represents the aggregate tax effect assuming a 21% tax rate for the
items impacting pre-tax income, which is our effective U.S.
statutory Federal tax rate for fiscal 2021and 2020.
For the Three Months Ended
November 30,
2020
2019
Reconciliation of cash provided by
operations to free cash flow
Net cash provided by operating
activities
$
14,052
$
18,153
Purchases of property, plant and
equipment
(660)
(699)
Free cash flow
$
13,392
$
17,454
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210107005877/en/
Investor & Media Contact: Michael Cummings or Jackie
Marcus Alpha IR Group Phone: (617) 982-0475 E-mail:
CCF@alpha-ir.com or Shareholder & Investor Relations Department
Phone: (781) 332-0700 E-mail: investorrelations@chasecorp.com
Website: www.chasecorp.com
Chase (AMEX:CCF)
Historical Stock Chart
From Mar 2024 to Apr 2024
Chase (AMEX:CCF)
Historical Stock Chart
From Apr 2023 to Apr 2024