10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended November 30, 2013

Commission File Number: 1-9852

CHASE CORPORATION

(Exact name of registrant as specified in its charter)

Massachusetts	11-1797126
(State or other jurisdiction of incorporation of organization)	(I.R.S. Employer Identification No.)

26 Summer Street, Bridgewater, Massachusetts 02324

(Address of Principal Executive Offices, Including Zip Code)

(508) 819-4200

(Registrant’s Telephone Number, Including Area 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 o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  YES x  NO o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o	Accelerated filer x
Non-accelerated filer o (Do not check if a smaller reporting company)	Smaller reporting company o

Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  YES o  NO x

The number of shares of Common Stock outstanding as of December 31, 2013 was 9,097,078.

CHASE CORPORATION

INDEX TO FORM 10-Q

For the Quarter Ended November 30, 2013

Part I — FINANCIAL INFORMATION
Item 1 — Unaudited Financial Statements
Consolidated Balance Sheets as of November 30, 2013 and August 31, 2013	3
Consolidated Statements of Operations for the three months ended November 30, 2013 and 2012	4
Consolidated Statements of Comprehensive Income for the three months ended November 30, 2013 and 2012	5
Consolidated Statement of Equity for the three months ended November 30, 2013	6
Consolidated Statements of Cash Flows for the three months ended November 30, 2013 and 2012	7
Notes to Consolidated Financial Statements	8
Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3 — Quantitative and Qualitative Disclosures About Market Risk	25
Item 4 — Controls and Procedures	25
Part II — OTHER INFORMATION
Item 1 — Legal Proceedings	27
Item 1A — Risk Factors	27
Item 6 — Exhibits	27
SIGNATURES	28

2

Part 1 — FINANCIAL INFORMATION

Item 1 — Unaudited Financial Statements

CHASE CORPORATION

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

In thousands, except share and per share amounts

	November 30,			August 31,
	2013			2013
ASSETS
Current Assets
Cash & cash equivalents	$	36,928		$	29,997
Accounts receivable, less allowance for doubtful accounts of $672 and $696	30,691			32,084
Inventories	33,983			32,048
Prepaid expenses and other current assets	3,987			1,826
Due from sale of product line	3,255			—
Assets held for sale, net	—			1,905
Deferred income taxes	2,115			2,115
Total current assets	110,959			99,975
Property, plant and equipment, net	44,835			45,192
Other Assets
Goodwill	38,092			37,815
Intangible assets, less accumulated amortization of $19,179 and $17,554	30,932			31,781
Cash surrender value of life insurance	7,300			7,278
Restricted investments	1,229			1,094
Funded pension plan	1,226			1,014
Other assets	202			211
	$	234,775		$	224,360
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable	$	15,588		$	12,416
Accrued payroll and other compensation	2,885			7,046
Accrued expenses	5,125			5,171
Accrued income taxes	4,009			2,161
Dividends payable	4,093			—
Current portion of long-term debt	5,950			5,600
Total current liabilities	37,650			32,394
Long-term debt, less current portion	57,050			58,800
Deferred compensation	2,020			1,897
Accumulated pension obligation	7,895			7,834
Other liabilities	104			108
Deferred income taxes	9,446			9,467
Commitments and Contingencies (Note 10)
Equity
First Serial Preferred Stock, $1.00 par value: Authorized 100,000 shares; none issued	—			—
Common stock, $.10 par value: Authorized 20,000,000 shares; 9,094,868 shares at November 30, 2013 and 9,066,115 shares at August 31, 2013 issued and outstanding	910			907
Additional paid-in capital	13,662			13,336
Accumulated other comprehensive loss	(3,466		)	(5,163		)
Retained earnings	108,416			103,734
Chase Corporation stockholders’ equity	119,522			112,814
Non-controlling interest related to NEPTCO joint venture	1,088			1,046
Total equity	120,610			113,860
Total liabilities and equity	$	234,775		$	224,360

See accompanying notes to the consolidated financial statements

3

CHASE CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

In thousands, except share and per share amounts

	Three Months Ended November 30,
	2013			2012
Revenues
Sales	$	53,655		$	52,976
Royalties and commissions	528			424
	54,183			53,400
Costs and Expenses
Cost of products and services sold	35,478			37,271
Selling, general and administrative expenses	10,439			10,539
Operating income	8,266			5,590
Interest expense	(303		)	(362		)
Gain on sale of product line (Note 8)	5,706			—
Other (expense) income	(105		)	69
Income before income taxes	13,564			5,297
Income taxes	4,747			1,820
Net income	$	8,817		$	3,477
Net (gain) loss attributable to non-controlling interest	(42		)	63
Net income attributable to Chase Corporation	$	8,775		$	3,540
Net income available to common shareholders, per common and common equivalent share
Basic	$	0.96		$	0.39
Diluted	$	0.94		$	0.39
Weighted average shares outstanding
Basic	8,938,149			8,851,314
Diluted	9,149,677			8,927,970
Annual cash dividends declared per share	$	0.45		$	0.40

See accompanying notes to the consolidated financial statements

4

CHASE CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

Dollars in thousands

	Three Months Ended November 30,
	2013			2012
Net income	$	8,817		$	3,477
Other comprehensive income:
Net unrealized loss on restricted investments, net of tax	71			—
Change in funded status of pension plans, net of tax	48			272
Foreign currency translation adjustment	1,578			404
Total other comprehensive income	1,697			676
Comprehensive income	10,514			4,153
Comprehensive (income) loss attributable to non-controlling interest	(42		)	63
Comprehensive income attributable to Chase Corporation	$	10,472		$	4,216

See accompanying notes to the consolidated financial statements

5

CHASE CORPORATION

CONSOLIDATED STATEMENT OF EQUITY

(UNAUDITED)

Dollars in thousands

				Additional			Accumulated Other						Chase
	Common Stock			Paid-In			Comprehensive			Retained			Stockholders’			Non-conrolling		Total
	Shares	Amount		Capital			Income (loss)			Earnings			Equity			Interest		Equity
Balance at August 31, 2013	9,066,115	$	907	$	13,336		$	(5,163	)	$	103,734		$	112,814		$	1,046	$	113,860
Restricted stock grants, net of forfeitures	28,753	3		(3		)							—					—
Amortization of restricted stock grants				265									265					265
Amortization of stock option grants				64									64					64
Cash dividend accrued, $0.45 per share										(4,093		)	(4,093		)			(4,093		)
Change in funded status of pension plan, net of tax of $26							48						48					48
Foreign currency translation adjustment							1,578						1,578					1,578
Net unrealized gain on restricted investments, net of tax of $38							71						71					71
Net income										8,775			8,775			42		8,817
Balance at November 30, 2013	9,094,868	$	910	$	13,662		$	(3,466	)	$	108,416		$	119,522		$	1,088	$	120,610

See accompanying notes to the consolidated financial statements

6

CHASE CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

Dollars in thousands

	Three Months Ended November 30,
	2013			2012
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	8,817		$	3,477
Adjustments to reconcile net income to net cash provided by operating activities
Gain on sale of assets	(6		)	(4		)
Gain on sale of product line	(5,706		)	—
Depreciation	1,426			1,508
Amortization	1,194			1,217
Cost of sale of inventory step-up	—			564
Recovery on allowance for doubtful accounts	(38		)	(130		)
Stock based compensation	329			419
Realized gain on restricted investments	(5		)	(25		)
Decrease in cash surrender value life insurance	30			82
Pension curtailment and settlement loss	—			352
Increase (decrease) from changes in assets and liabilities
Accounts receivable	1,619			839
Inventories	(4,032		)	(4,818		)
Prepaid expenses & other assets	(2,112		)	(623		)
Accounts payable	3,074			3,753
Accrued compensation and other expenses	(4,522		)	(4,131		)
Accrued income taxes	1,792			(399		)
Deferred compensation	123			35
Net cash provided by operating activities	1,983			2,116
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment	(781		)	(544		)
Cost to acquire intangible assets	(22		)	(101		)
Contingent purchase price paid for acquisition	—			84
Proceeds from sale of fixed assets	11			11
Net proceeds from sale of product line	6,655			—
Contributions from restricted investments	(21		)	(22		)
Payments for cash surrender value life insurance	(46		)	(24		)
Net cash provided by (used in) investing activities	5,796			(596		)
CASH FLOWS FROM FINANCING ACTIVITIES
Payments of principal on debt	(1,400		)	(1,400		)
Net cash used in financing activities	(1,400		)	(1,400		)
INCREASE IN CASH & CASH EQUIVALENTS	6,379			120
Effect of foreign exchange rates on cash	552			73
CASH & CASH EQUIVALENTS, BEGINNING OF PERIOD	29,997			15,180
CASH & CASH EQUIVALENTS, END OF PERIOD	$	36,928		$	15,373
Non-cash Investing and Financing Activities
Property, plant & equipment additions included in accounts payable	$	90		$	157
Annual cash dividend declared	$	4,093		$	3,626

See accompanying notes to the consolidated financial statements

7

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

In thousands, except share and per share amounts

Note 1 - Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial reporting and instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Therefore, they do not include all information and footnote disclosure necessary for a complete presentation of Chase Corporation’s financial position, results of operations and cash flows, in conformity with generally accepted accounting principles.  Chase Corporation (the “Company,” “Chase,” “we,” or “us”) filed audited consolidated financial statements, which included all information and notes necessary for such complete presentation for the three years ended August 31, 2013 in conjunction with its 2013 Annual Report on Form 10-K.

The results of operations for the interim period ended November 30, 2013 are not necessarily indicative of the results to be expected for any future period or the entire fiscal year.  These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended August 31, 2013, which are contained in the Company’s 2013 Annual Report on Form 10-K.

The accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of normal recurring items) which are, in the opinion of management, necessary for a fair statement of the Company’s financial position as of November 30, 2013, the results of operations, comprehensive income and cash flows for the interim periods ended November 30, 2013 and 2012, and changes in equity for the interim period ended November 30, 2013.

The financial statements include the accounts of the Company and its wholly-owned subsidiaries.  All intercompany transactions and balances have been eliminated in consolidation.  The Company uses the U.S. dollar as the reporting currency for financial reporting.  The financial position and results of operations of the Company’s UK-based operations are measured using the British Pound as the functional currency and the financial position and results of operations of the Company’s operations based in France are measured using the euro as the functional currency.  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.  Translation gains and losses generated from the remeasurement of assets and liabilities denominated in currencies other than the functional currency of our foreign operations are included in other (expense) / income on the consolidated statements of operations.

During the third quarter of fiscal 2013, an immaterial error was identified in the presentation of two line items within the operating activities section of the Company’s previously reported statement of cash flows for the comparing period ended November 30, 2012.  The Company revised the statement of cash flows to correct the presentation of two line items within the operating activities section.  This revision to the statement of cash flows results in pension curtailment and settlement loss changing from ($352) to $352 and accrued compensation and other expenses changing from ($3,427) to ($4,131) for the three months ended November 30, 2012. There was no impact on the comparing balance sheet or the related statement of operations, statement of comprehensive income, total cash provided by operating activities or overall cash flows.

During the fourth quarter of fiscal 2013, the Company identified an immaterial error in the statement of comprehensive income within the Company’s previously reported unaudited financial statements for the first three quarters of fiscal 2013.  In those fiscal quarters, the Company properly recorded pension

8

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

In thousands, except share and per share amounts

settlement losses that resulted from lump sum distributions to pension plan participants in earnings, but did not properly reclassify the amount out of Equity—Accumulated Other Comprehensive Income (Loss).  As a result, the Company revised the reclassification adjustment for the change in funded status of pension plans line item from $58 to $272 for the three months ended November 30, 2012.  There was no impact on the comparing balance sheet or the related statement of operations, and statement of cash flows.

The Company has evaluated events and transactions subsequent to the balance sheet date.  Based on this evaluation, the Company is not aware of any 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.

Note 2 — Recent Accounting Policies

Recently Adopted Accounting Pronouncements

In February 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2013-02, “Comprehensive Income (Topic 220):  Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income”.  This ASU expands the presentation of changes in accumulated other comprehensive income.  The new guidance requires an entity to disaggregate the total change of each component of other comprehensive income either on the face of the net income statement or as a separate disclosure in the notes. ASU 2013-02 is effective for fiscal years beginning after December 15, 2012.  The Company adopted this ASU in the first quarter of fiscal 2014 (See Note 13 for additional details).  The provisions of ASU 2013-02 did not have a material impact on the Company’s consolidated financial position, results of operations or cash flows.

Note 3 — Inventories

Inventories consist of the following as of November 30, 2013 and August 31, 2013:

	November 30, 2013		August 31, 2013
Raw materials	$	15,032	$	14,545
Work in process	6,665		5,967
Finished goods	12,286		11,536
Total Inventories	$	33,983	$	32,048

9

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

In thousands, except share and per share amounts

Note 4 — 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”.  The Company allocates earnings to participating securities and computes earnings per share using the two class method.  The determination of earnings per share under the two-class method is as follows:

	Three Months Ended November 30,
	2013		2012
Basic Earnings per Share
Net income attributable to Chase Corporation	$	8,775	$	3,540
Less: Allocated to participating securities	151		77
Net income available to common shareholders	$	8,624	$	3,463
Basic weighted average shares outstanding	8,938,149		8,851,314
Net income per share - Basic	$	0.96	$	0.39
Diluted Earnings per Share
Net income attributable to Chase Corporation	$	8,775	$	3,540
Less: Allocated to participating securities	148		76
Net income available to common shareholders	$	8,627	$	3,464
Basic weighted average shares outstanding	8,938,149		8,851,314
Additional dilutive common stock equivalents	211,528		76,656
Diluted weighted average shares outstanding	9,149,677		8,927,970
Net income per share - Diluted	$	0.94	$	0.39

Included in the calculation of dilutive common stock equivalents are the unvested portion of restricted stock and stock options.

Note 5 — Stock Based Compensation

In October 2012, the Board of Directors of the Company approved the fiscal year 2013 Long Term Incentive Plan (“2013 LTIP”) for the executive officers.  The 2013 LTIP is an equity based plan with a grant date of October 22, 2012 and contains a performance and service based restricted stock grant of 11,861 shares in the aggregate, subject to adjustment, with a vesting date of August 31, 2015.  Based on the fiscal year 2013 financial results, 11,861 additional shares of restricted stock (total of 23,722 shares) were earned and granted subsequent to the end of fiscal year 2013 in accordance with the performance measurement criteria.  No further performance-based measurements apply to this award.  Compensation expense is being recognized on a ratable basis over the vesting period.

In September 2013, the Board of Directors of the Company approved the fiscal year 2014 Long Term Incentive Plan (“2014 LTIP”) for the executive officers and other members of management.  The 2014 LTIP is an equity based plan with a grant date of September 1, 2013 and contains the following equity components:

Restricted Shares — (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.  Compensation expense is recognized on a ratable basis over the vesting period based on quarterly probability assessments; (b) 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,

10

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

In thousands, except share and per share amounts

2014, respectively.  Compensation expense is recognized on a ratable basis over the vesting period.

Stock options — options to purchase 25,969 shares of common stock in the aggregate with an exercise price of $29.72 per share.  The options will vest in three equal annual allotments beginning on August 31, 2014 and ending on August 31, 2016. The options will expire on August 31, 2023.  Compensation expense is recognized over the period of the award on an annual basis consistent with the vesting terms.

Note 6 — Segment Data and Foreign Operations

The Company is organized into two operating segments, an Industrial Materials segment and a Construction Materials segment.  The basis for this segmentation is distinguished by the nature of the products and how they are delivered to their respective markets.  The Industrial Materials segment reflects specified products that are used in or integrated into another company’s product with demand dependent upon general economic conditions.  Industrial Materials products include insulating and conducting materials for wire and cable manufacturers, moisture protective coatings for electronics and printing services, laminated durable papers, and flexible composites, laminates for the packaging and industrial laminate markets, pulling and detection tapes used in the installation, measurement and location of fiber optic cables, water and natural gas lines, cover tapes essential to delivering semiconductor components via tape and reel packaging, and wind energy composite materials and elements.  Additionally, the Industrial Materials segment includes a joint venture which produces glass based strength elements designed to allow fiber optic cables to withstand mechanical and environmental strain and stress. The Construction Materials segment reflects construction 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, high performance polymeric asphalt additives, and expansion and control joint systems for use in the transportation and architectural markets.

The following tables summarize financial information about the Company’s reportable segments:

	Three Months Ended November 30,
	2013			2012
Revenues from external customers
Industrial Materials	$	41,670		$	39,850
Construction Materials	12,513			13,550
Total	$	54,183		$	53,400
Income before income taxes
Industrial Materials	$	13,607		$	5,530
Construction Materials	1,591			1,430
Total for reportable segments	15,198			6,960
Corporate and Common Costs	(1,634		)	(1,663		)
Total	$	13,564		$	5,297

The Company’s products are sold world-wide.  For the three months ended November 30, 2013 and 2012, sales from its operations located in the United Kingdom accounted for 8% of consolidated revenues in each period.  No foreign geographic area accounted for more than 10% of consolidated revenues for the three months ended November 30, 2013 and 2012.

11

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

In thousands, except share and per share amounts

	November 30, 2013		August 31, 2013
Total assets
Industrial Materials	$	136,686	$	133,110
Construction Materials	48,041		48,573
Total for reportable segments	184,727		181,683
Corporate and Common Assets	50,048		42,677
Total	$	234,775	$	224,360

As of November 30, 2013 and August 31, 2013, 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) of $4,212 and $4,063, respectively, located in the United Kingdom.   These balances exclude goodwill and intangibles of $10,618 and $10,333, as of November 30, 2013 and August 31, 2013, respectively.

Note 7 — Goodwill and Other Intangibles

The changes in the carrying value of goodwill, by reportable segment, are as follows:

	Construction		Industrial
	Materials		Materials		Consolidated
Balance at August 31, 2013	$	10,735	$	27,080	$	37,815
Foreign currency translation adjustment	13		264		277
Balance at November 30, 2013	$	10,748	$	27,344	$	38,092

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 identified several reporting units within each of its two 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 public company analysis and discounted cash flows. The Company evaluates the possible impairment of goodwill annually each fourth quarter and whenever events or circumstances indicate the carrying value of goodwill may not be recoverable.

12

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

In thousands, except share and per share amounts

Intangible assets subject to amortization consist of the following as of November 30, 2013 and August 31, 2013:

	Weighted-Average	Gross Carrying		Accumulated		Net Carrying
	Amortization Period	Value		Amortization		Value
November 30, 2013
Patents and agreements	11.9 years	$	3,237	$	2,217	$	1,020
Formulas	9.1 years	5,834		2,423		3,411
Trade names	5.7 years	6,394		2,354		4,040
Customer lists and relationships	10.2 years	34,646		12,185		22,461
		$	50,111	$	19,179	$	30,932
August 31, 2013
Patents and agreements	11.9 years	$	3,198	$	2,200	$	998
Formulas	9.1 years	5,772		2,238		3,534
Trade names	5.7 years	6,345		2,055		4,290
Customer lists and relationships	10.2 years	34,020		11,061		22,959
		$	49,335	$	17,554	$	31,781

Aggregate amortization expense related to intangible assets for the three months ended November 30, 2013 and 2012 was $1,194 and $1,217, respectively.  Estimated amortization expense for the remainder of fiscal year 2014 and for each of the five succeeding fiscal years is as follows:

Years ending August 31,
2014 (remaining 9 months)	$	3,700
2015	4,750
2016	4,687
2017	4,250
2018	4,019
2019	3,322
	$	24,728

Note 8 — Sale of Insulfab Product Line

On October 7, 2013, the Company sold substantially all of its property and assets, including intellectual property, comprising the Insulfab® product line, to an unrelated third party (“buyer”).  The Insulfab product line is primarily focused on manufacturing high quality, engineered barrier laminates used in aerospace applications.  The sale proceeds of $7,394 are subject to certain post-closing adjustments based on the change in the final net book value compared to the bid date net book value.  As of November 30, 2013, management determined these post-closing adjustments resulted in an increase in the sale proceeds of $2,516 based on the increase of inventory sold to the buyer at closing.  This adjustment is subject to final review by the buyer.  The net proceeds from the sale are available for debt reduction and investment in the Company’s core businesses.

This transaction resulted in a pre-tax book gain of $5,706 ($3,709 after-tax gain) which was recorded in the quarter ending November 30, 2013.  The additional proceeds of $2,516 and the portion of the sale price held in escrow of $739 are recorded as current assets (Due from sale of product line) as of November 30, 2013.

13

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

In thousands, except share and per share amounts

The following table summarizes information about the Insulfab product line as of October 7, 2013 and August 31, 2013:

	October 7, 2013			August 31, 2013
Inventory	$	3,153		$	885
Property & equipment	1,062			1,060
Accrued expenses	(3		)	(40		)
	$	4,212		$	1,905

As a result of the efforts to market and sell this product line in the fourth quarter of fiscal 2013, the Company had classified the Insulfab assets (including inventory and equipment) as assets held for sale as of August 31, 2013.  This product line and related assets were part of the Company’s Industrial Materials segment.

Note 9 — Joint Venture

The NEPTCO JV LLC (“JV”) was originally formed in 2003 by NEPTCO and a joint venture partner, an otherwise unrelated party (collectively, the “members”), whereby each member’s fiber optic strength elements businesses were combined. This venture, which is 50% owned by each member, is managed and operated on a day-to-day basis by NEPTCO. The JV operates out of the Company’s Granite Falls, NC facility.

The Company accounts for the joint venture partner’s non-controlling interest in the JV under ASC Topic 810 “Consolidations” (“ASC 810”).  Based on the criteria in ASC 810, the Company determined that the JV qualifies as a variable interest entity (“VIE”).  Because of the Company’s controlling financial interest, the JV’s assets and liabilities and results of operations have been consolidated within the Company’s consolidated financial statements since June 27, 2012, the date the Company acquired NEPTCO.  An offsetting amount equal to 50% of net assets and net income (loss) of the JV has been recorded within the Company’s consolidated financial statements to the non-controlling interest, representing the joint venture partner’s 50% ownership interest and pro rata share in the JV.

14

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

In thousands, except share and per share amounts

At November 30, 2013 and August 31, 2013, the following amounts were consolidated in the Company’s balance sheets related to the JV:

	November 30,		August 31,
	2013		2013
Assets
Cash	$	523	$	394
Accounts receivable, net	1,041		1,106
Inventories	1,747		1,510
Prepaid expenses and other assets	285		283
Property, plant and equipment, net	418		448
Intangible assets, net	699		706
Total assets	$	4,713	$	4,447
Liabilities and net assets
Accounts payable and accrued expenses	$	721	$	679
Due to Members	1,816		1,677
Total liabilities	$	2,537	$	2,356
Net assets	$	2,176	$	2,091
Non-controlling interest	$	1,088	$	1,046

Effective on the date of the JV’s inception, and for four years following the date on which the members no longer own any membership interest in the JV, non-compete agreements exist between the members. Each member retains the right to tender an offer to buy the other member’s share. Once an offer is tendered, the tendered member has the option to either sell, or match the initial offer to purchase the tendering member’s share.

Under the JV agreement, the JV is barred from issuing third party debt, other than customary accounts payable, resulting from its normal trade operations. The liabilities of the JV are not guaranteed by any portion of NEPTCO or the Company.

The JV agrees to purchase a minimum of 80% of its total glass fiber requirements from the other joint venture partner. Additionally, the JV agrees to purchase private-label products exclusively from an affiliate of the other joint venture partner; however, the JV is not subject to a minimum purchase requirement on private-label products. Purchases from the joint venture partner totaled $467 and $463 for the three months ended November 30, 2013 and 2012, respectively. The JV had amounts due to the other joint venture partner of $356 and $378 at November 30, 2013 and August 31, 2013, respectively.

Note 10 — Commitments and Contingencies

The Company is involved from time to time in litigation incidental to the conduct of its business.  Although the Company does not expect that the outcome in any of these matters, individually or collectively, will have a material adverse effect on its financial condition, results of operations or cashflows, litigation is inherently unpredictable.  Therefore, judgments could be rendered or settlements entered that could adversely affect the Company’s operating results or cash flows in a particular period.  The Company routinely assesses all of 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 the Company assesses the likelihood of loss as probable.

15

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

In thousands, except share and per share amounts

Note 11 - Pensions and Other Post Retirement Benefits

The components of net periodic benefit cost for the three months ended November 30, 2013 and 2012 are as follows:

	Three Months Ended November 30,
	2013			2012
Service cost	$	81		$	103
Interest cost	161			114
Expected return on plan assets	(178		)	(149		)
Amortization of prior service cost	1			6
Amortization of unrecognized loss	73			84
Curtailment loss	—			25
Settlement loss	—			327
Net periodic benefit cost	$	138		$	510

When funding is required, the Company’s policy is to contribute amounts that are deductible for federal income tax purposes.  As of November 30, 2013, the Company has made contributions of $200 in the current fiscal year to fund its obligations under its pension plan and will make the necessary contributions over the remainder of fiscal 2014 to ensure the qualified plan continues to be adequately funded given the current market conditions.

Note 12 — Fair Value Measurements

The Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price).  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.

The Company utilizes the best available information in measuring fair value.  Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement.  The financial assets classified as Level 1 as of November 30, 2013 and August 31, 2013 represent investments that are restricted for use in a nonqualified retirement savings plan for certain key employees and directors.

The following table sets forth the Company’s financial assets that were accounted for at fair value on a recurring basis as of November 30, 2013 and August 31, 2013:

				Fair value measurement category
	Fair value measurement date	Total		Quoted prices in active  markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Assets:
Restricted investments	November 30, 2013	$	1,229	$	1,229	$	—	$	—
Restricted investments	August 31, 2013	$	1,094	$	1,094	$	—	$	—

16

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

In thousands, except share and per share amounts

The following table presents the fair value of the Company’s long-term debt as of November 30, 2013 and August 31, 2013, which is recorded at its carrying value:

				Fair value measurement category
	Fair value measurement date	Total		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Liabilities:
Long-term debt	November 30, 2013	$	63,000	$	—	$	63,000	$	—
Long-term debt	August 31, 2013	$	64,400	$	—	$	64,400	$	—

The carrying value of the long-term debt approximates its fair value, as the monthly interest rate is set based on the movement of the underlying market rates.

Note 13 — Accumulated Other Comprehensive Income

The changes in accumulated other comprehensive income (loss), net of tax, were as follows:

	Restricted Investments			Change in Funded Status of Pension Plan			Foreign Currency Translation Adjustment			Total
Balance at August 31, 2013	$	144		$	(3,578	)	$	(1,729	)	$	(5,163	)
Other comprehensive gains (losses) before reclassifications (1)	74			—			1,578			1,652
Reclassifications to net income of previously deferred (gains) losses (2)	(3		)	48			—			45
Other comprehensive income (loss)	71			48			1,578			1,697
Balance at November 30, 2013	$	215		$	(3,530	)	$	(151	)	$	(3,466	)

(1)Net of tax benefit of $40, $0, $0, respectively.

(2)Net of tax expense of $2, tax benefit of $26, $0, respectively.

The following table summarizes the reclassifications from accumulated other comprehensive income (loss) to the unaudited condensed consolidated statements of income:

	Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income
	Three Months Ended November 30, 2013			Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income
Gains on Restricted Investments:
Realized gain on sale of restricted investments	$	5		Selling, general and administrative expenses
Tax expense (benefit)	2
Gain net of tax	$	3
Loss on Funded Pension Plan adjustments:
Realized loss on amortization of prior pension service costs and unrecognized losses	$	(20	)	Cost of products and services sold
Realized loss on amortization of prior pension service costs and unrecognized losses	$	(54	)	Selling, general and administrative expenses
Tax expense (benefit)	26
(Loss) net of tax	$	(48	)
Total net (loss) reclassified for the period	$	(45	)

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Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion provides an analysis of our financial condition and results of operations and should be read in conjunction with the unaudited Consolidated Financial Statements and notes thereto included in Item 1 of Part I of this Quarterly Report on Form 10-Q and with our Annual Report on Form 10-K filed for the fiscal year ended August 31, 2013.

Overview

Revenue and profit increases in the first three months of fiscal 2014 over the prior year period reflect the on-going benefits from production facility consolidation, efficiency improvements, favorable sales mix and strong demand. Additionally, the sale of the Company’s Insulfab product line in October 2013 significantly contributed to earnings and cash flows in the first quarter of fiscal 2014.  Revenues from the Industrial Materials segment increased over the same period in the prior year primarily due to increased sales from our electronic coatings, electronic material cover tape, and wire and cable product sales.  These increases were partially offset by a reduction in our laminated durable paper product sales in the current quarter as compared to those realized in the first quarter of the prior year.

Our Construction Materials segment observed decreased demand for our coating and lining system products and bridge and highway related construction products in the first quarter of fiscal 2014 that resulted in lower sales and profits in the current quarter compared to the prior year period.  This segment was positively impacted in the prior year period by certain large, non-recurring projects that were not repeated in the first three months of fiscal 2014.  These decreases were partially offset by increased demand for our pipeline products and private label products produced at our North America facilities.

The upcoming second fiscal quarter has historically generated lower quarterly revenues for many of our product lines, especially within the Construction Materials segment.  Our key objectives include our on-going global ERP system implementation which will continue through December 2014, as well as key strategies that focus on our marketing and product development efforts and continued emphasis on identifying potential acquisition targets.  Our balance sheet remains strong, with cash on hand of $36.9 million and a current ratio of 2.9.  Our $15.0 million line of credit is fully available, while the balance of our term debt is $63.0 million.

We have two reportable segments as summarized below:

Segment	Product Lines	Manufacturing Focus and Products
Industrial Materials	·Wire and Cable ·Electronic Coatings ·Specialty Products ·Pulling and Detection ·Electronic Materials ·Structural Composites ·Fiber Optic Cable Components (JV)	Protective coatings and tape products including insulating and conducting materials for wire and cable manufacturers, moisture protective coatings for electronics and printing services, laminated durable papers, packaging and industrial laminate markets, pulling and detection tapes used in the installation, measurement and location of fiber optic cables, water and natural gas lines, cover tapes essential to delivering semiconductor components via tape and reel packaging, and wind energy composite materials and elements; a joint venture also produces glass-based strength elements designed to allow fiber optic cables to withstand mechanical and environmental strain and stress.
Construction Materials	·Pipeline ·Bridge & Highway ·Coating & Lining Systems ·Private Label	Protective coatings and tape products including coating and lining systems for use in liquid storage and containment applications, protective coatings for pipeline and general construction applications, high-performance polymeric asphalt additives, and expansion and control joint systems for use in the transportation and architectural markets.

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Results of Operations

Revenues and Operating Profit by Segment are as follows (Dollars in Thousands):

	Three Months Ended		% of Total	Three Months Ended		% of Total
	November 30, 2013		Revenues	November 30, 2012		Revenues
Revenues from external customers
Industrial Materials	$	41,670	77%	$	39,850	75%
Construction Materials	12,513		23%	13,550		25%
Total	$	54,183		$	53,400

	Three Months Ended			% of Segment	Three Months Ended			% of Segment
	November 30, 2013			Revenues	November 30, 2012			Revenues
Income before income taxes
Industrial Materials	$	13,607	(a)	33%	$	5,530	(b)	14%
Construction Materials	1,591			13%	1,430		(c)	11%
Total for reportable segments	15,198			28%	6,960			13%
Corporate and Common Costs	(1,634		)		(1,663		)
Total	$	13,564		25%	$	5,297		10%

(a)Includes $5,706 gain on sale of Insulfab product line

(b)Includes $564 of costs of products sold related to inventory step up in fair value as part of the NEPTCO acquisition, $267 of pension related settlement costs due to the timing of lump sum distributions, and $150 of Randolph, MA plant closing expenses

(c)Includes $85 of pension related settlement costs due to the timing of lump sum distributions

Total Revenues

Total revenues increased $783,000 or 1% to $54,183,000 for the quarter ended November 30, 2013 compared to $53,400,000 in the same quarter of the prior year.  Revenues in our Industrial Materials segment increased $1,820,000 or 5% to $41,670,000 for the quarter ended November 30, 2013 compared to $39,850,000 in the same quarter of the prior year.  The increase in revenues from our Industrial Materials segment in the current quarter was primarily due to the following: (a) increased sales of $816,000 from our wire & cable products that service the power cable tapes and industrial power markets; (b) increased sales of $796,000 from our electronic coatings products resulting from higher sales in the European and Asian markets; and (c) increased sales of $1,031,000 from the electronic cover tapes market.  These increases were partially offset by decreased sales of $491,000 from our laminated durable paper products, as well as reduced sales of $208,000 from our Insulfab product line that was sold in the first week of October 2013.

Revenues from our Construction Materials segment decreased $1,037,000 or 8% to $12,513,000 in the current quarter compared to $13,550,000 in the same period last year.  The reduced sales from this segment was primarily due to decreased sales of $857,000 of our coating and lining systems (CIM Industries), as well as lower sales of $356,000 from our bridge and highway products.

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Cost of Products and Services Sold

Cost of products and services sold decreased $1,793,000 or 5% to $35,478,000 in the quarter ended November 30, 2013 compared to $37,271,000 in the same period in fiscal 2013.

The following table summarizes our costs of products and services sold as a percentage of revenues for each of our reporting segments:

	Three Months Ended November 30,
Cost of products and services sold	2013	2012
Industrial Materials	64.9%	69.5%
Construction Materials	67.5%	70.8%
Total	65.5%	69.8%

Cost of products and services sold in our Industrial Materials segment was $27,033,000 for the first three months of fiscal 2014 compared to $27,677,000 for the same period in the prior year.  As a percentage of revenues, cost of products and services sold in the Industrial Materials segment decreased primarily due to the prior year period being impacted by the inclusion of $564,000 from the sale of inventory which had a stepped up valuation as part of the NEPTCO acquisition, $176,000 of pension related settlement costs due to the timing of lump sum distributions, and $150,000 of Randolph, MA plant transition expenses.

Cost of products and services sold in our Construction Materials segment was $8,445,000 in the current quarter compared to $9,594,000 for the same period last year.  As a percentage of revenues, cost of products and services sold in the Construction Materials segment decreased in the current quarter primarily due to product mix as we had decreased sales from our lower margin products within this segment.  We continue to closely monitor raw material pricing across all product lines in this segment to preserve margins.

Selling, General and Administrative Expenses

Selling, general and administrative expenses decreased $100,000 or 1% to $10,439,000 in the quarter ended November 30, 2013 compared to $10,539,000 in the same period in fiscal 2013. As a percentage of revenues, selling, general and administrative expenses decreased to 19% in the first quarter of fiscal 2014 compared to 20% in the prior year period.  The percentage decrease is primarily attributable to our continued emphasis on controlling costs and leveraging fixed overhead wherever possible.  Additionally, the prior year period included $176,000 of pension related settlement costs due to the timing of lump sum distributions.

Interest Expense

Interest expense decreased $59,000 or 16% to $303,000 in the quarter ended November 30, 2013, compared to $362,000 in the same period in fiscal 2013.  The decrease in interest expense from the prior year period is a direct result of a reduction in the Company’s overall debt balance through principal payments made from operating cash flow over the past year.

Gain on sale of product line

On October 7, 2013, the Company sold substantially all of its property and assets, including intellectual property, comprising the Insulfab product line, to an unrelated third party buyer.  This transaction resulted in a pre-tax book gain of $5,706,000, which was recorded in the current fiscal quarter ended November 30, 2013.

20

Other Income (Expense)

Other expense decreased $174,000 to $105,000 in the quarter ended November 30, 2013 compared to other income of $69,000 in the same period in the prior year.  Other income (expense) primarily includes interest income and foreign exchange gains (losses) caused by changes in exchange rates on transactions or balances denominated in currencies other than the functional currency of our subsidiaries.

Non-controlling Interest

The income (loss) from non-controlling interest relates to a joint venture in which we have, through our NEPTCO subsidiary, a 50% ownership interest.  The joint venture between NEPTCO and its joint venture partner (an otherwise unrelated party) is managed and operated on a day-to-day basis by NEPTCO.  The purpose of this joint venture was to combine the elements of each member’s fiber optic strength elements businesses.

Net Income

Net income attributable to Chase Corporation increased $5,235,000 or 148% to $8,775,000 in the quarter ended November 30, 2013 compared to $3,540,000 in the same quarter of the prior year.  The increase in net income in the current quarter is primarily due to the previously mentioned $5,706,000 gain that resulted from the sale of the Insulfab product line in October 2013.  Additionally, the prior year results included incremental expenses of $564,000 in inventory fair value step up related to the NEPTCO acquisition during the first quarter, and the acceleration of defined benefit plan settlement costs of $352,000 resulting from the timing of lump sum distributions to participants.

Other Important Performance Measures

We believe that EBITDA and Adjusted EBITDA are useful performance measures.  They are used by our executive management team and board of directors to measure operating performance, to allocate resources, to evaluate the effectiveness of our business strategies and to communicate with our board of directors and investors concerning our financial performance.  EBITDA and Adjusted EBITDA are non-GAAP financial measures.

We define EBITDA as follows:  net income attributable to Chase Corporation before interest expense from borrowings, income tax expense, depreciation expense from fixed assets, and amortization from intangible assets.  We define Adjusted EBITDA as EBITDA excluding costs and gains/losses related to our acquisitions and disposals, costs of products sold related to inventory step-up to fair value, and settlement (gains) or losses resulting from lump sum distributions to participants from our defined benefit plan.

The use of EBITDA and Adjusted EBITDA has limitations and these performance measures should not be considered in isolation from, or as an alternative to, U.S. GAAP measures such as net income.  Our measurement of Adjusted EBITDA may not be comparable to similarly titled measures used by other companies.

21

The following unaudited table provides a reconciliation of net income attributable to Chase Corporation, the most directly comparable financial measure presented in accordance with U.S. GAAP, to EBITDA and Adjusted EBITDA for the periods presented:

	Three Months Ended November 30,
	2013			2012
Net income attributable to Chase Corporation	$	8,775,000		$	3,540,000
Interest expense	303,000			362,000
Income taxes	4,747,000			1,820,000
Depreciation expense	1,426,000			1,508,000
Amortization expense	1,194,000			1,217,000
EBITDA	$	16,445,000		$	8,447,000
Gain on sale of Insulfab (a)	(5,706,000		)	—
Cost of sale of inventory step-up (b)	—			564,000
Pension curtailment and settlement costs (c)	—			352,000
Adjusted EBITDA	$	10,739,000		$	9,363,000

(a)Represents gain on sale of Insulfab product line that was completed in October 2013

(b)Represents costs of product related to the step-up in fair value of inventory through purchase accounting from the June 2012 acquisition of NEPTCO

(c)Represents pension related settlement costs due to the timing of lump sum distributions

Liquidity and Sources of Capital

Our overall cash and cash equivalents balance increased $6,931,000 to $36,928,000 at November 30, 2013, from $29,997,000 at August 31, 2013.  The increased cash balance is primarily attributable to the proceeds from the sale of the Insulfab product line in October 2013 as well as from cash from operations, partially offset by payments on:  outstanding debt, income taxes, annual incentive compensation and equipment purchases.  A portion of cash held as of November 30, 2013 was subsequently used in December 2013 to pay our annual dividend of $4,093,000.  We will continue to review our current cash balances denominated in foreign currency in light of current tax guidelines, working capital requirements, infrastructure improvements and potential acquisitions.

Cash flow provided by operations was $1,983,000 in the first quarter of fiscal 2014 compared to $2,116,000 in the prior year’s first quarter.  Cash provided by operations during the first three months of fiscal 2014 was primarily due to operating income, decreased accounts receivable and increased accounts payable balances offset by increased inventory and other current assets balances, as well as decreased accrued expenses due to the payment of our annual incentive compensation.

The ratio of current assets to current liabilities was 2.9 as of November 30, 2013, compared to 3.1 as of August 31, 2013.  The decrease in our current ratio at November 30, 2013 was primarily attributable to increased accounts payable as well as an accrual for our fiscal 2013 annual dividend which was declared in the first fiscal quarter ending November 30, 2013 and paid in December 2013.  This was partially offset by an increase in current assets due to the remaining open receivable amount for the sale of the Insulfab product line and increased inventory resulting from higher sales volume and strategic raw material purchases, as well as decreased accrued payroll and other compensation due to the payment of our annual incentive program.

Cash flow provided by investing activities of $5,796,000 was primarily due to the proceeds from the sale of the Insulfab product line in October 2013, which was partially offset by cash paid for purchases of machinery and equipment at our manufacturing locations during the first quarter of fiscal 2014.

22

Cash flow used in financing activities of $1,400,000 was due to payments made on the bank loans used to finance our acquisition of NEPTCO, described in more detail below.

On October 23, 2013, we announced an annual cash dividend of $0.45 per share (totaling $4,093,000), to shareholders of record on November 5, 2013 and payable on December 4, 2013.

In June 2012, as part of our acquisition of NEPTCO, we borrowed $70,000,000 under a five year term debt financing arrangement led and arranged by Bank of America, with participation from RBS Citizens (the “Credit Facility”). The applicable interest rate is based on the effective LIBOR plus a range of 1.75% to 2.25%, depending on our consolidated leverage ratio.  At November 30, 2013, the applicable interest rate was 1.91% per annum and the outstanding principal amount was $63,000,000.  We are required to repay the principal amount of the term loan in quarterly installments of $1,400,000 beginning in September 2012 through June 2014, increasing to $1,750,000 per quarter thereafter through June 2015, and to $2,100,000 per quarter thereafter through March 2017.  The Credit Facility matures in June 2017 and prepayment of the Credit Facility is allowed at any time.

We have a revolving line of credit with Bank of America (the “Revolver”) totaling $15,000,000, which bears interest at LIBOR plus a range of 1.75% to 2.25%, depending on our consolidated leverage ratio, or, at our option, at the bank’s base lending rate.  As of November 30, 2013 and December 31, 2013, the entire amount of $15,000,000 was available for use.  The Revolver is scheduled to mature in June 2017.  This Revolver allows for increased flexibility for working capital requirements going forward, and we plan to use this availability to help finance our cash needs, including potential acquisitions, in fiscal 2014 and future periods.

The Credit Facility with Bank of America contains customary affirmative and negative covenants that, among other things, restrict our ability to incur additional indebtedness.  It also requires us to maintain a ratio of consolidated indebtedness to consolidated EBITDA (each as defined in the facility) of no more than 3.00 to 1.00, and to maintain a consolidated fixed charge coverage ratio (as calculated in the facility) of at least 1.25 to 1.00.  We were in compliance with our debt covenants as of November 30, 2013.

We currently have several on-going capital projects that are important to our long term strategic goals.  Machinery and equipment will also be added as needed to increase capacity or enhance operating efficiencies in our other manufacturing plants.

We may also consider the acquisition of companies or other assets in fiscal 2014 or in future periods which are complementary to our business.  We believe that our existing resources, including cash on hand and our Revolver, together with cash generated from operations and additional bank borrowings, will be sufficient to fund our cash flow requirements through at least the next twelve months.  However, there can be no assurances that additional financing will be available on favorable terms, if at all.

To the extent that interest rates increase in future periods, we will assess the impact of these higher interest rates on the financial and cash flow projections of our potential acquisitions.

We have no significant off balance sheet arrangements.

Contractual Obligations

Please refer to Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section in our Annual Report on Form 10-K for the fiscal year ended August 31, 2013 for a complete discussion of our contractual obligations.

23

Recent Accounting Standards

In February 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2013-02, “Comprehensive Income (Topic 220):  Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income”.  This ASU expands the presentation of changes in accumulated other comprehensive income.  The new guidance requires an entity to disaggregate the total change of each component of other comprehensive income either on the face of the net income statement or as a separate disclosure in the notes. ASU 2013-02 is effective for fiscal years beginning after December 15, 2012.  We adopted this ASU in the first quarter of fiscal 2014.  The provisions of ASU 2013-02 did not have a material impact on our consolidated financial position, results of operations or cash flows.

Critical Accounting Policies and Estimates

Our financial statements are prepared in accordance with accounting principles generally accepted in the United States.  To apply these principles, we must make estimates and judgments that affect our reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.  In many instances, we reasonably could have used different accounting estimates and, in other instances, changes in the accounting estimates are reasonably likely to occur from period to period. Accordingly, actual results could differ significantly from our estimates.  To the extent that there are material differences between these estimates and actual results, our financial condition or results of operations will be affected.  We base our estimates and judgments on historical experience and other assumptions that we believe to be reasonable at the time and under the circumstances, and we evaluate these estimates and judgments on an ongoing basis.  We refer to accounting estimates and judgments of this type as critical accounting policies, judgments, and estimates.  Management believes there have been no material changes during the three months ended November 30, 2013 to the critical accounting policies reported in Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended August 31, 2013.

Forward Looking Information

The part of this Quarterly Report on Form 10-Q captioned “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contains certain forward-looking statements, which involve risks and uncertainties.  Forward-looking statements include, without limitation, statements as to our future operating results, plans for manufacturing facilities, future economic conditions and expectations or plans relating to the implementation or realization of our strategic goals and future growth.  These statements are based on current expectations, estimates and projections about the industries in which we operate, and the beliefs and assumptions made by management.  Readers should refer to the discussions under “Forward Looking Information” and “Risk Factors” contained in our Annual Report on Form 10-K for the fiscal year ended August 31, 2013 concerning certain factors that could cause our actual results to differ materially from the results anticipated in such forward-looking statements. These discussions and Risk Factors are hereby incorporated by reference into this Quarterly Report.

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Item 3 - Quantitative and Qualitative Disclosures about Market Risk

We limit the amount of credit exposure to any one issuer.  At November 30, 2013, other than our restricted investments (which are restricted for use in a non-qualified retirement savings plan for certain key employees and members of the Board of Directors), all of our funds were either in demand deposit accounts or investment instruments that meet high credit quality standards such as money market funds, government securities, or commercial paper.

Our domestic operations have limited currency exposure since substantially all transactions are denominated in U.S. dollars (USD).  However, our European operations are subject to currency exchange fluctuations.  We continue to review our policies and procedures to reduce this exposure while maintaining the benefit from these operations and sales to other European customers.  As of November 30, 2013, the Company had cash balances in the following foreign currencies (with USD equivalents):

Currency Code	Currency Name	USD Equivalent at November 30, 2013
GBP	British Pound	$	8,448,000
EUR	Euro	$	2,245,000
CNY	Chinese Yuan	$	264,000
CAD	Canadian Dollar	$	248,000

We will continue to review our current cash balances denominated in foreign currency in light of current tax guidelines, working capital requirements, infrastructure improvements and potential acquisitions.

We recognized a foreign currency translation gain for the three months ended November 30, 2013 in the amount of $1,578,000 related to our European operations, which is recorded in other comprehensive income (loss) within our Statement of Equity and Statement of Comprehensive Income.  We do not have or utilize any derivative financial instruments.

Item 4 - Controls and Procedures

Evaluation of disclosure controls and procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure.  In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

We carry out a variety of ongoing procedures under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, to evaluate the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of the end of the period covered by this report.

25

Changes in internal control over financial reporting

Effective April 1, 2013, the Company began the process of implementing a single enterprise resource planning (“ERP”) computer system world-wide.  During fiscal 2013 and the first quarter of fiscal 2014, the Company expanded its existing ERP modules to five of its domestic locations which resulted in changes to the Company’s processes and procedures affecting its internal control over financial reporting.  The Company expects this process to continue over the next twelve months as it continues with its plan to deploy more effective and efficient processes to support the Company’s financial reporting as it continues to grow in size and scale.  Otherwise, there have not been any changes in the Company’s internal control over financial reporting during its most recent fiscal year that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.

26

Part II — OTHER INFORMATION

Item 1 — Legal Proceedings

We are involved from time to time in litigation incidental to the conduct of our business.  Although we do not expect that the outcome in any of these matters, individually or collectively, will have a material adverse effect on our financial condition, results of operations or cashflows, litigation is inherently unpredictable.  Therefore, judgments could be rendered or settlements entered, that could adversely affect our operating results or cash flows in a particular period.  We routinely assess all of our litigation and threatened litigation as to the probability of ultimately incurring a liability, and record our best estimate of the ultimate loss in situations where we assess the likelihood of loss as probable.

Item 1A — Risk Factors

Please refer to Item 1A in our Annual Report on Form 10-K for the fiscal year ended August 31, 2013 for a complete discussion of the risk factors which could materially affect our business, financial condition or future results.

Item 6 - Exhibits

Exhibit Number	Description
10.1	Chase Corporation Annual Incentive Plan for Fiscal Year 2014 (incorporated by reference from Exhibit 99.1 to the Company’s current report on Form 8-K filed October 11, 2013).
10.2	Chase Corporation Long-Term Incentive Plan for Fiscal Year 2014 (incorporated by reference from Exhibit 99.2 to the Company’s current report on Form 8-K filed October 11, 2013).
31.1	Certification of principal executive officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of principal executive officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of principal financial officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document**
101.SCH	XBRL Taxonomy Extension Schema Document**
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document**
101.LAB	XBRL Taxonomy Extension Label Linkbase Document**
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document**
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document**

*Identifies management plan or compensatory plan or arrangement.

**Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability under those sections.

27

SIGNATURES

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
Dated: January 9, 2014	By:	/s/ Peter R. Chase
		Peter R. Chase,
		Chairman and Chief Executive Officer
Dated: January 9, 2014	By:	/s/ Kenneth L. Dumas
		Kenneth L. Dumas,
		Chief Financial Officer and Treasurer

28

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Peter R. Chase, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Chase Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.    The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Date:  January 9, 2014

/s/ Peter R. Chase

Peter R. Chase

Chairman and Chief Executive Officer

(Principal Executive Officer)

1

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Kenneth L. Dumas, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Chase Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.    The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Date:  January 9, 2014

/s/ Kenneth L. Dumas

Kenneth L. Dumas

Chief Financial Officer & Treasurer

(Principal Financial and Accounting Officer)

1

EX-32.1

Exhibit 32.1

CERTIFICATION

PURSUANT TO

18 U.S.C. 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned officer of Chase Corporation (the “Company”) hereby certifies that the Company’s Quarterly Report on Form 10-Q for the period ended November 30, 2013 (the “Report”), as filed with the Securities and Exchange Commission on the date hereof, fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended, and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. This certificate is furnished solely pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Date:  January 9, 2014

/s/ Peter R. Chase

Peter R. Chase

Chairman and Chief Executive Officer

(Principal Executive Officer)

1

EX-32.2

Exhibit 32.2

CERTIFICATION

PURSUANT TO

18 U.S.C. 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned officer of Chase Corporation (the “Company”) hereby certifies that the Company’s Quarterly Report on Form 10-Q for the period ended November 30, 2013 (the “Report”), as filed with the Securities and Exchange Commission on the date hereof, fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended, and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. This certificate is furnished solely pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Date:  January 9, 2014

/s/ Kenneth L. Dumas

Kenneth L. Dumas

Chief Financial Officer & Treasurer

(Principal Financial and Accounting Officer)

1

XML

Joint Venture

3 Months Ended

Nov. 30, 2013

Joint Venture

Joint Venture

Note 9 — Joint Venture

The NEPTCO JV LLC (“JV”) was originally formed in 2003 by NEPTCO and a joint venture partner, an otherwise unrelated party (collectively, the “members”), whereby each member’s fiber optic strength elements businesses were combined. This venture, which is 50% owned by each member, is managed and operated on a day-to-day basis by NEPTCO. The JV operates out of the Company’s Granite Falls, NC facility.

The Company accounts for the joint venture partner’s non-controlling interest in the JV under ASC Topic 810 “Consolidations” (“ASC 810”).  Based on the criteria in ASC 810, the Company determined that the JV qualifies as a variable interest entity (“VIE”).  Because of the Company’s controlling financial interest, the JV’s assets and liabilities and results of operations have been consolidated within the Company’s consolidated financial statements since June 27, 2012, the date the Company acquired NEPTCO.  An offsetting amount equal to 50% of net assets and net income (loss) of the JV has been recorded within the Company’s consolidated financial statements to the non-controlling interest, representing the joint venture partner’s 50% ownership interest and pro rata share in the JV.

At November 30, 2013 and August 31, 2013, the following amounts were consolidated in the Company’s balance sheets related to the JV:

	November 30,		August 31,
	2013		2013
Assets
Cash	$	523	$	394
Accounts receivable, net	1,041		1,106
Inventories	1,747		1,510
Prepaid expenses and other assets	285		283
Property, plant and equipment, net	418		448
Intangible assets, net	699		706
Total assets	$	4,713	$	4,447
Liabilities and net assets
Accounts payable and accrued expenses	$	721	$	679
Due to Members	1,816		1,677
Total liabilities	$	2,537	$	2,356
Net assets	$	2,176	$	2,091
Non-controlling interest	$	1,088	$	1,046

Effective on the date of the JV’s inception, and for four years following the date on which the members no longer own any membership interest in the JV, non-compete agreements exist between the members. Each member retains the right to tender an offer to buy the other member’s share. Once an offer is tendered, the tendered member has the option to either sell, or match the initial offer to purchase the tendering member’s share.

Under the JV agreement, the JV is barred from issuing third party debt, other than customary accounts payable, resulting from its normal trade operations. The liabilities of the JV are not guaranteed by any portion of NEPTCO or the Company.

The JV agrees to purchase a minimum of 80% of its total glass fiber requirements from the other joint venture partner. Additionally, the JV agrees to purchase private-label products exclusively from an affiliate of the other joint venture partner; however, the JV is not subject to a minimum purchase requirement on private-label products. Purchases from the joint venture partner totaled $467 and $463 for the three months ended November 30, 2013 and 2012, respectively. The JV had amounts due to the other joint venture partner of $356 and $378 at November 30, 2013 and August 31, 2013, respectively.

XML

CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Nov. 30, 2013	Nov. 30, 2012
Revenues
Sales	$ 53,655	$ 52,976
Royalties and commissions	528	424
Total revenues	54,183	53,400
Costs and Expenses
Cost of products and services sold	35,478	37,271
Selling, general and administrative expenses	10,439	10,539
Operating income	8,266	5,590
Interest expense	(303)	(362)
Gain on sale of product line (Note 8)	5,706
Other (expense) income	(105)	69
Income before income taxes	13,564	5,297
Income taxes	4,747	1,820
Net income	8,817	3,477
Net (gain) loss attributable to non-controlling interest	(42)	63
Net income attributable to Chase Corporation	$ 8,775	$ 3,540
Net income available to common shareholders, per common and common equivalent share
Basic (in dollars per share)	$ 0.96	$ 0.39
Diluted (in dollars per share)	$ 0.94	$ 0.39
Weighted average shares outstanding
Basic (in shares)	8,938,149	8,851,314
Diluted (in shares)	9,149,677	8,927,970
Annual cash dividends declared per share (in dollars per share)	$ 0.45	$ 0.40

XML

Recent Accounting Policies

3 Months Ended

Nov. 30, 2013

Recent Accounting Policies

Recent Accounting Policies

Note 2 — Recent Accounting Policies

Recently Adopted Accounting Pronouncements

In February 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2013-02, “Comprehensive Income (Topic 220):  Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income”.  This ASU expands the presentation of changes in accumulated other comprehensive income.  The new guidance requires an entity to disaggregate the total change of each component of other comprehensive income either on the face of the net income statement or as a separate disclosure in the notes. ASU 2013-02 is effective for fiscal years beginning after December 15, 2012.  The Company adopted this ASU in the first quarter of fiscal 2014 (See Note 13 for additional details).  The provisions of ASU 2013-02 did not have a material impact on the Company’s consolidated financial position, results of operations or cash flows.

XML

Segment Data and Foreign Operations (Tables)

3 Months Ended

Nov. 30, 2013

Segment Data and Foreign Operations

Summary of financial information about the Company's reportable segments

	Three Months Ended November 30,
	2013			2012
Revenues from external customers
Industrial Materials	$	41,670		$	39,850
Construction Materials	12,513			13,550
Total	$	54,183		$	53,400
Income before income taxes
Industrial Materials	$	13,607		$	5,530
Construction Materials	1,591			1,430
Total for reportable segments	15,198			6,960
Corporate and Common Costs	(1,634		)	(1,663		)
Total	$	13,564		$	5,297

Schedule of total assets for the Company's reportable segments

	November 30, 2013		August 31, 2013
Total assets
Industrial Materials	$	136,686	$	133,110
Construction Materials	48,041		48,573
Total for reportable segments	184,727		181,683
Corporate and Common Assets	50,048		42,677
Total	$	234,775	$	224,360

XML

Commitments and Contingencies

3 Months Ended

Nov. 30, 2013

Commitments and Contingencies

Commitments and Contingencies

Note 10 — Commitments and Contingencies

The Company is involved from time to time in litigation incidental to the conduct of its business.  Although the Company does not expect that the outcome in any of these matters, individually or collectively, will have a material adverse effect on its financial condition, results of operations or cashflows, litigation is inherently unpredictable.  Therefore, judgments could be rendered or settlements entered that could adversely affect the Company’s operating results or cash flows in a particular period.  The Company routinely assesses all of 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 the Company assesses the likelihood of loss as probable.

XML

Goodwill and Other Intangibles (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended			3 Months Ended	12 Months Ended	3 Months Ended	12 Months Ended	3 Months Ended	12 Months Ended	3 Months Ended	12 Months Ended
	Nov. 30, 2013	Nov. 30, 2012	Aug. 31, 2013	Nov. 30, 2013 Patents and agreements	Aug. 31, 2013 Patents and agreements	Nov. 30, 2013 Formulas	Aug. 31, 2013 Formulas	Nov. 30, 2013 Trade names	Aug. 31, 2013 Trade names	Nov. 30, 2013 Customer lists and relationships	Aug. 31, 2013 Customer lists and relationships
Intangible assets
Weighted-Average Amortization Period				11 years 10 months 24 days	11 years 10 months 24 days	9 years 1 month 6 days	9 years 1 month 6 days	5 years 8 months 12 days	5 years 8 months 12 days	10 years 2 months 12 days	10 years 2 months 12 days
Gross Carrying Value	$ 50,111		$ 49,335	$ 3,237	$ 3,198	$ 5,834	$ 5,772	$ 6,394	$ 6,345	$ 34,646	$ 34,020
Accumulated Amortization	19,179		17,554	2,217	2,200	2,423	2,238	2,354	2,055	12,185	11,061
Net Carrying Value	30,932		31,781	1,020	998	3,411	3,534	4,040	4,290	22,461	22,959
Aggregate amortization expense	1,194	1,217
Estimated amortization expense
2014 (remaining 9 months)	3,700
2015	4,750
2016	4,687
2017	4,250
2018	4,019
2019	3,322
Net Carrying Value	$ 24,728

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Joint Venture (Tables)

3 Months Ended

Nov. 30, 2013

Joint Venture

Schedule of condensed balance sheet of the JV

	November 30,		August 31,
	2013		2013
Assets
Cash	$	523	$	394
Accounts receivable, net	1,041		1,106
Inventories	1,747		1,510
Prepaid expenses and other assets	285		283
Property, plant and equipment, net	418		448
Intangible assets, net	699		706
Total assets	$	4,713	$	4,447
Liabilities and net assets
Accounts payable and accrued expenses	$	721	$	679
Due to Members	1,816		1,677
Total liabilities	$	2,537	$	2,356
Net assets	$	2,176	$	2,091
Non-controlling interest	$	1,088	$	1,046

XML

Sale of Insulfab Product Line (Tables)

3 Months Ended

Nov. 30, 2013

Sale of Insulfab Product Line

Summary of information about the Insulfab product line

	October 7, 2013			August 31, 2013
Inventory	$	3,153		$	885
Property & equipment	1,062			1,060
Accrued expenses	(3		)	(40		)
	$	4,212		$	1,905

XML

Stock Based Compensation (Details) (USD $)	0 Months Ended	3 Months Ended	13 Months Ended	0 Months Ended
	Oct. 22, 2012 2013 LTIP Performance and service based restricted stock Executive officers	Nov. 30, 2013 2013 LTIP Performance and service based restricted stock Executive officers	Nov. 30, 2013 2013 LTIP Performance and service based restricted stock Executive officers	Sep. 02, 2013 2014 LTIP Performance and service based restricted stock Executive officers and other members of management	Sep. 02, 2013 2014 LTIP Time-based restricted stock Executive officers and other members of management August 31, 2016 vesting date	Sep. 02, 2013 2014 LTIP Time-based restricted stock Executive officers and other members of management August 31, 2014 vesting date	Sep. 02, 2013 2014 LTIP Options Executive officers and other members of management item
Stock Based Compensation
Shares granted	11,861	11,861		7,529	8,323	1,040
Cumulative shares granted			23,722
Number Options Outstanding (in shares)							25,969
Weighted Average Exercise Price (in dollars per share)							$ 29.72
Number of equal annual allotments in which awards will vest							3

XML

Joint Venture (Details) (USD $) In Thousands, unless otherwise specified					3 Months Ended				3 Months Ended
	Nov. 30, 2013	Aug. 31, 2013	Nov. 30, 2012	Aug. 31, 2012	Nov. 30, 2013 JV Joint venture partner	Nov. 30, 2012 JV Joint venture partner	Aug. 31, 2013 JV Joint venture partner	Nov. 30, 2013 NEPTCO Joint venture partner	Nov. 30, 2013 NEPTCO Joint venture partner Minimum	Nov. 30, 2013 NEPTCO JV Joint venture partner
Joint Venture
Ownership interest held by each member (as a percent)										50.00%
Percentage of net assets and net loss recorded as non-controlling interest in the entity's consolidated financial statements					50.00%
Ownership interest (as a percent)								50.00%
ASSETS
Cash	$ 36,928	$ 29,997	$ 15,373	$ 15,180	$ 523		$ 394
Accounts receivable, net	30,691	32,084			1,041		1,106
Inventories	33,983	32,048			1,747		1,510
Prepaid expenses and other assets	3,987	1,826			285		283
Property, plant and equipment, net	44,835	45,192			418		448
Intangible assets, net	30,932	31,781			699		706
Total assets	234,775	224,360			4,713		4,447
Liabilities and net assets
Accounts payable and accrued expenses					721		679
Due to members					1,816		1,677
Total liabilities					2,537		2,356
Net assets					2,176		2,091
Non-controlling interest	1,088	1,046			1,088		1,046
Period for which the non-compete agreements exist subsequent to the date on which members no longer own membership interest										4 years
Percentage of total glass fiber requirements agreed to be purchased									80.00%
Purchases made					467	463
Amounts due for purchases made					$ 356		$ 378

XML

Basis of Presentation (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Nov. 30, 2013	Nov. 30, 2012	May 31, 2013 item
Basis of Presentation
Number of Line Items of Statement of Cash Flows Containing Immaterial Error			2
Basis of Presentation
Pension curtailment and settlement loss		$ 352
Accrued compensation and other expenses	(4,522)	(4,131)
Adjustment for immaterial error correction
Basis of Presentation
Pension curtailment and settlement loss		352
Accrued compensation and other expenses		(4,131)
Adjustment for immaterial error correction | Previously reported
Basis of Presentation
Pension curtailment and settlement loss		(352)
Accrued compensation and other expenses		(3,427)
Reclassification adjustment for immaterial error correction
Basis of Presentation
Pension curtailment and settlement loss		272
Reclassification adjustment for immaterial error correction | Previously reported
Basis of Presentation
Pension curtailment and settlement loss		$ 58

XML

Accumulated Other Comprehensive Income (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Nov. 30, 2013	Nov. 30, 2012
Accumulated other comprehensive income
Balance at the beginning of the period	$ (5,163)
Other comprehensive gains (losses) before reclassifications	1,652
Reclassifications to net income of previously deferred (gains) losses	45
Total other comprehensive income	1,697	676
Balance at the beginning of the period	(3,466)
Restricted investments, other comprehensive gains (losses) before reclassifications, tax benefit	38
Change in funded status of pension plan, other comprehensive gains (losses) before reclassifications, tax benefit	0
Foreign currency translation adjustment, other comprehensive gains (losses) before reclassifications, tax benefit	0
Restricted investments, reclassifications to net income of previously deferred (gains) losses, tax (expense) benefit	2
Change in funded status of pension plan, reclassifications to net income of previously deferred (gains) losses, tax (expense) benefit	26
Foreign currency translation adjustment, reclassifications to net income of previously deferred (gains) losses, tax (expense) benefit	0
Gains on Restricted Investments:
Accumulated other comprehensive income
Balance at the beginning of the period	144
Other comprehensive gains (losses) before reclassifications	74
Reclassifications to net income of previously deferred (gains) losses	(3)
Total other comprehensive income	71
Balance at the beginning of the period	215
Loss on Funded Pension Plan adjustments:
Accumulated other comprehensive income
Balance at the beginning of the period	(3,578)
Reclassifications to net income of previously deferred (gains) losses	48
Total other comprehensive income	48
Balance at the beginning of the period	(3,530)
Foreign Currency Translation Adjustment
Accumulated other comprehensive income
Balance at the beginning of the period	(1,729)
Other comprehensive gains (losses) before reclassifications	1,578
Total other comprehensive income	1,578
Balance at the beginning of the period	$ (151)

XML

Goodwill and Other Intangibles (Tables)

3 Months Ended

Nov. 30, 2013

Goodwill and Other Intangibles

Schedule of changes in the carrying value of goodwill by reportable segment

	Construction		Industrial
	Materials		Materials		Consolidated
Balance at August 31, 2013	$	10,735	$	27,080	$	37,815
Foreign currency translation adjustment	13		264		277
Balance at November 30, 2013	$	10,748	$	27,344	$	38,092

Schedule of intangible assets subject to amortization

	Weighted-Average	Gross Carrying		Accumulated		Net Carrying
	Amortization Period	Value		Amortization		Value
November 30, 2013
Patents and agreements	11.9 years	$	3,237	$	2,217	$	1,020
Formulas	9.1 years	5,834		2,423		3,411
Trade names	5.7 years	6,394		2,354		4,040
Customer lists and relationships	10.2 years	34,646		12,185		22,461
		$	50,111	$	19,179	$	30,932
August 31, 2013
Patents and agreements	11.9 years	$	3,198	$	2,200	$	998
Formulas	9.1 years	5,772		2,238		3,534
Trade names	5.7 years	6,345		2,055		4,290
Customer lists and relationships	10.2 years	34,020		11,061		22,959
		$	49,335	$	17,554	$	31,781

Schedule of estimated amortization expense related to intangible assets

Years ending August 31,
2014 (remaining 9 months)	$	3,700
2015	4,750
2016	4,687
2017	4,250
2018	4,019
2019	3,322
	$	24,728

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CONSOLIDATED STATEMENTS OF EQUITY (USD $) In Thousands, except Share data, unless otherwise specified	Total	Chase Stockholders' Equity	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Income (loss)	Retained Earnings	Non-controlling Interest
Balance at Aug. 31, 2013	$ 113,860	$ 112,814	$ 907	$ 13,336	$ (5,163)	$ 103,734	$ 1,046
Balance (in shares) at Aug. 31, 2013			9,066,115
Increase (Decrease) in Stockholders' Equity
Restricted stock grants, net of forfeitures			3	(3)
Restricted stock grants, net of forfeitures (in shares)			28,753
Amortization of restricted stock grants	265	265		265
Amortization of stock option grants	64	64		64
Cash dividend accrued, $0.45 per share	(4,093)	(4,093)				(4,093)
Change in funded status of pension plan, net of tax of $ 26	48	48			48
Foreign currency translation adjustment	1,578	1,578			1,578
Net unrealized gain on restricted investments, net of tax of $38	71	71			71
Net income	8,817	8,775				8,775	42
Balance at Nov. 30, 2013	$ 120,610	$ 119,522	$ 910	$ 13,662	$ (3,466)	$ 108,416	$ 1,088
Balance (in shares) at Nov. 30, 2013			9,094,868

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Nov. 30, 2013	Nov. 30, 2012
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 8,817	$ 3,477
Adjustments to reconcile net income to net cash provided by operating activities
Gain on sale of assets	(6)	(4)
Gain on sale of product line	(5,706)
Depreciation	1,426	1,508
Amortization	1,194	1,217
Cost of sale of inventory step-up		564
Recovery on allowance for doubtful accounts	(38)	(130)
Stock based compensation	329	419
Realized gain on restricted investments	(5)	(25)
Decrease in cash surrender value life insurance	30	82
Pension curtailment and settlement loss		352
Increase (decrease) from changes in assets and liabilities
Accounts receivable	1,619	839
Inventories	(4,032)	(4,818)
Prepaid expenses & other assets	(2,112)	(623)
Accounts payable	3,074	3,753
Accrued compensation and other expenses	(4,522)	(4,131)
Accrued income taxes	1,792	(399)
Deferred compensation	123	35
Net cash provided by operating activities	1,983	2,116
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment	(781)	(544)
Cost to acquire intangible assets	(22)	(101)
Contingent purchase price paid for acquisition		84
Proceeds from sale of fixed assets	11	11
Net proceeds from sale of product line	6,655
Contributions from restricted investments	(21)	(22)
Payments for cash surrender value life insurance	(46)	(24)
Net cash provided by (used in) investing activities	5,796	(596)
CASH FLOWS FROM FINANCING ACTIVITIES
Payments of principal on debt	(1,400)	(1,400)
Net cash used in financing activities	(1,400)	(1,400)
INCREASE IN CASH & CASH EQUIVALENTS	6,379	120
Effect of foreign exchange rates on cash	552	73
CASH & CASH EQUIVALENTS, BEGINNING OF PERIOD	29,997	15,180
CASH & CASH EQUIVALENTS, END OF PERIOD	36,928	15,373
Non-cash Investing and Financing Activities
Property, plant & equipment additions included in accounts payable	90	157
Annual cash dividend declared	$ 4,093	$ 3,626

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Inventories

3 Months Ended

Nov. 30, 2013

Inventories

Inventories

Note 3 — Inventories

Inventories consist of the following as of November 30, 2013 and August 31, 2013:

	November 30, 2013		August 31, 2013
Raw materials	$	15,032	$	14,545
Work in process	6,665		5,967
Finished goods	12,286		11,536
Total Inventories	$	33,983	$	32,048

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Basis of Presentation

3 Months Ended

Nov. 30, 2013

Basis of Presentation

Basis of Presentation

Note 1 - Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial reporting and instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Therefore, they do not include all information and footnote disclosure necessary for a complete presentation of Chase Corporation’s financial position, results of operations and cash flows, in conformity with generally accepted accounting principles.  Chase Corporation (the “Company,” “Chase,” “we,” or “us”) filed audited consolidated financial statements, which included all information and notes necessary for such complete presentation for the three years ended August 31, 2013 in conjunction with its 2013 Annual Report on Form 10-K.

The results of operations for the interim period ended November 30, 2013 are not necessarily indicative of the results to be expected for any future period or the entire fiscal year.  These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended August 31, 2013, which are contained in the Company’s 2013 Annual Report on Form 10-K.

The accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of normal recurring items) which are, in the opinion of management, necessary for a fair statement of the Company’s financial position as of November 30, 2013, the results of operations, comprehensive income and cash flows for the interim periods ended November 30, 2013 and 2012, and changes in equity for the interim period ended November 30, 2013.

The financial statements include the accounts of the Company and its wholly-owned subsidiaries.  All intercompany transactions and balances have been eliminated in consolidation.  The Company uses the U.S. dollar as the reporting currency for financial reporting.  The financial position and results of operations of the Company’s UK-based operations are measured using the British Pound as the functional currency and the financial position and results of operations of the Company’s operations based in France are measured using the euro as the functional currency.  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.  Translation gains and losses generated from the remeasurement of assets and liabilities denominated in currencies other than the functional currency of our foreign operations are included in other (expense) / income on the consolidated statements of operations.

During the third quarter of fiscal 2013, an immaterial error was identified in the presentation of two line items within the operating activities section of the Company’s previously reported statement of cash flows for the comparing period ended November 30, 2012.  The Company revised the statement of cash flows to correct the presentation of two line items within the operating activities section.  This revision to the statement of cash flows results in pension curtailment and settlement loss changing from ($352) to $352 and accrued compensation and other expenses changing from ($3,427) to ($4,131) for the three months ended November 30, 2012. There was no impact on the comparing balance sheet or the related statement of operations, statement of comprehensive income, total cash provided by operating activities or overall cash flows.

During the fourth quarter of fiscal 2013, the Company identified an immaterial error in the statement of comprehensive income within the Company’s previously reported unaudited financial statements for the first three quarters of fiscal 2013.  In those fiscal quarters, the Company properly recorded pension settlement losses that resulted from lump sum distributions to pension plan participants in earnings, but did not properly reclassify the amount out of Equity—Accumulated Other Comprehensive Income (Loss).  As a result, the Company revised the reclassification adjustment for the change in funded status of pension plans line item from $58 to $272 for the three months ended November 30, 2012.  There was no impact on the comparing balance sheet or the related statement of operations, and statement of cash flows.

The Company has evaluated events and transactions subsequent to the balance sheet date.  Based on this evaluation, the Company is not aware of any 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.

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Pensions and Other Post Retirement Benefits (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Nov. 30, 2013	Nov. 30, 2012
Components of net periodic benefit cost
Service cost	$ 81	$ 103
Interest cost	161	114
Expected return on plan assets	(178)	(149)
Amortization of prior service cost	1	6
Amortization of unrecognized loss	73	84
Curtailment loss		25
Settlement loss		327
Net periodic benefit cost	138	510
Employer contribution	$ 200

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Pensions and Other Post Retirement Benefits (Tables)

3 Months Ended

Nov. 30, 2013

Pensions and Other Post Retirement Benefits

Schedule of components of net periodic benefit cost

	Three Months Ended November 30,
	2013			2012
Service cost	$	81		$	103
Interest cost	161			114
Expected return on plan assets	(178		)	(149		)
Amortization of prior service cost	1			6
Amortization of unrecognized loss	73			84
Curtailment loss	—			25
Settlement loss	—			327
Net periodic benefit cost	$	138		$	510

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Inventories (Details) (USD $) In Thousands, unless otherwise specified	Nov. 30, 2013	Aug. 31, 2013
Inventories
Raw materials	$ 15,032	$ 14,545
Work in process	6,665	5,967
Finished goods	12,286	11,536
Total Inventories	$ 33,983	$ 32,048

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Goodwill and Other Intangibles (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Nov. 30, 2013 item
Changes in the carrying value of goodwill
Balance at the beginning of the period	$ 37,815
Foreign currency translation adjustment	277
Balance at the end of the period	38,092
Number of operating segments	2
Construction Materials
Changes in the carrying value of goodwill
Balance at the beginning of the period	10,735
Foreign currency translation adjustment	13
Balance at the end of the period	10,748
Industrial Materials
Changes in the carrying value of goodwill
Balance at the beginning of the period	27,080
Foreign currency translation adjustment	264
Balance at the end of the period	$ 27,344

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Nov. 30, 2013	Aug. 31, 2013
CONSOLIDATED BALANCE SHEETS
Accounts receivable, allowance for doubtful accounts (in dollars)	$ 672	$ 696
Intangible assets, accumulated amortization (in dollars)	$ 19,179	$ 17,554
First Serial Preferred Stock, par value (in dollars per share)	$ 1.00	$ 1.00
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	9,094,868	9,066,115
Common stock, shares outstanding	9,094,868	9,066,115

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Segment Data and Foreign Operations

3 Months Ended

Nov. 30, 2013

Segment Data and Foreign Operations

Segment Data and Foreign Operations

Note 6 — Segment Data and Foreign Operations

The Company is organized into two operating segments, an Industrial Materials segment and a Construction Materials segment.  The basis for this segmentation is distinguished by the nature of the products and how they are delivered to their respective markets.  The Industrial Materials segment reflects specified products that are used in or integrated into another company’s product with demand dependent upon general economic conditions.  Industrial Materials products include insulating and conducting materials for wire and cable manufacturers, moisture protective coatings for electronics and printing services, laminated durable papers, and flexible composites, laminates for the packaging and industrial laminate markets, pulling and detection tapes used in the installation, measurement and location of fiber optic cables, water and natural gas lines, cover tapes essential to delivering semiconductor components via tape and reel packaging, and wind energy composite materials and elements.  Additionally, the Industrial Materials segment includes a joint venture which produces glass based strength elements designed to allow fiber optic cables to withstand mechanical and environmental strain and stress. The Construction Materials segment reflects construction 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, high performance polymeric asphalt additives, and expansion and control joint systems for use in the transportation and architectural markets.

The following tables summarize financial information about the Company’s reportable segments:

	Three Months Ended November 30,
	2013			2012
Revenues from external customers
Industrial Materials	$	41,670		$	39,850
Construction Materials	12,513			13,550
Total	$	54,183		$	53,400
Income before income taxes
Industrial Materials	$	13,607		$	5,530
Construction Materials	1,591			1,430
Total for reportable segments	15,198			6,960
Corporate and Common Costs	(1,634		)	(1,663		)
Total	$	13,564		$	5,297

The Company’s products are sold world-wide.  For the three months ended November 30, 2013 and 2012, sales from its operations located in the United Kingdom accounted for 8% of consolidated revenues in each period.  No foreign geographic area accounted for more than 10% of consolidated revenues for the three months ended November 30, 2013 and 2012.

	November 30, 2013		August 31, 2013
Total assets
Industrial Materials	$	136,686	$	133,110
Construction Materials	48,041		48,573
Total for reportable segments	184,727		181,683
Corporate and Common Assets	50,048		42,677
Total	$	234,775	$	224,360

As of November 30, 2013 and August 31, 2013, 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) of $4,212 and $4,063, respectively, located in the United Kingdom.   These balances exclude goodwill and intangibles of $10,618 and $10,333, as of November 30, 2013 and August 31, 2013, respectively.

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Nov. 30, 2013	Nov. 30, 2012
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net income	$ 8,817	$ 3,477
Other comprehensive income:
Net unrealized loss on restricted investments, net of tax	71
Change in funded status of pension plans, net of tax	48	272
Foreign currency translation adjustment	1,578	404
Total other comprehensive income	1,697	676
Comprehensive income	10,514	4,153
Comprehensive (income) loss attributable to non-controlling interest	(42)	63
Comprehensive income attributable to Chase Corporation	$ 10,472	$ 4,216

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CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Nov. 30, 2013	Aug. 31, 2013
Current Assets
Cash and Cash Equivalents, at Carrying Value	$ 36,928	$ 29,997
Accounts receivable, less allowance for doubtful accounts of $672 and $696	30,691	32,084
Inventories	33,983	32,048
Prepaid expenses and other current assets	3,987	1,826
Due From Sale of Product Line	3,255
Assets held for sale, net		1,905
Deferred income taxes	2,115	2,115
Total current assets	110,959	99,975
Property, plant and equipment, net	44,835	45,192
Other Assets
Goodwill	38,092	37,815
Intangible assets, less accumulated amortization of $19,179 and $17,554	30,932	31,781
Cash surrender value of life insurance	7,300	7,278
Restricted investments	1,229	1,094
Funded pension plan	1,226	1,014
Other assets	202	211
Total assets	234,775	224,360
Current Liabilities
Accounts payable	15,588	12,416
Accrued payroll and other compensation	2,885	7,046
Accrued expenses	5,125	5,171
Accrued income taxes	4,009	2,161
Dividends payable	4,093
Current portion of long-term debt	5,950	5,600
Total current liabilities	37,650	32,394
Long-term debt, less current portion	57,050	58,800
Deferred compensation	2,020	1,897
Accumulated pension obligation	7,895	7,834
Other liabilities	104	108
Deferred income taxes	9,446	9,467
Commitments and Contingencies (Note 10)
Equity
First Serial Preferred Stock, $1.00 par value: Authorized 100,000 shares; none issued
Common stock, $.10 par value: Authorized 20,000,000 shares; 9,094,868 shares at November 30, 2013 and 9,066,115 shares at August 31, 2013 issued and outstanding	910	907
Additional paid-in capital	13,662	13,336
Accumulated other comprehensive loss	(3,466)	(5,163)
Retained earnings	108,416	103,734
Chase Corporation stockholders' equity	119,522	112,814
Non-controlling interest related to NEPTCO joint venture	1,088	1,046
Total equity	120,610	113,860
Total liabilities and equity	$ 234,775	$ 224,360

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Fair Value Measurements (Tables)

3 Months Ended

Nov. 30, 2013

Fair Value Measurements

Schedule of financial assets that were accounted for at fair value on a recurring basis

				Fair value measurement category
	Fair value measurement date	Total		Quoted prices in active  markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Assets:
Restricted investments	November 30, 2013	$	1,229	$	1,229	$	—	$	—
Restricted investments	August 31, 2013	$	1,094	$	1,094	$	—	$	—

Schedule of fair values of the Company's long-term debt

				Fair value measurement category
	Fair value measurement date	Total		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Liabilities:
Long-term debt	November 30, 2013	$	63,000	$	—	$	63,000	$	—
Long-term debt	August 31, 2013	$	64,400	$	—	$	64,400	$	—

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Net Income Per Share (Tables)

3 Months Ended

Nov. 30, 2013

Net Income Per Share

Schedule of determination of earnings per share under the two-class method

	Three Months Ended November 30,
	2013		2012
Basic Earnings per Share
Net income attributable to Chase Corporation	$	8,775	$	3,540
Less: Allocated to participating securities	151		77
Net income available to common shareholders	$	8,624	$	3,463
Basic weighted average shares outstanding	8,938,149		8,851,314
Net income per share - Basic	$	0.96	$	0.39
Diluted Earnings per Share
Net income attributable to Chase Corporation	$	8,775	$	3,540
Less: Allocated to participating securities	148		76
Net income available to common shareholders	$	8,627	$	3,464
Basic weighted average shares outstanding	8,938,149		8,851,314
Additional dilutive common stock equivalents	211,528		76,656
Diluted weighted average shares outstanding	9,149,677		8,927,970
Net income per share - Diluted	$	0.94	$	0.39

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Accumulated Other Comprehensive Income (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Nov. 30, 2013	Nov. 30, 2012
Accumulated other comprehensive income
Selling, general and administrative expenses	$ 10,439	$ 10,539
Cost of products and services sold	35,478	37,271
Tax expense (benefit)	4,747	1,820
Net income	8,817	3,477
Reclassification out of accumulated other comprehensive income (loss)
Accumulated other comprehensive income
Net income	(45)
Gains on Restricted Investments: | Reclassification out of accumulated other comprehensive income (loss)
Accumulated other comprehensive income
Selling, general and administrative expenses	(5)
Tax expense (benefit)	2
Net income	3
Loss on Funded Pension Plan adjustments: | Reclassification out of accumulated other comprehensive income (loss)
Accumulated other comprehensive income
Selling, general and administrative expenses	(54)
Cost of products and services sold	(20)
Tax expense (benefit)	26
Net income	$ 48

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Sale of Insulfab Product Line (Details) (USD $) In Thousands, unless otherwise specified	0 Months Ended	3 Months Ended
	Oct. 07, 2013	Nov. 30, 2013	Aug. 31, 2013
Sale of Insulfab product line
Proceeds from the sale of property and assets		$ 6,655
Insulfab product line
Sale of Insulfab product line
Proceeds from the sale of property and assets	7,394
Increase in sale proceeds resulting from post-closing adjustments		2,516
Pre-tax book gain from the sale of property and assets		5,706
After-tax book gain from the sale of property and assets		3,709
Sale price held in escrow		739
Inventory	3,153		885
Property & equipment	1,062		1,060
Accrued expenses	(3)		(40)
Assets, net	$ 4,212		$ 1,905

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Segment Data and Foreign Operations (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Nov. 30, 2013 item	Nov. 30, 2012	Aug. 31, 2013
Segment Data and Foreign Operations
Number of operating segments	2
Segment data
Revenues	$ 54,183	$ 53,400
Income before income taxes	13,564	5,297
Total assets	234,775		224,360
Industrial Materials
Segment data
Revenues	41,670	39,850
Income before income taxes	13,607	5,530
Total assets	136,686		133,110
Construction Materials
Segment data
Revenues	12,513	13,550
Income before income taxes	1,591	1,430
Total assets	48,041		48,573
Reportable segments
Segment data
Income before income taxes	15,198	6,960
Total assets	184,727		181,683
Corporate and common costs
Segment data
Income before income taxes	(1,634)	(1,663)
Total assets	$ 50,048		$ 42,677

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Segment Data and Foreign Operations (Details 2) (USD $) In Thousands, unless otherwise specified					3 Months Ended
	Nov. 30, 2013	Aug. 31, 2013	Nov. 30, 2013 United Kingdom	Aug. 31, 2013 United Kingdom	Nov. 30, 2013 Revenues Geographic concentration risk United Kingdom	Nov. 30, 2012 Revenues Geographic concentration risk United Kingdom	Nov. 30, 2013 Long-lived assets Geographic concentration risk United Kingdom	Aug. 31, 2013 Long-lived assets Geographic concentration risk United Kingdom
Concentration risk
Percentage of concentration risk					8.00%	8.00%
Long-lived assets	$ 44,835	$ 45,192					$ 4,212	$ 4,063
Goodwill and intangible assets			$ 10,618	$ 10,333

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Stock Based Compensation

3 Months Ended

Nov. 30, 2013

Stock Based Compensation

Stock Based Compensation

Note 5 — Stock Based Compensation

In October 2012, the Board of Directors of the Company approved the fiscal year 2013 Long Term Incentive Plan (“2013 LTIP”) for the executive officers.  The 2013 LTIP is an equity based plan with a grant date of October 22, 2012 and contains a performance and service based restricted stock grant of 11,861 shares in the aggregate, subject to adjustment, with a vesting date of August 31, 2015.  Based on the fiscal year 2013 financial results, 11,861 additional shares of restricted stock (total of 23,722 shares) were earned and granted subsequent to the end of fiscal year 2013 in accordance with the performance measurement criteria.  No further performance-based measurements apply to this award.  Compensation expense is being recognized on a ratable basis over the vesting period.

In September 2013, the Board of Directors of the Company approved the fiscal year 2014 Long Term Incentive Plan (“2014 LTIP”) for the executive officers and other members of management.  The 2014 LTIP is an equity based plan with a grant date of September 1, 2013 and contains the following equity components:

Restricted Shares — (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.  Compensation expense is recognized on a ratable basis over the vesting period based on quarterly probability assessments; (b) 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 is recognized on a ratable basis over the vesting period.

Stock options — options to purchase 25,969 shares of common stock in the aggregate with an exercise price of $29.72 per share.  The options will vest in three equal annual allotments beginning on August 31, 2014 and ending on August 31, 2016. The options will expire on August 31, 2023.  Compensation expense is recognized over the period of the award on an annual basis consistent with the vesting terms.

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Accumulated Other Comprehensive Income (Tables)

3 Months Ended

Nov. 30, 2013

Accumulated Other Comprehensive Income

Schedule of changes in accumulated other comprehensive income (loss), net of tax

	Restricted Investments			Change in Funded Status of Pension Plan			Foreign Currency Translation Adjustment			Total
Balance at August 31, 2013	$	144		$	(3,578	)	$	(1,729	)	$	(5,163	)
Other comprehensive gains (losses) before reclassifications (1)	74			—			1,578			1,652
Reclassifications to net income of previously deferred (gains) losses (2)	(3		)	48			—			45
Other comprehensive income (loss)	71			48			1,578			1,697
Balance at November 30, 2013	$	215		$	(3,530	)	$	(151	)	$	(3,466	)

(1) Net of tax benefit of $40, $0, $0, respectively.

(2) Net of tax expense of $2, tax benefit of $26, $0, respectively.

Summary of the reclassifications from accumulated other comprehensive income (loss) to the unaudited condensed consolidated statements of income

	Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income
	Three Months Ended November 30, 2013			Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income
Gains on Restricted Investments:
Realized gain on sale of restricted investments	$	5		Selling, general and administrative expenses
Tax expense (benefit)	2
Gain net of tax	$	3
Loss on Funded Pension Plan adjustments:
Realized loss on amortization of prior pension service costs and unrecognized losses	$	(20	)	Cost of products and services sold
Realized loss on amortization of prior pension service costs and unrecognized losses	$	(54	)	Selling, general and administrative expenses
Tax expense (benefit)	26
(Loss) net of tax	$	(48	)
Total net (loss) reclassified for the period	$	(45	)

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Fair Value Measurements (Details) (Recurring basis, USD $) In Thousands, unless otherwise specified	Nov. 30, 2013	Aug. 31, 2013
Total
Fair value measurements
Long-term debt	$ 63,000	$ 64,400
Restricted investments	1,229	1,094
Quoted prices in active markets (Level 1)
Fair value measurements
Restricted investments	1,229	1,094
Significant other observable inputs (Level 2)
Fair value measurements
Long-term debt	$ 63,000	$ 64,400

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Sale of Insulfab Product Line

3 Months Ended

Nov. 30, 2013

Sale of Insulfab Product Line

Sale of Insulfab Product Line

Note 8 — Sale of Insulfab Product Line

On October 7, 2013, the Company sold substantially all of its property and assets, including intellectual property, comprising the Insulfab® product line, to an unrelated third party (“buyer”).  The Insulfab product line is primarily focused on manufacturing high quality, engineered barrier laminates used in aerospace applications.  The sale proceeds of $7,394 are subject to certain post-closing adjustments based on the change in the final net book value compared to the bid date net book value.  As of November 30, 2013, management determined these post-closing adjustments resulted in an increase in the sale proceeds of $2,516 based on the increase of inventory sold to the buyer at closing.  This adjustment is subject to final review by the buyer.  The net proceeds from the sale are available for debt reduction and investment in the Company’s core businesses.

This transaction resulted in a pre-tax book gain of $5,706 ($3,709 after-tax gain) which was recorded in the quarter ending November 30, 2013.  The additional proceeds of $2,516 and the portion of the sale price held in escrow of $739 are recorded as current assets (Due from sale of product line) as of November 30, 2013.

The following table summarizes information about the Insulfab product line as of October 7, 2013 and August 31, 2013:

	October 7, 2013			August 31, 2013
Inventory	$	3,153		$	885
Property & equipment	1,062			1,060
Accrued expenses	(3		)	(40		)
	$	4,212		$	1,905

As a result of the efforts to market and sell this product line in the fourth quarter of fiscal 2013, the Company had classified the Insulfab assets (including inventory and equipment) as assets held for sale as of August 31, 2013.  This product line and related assets were part of the Company’s Industrial Materials segment.

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Net Income Per Share

3 Months Ended

Nov. 30, 2013

Net Income Per Share

Net Income Per Share

Note 4 — Net Income Per Share

The Company has unvested share-based payment awards with a right to receive nonforfeitable dividends which are considered participating securities under ASC Topic 260, “Earnings Per Share”.  The Company allocates earnings to participating securities and computes earnings per share using the two class method.  The determination of earnings per share under the two-class method is as follows:

	Three Months Ended November 30,
	2013		2012
Basic Earnings per Share
Net income attributable to Chase Corporation	$	8,775	$	3,540
Less: Allocated to participating securities	151		77
Net income available to common shareholders	$	8,624	$	3,463
Basic weighted average shares outstanding	8,938,149		8,851,314
Net income per share - Basic	$	0.96	$	0.39
Diluted Earnings per Share
Net income attributable to Chase Corporation	$	8,775	$	3,540
Less: Allocated to participating securities	148		76
Net income available to common shareholders	$	8,627	$	3,464
Basic weighted average shares outstanding	8,938,149		8,851,314
Additional dilutive common stock equivalents	211,528		76,656
Diluted weighted average shares outstanding	9,149,677		8,927,970
Net income per share - Diluted	$	0.94	$	0.39

Included in the calculation of dilutive common stock equivalents are the unvested portion of restricted stock and stock options.

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CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Nov. 30, 2013
CONSOLIDATED STATEMENT OF EQUITY
Annual cash dividend accrued (in dollars per share)	$ 0.45
Change in funded status of pension plan, tax	$ 26
Net unrealized gain on restricted investments, tax	$ 38

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Net Income Per Share (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Nov. 30, 2013	Nov. 30, 2012
Basic Earnings per Share
Net income attributable to Chase Corporation	$ 8,775	$ 3,540
Less: Allocated to participating securities	151	77
Net income available to common shareholders	8,624	3,463
Basic weighted average shares outstanding	8,938,149	8,851,314
Net income per share - Basic (in dollars per share)	$ 0.96	$ 0.39
Diluted Earnings per Share
Net income attributable to Chase Corporation	8,775	3,540
Less: Allocated to participating securities	148	76
Net income available to common shareholders	$ 8,627	$ 3,464
Basic weighted average shares outstanding	8,938,149	8,851,314
Additional dilutive common stock equivalents (in shares)	211,528	76,656
Diluted weighted average shares outstanding	9,149,677	8,927,970
Net income per share - Diluted (in dollars per share)	$ 0.94	$ 0.39

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Pensions and Other Post Retirement Benefits

3 Months Ended

Nov. 30, 2013

Pensions and Other Post Retirement Benefits

Pensions and Other Post Retirement Benefits

Note 11 - Pensions and Other Post Retirement Benefits

The components of net periodic benefit cost for the three months ended November 30, 2013 and 2012 are as follows:

	Three Months Ended November 30,
	2013			2012
Service cost	$	81		$	103
Interest cost	161			114
Expected return on plan assets	(178		)	(149		)
Amortization of prior service cost	1			6
Amortization of unrecognized loss	73			84
Curtailment loss	—			25
Settlement loss	—			327
Net periodic benefit cost	$	138		$	510

When funding is required, the Company’s policy is to contribute amounts that are deductible for federal income tax purposes.  As of November 30, 2013, the Company has made contributions of $200 in the current fiscal year to fund its obligations under its pension plan and will make the necessary contributions over the remainder of fiscal 2014 to ensure the qualified plan continues to be adequately funded given the current market conditions.

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Goodwill and Other Intangibles

3 Months Ended

Nov. 30, 2013

Goodwill and Other Intangibles

Goodwill and Other Intangibles

Note 7 — Goodwill and Other Intangibles

The changes in the carrying value of goodwill, by reportable segment, are as follows:

	Construction		Industrial
	Materials		Materials		Consolidated
Balance at August 31, 2013	$	10,735	$	27,080	$	37,815
Foreign currency translation adjustment	13		264		277
Balance at November 30, 2013	$	10,748	$	27,344	$	38,092

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 identified several reporting units within each of its two 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 public company analysis and discounted cash flows. The Company evaluates the possible impairment of goodwill annually each fourth quarter and whenever events or circumstances indicate the carrying value of goodwill may not be recoverable.

Intangible assets subject to amortization consist of the following as of November 30, 2013 and August 31, 2013:

	Weighted-Average	Gross Carrying		Accumulated		Net Carrying
	Amortization Period	Value		Amortization		Value
November 30, 2013
Patents and agreements	11.9 years	$	3,237	$	2,217	$	1,020
Formulas	9.1 years	5,834		2,423		3,411
Trade names	5.7 years	6,394		2,354		4,040
Customer lists and relationships	10.2 years	34,646		12,185		22,461
		$	50,111	$	19,179	$	30,932
August 31, 2013
Patents and agreements	11.9 years	$	3,198	$	2,200	$	998
Formulas	9.1 years	5,772		2,238		3,534
Trade names	5.7 years	6,345		2,055		4,290
Customer lists and relationships	10.2 years	34,020		11,061		22,959
		$	49,335	$	17,554	$	31,781

Aggregate amortization expense related to intangible assets for the three months ended November 30, 2013 and 2012 was $1,194 and $1,217, respectively.  Estimated amortization expense for the remainder of fiscal year 2014 and for each of the five succeeding fiscal years is as follows:

Years ending August 31,
2014 (remaining 9 months)	$	3,700
2015	4,750
2016	4,687
2017	4,250
2018	4,019
2019	3,322
	$	24,728

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Inventories (Tables)

3 Months Ended

Nov. 30, 2013

Inventories

Schedule of inventories

	November 30, 2013		August 31, 2013
Raw materials	$	15,032	$	14,545
Work in process	6,665		5,967
Finished goods	12,286		11,536
Total Inventories	$	33,983	$	32,048

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Fair Value Measurements

3 Months Ended

Nov. 30, 2013

Fair Value Measurements

Fair Value Measurements

Note 12 — Fair Value Measurements

The Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price).  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.

The Company utilizes the best available information in measuring fair value.  Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement.  The financial assets classified as Level 1 as of November 30, 2013 and August 31, 2013 represent investments that are restricted for use in a nonqualified retirement savings plan for certain key employees and directors.

The following table sets forth the Company’s financial assets that were accounted for at fair value on a recurring basis as of November 30, 2013 and August 31, 2013:

				Fair value measurement category
	Fair value measurement date	Total		Quoted prices in active  markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Assets:
Restricted investments	November 30, 2013	$	1,229	$	1,229	$	—	$	—
Restricted investments	August 31, 2013	$	1,094	$	1,094	$	—	$	—

The following table presents the fair value of the Company’s long-term debt as of November 30, 2013 and August 31, 2013, which is recorded at its carrying value:

				Fair value measurement category
	Fair value measurement date	Total		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Liabilities:
Long-term debt	November 30, 2013	$	63,000	$	—	$	63,000	$	—
Long-term debt	August 31, 2013	$	64,400	$	—	$	64,400	$	—

The carrying value of the long-term debt approximates its fair value, as the monthly interest rate is set based on the movement of the underlying market rates.

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Document and Entity Information	3 Months Ended
	Nov. 30, 2013	Dec. 31, 2013
Document and Entity Information
Entity Registrant Name	CHASE CORP
Entity Central Index Key	0000830524
Document Type	10-Q
Document Period End Date	Nov. 30, 2013
Amendment Flag	false
Current Fiscal Year End Date	--08-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		9,097,078
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q1

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Accumulated Other Comprehensive Income

3 Months Ended

Nov. 30, 2013

Accumulated Other Comprehensive Income

Accumulated Other Comprehensive Income

Note 13 — Accumulated Other Comprehensive Income

The changes in accumulated other comprehensive income (loss), net of tax, were as follows:

	Restricted Investments			Change in Funded Status of Pension Plan			Foreign Currency Translation Adjustment			Total
Balance at August 31, 2013	$	144		$	(3,578	)	$	(1,729	)	$	(5,163	)
Other comprehensive gains (losses) before reclassifications (1)	74			—			1,578			1,652
Reclassifications to net income of previously deferred (gains) losses (2)	(3		)	48			—			45
Other comprehensive income (loss)	71			48			1,578			1,697
Balance at November 30, 2013	$	215		$	(3,530	)	$	(151	)	$	(3,466	)

(1) Net of tax benefit of $40, $0, $0, respectively.

(2) Net of tax expense of $2, tax benefit of $26, $0, respectively.

The following table summarizes the reclassifications from accumulated other comprehensive income (loss) to the unaudited condensed consolidated statements of income:

	Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income
	Three Months Ended November 30, 2013			Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income
Gains on Restricted Investments:
Realized gain on sale of restricted investments	$	5		Selling, general and administrative expenses
Tax expense (benefit)	2
Gain net of tax	$	3
Loss on Funded Pension Plan adjustments:
Realized loss on amortization of prior pension service costs and unrecognized losses	$	(20	)	Cost of products and services sold
Realized loss on amortization of prior pension service costs and unrecognized losses	$	(54	)	Selling, general and administrative expenses
Tax expense (benefit)	26
(Loss) net of tax	$	(48	)
Total net (loss) reclassified for the period	$	(45	)