SECURITIES AND EXCHANGE COMMISSION
Washington, D.C., 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended November 30, 1998 Commission File Number: 1-9852
CHASE CORPORATION
(Exact name of registrant as specified in its charter)
Massachusetts 11-1797126
(State or other jurisdiction of (I.R.S. Employer
incorporation of organization) Identification No.)
26 Summer Street
Bridgewater, Massachusetts 02324
(Address of principal executive offices) (Zip Code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months, and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
Common Shares Outstanding as of December 31, 1998 3,889,681
<TABLE>
<CAPTION>
PART 1: FINANCIAL INFORMATION
CHASE CORPORATION
CONSOLIDATED BALANCE SHEET
ASSETS Nov. 30 Aug.31
1998 1998
(UNAUDITED) (AUDITED)
CURRENT ASSETS
<S> <C> <C>
Cash and cash equivalents $ 1,499,260 $ 2,296,384
Trade receivables,less allowance
for doubtful accounts of $219,300 and
$201,135 respectively 6,547,177 7,320,022
Note receivable from related party 46,407 46,406
Inventories(Note B)
Finished and in process 2,088,011 1,671,770
Raw materials 2,896,151 3,064,684
------------ -----------
4,984,162 4,736,454
Prepaid expenses & other curr assets 532,477 380,062
Deferred taxes 90,294 90,294
------------ -----------
TOTAL CURRENT ASSETS 13,699,777 14,869,622
PROPERTY, PLANT AND EQUIPMENT
Land and improvements 322,423 332,536
Buildings 2,269,999 2,385,647
Machinery & equipment 11,869,939 11,763,321
Construction in progress 1,392,599 532,628
------------ -----------
15,854,960 15,014,132
Less allowance for depreciation 10,106,081 9,904,243
------------ -----------
5,748,879 5,109,889
OTHER ASSETS
Note receivable from related party
Excess of cost over net assets of
acquired businesses less amortization 1,085,705 1,106,462
Patents, agreements and trademarks
less amortization 1,019,674 1,044,404
Cash surrender value of life ins. net 2,550,884 2,423,851
Deferred taxes 86,766 72,266
Investment in joint venture 546,797 486,795
Other 258,184 148,497
------------ -----------
5,548,010 5,282,275
------------ -----------
$ 24,996,666 $ 25,261,786
============ ===========
LIABILITIES AND STOCKHOLDERS' EQUITY Nov. 30 Aug.31
1998 1998
(UNAUDITED) (AUDITED)
CURRENT LIABILITIES
Accounts payable $ 2,783,168 $ 2,848,199
Notes payable 1,192,538 1,136,000
Accrued expenses 2,265,568 3,227,937
Accrued pension expense - current 289,478 289,478
Income taxes (432,688) (134,809)
Deferred compensation 41,999 41,999
Current portion of L.T. debt 194,663 287,317
------------ -----------
TOTAL CURRENT LIABILITIES 6,334,726 7,696,121
LONG-TERM DEBT, less current portion 590,056 682,576
Long-term deferred compensation
obligations 297,318 199,131
ACCRUED PENSION EXPENSE 296,927 201,369
Minority interest 4,105 58,923
STOCKHOLDERS' EQUITY
First Serial Preferred Stock, par value
$1.00 a share authorized 100,000
shares; (issued-none)
Common Stock. par value $.10 a share,
Authorized 10,000,000 shares; issued
and outstanding 4,978,265 shares at
Nov. 30, 1998 and 4,977,650 shares at
Aug. 31, 1998 respectively 497,826 497,765
Additional paid-in capital 3,394,629 3,370,066
Treasury Stock, 1,088,584 and 1,072,084 shares at
Nov. 30, 1998, and August 31, 1998, resp (4,687,565) (4,535,476)
Cum. G/(L) on currency translation (222,203) (238,728)
Retained earnings 18,490,847 17,330,039
------------ -----------
17,473,534 16,423,666
------------ -----------
$ 24,996,666 $ 25,261,786
============ ===========
See accompanying notes to the consolidated financial
statements and accountants' review report.
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<TABLE>
<CAPTION>
CHASE CORPORATION
STATEMENT OF CONSOLIDATED OPERATIONS
(UNAUDITED)
3 Months End
Nov.30 Nov.30
1998 1997
<S> <C> <C>
Sales $ 11,511,910 $ 11,557,583
Comm. and other income 84,518 61,491
Interest 19,980 2,152
11,616,408 11,621,226
Cost and Expenses
Cost of products sold(Note B) 7,456,552 7,345,511
Sell.,gen. and admin. expen. 2,368,038 2,762,324
Bad debt expense 12,300 4,634
Interest expense 40,228 76,615
Certain divisions used estimated gross profit rates to determine the cost
of goods sold. No significant adjustments have resulted from reconciling with
the interim physical inventories as a result of using this method.
Note C - Income per Share of Common Stock
Income per share is based on the average number of shares and share
equivalents outstanding during the period. The average number of shares and
share equivalents outstanding used in determining primary per share results was
3,903,674 for the period of three months ended November 30, 1996. Earnings per
share on a fully diluted basis are calculated on 3,907,130 common shares and
share equivalents. Common share equivalents arise from the issuance of certain
stock options.
Note D - Stock Issued for Compensation
The Company issued 100,000 shares of common stock restricted as to sale to
its president. The fair market value of the stock at time of grant is being
amortized over the eight year vesting period. The restriction on sale is
removed at the end of nine years subject to certain service requirements.
Note E - Review by Independent Public Accountant
The financial information included in this form has been reviewed by an
independent public accountant in accordance with established professional
standards and procedures. Based upon such review, no adjustments or additional
disclosures were recommended.
Letter from the independent public accountant is included as a part of this
report.
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
(A) Exhibits
Reg. S-K
Item 601
Subsection Description of Exhibit State Page Number
Pursuant to reg. S-K item 601
no exhibits are required.
(b) Reports on Form 8-K
No 8-K reports were filed during the three months ended
November 30, 1998.
No financial statements were filed during the three months
ended November 30, 1998.
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CHASE CORPORATION
/s/ Peter R. Chase
Peter R. Chase, President & CEO
Dated: January 12, 1999
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from SEC Form
10-Q and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> AUG-31-1999
<PERIOD-END> NOV-30-1998
<CASH> 1,499,260
<SECURITIES> 0
<RECEIVABLES> 6,766,477
<ALLOWANCES> 219,300
<INVENTORY> 4,984,162
<CURRENT-ASSETS> 13,699,777
<PP&E> 15,854,960
<DEPRECIATION> 10,106,081
<TOTAL-ASSETS> 24,996,666
<CURRENT-LIABILITIES> 6,334,726
<BONDS> 0
0
0
<COMMON> 497,826
<OTHER-SE> 16,975,709
<TOTAL-LIABILITY-AND-EQUITY> 24,996,666
<SALES> 11,511,910
<TOTAL-REVENUES> 11,596,428
<CGS> 7,456,552
<TOTAL-COSTS> 7,456,552
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 12,300
<INTEREST-EXPENSE> 40,228
<INCOME-PRETAX> 1,739,290
<INCOME-TAX> 693,300
<INCOME-CONTINUING> 1,160,808
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,160,808
<EPS-PRIMARY> 0.298
<EPS-DILUTED> 0.292
</TABLE>
