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Chase Corporation Announces First Quarter Results

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Chase Corporation (NYSE American: CCF), a global specialty chemicals company that is a leading manufacturer of protective materials for high-reliability applications, today announced financial results for the quarter ended November 30, 2018, the first quarter of its fiscal 2019.

HIGHLIGHTS “ Q1 2019 vs. Q1 2018

GAAP Financials

  • Revenue of $72.50 million, up $10.59 million, or 17%, from $61.92 million
  • Operating income of $12.31 million, down $0.82 million, or 6%, from $13.13 million
  • Net income of $8.82 million, up $0.51 million, or 6%, from $8.32 million
  • EPS of $0.93, up $0.05 or 6%, from $0.88

Non-GAAP Financial Measures *

  • EBITDA of $16.36 million, up $0.15 million, or 1%, from $16.21 million
  • Adjusted EBITDA of $16.82 million, up $0.61 million, or 4%, from $16.21 million
  • Adjusted diluted EPS of $0.97 up $0.09, or 10%, from $0.88

* Reconciliations of the non-GAAP financial measures to Chases GAAP financial results are included at the end of this release. See also Use of Non-GAAP Financial Measures below.

Adam P. Chase, President and Chief Executive Officer, commented, Revenue growth over the prior year resulted from ongoing organic growth through both increases in volume and price along with the inorganic comparative boost from the Zappa Stewart superabsorbent polymers acquisition.

We experienced lower than desired operational efficiencies in the first quarter as we worked to integrate the Pawtucket, RI product lines into other facilities following our fourth quarter plant consolidation announcement. This combined with a less favorable product mix and continued raw material cost increases, despite steady progress being made in passing them along in the marketplace, proved to be a drag on our gross margins. The Company has also made certain opportunistic purchases of products anticipated to further increase in price over the short-term, working to create a natural hedge against inflationary pressures. This investment in working capital is planned to be short-term until supply chain and tariff issues are resolved.

Additionally, we had an increase in our lower-margin custom manufacturing services business during the quarter. This tolling work is performed for the purchaser of both our fiber optic cable components and our structural composites rod businesses. Heading into the second quarter, the purchaser has begun to take on more of the manufacturing themselves, and we anticipate less margin strain from this moving forward.

Industrial Materials:

         

For the Three Months Ended November 30,

2018     2017
Revenue $ 60,160 $ 49,985
Cost of products and services sold   39,610   30,465
Gross Margin $ 20,550 $ 19,520
Gross Margin % 34% 39%

Mr. Chase continued, Inorganic sales growth from Zappa Stewart accounted for $6.53 million of our Industrial Materials overall growth, while both volume- and price-related organic growth came from our cable materials and pulling and detection product lines. Both legacy businesses benefit from the ever-growing IoT (Internet of Things) which is a driving force behind the growth of telecom and utility infrastructure. Our specialty products business also recognized increases over the prior year, but with lower-margin custom manufacturing services driving a large part of that growth.

Construction Materials:

          For the Three Months Ended November 30,
2018     2017
Revenue $ 12,343 $ 11,932
Cost of products and services sold   6,965   6,430
Gross Margin $ 5,378 $ 5,502
Gross Margin % 44% 46%

Our Construction Materials segment recognized revenue growth over the prior-year first quarter noted Mr. Chase. Volume-driven growth, especially in the western U.S. and internationally, bolstered our coating and lining systems top-line results. Our bridge and highway products gained on volume and price increases, with our Rosphalt50 product being utilized in several domestic bridge rehabilitation projects including the Benjamin Franklin (PA), Verrazano (NY), RFK (NY) and Cross Bay (NY) bridges. Our pipeline coatings products did not repeat prior year results for the quarter, on overall tightening credit across the Middle East for water infrastructure project work, as well as slower sales of our domestically-produced oil and gas pipeline products.

Other matters:

Kenneth J. Feroldi, Treasurer and Chief Financial Officer, added, In the first quarter of fiscal 2019, we continued to book preliminary and conditional entries related to U.S. tax reform, and we anticipate final and complete entries will be booked in the second quarter. We have entered our first full year under the new Federal tax rates dictated by the Tax Act, and recognized an effective tax rate of 25.3%, as compared to the pre-Tax Act rate of 34% recognized in the prior year period. The reduction in rate came nearly entirely from the Tax Act, as we had no significant discrete items in the current period.

Benefiting from the flexibility allowed under the Tax Act, we were able to repatriate an additional $10 million during the first quarter of fiscal 2019, with no additional tax effects, and utilized the funds to continue to pay down debt incurred in the prior year to acquire Zappa Stewart.

On a personal note, I have completed my 28th year with the Company and my 4th year as Chief Financial Officer and Treasurer of Chase Corporation, having spent the majority of the prior two decades in a similar role at our subsidiary NEPTCO. I remain grateful to Adam and Peter Chase and our Board of Directors for the opportunity to serve in this role and am thankful for the dedicated and hard-working associates I have had the pleasure and honor of working alongside. The growth the Company achieved during my time here was rewarding and I was fortunate to have played a role. This past August, Chase welcomed Christian J. Talma into the newly created role of Chief Accounting Officer, and I am pleased with the speed and thoroughness with which he has gained an understanding of the Company and the trust of our associates. Effective with our annual shareholders meeting scheduled for February 5, 2019, and subject to final board approval at that time, Christian will be named Chief Financial Officer, while I will retain the role of Treasurer. Our plan is for me to work closely with Christian through this transition, while remaining an executive officer and employee of the Company.

Mr. Chase also commented, Our balance sheet remains strong. As of November 30, 2018, the Companys cash on hand was $35.52 million and our $150 million revolving credit facility had $135 million of unused availability. Strategic growth initiatives in marketing and product development, along with mergers, acquisitions and divestitures, and operational consolidation will all continue to be our foundation for long-term growth and value creation and our current financial position puts us on solid footing to execute on these objectives.

The following table summarizes the Companys financial results for the three months ended November 30, 2018 and 2017.

             
For the Three Months Ended November 30,
All figures in thousands, except per share figures         2018 2017
Revenue $ 72,503 $ 61,917
Costs and Expenses
Cost of products and services sold 46,575 36,895
Selling, general and administrative expenses 13,362 11,896
Exit costs related to idle facility   260  
Operating income 12,306 13,126
Interest expense (204) (45)
Other income (expense)   (294)   (482)
Income before income taxes 11,808 12,599
Income taxes   2,985   4,284
Net income $ 8,823 $ 8,315
Net income per diluted share $ 0.93 $ 0.88
Weighted average diluted shares outstanding   9,381   9,384
Reconciliation of net income to EBITDA and adjusted EBITDA
Net income $ 8,823 $ 8,315
Interest expense 204 45
Income taxes 2,985 4,284
Depreciation expense 1,238 1,254
Amortization expense   3,113   2,314
EBITDA $ 16,363 $ 16,212
Exit costs related to idle facility 260
Pension settlement costs   200  
Adjusted EBITDA $ 16,823 $ 16,212
Reconciliation of net income to adjusted net income
Net income $ 8,823 $ 8,315
Exit costs related to idle facility 260
Pension settlement costs 200
Income taxes **   (97)  
Adjusted net income $ 9,186 $ 8,315
Adjusted net income per diluted share (Adjusted diluted EPS) $ 0.97 $ 0.88
 

** For the three months ended November 30, 2018, represents the aggregate tax effect assuming a 21% tax rate for the items impacting pre-tax income, which is our estimated effective U.S. statutory Federal tax rate for fiscal 2019.

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.

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 and Adjusted EBITDA are non-GAAP financial measures. The Company believes that Adjusted net income, Adjusted diluted EPS, EBITDA and Adjusted EBITDA 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 and Adjusted EBITDA are commonly used by financial analysts and others in the industries in which the Company operates, and thus provide useful information to investors. Non-GAAP financial measures should be considered in addition to, and not as an alternative to, the Companys reported results prepared in accordance with GAAP.

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 Corporations 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 Companys ability to successfully integrate acquired operations; the effectiveness of cost-reduction plans; rapid technology changes; and the highly competitive environment in which the Company operates. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made.

Ruthanne Hawkins
Shareholder & Investor Relations Department
Phone:
(781) 332-0700
E-mail: [email protected]
Website:
www.chasecorp.com

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DHL sends healthcare supplies for World Health Organization to the Pacific Islands

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  • Tourism-dependent islands badly impacted by more than 90% decline in passenger flights
  • Supplementary COVID-19 supplies moved through Singapore and Fiji to reach the Pacific islands

SINGAPORE – Media OutReach – 26 November 2020 – The far flung islands in the Pacific have not been spared the brunt of COVID-19. The World Health Organization has been working tirelessly to ensure much-needed supplies and healthcare equipment reach the shores of these islands. While the number of cases has been relatively small, many of these countries, which are heavily dependent on tourism, have been impacted by the dramatic cuts in passenger flights, resulting in a logistical challenge to send in basic supplies on a regular basis.

[View Image]

Image taken prior to Covid-19

 

This week, the World Health Organization coordinated its latest cargo donation through DHL Global Forwarding (“DHL”), the freight specialist of Deutsche Post DHL Group, to support the islands’ fight against COVID-19. The shipments, worth over EUR 650,000 contained medical devices such as oxygen concentrator sets, patient monitors and pulse oximeters, were airfreighted from Singapore to Fiji, where they will be dispatched to eight islands in the Pacific. The Pacific Islands, which had previously managed to avoid large outbreaks, experienced a recent spike in COVID-19 infections that doubled its total number of cases.

 

Due to the shortage of air capacity with passenger flights reduced by more than 90%, the freight had to be broken down into three tranches, sent some two weeks apart. DHL Global Forwarding organized the first shipment from Singapore to Fiji on 22 October, and will be stored till the last shipment arrives on 19 November. From Fiji, special flights or shipping lines were then organized into eight markets, Cook Islands, Kiribati, Nauru, Niue, Solomon Islands, Tokelau, Tuvalu and Tonga, to ensure they reached their destination.

 

“Ensuring that the Pacific Island countries have access to the necessary medical equipment and supplies to prepare for and respond to COVID-19 is a priority for the World Health Organization. But reaching such remote places, especially when so many airports are closed, is a huge logistical challenge. WHO is happy to be working with our partners like DHL to be able to make this happen.” said Dr Takeshi Kasai, WHO Regional Director for the Western Pacific.

 

The medical devices, which will be sent to hospitals and other healthcare institutions, will aid local medical professionals in treating COVID-19 patients.

 

“Whilst the Pacific Islands’ geographic distance from densely populated countries had helped them avert major outbreaks during the pandemic, it has equally worked against them in acquiring much-needed supplies due to the scarcity of air freight capacity. As one of the few global logistics players in the Islands and one with a geographic footprint as wide as ours, we are glad to be able to play a part in delivering the medical equipment and living up to our purpose of ‘Connecting People, Improving Lives,” said Kelvin Leung, CEO, DHL Global Forwarding Asia Pacific.

 

More than ever before, the criticality of logistics networks have been demonstrated in the battle to get much needed supplies to countries that need it the most. Since the start of the year, DHL Global Forwarding tapped on its network of life science and healthcare facilities, temperature-controlled solutions and customs clearance expertise to fly more than 1.3 million COVID-19 test kits from South Korea to Brazil, Ecuador, India, Lithuania, Poland, Russia and Saudi Arabia. The freight forwarder also launched a dedicated 100-ton weekly air freight service for organizations and governments shipping health and medical-related items and other goods from China to Middle East and Africa.

 

Note to editors:

Vaccine logistics for Covid-19 will pose challenges along the supply chain that must be jointly addressed by governments, NGOs, pharmaceutical companies, and logistics players urgently. Find out what lessons Covid-19 has taught on securing stable supply chains for future emergencies and the complexities in distributing the vaccine across the globe.


DHL – The logistics company for the world

DHL is the leading global brand in the logistics industry. Our DHL divisions offer an unrivalled portfolio of logistics services ranging from national and international parcel delivery, e-commerce shipping and fulfillment solutions, international express, road, air and ocean transport to industrial supply chain management. With about 380,000 employees in more than 220 countries and territories worldwide, DHL connects people and businesses securely and reliably, enabling global sustainable trade flows. With specialized solutions for growth markets and industries including technology, life sciences and healthcare, engineering, manufacturing & energy, auto-mobility and retail, DHL is decisively positioned as “The logistics company for the world”.

DHL is part of Deutsche Post DHL Group. The Group generated revenues of more than 63 billion euros in 2019. With sustainable business practices and a commitment to society and the environment, the Group makes a positive contribution to the world. Deutsche Post DHL Group aims to achieve zero-emissions logistics by 2050.

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Sunlight Real Estate Investment Trust Issued HK$300 Million Five-year Medium Term Notes

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HONG KONG SAR – Media OutReach – 26 November 2020 – Henderson Sunlight Asset Management Limited (the “Manager“) is pleased to announce that Sunlight Real Estate Investment Trust (“Sunlight REIT“) has completed its first HK$300 million five-year medium term notes (the “Notes“) today.  This successful inaugural Hong Kong dollar fixed-rate issuance marks a major milestone of Sunlight REIT, testifying to its credit quality amidst a challenging economic environment.

As part of the US$1,000,000,000 guaranteed medium term note programme which was reactivated in April this year, the Notes carry a tenor of five years and a coupon rate of 2.00%. CMB Wing Lung Bank Limited (“CMB Wing Lung“) and CMB International Capital Limited (“CMBI“) are the joint placing agents of the Notes.

Mr. Wu Shiu Kee, Keith, Chief Executive Officer of the Manager, said, “We are delighted to have partnered with CMB Wing Lung and CMBI in launching this maiden medium term note issue of Sunlight REIT, with the competitive pricing of the Notes clearly demonstrating its strong capital market recognition. Similar to the Japanese yen 7,000 million sustainability-linked loan completed last month, this financing exercise once again illustrates the Manager’s commitment to diversifying Sunlight REIT’s sources of funding, while strengthening its exposure to fixed rate borrowing.”

Mr. Wilson He, Assistant General Manager of CMB Wing Lung, said, “We are truly grateful to have such opportunity to support Sunlight REIT’s issuance of the Notes and it is a move to further underpin our collaboration in the future.”

About Sunlight REIT

Sunlight REIT (Stock code: 435) is a real estate investment trust authorized by the Securities and Futures Commission and constituted by the trust deed dated 26 May 2006 (as amended and supplemented by six supplemental deeds) (the “Trust Deed“), and has been listed on The Stock Exchange of Hong Kong Limited on 21 December 2006. Sunlight REIT offers investors the opportunity to invest in a diversified portfolio of 11 office and five retail properties in Hong Kong with a total gross rentable area of over 1.2 million sq. ft.. The office properties are primarily located in core business areas, including Wan Chai and Sheung Wan, as well as in decentralized business areas such as Mong Kok and North Point. The key retail properties are situated in regional transportation hubs and new towns including Sheung Shui, Tseung Kwan O and Yuen Long.

About the Manager

The Manager of Sunlight REIT is an indirect wholly-owned subsidiary of Henderson Land Development Company Limited (恒基兆業地產有限公司). Its main responsibility is to manage Sunlight REIT and all of its assets in accordance with the Trust Deed in the sole interest of its unitholders.


Disclaimer: The information contained in this press release does not constitute an offer or invitation to sell or the solicitation of an offer or invitation to purchase or subscribe for units in Sunlight REIT in Hong Kong or any other jurisdiction.


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Communications Association of Hong Kong Supports The New Initiatives on Telecommunications Industry in The Chief Executive’s 2020 Policy Address

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New initiatives will be beneficial to the long-term development of innovation and technology and the implementation of the Smart City blueprint

 

HONG KONG SAR – Media OutReach – 25 November 2020 – Communications Association of Hong Kong (CAHK) has expressed positive support to the Chief Executive’s 2020 Policy Address, in particular its new initiatives on Network Development and Wider Application of 5G as highlighted under the “New Impetus to the Economy”.

 

We welcome the Hong Kong SAR (HKSAR) Government’s plan to release more 5G spectrum (currently at 3.5GHz, 4.9GHz, and 3.3GHz ranges) in different frequency bands in 2021 to meet the needs of various 5G applications in terms of speed, capacity and coverage, as cited in the Policy Address. Making available more spectrum to all mobile operators in Hong Kong is fundamental to meeting the ever-increasing demand for mobile data services.

 

In addition, the new initiatives will address the restriction zone issue in the Tai Po area, which is caused by the interference between 5G and the satellite earth station in the 3.5GHz band.  When the telemetry, tracking and control stations of the two satellite operators are relocated from Tai Po to Chung Hom Kok Teleport in four years’ time, the overall 5G coverage in Tai Po will be improved when mobile network operators could deploy the 5G frequency bands in a more holistic and efficient manner. 

 

On the promotion of 5G application, we note from the Policy Address that the HKSAR Government is determined to improve the deployment of 5G technology and application with the extension of the subsidy scheme application period under the Anti-epidemic Fund for six months until May 2021.  Furthermore, the HKSAR Government has also worked with a number of public organisations to encourage the deployment of 5G technology in various sectors to facilitate the early adoption of 5G technology and application in government departments and public organisations. 

 

All these encouraging initiatives are welcomed by us and the industry. These initiatives will also promote the long-term development of innovation and technology and facilitate the implementation of the HKSAR Government’s Smart City blueprint.

About Communications Association of Hong Kong

CAHK is a non-profit making organisation incorporated in Hong Kong on 27 May 1983 following the announcement of deregulation of local communication products and services. It is the association for Hong Kong’s communications industries, with responsibilities across broadcasting, wireline and wireless communications, and other sectors in information communications technology.

For more information, please visit:  www.cahk.hk

This press release is distributed by Communications Association of Hong Kong.

 

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