Note 6 — Segment Data and Foreign Operations

The Company is organized into three reportable operating segments: Adhesives, Sealants and Additives; Industrial Tapes; and Corrosion Protection and Waterproofing. The segments are distinguished by the nature of the products manufactured and how they are delivered to their respective markets. In the fourth quarter of the Company’s fiscal year 2019, it reorganized from two into three reportable operating segments; prior year quarter and year-to-date period amounts have been recast to reflect this change.

The Adhesives, Sealants and Additives segment offers innovative and specialized product offerings consisting of both end-use products and intermediates that are used in, or integrated into, another company’s product. Demand for the segment’s product offerings is typically dependent upon general economic conditions. The Adhesives, Sealants and Additives segment leverages the core specialty chemical competencies of the Company, and serves diverse markets and applications. The segment sells predominantly into the transportation, appliances, medical, general industrial and environmental market verticals. The segment’s products include moisture protective coatings and customized sealant and adhesive systems for electronics, polymeric microspheres, polyurethane dispersions and superabsorbent polymers.

The Industrial Tapes segment features legacy wire and cable materials, specialty tapes and other laminated and coated products. The segment derives its competitive advantage through its proven chemistries, diverse specialty offerings and the reliability its supply chain offers to end customers. These products are generally used in the assembly of other manufacturers’ products, with demand typically dependent upon general economic conditions. The Industrial Tapes segment sells mostly to established markets, with some exposure to growth opportunities through further development of existing products. Markets served include cable manufacturing, utilities and telecommunications, and electronics packaging. The segment’s offerings include insulating and conducting materials for wire and cable manufacturers, laminated durable papers, laminates for the packaging and industrial laminate markets, custom manufacturing services, pulling and detection tapes used in the installation, measurement and location of fiber optic cables and water and natural gas lines and cover tapes essential to delivering semiconductor components via tape-and-reel packaging.

The Corrosion Protection and Waterproofing segment is principally composed of project-oriented product offerings that are primarily sold and used as “Chase” branded products. End markets include new and existing infrastructure projects on oil, gas, water and wastewater pipelines, highways and bridge decks, water and wastewater containment systems, and commercial buildings. The segment’s products include protective coatings for pipeline applications, coating and lining systems for waterproofing and liquid storage applications, adhesives and sealants used in architectural and building envelope waterproofing applications, high-performance polymeric asphalt additives, and expansion joint systems for waterproofing applications in transportation and architectural markets. With sales generally dependent on outdoor project work, the segment experiences highly seasonal sales patterns.

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


	Three Months Ended May 31,						Nine Months Ended May 31,
	2020			2019			2020			2019
Revenue
Adhesives, Sealants and Additives	$	22,922		$	26,009		$	73,184		$	78,814
Industrial Tapes		31,752			33,704			91,931			98,324
Corrosion Protection and Waterproofing		10,197			12,399			32,140			34,108
Total	$	64,871		$	72,112		$	197,255		$	211,246

Income before income taxes
Adhesives, Sealants and Additives	$	6,704		$	7,509		$	20,936		$	20,530	(f)
Industrial Tapes		9,011			6,929	(b)		24,050	(d)		20,980	(g)
Corrosion Protection and Waterproofing		4,149			4,817			12,240			11,667
Total for reportable segments		19,864			19,255			57,226			53,177
Corporate and common costs		(7,337)	(a)		(7,067)	(c)		(23,823)	(e)		(22,249)	(h)
Total	$	12,527		$	12,188		$	33,403		$	30,928

Includes the following costs by segment:
Adhesives, Sealants and Additives
Interest	$	26		$	34		$	68		$	172
Depreciation		199			356			791			1,121
Amortization		2,340			2,341			7,033			7,020

Industrial Tapes
Interest	$	33		$	38		$	87		$	193
Depreciation		428			410			1,247			1,304
Amortization		450			450			1,350			1,350

Corrosion Protection and Waterproofing
Interest	$	8		$	19		$	23		$	92
Depreciation		144			161			449			500
Amortization		108			323			341			969

(a)

Includes $760 in gain related to the April 2020 sale of the Company’s Pawtucket, RI location, $183 in severance expense related to the May 2020 reduction in force, $85 in expenses related to the final transition out of the Pawtucket, RI facility, and $75 of pension-related settlement costs due to the timing of lump-sum distribution

(b)

Includes $193 in exit costs related to the movement of the pulling and detection business out of the Granite Falls, NC location and into the Hickory, NC location during the third quarter of fiscal 2019

(c)

Includes $11 of pension-related settlement costs due to the timing of lump-sum distributions

(d)

Includes $559 in exit costs related to the movement of the pulling and detection business out of the Granite Falls, NC location and into the Hickory, NC location during the first nine months of fiscal 2020

(e)

Includes $150 of expense related to exploratory IT work performed to assess potential future upgrades to the companywide ERP system, a $760 gain related to the April 2020 sale of the Company’s Pawtucket, RI location, $183 in severance expense related to the May 2020 reduction in force, $85 in expenses related to the final transition out of the Pawtucket, RI facility, and $75 of pension-related settlement costs due to the timing of lump-sum distribution

(f)

Includes $2,410 of loss on impairment of goodwill related to the Company’s polyurethane dispersions business

(g)

Includes $260 of expense related to the closure and exit of the Pawtucket, RI location recognized in the first quarter of fiscal 2019, $193 in exit costs related to the movement of the pulling and detection business out of the Granite Falls, NC location and into the Hickory, NC location during the third quarter of fiscal 2019

(h)

Includes $484 of pension-related settlement costs due to the timing of lump-sum distributions

Total assets for the Company’s reportable segments as of May 31, 2020 and August 31, 2019 were:


	May 31,		August 31,
	2020		2019
Total Assets
Adhesives, Sealants and Additives	$	134,353	$	135,583
Industrial Tapes		70,489		77,085
Corrosion Protection and Waterproofing		31,722		32,478
Total for reportable segments		236,564		245,146
Corporate and common assets		97,306		62,822
Total	$	333,870	$	307,968

The Company’s products are sold worldwide. Revenue for the three-month and nine-month periods ended May 31, 2020 and 2019 were attributed to operations located in the following countries:


	Three Months Ended May 31,				Nine Months Ended May 31,
	2020		2019		2020			2019
Revenue
United States	$	56,177	$	64,046		$	171,774		$	186,339
United Kingdom		5,070		4,502			14,489			12,946
All other foreign (1)		3,624		3,564			10,992			11,961
Total	$	64,871	$	72,112		$	197,255		$	211,246

(1)

Comprises sales originated from the Company’s Paris, France location, royalty revenue attributable to its licensed manufacturer in Asia, and Chase foreign manufacturing operations.

As of May 31, 2020 and August 31, 2019 the Company had long-lived assets (defined as tangible assets providing the Company with a future economic benefit beyond the current year or operating period, including buildings, equipment and leasehold improvements) and goodwill and intangible assets, less accumulated amortization, in the following countries:


	May 31,		August 31,
	2020		2019
Long-Lived Assets
United States
Property, plant and equipment, net	$	23,509	$	24,993
Goodwill and Intangible assets, less accumulated amortization		120,673		129,057

United Kingdom
Property, plant and equipment, net		2,246		2,493
Goodwill and Intangible assets, less accumulated amortization		4,180		4,446

All other foreign
Property, plant and equipment, net		901		1,840
Goodwill and Intangible assets, less accumulated amortization		1,194		1,187

Total
Property, plant and equipment, net	$	26,656	$	29,326
Goodwill and Intangible assets, less accumulated amortization	$	126,047	$	134,690