10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

⌧ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED

AUGUST 31, 2020

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO

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.)

295 University Avenue, Westwood, Massachusetts 02090

(Address of Principal Executive Offices) (Zip Code)

(781) 332-0700

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to section 12(b) of the Act:

Title of each class Common stock, $.10 par value Trading Symbol(s) CCF Name of each exchange on which registered NYSE American

Securities registered pursuant to section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES ◻  NO ⌧

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. YES ◻ NO ⌧

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 (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES ⌧ NO ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). YES ⌧ NO ◻

Indicate by checkmark 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”, “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ◻	Accelerated filer ⌧
Non-accelerated filer ◻	Smaller reporting company ☐
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

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

The aggregate market value of the common stock held by non-affiliates of the registrant, computed by reference to the closing price as of the last business day of the Registrant’s most recently completed second fiscal quarter, February 29, 2020, was approximately $465,871,000.

As of October 31, 2020, the Company had outstanding 9,445,474 shares of common stock, $0.10 par value, which is its only class of common stock.

Documents Incorporated By Reference:

Portions of the registrant’s definitive proxy statement for the Annual Meeting of Shareholders, which is expected to be filed within 120 days after the registrant’s fiscal year ended August 31, 2020, are incorporated by reference into Part III hereof.

CHASE CORPORATION

INDEX TO ANNUAL REPORT ON FORM 10-K

For the Year Ended August 31, 2020

		Page No.
Cautionary Note Concerning Forward-Looking Statements		2
PART I
Item 1	Business	3
Item 1A	Risk Factors	11
Item 1B	Unresolved Staff Comments	17
Item 2	Properties	17
Item 3	Legal Proceedings	18
Item 4	Mine Safety Disclosures	18
Item 4A	Information About our Executive Officers	18
PART II
Item 5	Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	19
Item 6	Selected Financial Data	21
Item 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 7A	Quantitative and Qualitative Disclosures About Market Risk	40
Item 8	Financial Statements and Supplementary Data	41
Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	103
Item 9A	Controls and Procedures	103
Item 9B	Other Information	106
PART III
Item 10	Directors, Executive Officers and Corporate Governance	106
Item 11	Executive Compensation	106
Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	106
Item 13	Certain Relationships and Related Transactions, and Director Independence	106
Item 14	Principal Accountant Fees and Services	107
PART IV
Item 15	Exhibits and Financial Statement Schedules	108
Item 16	Form 10-K Summary	111
SIGNATURES		112

1

Cautionary Note Concerning Forward-Looking Statements

This Annual Report on Form 10-K contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements, including without limitation forward-looking statements made under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” involve risks and uncertainties. Any statements contained in this Annual Report that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements include, without limitation, statements as to our future operating results; seasonality expectations; plans for the development, utilization or disposal of manufacturing facilities; future economic conditions; our expectations as to legal proceedings; the effect of our market and product development efforts; and expectations or plans relating to the implementation or realization of our strategic goals and future growth, including through potential future acquisitions. Forward-looking statements may also include, among other things, statements relating to future sales, earnings, cash flow, results of operations, use of cash and other measures of financial performance, statements relating to future dividend payments, as well as expected impact of the coronavirus disease 2019 (COVID-19) pandemic on the Company's businesses. Forward-looking statements may be identified through the use of words such as “believes,” “anticipates,” “may,” “should,” “will,” “plans,” “projects,” “expects,” “expectations,” “estimates,” “predicts,” “targets,” “forecasts,” “strategy,” and other words of similar meaning in connection with the discussion of future operating or financial performance. 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. Because forward-looking statements relate to the future, they are subject to inherent risks, uncertainties and changes in circumstances that are difficult to predict. Accordingly, the Company’s actual results may differ materially from those contemplated by the forward-looking statements. Investors, therefore, are cautioned against relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. Readers should refer to the discussions under Item 1A “Risk Factors” of this Annual Report on Form 10-K.

2

PART I

Item 1 – Business

Primary Operating Divisions and Facilities and Industry Segments

Chase Corporation (the “Company,” “Chase,” “we,” or “us”), a global specialty chemicals company founded in 1946, is a leading manufacturer of protective materials for high-reliability applications across diverse market sectors. Our strategy is to maximize the performance of our core businesses and brands while seeking future opportunities through strategic acquisitions. Through investments in facilities, systems and organizational consolidation we seek to improve performance and gain economies of scale.

In the fourth quarter of our fiscal year 2019 (the prior year), we reorganized from two into three reportable operating segments: an Adhesives, Sealants and Additives segment, an Industrial Tapes segment and a Corrosion Protection and Waterproofing segment. The segments are distinguished by the nature of the products manufactured and how they are delivered to their respective markets. The Adhesives, Sealants and Additives segment (whose operations were formerly included within the Industrial Materials 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 products. Demand for the segment’s product offerings is typically dependent upon general economic conditions. This segment leverages the core specialty chemical competencies of the Company, and serves diverse markets and applications. The segment sells predominantly into the transportation, appliance, medical, general industrial and environmental market verticals. The Industrial Tapes segment (whose operations were formerly included within the Industrial Materials 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. This 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. TheCorrosion Protection and Waterproofing segment (formerly known as the Construction Materials 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. Our manufacturing facilities are distinct to their respective segments apart from our O’Hara Township, PA, Blawnox, PA and Hickory, NC facilities, which produce products related to a combination of operating segments.

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A summary of our operating structure as of August 31, 2020 is as follows:

ADHESIVES, SEALANTS AND ADDITIVES SEGMENT
	Primary
	Operating
Key Products	Locations	Background/History
Protective conformal coatings under the brand name HumiSeal®, moisture protective electronic coatings sold to the electronics industry including circuitry used in automobiles, industrial controls and home appliances.	O'Hara Township, PA	The HumiSeal business and product lines were acquired in the early 1970s.
Advanced adhesives, sealants, and coatings for automotive and industrial applications that require specialized bonding, encapsulating, environmental protection, or thermal management functionality.	Woburn, MA Newark, CA	In September 2016, we acquired certain assets and the operations of Resin Designs, LLC, and entered leases for their existing manufacturing facilities in Massachusetts and California.
Protective conformal coatings under the brand name HumiSeal®, moisture protective electronic coatings sold to the electronics industry including circuitry used in automobiles, industrial controls and home appliances.	Winnersh, Wokingham, England Paris, France Pune, India	In October 2005, we acquired all of the capital stock of Concoat Holdings Ltd. and its subsidiaries. In 2006 Concoat was renamed HumiSeal Europe. In March 2007, we expanded our international presence with the formation of HumiSeal Europe SARL in France. HumiSeal Europe SARL operates a sales/technical service office and warehouse near Paris, France. This business works closely with the HumiSeal operation in Winnersh, Wokingham, England, allowing direct sales and service to the French market. In June 2016, we further expanded our international presence through the purchase of Spray Products (India) Private Limited, located in Pune, India. This business enhances the Company’s ability to provide technical, sales, manufacturing, chemical handling and packaging services in the region and works closely with our HumiSeal manufacturing operation in Winnersh, Wokingham, England.In December 2016, the business was renamed HumiSeal India Private Limited.
Polymeric microspheres, sold under the Dualite® brand, which are utilized for weight and density reduction and sound dampening across varied industries. Polyurethane dispersions utilized for various coating products.	Greenville, SC	In January 2015, we acquired two product lines from Henkel Corporation. They, along with the Superabsorbents business acquired in December 2017, comprise our specialty chemical intermediates product line. The Company currently contracts with manufacturing partners to produce its polyurethane dispersions.
Superabsorbent polymers, sold through our Zappa Stewart division, which are utilized for water and liquid management, remediation and protection in diverse markets including wire and cable, medical, environmental, infrastructure, energy and consumer products.	Hickory, NC McLeansville, NC	In December 2017, we acquired Stewart Superabsorbents, LLC and its Zappa-Tec business (collectively “Zappa Stewart”).

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INDUSTRIAL TAPES SEGMENT
	Primary
	Operating
Key Products	Locations	Background/History
Specialty tapes and related products for the electronic and telecommunications industries using the brand name Chase & Sons®. Insulating and conducting materials for the manufacture of electrical and telephone wire and cable, electrical splicing, and terminating and repair tapes, which are marketed to wire and cable manufacturers selling into energy-oriented and communication markets, and to public utilities. PaperTyger®, a trademark for laminated durable papers sold to the envelope converting and commercial printing industries.	Oxford, MA	In August 2011, we relocated our manufacturing processes that had been previously conducted at our Webster, MA facility to this location. In December 2012, we relocated the majority of our manufacturing processes that had been previously conducted at our Randolph, MA facility to this location. Our Randolph facility was one of our first operating facilities, and had been producing products for the wire and cable industry for more than fifty years. In the fourth quarter of 2018, we moved the wire and cable material manufacturing process that had been conducted at our Pawtucket, RI facility to our Lenoir, NC and Oxford, MA locations. We acquired the Paper Tyger, LLC assets in 2003.
Chase BLH2OCK®, a water-blocking compound sold to the wire and cable industry.	Blawnox, PA	In September 2012, we relocated our Chase BLH2OCK® manufacturing processes that had been previously conducted at our Randolph, MA facility to this location.
Laminated film foils for the electronics and cable industries and cover tapes essential to delivering semiconductor components via tape and reel packaging. Pulling and detection tapes used in the installation, measurement and location of fiber optic cable, and water and natural gas lines.	Lenoir, NC Suzhou, China Hickory, NC	In June 2012, we acquired all of the capital stock of NEPTCO Incorporated, which operated facilities in Rhode Island, North Carolina and China. In October 2013, we moved the manufacturing processes that had been conducted at our Taylorsville, NC facility to our Lenoir, NC location. In the fourth quarter of 2018, we moved the wire and cable material manufacturing process that had been conducted at our Pawtucket, RI facility to our Lenoir, NC and Oxford, MA locations. In the third quarter of 2019, we began relocating the pulling and detection tapes manufacturing process from our Granite Falls, NC location to our Hickory, NC location. This relocation was completed in the second quarter of fiscal 2020.

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CORROSION PROTECTION AND WATERPROOFING SEGMENT
	Primary
	Operating
Key Products	Locations	Background/History
Protective pipe-coating tapes and other protectants for valves, regulators, casings, joints, metals, and concrete, which are sold under the brand name Royston®, to oil companies, gas utilities and pipeline companies. Rosphalt50® is a polymer additive that provides long-term cost-effective solutions in many applications such as waterproofing of bridge decks and approaches, ramps, racetracks, airport runways and taxiways and specialty road applications. Waterproofing membranes for highway bridge deck metal-supported surfaces.	Blawnox, PA	The Royston business was acquired in the early 1970s.
Waterproofing sealants, expansion joints and accessories for the transportation, industrial and architectural markets.	O'Hara Township, PA	In April 2005, we acquired certain assets of E-Poxy Engineered Materials. Additionally, in September 2006, we acquired all of the capital stock of Capital Services Joint Systems. Both of these acquisitions were combined to form the expansion joints business.
Technologically advanced products, including the brand Tapecoat®, for demanding anti-corrosion applications in the gas, oil and marine pipeline market segments, as well as tapes and membranes for roofing and other construction-related applications.	Evanston, IL	In November 2001, we acquired substantially all the assets of Tapecoat, previously a division of T.C. Manufacturing Inc.
Specialized high-performance coating and lining systems used worldwide in liquid storage and containment applications.	Houston, TX	In September 2009, we acquired all the outstanding capital stock of C.I.M. Industries Inc. (“CIM”).
Waterproofing and corrosion protection systems for oil, gas and water pipelines, and a supplier to Europe, the Middle East and Southeast Asia. The ServiWrap® brand bitumen pipeline protection tapes and products, which offer long-term corrosion protection for buried pipelines in the most challenging natural environments.	Rye, East Sussex, England	In September 2007, we purchased certain product lines and a related manufacturing facility in Rye, East Sussex, England through our wholly-owned subsidiary, Chase Protective Coatings Ltd. This facility joins Chase's North American-based Tapecoat® and Royston® brands to broaden the protective pipeline coatings product line and better address global demand. In December 2009, we acquired the full range of ServiWrap® pipeline protection products (“ServiWrap”) from Grace Construction Products Limited, a U.K.-based unit of W.R. Grace & Co. ServiWrap products complement our portfolio of pipeline protection tapes, coatings and accessories and extend our global customer base.

Other Business Developments

On September 1, 2020 (subsequent to fiscal 2020), the Company acquired all the capital stock of ABchimie for €18,000,000 (approximately $21,420,000 at the time of the transaction) net of cash and marketable securities acquired, subject to final working capital adjustment, excluding acquisition-related costs of $274,000 and with a potential earn out based on performance potentially worth an additional €7,000,000 (approximately $8,330,000 at the time of the transaction). ABchimie is a Corbelin, France headquartered solutions provider for the cleaning and the protection of electronic assemblies, with ‎further formulation, production, and research and development capabilities‎. The transaction was funded 100% with cash on hand. The financial results of the business will be included in the Company's fiscal 2021 financial statements within the Adhesives, Sealants and Additives operating segment in the electronic and industrial coatings product line. The Company is currently in the process of finalizing purchase accounting, regarding a final allocation of the purchase price to tangible and identifiable intangible assets assumed and anticipates completion within fiscal 2021. The ABchimie acquisition does not represent a significant business combination so pro forma financial information is not provided.

6

The Company’s second quarter of fiscal 2020 saw the beginning of the global spread of the coronavirus pandemic (COVID-19), which subsequently grew to create significant volatility, uncertainty, and global economic disruption. During the third fiscal quarter, the Company implemented changes to its cost structure designed to address market changes brought on by COVID-19 and demonstrate its commitment to fiscal prudence: (a) the Company made a targeted reduction in its global workforce, contemplated pre-pandemic but catalyzed by COVID-19, which resulted in the recognition of $183,000 in severance costs during the period; and (b) the Company also instituted a temporary 20% reduction in the base salaries of its named executive officers and select members of senior management, as well as the cash compensation of the non-employee members of its Board of Directors. The reduction in force, which impacted operations in the Company’s U.S. facilities, and the adjustments in compensation were both effective May 2020.

During the third quarter of fiscal 2019, Chase began moving the pulling and detection operations housed in its Granite Falls, NC location to its Hickory, NC facility. This is in line with the Company’s ongoing initiative to consolidate its manufacturing plants and streamline its existing processes. At the time, the pulling and detection operations were the only Chase-owned production operations in Granite Falls, NC, with the remaining portions of the building being either utilized for research and development or leased to a third party. The process of moving, including moving internal research and development capabilities, was substantially completed during the second quarter of fiscal 2020. The Company recognized $559,000 in expense related to the move in the six-month period ended February 29, 2020, having recognized $526,000 in expense during the second half of fiscal 2019. No costs were recognized in the six months ended August 31, 2020, and future costs related to this move are not anticipated to be significant to the consolidated financial statements.

During the fourth quarter of fiscal 2019 (prior year), Chase commissioned engineering studies of certain legacy operations, machinery and locations related to the Company’s ongoing facility rationalization and consolidation initiative. Chase completed its review of the data and recommendations provided by the study in the fourth quarter of fiscal 2020 (current year). Following the review, the Company wrote down the value of certain non-operating production assets related to the pipeline coatings product line, within the Corrosion Protection and Waterproofing segment. Given the nature and prospects of the equipment, the Company determined its then carrying value exceeded its fair value and recognized an expense of $405,000 to write-down the value. Given the ongoing nature of the facility rationalization and consolidation initiative, an estimate of future costs cannot currently be determined.

Products and Markets

Our principal products are specialty tapes, laminates, adhesives,sealants, coatings and chemical intermediates which are sold by our salespeople, manufacturers' representatives and distributors.  In our Adhesives, Sealants and Additives segment, these products consist of: 

(i) moisture protective coatings, which are sold to the electronics industry for circuitry manufacturing, including circuitry used in automobiles, industrial controls and home appliances;

(ii) advanced adhesives, sealants, and coatings for automotive and industrial applications that require specialized bonding, encapsulating, environmental protection, or thermal management functionality;

(iii) polymeric microspheres utilized by various industries to allow for weight and density reduction and sound dampening;

(iv) polyurethane dispersions utilized for various coating products; and

(v) superabsorbent polymers, which are utilized for water and liquid management, remediation and protection in diverse markets including wire and cable, medical, environmental, infrastructure, energy and consumer products.

7

In our Industrial Tapes segment, these products consist of: 

(i) insulating and conducting materials for the manufacture of electrical and telephone wire and cable, electrical splicing, and terminating and repair tapes, which are marketed to wire and cable manufacturers;

(ii) laminated film foils, including EMI/RFI shielding tapes used in communication and local area network (LAN) cable;

(iii) industrial coated or laminate products and custom manufacturing services sold into medical, consumer, automotive, packaging, energy, telecommunications and other specialized markets;

(iv) laminated durable papers, including laminated paper with an inner security barrier used in personal and mail-stream privacy protection, which are sold primarily to the envelope converting and commercial printing industries;

(v) pulling and detection tapes used in the installation, measurement and location of fiber optic cable, water and natural gas lines, and power, data, and video cable for commercial buildings; and

(vi) cover tapes with reliable adhesive and anti-static properties essential to delivering semiconductor components via tape and reel packaging.

In our Corrosion Protection and Waterproofing segment, these products consist of:

(i) protective coatings, tapes and protectants for pipelines, valves, casings and other metals, which are sold to oil companies, gas companies and water/wastewater utilities for use in both the construction and maintenance of oil, gas, water and wastewater pipelines;

(ii) fluid-applied coating and lining systems for use in the water and wastewater industry;

(iii) waterproofing tapes and coatings used in waterproofing of the exterior of both commercial and industrial structures;

(iv) waterproofing membranes for highway bridge deck metal-supported surfaces, and high-performance polymeric asphalt additives, which are sold to municipal transportation authorities; and

(v) expansion and control joint systems designed for roads, bridges, stadiums and airport runways.

There is some seasonality in selling products into the construction market, which most acutely effects our Corrosion Protection and Waterproofing segment. Higher demand is often experienced when temperatures are warmer in most of North America (April through October), with lower demand occurring when temperatures are colder (typically our second fiscal quarter).

Human Capital Resources

As of October 31, 2020, we employed approximately 619 people (including union employees). 80% are U.S. based and 20% international. 29% of our employees work in administrative, selling and research and development functions, while 71% work in the manufacture of our products at our facilities. We consider our employee relations to be good. In the U.S., we offer our employees a wide array of company-paid benefits, which we believe are competitive relative to others in our industry. In our operations outside the U.S., we offer benefits that may vary from those offered to our U.S. employees due to customary local practices and statutory requirements.

8

Backlog, Customers and Competition

As of October 31, 2020, the backlog of customer orders believed to be firm was approximately $15,949,000.  This compared with a backlog of $17,930,000 as of October 31, 2019. The decrease in backlog from the prior year amount is believed to be primarily due to changes in customers’ ordering patterns in the current COVID-19 environment. During fiscal 2020, 2019 and 2018, no customer accounted for more than 10% of sales. No material portion of our business is subject to renegotiation or termination of profits or contracts at the election of the United States Federal Government.

There are other companies that manufacture or sell products and services similar to those made and sold by us.  Many of those companies are larger and have greater financial resources than we have. We compete principally on the basis of technical performance, service reliability, quality and price.

Raw Materials

We obtain raw materials from a wide variety of suppliers, with alternative sources of most essential materials available within reasonable lead times.

Patents, Trademarks, Licenses, Franchises and Concessions

As of August 31, 2020, we owned the following trademarks that we believe were of material importance to our business: Chase Corporation^®, C-Spray (Logo), a trademark used in conjunction with most of the Company’s business segment and product line marketing material and communications; HumiSeal^®, a trademark for moisture protective coatings sold to the electronics industry; Chase & Sons^®, a trademark for barrier and insulating tapes sold to the wire and cable industry; Chase BLH2OCK^®, a trademark for a water-blocking compound sold to the wire and cable industry; Rosphalt50^®, a trademark for an asphalt additive used predominantly on bridge decks for waterproofing protection; PaperTyger^®, a trademark for laminated durable papers sold to the envelope converting and commercial printing industries; DuraDocument^®, a trademark for durable, laminated papers sold to the digital print industry; Defender^® a trademarked RFID protective material sold to the personal accessories and paper industries; Tapecoat^®, a trademark for corrosion preventive surface coatings and primers; Maflowrap^®, a trademark for anti-corrosive tapes incorporating self-adhesive mastic or rubber-backed strips, made of plastic materials; Royston^®, a trademark for a corrosion-inhibiting coating composition for use on pipes; Ceva^®, a trademark for epoxy pastes/gels/mortars and elastomeric concrete used in the construction industry; CIM^® trademarks for fluid-applied coating and lining systems used in the water and wastewater industry; ServiWrap^® trademarks for pipeline protection tapes, coatings and accessories; NEPTCO^®, a trademark used in conjunction with most of NEPTCO’s products marketing material and communications; NEPTAPE^®, a trademark for coated shielding and insulation materials used in the wire and cable industry; Muletape^®, a trademark for pulling and installation tapes sold to the telecommunications industry; Trace-Safe^®, a trademark for detection tapes sold to the telecommunications and water and gas utilities industries; Dualite^®, a trademark for polymeric microspheres utilized for density and weight reduction and sound dampening by various industries; 4EvaSeal^®, a trademark for adhesive-backed tape utilized in various industries; Resin Designs^®, a trademark for adhesives and sealants sold into the microelectronics and semiconductor industries; SlickTape^®, a trademark for a lubricated shielding tape sold to the wire and cable industry; HighDraw^®, a trademark for a highly extensible shielding tape sold to the wire and cable industry; ZapZorb^®, a trademark for environmental solidification products that are designed to meet the specific challenges posed by a wide range of liquid-bearing waste streams; ZapLoc^®, a trademark for medical waste solidifier products packaged in bottles or larger packages; and ZapPak^®, a trademark for medical waste solidifier products packaged in dissolvable film. We do not have any other material trademarks, licenses, franchises, or concessions. While we do hold various patents, as well as other trademarks, we do not believe that they are material to the success of our business.

9

Research and Development

We expensed approximately $4,007,000, $4,021,000 and $3,940,000 for Company-sponsored research and development during fiscal 2020, 2019 and 2018, respectively, which was recorded withinResearch and Product Development Costs. Research and development stayed consistent from fiscal 2019 to 2020 as the Company continued focused development work on strategic product lines. The increase in expense from fiscal 2018 to 2019 came as the Company recognized its first full fiscal year with the established research and development department of Zappa Stewart (acquired in the second quarter of fiscal 2018).

Available Information

Chase maintains a website at http://www.chasecorp.com. Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to such reports filed or furnished pursuant to section 13(a) or 15(d) of the Securities Exchange Act of 1934, as well as section 16 reports on Form 3, 4, or 5, are available free of charge on this site as soon as is reasonably practicable after they are filed or furnished with the SEC. Our Code of Conduct and Ethics and the charters for the Audit Committee, the Nominating and Governance Committee and the Compensation and Management Development Committee of our Board of Directors are also available on our internet website. The Code of Conduct and Ethics and charters are also available in print to any shareholder upon request. Requests for such documents should be directed to Shareholder and Investor Relations Department, at 295 University Avenue, Westwood, Massachusetts 02090. Our internet website and the information contained on it or connected to it are not part of nor incorporated by reference into this Form 10-K. Our filings with the SEC are also available on the SEC’s website at http://www.sec.gov.

Financial Information regarding Segment and Geographic Areas

Please see Notes 11 and 12 to the Company’s Consolidated Financial Statements for financial information about the Company’s operating segments and domestic and foreign operations for each of the last three fiscal years.

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Item 1A – Risk Factors

The following risk factors should be read carefully in connection with evaluating our business and the forward-looking information contained in this Annual Report on Form 10-K. We feel that any of the following risks could materially adversely affect our business, operations, industry, financial position or our future financial performance. While we believe that we have identified and discussed below the key risk factors affecting our business, there may be additional risks and uncertainties that are not presently known or that are not currently believed to be significant that may adversely affect our business, operations, industry, financial position and financial performance in the future.

Operational and Competitive Risks

We currently operate in mature markets where increases or decreases in market share could be significant.

Our sales and net income are largely dependent on sales from a consistent and well-established customer base. Organic growth opportunities are minimal; however, we have used and will continue to use strategic acquisitions as a means to build and grow the business. In this business environment, increases or decreases in market share could have a material effect on our business condition or results of operation. We face intense competition from a diverse range of competitors, including operating divisions of companies much larger and with far greater resources than we have. If we are unable to maintain our market share, our business could suffer.

Fluctuations in the supply and prices of raw materials may negatively impact our financial results.

We obtain raw materials needed to manufacture our products from a number of suppliers. Many of these raw materials are petroleum-based derivatives. Under normal market conditions, these materials are generally available on the open market and from a variety of producers. From time to time, however, the prices and availability of these raw materials fluctuate, which could impair our ability to procure necessary materials, or increase the cost of manufacturing our products. If the prices of raw materials increase, and we are unable to pass these increases on to our customers, we could experience reduced profit margins.

If our products fail to perform as expected, or if we experience product recalls, we could incur significant and unexpected costs and lose existing and future business.

Our products are complex and could have defects or errors presently unknown to us, which may give rise to claims against us, diminish our brands or divert our resources from other purposes. Despite testing, new and existing products could contain defects and errors and may in the future contain manufacturing or design defects, errors or performance problems when first introduced, or even after these products have been used by our customers for a period of time. These problems could result in expensive and time-consuming design modifications or warranty charges, changes to our manufacturing processes, product recalls, significant increases in our maintenance costs, or exposure to liability for damages, any of which may result in substantial and unexpected expenditures, require significant management attention, damage our reputation and customer relationships, and adversely affect our business, our operating results and our cash flow.

11

The Company’s results of operations have been adversely affected and could in the future be materially adversely impacted by the coronavirus disease 2019 (COVID-19) pandemic.

The global spread of the coronavirus disease 2019 (COVID-19) pandemic has created significant volatility, uncertainty and economic disruption.The Company experienced lower sales as a result of the economic disruption, and it has initiated cost-saving measures, including a targeted workforce reduction, in response to the uncertainties associated with the scope and duration of the pandemic. The extent to which the COVID-19 pandemic impacts the Company’s business, operations and financial results in future periods will depend on numerous evolving factors that it may not be able to accurately predict, including: the duration and scope of the pandemic; governmental, business and individuals’ actions that have been and continue to be taken in response to the pandemic; the impact of the pandemic on economic activity and actions taken in response; the effect on its customers’ demand for its goods and services and its vendors ability to supply it with raw materials; its ability to sell and provide goods and services, including as a result of travel restrictions and people working from home; the ability of its customers to pay for goods and services; and any closures of its customers’ offices and facilities. Customers may also slow down decision-making, delay planned work or seek to terminate existing agreements.

Further, the effects of the pandemic may also increase the Company’s cost of capital or make additional capital, including the refinancing of its credit facility, more difficult or available only on terms less favorable to it. A sustained downturn may also result in the carrying value of the Company’s goodwill or other intangible assets exceeding their fair value, which may require it to recognize an impairment to those assets. A sustained downturn in the financial markets and asset values may have the effect of increasing the Company’s pension funding obligations in order to ensure that its qualified pension plan continues to be adequately funded, which may divert cash flow from other uses. The effects of the pandemic, including remote working arrangements for employees, may also impact the Company’s financial reporting systems and internal control over financial reporting, including its ability to ensure information required to be disclosed in its 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 its management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure.

We may experience difficulties in the redesign and consolidation of our manufacturing facilities which could impact shipments to customers, product quality, and our ability to realize cost savings.

We currently have several ongoing projects to streamline our manufacturing operations, which include the redesign and consolidation of certain manufacturing facilities in order to reduce overhead costs. Despite our planning, we may be unable to effectively leverage assets, personnel, and business processes in the transition of production among manufacturing facilities. Uncertainty is inherent within the facility redesign and consolidation process, and unforeseen circumstances could offset the anticipated benefits of these streamlining projects, disrupt service to customers, and impact product quality.

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Strategic Risks

Our business strategy includes the pursuit of strategic acquisitions, which may not be successful if they happen at all.

From time to time, we engage in discussions with potential target companies concerning potential acquisitions. In executing our acquisition strategy, we may be unable to identify suitable acquisition candidates. In addition, we may face competition from other companies for acquisition candidates, making it more difficult to acquire suitable companies on favorable terms. We have historically financed larger acquisitions with additional borrowings under our bank credit agreements. Our existing credit agreement places certain restrictions on our ability to acquire other businesses, and imposes certain financial covenants on us that may limit our ability to borrow generally. If we incur additional indebtedness in order to finance an acquisition, that indebtedness may reduce the availability of our cash flow to fund future working capital, capital expenditures, and other general corporate purposes, may increase our vulnerability to adverse economic conditions, and may expose us to the risk of increased interest rates. If we finance an acquisition through the issuance of equity securities, the ownership interest of our existing shareholders would be proportionately diluted.

Even if we do identify a suitable acquisition target and are able to negotiate and close a transaction, the integration of an acquired business into our operations involves numerous risks, including potential difficulties in integrating an acquired company’s product line with ours; the diversion of our resources and management’s attention from other business concerns; the potential loss of key employees; limitations imposed by antitrust or merger control laws in the United States or other jurisdictions; risks associated with entering a new geographical or product market; and the day-to-day management of a larger and more diverse combined company.

We may not realize the synergies, operating efficiencies, market position or revenue growth we anticipate from acquisitions, and our failure to effectively manage the above risks could have a material adverse effect on our business, growth prospects and financial performance.

International Risks

If we cannot successfully manage the unique challenges presented by international markets, we may not be successful in expanding our international operations.

Our strategy includes expansion of our operations in existing and new international markets by selective acquisitions and strategic alliances. Our ability to successfully execute our strategy in international markets is affected by many of the same operational risks we face in expanding our U.S. operations. In addition, our international expansion may be adversely affected by our ability to identify and gain access to local suppliers as well as by local laws and customs, legal and regulatory constraints, political and economic conditions and currency regulations of the countries or regions in which we currently operate or intend to operate in the future. The ongoing negotiations to determine the terms of the U.K.’s exit from the European Union (Brexit), pose risks of volatility in global markets and, given our exposure and presence in the U.K., could specifically affect our operations and future financial results. Risks inherent in our international operations also include, among others, the costs and difficulties of managing international operations, adverse tax consequences, domestic and international tariffs and trade policies and greater difficulty in enforcing intellectual property rights. Additionally, foreign currency exchange rates and fluctuations may have an impact on future costs or on future cash flows from our international operations.

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Current and threatened tariffs on goods from China and other countries could result in lower revenue, profits and cash flows.

The Company imports raw materials from China, makes sales of finished goods into China and has manufacturing operations in China. The Company works to lower the potential negative effects of the tariffs through seeking alternative sources for our raw materials, when available and pragmatic, and, in certain cases, through altering our manufacturing logistics by utilizing non-U.S. manufacturing where tariffs do not apply. While we also attempt to pass on these additional costs to our customers, competitive factors (including competitors who import from other countries not subject to such tariffs) may limit our ability to sustain price increases and, as a result, may adversely impact our revenue, profits and cash flows. In addition, the imposition of tariffs may influence the sourcing habits of certain end users of our products which, in turn, could have a direct impact on the requirements of our direct customers for our products. Such an impact could adversely affect our revenue, profits and cash flows.

Industry Risks

Our results of operations could be adversely affected by uncertain economic and political conditions and the effects of these conditions on our customers’ businesses and levels of business activity.

Global economic and political conditions can affect the businesses of our customers and the markets they serve. A severe or prolonged economic downturn or a negative or uncertain political climate could adversely affect, among others, the automotive, housing, construction, pipeline, energy, transportation infrastructure or electronics industries. This may reduce demand for our products or depress pricing of those products, either of which may have a material adverse effect on our results of operations. Changes in global economic conditions or foreign and domestic trade policy could also shift demand to products for which we do not have competitive advantages, and this could negatively affect the amount of business that we are able to obtain. In addition, if we are unable to successfully anticipate changing economic and political conditions, we may be unable to effectively plan for and respond to those changes and our business could be negatively affected.

General economic factors, domestically and internationally, may also adversely affect our financial performance through increased raw material costs or other expenses and by making access to capital more difficult.

The cumulative effect of higher interest rates, energy costs, inflation, levels of unemployment, healthcare costs, unsettled financial markets, and other economic factors (including changes in foreign currency exchange rates and changes to federal, state, local and international tax laws or the application or enforcement practices of such laws) could adversely affect our financial condition by increasing our manufacturing costs and other expenses at the same time that our customers may be scaling back demand for our products. Prices of certain commodity products, including oil and petroleum-based products, are historically volatile and are subject to fluctuations arising from changes in domestic and international supply and demand, labor costs, competition, weather events and climate change, regional and global public health crises, market speculation, government regulations and periodic delays in delivery. Rapid and significant changes in commodity prices may affect our sales and profit margins. These factors can increase our cost of products and services sold and/or selling, general and administrative expenses, and otherwise adversely affect our operating results. Disruptions in the credit markets may limit our ability to access debt capital for use in acquisitions or other purposes on advantageous terms or at all. If we are unable to manage our expenses in response to general economic conditions and margin pressures, or if we are unable to obtain capital for strategic acquisitions or other needs, then our results of operations would be negatively affected.

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Other Risks

We are dependent on key personnel.

We depend significantly on our executive officers including our President and Chief Executive Officer, Adam P. Chase, and on other key employees. The loss of the services of any of these key employees could have a material impact on our business and results of operations. In addition, our acquisition strategy will require that we attract, motivate and retain additional skilled and experienced personnel. The inability to satisfy such requirements could have a negative impact on our ability to remain competitive in the future.

Financial market performance may have a material adverse effect on our pension plan assets and require additional funding requirements.

Significant and sustained declines in the financial markets may have a material adverse effect on the fair market value of the assets of our qualified pension plan. While these pension plan assets are considered non-financial assets since they are not carried on our balance sheet (i.e. the balance sheet reflects only the net of plan assets and obligations), the fair market valuation of these assets could impact our funding requirements, funded status or net periodic pension cost. Any significant and sustained declines in the fair market value of these pension assets could require us to increase our funding requirements, which would have an impact on our cash flow, and could also lead to additional pension expense.

If we fail to maintain effective internal control over financial reporting, this may adversely affect investor confidence in our company and, as a result, the value of our common stock.

We are required under Section 404 of the Sarbanes-Oxley Act to furnish a report by management on the effectiveness of our internal control over financial reporting and to include a report by our independent auditors attesting to such effectiveness. Any failure by us to maintain effective internal control over financial reporting could adversely affect our ability to report accurately our financial condition or results of operations.

As discussed in our Annual Report on Form 10-K for the year ended August 31, 2018 (under "Controls and Procedures"), our management concluded that, as of August 31, 2018, we had a material weakness in our internal control over financial reporting related to our business combination processes. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. We have remediated the identified material weakness, but no assurances can be given that management will not identify in the future other internal control deficiencies that constitute a material weakness in our internal control over financial reporting or that any such material weakness will be remediated in a timely fashion.

If we are unable to maintain effective internal control over financial reporting, or if our independent auditors determine that we have a material weakness in our internal control over financial reporting, we could lose investor confidence in the accuracy and completeness of our financial reports, the market price of our common stock could decline, and we could be subject to sanctions or investigations by the SEC or other regulatory authorities. Failure to remedy any material weakness in our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, also could restrict our future access to the capital markets.

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Failure or compromise of security with respect to an operating or information system or portable electronic device could adversely affect our results of operations and financial condition or the effectiveness of our internal controls over operations and financial reporting.

We are highly dependent on automated systems to record and process our daily transactions and certain other components of our financial statements.  Notwithstanding efforts to ensure the integrity of our automated systems, we could experience a failure of one or more of these systems, or a compromise of our security due to technical system flaws, data input or recordkeeping errors, or tampering or manipulation of our systems by employees or unauthorized third parties.  Information security risks also exist with respect to the use of portable electronic devices, such as laptops and smartphones, which are particularly vulnerable to loss and theft. We may also be subject to disruptions of any of these systems arising from events that are wholly or partially beyond our control (for example, natural disasters, acts of terrorism, epidemics, pandemics, computer viruses, cyber-attacks, malware, ransomware, and electrical/telecommunications outages). All of these risks are also applicable wherever we rely on outside vendors to provide services.  Operating system failures, disruptions, or the compromise of security with respect to operating systems or portable electronic devices could subject us to liability claims, harm our reputation, interrupt our operations, or adversely affect our business, results from operations, financial condition, cash flow or internal control over financial reporting.

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Item 1B – Unresolved Staff Comments

Not applicable.

Item 2 – Properties

The principal properties of the Company as of August 31, 2020 are situated at the following locations and have the following characteristics:

	Square	Owned /
Location	Feet	Leased	Principal Use
Westwood, MA	20,200	Leased	Corporate headquarters, executive office and global operations center, including research and development, sales and administrative services
Blawnox, PA	44,000	Owned	Manufacture and sale of protective coatings and tape products
Evanston, IL	100,000	Owned	Manufacture and sale of protective coatings and tape products
Granite Falls, NC	108,000	Owned	Manufacture and sale of pulling and detection tapes, as well as research and development services, (through the second quarter of fiscal 2020, when operations were relocated to our Hickory, NC facility). The building is currently being leased to a third party
Greenville, SC	34,600	Leased	Manufacture and sale of polymeric microspheres, as well as research and development
Hickory, NC	180,000	Leased	Manufacture and sale of superabsorbent polymer products and pulling and detection tapes, as well as research and development
Houston, TX	45,000	Owned	Manufacture of coating and lining systems for use in liquid storage and containment applications
Lenoir, NC	110,000	Owned	Manufacture and sale of laminated film foils and cover tapes
McLeansville, NC	41,000	Leased	Sales/technical service office and warehouse for superabsorbent polymer products
Mississauga, Canada	2,500	Leased	Distribution center
Newark, CA	32,500	Leased	Manufacture and sale of sealant systems
O’Hara Township, PA	109,000	Owned	Manufacture and sale of protective electronic coatings, expansion joints and accessories
Oxford, MA	73,600	Owned	Manufacture of tape and related products for the electronic and telecommunications industries, as well as laminated durable papers
Paris, France	1,900	Leased	Sales/technical service office and warehouse allowing direct sales and service to the French market
Pune, India	4,650	Leased	Manufacture, packaging and sale of protective electronic coatings
Rotterdam, Netherlands	2,500	Leased	Distribution center
Rye, East Sussex, England	36,600	Owned	Manufacture and sale of protective coatings and tape products
Suzhou, China	48,000	Leased	Manufacture of packaging tape products for the electronics industries
Winnersh, Wokingham, England	18,800	Leased	Manufacture and sale of protective electronic coatings, as well as research and development
Woburn, MA	34,000	Leased	Manufacture and sale of adhesive systems, as well as research and development

The above facilities vary in age, are in good condition and, in the opinion of management, adequate and suitable for present operations. We also own equipment and machinery that is in good repair and, in the opinion of management, adequate and suitable for present operations. We believe that we could significantly add to our capacity by increasing shift operations. Availability of machine hours through additional shifts would provide expansion of current production volume without significant additional capital investment.

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Item 3 – Legal Proceedings

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 cash flows, litigation is inherently unpredictable. Therefore, judgments could be rendered, or settlements agreed to, that could adversely affect the Company’s operating results or cash flows in a particular period. The Company routinely assesses all 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 it assesses the likelihood of loss as probable.

item 4 – mine safety disclosures

Not applicable.

Item 4a – INFORMATION ABOUT OUR Executive OfficerS

The following table sets forth information concerning our Executive Officers as of October 31, 2020.  Each of our Executive Officers is selected by our Board of Directors and holds office until his successor is elected and qualified.

Name	Age	Offices Held and Business Experience during the Past Five Years
Adam P. Chase	48	President of the Company since January 2008, Chief Executive Officer of the Company since February 2015. Adam Chase was the Chief Operating Officer of the Company from February 2007 to February 2015.
Peter R. Chase	72	Chairman of the Board of the Company since February 2007, and Executive Chairman of the Company since February 2015. Peter Chase was the Chief Executive Officer of the Company from September 1993 to February 2015. Peter Chase is the father of Adam Chase.
Christian J. Talma	47	Chief Financial Officer of the Company since February 2019 and Chief Accounting Officer from August 2018 to February 2019. Previously, Vice President Operations Finance and Strategy for Haemonetics Corp. from 2016 to 2018. Prior to that, Christian Talma was employed at Siemens A.G., since 2002, most recently as Head of North America Service Sales Finance.

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PART II

Item 5 – Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Our common stock is traded on the NYSE American under the symbol CCF.  As of October 31, 2020, there were 320 shareholders of record of our Common Stock and we believe there were approximately 6,435 beneficial shareholders who held shares in nominee name. On that date, the closing price of our common stock was $95.16 per share as reported by the NYSE American.

Single annual cash dividend payments were declared and scheduled to be paid subsequent to each year ended August 31, 2020, 2019 and 2018 in the amount of $0.80 per common share. Our revolving credit facility contains financial covenants which may have the effect of limiting the amount of dividends that we can pay.

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Comparative Stock Performance

The following line graph compares the yearly percentage change in our cumulative total shareholder return on the Common Stock for the last five fiscal years with the cumulative total return on the Standard & Poor's 500 Stock Index (the “S&P 500 Index”), and a composite peer index that is weighted by market equity capitalization (the “Peer Group Index”). The companies included in the Peer Group Index are Henkel AG & Co KGaA, H.B. Fuller Company, Intertape Polymer Group, Rogers Corporation and RPM International, Inc. Cumulative total returns are calculated assuming that $100 was invested on August 31, 2015 in each of the Common Stock, the S&P 500 Index and the Peer Group Index, and that all dividends were reinvested.

	2015		2016		2017		2018		2019		2020
Chase Corp	$	100	$	165	$	243	$	324	$	264	$	259
S&P 500 Index	$	100	$	113	$	131	$	157	$	161	$	196
Peer Group Index	$	100	$	128	$	133	$	136	$	114	$	123

The information under the caption “Comparative Stock Performance” above is not deemed to be “filed” as part of this Annual Report, and is not subject to the liability provisions of Section 18 of the Securities Exchange Act of 1934. Such information will not be deemed to be incorporated by reference into any filing we make under the Securities Act of 1933 unless we explicitly incorporate it into such a filing at the time.

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Item 6 – Selected Financial Data

the following selected financial data should be read in conjunction with “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Item 8 – Financial Statements and Supplementary Data.”

	Fiscal Years Ended August 31,
	2020		2019		2018		2017		2016
	(In thousands, except per share amounts)
Statement of Operations Data
Revenue	$	261,162	$	281,351	$	284,188	$	252,560	$	238,094
Net income	$	34,157	$	32,711	$	43,143	$	42,014	$	32,807
Net income available to common shareholders, per common and common equivalent share:
Basic:
Net income per common and common equivalent share	$	3.62	$	3.48	$	4.60	$	4.49	$	3.55
Diluted:
Net income per common and common equivalent share	$	3.59	$	3.46	$	4.56	$	4.44	$	3.50
Balance Sheet Data
Total assets	$	346,830	$	307,968	$	316,469	$	254,738	$	262,819
Long-term debt, including current portion	$	—	$	—	$	25,000	$	—	$	43,400
Total stockholders' equity	$	302,792	$	271,227	$	246,756	$	210,929	$	174,089
Cash dividends paid per common and common equivalent share	$	0.80	$	0.80	$	0.80	$	0.70	$	0.65

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Item 7 – 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 Consolidated Financial Statements and notes thereto included in Item 8 of this Annual Report on Form 10-K.

Selected Relationships within the Consolidated Statements of Operations

	Years Ended August 31,
	2020			2019			2018
	(Dollars in thousands)
Revenue	$	261,162		$	281,351		$	284,188
Net income	$	34,157		$	32,711		$	43,143
Increase (decrease) in revenue from prior year
Amount	$	(20,189)		$	(2,837)		$	31,628
Percentage		(7)	%		(1)	%		13	%
Increase (decrease) in net income from prior year
Amount	$	1,446		$	(10,432)		$	1,129
Percentage		4	%		(24)	%		3	%
Percentage of revenue:
Revenue		100	%		100	%		100	%
Cost of products and services sold		62			64			62
Selling, general and administrative expenses		19			17			17
Research and Product Development Costs		2			1			1
Other (income) expense, net		*			2			*
Income before income taxes		17	%		15	%		20	%
Income taxes		4			4			5
Net income		13	%		12	%		15	%

* denotes less than one percent

Note: Some percentage of revenue amounts may not sum due to rounding

Overview

Chase Corporation emphasized operational and financial discipline in fiscal 2020, a year which continued the macrotrend revenue drag observed in the prior year, and ultimately saw the spread of the coronavirus pandemic (COVID-19) across all geographies served by the Company. Domestic and international top-line headwinds attributable to the pandemic affected all three of the Company’s operating segments, while the prior year tightness in Asian markets persisted. Through this, the Company was able to increase its relative gross margin, complete the consolidation of its pulling and detection operations into its existing Hickory, NC location, liquidate two real estate assets for gains and achieve a year-over-year increase in cashflows from operations.

Chase Corporation’s balance sheet remained strong at August 31, 2020, with cash on hand of $99,068,000, a current ratio of 7.7 and no outstanding principal balance owed on the Company’s $150,000,000 revolving credit facility. The Company took advantage of its solid financial position with its September 2020 (fiscal 2021) cash on hand funded purchase of ABchimie, a Corbelin, France headquartered solutions provider for the cleaning and the protection of electronic assemblies, with further formulation, production, and research and development capabilities.

As an extension of the Company’s pre-existing facility consolidation and rationalization initiative, the Company implemented certain changes in its cost structure in fiscal 2020 designed to address market dynamics brought on by COVID-19. In the third fiscal quarter, these included: (a) a targeted 4.5% reduction in the Company’s global workforce, contemplated pre-pandemic but catalyzed by COVID-19; and (b) the institution of a temporary 20% reduction in the

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base salaries of named executive officers and select members of senior management, as well as the cash compensation of the non-employee members of the Board. The Company remains profitable with sufficient cash on hand to continue to meet its short- and long-term strategic objectives and implemented the aforementioned expense reductions as a demonstration of fiscal prudence during these uncertain times.

Chase Corporation is a supplier of several essential industries, providing products to critical industries such as healthcare, utilities, infrastructure and telecommunications, and throughout the COVID-19 effected period of fiscal 2020, successfully maintained business continuity for the Company’s global customers. As of August 31, 2020, all the Company’s facilities were operational, with only two facilities, Pune, India and Newark, CA, having experienced prior temporary closures due to separate general government orders. However, given the magnitude of the uncertainty that COVID-19 has broadly placed on global markets, the pandemic’s long-term effects on the Company’s results and the Company’s ability to maintain current service levels cannot currently be estimated. The Company will continue to assess the situation and take the appropriate actions to ensure it is in the strongest position possible.

During the second fiscal quarter of 2020, the relocation of the Company’s pulling and detection product line production operations from the Granite Falls, NC facility to the existing Hickory, NC facility was completed. In the third fiscal quarter of 2020, the Company completed the sale of its Pawtucket, RI location for a net gain. Also during the third quarter, the administrative functions based in the Pawtucket, RI location were moved into the Company’s existing Westwood, MA location. In the fourth fiscal quarter of 2020, the Company sold its Randolph, MA property for a net gain.

Net cash provided by operating activities exceeded that of the prior year, with the Company’s cash position continuing the positive trend seen in the latter half of fiscal 2019 (prior year) following the full payoff of its outstanding debt. The Company held no outstanding balance on its $150,000,000 revolving credit facility as of August 31, 2020. The revolving credit facility allows for the Company to pay down debt with excess cash, while retaining access to immediate liquidity to fund future accretive activities, including mergers and acquisitions, as identified.

Revenue from the Adhesives, Sealants and Additives segment decreased versus the prior year. Sales volume within the electronic and industrial coatings product line decreased in North American, European, and Asian markets. This decrease was attributable to the effects of the COVID-19 pandemic on the already strained automotive and industrial markets, and Asian headwinds. The Company’s specialty chemical intermediates product line sales, which have a North American concentration, also experienced a volume drop as compared to the prior year.

Net sales decreased in the Industrial Tapes segment as compared to the prior year, with the cable materials and specialty products product lines driving the top-line remission. A primary driver in the sales reduction in the specialty products product line was the Company’s planned exit from providing transitional toll manufacturing services to the common purchaser of its former structural composites rod and fiber optical cable components businesses, with sales tapering in the first quarter of fiscal 2020 and fully ending in the second quarter. The Company’s electronic materials product line, which sells nearly exclusively to Asian markets, achieved sales growth over the prior year. The pulling and detection product line, carried by sales momentum in the North American utility and telecommunication markets, also achieved a year-over-year increase in sales.

The Company’s Corrosion Protection and Waterproofing segment’s sales decreased compared to the prior year. The building envelope product line’s sales were unfavorable to the prior year, driving the segment’s overall unfavorable results. The coating and lining systems, bridge and highway and pipeline coatings product lines all saw sales increases over the prior year. The pipeline coatings product line results were driven by increased sales by our Rye, U.K. facility, especially in the fourth fiscal quarter of 2020 with sales into the Middle East.

Through mergers, acquisitions and divestitures, its marketing and product development efforts and its ability to rationalize and consolidate its operations, the Company remains focused on its core strategies for sustainable long-term growth.

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The Company has three reportable operating segments summarized below:

Segment	Product Lines	Manufacturing Focus and Products
Adhesives, Sealants and Additives	Electronic and Industrial Coatings Specialty Chemical Intermediates	Protective coatings, including moisture protective coatings and customized sealant and adhesive systems for electronics; polyurethane dispersions, polymeric microspheres and superabsorbent polymers.
Industrial Tapes	Cable Materials Specialty Products Pulling and Detection Electronic Materials Structural Composites (1)	Protective tape and coating products and services, including insulating and conducting materials for wire and cable manufacturers; laminated durable papers, packaging and industrial laminate products and custom manufacturing services; pulling and detection tapes used in the installation, measurement and location of fiber optic cable and water and natural gas lines; cover tapes essential to delivering semiconductor components via tape and reel packaging; and composite materials elements (now divested).
Corrosion Protection and Waterproofing	Coating and Lining Systems Pipeline Coatings Building Envelope Bridge and Highway	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; adhesives and sealants used in architectural and building envelope waterproofing applications; high-performance polymeric asphalt additives and expansion and control joint systems for use in the transportation and architectural markets.

(1) Product line was substantially divested with the sale of the structural composites rod business on April 20, 2018. Custom manufacturing performed for the purchaser of the structural composites rod business subsequent to the sale is included within the specialty products product line.

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Results of Operations

Revenue and Income Before Income Taxes by Segment are as follows:

			Income Before			% of
	Revenue		Income Taxes			Revenue
	(Dollars in thousands)
Fiscal 2020
Adhesives, Sealants and Additives	$	96,208	$	25,953		27	%
Industrial Tapes		118,960		31,237	(a)	26	%
Corrosion Protection and Waterproofing		45,994		16,638	(b)	36	%
	$	261,162		73,828		28	%
Less corporate and common costs				(28,508)	(c)
Income before income taxes			$	45,320
Fiscal 2019
Adhesives, Sealants and Additives	$	104,796	$	27,142	(d)	26	%
Industrial Tapes		129,845		28,216	(e)	22	%
Corrosion Protection and Waterproofing		46,710		15,909	(f)	34	%
	$	281,351		71,267		25	%
Less corporate and common costs				(27,714)	(g)
Income before income taxes			$	43,553
Fiscal 2018
Adhesives, Sealants and Additives	$	101,690	$	35,190	(h)	35	%
Industrial Tapes		130,598		30,886	(i)	24	%
Corrosion Protection and Waterproofing		51,900		18,178		35	%
	$	284,188		84,254		30	%
Less corporate and common costs				(27,289)	(j)
Income before income taxes			$	56,965

(a) 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 six months of fiscal 2020

(b) Includes $170 gain on the refund of a payment made in fiscal 2019 related to engineering studies performed to assess potential operational changes and further plant rationalization and consolidation and an expense of $405 for the write-down of certain assets under construction.

(c) Includes $150 of expense related to exploratory IT work performed to assess potential future upgrades to the Company’s companywide ERP system, a $760 gain related to the April 2020 sale of the Company’s Pawtucket, RI location, a $1,791 gain related to the August 2020 sale of the Company’s Randolph, MA property, $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, $155 of pension-related settlement costs due to the timing of lump-sum distribution and $274 in acquisition-related costs attributable to the September 2020 (fiscal 2021) acquisition of ABchimie

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

(e) Includes $260 of expense related to the closure and exit of our Pawtucket, RI location recognized in the first quarter of fiscal 2019, and $526 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 second half of fiscal 2019

(f) Includes $200 of expense related to engineering studies performed to assess potential future operational changes and further plant rationalization and consolidation, see note (b)

(g) Includes $511 of pension-related settlement costs due to the timing of lump-sum distributions

(h) Includes $1,070 of expense related to inventory step-up in fair value attributable to the acquisition of Zappa Stewart

(i) Includes $1,085 gain on sale of license related to the structural composites product line recorded in the second quarter of fiscal 2018, $1,480 gain on sale of business related to the April 2018 sale of the structural composites rod business and $1,272 of expense related to the exit of our Pawtucket, RI location in the fourth quarter of fiscal 2018

(j) Includes $393 in acquisition-related expense attributable to the December 2017 acquisition of Zappa Stewart

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Total Revenue

Total revenue in fiscal 2020 decreased $20,189,000 or 7% to $261,162,000 from $281,351,000 in the prior year.

Revenue in our Adhesives, Sealants and Additives segment decreased $8,588,000 or 8% to $96,208,000 for the year ended August 31, 2020 compared to $104,796,000 in fiscal 2019. The decreases in revenue from the Adhesives, Sealants and Additives segment in fiscal 2020 was primarily due to the electronic and industrial coatings product line’s $6,276,000 sales volume-driven decrease. North American, European, and Asian automotive and industrial weakness, exacerbated by COVID-19, affected revenue, including the royalty received from the Company’s licensed manufacturer in Asia. Also contributing to the segment’s sales decline was a decrease in revenue from the North American focused specialty chemical intermediates product line, totaling $2,312,000 in fiscal 2020.

Revenue in our Industrial Tapes segment decreased $10,885,000 or 8% to $118,960,000 for the year ended August 31, 2020 compared to $129,845,000 in fiscal 2019. The decrease in revenue for the segment was primarily due to the following: (a) a sales volume demand decrease of $7,880,000 from the North American focused cable materials product line; and (b) revenue reduction of $4,979,000 for the specialty products product line, as the Company ended its arrangement to provide low-margin transitional toll manufacturing services in the second quarter of fiscal 2020. Offsetting the overall sales decreases for the current year were (a) an entirely volume-driven sales increase of $169,000 in the electronic materials product line, which has a near exclusively Asian end-market; and (b) the pulling and detection tapes product line achieving predominately volume-driven revenue growth of $1,805,000, with sales primarily into the North American telecommunication and utility industries.

Revenue from our Corrosion Protection and Waterproofing segment decreased $716,000 or 2% to $45,994,000 for the year ended August 31, 2020 compared to $46,710,000 for fiscal 2019. The segment’s sales decrease in the current year was driven by the building envelope product line’s sales decline of $1,717,000. Partially offsetting the segment’s top-line decline were: (a) the coating and lining systems product line’s $668,000 volume- and price-driven sales increase; (b) the bridge and highway product line’s $244,000 revenue increase; and (c) the pipeline coatings product line’s $89,000 year-over-year increase, driven by increased sales by our Rye, U.K. facility, especially in the fourth fiscal quarter of 2020.

Royalties and commissions in the Adhesive, Sealants and Additives and Industrial Tapes segments totaled $3,420,000, $4,512,000 and $5,226,000 for the years ended August 31, 2020, 2019 and 2018, respectively. The decrease in royalties and commissions in fiscal 2020 compared to both fiscal 2019 and 2018 was primarily due to decreased sales of electronic and industrial coatings products by our licensed manufacturer in Asia.

Export sales from domestic operations to unaffiliated third parties were $30,067,000, $30,582,000 and $42,883,000 for the years ended August 31, 2020, 2019 and 2018, respectively.  The decrease in export sales in fiscal 2020 against fiscal 2019 reflects the overall year-over-year decrease in sales results. The decrease in export sales in fiscal 2019 against fiscal 2018 resulted from decreased export sales into China and Europe.

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Total revenue in fiscal 2019 decreased $2,837,000 or 1% to $281,351,000 from $284,188,000 in fiscal 2018. Revenue in our Adhesives, Sealants and Additives segment increased $3,106,000 or 3% to $104,796,000 for the year ended August 31, 2019 compared to $101,690,000 in fiscal 2018. The increase in revenue from our Adhesives, Sealants and Additives segment in fiscal 2019 was primarily due to an increase in revenue from our specialty chemical intermediates product line totaling $7,083,000, which included the first full year of operations from the December 2017 acquired Zappa Stewart business. The segment’s net sales increase was negatively affected by our electronic and industrial coatings product line’s $3,977,000 sales-volume-driven decrease, with headwinds seen most acutely in Asian markets in the second half of the fiscal 2019. These headwinds also manifested in a decreased royalty received from our licensed manufacturer in Asia.

Revenue in our Industrial Tapes segment decreased $753,000 or 1% to $129,845,000 for the year ended August 31, 2019 compared to $130,598,000 in fiscal 2018. The decrease in revenue from our Industrial Tapes segment in fiscal 2019 was primarily due to: (a) a sales volume decrease of $5,077,000 from our structural composite products (following the Company’s divestiture of the structural composites rod business in April 2018, product sales revenue for wind energy products significantly declined, and the Company has recognized wind-energy-related revenue, including royalty revenue and revenue for transitional custom manufacturing services performed for the buyer, in our specialty products product line since the sale); and (b) an entirely volume-driven sales decrease of $2,608,000 in our electronic materials product line, which has a near exclusively Asian end-market. These decreases were partially offset by: (a) a sales increase of $3,500,000 from our pulling and detection products, from volume and price-driven sales growth into large scale utility and telecommunications infrastructure build in North America; (b) an increase in revenue from our cable materials products of $2,880,000 on both volume and price; and (c) a sales volume increase of $552,000 for our specialty products, which, subsequent to the sale of our fiber optic cable components business in April 2017 and our structural composites rod business in April 2018, includes revenue from the manufacturing services provided by the Company to the common purchaser of the divested businesses (totaling $2,062,000 for fiscal 2019).

Revenue from our Corrosion Protection and Waterproofing segment decreased $5,190,000 or 10% to $46,710,000 for the year ended August 31, 2019 compared to $51,900,000 for fiscal 2018. The decreased revenue for our Corrosion Protection and Waterproofing segment in fiscal 2019 was primarily due to a decrease in sales totaling $4,680,000 in our pipeline coatings products. Our U.K.-produced water and wastewater pipeline products experienced the sharpest decline attributed to tight credit markets in the Middle East regions they sell into, while our U.S.-produced oil and gas pipeline products had sales levels only slightly below fiscal 2018 levels. Our bridge and highway products failed to repeat the large eastern U.S. bridge work laden fiscal year 2018 sales levels in fiscal 2019 and were off by $2,353,000 year-over-year. Partially countering the overall decrease in revenue for the segment were: (a) a $952,000 increase in our building envelope product sales, driven predominantly by an increase in sales volume; and (b) coating and lining systems products, which had a revenue increase of $891,000.

Cost of Products and Services Sold

Cost of products and services sold decreased $18,548,000 or 10% to $161,615,000 for the fiscal year ended August 31, 2020 compared to $180,163,000 in fiscal 2019. As a percentage of revenue, cost of products and services sold decreased to 62% in fiscal 2020 compared to 64% for fiscal 2019.

The following table summarizes the relative percentages of cost of products and services sold to revenue for our three operating segments:

	Fiscal Years Ended August 31,
Cost of products and services sold	2020		2019		2018
Adhesives, Sealants and Additives	58	%	58	%	52	%
Industrial Tapes	68	%	72	%	71	%
Corrosion Protection and Waterproofing	55	%	57	%	57	%
Total Company	62	%	64	%	62	%

Cost of products and services sold in our Adhesives, Sealants and Additives segment was $55,902,000 for the fiscal year ended August 31, 2020 compared to $60,345,000 in fiscal 2019. As a percentage of revenue, cost of products and

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services sold in this segment was consistent at 58% in both fiscal 2020 and fiscal 2019. Cost of products and services sold in our Industrial Tapes segment was $80,351,000 for the fiscal year ended August 31, 2020 compared to $93,299,000 in fiscal 2019. As a percentage of revenue, cost of products and services sold in this segment decreased to 68% in fiscal 2020 compared to 72% for fiscal 2019. Cost of products and services sold in our Corrosion Protection and Waterproofing segment was $25,362,000 for the fiscal year ended August 31, 2020 compared to $26,519,000 in fiscal 2019. As a percentage of revenue, cost of products and services sold in this segment decreased to 55% in fiscal 2020 compared to 57% in fiscal 2019. As a percentage of revenue, cost of products and services overall decreased primarily due to: (a) production efficiencies recognized, most acutely seen at our Oxford, MA and Lenoir, NC locations following the consolidation of our former Pawtucket, RI cable materials plant, and benefiting our Industrial Tapes segment; (b) more favorable sales mix, most specifically obtained in our Industrial Tapes segment, as our lower margin products constituted a comparatively lower portion of total sales; and (c) the full period effects of price increases the Company instituted during fiscal 2019 (prior year) to address inflation then seen in raw material costs.

With the composition of our finished goods and the markets we serve, the costs of certain commodities (including petroleum-based solvents, films, yarns, polymers and nonwovens, aluminum and copper foils, specialty papers, and various resins, adhesives and inks) both directly and indirectly affect the purchase price of our raw materials and the market demand for our product offerings. The Company diligently monitors raw material and commodities pricing across all its product lines in its efforts to preserve margins.

Cost of products and services sold in our Adhesives, Sealants and Additives segment was $60,345,000 for the fiscal year ended August 31, 2019 compared to $53,324,000 in fiscal 2018. As a percentage of revenue, cost of products and services sold in this segment increased to 58% for fiscal 2019 compared to 52% in fiscal 2018. Cost of products and services sold in our Industrial Tapes segment was $93,299,000 for the fiscal year ended August 31, 2019 compared to $92,418,000 in fiscal 2018. As a percentage of revenue, cost of products and services sold in this segment increased to 72% in fiscal 2019 compared to 71% for fiscal 2018. Cost of products and services sold in our Corrosion Protection and Waterproofing segment was $26,519,000 for the fiscal year ended August 31, 2019 compared to $29,394,000 in fiscal 2018. As a percentage of revenue, cost of products and services sold in this segment was consistent at 57% in both fiscal 2019 and fiscal 2018. As a percentage of revenue, cost of products and services overall increased in 2019 compared to 2018 primarily due to: (a) a less favorable sales mix, most specifically felt in our Adhesives, Sealants and Additives segment, as our lower margin products constituted a comparatively higher portion of total sales; (b) increasing supply and demand imbalances and tariffs causing rising raw material costs; and (c) production inefficiencies and additional costs to maintain service levels in the first half of fiscal 2019 at our Oxford, MA and Lenoir, NC locations following the consolidation of our Pawtucket, RI operations.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased $657,000 or 1% to $49,364,000 during fiscal 2020 compared to $48,707,000 in fiscal 2019. As a percentage of revenue, selling, general and administrative expenses increased to 19% of total revenue in fiscal 2020 compared to 17% for fiscal 2019. The year-over-year increase in expenses is primarily attributable to $1,107,000 of additional corporate development and due diligence costs, beyond that included in acquisition-related costs, increased non-cash stock-based compensation expense of $1,032,000 given increased restricted stock and stock option grants in fiscal 2020, which were partially offset by decreased amortization expense of $869,000, as certain intangible assets related to prior acquisitions became fully amortized. The Company continues to closely monitor spending with an emphasis on controlling costs and leveraging existing resources.

During fiscal 2019, selling, general and administrative expenses increased $1,004,000 or 2% to $48,707,000 compared to $47,703,000 in fiscal 2018. As a percentage of revenue, selling, general and administrative expenses stayed consistent at 17% of total revenue for both fiscal 2019 and fiscal 2018. The year-over-year increase in expenses is primarily attributable to: (a) increased amortization expense of $638,000, primarily related to intangible assets acquired in our December 31, 2017 acquisition of Zappa Stewart; and (b) increased selling and commission expense of $252,000, principally related to sales growth on our highest commissionable products in the current year, coupled with the addition of a full year of the established sales force of Zappa Stewart.

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Research and Product Development Costs

Research and Product Development Costs decreased $14,000 or less than one percent to $4,007,000 during fiscal 2020, compared to $4,021,000 in fiscal 2019. Research and development stayed relatively consistent from fiscal 2019 to 2020 as the Company continued focused development work on strategic product lines.

During fiscal 2019, Research and Product Development expense increased $81,000 or 2% to $4,021,000 compared to $3,940,000 in fiscal 2018. This increase in expense from fiscal 2018 to 2019 came as the Company recognized its first full fiscal year with the established research and development department of Zappa Stewart (acquired in the second quarter of fiscal 2018).

Operations Optimization Costs

During the third fiscal quarter of 2020, the Company implemented changes in its cost structure designed to address market changes brought on, in part, by COVID-19. These changes included a targeted reduction of approximately 4.5% of the Company’s global workforce. This reduction, which was contemplated pre-pandemic but catalyzed by COVID-19, resulted in the recognition of $183,000 in severance costs during the third quarter of fiscal 2020. The reduction in force, which impacted operations in the Blawnox, PA, Hickory, NC, Lenoir, NC, Evanston, IL, Oxford, MA and Westwood, MA facilities, was effective May 2020.

During the first quarter of fiscal 2020, the Company commissioned third party led studies regarding the potential upgrading of the Company’s current worldwide ERP system. Chase is currently reviewing the data and recommendations provided by the study and may further utilize third-party engineering, IT and other professional services firms in the future for similar work, as well as work around the Company’s facilities rationalization and consolidation initiative. The Company recognized $150,000 in expense related to these services in the first quarter of fiscal 2020. Given the ongoing nature of the review, an estimate of future costs, including costs that could be capitalized, cannot currently be determined.

During the third quarter of fiscal 2019, Chase began moving the pulling and detection operations housed in its Granite Falls, NC location to its Hickory, NC facility. This is in line with the Company’s ongoing initiative to consolidate its manufacturing plants and streamline its existing processes. At the time, the pulling and detection operations were the only Chase-owned production operations in Granite Falls, NC, with the remaining portions of the building being either utilized for research and development or leased to a third party. The process of moving, including moving internal research and development capabilities, was substantially completed during the second quarter of fiscal 2020. The Company recognized $559,000 in expense related to the move in the six-month period ended February 29, 2020, having recognized $526,000 in expense during the second half of fiscal 2019. No costs were recognized in the six months ended August 31, 2020, and future costs related to this move are not anticipated to be significant to the Consolidated Financial Statements.

During the fourth quarter of fiscal 2019 (prior year), Chase commissioned engineering studies of certain legacy operations, machinery and locations related to the Company’s ongoing facility rationalization and consolidation initiative. Chase completed its review of the data and recommendations provided by the study in the fourth quarter of fiscal 2020 (current year). The Company recognized $200,000 in expense related to these services in fiscal 2019, and a gain of $170,000 in fiscal 2020,as certain amounts expensed in fiscal 2019 were refunded.Chase may utilize third party engineering, IT and other professional services firms in the future for similar optimization-related work. Given the ongoing nature of the facility rationalization and consolidation initiative, an estimate of future costs cannot currently be determined.

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On June 25, 2018, the Company announced to its employees the planned closing of its Pawtucket, RI manufacturing facility effective August 31, 2018. This is in line with the Company’s ongoing efforts to consolidate its manufacturing plants and streamline its existing processes. The manufacture of products previously produced in the Pawtucket, RI facility was substantially moved to Company facilities in Oxford, MA and Lenoir, NC during a two-month transition period. In the fourth quarter of fiscal 2018, the Company expensed $1,272,000 related to the closure. The Company also recognized $260,000 in expense related to the move in the three-month period ended November 30, 2018, with no additional expense recognized in the remainder of fiscal 2019. The Company completed the sale of its Pawtucket, RI location to a third-party in April 2020, for net proceeds totaling $1,810,000. This transaction resulted in a gain of $760,000 which was recorded during the third quarter of fiscal 2020. Also, during the third quarter of fiscal 2020, the Company recognized $85,000 in final Pawtucket, RI transition and exit costs, with no further costs related to this initiative anticipated in future periods.

Acquisition-Related Costs

In fiscal 2020, the Company incurred $274,000 of costs related to our acquisition of ABchimie.  This acquisition was accounted for as a business combination in accordance with applicable accounting standards, and all related professional service fees (including banking, legal, accounting and actuarial fees) were expensed as incurred within the second, third and fourth quarters of fiscal 2020. The transaction was consummated at the beginning of fiscal 2021.

In fiscal 2018, the Company incurred $393,000 of costs related to our acquisition of Zappa Stewart.  This acquisition was accounted for as a business combination in accordance with applicable accounting standards, and all related professional service fees (including banking, legal, accounting and actuarial fees) were expensed as incurred within the second fiscal quarter of 2018.

Gain on Sale of Real Estate

In August 2020, the Company finalized the sale of its Randolph, MA property for net proceeds of $1,805,000. This transaction resulted in a gain of $1,791,000 which was recorded during the quarter ended August 31, 2020 (fiscal 2020).

In April 2020, the Company finalized the sale of its Pawtucket, RI location for net proceeds of $1,810,000. This transaction resulted in a gain of $760,000 which was recorded during the quarter ended May 31, 2020 (fiscal 2020).

Both properties were classified as assets held for sale as of August 31, 2019 (prior year).

Write-down of certain assets under construction

In the fourth quarter of fiscal 2020, given the results and recommendations of a commissioned engineering study, the Company wrote down the value of certain non-operating production assets related to the pipeline coatings product line, within the Corrosion Protection and Waterproofing segment. Given the nature and prospects of the equipment, the Company determined its then carrying value exceeded its fair value and recognized an expense of $405,000 related to the machinery.

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Loss on Impairment of Goodwill

The ordering patterns of the polyurethane dispersions reporting unit’s customers during the three-month period ended February 28, 2019 (fiscal 2019), especially those in the automotive industry, combined with a decrease in the reporting unit’s backlog of customer orders believed to be firm as of February 28, 2019 indicated an impairment in the carrying value of the reporting unit might have occurred. As such, the Company performed an impairment test on the long-lived assets related to the polyurethane dispersions reporting unit, then part of the Adhesives, Sealants and Additives operating segment, in accordance with ASC Topic 350, “Intangibles — Goodwill and Other” and ASC Topic 360, “Disclosure — Impairment or Disposal of Long-Lived Assets.” As a result of impairment testing, which included first testing long-lived assets other than goodwill for impairment under applicable guidance, the Company recorded a charge of $2,410,000 to loss on impairment of goodwill within the consolidated statement of operations during the quarter ended February 28, 2019.

Interest Expense

Interest expense decreased $273,000 or 53% to $246,000 in fiscal 2020 compared to $519,000 in fiscal 2019. Interest expense decreased $653,000 or 56% to $519,000 in fiscal 2019 compared to $1,172,000 in fiscal 2018. The decrease in interest expense in fiscal 2020 and 2019 is the result of the decreased average outstanding balance of Chase’s revolving debt facility, following the $65,000,000 draw on the facility in December 2017 (fiscal 2018) to substantially fund the Company’s acquisition of Zappa Stewart and subsequent incremental principal payments made.

In fiscal 2018, subsequent to the December 2017 borrowing, the Company made $40,000,000 in payments against the principal. In fiscal 2019, Chase made an additional $25,000,000 in principal payments, paying off the outstanding balance in full as of August 31, 2019.

Gain on Sale of License

In November 2017 (fiscal 2018), the Company entered an agreement with an unrelated party to sell a license, including certain intellectual property, and sell certain construction in process assets, both related to the manufacturing of certain structural composite materials. In the second fiscal quarter of 2018, the transaction was finalized for gross consideration of $1,111,000 comprising cash proceeds of $1,000,000 and foreign tax consideration paid by the purchaser on Chase’s behalf of $111,000. This transaction resulted in a gain of $1,085,000, which was recorded as a gain on sale of license during the fiscal quarter ended February 28, 2018.

In relation to this license agreement, the purchaser also entered into a royalty agreement with the Company. The purchaser will make royalty payments to Chase based on the volume of future sales of certain structural composite material manufactured by the purchaser. Revenue recognized related to this royalty agreement was not material in fiscal 2019 or 2018, and this royalty agreement was terminated in fiscal 2019.

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Gain on Sale of Businesses

On April 20, 2018, Chase finalized an agreement with an unrelated party to sell all inventory, operational machinery and equipment and intangible assets of the Company’s structural composites rod business, as well as a license related to the production and sale of rod, for proceeds of $2,232,000, net of transaction costs and following certain working capital adjustments. This business, which was part of the structural composites product line within the Industrial Tapes segment, had limited growth and profitability prospects as part of the Company, and was outside the areas Chase has identified for strategic emphasis. The resulting pre-tax gain on sale of $1,480,000 was recognized in the third quarter of fiscal 2018 as a gain on sale of businesses within the Consolidated Statement of Operations. Chase received $2,075,000, net of transaction costs, in the third quarter of fiscal 2018, with the remaining $157,000 received in the fourth quarter of fiscal 2018 as a result of a working capital true-up. Chase will provide certain transitional manufacturing and administrative support to the purchaser for which the Company will receive additional consideration upon the performance of services.

In relation to this transaction, the purchaser entered into a royalty agreement with the Company. The purchaser will make royalty payments to Chase based on future sales of certain structural composite material manufactured by the purchaser. Royalty revenue recognized in 2019 and 2018 related to this agreement was not material, and this royalty agreement was terminated in fiscal 2019.

Other Income (Expense)

Other expense was $1,675,000 in fiscal 2020 compared to other expense of $992,000 in fiscal 2019, an increase of $683,000. Other income (expense) primarily includes 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-service cost components of periodic pension expense (including pension-related settlement costs due to the timing of lump-sum distributions), interest income, rental income and other non-trade/non-royalty/non-commission receipts.  The increase in total other expense in fiscal 2020 compared to fiscal 2019 was largely due to the recognition of a larger foreign exchange loss in fiscal 2020 as compared to fiscal 2019.

Other expense was $992,000 in fiscal 2019 compared to other expense of $172,000 in fiscal 2018, an increase of $820,000. The increase in total other expense in fiscal 2019 compared to fiscal 2018 was largely due to the recognition of $511,000 in pension-related settlement costs in fiscal 2019, while no such expense was recognized in fiscal 2018.

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Income Taxes

Our effective tax rate for fiscal 2020 was 24.6% as compared to 24.9% and 24.3% in fiscal 2019 and 2018, respectively. 

The current and prior years’ effective tax rates were most prominently affected by the passage of the Tax Cuts and Jobs Act (the “Tax Act”) in December 2017 and discrete tax benefits related to stock-based compensation, recognized in relation to the Company’s early adoption of ASU 2016-09 and described in more detail below. For fiscal 2020 and 2019, the Company utilized the new 21% Federal tax rate enacted by the Tax Act. During fiscal 2018, Chase utilized a blended rate of 25.7%, based on a combination of four months of operations under the old 35% corporate income tax rate, and eight months at the new 21% rate. Please see Note 7 — “Income Taxes” to the Consolidated Financial Statements for further discussion of the effects of the Tax Act.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted in response to the COVID-19 pandemic. The CARES Act, among other things, included a technical correction to the Tax Act which will allow accelerated deductions for qualified improvement property. The Company is currently evaluating the impact of the CARES Act, but at present does not expect that the qualified improvement property correction nor other provisions of the CARES Act would result in a material tax benefit to us in future periods. The CARES Act had no material effect on the effective tax rate for fiscal 2020.

The Company early adopted ASU No. 2016-09, “Compensation – Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting”, during the first fiscal quarter of 2017. During the fiscal years ended August 31, 2020, 2019 and 2018, the Company recognized excess tax benefits from stock-based compensation of $149,000, $157,000 and $1,921,000, respectively, within income tax expense on the Consolidated Statements of Operations. The current year and prior year decrease in the benefit resulted from a decrease in certain stock option exercise activity in fiscal 2020 and 2019 as compared to fiscal 2018. The Company anticipates the potential for increased periodic volatility in future effective tax rates based on the continued application of ASU No. 2016-09.

Net Income

Net income increased $1,446,000 or 4% to $34,157,000 compared to $32,711,000 in fiscal 2019. The increase in net income in fiscal 2020 was primarily due to: (a) a nonrecurring impairment of goodwill charge recognized in the prior year; (b) the gain on sale of the Pawtucket, RI and Randolph, MA locations: and (c) a lower pension expense. Partially offsetting this increase were: (a) acquisition-related costs; (b) a write-down of certain assets under construction; and (c) a larger foreign exchange loss in the current year.

Net income in fiscal 2019 decreased $10,432,000 or 24% to $32,711,000 compared to $43,143,000 in fiscal 2018. The decrease in net income in 2019 was primarily due to: (a) a lower gross profit on sales; (b) a loss on impairment of goodwill; (c) increased amortization expense recognized in the current period and related to our December 2017 acquisition of Zappa Stewart; (d) nonrecurring gains on sales of both a business and a license in the prior year period; and (e) increased pension-related settlement costs due to the timing of lump-sum disbursements in fiscal 2019.

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Liquidity and Sources of Capital

Our cash balance increased $51,297,000 to $99,068,000 at August 31, 2020 from $47,771,000 at August 31, 2019. The increased cash balance was primarily attributable to cash from operations of $55,734,000, partially offset by a cash dividend payment of $7,539,000. Of the above noted amounts, $42,615,000 and $17,235,000 were held outside the U.S. by Chase Corporation and our foreign subsidiaries as of August 31, 2020 and 2019, respectively. Given our cash position and borrowing capability in the United States and the potential for increased investment and acquisitions in foreign jurisdictions, prior to the second quarter of fiscal 2018, we did not have a history of repatriating a significant portion of our foreign cash. With the passage of the Tax Cuts and Jobs Act (the “Tax Act”) in the second fiscal quarter of 2018, significant changes in the Internal Revenue Code were enacted, changing the U.S. taxable nature of previously unrepatriated foreign earnings. Following the passage of the Tax Act, the Company repatriated $10,499,000 in U.K. foreign earnings in fiscal 2018 and $17,230,000 in fiscal 2019. No additional amounts were repatriated in fiscal year 2020. We do not currently take the position that undistributed foreign subsidiaries’ earnings are considered to be permanently reinvested. See Note 7 — “Income Taxes” to the Consolidated Financial Statements included in this Report for further discussion of the effects of the Tax Act.

Our cash balance increased $12,943,000 to $47,771,000 at August 31, 2019 from $34,828,000 at August 31, 2018. The increased cash balance was primarily attributable to cash from operations of $49,535,000, partially offset by: (a) $25,000,000 in principal debt pay down on debt incurred to acquire Zappa Stewart in the prior year; and (b) a cash dividend payment of $7,522,000.

Cash provided by operations was $55,734,000 for the year ended August 31, 2020 compared to $49,535,000 in fiscal 2019.  Cash provided by operations during fiscal 2020 was primarily due to operating income and decreased levels of accounts receivable (resulting from lower sales) and inventory.

Cash provided by operations was $49,535,000 for the year ended August 31, 2019 compared to $46,071,000 in fiscal 2018. Cash provided by operations during fiscal 2019 was primarily due to operating income and decreased accounts receivable, which contracted on lower sales levels. Partially offsetting the overall increase of cash provided by operations were decreased payables.

The ratio of current assets to current liabilities was 7.7 as of August 31, 2020 compared to 6.0 as of August 31, 2019. The increase in our current ratio in fiscal 2020 was primarily attributable to increased cash and cash equivalents, primarily generated by cash flow from operations.

Cash provided by investing activities was $2,077,000 for the year ended August 31, 2020 compared to $2,166,000 in cash used in investing activities in fiscal 2019. During fiscal 2020, cash provided by investing activities was largely due to the net cash received for the sales of the Pawtucket, RI and Randolph, MA locations, partially offset by cash spent on capital purchases of machinery and equipment.

Cash used in investing activities was $2,166,000 for the year ended August 31, 2019 compared to $73,766,000 in fiscal 2018. During fiscal 2019, cash used in investing activities was primarily due to cash spent on capital purchases of machinery and equipment, partially offset by the final escrow payment received by the Company for our April 2017 sale of the fiber optic cable components business.

Cash used in financing activities was $8,420,000 for the year ended August 31, 2020 compared to $33,450,000 used in financing activities in fiscal 2019 and $14,423,000 provided by financing activities in fiscal 2018. During fiscal 2019 and 2018, Chase repaid $25,000,000 and $40,000,000, respectively, on the $65,000,000 it borrowed on its revolving debt facility to substantially fund its purchase of Zappa Stewart in fiscal 2018. Chase also paid annual dividends of $7,539,000, $7,522,000 and $7,497,000 in 2020, 2019 and 2018, respectively.

On November 12, 2020, we announced a cash dividend of $0.80 per share (totaling approximately $7,556,000) to shareholders of record on November 27, 2020 and payable on December 7, 2020.

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On November 13, 2019, we announced a cash dividend of $0.80 per share (resulting in payment of $7,539,000) to shareholders of record on November 26, 2019 and payable on December 4, 2019.

On November 13, 2018, we announced a cash dividend of $0.80 per share (resulting in payment of $7,522,000) to shareholders of record on November 23, 2018 and payable on December 5, 2018.

On December 15, 2016, we entered an Amended and Restated Credit Agreement (the “Credit Agreement”) with Bank of America, acting as administrative agent, and with participation from Citizens Bank and JPMorgan Chase Bank (collectively with Bank of America, the “Lenders”). The Credit Agreement is initially an all-revolving credit facility with a borrowing capacity of $150,000,000, which can be increased by an additional $50,000,000 at the request of the Company and the individual or collective option of any of the Lenders. The Credit Agreement contains customary affirmative and negative covenants that, among other things, restrict our ability to incur additional indebtedness and require certain lender approval for acquisitions by us and our subsidiaries over a certain size. It also requires us to maintain certain financial ratios on a consolidated basis, including a consolidated net leverage ratio (as defined in the facility) of no more than 3.25 to 1.00, and a consolidated fixed charge coverage ratio (as defined in the facility) of at least 1.25 to 1.00. We were in compliance with our debt covenants as of August 31, 2020 and 2019. The applicable interest rate for the Credit Agreement is based on the effective LIBOR plus an additional amount in the range of 1.00% to 1.75%, depending on our consolidated net leverage ratio or, at our option, at the bank’s base lending rate. At both August 31, 2020 and 2019, there was no outstanding principal balance, and as such, no applicable interest rate. The Credit Agreement was used to refinance our previously existing credit facility, which consisted of a $70,000,000 five-year term loan entered into in June 2012 in connection with our acquisition of NEPTCO, together with a $15,000,000 revolving line of credit, each bearing interest at LIBOR plus an additional amount in the range of 1.75% to 2.25%, depending on our leverage ratio. The Credit Agreement also provides for additional liquidity to finance potential acquisitions, working capital, capital expenditures, and other general corporate purposes.

The Company has several ongoing capital projects, as well as its facility rationalization and consolidation initiative, which are important to its long-term strategic goals. Machinery and equipment may be added as needed to increase capacity or enhance operating efficiencies in the Company’s production facilities.

During the third fiscal quarter of 2020, Company implemented changes in its cost structure designed to address market changes brought on, in part, by COVID-19. These changes included a targeted reduction of approximately 4.5% of the Company’s global workforce. During fiscal 2019, the Company announced it had begun moving the production of its pulling and detection products from its Granite Falls, NC location to its Hickory, NC location, with completion of the move occurring in the first half of fiscal 2020. During fiscal 2018, the Company announced the planned closing of its Pawtucket, RI manufacturing facility effective August 31, 2018. The manufacturing of products previously produced in the Pawtucket, RI facility was moved to Company facilities in Oxford, MA and Lenoir, NC, and the facility was subsequently sold in fiscal 2020. During the fourth quarter of fiscal 2019, the Company commissioned engineering studies to assess potential future operational changes and further plant rationalization and consolidation. These actions are in line with the Company’s ongoing efforts to consolidate its manufacturing plants and streamline its processes. A total of all potential future costs arising from any further plant rationalization and consolidation cannot be estimated at this time.

We may acquire companies or other assets in future periods which are complementary to our business. We believe that our existing resources, including cash on hand and the Credit Agreement, 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 assurance that additional financing, if needed, 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 material off-balance sheet arrangements.

35

Contractual Obligations

The following table summarizes our contractual cash obligations at August 31, 2020 and the effect such obligations are expected to have on our liquidity and cash flow in future periods (dollars in thousands):

			Payments Due
Contractual Obligations	Total		2021		2022		2023		2024		2025 and thereafter
Operating leases	$	8,978	$	2,085	$	1,500	$	1,346	$	1,360	$	2,687
Total (1) (2) (3)	$	8,978	$	2,085	$	1,500	$	1,346	$	1,360	$	2,687

(1) We may be required to make payments related to our unrecognized tax benefits. However, due to the uncertainty of the timing of future cash flows associated with these unrecognized tax benefits, we are unable to make reasonably reliable estimates of the period of cash settlement, if any, with the respective taxing authorities. Accordingly, unrecognized tax benefits of $1,941,000 as of August 31, 2020 have been excluded from the contractual obligations table above. See Note 7 — “Income Taxes” to the Consolidated Financial Statements for further information.

(2) This table does not include the expected payments for our obligations for pension and other post-retirement benefit plans. As of August 31, 2020, we had recognized an accrued benefit plan liability of $12,495,000 representing the unfunded obligations of the pension benefit plans. See Note 9 — “Benefits and Pension Plans” to the Consolidated Financial Statements for further information, including expected pension benefit payments for the next 10 years.

(3) Purchase orders or contracts for normal purchases of raw materials and other goods and services are not included in the table above. The Company does not have significant agreements for the purchase of raw materials or other goods specifying minimum quantities or set prices that exceed expected requirements or extend beyond one year.

Recently Issued Accounting Standards

For discussion of the newly issued accounting pronouncements see “Recently Issued Accounting Standards” and “Recently Adopted Accounting Standards” in Note 1 — “Summary of Significant Accounting Policies” to the Consolidated Financial Statements included in this Report.

36

Critical Accounting Policies, Judgments, and Estimates

The U.S. Securities and Exchange Commission (“SEC”) requires companies to provide additional disclosure and commentary on their most critical accounting policies. The SEC has defined the most critical accounting policies as the ones that are most important to the portrayal of a company’s financial condition and operating results, and require management to make its most significant estimates and judgments in the preparation of its Consolidated Financial Statements. Our critical accounting policies are described below.

Accounts Receivable

We evaluate the collectability of accounts receivable balances based on a combination of factors. In cases where we are aware of circumstances that may impair a specific customer’s ability to meet its financial obligations to us, a specific allowance against amounts due to us is recorded, and thereby reduces the net recognized receivable to the amount we reasonably believe will be collected. For all other customers, we recognize allowances for doubtful accounts based on the length of time the receivables are past due, industry and geographic concentrations, the current business environment and our historical experience. If the financial condition of our customers deteriorates or if economic conditions worsen, additional allowances may be required in the future, which could have an adverse impact on our future operating results.

Inventory

We value inventory at the lower of cost or net realizable value using the first in, first out (FIFO) method. Management assesses the recoverability of inventory based on types and levels of inventory held, forecasted demand and changes in technology. These assessments require management judgments and estimates, and valuation adjustments for excess and obsolete inventory may be recorded based on these assessments. We estimate excess and obsolescence exposures based upon assumptions about future demand, product transitions, and market conditions, and record adjustments to reduce inventories to their estimated net realizable value. The failure to accurately forecast demand may lead to additional excess and obsolete inventory and future charges.

Business Combinations

We assign the value of the consideration transferred to acquire a business to the tangible assets and identifiable intangible assets acquired, and liabilities assumed on the basis of their fair values at the date of acquisition. We assess the fair value of assets, including intangible assets, using a variety of methods, and each asset is measured at fair value from the perspective of a market participant. The method used to estimate the fair values of intangible assets incorporates significant assumptions regarding the estimates a market participant would make in order to evaluate an asset, including a market participant’s use of the asset and the appropriate discount rates for a market participant. Assets recorded from the perspective of a market participant that are determined to not have economic use for us are expensed immediately. Any excess purchase price over the fair value of the net tangible and intangible assets acquired is allocated to goodwill. Transaction costs and restructuring costs associated with a transaction to acquire a business are expensed as incurred.

37

Goodwill, Intangible Assets, and Other Long-Lived Assets

Long-lived assets consist of goodwill, identifiable intangible assets, trademarks, and patents and property, plant, and equipment. Intangible assets and property, plant, and equipment, excluding goodwill, are amortized over their estimated useful life. We review long-lived assets and all intangible assets for impairment whenever events or changes in circumstances indicate the carrying amount of such assets may not be recoverable. 

Goodwill is also reviewed at least annually for impairment. We perform our annual goodwill impairment assessment during the fourth fiscal quarter of each year. In fiscal 2017, we early adopted Accounting Standards Update (“ASU”) No. 2017-04 “Intangibles — Goodwill and Other Topics (Topic 350): Simplifying the Test for Goodwill Impairment.” When evaluating the potential impairment of goodwill, we first assess a range of qualitative factors, including but not limited to, industry conditions, the competitive environment, changes in the market for our products and services, entity-specific factors such as strategy and changes in key personnel, and the overall financial performance for each of our reporting units relative to historical or projected future operating results. If after completing this assessment, it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying value, we then assess goodwill for impairment by comparing the fair value of the reporting unit to its carrying amount. If the fair value of a reporting unit is less than its carrying value, an impairment loss, limited to the amount of goodwill allocated to that reporting unit, is recorded. Fair values for reporting units are determined based on the income approach (discounted cash flow method).

Revenue

Effective September 1, 2018 (fiscal 2019), the Company adopted accounting standard ASU No. 2014-09, “Revenue from Contracts with Customers" (ASC 606) using the modified retrospective method for contracts that were not completed as of August 31, 2018. We recognized the cumulative effect of initially applying the new revenue standard as an adjustment to the opening balance of retained earnings, whereby the cumulative impact of all prior periods is recorded in retained earnings or other impacted balance sheet line items upon adoption. The comparative information (for all periods prior to September 1, 2018) has not been adjusted and continues to be reported under ASU No. 2009-13 “Revenue Recognition” (ASC 605). The impact on the Company’s consolidated balance sheet and statements of operations, equity and cash flows as of the adoption date as a result of applying ASC 606 have been reflected within those respective financial statements. The Company’s accounting policy has been updated to align with ASC 606.

The adoption of ASC 606 represents a change in accounting principle that provides enhanced revenue recognition disclosures. The Company accounts for revenue from contracts with customers when: (a) there is approval and commitment from both parties; (b) the rights of the parties are identified; (c) payment terms are identified; (d) the contract has commercial substance; and (e) collectability of consideration is probable. Revenue is primarily derived from customer purchase orders, master sales agreements, and negotiated contracts, all of which represent contracts with customers. See Note 26 to the Consolidated Financial Statements included in this Report for more information on our accounting for revenue.

Uncertain Tax Positions

We are subject to routine income tax audits that occur periodically in the normal course of business. Our contingent income tax liabilities are estimated based on the methodology prescribed in the guidance for accounting for uncertain tax positions. The guidance prescribes a minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. Our liabilities related to uncertain tax positions require an assessment of the probability of the income tax-related exposures and settlements. Our assessment is based on our historical audit experiences with various state and federal taxing authorities, as well as by current income tax trends. If circumstances change, we may be required to record adjustments that could be material to our reported financial condition and results of operations. See Note 7 to the Consolidated Financial Statements included in this Report for more information on our accounting for uncertain tax positions.

38

Deferred Income Taxes

We evaluate the need for a valuation allowance to reduce our deferred tax assets to the amount that is more likely than not to be realized.  We have considered future taxable income and ongoing prudent and feasible tax planning strategies in assessing the need for a valuation allowance.  Should we determine that we would not be able to realize all or part of our net deferred tax asset in the future, an adjustment to the deferred tax asset would be charged to income in the period such determination was made.

Stock-Based Compensation

We measure compensation cost for share-based compensation at fair value and recognize the expense over the period that the recipient is required to provide service in exchange for the award, which generally is the vesting period. We use the Black-Scholes option pricing model to measure the fair value of stock options. This model requires significant estimates related to the award’s expected life and future stock price volatility of the underlying equity security. Since we early adopted ASU No. 2016-09, “Compensation – Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting,” in fiscal 2017, we have elected to account for forfeitures as they occur.

Pension Benefits

We sponsor a non-contributory defined benefit pension plan covering employees of certain divisions of the Company. In calculating our retirement plan obligations and related expense, we make various assumptions and estimates. These assumptions include discount rates, benefits earned, expected return on plan assets, mortality rates, and other factors. While we believe that the assumptions used are appropriate, differences in actual experience or changes in assumptions may affect our pension obligations and future expense.

Effective December 1, 2008, the Chase defined benefit pension plan was amended to include a “soft freeze” whereby any employee hired after the effective date of December 1, 2008 will not be admitted to the plan. The only exception related to employees who are members of the International Association of Machinists and Aerospace Workers Union whose contract was amended to include a soft freeze whereby any employees hired after the effective date of July 15, 2012 will not be admitted to the plan. All eligible participants who were previously admitted to the plan prior to the applicable soft freeze dates will continue to accrue benefits as detailed in the plan agreements.

Through our wholly-owned subsidiary NEPTCO, we had another defined benefit pension plan which covered substantially all of our union employees at our Pawtucket, RI plant. This plan was frozen effective October 31, 2006, and as a result, no new participants could enter the plan and the benefits of current participants were frozen as of that date. The benefits were based on years of service and the employee’s average compensation during the earlier of five years before retirement, or October 31, 2006. In August 2019, the Board of Directors voted to terminate the NEPTCO defined benefit plan. The Company established November 15, 2019 as the plan termination date, subsequent to which it performed the administrative actions required to carry out the termination, inclusive of making full payouts to (or setting up annuities for) all participants. No balance related to the NEPTCO defined benefit plan was carried on the Company’s consolidated balance sheet as of August 31, 2020.

We account for our pension plans following the requirements of ASC Topic 715, “Compensation – Retirement Benefits” (“ASC 715”). ASC 715 requires an employer to: (a) recognize in its statement of financial position the funded status of a benefit plan; (b) measure defined benefit plan assets and obligations as of the end of the employer’s fiscal year (with limited exceptions); and (c) recognize as a component of other comprehensive income, net of tax, the gains or losses and prior service costs or credits that arise but are not recognized as components of net periodic benefit costs pursuant to prior existing guidance.

Impact of Inflation

Inflation has not had a significant long-term impact on our earnings.  In the event of significant inflation, our efforts to recover cost increases would be hampered as a result of the competitive nature of the industries in which we operate.

39

Item 7a – Quantitative and Qualitative Disclosures about Market Risk

We limit the amount of credit exposure to any one issuer. At August 31, 2020, 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. However, our European and Asian operations are subject to currency exchange fluctuations. We continue to review our policies and procedures to control this exposure while maintaining the benefit from these operations and sales not denominated in U.S. dollars. The effect of an immediate hypothetical 10% change in the exchange rate between the British pound or euro and the U.S. dollar would not have a material effect on the Company’s overall liquidity. As of August 31, 2020, the Company had cash balances in the following foreign currencies (with USD equivalents in thousands):

Currency Code	Currency Name	USD Equivalent at August 31, 2020
EUR	Euro	$	25,926
GBP	British Pound	$	11,408
CAD	Canadian Dollar	$	1,450
INR	Indian Rupee	$	355
CNY	Chinese Yuan	$	350

The Company will continue to review its current cash balances denominated in foreign currency considering current tax guidelines, including the impact of the Tax Act to the U.S. Internal Revenue Code, working capital requirements, infrastructure improvements and potential acquisitions. The increased euro denominated balance at August 31, 2020 was done in preparation of the September 1, 2020 (fiscal 2021) purchase of ABchimie. See Note 1 — “Summary of Significant Accounting Policies” and Note 14 — “Acquisitions” to the Consolidated Financial Statements for additional information regarding our fiscal 2021 purchase of ABchimie.

The Company recognized a foreign currency translation gain for the year ended August 31, 2020 in the amount of $3,163,000 related to our European and Indian operations, which is recorded in accumulated other comprehensive income (loss) within our consolidated statement of equity. The functional currency for all our other operations is the U.S. Dollar.We do not have or utilize any derivative financial instruments.

We pay interest on our outstanding long-term debt at interest rates that fluctuate based upon changes in various base interest rates. There was no outstanding balance of long-term debt at August 31, 2020 and 2019. See “Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Sources of Capital,” Note 6 — “Long-Term Debt” and Note 16 — “Fair Value Measurements” to the Consolidated Financial Statements for additional information regarding our outstanding long-term debt.  The effect of an immediate hypothetical 10% change in variable interest rates would not have a material effect on our Consolidated Financial Statements.

40

Item 8 – Financial Statements and Supplementary Data

The following Consolidated Financial Statements of Chase Corporation are filed as part of this Annual Report on Form 10-K:

Index to Consolidated Financial Statements:

	Page No.
Reports of Independent Registered Public Accounting Firms	42
Consolidated Balance Sheets as of August 31, 2020 and 2019	44
Consolidated Statements of Operations for each of the three fiscal years in the period ended August 31, 2020	45
Consolidated Statements of Comprehensive Income for each of the three fiscal years in the period ended August 31, 2020	46
Consolidated Statements of Equity for each of the three fiscal years in the period ended August 31, 2020	47
Consolidated Statements of Cash Flows for each of the three fiscal years in the period ended August 31, 2020	48
Notes to Consolidated Financial Statements	49

41

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Shareholders

Chase Corporation

Opinion on the financial statements

We have audited the accompanying consolidated balance sheets of Chase Corporation (a Massachusetts corporation) and subsidiaries (the “Company”) as of August 31, 2020 and 2019, the related consolidated statements of operations, comprehensive income, equity, and cash flows for each of the two years in the period ended August 31, 2020, and the related notes (collectively referred to as the “financial statements”). In our opinion, thefinancial statements present fairly, in all material respects, the financial position of the Companyas of August 31, 2020 and 2019, and the results of itsoperations and itscash flows for each of the two years in the period ended August 31, 2020, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of August 31, 2020, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated November 12, 2020 expressed an unqualified opinion.

Basis for opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ GRANT THORNTON LLP

We have served as the Company’s auditor since 2019.

Boston, Massachusetts

November 12, 2020

42

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of Chase Corporation

Opinion on the Financial Statements

We have audited the consolidated statements of operations, of comprehensive income, of equity and of cash flows of Chase Corporation and its subsidiaries (the “Company”) for the year ended August 31, 2018, including the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the results of operations and cash flows of the Company for the year ended August 31, 2018 in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.

/s/PricewaterhouseCoopers LLP

Boston, Massachusetts

November 27, 2018, except for the change in composition of reportable segments discussed in Note 11 to the consolidated financial statements, as to which the date is November 13, 2019

We served as the Company's auditor from 2003to 2018.

43

CHASE CORPORATION

CONSOLIDATED BALANCE SHEETS

In thousands, except share and per share amounts

	August 31,		August 31,
	2020		2019
ASSETS
Current Assets
Cash and cash equivalents	$	99,068	$	47,771
Accounts receivable, less allowance for doubtful accounts of $438 and $739		36,993		39,324
Inventory		39,058		42,354
Prepaid expenses and other current assets		2,470		2,418
Assets held for sale		—		1,064
Prepaid income taxes		231		1,451
Total current assets		177,820		134,382
Property, plant and equipment, less accumulated depreciation of $52,283 and $49,730		25,574		29,326
Other Assets
Goodwill		82,402		81,986
Intangible assets, less accumulated amortization of $78,351 and $65,862		41,200		52,704
Cash surrender value of life insurance		4,450		4,450
Restricted investments		1,619		1,260
Deferred income taxes		4,929		3,804
Operating lease right-of-use asset (Note 8)		8,821		—
Other assets		15		56
Total assets	$	346,830	$	307,968
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable	$	12,525	$	12,105
Accrued payroll and other compensation		5,751		6,300
Accrued expenses		4,867		4,035
Total current liabilities		23,143		22,440
Operating lease long-term liabilities (Note 8)		6,395		—
Deferred compensation		1,629		1,275
Accumulated pension obligation		10,930		10,485
Other liabilities		—		217
Accrued income taxes		1,941		2,324
Commitments and contingencies (Notes 6, 8, 21)
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; 9,439,082 shares at August 31, 2020 and 9,400,748 shares at August 31, 2019 issued and outstanding		944		940
Additional paid-in capital		16,674		14,351
Accumulated other comprehensive loss		(13,092)		(14,324)
Retained earnings		298,266		270,260
Total equity		302,792		271,227
Total liabilities and equity	$	346,830	$	307,968

See accompanying notes to the Consolidated Financial Statements.

44

CHASE CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

In thousands, except share and per share amounts

	Years Ended August 31,
	2020		2019		2018
Revenue
Sales	$	257,742	$	276,839	$	278,962
Royalties and commissions		3,420		4,512		5,226
		261,162		281,351		284,188
Costs and Expenses
Cost of products and services sold		161,615		180,163		175,136
Selling, general and administrative expenses		49,364		48,707		47,703
Research and product development costs		4,007		4,021		3,940
Operations optimization costs (Note 20)		807		986		1,272
Acquisition-related costs (Note 14)		274		—		393
Gain on sale of real estate (Note 19)		(2,551)		—		—
Write-down of certain assets under construction (Note 20)		405		—		—
Loss on impairment of goodwill (Note 4)		—		2,410		—
Operating income		47,241		45,064		55,744
Interest expense		(246)		(519)		(1,172)
Gain on sale of license (Note 15)		—		—		1,085
Gain on sale of businesses (Note 18)		—		—		1,480
Other income (expense)		(1,675)		(992)		(172)
Income before income taxes		45,320		43,553		56,965
Income taxes (Note 7)		11,163		10,842		13,822
Net income	$	34,157	$	32,711	$	43,143
Net income available to common shareholders, per common and common equivalent share (Note 17)
Basic	$	3.62	$	3.48	$	4.60
Diluted	$	3.59	$	3.46	$	4.56
Weighted average shares outstanding
Basic		9,359,940		9,334,232		9,296,648
Diluted		9,439,750		9,379,207		9,366,071
Annual cash dividends declared per share	$	0.80	$	0.80	$	0.80

See accompanying notes to the Consolidated Financial Statements.

45

CHASE CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

In thousands, except share and per share amounts

	Years Ended August 31,
	2020		2019		2018
Net income	$	34,157	$	32,711	$	43,143
Other comprehensive income (loss):
Net unrealized gain on restricted investments, net of tax		115		28		5
Change in funded status of pension plans, net of tax		(658)		(475)		385
Foreign currency translation adjustment		3,163		(1,541)		743
Total other comprehensive income (loss)		2,620		(1,988)		1,133
Comprehensive income	$	36,777	$	30,723	$	44,276

See accompanying notes to the Consolidated Financial Statements.

46

CHASE CORPORATION

CONSOLIDATED STATEMENTS OF EQUITY

In thousands, except share and per share amounts

				Additional		Accumulated Other				Total
	Common Stock			Paid-In		Comprehensive		Retained		Stockholders'
	Shares	Amount		Capital		Income (Loss)		Earnings		Equity
Balance at August 31, 2017	9,354,136	$	935	$	14,060	$	(13,469)	$	209,403	$	210,929
Restricted stock grants, net of forfeitures	16,701		2		(2)						—
Amortization of restricted stock grants					1,669						1,669
Amortization of stock option grants					459						459
Exercise of stock options	64,012		6		1,214						1,220
Common stock received for payment of stock option exercises	(9,693)		(1)		(1,027)						(1,028)
Common stock retained to pay statutory minimum withholding taxes on common stock	(28,209)		(3)		(3,269)						(3,272)
Cash dividend paid, $0.80 per share									(7,497)		(7,497)
Change in funded status of pension plans, net of tax $130							385				385
Foreign currency translation adjustment							743				743
Net unrealized gain on restricted investments, net of tax $2							5				5
Net income									43,143		43,143
Balance at August 31, 2018	9,396,947	$	939	$	13,104	$	(12,336)	$	245,049	$	246,756
Restricted stock grants, net of forfeitures	8,818		1		(1)						—
Amortization of restricted stock grants					1,673						1,673
Amortization of stock option grants					503						503
Exercise of stock options	7,022		1		300						301
Common stock received for payment of stock option exercises	(954)		—		(119)						(119)
Common stock retained to pay statutory minimum withholding taxes on common stock	(11,085)		(1)		(1,109)						(1,110)
Cash dividend paid, $0.80 per share									(7,522)		(7,522)
Change in funded status of pension plans, net of tax $218							(475)				(475)
Foreign currency translation adjustment							(1,541)				(1,541)
Net unrealized gain on restricted investments, net of tax ($5)							28				28
Adoption of ASC 606 (Note 26)									22		22
Net income									32,711		32,711
Balance at August 31, 2019	9,400,748	$	940	$	14,351	$	(14,324)	$	270,260	$	271,227
Restricted stock grants, net of forfeitures	45,621		5		(5)						—
Amortization of restricted stock grants					2,290						2,290
Amortization of stock option grants					918						918
Exercise of stock options	3,618		—		123						123
Common stock received for payment of stock option exercises	(1,057)		—		(123)						(123)
Common stock retained to pay statutory minimum withholding taxes on common stock	(9,848)		(1)		(880)						(881)
Cash dividend on common stock, $0.80 per share									(7,539)		(7,539)
Change in funded status of pension plans, net of tax ($215)							(658)				(658)
Foreign currency translation adjustment							3,163				3,163
Net unrealized gain (loss) on restricted investments, net of tax $40							115				115
Adoption of ASU 2018-02 (Note 1)							(1,388)		1,388		—
Net income									34,157		34,157
Balance at August 31, 2020	9,439,082	$	944	$	16,674	$	(13,092)	$	298,266	$	302,792

See accompanying notes to the Consolidated Financial Statements.

47

CHASE CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

In thousands

	Years Ended August 31,
	2020		2019		2018
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	34,157	$	32,711	$	43,143
Adjustments to reconcile net income to net cash provided by operating activities
Gain on sale of real estate		(2,551)		—		—
Gain on sale of license		—		—		(1,085)
Loss on impairment of goodwill		—		2,410		—
Write-down of certain assets under construction		405		—		—
Gain on sale of businesses		—		—		(1,480)
Depreciation		4,015		4,762		5,817
Amortization		11,576		12,445		11,807
Cost of sale of inventory step-up		—		—		1,070
(Recovery) provision for allowance for doubtful accounts		(307)		183		101
Stock-based compensation		3,208		2,176		2,128
Realized gain on restricted investments		(37)		(11)		(97)
Pension curtailment and settlement loss		155		511		—
Deferred taxes		(769)		(2,312)		(2,473)
Increase (decrease) from changes in assets and liabilities
Accounts receivable		3,092		4,858		(2,968)
Inventory		3,562		(2,864)		(8,845)
Prepaid expenses and other assets		43		356		569
Accounts payable		260		(5,493)		2,847
Accrued compensation and other expenses		(1,865)		(1,536)		(501)
Accrued income taxes		790		1,339		(3,962)
Net cash provided by operating activities		55,734		49,535		46,071
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment		(1,371)		(2,488)		(3,488)
Cost to acquire intangible assets		—		(36)		(18)
Payments for acquisitions		—		—		(73,469)
Proceeds from sale of real estate		3,615		—		—
Proceeds from sale of license		—		—		1,000
Proceeds from sale of businesses		—		400		2,232
Changes in restricted investments		(167)		(122)		(23)
Proceeds from settlement of life insurance policies		—		80		—
Net cash provided by (used in) investing activities		2,077		(2,166)		(73,766)
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings on debt		—		—		65,000
Payments of principal on debt		—		(25,000)		(40,000)
Dividend paid		(7,539)		(7,522)		(7,497)
Proceeds from exercise of common stock options		—		182		192
Payments of taxes on stock options and restricted stock		(881)		(1,110)		(3,272)
Net cash (used in) provided by financing activities		(8,420)		(33,450)		14,423
INCREASE IN CASH & CASH EQUIVALENTS		49,391		13,919		(13,272)
Effect of foreign exchange rates on cash		1,906		(976)		746
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		47,771		34,828		47,354
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	99,068	$	47,771	$	34,828

See Note 13 for supplemental cash flow information including non-cash financing and investing activities

See accompanying notes to the Consolidated Financial Statements.

48

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share amounts

Note 1—Summary of Significant Accounting Policies

The principal accounting policies of Chase Corporation (the “Company”) and its subsidiaries are as follows:

Products and Markets

Our principal products are specialty tapes, laminates, adhesives, sealants, coatings and chemical intermediates that are sold by our salespeople, manufacturers' representatives and distributors. In our Adhesives, Sealants and Additives segment, these products consist of:

(i) moisture protective coatings, which are sold to the electronics industry for circuitry manufacturing, including circuitry used in automobiles, industrial controls and home appliances;

(ii) advanced adhesives, sealants, and coatings for automotive and industrial applications that require specialized bonding, encapsulating, environmental protection, or thermal management functionality;

(iii) polymeric microspheres utilized by various industries to allow for weight and density reduction and sound dampening;

(iv) polyurethane dispersions utilized for various coating products; and

(v) superabsorbent polymers, which are utilized for water and liquid management, remediation and protection in diverse markets including wire and cable, medical, environmental, infrastructure, energy and consumer products.

In our Industrial Tapes segment, these products consist of:

(i) insulating and conducting materials for the manufacture of electrical and telephone wire and cable, electrical splicing, and terminating and repair tapes, which are marketed to wire and cable manufacturers;

(ii) laminated film foils, including EMI/RFI shielding tapes, used in communication and local area network (LAN) cable;

(iii) industrial coated or laminate products and custom manufacturing services sold into medical, consumer, automotive, packaging, energy, telecommunications and other specialized markets;

(iv) laminated durable papers, including laminated paper with an inner security barrier used in personal and mail-stream privacy protection, which are sold primarily to the envelope converting and commercial printing industries;

(v) pulling and detection tapes used in the installation, measurement and location of fiber optic cable, water and natural gas lines, and power, data and video cable for commercial buildings; and

(vi) cover tapes with reliable adhesive and anti-static properties essential to delivering semiconductor components via tape and reel packaging.

49

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share amounts

In our Corrosion Protection and Waterproofing segment, these products consist of:

(i) protective coatings, tapes and protectants for pipelines, valves, casings and other metals, which are sold to oil companies, gas companies and water/wastewater utilities for use in both the construction and maintenance of oil, gas, water and wastewater pipelines;

(ii) fluid applied coating and lining systems for use in the water and wastewater industry;

(iii) waterproofing tapes and coatings used in waterproofing of the exterior of both commercial and industrial structures;

(iv) waterproofing membranes for highway bridge deck metal supported surfaces, which are sold to municipal transportation authorities, and high-performance polymeric asphalt additives; and

(v) expansion and control joint systems designed for roads, bridges, stadiums and airport runways.

Basis of Presentation

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 functional currency for financial reporting. Certain reclassifications have been made to the prior year amounts to conform to the current year’s presentation.

Other Business Developments

On September 1, 2020 (subsequent to fiscal 2020), the Company acquired all the capital stock of ABchimie for €18,000 (approximately $21,420 at the time of the transaction) net of cash and marketable securities acquired, subject to final working capital adjustment, excluding acquisition-related costs of $274 and with a potential earn out based on performance potentially worth an additional €7,000 (approximately $8,330 at the time of the transaction). ABchimie is a Corbelin, France headquartered solutions provider for the cleaning and the protection of electronic assemblies, with ‎further formulation, production, and research and development capabilities‎. The transaction was funded 100% with cash on hand. The financial results of the business will be included in the Company's fiscal 2021 financial statements within the Adhesives, Sealants and Additives operating segment in the electronic and industrial coatings product line. The Company is currently in the process of finalizing purchase accounting, regarding a final allocation of the purchase price to tangible and identifiable intangible assets assumed and anticipates completion within fiscal 2021. The ABchimie acquisition does not represent a significant business combination so pro forma financial information is not provided.

The second, third and fourth fiscal quarters of 2020 saw the global spread of the coronavirus pandemic (COVID-19), which grew to create significant volatility, uncertainty and global economic disruption. During the third fiscal quarter, the Company implemented changes to its cost structure designed to address market changes brought on by COVID-19 and demonstrate its commitment to fiscal prudence: (a) the Company made a targeted reduction in its global workforce, contemplated pre-pandemic but catalyzed by COVID-19, which resulted in the recognition of $183 in severance costs during the period; and (b) the Company also instituted a temporary 20% reduction in the base salaries of its named executive officers and select members of senior management, as well as the cash compensation of the non-employee members of its Board of Directors. The reduction in force, which impacted operations in the Company’s U.S. facilities, and the adjustments in compensation, were both effective May 2020.

During the first quarter of fiscal 2020, the Company commissioned third party led studies regarding the potential upgrading of the Company’s current worldwide ERP system. Chase Corporation is currently reviewing the data and recommendations provided by the study and may further utilize third-party engineering, IT and other professional

50

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share amounts

services firms in the future for similar work, as well as work around the facilities rationalization and consolidation initiative. The Company recognized $150 in expense related to these services in the first quarter of fiscal 2020, with no expense recognized in the second, third or fourth fiscal quarters. Given the ongoing nature of the review, an estimate of future costs, including those that may be capitalized, cannot currently be determined.

During the third quarter of fiscal 2019, the Company began moving the pulling and detection operations housed in its Granite Falls, NC location to its Hickory, NC facility. This is in line with the Company’s ongoing initiative to consolidate its manufacturing plants and streamline its existing processes. At the time, the pulling and detection operations were the only Chase-owned production operations in Granite Falls, NC, with the remaining portions of the building being either utilized for research and development or leased to a third party. The process of moving, including moving internal research and development capabilities, was substantially completed during the second quarter of fiscal 2020. The Company recognized $559 in expense related to the move in the six-month periods ended February 29, 2020, having recognized $526 in expense during the second half of fiscal 2019. No costs were recognized in the six months ended August 31, 2020, and future costs related to this move are not anticipated to be significant to the consolidated financial statements.

During the fourth quarter of fiscal 2019 (prior year), Chase Corporation commissioned engineering studies of certain legacy operations, machinery and locations related to the Company’s ongoing facility rationalization and consolidation initiative. Chase completed its review of the data and recommendations provided by the study in the fourth quarter of fiscal 2020 (current year). The Company recognized $200 in expense related to these services in fiscal 2019, and a gain of $170 in fiscal 2020, as certain amounts expensed in fiscal 2019 were refunded. Also in the fourth quarter of fiscal 2020 and related to the recommendations of the commissioned engineering studies, the Company wrote down the value of certain non-operating production assets related to the pipeline coatings product line, within the Corrosion Protection and Waterproofing segment. Given the nature and prospects of the equipment, the Company determined its then carrying value exceeded its fair value and recognized an expense of $405 related to the machinery. Chase may utilize third party engineering, IT and other professional services firms in the future for similar optimization-related work. Given the ongoing nature of the facility rationalization and consolidation initiative, an estimate of future costs cannot currently be determined.

On June 25, 2018, the Company announced to its employees the planned closing of its Pawtucket, RI manufacturing facility effective August 31, 2018. This is in line with the Company’s ongoing efforts to consolidate its manufacturing plants and streamline its existing processes. The manufacture of products previously produced in the Pawtucket, RI facility was substantially moved to Company facilities in Oxford, MA and Lenoir, NC during a two-month transition period. In the fourth quarter of fiscal 2018, the Company expensed $1,272 related to the closure. The Company also recognized $260 in expense related to the move in the three-month period ended November 30, 2018, with no additional expense recognized in the remainder of fiscal 2019. The Company completed the sale of its Pawtucket, RI location to a third party in the third quarter of fiscal 2020 for net proceeds totaling $1,810, recognizing a gain on sale of real estate of $760. Also, during the third quarter of fiscal 2020, the Company recognized $85 in final Pawtucket, RI transition and exit costs, with no further costs related to this initiative anticipated in future periods.

On April 20, 2018, Chase Corporation finalized an agreement with an unrelated party to sell all inventory, operational machinery and equipment and intangible assets of the Company’s structural composites rod business, as well as a license related to the production and sale of rod, for proceeds of $2,232, net of transaction costs and following certain working capital adjustments. This business, which was part of the structural composites product line within the Industrial Tapes segment, had limited growth and profitability prospects as part of the Company, and was outside the areas Chase has identified for strategic emphasis. The resulting pre-tax gain on sale of $1,480 was recognized in the third quarter of fiscal 2018 as a gain on sale of businesses within the consolidated statement of operations. Chase received $2,075, net of transaction costs, in the third quarter of fiscal 2018, with the remaining $157 received in the fourth quarter of fiscal 2018 as a result of a working capital true-up. Chase Corporation will provide certain transitional manufacturing

51

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share amounts

and administrative support to the purchaser for which the Company will receive additional consideration upon the performance of services.

On December 29, 2017, Chase Corporation entered an agreement to acquire Stewart Superabsorbents, LLC (“SSA, LLC”), an advanced superabsorbent polymer (SAP) formulator and solutions provider, with operations located in Hickory and McLeansville, NC. The transaction closed on December 31, 2017. In its final fiscal year before its acquisition, SSA, LLC, and its then recently-acquired Zappa-Tec business (collectively “Zappa Stewart”) had combined revenue in excess of $24,000. This acquisition proved to be immediately accretive to the Company’s earnings in the period of acquisition, after adjusting for nonrecurring costs associated with the transaction and financing. The business was acquired for a purchase price of $73,469 after final working capital adjustments and excluding acquisition-related costs. As part of this transaction, Chase Corporation acquired all assets of the business, and entered multiyear leases at both locations. The Company expensed $393 of acquisition-related costs during the second quarter of fiscal 2018. The purchase was funded from a combination of Chase’s existing revolving credit facility and available cash on hand. Zappa Stewart’s protective materials technology complements Chase’s current specialty chemicals offerings. This acquisition is aligned with the Company’s core strategies and extends its reach into growing medical, environmental and consumer applications. The Company finalized purchase accounting in the first quarter of fiscal 2019, without any adjustment to amounts recorded at August 31, 2018. Following the effective date of the acquisition the financial results of Zappa Stewart’s operations have been included in the Company’s financial statements in the specialty chemical intermediates product line, contained within the Adhesives, Sealants and Additives operating segment.

The Company has evaluated events and transactions subsequent to the balance sheet date. Based on this evaluation, and other than: (a) the cash dividend announced on November 12, 2020 of $0.80 per share to shareholders of record on November 27, 2020 and payable on December 7, 2020; and (b) the acquisition of ABchimie discussed in Note 14, the Company is not aware of any other 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.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash and cash equivalents consist primarily of demand deposit accounts or investment instruments that meet high credit quality standards such as money market funds, government securities, or commercial paper. The Company considers all highly liquid debt instruments purchased with an original maturity of three months or less from the date of purchase to be cash equivalents.

Accounts Receivable

The Company evaluates the collectability of accounts receivable balances based on a combination of factors. In cases where the Company is aware of circumstances that may impair a specific customer’s ability to meet its financial obligations to it, a specific allowance against amounts due to the Company is recorded, and thereby reduces the net recognized receivable to the amount the Company reasonably believes will be collected. For all other customers, the Company recognizes allowances for doubtful accounts based on the length of time the receivables are past due, industry and geographic factors, the current business environment and its historical experience. Receivables are written off against these reserves in the period they are determined to be uncollectable.

52

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share amounts

Inventory

The Company values inventory at the lower of cost or net realizable value using the first in, first out (FIFO) method. Management assesses the recoverability of inventory based on types and levels of inventory held, forecasted demand and changes in technology. These assessments require management judgments and estimates, and valuation adjustments for excess and obsolete inventory may be recorded based on these assessments. The Company estimates excess and obsolescence exposures based upon assumptions about future demand, product transitions and market conditions, and records adjustments to reduce inventories to their estimated net realizable value. The failure to accurately forecast demand may lead to additional excess and obsolete inventory and future charges.

Goodwill

The Company accounts for goodwill in accordance with ASC Topic 350, “Intangibles — Goodwill and Other.” The Company performs impairment reviews annually each fourth quarter and whenever events or circumstances indicate the carrying value of goodwill may not be recoverable.

During the three-month period ended February 28, 2019, the ordering patterns of the polyurethane dispersions reporting unit’s customers, especially those in the automotive industry, combined with a decrease in the reporting unit’s backlog of customer orders believed to be firm as of February 28, 2019, indicated that an impairment in the carrying value of the reporting unit might have occurred. The Company performed an impairment test on the indefinite-lived and long-lived assets related to the polyurethane dispersions reporting unit, now part of the Adhesives, Sealants and Additives operating segment and reporting unit (part of the former Industrial Materials segment during the second fiscal quarter of 2019), in accordance with ASC Topic 350, “Intangibles — Goodwill and Other” and ASC Topic 360, “Disclosure — Impairment or Disposal of Long-Lived Assets.” As a result of impairment testing, which included first testing long-lived assets other than goodwill for impairment under applicable guidance, the Company recorded a charge of $2,410 to loss on impairment of goodwill within the consolidated statement of operations during the quarter ended February 28, 2019. The polyurethane dispersions reporting unit’s fair value was determined based on the income approach (discounted cash flow method).

In fiscal 2017, we early adopted Accounting Standards Update (“ASU”) No. 2017-04 “Intangibles — Goodwill and Other Topics (Topic 350): Simplifying the Test for Goodwill Impairment.” When evaluating the potential impairment of goodwill, we first assess a range of qualitative factors, including but not limited to, industry conditions, the competitive environment, changes in the market for our products and services, entity-specific factors such as strategy and changes in key personnel, and the overall financial performance for each of our reporting units relative to historical or projected future operating results. If after completing this assessment, it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying value, we then assess goodwill for impairment by comparing the fair value of the reporting unit to its carrying amount. If the fair value of a reporting unit is less than its carrying value, an impairment loss, limited to the amount of goodwill allocated to that reporting unit, is recorded. Fair values for reporting units are determined based on the income approach (discounted cash flow method).

For the annual fiscal 2020 fourth quarter review, no goodwill impairment, nor at-risk reporting units, was indicated as of August 31, 2020.For the annual fiscal 2020 goodwill impairment test, we performed a qualitative assessment of goodwill impairment and concluded that it was more likely than not that our reporting units' fair values exceeded their carrying values (i.e. indicated no impairment of goodwill). Accordingly, it was not necessary for us to perform the quantitative analysis.

53

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share amounts

Intangible Assets

Intangible assets consist of patents, formulas, trade names, customer relationships and trademarks. The Company capitalizes costs related to patent applications and technology agreements. The costs of these assets are amortized over the lesser of the useful life of the asset or its statutory life. Capitalized costs are periodically reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.

Property, Plant and Equipment

Property, plant and equipment are stated at cost and depreciated using the straight-line method over the assets’ estimated useful lives. Expenditures for maintenance repairs and minor renewals are charged to expense as incurred. Betterments and major renewals are capitalized. Upon retirement or other disposition of assets, related allowances for depreciation and amortization are eliminated from the accounts and any resulting gain or loss is included in the determination of income or loss. The estimated useful lives of property, plant and equipment are as follows:

Buildings and improvements	15	to	40	years
Machinery and equipment	3	to	10	years

Leasehold improvements are depreciated over the lesser of the useful life or the term of the lease.

Restricted Investments and Deferred Compensation

The Company has a non-qualified deferred savings plan that covers its Board of Directors and a separate plan covering selected employees.  Participants may elect to defer a portion of their compensation for payment in a future tax year. The plans are funded by trusteed assets that are restricted to the payment of deferred compensation or satisfaction of the Company’s general creditors. The Company’s restricted investments under the plans were $1,619 and $1,260 at August 31, 2020 and 2019, respectively, and corresponding deferred compensation liabilities were $1,629 and $1,275 at August 31, 2020 and 2019, respectively. The Company accounts for the restricted investments as available for sale by recording net unrealized gains or losses in other comprehensive income as a component of stockholders’ equity.

Revenue

Effective September 1, 2018, the Company adopted accounting standard ASU No. 2014-09, “Revenue from Contracts with Customers” (ASC 606) using the modified retrospective method for contracts that were not completed as of August 31, 2018. We recognized the cumulative effect of initially applying the new revenue standard as an adjustment to the opening balance of retained earnings, whereby the cumulative impact of all prior periods is recorded in retained earnings or other impacted balance sheet line items upon adoption. The comparative information (for all periods prior to September 1, 2018) has not been adjusted and continues to be reported under ASU No. 2009-13 “Revenue Recognition” (ASC 605). The impact on the Company’s consolidated balance sheets, and statements of operations, equity or cash flows as of the adoption date as a result of applying ASC 606 have been reflected within those respective financial statements. The Company’s accounting policy has been updated to align with ASC 606.

The adoption of ASC 606 represents a change in accounting principle that provides enhanced revenue recognition disclosures. The Company accounts for revenue from contracts with customers when: (a) there is approval and commitment from both parties; (b) the rights of the parties are identified; (c) payment terms are identified; (d) the contract has commercial substance; and (e) collectability of consideration is probable. Revenue is primarily derived from customer purchase orders, master sales agreements, and negotiated contracts, all of which represent contracts with customers. See Note 26 to the consolidated financial statements for more information on our accounting for revenue.

54

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share amounts

Research and Product Development Costs

Research and product development costs are expensed as incurred and include primarily engineering salaries, overhead and materials used in connection with research and development projects. Research and development expense amounted to $4,007, $4,021 and $3,940 for the years ended August 31, 2020, 2019 and 2018, respectively, and was recorded within Research and product development costs on the consolidated statements of operations.

Pension Plans

The Company accounts for its pension plans following the requirements of ASC Topic 715, “Compensation —Retirement Benefits” (“ASC 715”). ASC 715 requires an employer to: (a) recognize in its statement of financial position the funded status of a benefit plan; (b) measure defined benefit plan assets and obligations as of the end of the employer’s fiscal year (with limited exceptions); and (c) recognize as a component of other comprehensive income, net of tax, the gains or losses and prior service costs or credits that arise but are not recognized as components of net periodic benefit costs pursuant to prior existing guidance.

Stock-Based Compensation

In accordance with the accounting for stock-based compensation guidance, ASC Topic 718 “Compensation – Stock Compensation” (“ASC 718”), the Company measures and recognizes compensation expense for all share-based payment awards made to employees and directors based on estimated fair values. This includes restricted stock, restricted stock units and stock options. The guidance allows for the continued use of the simplified method as the Company has concluded that its historical share option exercise experience does not provide a reasonable basis for estimating expected term.

Stock-based compensation expense recognized in fiscal years 2020, 2019 and 2018 was $3,208, $2,176 and $2,128, respectively.

The fair value of options granted was estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions for the years ending August 31, 2020, 2019 and 2018:

	2020		2019		2018
Expected dividend yield	0.7	%	0.7	%	0.9	%
Expected life	6.0	years	6.0	years	6.0	years
Expected volatility	31.0	%	31.4	%	34.7	%
Risk-free interest rate	1.4	%	2.7	%	1.9	%

Expected volatility is determined by looking at a combination of historical volatility over the past six years as well as implied future volatility.

55

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share amounts

Translation of Foreign Currency

The financial position and results of operations of the Company’s HumiSeal Europe Ltd and Chase Protective Coatings Ltd businesses are measured using the British pound as the functional currency. The financial position and results of operations of the Company’s HumiSeal Europe SARL business in France are measured using euros as the functional currency. The financial position and results of the Company’s HumiSeal India Private Limited business in India are measured using the Indian rupee as the functional currency. The functional currency for all our other operations is the U.S. dollar. Revenue and expenses of these international businesses have been translated at average exchange rates. 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 (a component of stockholders’ equity). Transaction gains and losses generated from the remeasurement of assets and liabilities denominated in currencies other than the functional currency of these international operations are included in other income (expense) on the consolidated statements of operations and were gains (losses) of ($911), ($48) and $85 for the fiscal years ended August 31, 2020, 2019 and 2018, respectively.

Income Taxes

The Company accounts for income taxes under the asset and liability method. Under this method, a deferred tax asset or liability is determined based upon the differences between the financial statement and tax bases of assets and liabilities as measured by the enacted tax rates that will be in effect when these differences reverse. Tax credits are recorded as a reduction in income taxes. Valuation allowances are provided if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

The Company estimates contingent income tax liabilities based on the guidance for accounting for uncertain tax positions as prescribed in ASC Topic 740, “Income Taxes.” See Note 7 for more information on the Company’s income taxes, including information on the effects of the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) on our financial position and results of operations, including adjustments that were recorded during fiscal 2018 and 2019 related to the Tax Act.

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” (“ASC 260”). The Company allocates earnings to participating securities and computes earnings per share using the two-class method.

Comprehensive Income

Comprehensive income is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources, including foreign currency translation adjustments, unrealized gains and losses on marketable securities and adjustments related to the change in the funded status of the pension plans.

56

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share amounts

Segments

ASC Topic 280 “Segment Reporting” of the Financial Accounting Standards Board (“FASB”) codification establishes standards for reporting information about operating segments. In the fourth quarter of its 2019 fiscal year (prior year), the Company reorganized into three reportable operating segments, an Adhesives, Sealants and Additives segment, an Industrial Tapes segment and a Corrosion Protection and Waterproofing segment. The segments are distinguished by the nature of the products manufactured and how they are delivered to their respective markets.

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 products. 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. Beginning December 31, 2017, the Adhesives, Sealants and Additives segment includes the acquired operations of Zappa Stewart, within the specialty chemical intermediates product line.

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 cable 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.

Recently Issued Accounting Standards

In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which modifies the measurement approach for credit losses on financial assets measured on an amortized cost basis from an 'incurred loss' method to an 'expected loss' method. In November 2019, the FASB issued ASU 2019-11, “Codification Improvements to Topic 326, Financial Instruments – Credit Losses.” ASU 2019-11 is an accounting pronouncement that amends ASU 2016-13. The ASU 2019-11 amendment provides clarity and improves the codification to ASU 2016-13. The pronouncements are concurrently effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years (effective fiscal 2021). The Company is currently evaluating the effects of this pronouncement on its consolidated financial statements.

57

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share amounts

Recently Adopted Accounting Standards

Fiscal 2020

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” Under the new guidance, lessees are required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: (a) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (b) a right-of-use asset, which represents the lessee’s right to use, or control the use of, a specified asset for the lease term. In July 2018, the FASB issued ASU 2018-11, “Leases (Topic 842) Targeted Improvements.” The updated guidance provided an optional transition method, which allows for the application of the standard as of the adoption date with no restatement of prior period amounts. The Company adopted the standard on September 1, 2019 (start of fiscal 2020) under the optional transition method described above. Consequently, historical financial information was not updated, and the disclosures required under the new standard are not provided for dates and periods prior to September 1, 2019.

The new standard provides several optional practical expedients in transition. The Company has elected to apply the “package of practical expedients” which allows it to not reassess i) whether existing or expired arrangements contain a lease, ii) the lease classification of existing or expired leases, or iii) whether previous initial direct costs would qualify for capitalization under the new lease standard. In preparation for adoption of the standard, the Company enhanced its internal controls to enable the preparation of financial information including the assessment of the impact of the standard. The initial adoption of the ASU resulted in the recognition of additional lease liabilities of $9,644 ($2,071 short-term and $7,573 long-term) and right-of-use assets of $10,200 as of September 1, 2019 on the consolidated balance sheet as it relates to the Company’s operating leases. The new standard did not have a material impact on the Company’s consolidated statement of operations or cash flows.

In February 2018, the FASB issued ASU 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220) - Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” This ASU was issued to address a narrow-scope financial reporting issue that arose as a result of the enactment of the Tax Cuts and Jobs Act (“Tax Reform”) on December 22, 2017. The objective of ASU 2018-02 is to address the tax effects of items within accumulated other comprehensive income (referred to as “stranded tax effects”) that do not reflect the appropriate tax rate enacted in the Tax Reform. As a result, the ASU 2018-02 allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the newly enacted federal corporate income tax rate. The amount of the reclassification would be the difference between the historical corporate income tax rate of 35 percent and the current enacted corporate income tax rate of 21 percent. ASU 2018-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted, including adoption in an interim period. The amendments in this ASU may be applied retrospectively to each period in which the effect of the change in the U.S. Federal corporate income tax rate in the Tax Reform is recognized. Therefore, the Company adopted ASU 2018-02 in the first quarter of the year ending August 31, 2020, and has elected to reclassify the income tax effects of the Tax Reform related to its pension funding from accumulated other comprehensive loss to retained earnings.

Fiscal 2019

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606).” The amended guidance establishes a single comprehensive model for companies to use in accounting for revenue arising from contracts with customers and supersedes most of the existing revenue recognition guidance, including industry-specific guidance.

The amended guidance clarifies that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange

58

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share amounts

for those goods or services. In applying the amended guidance, an entity will (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the contract’s performance obligations; and (5) recognize revenue when (or as) the entity satisfies a performance obligation. ASC 606 was effective for the Company’s interim and annual reporting periods beginning September 1, 2018 (fiscal 2019), and could have been adopted using either a full retrospective or modified retrospective transition method.

The Company adopted the amended guidance and all related amendments using the modified retrospective approach on September 1, 2018. The Company recognized the cumulative effect of initially applying the new revenue standard to all open contracts requiring recognition over time that were not completed on the date of adoption as an adjustment to the opening balance of retained earnings.

At the adoption date, the cumulative impact of revenue that would have been recognized over time was $80. The related adoption impact to retained earnings was $22, net of tax. The impact to net sales and net income as a result of applying ASC 606 was an increase of $67 and $5, respectively, for the year ended August 31, 2019. See Note 26 — “Revenue from Contracts with Customers” for further discussion of the effects of adoption.

In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230).” This ASU provides guidance on the presentation and classification of specific cash flow items to improve consistency within the statement of cash flows. The Company adopted ASU No. 2016-15 on September 1, 2018, and the adoption did not have a material effect on its financial statements and related disclosures.

In January 2017, the FASB issued ASU No. 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business.”  The new guidance dictates that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, it should be treated as an acquisition or disposal of an asset. The Company adopted the ASU on September 1, 2018. The adoption had no material effect on the financial statements and related disclosures in fiscal 2020 and 2019. The effect ASU No. 2017-01 will have on the financial statements and related disclosures of the Company in future periods will be dependent on the nature of potential future acquisitions and divestitures.

In March 2017, the FASB issued ASU No. 2017-07, “Compensation — Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.” This ASU applies to all employers that offer to their employees defined benefit pension plans, other postretirement benefit plans, or other types of benefits accounted for under Topic 715, Compensation — Retirement Benefits. The ASU requires that an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. If a separate line item or items are used to present the other components of net benefit cost, that line item or items must be appropriately described. If a separate line item or items are not used, the line item or items used in the income statement to present the other components of net benefit cost must be disclosed. The ASU also allows only the service cost component to be eligible for capitalization when applicable (e.g., as a cost of internally manufactured inventory or a self-constructed asset). The Company adopted ASU No. 2017-07 on September 1, 2018, which resulted in the reclassification of $654 and $1,065, previously reported in selling, general and administrative expense, to other income (expense) for the years ended August 31, 2018 and 2017 (prior years), respectively.

Fiscal 2018

The Company did not adopt any new accounting standards in fiscal 2018.

59

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share amounts

Note 2—Inventory

Inventory consisted of the following as of August 31, 2020 and 2019:

	August 31,		August 31,
	2020		2019
Raw materials	$	18,993	$	20,325
Work in process		7,761		8,748
Finished goods		12,304		13,281
Total Inventory	$	39,058	$	42,354

Note 3—Property, Plant and Equipment

Property, plant and equipment consisted of the following as of August 31, 2020 and 2019:

	2020		2019
Land and improvements	$	4,997	$	6,079
Buildings		17,992		17,900
Machinery and equipment		51,942		51,934
Leasehold improvements		2,212		1,828
Construction in progress		714		1,315
		77,857		79,056
Accumulated depreciation		(52,283)		(49,730)
Property, plant and equipment, net	$	25,574	$	29,326

Note 4—Goodwill and Intangible Assets

The changes in the carrying value of goodwill, by operating segment, were as follows:

	Adhesives, Sealants and Additives		Industrial Tapes		Corrosion Protection and Waterproofing		Consolidated
Balance at August 31, 2018	$	52,787	$	21,215	$	10,694	$	84,696
Loss on impairment of polyurethane dispersions business		(2,410)		—		—		(2,410)
Foreign currency translation adjustment		(287)		—		(13)		(300)
Balance at August 31, 2019	$	50,090	$	21,215	$	10,681	$	81,986
Foreign currency translation adjustment		397		—		19		416
Balance at August 31, 2020	$	50,487	$	21,215	$	10,700	$	82,402

60

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share amounts

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 has identified a total of three reporting units, corresponding to its three reportable 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, including the anticipated future impact of the coronavirus disease 2019 (COVID-19) pandemic. When testing, fair values of the reporting units and the related implied fair values of their respective goodwill are established using discounted cash flows.

In fiscal 2017, we early adopted Accounting Standards Update (“ASU”) No. 2017-04 “Intangibles — Goodwill and Other Topics (Topic 350): Simplifying the Test for Goodwill Impairment.” When evaluating the potential impairment of goodwill, we first assess a range of qualitative factors, including but not limited to, industry conditions, the competitive environment, changes in the market for our products and services, entity-specific factors such as strategy and changes in key personnel, and the overall financial performance for each of our reporting units relative to historical or projected future operating results. If after completing this assessment, it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying value, we then assess goodwill for impairment by comparing the fair value of the reporting unit to its carrying amount. If the fair value of a reporting unit is less than its carrying value, an impairment loss, limited to the amount of goodwill allocated to that reporting unit, is recorded. Fair values for reporting units are determined based on the income approach (discounted cash flow method).

During the three-month period ended February 28, 2019, the ordering patterns of the polyurethane dispersions reporting unit’s customers, especially those in the automotive industry, combined with a decrease in the reporting unit’s backlog of customer orders believed to be firm as of February 28, 2019, indicated that an impairment in the carrying value of the reporting unit might have occurred. The Company performed an impairment test on the indefinite-lived and long-lived assets related to the polyurethane dispersions reporting unit, now part of the Adhesives, Sealants and Additives operating segment and reporting unit (part of the former Industrial Materials segment during the second fiscal quarter of 2019), in accordance with ASC Topic 350, “Intangibles — Goodwill and Other” and ASC Topic 360, “Disclosure — Impairment or Disposal of Long-Lived Assets.” As a result of impairment testing, which included first testing long-lived assets other than goodwill for impairment under applicable guidance, the Company recorded a charge of $2,410 to loss on impairment of goodwill within the consolidated statement of operations during the quarter ended February 28, 2019. The polyurethane dispersions reporting unit’s fair value was determined based on the income approach (discounted cash flow method).

The Company performs impairment reviews annually each fourth quarter and whenever events or circumstances indicate the carrying value of goodwill may not be recoverable. For the annual fiscal 2020 goodwill impairment test, we performed a qualitative assessment of goodwill impairment and concluded that it was more likely than not that our reporting units' fair values exceeded their carrying values (i.e. indicated no impairment of goodwill). Accordingly, it was not necessary for us to perform the quantitative analysis.

As of August 31, 2020 and 2019, the Company had a total goodwill balance of $82,402 and $81,986, respectively, related to its acquisitions, of which $31,591 and $34,778, respectively, remained deductible for income taxes.

61

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share amounts

Intangible assets subject to amortization consisted of the following as of August 31, 2020 and 2019:

	Weighted Average		Gross Carrying		Accumulated		Net Carrying
	Amortization Period		Value		Amortization		Value
August 31, 2020
Patents and agreements	14.6	years	$	1,760	$	1,705	$	55
Formulas and technology	7.8	years		10,250		9,121		1,129
Trade names	5.8	years		8,575		7,781		794
Customer lists and relationships	9.1	years		98,966		59,744		39,222
			$	119,551	$	78,351	$	41,200
August 31, 2019
Patents and agreements	14.6	years	$	1,760	$	1,693	$	67
Formulas and technology	7.8	years		10,164		7,969		2,195
Trade names	5.8	years		8,503		7,261		1,242
Customer lists and relationships	9.1	years		98,139		48,939		49,200
			$	118,566	$	65,862	$	52,704

Aggregate amortization expense related to intangible assets for the years ended August 31, 2020, 2019 and 2018 was $11,576, $12,445 and $11,807, respectively. As of August 31, 2020 estimated amortization expense for the next five fiscal years is as follows:

Years ending August 31,
2021	11,066
2022	10,036
2023	6,768
2024	5,560
2025	3,961

Note 5—Cash Surrender Value of Life Insurance

The Company recognized cash surrender value of a life insurance policy with the following carrier as of August 31, 2020 and 2019:

	2020		2019
John Hancock	$	4,450	$	4,450
Cash surrender value of life insurance policies	$	4,450	$	4,450

The policy is subject to periodic review. The Company currently intends to maintain the policy through the life or retirement of the insured, and records at the premium paid balance.

62

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share amounts

Note 6—Long-Term Debt

Long-term debt consisted of the following at August 31, 2020 and 2019:

	2020		2019
All-revolving credit facility with a borrowing capacity of $150,000	$	—	$	—
Long-term debt	$	—	$	—

On December 15, 2016, the Company entered an Amended and Restated Credit Agreement (the “Credit Agreement”) with Bank of America, acting as administrative agent, and with participation from Citizens Bank and JPMorgan Chase Bank (collectively with Bank of America, the “Lenders”). The Credit Agreement is initially an all-revolving credit facility with a borrowing capacity of $150,000, which can be increased by an additional $50,000 at the request of the Company and the individual or collective option of any of the Lenders. The Credit Agreement contains customary affirmative and negative covenants that, among other things, restrict our ability to incur additional indebtedness and require certain lender approval for acquisitions by the Company and its subsidiaries over a certain size. It also requires us to maintain certain financial ratios on a consolidated basis, including a consolidated net leverage ratio (as defined in the facility) of no more than 3.25 to 1.00, and a consolidated fixed charge coverage ratio (as defined in the facility) of at least 1.25 to 1.00. We were in compliance with our debt covenants as of August 31, 2020 and 2019. The Credit Agreement is guaranteed by all of Chase Corporation’s direct and indirect domestic subsidiaries, which collectively had a carrying value of $246,096 at August 31, 2020. The Credit Agreement was entered both to refinance our previously existing term loan and revolving line of credit, and to provide for additional liquidity to finance potential acquisitions, working capital, capital expenditures, and for other general corporate purposes.

The applicable interest rate for the revolver portion of the Credit Agreement (the “Revolving Facility”) and any Term Loan (defined below) is based on the effective London Interbank Offered Rate (LIBOR) plus an additional amount in the range of 1.00% to 1.75%, depending on the consolidated net leverage ratio of Chase Corporation and its subsidiaries. At August 31, 2020 and 2019, there was no outstanding principal balance, and therefore no applicable interest rate. The Credit Agreement has a five-year term with interest payments due at the end of the applicable LIBOR period (but in no event less frequently than the three-month anniversary of the commencement of such LIBOR period) and principal payment due at the expiration of the agreement, December 15, 2021. The Company may elect a base rate option for all or a portion of the Revolving Facility, in which case, interest payments shall be due with respect to such portion of the Revolving Facility on the last business day of each quarter.

Subject to certain conditions set forth in the Credit Agreement, the Company may elect to convert all or a portion of the outstanding Revolving Facility into a term loan (each, a “Term Loan”), which shall be payable quarterly in equal installments sufficient to amortize the original principal amount of such Term Loan on a seven year amortization schedule; provided, however, that the final principal repayment installment shall be repaid on December 15, 2021 and in any event shall be in an amount equal to the aggregate principal amount of all Term Loans outstanding on such date. Prepayment is allowed by the Credit Agreement at any time during the term of the agreement, subject to customary notice requirements.

63

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share amounts

In December 2017 (fiscal year 2018), the Company utilized $65,000 of the Credit Agreement to finance the majority of the acquisition cost of Zappa Stewart. See Note 14 to the consolidated financial statements for additional information on this acquisition. The Company paid down $40,000 of the outstanding balance in fiscal 2018, and made additional principal payments totaling $25,000 in fiscal 2019, resulting in an outstanding balance of $0 at August 31, 2020 and 2019.

Note 7—Income Taxes

On December 22, 2017 (fiscal 2018), President Trump signed into law the Tax Cuts and Jobs Act of 2017 (the "Tax Act"). The Tax Act impacted the U.S. statutory Federal tax rate that the Company will use going forward, reducing it from 35% to 21%. As the Company has an August 31 fiscal year-end, the lower corporate income tax rate was phased in, resulting in a U.S. statutory Federal rate of 25.7% for our fiscal year ended August 31, 2018, and a rate of 21% for fiscal 2019 and 2020.

To transition to the reduced U.S. corporate tax rate, we were required to make an adjustment to our net U.S. deferred tax assets. During fiscal 2018, predominantly in the three months ended February 28, 2018 (the second fiscal quarter of 2018), the Company recorded initial provisional adjustments to the U.S. deferred tax assets and liabilities and uncertain tax positions resulting in a net discrete tax expense of $681 recorded to the consolidated statement of operations. This net discrete tax expense recorded in fiscal 2018 is the result of the following: (a) a $379 tax benefit resulting from the remeasurement and reclassification of our then existing deferred tax liability related to unrepatriated foreign earnings to accrued income tax balance (discussed in more detail below); (b) a $917 tax expense for the remeasurement of the remaining net U.S. deferred tax assets in recognition of the new lower Federal rate; and (c) a $143 tax expense recorded as the result of remeasuring the Federal benefit on our uncertain tax positions. During fiscal 2019, no additional transitional adjustments were made related to the adoption of the Tax Act in the quarters ended November 30, 2018, May 31, 2019 and August 31, 2019, and only immaterial adjustments were made in the quarter ended February 28, 2019. During fiscal 2020, no additional transitional adjustments were made.

The Tax Act includes a transition tax or “toll charge,” which is a one-time tax charge on unrepatriated foreign earnings. The calculation of accumulated foreign earnings requires an analysis of each foreign entity’s financial results going back to 1986. During fiscal 2018, the Company recorded a provisional transition tax adjustment associated with its accumulated unrepatriated foreign earnings reducing long-term deferred tax liabilities by $2,298 and increasing short and long-term accrued income taxes by $153 and $1,766, respectively (the short-term payable representing eight percent of the total amount due, the amount payable within the first year as per the Tax Act). The difference between the decrease in the deferred tax liabilities for unrepatriated foreign earnings and the increase in accrued income taxes, $379, was recorded as a discrete tax benefit in fiscal 2018. During fiscal 2019 (prior year), the Company paid the entire long-term and short-term toll charge balances that had been accrued at August 31, 2018.

Under the guidance set forth in the SEC's Staff Accounting Bulletin No. 118 (“SAB 118”), the Company may record provisional amounts for the impact of the Tax Act. For the second quarter of fiscal 2018, the Company made a provisional and reasonable estimate of the effects of the Tax Act on its existing deferred tax balances, including a provisional adjustment for the toll charge, and made provisional adjustments to these initially recorded amounts in the third and fourth quarters of fiscal 2018. The Company made complete and final adjustments during the quarter ended February 28, 2019 (the second quarter of fiscal 2019), which were not material in nature.

64

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share amounts

In fiscal 2019, the Company began recognizing an additional component of total Federal tax expense, the tax on Global Intangible Low-Taxed Income (“GILTI”) provision of the Tax Act, which became applicable to the Company in fiscal 2019. The Company elected to account for GILTI as a period cost, and therefore included GILTI expense in the effective tax rate calculation. This provision did not have a material effect on the effective tax rate for the years ended August 31, 2020 and 2019.

The Company concluded that the Base Erosion and Anti Abuse Tax (“BEAT”) provision of the Tax Act, which also became applicable to the Company in fiscal 2019, had no effect on our effective tax rate for fiscal 2019 or 2020. Additionally, the Company has deferred the application of Foreign-Derived Intangible Income (“FDII”) for 2019 and 2020, in anticipation of further guidance and the establishment of industry standards by the U.S. Treasury Department and trade associations.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted in response to the COVID-19 pandemic. The CARES Act, among other things, included a technical correction to the Tax Act which will allow accelerated deductions for qualified improvement property. The Company is currently evaluating the impact of the CARES Act, but at present does not expect that the qualified improvement property correction nor other provisions of the CARES Act would result in a material tax benefit to us in future periods. The CARES Act had no material effect on the effective tax rate for fiscal 2020.

Domestic and foreign pre-tax income for the years ended August 31, 2020, 2019 and 2018 was:

	Year Ended August 31,
	2020		2019		2018
United States	$	42,027	$	37,088	$	48,962
Foreign		3,293		6,465		8,003
	$	45,320	$	43,553	$	56,965

The provision (benefit) for income taxes for the years ended August 31, 2020, 2019 and 2018 was:

	Year Ended August 31,
	2020		2019		2018
Current:
Federal	$	9,157	$	9,880	$	12,872
State		1,813		1,699		1,662
Foreign		962		1,575		1,761
Total current income tax provision		11,932		13,154		16,295
Deferred:
Federal		(520)		(1,699)		(2,214)
State		(184)		(529)		(263)
Foreign		(65)		(84)		4
Total deferred income tax benefit		(769)		(2,312)		(2,473)
Total income tax provision	$	11,163	$	10,842	$	13,822

65

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share amounts

The provision (benefit) for income taxes differs from the amount computed by applying the Federal statutory income tax rate to income before income taxes. The Company’s combined federal, state and foreign effective tax rate as a percentage of income before taxes for fiscal 2020, 2019 and 2018, net of offsets generated by federal, state and foreign tax benefits, was 24.6%, 24.9% and 24.3%, respectively. The following is a reconciliation of the effective income tax rate with the U.S. Federal statutory income tax rate for the years ended August 31, 2020, 2019 and 2018:

	Year Ended August 31,
	2020		2019		2018
Federal statutory rates	21.0	%	21.0	%	25.7	%
Adjustment resulting from the tax effect of:
State and local taxes, net of federal benefit	3.0	%	2.1	%	1.9	%
Domestic production deduction	0.0	%	0.0	%	(1.6)	%
Foreign tax rate differential	0.0	%	0.1	%	(0.3)	%
Adjustment to uncertain tax position	(1.1)	%	1.0	%	1.1	%
Transaction costs not deductible	0.5	%	0.0	%	0.0	%
Research credit generated	(0.1)	%	(0.3)	%	(0.2)	%
Stock Compensation	(0.3)	%	(0.4)	%	(3.4)	%
Permanent items	0.9	%	1.1	%	0.9	%
Tax effect of undistributed earnings	0.3	%	0.6	%	(0.8)	%
Other	0.4	%	(0.4)	%	(0.8)	%
Change in valuation allowance	0.0	%	0.1	%	0.1	%
Deferred income tax remeasurement	0.0	%	0.0	%	1.7	%
Effective income tax rate	24.6	%	24.9	%	24.3	%

66

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share amounts

The following table summarizes the tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities:

	As of August 31,
	2020		2019
Deferred tax assets:
Allowance for doubtful accounts	$	309	$	432
Inventories		994		1,193
Accruals		504		541
Warranty reserve		14		22
Pension accrual		2,749		2,623
Deferred compensation		391		300
Foreign currency loss on previously taxed income		96		96
Loan finance costs		7		34
Restricted stock grants		823		456
Non-qualified stock options		211		258
Right-of-use asset		2,354		—
Foreign net operating loss, net of valuation allowance		247		—
Other		572		353
		9,271		6,308
Deferred tax liabilities:
Prepaid liabilities		(16)		(8)
Lease liability		(2,693)		—
Depreciation and amortization		(1,633)		(2,496)
		(4,342)		(2,504)
Net deferred tax assets (liabilities)	$	4,929	$	3,804

As of August 31, 2020, the Company had $727 of gross foreign operating loss carry forwardsto offset future taxable income, the net balance of which was included within deferred income taxes. The net operating losses will begin to expire in fiscal year ending August 31, 2027.

Chase Corporation is required to apply a valuation allowance to reduce the deferred tax assets reported if based on the weight of the evidence it is more likely than not that some portion or all of the deferred tax assets will not be realized. As of August 31, 2020, the Company determined that a valuation allowance was not needed.

Consistent with the Company’s practice prior to the passage of the Tax Act, we do not currently take the position that undistributed foreign subsidiaries’ earnings are considered to be permanently reinvested.

67

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share amounts

A summary of the Company’s adjustments to its uncertain tax positions, included within long-term accrued income taxes on the consolidated balance sheet, in fiscal years ended August 31, 2020, 2019 and 2018 are as follows:

	2020		2019		2018
Balance, at beginning of the year	$	2,324	$	1,889	$	1,257
Increase for tax positions related to the current year		101		55		47
(Decrease) increase for tax positions related to prior years		(609)		300		595
Increase for interest and penalties		125		106		71
Decrease for lapses of statute of limitations		—		(26)		(81)
Balance, at end of year	$	1,941	$	2,324	$	1,889

The unrecognized tax benefits mentioned above include an aggregate of $1,002 of accrued interest and penalty balances related to uncertain tax positions. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. An increase in accrued interest and penalty charges of approximately $125, net of Federal tax expense, was recorded as a tax expense during the current fiscal year. The Company does not anticipate that its accrual for uncertain tax positions will change by a material amount over the next twelve-month period, as it does not expect to settle any potential disputed items with the appropriate taxing authorities nor does it expect the statute of limitations to expire for any material items.

The Company is subject to U.S. Federal income tax, as well as to income tax of multiple state, local and foreign tax jurisdictions. The statute of limitations for all material U.S. Federal, state, and local tax filings remains open for fiscal years subsequent to 2016. For foreign jurisdictions, the statute of limitations remains open in the U.K. for fiscal years subsequent to 2016 and in France for fiscal years subsequent to 2019.

Note 8—Leases

Effective September 1, 2019 (the start of fiscal 2020), the Company adopted ASU 2016-02, Leases (Topic 842), using the modified retrospective approach and utilizing the effective date as its date of initial application. As a result, prior periods are presented in accordance with the previous guidance in ASC 840, Leases (“ASC 840”). The Company has elected to apply the ‘package of practical expedients’ which allows it to not reassess i) whether existing or expired arrangements contain a lease, ii) the lease classification of existing or expired leases, or iii) whether previous initial direct costs would qualify for capitalization under the new lease standard.

At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present in the arrangement. Leases with a term greater than one year are recognized on the balance sheet as right-of-use (ROU) assets and short-term and long-term lease liabilities, as applicable. The Company does not have any financing leases that are material in nature.

Operating lease liabilities and their corresponding right-of-use assets are initially recorded based on the present value of lease payments over the expected remaining lease term. The interest rate implicit in lease contracts is typically not readily determinable. As a result, the Company utilizes its incremental borrowing rate to discount lease payments, which reflects the fixed rate at which the Company believes it could borrow on a collateralized basis the amount of the lease payments in the same currency, for a similar term, in a similar economic environment.

The Company has elected not to recognize leases with an original term of one year or less on the balance sheet. The Company typically only includes an initial lease term in its assessment of a lease arrangement. Options to renew a lease are not included in the Company’s assessment unless there is reasonable certainty that the Company will renew.

68

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share amounts

The following table presents the right-of-use asset and short-term and long-term lease liabilities amounts recorded on the consolidated balance sheet as of August 31, 2020:

	August 31,
	2020
Assets
Operating lease right-of-use asset	$	8,821
Liabilities
Current (accrued expense)	$	1,865
Operating lease long-term liabilities		6,395
Total lease liability	$	8,260

69

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share amounts

Lease cost

The components of lease costs for the year ended August 31, 2020 are as follows:

	Year Ended
	August 31, 2020
Operating lease cost (a)	$	3,783

(a) Includes short-term leases and variable lease costs (e.g. common area maintenance), which are immaterial.

Maturity of lease liability

The maturity of the Company's lease liabilities on August 31, 2020 was as follows:

	Future Operating
Year ending August 31,	Lease Payments
2021	$	2,085
2022		1,500
2023		1,346
2024		1,360
2025 and thereafter		2,687
Less: Interest		(718)
Present value of lease liabilities	$	8,260

The weighted average remaining lease term and discount rates are as follows:

	August 31,
	2020
Lease Term and Discount Rate
Weighted average remaining lease term (years)
Operating leases		5.5
Weighted average discount rate (percentage)
Operating leases		3.1	%

Other Information

Supplemental cash flow information related to leases is as follows:

	Year Ended
	August 31, 2020
Operating cash outflows from operating leases	$	2,444
Total cash paid for amounts included in the measurement of lease liabilities	$	2,444

70

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share amounts

Minimum lease payments under operating leases prior to adoption of ASU 2016-02 were as follows:

	Future Operating
Year ending August 31,	Lease Payments
2020	$	2,468
2021		2,059
2022		1,371
2023		1,187
2024		1,200
2025 and thereafter		2,608
Total future minimum lease payments	$	10,893

Total rental expense for all operating leases amounted to $3,783, $3,734 and $3,114 for the years ended August 31, 2020, 2019 and 2018, respectively.

Note 9—Benefits and Pension Plans

401(k) Plans

The Company has a defined contribution plan adopted pursuant to section 401(k) of the Internal Revenue Code of 1986 (the “Chase 401(k) Plan”). Any qualified employee who has attained age 21 and has been employed by the Company for at least six months may contribute a portion of his or her salary to the plan and the Company will match 100% of the first one percent of salary contributed and 50% thereafter, up to an amount equal to three and one-half percent of such employee’s annual salary.

Through our wholly-owned subsidiary NEPTCO, the Company had two additional 401(k) savings plans, one for union employees and one for nonunion employees. Under these plans, substantially all employees of NEPTCO were eligible to participate by making pre-tax contributions to these plans. Participants could elect to defer between 1% and 10% of their annual compensation. The Company could contribute $0.75 for each $1.00 of participant deferrals up to 6% of the nonunion participant’s compensation. The Company could match union employee contributions by $0.50 for each $1.00 of participant deferrals up to 6% of the participant’s compensation. The nonunion plan was merged into the Chase 401(k) Plan effective January 1, 2018 and the union plan was merged into the Chase 401(k) Plan effective November 15, 2018.

The Company’s contribution expense for all 401(k) plans was $852, $787 and $702 for the years ended August 31, 2020, 2019 and 2018, respectively.

Non-Qualified Deferred Savings Plans

The Company has a non-qualified deferred savings plan covering the Board of Directors and a separate plan covering selected employees. Participants may elect to defer a portion of their compensation for future payment. The plans are funded by trusteed assets that are restricted to the payment of deferred compensation or satisfaction of the Company’s general creditors. The Company’s liability under the plans was $1,629 and $1,275 on August 31, 2020 and 2019, respectively.

71

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share amounts

Pension Plans

The Company has noncontributory defined benefit pension plans covering employees of certain divisions of the Company. The Company has a funded, qualified plan (“Qualified Plan”) and an unfunded supplemental plan (“Supplemental Plan”) designed to maintain benefits for certain employees at the plan formula level. The plans provide for pension benefits determined by a participant’s years of service and final average compensation. The Qualified Plan assets consist of separate pooled investment accounts with a trust company. The measurement date for the plans is August 31, 2020.

Effective December 1, 2008, a “soft freeze” in the Qualified Plan was adopted whereby no new employees hired would be admitted to the Qualified Plan, with the exception of employees who were members of the International Association of Machinists and Aerospace Workers Union whose contract was amended in June 2012 to include a soft freeze with an effective date of July 15, 2012. All eligible participants who were admitted to the plan prior to the applicable soft freeze dates continue to accrue benefits as detailed in the plan agreements.

Through our wholly-owned subsidiary NEPTCO, the Company had a third defined benefit pension plan (“NEPTCO Pension Plan”) covering our union employees at our Pawtucket facility. This plan was frozen effective October 31, 2006, and as a result, no new participants could enter the plan and the benefits of current participants were frozen as of that date. The benefits were based on years of service and the employee’s average compensation during the earlier of five years before retirement, or October 31, 2006. The NEPTCO Pension Plan assets consisted of separate pooled investment accounts with a trust company. The measurement date for the NEPTCO Pension Plan was historically the same as the Company’s fiscal year end.

In August 2019, the Board of Directors approved a plan to terminate the NEPTCO Pension Plan. The Company established November 15, 2019 as the plan termination date and during fiscal 2020 performed the administrative actions required to carry out the termination. In relation to the Company’s intention to terminate the plan in less than one year following the prior year balance sheet date, the liability associated with the NEPTCO Pension Plan was classified as a current liability, within accrued payroll and other compensation, on the consolidated balance sheet as of August 31, 2019 (prior year). No balance related to the NEPTCO defined benefit plan was carried on the Company’s consolidated balance sheet as of August 31, 2020.

72

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share amounts

The following tables reflect the status of the Company’s pension plans for the years ended August 31, 2020 2019 and 2018:

	Year Ended August 31,
	2020		2019		2018
Change in benefit obligation
Projected benefit obligation at beginning of year	$	20,087	$	21,860	$	22,673
Service cost		295		283		283
Interest cost		451		696		629
Actuarial (gain) loss		2,253		995		17
Settlements		—		—		—
Benefits paid		(2,423)		(3,747)		(1,742)
Projected benefit obligation at end of year	$	20,663	$	20,087	$	21,860
Change in plan assets
Fair value of plan assets at beginning of year	$	7,859	$	9,855	$	9,003
Actual return on plan assets		868		181		509
Employer contribution		1,864		1,570		2,085
Settlements		—		—		—
Benefits paid		(2,423)		(3,747)		(1,742)
Fair value of plan assets at end of year	$	8,168	$	7,859	$	9,855
Funded status at end of year	$	(12,495)	$	(12,228)	$	(12,005)

	Year Ended August 31,
	2020		2019		2018
Amounts recognized in consolidated balance sheets
Noncurrent assets	$	—	$	—	$	301
Current liabilities		(1,565)		(1,743)		(1,570)
Noncurrent liabilities		(10,930)		(10,485)		(10,736)
Net amount recognized in consolidated balance sheets	$	(12,495)	$	(12,228)	$	(12,005)
Actuarial present value of benefit obligation and funded status
Accumulated benefit obligations	$	18,307	$	18,244	$	20,075
Projected benefit obligations	$	20,663	$	20,087	$	21,858
Plan assets at fair value	$	8,168	$	7,859	$	9,855
Amounts recognized in accumulated other comprehensive income
Prior service cost	$	44	$	47	$	54
Net actuarial loss		10,595		9,638		9,377
Adjustment to pre-tax accumulated other comprehensive income	$	10,639	$	9,685	$	9,431

73

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share amounts

	Year Ended August 31,
	2020		2019		2018
Other changes in plan assets and benefit obligations recognized in other comprehensive income
Net (gain)/loss	$	711	$	1,863	$	(704)
Amortization of loss		(664)		(472)		(484)
Supplemental plan assumption change		1,065		(620)		676
Amortization of prior service cost		(3)		(3)		(3)
Effect of settlement on accumulated other comprehensive income		(155)		(511)		—
Total recognized in other comprehensive income		954		257		(515)
Net periodic pension cost		1,178		1,537		937
Total recognized in net periodic pension cost and other comprehensive income	$	2,132	$	1,794	$	422
Estimated amounts that will be amortized from accumulated comprehensive income over the next fiscal year
Prior service cost	$	3	$	3	$	3
Net actuarial loss		656		500		475

Prior service cost arose from the amendment of the plan’s benefit schedules to comply with the Tax Reform Act of 1986 and adoption of the unfunded supplemental pension plan.

74

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share amounts

Components of net periodic pension cost for the fiscal years ended August 31, 2020, 2019 and 2018 included the following:

	2020		2019		2018
Components of net periodic benefit cost
Service cost	$	295	$	283	$	283
Interest cost		451		696		629
Expected return on plan assets		(390)		(428)		(462)
Amortization of prior service cost		3		3		3
Amortization of accumulated loss		664		472		484
Curtailment and settlement loss		155		511		—
Net periodic benefit cost	$	1,178	$	1,537	$	937

Weighted average assumptions used to determine benefit obligations as of August 31, 2020, 2019 and 2018 are as follows:

	2020		2019		2018
Discount rate
Qualified plan	1.92	%	2.58	%	3.80	%
Supplemental plan	1.65	%	2.37	%	3.57	%
NEPTCO plan	—	%	2.29	%	3.59	%
Rate of compensation increase
Qualified and Supplemental plan	3.50	%	3.50	%	3.50	%
NEPTCO plan	—	%	—	%	—	%

Weighted average assumptions used to determine net periodic benefit cost for the years ended August 31, 2020, 2019 and 2018 are as follows:

	2020		2019		2018
Discount rate
Qualified plan	2.58	%	3.80	%	3.30	%
Supplemental plan	2.37	%	3.57	%	2.73	%
NEPTCO plan	2.29	%	3.59	%	2.95	%
Expected long-term return on plan assets
Qualified plan	5.60	%	5.40	%	5.40	%
Supplemental plan	—	%	—	%	—	%
NEPTCO plan	5.60	%	5.40	%	5.20	%
Rate of compensation increase
Qualified and Supplemental plan	3.50	%	3.50	%	3.50	%
NEPTCO plan	—	%	—	%	—	%

It is the Company’s policy to evaluate, on an annual basis, the discount rate used to determine the projected benefit obligation to approximate rates on high quality, long-term obligations. The Moody’s Corporate Aa Bond index has generally been used as a benchmark for this purpose, with adjustments made if the duration of the index differed from that of the plan. The discount rate is determined by matching the expected payouts from the respective plans to the spot rates inherent in the FTSE Pension Discount Curve (formerly Citigroup Pension Discount Curve). A single rate is then developed, that when applied to the expected cash flows, results in the same present value as determined using the various spot rates. The Company believes that this approach produces the most appropriate approximation of the plan liability.

75

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share amounts

The Company estimates that each 100-basis point reduction in the discount rate would result in additional (decreased) net periodic pension cost, the Company’s primary pension obligation, of approximately $41 for the Qualified Plan and ($57) for the Supplemental Plan. For the current fiscal year, the NEPTCO Pension Plan expense is insignificant so sensitivity disclosure is not presented. The expected return on plan assets is derived from a periodic study of long-term historical rates of return on the various asset classes included in the Company’s targeted pension plan asset allocation. The Company estimates that each 100-basis point reduction in the expected return on plan assets would result in additional net periodic pension cost of approximately $68 for the Qualified Plan. No rate of return is assumed for the Supplemental Plan since that plan is currently not funded. The rate of compensation increase is also evaluated and is adjusted by the Company, if necessary, periodically.

Qualified Plan Assets

The investment policy for the Qualified Plan is based on ERISA standards for prudent investing. The fundamental goal underlying the investment policy is to ensure that the assets of the plans are invested in a prudent manner to meet the obligations of the plans as these obligations come due. The primary investment objectives include providing a total return which will promote the goal of benefit security by attaining an appropriate ratio of plan assets to plan obligations, to provide for real asset growth while also tracking plan obligations, to diversify investments across and within asset classes, to reduce the impact of losses in single investments, and to follow investment practices that comply with applicable laws and regulations.

The primary policy objectives will be met by investing assets to achieve a reasonable tradeoff between return and risk relative to the plan’s obligations. This includes investing a portion of the assets in funds selected in part to hedge the interest rate sensitivity to plan obligations.

The Qualified Plan assets are invested in a diversified mix of both domestic and foreign equity investments and fixed income securities. Asset manager performance is reviewed at least annually and benchmarked against the peer universe for the given investment style. The Company’s expected return for the Qualified Plan is 5.25%. To determine the expected long-term rate of return on the assets for the Qualified Plan, the Company considered the historical and expected return on the plan assets, as well as the current and expected allocation of the plan assets.

Asset allocation is monitored on an ongoing basis relative to the established asset class targets. The interaction between plan assets and benefit obligations is periodically studied to assist in the establishment of strategic asset allocation targets. The investment policy permits variances from the targets within certain parameters. Asset rebalancing occurs when the underlying asset class allocations move outside these parameters, at which time the asset allocation is rebalanced back to the policy target weight.

The Qualified Plan has the following target allocation and weighted average asset allocations as of August 31, 2020, 2019 and 2018:

	Target
	Allocation		Percentage of Plan Assets as of August 31,
Asset Category	Range		2020		2019		2018
Equity securities	10-80	%	49	%	44	%	46	%
Debt securities	20-70	%	51	%	56	%	54	%
Other	0-100	%	—	%	—	%	—	%
Total	100	%	100	%	100	%	100	%

76

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share amounts

NEPTCO Pension Plan Assets

Prior to the NEPTCO Pensions Plan’s termination and full payout in fiscal 2020, the investment policy for the NEPTCO Pension Plan was based on ERISA standards for prudent investing. The fundamental goal underlying the investment policy was to ensure that the assets of the plans were invested in a prudent manner to meet the obligations of the plan as these obligations come due. The primary investment objectives included maximization of return within reasonable and prudent levels of risk, provision of returns comparable to returns for similar investment options, provision of exposure to a wide range of investment opportunities in various asset classes and vehicles, control of administrative and management costs, and provision of appropriate diversification within investment vehicles.

The primary policy objectives were met by investing assets to achieve a reasonable tradeoff between return and risk relative to the plan’s obligations. This included investing a portion of the assets in funds selected in part to hedge the interest rate sensitivity to plan obligations.

The NEPTCO Pension Plan assets were invested in a diversified mix of fixed income, and both domestic and foreign equity investments. The ongoing monitoring of investments was a regular and disciplined process and confirmed that the criteria remain satisfied. The process of monitoring investment performance relative to specified guidelines was consistently applied.

Historically, to determine the expected long-term rate of return on the assets for the NEPTCO Pension Plan, the Company considered the historical and expected return on the plan assets, as well as the current and expected allocation of the plan assets.

Given the plan’s termination and full payout in 2020, the plan no longer holds assets as of August 31, 2020. The NEPTCO Pension Plan had the following target allocation and weighted average asset allocations as of August 31, 2020, 2019 and 2018:

	Target
	Allocation		Percentage of Plan Assets as of August 31,
Asset Category	Range		2020		2019		2018
Equity securities	10-80	%	—	%	44	%	46	%
Debt securities	20-70	%	—	%	56	%	54	%
Other	0-100	%	—	%	—	%	—	%
Total	100	%	—	%	100	%	100	%

77

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share amounts

Fair Market Value of Pension Plan Assets

The Company is required to categorize pension plan assets using 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 following table presents the Company’s pension plan assets at August 31, 2020 and 2019 by asset category:

			Fair value measurements at								Fair value measurements at
			August 31, 2020								August 31, 2019
					Significant								Significant
			Quoted prices		other		Significant				Quoted prices		other		Significant
			in active		observable		unobservable				in active		observable		unobservable
	August 31,		markets		inputs		inputs		August 31,		markets		inputs		inputs
	2020		(Level 1)		(Level 2)		(Level 3)		2019		(Level 1)		(Level 2)		(Level 3)
Asset Category
Equity securities	$	3,986	$	3,986	$	—	$	—	$	3,474	$	3,474	$	—	$	—
Debt securities		4,182		4,182		—		—		4,385		4,385		—		—
Total	$	8,168	$	8,168	$	—	$	—	$	7,859	$	7,859	$	—	$	—

Level 1 Assets: The fair values of the common stocks, corporate bonds and U.S. Government securities included in this tier are based on the closing price reported on the active market where the individual securities are traded.

Estimated Future Benefit Payments

The following pension benefit payments (which include expected future service) are assumed to be paid in each of the following fiscal years based on the participants’ normal retirement age, and giving consideration to the termination of the NEPTCO Pension plan:

Year ending August 31,	Pension Benefits
2021	$	2,996
2022		1,759
2023		2,507
2024		1,948
2025		1,788
2026-2030	$	5,393

The Company contributed $1,864, $1,570 and $2,085 to fund its obligations under the pension plans for the years ended August 31, 2020, 2019 and 2018, respectively, including final cash outlays related to the termination of the NEPTCO plan in fiscal 2020. The Company plans to make the necessary contributions during fiscal 2021 to ensure its pension plans continue to be adequately funded given the current market conditions and does not anticipate a material change from amounts contributed during the current fiscal year.

78

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share amounts

Note 10—Stockholders’ Equity

2013 Equity Incentive Plan

In October 2012, the Company adopted, and the stockholders subsequently approved, the 2013 Equity Incentive Plan (the “2013 Plan”). The 2013 Plan permits the grant of restricted stock, stock options, deferred stock, stock payments or other awards to employees, participating officers, directors, consultants and advisors who are linked directly to increases in shareholder value. The aggregate number of shares available for grant under the 2013 Plan was initially 1,200,000. Additional shares may become available in connection with share splits, share dividends or similar transactions. As of August 31, 2020, 949,398 shares remained available for future grant under the 2013 Plan.

2005 Incentive Plan

In November 2005, the Company adopted, and the stockholders subsequently approved, the 2005 Incentive Plan (the “2005 Plan”). The 2005 Plan permits the grant of restricted stock, stock options, deferred stock, stock payments or other awards to employees, participating officers, directors, consultants and advisors who are linked directly to increases in shareholder value. The aggregate number of shares available for grant under the 2005 Plan was initially 1,000,000. The Company is no longer granting equity awards under the 2005 Plan. Options to purchase 39,473 shares of common stock remained outstanding under the 2005 as of August 31, 2020.

Restricted Stock

Employees and Executive Management

During the third quarter of fiscal 2015, 16,000 restricted shares were issued to non-executive members of management; 15,000 with a vesting date of April 16, 2020 and 1,000 with a vesting date of January 31, 2018. Compensation expense was being recognized on a ratable basis over the vesting period.

In August 2015, the Board of Directors of the Company approved the fiscal year 2016 Long Term Incentive Plan (“LTIP”) for the executive officers and other members of management. The 2016 LTIP was an equity-based plan with a grant date of September 1, 2015. In addition to the stock option component described below, the plan contained the following restricted stock components: (a) a performance and service-based restricted stock grant of 6,962 shares in the aggregate, subject to adjustment based on fiscal 2016 results, with a vesting date of August 31, 2018 for which compensation expense was recognized on a ratable basis over the vesting period based on quarterly probability assessments; and (b) a time-based restricted stock grant of 7,683 shares in the aggregate, with a vesting date of August 31, 2018, for which compensation expense was recognized on a ratable basis over the vesting period.

Based on the fiscal year 2016 financial results, 6,277 additional shares of restricted stock (total of 13,239 shares) were earned and granted subsequent to the end of fiscal year 2016 in accordance with the performance measurement criteria. No further performance-based measurements apply to this award.

During the first quarter of fiscal 2016, an additional grant of 5,000 restricted shares was made to a non-executive member of management with a vesting date of October 20, 2020. Compensation expense is being recognized on a ratable basis over the vesting period.

In August 2016, the Board of Directors of the Company approved the fiscal year 2017 LTIP for the executive officers and other members of management. The 2017 LTIP was an equity-based plan with a grant date of September 1, 2016. In addition to the stock option component described below, the plan contained the following restricted stock components: (a) a performance and service-based restricted stock grant of 5,399 shares in the aggregate, subject to adjustment based on fiscal 2017 results, with a vesting date of August 31, 2019, for which compensation expense was

79

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share amounts

recognized on a ratable basis over the vesting period based on quarterly probability assessments; and (b) a time-based restricted stock grant of 5,367 shares in the aggregate, with a vesting date of August 31, 2019, for which compensation expense was recognized on a ratable basis over the vesting period.

Based on the fiscal year 2017 financial results, 5,399 additional shares of restricted stock (total of 10,798 shares) were earned and granted subsequent to the end of fiscal year 2017 in accordance with the performance measurement criteria. No further performance-based measurements apply to this award.

In August 2016, the Board of Directors of the Company approved equity retention agreements with certain executive officers. The equity-based retention agreements had a grant date of September 1, 2016. In addition to the stock option component described below, the equity retention agreements contain a time-based restricted stock grant of 16,312 shares in the aggregate, with 7,768 shares having a vesting date of August 31, 2019, and 8,544 shares initially having a vesting date of August 31, 2021. The latter award was amended in August 2017 to vest in five equal annual installments over the five-year period following the grant date. Compensation expense is being recognized on a ratable basis over the vesting period.

During the first quarter of fiscal 2017, additional grants totaling 8,805 shares of restricted stock were issued to non-executive members of management with a vesting date of August 31, 2021. Compensation expense is being recognized on a ratable basis over the vesting period.

In August 2017, the Board of Directors of the Company approved the fiscal year 2018 LTIP for the executive officers and other members of management. The 2018 LTIP was an equity-based plan with a grant date of September 1, 2017. In addition to the stock option component described below, the plan contained the following restricted stock components: (a) a performance and service-based restricted stock grant of 4,249 shares in the aggregate, subject to adjustment based on fiscal 2018 results, with a vesting date of August 31, 2020, for which compensation expense was recognized on a ratable basis over the vesting period based on quarterly probability assessments; and (b) a time-based restricted stock grant of 3,473 shares in the aggregate, with a vesting date of August 31, 2020. Compensation expense was recognized on a ratable basis over the vesting period.

Based on the fiscal year 2018 financial results, 572 additional shares of restricted stock (total of 4,821 shares) were earned and granted subsequent to the end of fiscal year 2018 in accordance with the performance measurement criteria. No further performance-based measurements apply to this award.

During the third quarter of fiscal 2018, an additional grant totaling 192 shares of restricted stock was issued to a non-executive member of management with a vesting date of August 31, 2020. Compensation expense was recognized on a ratable basis over the vesting period.

During the fourth quarter of fiscal 2018, an additional grant totaling 609 shares of restricted stock was issued to an executive member of management with a vesting date of August 20, 2019. Compensation expense was recognized on a ratable basis over the vesting period.

In August 2018, the Board of Directors of the Company approved the fiscal year 2019 LTIP for the executive officers and other members of management. The 2019 LTIP is an equity-based plan with a grant date of September 1, 2018. In addition to the stock option component described below, the plan contains the following restricted stock components: (a) a performance and service-based restricted stock grant of 3,541 shares in the aggregate, subject to adjustment based on fiscal 2019 results, with a vesting date of August 31, 2021, for which compensation expense is being recognized on a ratable basis over the vesting period based on quarterly probability assessments; and (b) a time-based restricted stock grant of 3,068 shares in the aggregate, with a vesting date of August 31, 2021. Compensation expense is being recognized on a ratable basis over the vesting period.

80

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share amounts

In September 2018, restricted stock in the amount of 2,472 shares related to a first quarter of fiscal 2017 grant was forfeited in conjunction with the termination of employment of a non-executive member of management of the Company.

During the fourth quarter of fiscal 2019, an additional grant of restricted stock was made related to the 2019 LTIP grant in conjunction with an amendment to the equity compensation program for a promoted employee. The additional grant contains the following restricted stock components: (a) a performance and service-based restricted stock grant of 211 shares in the aggregate, subject to adjustment based on fiscal 2019 results, with a vesting date of August 31, 2021, for which compensation expense is being recognized on a ratable basis over the vesting period based on quarterly probability assessments; and (b) a time-based restricted stock grant of 132 shares in the aggregate, with a vesting date of August 31, 2021, for which compensation expense is being recognized on a ratable basis over the vesting period.

In August 2019, restricted stock in the amount of 833 shares related to the 2019 LTIP grant was forfeited in conjunction with an amendment in the equity compensation agreement of an employee.

Based on the fiscal year 2019 financial results, 2,694 shares of restricted stock already granted were forfeited subsequent to the end of fiscal year 2019 in accordance with the performance measurement criteria. No further performance-based measurements apply to this award. Compensation expense relating to the remaining portion is being recognized on a ratable basis over the vesting period.

In August 2019, the Board of Directors of the Company approved the fiscal year 2020 LTIP for the executive officers and other members of management. The 2020 LTIP is an equity-based plan with a grant date of September 1, 2019 and contains the following equity components: (a) a performance and service-based restricted stock grant of 3,697 shares in the aggregate, subject to adjustment based on fiscal 2020 results, with a vesting date of August 31, 2022. Compensation expense is recognized on a ratable basis over the vesting period based on quarterly probability assessments; and (b) a time-based restricted stock grant of 3,689 shares in the aggregate, with a vesting date of August 31, 2022. Compensation expense is being recognized on a ratable basis over the vesting period.

In August 2019, the Board of Directors of the Company approved equity retention agreements with certain executive officers. The equity-based retention agreements have a grant date of September 1, 2019 and contained time-based restricted stock grants of 15,945 shares in the aggregate, and have a vesting date of August 31, 2022. Compensation expense is being recognized on a ratable basis over the vesting period.

During the second quarter of fiscal 2020, additional grants of 432, 616 and 18,720 shares of restricted stock (total of 19,768) were issued to non-executive members of management with vesting dates of December 31, 2021, 2022 and 2024, respectively. Compensation expense is being recognized on a ratable basis over the vesting period.

In May 2020, restricted stock in the amount of 432 shares related to a second quarter of fiscal 2020 grant was forfeited in conjunction with the termination of employment of a non-executive member of management of the Company.

During the fourth quarter of fiscal 2020, two additional grants totaling 481 shares and 261 shares of restricted stock were issued to two non-executive members of management, with vesting dates of July 27, 2021 and June 15, 2021, respectively. Compensation expense is being recognized on a ratable basis over the vesting period.

81

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share amounts

Non-employee Board of Directors

In February 2017, as part of their standard compensation for board service, non-employee members of the Board received a total grant of 2,407 shares of restricted stock for service for the period from January 31, 2017 through January 31, 2018. The shares of restricted stock vested at the conclusion of this service period. Compensation was recognized on a ratable basis over the twelve-month vesting period.

In February 2018, as part of their standard compensation for board service, non-employee members of the Board received a total grant of 2,779 shares of restricted stock for service for the period from January 31, 2018 through January 31, 2019. The shares of restricted stock vested at the conclusion of this service period. Compensation was recognized on a ratable basis over the twelve-month vesting period.

In February 2019, as part of their standard compensation for board service, non-employee members of the Board received a total grant of 4,599 shares of restricted stock for service for the period from January 31, 2019 through January 31, 2020. The shares of restricted stock will vest at the conclusion of this service period. Compensation was recognized on a ratable basis over the twelve-month vesting period.

In February 2020, as part of their standard compensation for board service, non-employee members of the Board received a total grant of 4,906 shares of restricted stock for service for the period from January 31, 2020 through January 31, 2021. The shares of restricted stock will vest at the conclusion of this service period. Compensation is being recognized on a ratable basis over the twelve-month vesting period.

A summary of the transactions of the Company’s restricted stock plans for the years ended August 31, 2020, 2019 and 2018 is presented below:

	Non Employee Directors	Weighted Average Grant Date Fair Value		Officers and Employees	Weighted Average Grant Date Fair Value
Unvested restricted stock at August 31, 2017	2,407	$	91.05	73,972	$	51.56
Granted	2,779	$	101.05	13,922	$	83.65
Vested	(2,407)	$	91.05	(22,315)	$	41.35
Forfeited or cancelled	—			—
Unvested restricted stock at August 31, 2018	2,779	$	101.05	65,579	$	61.85
Granted	4,599	$	101.92	7,524	$	121.64
Vested	(2,779)	$	101.05	(25,443)	$	65.79
Forfeited or cancelled	—			(3,305)	$	79.39
Unvested restricted stock at August 31, 2019	4,599	$	101.92	44,355	$	67.18
Granted	4,906	$	95.59	43,841	$	108.47
Vested	(4,599)	$	101.92	(25,195)	$	61.51
Forfeited or cancelled	—			(3,126)	$	123.19
Unvested restricted stock at August 31, 2020	4,906	$	95.59	59,875	$	97.72

82

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share amounts

Stock Options

In August 2015, the Board of Directors of the Company approved the fiscal year 2016 LTIP for the executive officers and other members of management. The 2016 LTIP was an equity-based plan with a grant date of September 1, 2015 and included options to purchase 21,275 shares of common stock in the aggregate with an exercise price of $39.50 per share. The options vested in three equal annual installments ending on August 31, 2018. The options granted will expire on September 1, 2025. Compensation expense was recognized over the period of the award consistent with the vesting terms.

In August 2016, the Board of Directors of the Company approved the fiscal year 2017 LTIP for the executive officers and other members of management. The 2017 LTIP is an equity-based plan with a grant date of September 1, 2016 and included options to purchase 15,028 shares of common stock in the aggregate with an exercise price of $64.37 per share. The options vested in three equal annual installments ending on August 31, 2019. Of the options granted, 5,596 options will expire on August 31, 2026, and 9,432 options will expire on September 1, 2026. Compensation expense was recognized over the period of the award consistent with the vesting terms.

In August 2016, the Board of Directors of the Company approved equity retention agreements with certain executive officers. The equity-based retention agreements have a grant date of September 1, 2016 and included options to purchase 23,563 shares of common stock in the aggregate with an exercise price of $64.37 per share. These options cliff vested on August 31, 2019 and will expire on August 31, 2026. Compensation expense was recognized over the period of the award consistent with the vesting terms.

In August 2017, the Board of Directors of the Company approved the fiscal year 2018 LTIP for the executive officers and other members of management. The 2018 LTIP is an equity-based plan with a grant date of September 1, 2017 and included options to purchase 9,622 shares of common stock in the aggregate with an exercise price of $93.50 per share. The options vested in three equal annual installments ending on August 31, 2020. Of the options granted, 4,591 options will expire on August 31, 2027, and 5,031 options will expire on September 1, 2027. Compensation expense was recognized over the period of the award consistent with the vesting terms.

During the third quarter of fiscal 2018, an additional grant of options to purchase 606 shares of common stock with an exercise price of $104.00 was issued to a non-executive member of management. The options vested in three equal annual installments ending on August 31, 2020 and will expire on March 1, 2028. Compensation expense was recognized on a ratable basis over the vesting period.

In August 2018, the Board of Directors of the Company approved the fiscal year 2019 LTIP for the executive officers and other members of management. The 2019 LTIP is an equity-based plan with a grant date of September 1, 2018 and included options to purchase 8,603 shares of common stock in the aggregate with an exercise price of $123.95 per share. The options vest in three equal annual installments ending on August 31, 2021. Of the options granted, 3,927 options will expire on August 31, 2028, and 4,676 options will expire on September 1, 2028. Compensation expense is being recognized over the period of the award consistent with the vesting terms.

During the fourth quarter of fiscal 2019, an additional grant of 483 options to purchase shares of common stock with an exercise price of $99.38 per share was made related to the 2019 LTIP grant and in conjunction with an amendment to the equity compensation program for a promotion of an employee. The options vest in three equal installments on August 31, 2019, 2020 and 2021, and will expire on August 31, 2028. Compensation expense is being recognized on a ratable basis over the vesting period.

83

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share amounts

In August 2019, the Board of Directors of the Company approved the fiscal year 2020 LTIP for the executive officers and other members of management. The 2020 LTIP is an equity-based plan with a grant date of September 1, 2019 and included options to purchase 13,418 shares of common stock in the aggregate with an exercise price of $100.22 per share. The options vest in three equal annual installments ending on August 31, 2022. Of the options granted, 6,218 options will expire on August 31, 2029, and 7,200 options will expire on September 1, 2029. Compensation expense is being recognized over the period of the award consistent with the vesting terms.

In August 2019, the Board of Directors of the Company approved equity retention agreements with certain executive officers. The equity-based retention agreements have a grant date of September 1, 2019 and contain stock options to purchase 53,642 shares of common stock in the aggregate with an exercise price of $100.22 per share. The options will cliff vest on August 31, 2022 and will expire on August 31, 2029. Compensation expense is being recognized on a ratable basis over the vesting period.

The following table summarizes information about stock options outstanding as of August 31, 2020:

		Options Outstanding						Options Exercisable
Exercise Prices		Number Outstanding	Weighted Avg. Remaining Contractual Life	Weighted Average Exercise Price		Aggregate Intrinsic Value		Number Exercisable	Weighted Average Exercise Price		Aggregate Intrinsic Value
$	16.00	5,065	2.1	$	16.00	$	413	5,065	$	16.00	$	413
$	29.72	13,790	3.0	$	29.72	$	936	13,790	$	29.72	$	936
$	35.50	13,372	4.0	$	35.50	$	830	13,372	$	35.50	$	830
$	39.50	12,753	5.0	$	39.50	$	741	12,753	$	39.50	$	741
$	64.37	34,260	6.0	$	64.37	$	1,137	34,260	$	64.37	$	1,137
$	93.50	8,704	7.0	$	93.50	$	35	8,704	$	93.50	$	35
$	99.38	483	8.0	$	99.38	$	—	322	$	99.38	$	—
$	100.22	67,060	9.0	$	100.22	$	—	4,473	$	100.22	$	—
$	104.00	606	7.5	$	104.00	$	—	606	$	104.00	$	—
$	123.95	8,603	8.0	$	123.95	$	—	5,735	$	123.95	$	—
		164,696	6.8	$	75.21	$	4,092	99,080	$	57.96	$	4,092

Options are granted with an exercise price that is equal to the closing market value of the Company’s common stock on the day preceding the grant date, which is determined not to be materially different from the opening market value on the date of grant.

84

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share amounts

A summary of the transactions of the Company’s stock option plans for the years ended August 31, 2020, 2019 and 2018 is presented below:

	Officers and Employees	Weighted Average Exercise Price
Options outstanding at August 31, 2017	152,974	$	34.21
Granted	10,228	$	94.12
Exercised	(64,012)	$	19.06
Forfeited or cancelled	—
Options outstanding at August 31, 2018	99,190	$	50.17
Granted	9,086	$	122.64
Exercised	(7,022)	$	42.86
Forfeited or cancelled	—
Options outstanding at August 31, 2019	101,254	$	57.18
Granted	67,060	$	100.22
Exercised	(3,618)	$	34.21
Forfeited or cancelled	—
Options outstanding at August 31, 2020	164,696	$	75.21
Options exercisable at August 31, 2020	99,080	$	57.96

The weighted average grant date fair value of options granted in the years ended August 31, 2020, 2019 and 2018 was $29.79, $40.12 and $30.99 per share, respectively.

The total pretax intrinsic value of stock options exercised was $311, $403 and $6,714 for the years ended August 31, 2020, 2019, and 2018, respectively.

Excluding the effects of common stock reserved for issuance upon exercise of the 164,696 outstanding options, there were 949,398 shares of common stock available for future issuance under the Company’s 2013 Equity Incentive Plan on August 31, 2020. Based on historic experience, management estimates all outstanding stock options will vest.

The income tax benefit realized from stock options exercised, vesting of restricted stock and issuance of stock pursuant to grants of restricted stock units was $149, $157 and $1,921 for the years ended August 31, 2020, 2019 and 2018, respectively.

As of August 31, 2020, unrecognized expense related to all stock-based compensation described above was $5,397 (including $4,136 for restricted stock and $1,261 for stock options), which will be recognized over the next five fiscal years.

85

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share amounts

Note 11—Segment Data

In fiscal 2019 (prior year), due to the recent changes in our business structure, including several recent acquisitions and divestitures within the previously existing Industrial Materials segment, changes in senior management and the establishment of our Chief Executive Officer as our sole chief operating decision maker, the Company's management team has restructured its internal and external reporting process to more accurately reflect the manner in which the current business is being managed and operated. In the fourth quarter of fiscal 2019 (prior year), the Company reorganized into three reportable operating segments: an Adhesives, Sealants and Additives segment, an Industrial Tapes segment and a Corrosion Protection and Waterproofing segment. The segments are distinguished by the nature of the products manufactured and how they are delivered to their respective markets.

The Adhesives, Sealants and Additives segment (formerly included within the Industrial Materials 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. This 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. Beginning December 31, 2017, the Adhesives, Sealants and Additives segment includes the acquired operations of Zappa Stewart within the Company’s specialty chemicals intermediates product line.

The Industrial Tapes segment (formerly included within the Industrial Materials 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. This 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 cable 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 (formerly known as the Construction Materials 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.

86

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share amounts

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

	Years Ended August 31,
	2020			2019			2018
Revenue
Adhesives, Sealants and Additives	$	96,208		$	104,796		$	101,690
Industrial Tapes		118,960			129,845			130,598
Corrosion Protection and Waterproofing		45,994			46,710			51,900
Total	$	261,162		$	281,351		$	284,188
Income before income taxes
Adhesives, Sealants and Additives	$	25,953		$	27,142	(d)	$	35,190	(h)
Industrial Tapes		31,237	(a)		28,216	(e)		30,886	(i)
Corrosion Protection and Waterproofing		16,638	(b)		15,909	(f)		18,178
Total for reportable segments		73,828			71,267			84,254
Corporate and common costs		(28,508)	(c)		(27,714)	(g)		(27,289)	(j)
Total	$	45,320		$	43,553		$	56,965
Includes the following costs by segment:
Adhesives, Sealants and Additives
Interest	$	98		$	177		$	422
Depreciation		994			1,467			1,285
Amortization		9,313			9,359			7,895
Industrial Tapes
Interest	$	111		$	216		$	516
Depreciation		1,746			1,755			2,748
Amortization		1,800			1,800			2,604
Corrosion Protection and Waterproofing
Interest	$	37		$	126		$	234
Depreciation		615			674			753
Amortization		463			1,286			1,308

(a) 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 six months of fiscal 2020

(b) Includes $170 gain on the refund of a payment made in fiscal 2019 related to engineering studies performed to assess potential operational changes and further plant rationalization and consolidation and an expense of $405 for the write-down of certain assets under construction.

(c) Includes $150 of expense related to exploratory IT work performed to assess potential future upgrades to the Company’s companywide ERP system, a $760 gain related to the April 2020 sale of the Company’s Pawtucket, RI location, a $1,791 gain related to the August 2020 sale of the Company’s Randolph, MA property, $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, $155 of pension-related settlement costs due to the timing of lump-sum distribution and $274 in acquisition-related costs attributable to the September 2020 (fiscal 2021) acquisition of ABchimie

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

(e) Includes $260 of expense related to the closure and exit of our Pawtucket, RI location recognized in the first quarter of fiscal 2019, and $526 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 second half of fiscal 2019

(f) Includes $200 of expense related to engineering studies performed to assess potential future operational changes and further plant rationalization and consolidation, see note (b)

(g) Includes $511 of pension-related settlement costs due to the timing of lump-sum distributions

(h) Includes $1,070 of expense related to inventory step-up in fair value attributable to the acquisition of Zappa Stewart

(i) Includes $1,085 gain on sale of license related to the structural composites product line recorded in the second quarter of fiscal 2018, $1,480 gain on sale of business related to the April 2018 sale of the structural composites rod business and $1,272 of expense related to the exit of our Pawtucket, RI location in the fourth quarter of fiscal 2018

87

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share amounts

(j) Includes $393 in acquisition-related expense attributable to the December 2017 acquisition of Zappa Stewart

	August 31,		August 31,
	2020		2019
Total Assets
Adhesives, Sealants and Additives	$	129,457	$	135,583
Industrial Tapes		71,229		77,085
Corrosion Protection and Waterproofing		32,642		32,478
Total for reportable segments		233,328		245,146
Corporate and common assets		113,502		62,822
Total	$	346,830	$	307,968

Note 12—Export Sales and Foreign Operations

Export sales from continuing domestic operations to unaffiliated third parties were $30,067, $30,582 and $42,883 for the years ended August 31, 2020, 2019 and 2018, respectively. The decrease in export sales in fiscal 2020 against fiscal 2019 in a reflection of the overall year-over-year decrease in sales results. The decrease in export sales in fiscal 2019 against fiscal 2018 resulted from decreased export sales into China and Europe.

The Company’s products are sold worldwide. Revenue for the years ended August 31, 2020, 2019 and 2018, are attributed to operations located in the following countries:

	Years Ended August 31,
	2020		2019		2018
Revenue
United States	$	226,690	$	248,281	$	244,225
United Kingdom		20,543		17,504		20,598
All other foreign (1)		13,929		15,566		19,365
Total	$	261,162	$	281,351	$	284,188

(1) Inclusive of sales originated from our Paris, France location, royalty revenue attributable to our licensed manufacturer in Asia, and Chase foreign manufacturing operations.

88

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share amounts

As of August 31, 2020 and 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:

	August 31,		August 31,
	2020		2019
Long-Lived Assets
United States
Property, plant and equipment, net	$	22,427	$	24,993
Goodwill and Intangible assets, less accumulated amortization		117,930		129,057
United Kingdom
Property, plant and equipment, net		2,320		2,493
Goodwill and Intangible assets, less accumulated amortization		4,403		4,446
All other foreign
Property, plant and equipment, net		827		1,840
Goodwill and Intangible assets, less accumulated amortization		1,269		1,187
Total
Property, plant and equipment, net	$	25,574	$	29,326
Goodwill and Intangible assets, less accumulated amortization	$	123,602	$	134,690

Note 13—Supplemental Cash Flow Data

Supplemental cash flow information for the years ended August 31, 2020, 2019 and 2018 is as follows:

	2020		2019		2018
Income taxes paid	$	11,186	$	11,714	$	20,142
Interest paid	$	230	$	728	$	915
Noncash Investing and Financing Activities
Common stock received for payment of stock option exercises	$	123	$	119	$	1,028
Property, plant and equipment additions included in accounts payable	$	92	$	67	$	197

89

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share amounts

Supplemental cash flow information as related to acquisitions and divestitures for the years ended August 31, 2020, 2019 and 2018 is as follows:

		2020		2019		2018
Sale of Randolph, MA Property
Asset held for sale	$	(14)
Gain on sale of real estate		(1,791)
Cash received from sale of real estate, net		1,805
Sale of Pawtucket, RI Location
Asset held for sale	$	(1,050)
Gain on sale of real estate		(760)
Cash received from sale of real estate, net		1,810
Acquisition of Zappa Stewart
Current assets					$	10,478
Property, plant & equipment						1,872
Goodwill and Intangible assets						64,378
Deferred tax liability						(2,626)
Accounts payable and accrued liabilities						(633)
Payments for acquisitions						(73,469)
Sale of Structural Composites Rod Business
Inventory					$	(522)
Goodwill						(230)
Gain on sale of business						(1,480)
Cash received from sale of business, net of transaction costs						2,232
Sale of Structural Composites License
Property and equipment					$	(26)
Gain on sale of license						(1,085)
Accrued income taxes						111
Cash received from sale of license						1,000
Sale of Fiber Optic Cable Components Product Line
Due from sale of business			$	(400)
Cash received from sale of product line, net of transaction costs				400

90

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share amounts

Note 14—Acquisitions

Acquisition of ABchimie

On September 1, 2020 (subsequent to fiscal 2020), the Company acquired all the capital stock of ABchimie for €18,000 (approximately $21,420 at the time of the transaction) net of cash and marketable securities acquired, subject to final working capital adjustment, excluding acquisition-related costs of $274 and with a potential earn out based on performance potentially worth an additional €7,000 (approximately $8,330 at the time of the transaction). ABchimie is a Corbelin, France headquartered solutions provider for the cleaning and the protection of electronic assemblies, with ‎further formulation, production, and research and development capabilities‎. The transaction was funded 100% with cash on hand. The financial results of the business will be included in the Company's fiscal 2021 financial statements within the Adhesives, Sealants and Additives operating segment in the electronic and industrial coatings product line. The Company is currently in the process of finalizing purchase accounting, regarding a final allocation of the purchase price to tangible and identifiable intangible assets assumed and anticipates completion within fiscal 2021. The ABchimie acquisition does not represent a significant business combination so pro forma financial information is not provided.

Acquisition of Zappa Stewart

On December 31, 2017, the Company acquired Zappa Stewart, an advanced superabsorbent polymer (SAP) formulator and solutions provider, with operations located in Hickory and McLeansville, NC. The business was acquired for a purchase price of $73,469, after final working capital adjustments and excluding acquisition-related costs.  Chase Corporation acquired all equity of the business and entered multiyear leases at both locations. The purchase was funded by a combination of a $65,000 draw on the Company’s existing revolving credit facility and available cash on hand. Zappa Stewart’s protective materials technology is complementary to Chase Corporation’s current specialty chemicals offerings. This acquisition is in line with our core strategies and extends our reach into growing medical and consumer applications.

Since the effective date for this acquisition, December 31, 2017, the financial results of the acquired business have been included in the Company’s financial statements within the Adhesives, Sealants and Additives operating segment, in the specialty chemicals intermediates product line. The acquisition was accounted for as a business combination under ASC Topic 805, “Business Combinations.” In accordance with this accounting standard, the Company expensed $393 of acquisition-related costs during the second quarter of 2018 to acquisition-related costs.

91

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share amounts

The Company finalized purchase accounting in the three-month period ended November 30, 2018 (the first quarter of fiscal 2019), with no adjustments made to the preliminary amounts recorded at August 31, 2018. The purchase price has been allocated to the acquired tangible and identifiable intangible assets assumed, based on their fair values as of the date of the acquisition:

Assets and Liabilities	Amount
Accounts receivable	$	3,670
Inventory		6,796
Prepaid expenses and other current assets		12
Property, plant & equipment		1,872
Goodwill		34,138
Intangible assets		30,240
Deferred tax liability		(2,626)
Accounts payable and accrued expenses		(633)
Total purchase price	$	73,469

The excess of the purchase price over the net tangible and intangible assets acquired resulted in goodwill of $34,138 that is largely attributable to the synergies and economies of scale from combining the operations, technologies and research and development capabilities of Zappa Stewart and Chase, particularly as it pertains to the expansion of the Company's product and service offerings, the established workforce and marketing efforts. A portion of this goodwill, $23,990, is deductible for income tax purposes.

All assets, including goodwill, acquired as part of the Zappa Stewart acquisition are included in the Adhesives, Sealants and Additives operating segment. Identifiable intangible assets purchased with this transaction are as follows:

			Weighted Average
Intangible Asset	Amount		Useful Life
Customer relationships	$	28,500	7.9	years
Technology		900	7	years
Trade names		840	4	years
Total intangible assets	$	30,240

92

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share amounts

Supplemental Pro Forma Data (unaudited)

The following table presents the pro forma results of the Company for the year ended August 31, 2018 as though the Zappa Stewart acquisition described above occurred on September 1, 2016 (the first day of fiscal 2017). The actual revenue and expenses for the acquired business are included in the Company’s consolidated results beginning on December 31, 2017. From the date of acquisition (December 31, 2017) through August 31, 2018, revenue and net income for the Zappa Stewart operations included in the consolidated statement of operations were $16,324 and $578, respectively, with results inclusive of sale of $1,070 in inventory step-up cost, $393 inacquisition-related costs and amortization expense of $2,672 recognized related to intangible assets recorded as part of the transaction, but not inclusive of any interest or financing costs. The pro forma results include adjustments for the estimated amortization of intangibles, acquisition-related costs, sale of inventory step-up cost, interest expense assuming the entire $65,000 draw remained outstanding through December 31, 2017 (at the interest rate effective at the date of borrowing) and the income tax impact of the pro forma adjustments at the statutory rate of 26% for fiscal 2018. The following pro forma information is not necessarily indicative of the results that would have been achieved if the acquisition had been effective on September 1, 2016.

	Years Ended August 31,
	2018
Revenue	$	292,609
Net income		44,508
Net income available to common shareholders, per common and common equivalent share
Basic earnings per share	$	4.75
Diluted earnings per share	$	4.70

Note 15—Sale of License

In November 2017 (fiscal 2018), the Company entered a license agreement with an unrelated party to sell a license, including intellectual property, and certain construction in process assets, with a net book value of $26, all of which related to the manufacturing of certain structural composite materials. In the second fiscal quarter of 2018, the transaction was finalized for gross consideration of $1,111 comprising cash proceeds of $1,000 and $111 in foreign tax consideration paid by the buyer on Chase Corporation’s behalf. This transaction resulted in a gain of $1,085, which was recorded in the Company’s consolidated statement of operations as a gain on sale of license during the fiscal quarter ended February 28, 2018.

In relation to this license agreement, the purchaser also entered into a royalty agreement with the Company under which the purchaser agreed to make royalty payments to the Company based on the volume of future sales of certain structural composite material manufactured by the purchaser. Revenue recognized related to this royalty agreement was not material in fiscal 2019 and 2018, and this royalty agreement was terminated in fiscal 2019.

93

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share amounts

Note 16—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 (exit price) in an orderly transaction between market participants at the measurement date. The Company uses a three-tier fair value hierarchy, which classifies the inputs used in measuring fair values. These tiers are: 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.

Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company has determined that it does not have any financial liabilities measured at fair value other than long-term debt and that its financial assets are currently all classified within Level 1 or Level 2 in the fair value hierarchy. The financial assets classified as Level 1 and Level 2 as of August 31, 2020 and 2019 represent investments which are restricted for use in non-qualified retirement savings plans 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 August 31, 2020 and 2019:

				Fair value measurement category
				Quoted prices		Significant other		Significant
	Fair value			in active markets		observable inputs		unobservable inputs
	measurement date	Total		(Level 1)		(Level 2)		(Level 3)
Assets:
Restricted investments	August 31, 2020	$	1,619	$	1,395	$	224	$	—
Restricted investments	August 31, 2019	$	1,260	$	1,091	$	169	$	—

The following table presents the fair values of the Company’s long-term debt as of August 31, 2020 and 2019 which is recorded at its carrying amount:

				Fair value measurement category
				Quoted prices		Significant other		Significant
	Fair value			in active markets		observable inputs		unobservable inputs
	measurement date	Total		(Level 1)		(Level 2)		(Level 3)
Liabilities:
Long-term debt	August 31, 2020	$	—	$	—	$	—	$	—
Long-term debt	August 31, 2019	$	—	$	—	$	—	$	—

The long-term debt had no outstanding balance as of August 31, 2020 and August 31, 2019. The carrying value of the long-term debt approximates its fair value, as the interest rate is set based on the movement of the underlying market rates. See Note 6 to the consolidated financial statements for additional information on long-term debt.

94

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share amounts

Note 17—Net Income Per Share

The determination of earnings per share under the two-class method is as follows:

	Years Ended August 31,
	2020		2019		2018
Net income	$	34,157	$	32,711	$	43,143
Less: Allocated to participating securities		273		257		410
Available to common shareholders	$	33,884	$	32,454	$	42,733
Basic weighted average shares outstanding		9,359,940		9,334,232		9,296,648
Additional dilutive common stock equivalents		79,810		44,975		69,423
Diluted weighted average shares outstanding		9,439,750		9,379,207		9,366,071
Net income available to common shareholders, per common and common equivalent share
Basic	$	3.62	$	3.48	$	4.60
Diluted	$	3.59	$	3.46	$	4.56

For the years ended August 31, 2020, 2019 and 2018, stock options to purchase 11,183, 12,901 and 404 shares of common stock were outstanding but were not included in the calculation of diluted net income per share because their inclusion would be antidilutive. Included in the calculation of dilutive common stock equivalents are the unvested portion of restricted stock and stock options.

Note 18—Sale of Businesses

Sale ofStructural Composites Rod Business

On April 20, 2018, Chase Corporation finalized an agreement with an unrelated party to sell all inventory, operational machinery and equipment and intangible assets of the Company’s structural composites rod business, as well as a license related to the production and sale of rod, for proceeds of $2,232, net of transaction costs and following all working capital adjustments. This business, which was part of the structural composites product line within the Industrial Tapes segment (previously within the former Industrial Materials segment), had limited growth and profitability prospects as part of the Company, and was outside the areas Chase has identified for strategic emphasis. The divestiture was accounted for under ASC Topic 360, “Disclosure—Impairment or Disposal of Long-Lived Assets.” In accordance with this accounting standard, the resulting pre-tax gain on sale of $1,480 was recognized in the third quarter of fiscal 2018 as a gain on sale of businesses within the consolidated statement of operations. Chase received $2,075, net of transaction costs, in the third quarter of fiscal 2018, with the remaining $157 received in the fourth quarter of fiscal 2018 as a result of a working capital true-up.

Related to this transaction, the purchaser entered into a royalty agreement with the Company, under which the purchaser agreed to make royalty payments to the Company based on future sales of certain structural composite material manufactured by the purchaser. Royalty revenue recognized in fiscal 2019 and 2018 related to this agreement was not material, and this royalty agreement was terminated in fiscal 2019.

The sale of the structural components rod business followed the Company’s sale of the RodPack^® wind blade components business in November 2015, and the licensing of certain composite technologies during the second quarter of fiscal 2018 (see further discussion in Note 15 to the consolidated financial statements). Subsequent to the third quarter of fiscal 2018, Chase Corporation has included the results of its remaining structural composites wind energy business (inclusive of the royalties and the custom manufacturing services) within the specialty products product line.

95

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share amounts

Note 19—Sale of Real Estate

Sale of Randolph, MA Property

In August 2020, the Company finalized the sale of its Randolph, MA property for net proceeds of $1,805. This transaction resulted in a gain of $1,791, which was recorded during the fourth quarter of fiscal 2020.

Sale of Pawtucket, RI Location

In April 2020, the Company finalized the sale of its Pawtucket, RI location for net proceeds of $1,810. This transaction resulted in a gain of $760, which was recorded during the third quarter of fiscal 2020.

Note 20—Operations Optimization Costs

Strategic Actions Taken Related to COVID-19

The second, third and fourth fiscal quarters of 2020 saw the global spread of the coronavirus pandemic (COVID-19), which grew to create significant volatility, uncertainty and global economic disruption. During the third fiscal quarter, the Company implemented changes to its cost structure designed to address market changes brought on by COVID-19 and demonstrate its commitment to fiscal prudence: (a) the Company made a targeted reduction in its global workforce, contemplated pre-pandemic but catalyzed by COVID-19, which resulted in the recognition of $183 in severance costs during the period; and (b) the Company also instituted a temporary 20% reduction in the base salaries of its named executive officers and select members of senior management, as well as the cash compensation of the non-employee members of its Board of Directors. The reduction in force, which impacted operations in the Company’s U.S. facilities, and the adjustments in compensation, were both effective May 2020.

ERP System Upgrade

During the first quarter of fiscal 2020, the Company commissioned third party led studies regarding the potential upgrading of the Company’s current worldwide ERP system. Chase Corporation is currently reviewing the data and recommendations provided by the study and may further utilize third-party engineering, IT and other professional services firms in the future for similar work, as well as work around the facilities rationalization and consolidation initiative. The Company recognized $150 in expense related to these services in the first quarter of fiscal 2020, with no expense recognized in the second, third or fourth fiscal quarters. Given the ongoing nature of the review, an estimate of future costs, including those that may be capitalized, cannot currently be determined.

Relocation of Pulling and Detection Manufacturing to Hickory, NC

During the third quarter of fiscal 2019, Chase Corporation began moving the pulling and detection operations housed in its Granite Falls, NC location to its Hickory, NC facility. This is in line with the Company’s ongoing initiative to consolidate its manufacturing plants and streamline its existing processes. At the time, the pulling and detection operations were the only Chase-owned production operations in Granite Falls, NC, with the remaining portions of the building being either utilized for research and development or leased to a third party. The process of moving, including moving internal research and development capabilities, was substantially completed during the second quarter of fiscal 2020. The Company recognized $559 in expense related to the move in the six-month period ended February 29, 2020, having recognized $526 in expense during the second half of fiscal 2019. No costs were recognized in the six months ended August 31, 2020, and future costs related to this move are not anticipated to be significant to the consolidated financial statements.

96

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share amounts

Engineering Studies Related to Facility Consolidation and Rationalization Initiative

During the fourth quarter of fiscal 2019 (prior year), the Company commissioned engineering studies of certain legacy operations, machinery and locations related to the Company’s facility rationalization and consolidation initiative. Chase Corporation completed its review of the data and recommendations provided by the study in the fourth quarter of fiscal 2020 (current year). The Company recognized $200 in expense related to these services in fiscal 2019, and a gain of $170 in fiscal 2020, as certain amounts expensed in fiscal 2019 were refunded. Also in the fourth quarter of fiscal 2020 and related to the recommendations of the commissioned engineering studies, the Company wrote down the value of certain non-operating production assets related to the pipeline coatings product line, within the Corrosion Protection and Waterproofing segment. Given the nature and prospects of the equipment, the Company determined its then carrying value exceeded its fair value and recognized an expense of $405 related to the machinery. The Company may utilize third party engineering, IT and other professional services firms in the future for similar optimization-related work. Given the ongoing nature of the facility rationalization and consolidation initiative, an estimate of future costs cannot currently be determined.

Closure of Pawtucket, RI Facility

On June 25, 2018, the Company announced to its employees the planned closing of its Pawtucket, RI manufacturing facility effective August 31, 2018. This is in line with the Company’s ongoing efforts to consolidate its manufacturing plants and streamline its existing processes. The manufacture of products previously produced in the Pawtucket, RI facility was substantially moved to Company facilities in Oxford, MA and Lenoir, NC during a two-month transition period. In the fourth quarter of fiscal 2018, the Company expensed $1,272 related to the closure. The Company also recognized $260 in expense related to the move in the three-month period ended November 30, 2018, with no additional expense recognized in the remainder of fiscal 2019. The Company completed the sale of its Pawtucket, RI location to a third party in the third quarter of fiscal 2020 for net proceeds totaling $1,810, recognizing a gain on sale of real estate of $760. Also, during the third quarter of fiscal 2020, the Company recognized $85 in final Pawtucket, RI transition and exit costs, with no further costs related to this initiative anticipated in future periods.

97

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share amounts

Note 21—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 cash flows, litigation is inherently unpredictable. Therefore, judgments could be rendered, or settlements agreed to that could adversely affect the Company’s operating results or cash flows in a particular period. The Company routinely assesses all 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 we assess the likelihood of loss as probable.

Note 22—Assets Held for Sale

The Company periodically reviews long-lived assets against its plans to retain or ultimately dispose of these assets. If the Company decides to dispose of an asset and commits to a plan to actively market and sell the asset, it will be moved to assets held for sale. The Company analyzes market conditions each reporting period, and, if applicable, records additional impairments due to declines in market values of like assets. The fair value of the asset is determined by observable inputs such as appraisals and prices of comparable assets in active markets for assets like the Company's. Gains are not recognized until the assets are sold. 

Assets held for sale as of August 31, 2020 and 2019 were:

	August 31, 2020		August 31, 2019
Pawtucket, RI - Property, plant and equipment	$	—	$	1,050
Randolph, MA - Property		—		14
Total	$	—	$	1,064

The Randolph, MA and Pawtucket, RI locations were sold for gains of $1,791 and $760, respectively, during fiscal 2020. See Note 19 to the consolidated financial statements for additional information on the sale of the Randolph, MA and Pawtucket, RI properties during fiscal 2020.

98

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share amounts

Note 23—Selected Quarterly Financial Data (Unaudited)

The following table presents unaudited operating results for each of the Company’s quarters in the years ended August 31, 2020 and 2019:

	Fiscal Year 2020 Quarters
	First		Second		Third		Fourth		Year
Net Sales	$	65,757	$	64,626	$	64,157	$	63,202	$	257,742
Gross Profit on Sales		23,974		23,960		24,468		23,725		96,127
Net income	$	7,362	$	7,879	$	9,908	$	9,008	$	34,157
Net income available to common shareholders, per common and common equivalent share:
Basic	$	0.78	$	0.83	$	1.05	$	0.95	$	3.62
Diluted	$	0.77	$	0.83	$	1.04	$	0.95	$	3.59

	Fiscal Year 2019 Quarters
	First		Second		Third		Fourth		Year
Net Sales	$	71,364	$	65,442	$	70,883	$	69,150	$	276,839
Gross Profit on Sales		24,789		22,229		24,477		25,181		96,676
Net income	$	8,823	$	5,273	$	8,541	$	10,074	$	32,711
Net income available to common shareholders, per common and common equivalent share:
Basic	$	0.94	$	0.56	$	0.91	$	1.07	$	3.48
Diluted	$	0.93	$	0.56	$	0.90	$	1.07	$	3.46

Note: Quarterly earnings per share amounts may not sum to earnings per share for the year due to rounding.

Note 24—Valuation and Qualifying Accounts

The following table sets forth activity in the Company’s accounts receivable and sales return reserve:

Year ended	Balance at Beginning of Year		Charges to Operations		Deductions to Reserves		Balance at End of Year
August 31, 2020	$	739	$	921	$	(1,222)	$	438
August 31, 2019	$	559	$	1,775	$	(1,595)	$	739
August 31, 2018	$	456	$	1,138	$	(1,035)	$	559

The following table sets forth activity in the Company’s warranty reserve (the warranty reserve is included within accrued expenses on the consolidated balance sheet):

Year ended	Balance at Beginning of Year		Charges to Operations		Deductions to Reserves		Balance at End of Year
August 31, 2020	$	37	$	—	$	(37)	$	—
August 31, 2019	$	—	$	37	$	—	$	37
August 31, 2018	$	220	$	—	$	(220)	$	—

99

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share amounts

Note 25—Accumulated Other Comprehensive Income

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

			Change in Funded		Foreign Currency
	Restricted		Status of		Translation
	Investments		Pension Plans		Adjustment		Total
Balance at August 31, 2018	$	126	$	(5,796)	$	(6,666)	$	(12,336)
Other comprehensive gains (losses) before reclassifications		36		(1,215)		(1,541)		(2,720)
Reclassifications to net income of previously deferred (gains) losses		(8)		740		—		732
Other comprehensive income (loss)		28		(475)		(1,541)		(1,988)
Balance at August 31, 2019	$	154	$	(6,271)	$	(8,207)	$	(14,324)
Other comprehensive gains (losses) before reclassifications		143		(1,278)		3,163		2,028
Reclassifications to net income of previously deferred (gains) losses		(28)		620		—		592
Other comprehensive income (loss)		115		(658)		3,163		2,620
Adoption of ASU 2018-02		—		(1,388)		—		(1,388)
Balance at August 31, 2020	$	269	$	(8,317)	$	(5,044)	$	(13,092)

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

	Amount of Gain (Loss) Reclassified from
	Accumulated Other Comprehensive Income
	(Loss) into Income
	Year Ended		Year Ended		Location of Gain (Loss) Reclassified from Accumulated
	August 31, 2020		August 31, 2019		Other Comprehensive Income (Loss) into Income
Gains on Restricted Investments:
Realized loss (gain) on sale of restricted investments	$	(37)	$	(11)	Selling, general and administrative expenses
Tax expense (benefit)		9		3
Gain net of tax	$	(28)	$	(8)
Loss on Funded Pension Plan adjustments:
Amortization of prior pension service costs and unrecognized losses	$	667	$	475	Other income (expense)
Settlement and curtailment loss		155		511	Other income (expense)
Tax expense (benefit)		(202)		(246)
Loss net of tax	$	620	$	740
Total net loss reclassified for the period	$	592	$	732

100

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share amounts

Note 26—Revenue from Contracts with Customers

The Company accounts for revenue in accordance with ASC 606, “Revenue from Contracts with Customers,” adopted September 1, 2018 (proceeding periods are accounted for under the historic accounting standards of ASC 605). This revenue is generated from the manufacture of specialty chemical products including coatings, linings, adhesives, sealants, specialty tapes, polymers and laminates. Certain of these manufactured products can incorporate customer-owned materials. The Company also recognizes, to a lesser extent, revenue through royalties and commissions from licensed manufacturers and from providing custom manufacturing-related services. The Company’s revenue recognition policies require the Company to make significant judgments and estimates. In applying the Company’s revenue recognition policy, determinations must be made as to when control of products passes to the Company’s customers, which can be either at a point in time or over time based on contractual terms with customers. Revenue is generally recognized at a point in time when control passes upon either shipment to or receipt by the customer of the Company’s products, while revenue is generally recognized over time when control of the Company’s products transfers to customers during the manufacturing process. The Company analyzes several factors, including but not limited to, the nature of the products being sold and contractual terms and conditions in contracts with customers to help the Company make such judgments about revenue recognition.

Contract Balances

The Company’s contract assets primarily relate to unbilled revenue for products currently in production at the Company’s facilities and which incorporate customer-owned material. Revenue is recognized in advance of billing to the customer in these specific circumstances, whereas billing is typically performed at the time of shipment to or receipt by the customer. Contract assets are included in prepaid expenses and other current assets on the Company’s consolidated balance sheet. The following table presents contract assets by reportable operating segment as of August 31, 2020 and 2019:

	August 31,		August 31,
	2020		2019
Contract Assets
Adhesives, Sealants and Additives	$	20	$	42
Industrial Tapes		21		26
Corrosion Protection and Waterproofing		41		79
Total	$	82	$	147

The Company did not have any contract liabilities as of August 31, 2020 and 2019.

101

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share amounts

Disaggregated Revenue

The Company disaggregates revenue from customers by geographic region, as it believes this disclosure best depicts how the nature, amount, timing and uncertainty of the Company's revenue and cash flows are affected by economic factors. Disaggregated revenue by geographical region for the years ended August 31, 2020 and 2019 was as follows:

	Year Ended August 31, 2020
	Adhesives, Sealants		Industrial		Corrosion Protection		Consolidated
	and Additives		Tapes		and Waterproofing		Revenue
Revenue
North America	$	64,611	$	105,911	$	36,252	$	206,774
Asia		17,977		7,150		6,361		31,488
Europe		13,201		3,286		3,047		19,534
All other foreign		419		2,613		334		3,366
Total Revenue	$	96,208	$	118,960	$	45,994	$	261,162
	Year Ended August 31, 2019
	Adhesives, Sealants		Industrial		Corrosion Protection		Consolidated
	and Additives		Tapes		and Waterproofing		Revenue
Revenue
North America	$	70,320	$	117,955	$	37,463	$	225,738
Asia		19,430		7,126		6,524		33,080
Europe		14,773		2,637		2,455		19,865
All other foreign		273		2,127		268		2,668
Total Revenue	$	104,796	$	129,845	$	46,710	$	281,351

Practical Expedients and Policy Elections

Shipping and Handling Policy Election — the Company has made an accounting policy election to record shipping and handling activities occurring after control has passed to the customer to be treated as a fulfillment cost rather than as a distinct performance obligation. Shipping and handling expenses consist primarily of costs incurred to deliver products to customers and internal costs related to preparing products for shipment and are recorded within cost of products and services sold. Amounts billed to customers as shipping and handling are classified as revenue when services are performed.

Considering Existence of a Significant Financing Component — as a practical expedient, an entity need not adjust the promised amount of consideration for the effects of a significant financing component if the entity expects, at contract inception, that the period between when the entity transfers a promised good or service to the customer and when the customer pays for that good or service will be one year or less. Given the time between the Company transferring a promised good or service to the customer and the customer paying for that good or service is less than one year based on the terms of arrangements with customers, the Company does not adjust the promised amount of consideration for effects of a significant financing component.

102

Item 9 - Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9a – Controls and Procedures

Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in the Company’s reports under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms and that such information is accumulated and communicated to the Company’s management, including its 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.

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

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, our principal executive and principal financial officers, or persons performing similar functions, and effected by our Board of Directors, management and other personnel, 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.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, the Company conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting based on the framework in “Internal Control — Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this assessment, our management concluded that our internal control over financial reporting was effective as of August 31, 2020. Grant Thornton LLP, an independent registered public accounting firm, audited the effectiveness of our internal control over financial reporting as of August 31, 2020.

103

Changes in Internal Control Over Financial Reporting

There have not been any changes in the Company’s internal control over financial reporting during the fourth quarter of fiscal 2020 that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.

104

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Shareholders

Chase Corporation

Opinion on internal control over financial reporting

We have audited the internal control over financial reporting of Chase Corporation (a Massachusetts corporation) and subsidiaries (the “Company”) as of August 31, 2020, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of August 31, 2020, based on criteria established in the 2013 Internal Control—Integrated Framework issued by COSO.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of and for the year ended August 31, 2020, and our report dated November 12, 2020 expressed an unqualified opinion on those financial statements.

Basis for opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and limitations of internal control over financial reporting

A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ GRANT THORNTON LLP

Boston, Massachusetts

November 12, 2020

105

Item 9b – Other Information

Not applicable.

PART III

Item 10 – Directors, Executive Officers and Corporate Governance

The information required by Item 10 of Form 10-K, relating to Directors of the Company, compliance with the reporting obligations under Section 16(a) of the Exchange Act, the Company’s code of ethics applicable to senior management, procedures for shareholder nominations to the Company’s Board of Directors, and the Company’s Audit Committee is incorporated by reference from the information contained in the Definitive Proxy Statement for the Annual Meeting of Stockholders, which is expected to be filed within 120 days after the Company’s fiscal year ended August 31, 2020. Information regarding the Company’s executive officers found in the section captioned “Information About Our Executive Officers” in Item 4A of Part I hereof is also incorporated by reference into this Item 10.

Item 11 – Executive Compensation

The information required by Item 11 of Form 10-K, relating to executive and director compensation and certain matters relating to the Company’s Compensation and Management Development Committee, is incorporated by reference from the information contained in the Definitive Proxy Statement for the Annual Meeting of Stockholders, which is expected to be filed within 120 days after the Company’s fiscal year ended August 31, 2020.

Item 12 – Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required by Item 12 of Form 10-K, relating to the stock ownership of certain beneficial owners and management, is incorporated by reference from the information contained in the Definitive Proxy Statement for the Annual Meeting of Stockholders, which is expected to be filed within 120 days after the Company’s fiscal year ended August 31, 2020.

The following table summarizes the Company’s equity compensation plans as of August 31, 2020. Further details on the Company’s equity compensation plans are discussed in the notes to the Consolidated Financial Statements. The adoption of each of the Company’s equity compensation plans was approved by its shareholders.

	Number of shares of	Weighted
	Chase common	average exercise		Number of shares of
	stock to be issued	price of		Chase common stock
	upon the exercise of	outstanding		remaining available for
	outstanding options	options		future issuance
2005 Incentive Plan	39,473	$	31.71	—
2013 Equity Incentive Plan	125,223		88.92	949,398
Total	164,696	$	75.21	949,398

Item 13 – Certain Relationships and Related Transactions, and director independence

The information required by Item 13 of Form 10-K, relating to transactions with related persons and the independence of members of the Company’s Board of Directors, is incorporated by reference from the information contained in the Definitive Proxy Statement for the Annual Meeting of Stockholders, which is expected to be filed within 120 days after the Company’s fiscal year ended August 31, 2020.

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Item 14 – Principal Accountant Fees and Services

The information required by Item 14 of Form 10-K, relating to fees paid to the Company’s independent registered public accounting firm and pre-approval policies of the Company’s Audit Committee, is incorporated by reference from the information contained in the Definitive Proxy Statement for the Annual Meeting of Stockholders, which is expected to be filed within 120 days after the Company’s fiscal year ended August 31, 2020.

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PART IV

Item 15 – Exhibits and Financial Statement Schedules

(a)(1) and (2)Financial Statements and Schedules:

The financial statements are set forth under Item 8 of this Annual Report on Form 10-K. Financial statement schedules have been omitted since they are either not required, not applicable, or the information is otherwise included.

(a)(3)Exhibit Index:

Exhibit
Number	Description
3.1.1	Articles of Organization of Chase Corporation (incorporated by reference from Exhibit 3.1 to the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2004, filed on November 24, 2004 (the “2004 Form 10-K”)).
3.1.2	Articles of Amendment to Articles of Organization of Chase Corporation (incorporated by reference from Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended February 29, 2008, filed on April 9, 2008).
3.2	Amended and Restated By-Laws (incorporated by reference from Exhibit 3.1 to the Company’s current report on Form 8-K filed on April 12, 2016).
4.1	Description of the Company’s Capital Stock (incorporated by reference from Exhibit 4.1 to the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2019, filed on November 13, 2019).
10.1	Amended and Restated Stock Agreement dated as of August 31, 2004, between the Company and Peter R. Chase (incorporated by reference to Exhibit 10 to the Company’s current report on Form 8-K filed on September 2, 2004).*
10.2	Chase Corporation Employee’s Supplemental Pension Plan effective January 1, 2008 (incorporated by reference from Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended May 31, 2008, filed on July 10, 2008). *
10.3.1	Chase Corporation Employee’s Supplemental Savings Plan, as Amended and Restated Effective December 31, 2016.*
10.3.2	Amendment to the Chase Corporation Employee’s Supplemental Savings Plan, dated July 15, 2020.*
10.4	Chase Corporation Non-Qualified Retirement Savings Plan for the Board of Directors, amended and restated effective January 1, 2009 (incorporated by reference from Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended February 28, 2009, filed on April 9, 2009). *
10.5	Severance Agreement between the Company and Peter R. Chase dated July 10, 2006 (incorporated by reference from Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended May 31, 2006, filed on July 17, 2006).*
10.6	Amended and Restated Severance Agreement between the Company and Adam P. Chase dated January 2, 2018 (incorporated by reference from Exhibit 10.1 to the Company’s current report on Form 8-K on January 8, 2018). *

108

10.7.1		Offer letter dated August 1, 2018 by and between Chase Corporation and Christian J. Talma (incorporated by reference from Exhibit 10.1 to the Company’scurrent report on Form 8-K on August 24, 2018).*
10.7.2		Severance Agreement between the Company and Christian J. Talma dated August 17, 2018 (incorporated by reference from Exhibit 10.2 to the Company’s current report on Form 8-K on August 24, 2018).*
10.8.1		2005 Equity Incentive Plan of Chase Corporation (incorporated by reference from Exhibit 10.1 to the Company's current report on Form 8-K filed on February 9, 2006).*
10.8.2		2013 Equity Incentive Plan of Chase Corporation (incorporated by reference from Exhibit A to the Company’s 2012 Proxy Statement filed on December 21, 2012).*
10.8.3		Form of restricted stock unit award issued for non-executive members of the Board of Directors (incorporated by reference from Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the period ended February 28, 2007, filed on April 16, 2007).*
10.8.4		Form of restricted stock unit award issued for members of Executive Management (incorporated by reference from Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the period ended February 28, 2007, filed on April 16, 2007).*
10.8.5		Form of restricted stock agreement issued for 2013 Equity Incentive Plan (incorporated by reference from Exhibit 10.9.5 to the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2019, filed on November 13, 2019).*
10.8.6		Form of stock option award issued (incorporated by reference from Exhibit 10.11.6 to the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2009, filed on November 16, 2009). *
10.9.1		Split Dollar Agreement between Chase Corporation and Peter R. Chase dated January 10, 2005 (incorporated by reference from Exhibit 10.2 to the Company’s current report on Form 8-K filed on January 14, 2005).*
10.9.2		Split Dollar Endorsement dated January 10, 2005 (incorporated by reference from Exhibit 10.3 to the Company’s current report on Form 8-K filed on January 14, 2005).*
10.10.1		FY 2020 Chase Corporation Annual Incentive Plan (incorporated by reference from Exhibit 99.1 to the Company's current report on Form 8-K filed on August 23, 2019).*
10.10.2		FY 2020 Chase Corporation Long Term Incentive Plan (incorporated by reference from Exhibit 99.2 to the Company's current report on Form 8-K filed on August 23, 2019).*
10.10.3		FY 2021 Chase Corporation Annual Incentive Plan (incorporated by reference from Exhibit 99.1 to the Company's current report on Form 8-K filed on August 31, 2020).*
10.10.4		FY 2021 Chase Corporation Long Term Incentive Plan (incorporated by reference from Exhibit 99.2 to the Company's current report on Form 8-K filed on August 31, 2020).*
10.11.1	Amended and Restated Credit Agreement dated as of December 15, 2016 by and among Chase Corporation, NEPTCO Incorporated, the Guarantors named therein, Bank of America, N.A., as administrative agent, and the Lenders party thereto (incorporated by reference from Exhibit 10.1 to the Company’s current report on Form 8-K filed December 20, 2016)

109

10.11.2	First Amendment to Amended and Restated Credit Agreement, dated as of February 6, 2017 by and among Chase Corporation, NEPTCO Incorporated, the Guarantors, the Lenders party thereto and Bank of America, N.A., as administrative agent (incorporated by reference from Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended February 28, 2017, filed on April 7, 2017).
10.12	Membership Interest and Stock Purchase Agreement by and among Chase Corporation, The Stewart Group Limited, Explortec, Inc., Zappa-Tec, LLC, Stewart Superabsorbents, LLC, Stewart SA, Inc. and William Morris. (incorporated by reference from Exhibit 10.2 to the Company’s current report on Form 8-K/A filed on March 9, 2018).
21	Subsidiaries of the Registrant
23.1	Consent of Independent Registered Public Accounting Firm – Grant Thornton LLP
23.2	Consent of Independent Registered Public Accounting Firm – PricewaterhouseCoopers LLP
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

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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.

(b)   See (a)(3) above.

(c)    None.

ITEM 16 – FORM 10-K SUMMARY

None.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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
By:	/s/ Adam P. Chase
	Adam P. Chase
	President and Chief Executive Officer
	November 12, 2020
By:	/s/ Christian J. Talma
	Christian J. Talma
	Treasurer and Chief Financial Officer
	November 12, 2020

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/ Peter R. Chase	Executive Chairman	November 12, 2020
Peter R. Chase
/s/ Adam P. Chase	Director, President and Chief Executive Officer (Principal Executive Officer)	November 12, 2020
Adam P. Chase
/s/ Christian J. Talma	Treasurer and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)	November 12, 2020
Christian J. Talma
/s/ Mary Claire Chase	Director	November 12, 2020
Mary Claire Chase
/s/ Thomas DeByle	Director	November 12, 2020
Thomas DeByle
/s/ John H. Derby III	Director	November 12, 2020
John H. Derby III
/s/ Lewis P. Gack	Director	November 12, 2020
Lewis P. Gack
/s/ Chad A. McDaniel	Director	November 12, 2020
Chad A. McDaniel
/s/Dana Mohler-Faria	Director	November 12, 2020
Dana Mohler-Faria
/s/ Thomas Wroe, Jr	Director	November 12, 2020
Thomas Wroe, Jr.

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EX-10.3.1

Exhibit 10.3.1

CHASE CORPORATION

EMPLOYEES' SUPPLEMENTAL SAVINGS PLAN

As Amended and Restated Effective December 31, 2016

ARTICLE I

NAME, PURPOSE AND EFFECTIVE DATE

1.1       Background.

Chase Corporation established the Chase Corporation Employees' Supplemental Pension and Savings Plan (the "Prior Plan") effective as of January 1, 1994, which was amended effective January 1, 2005, solely for the purpose of providing supplemental pension and savings plan benefits which are not provided under the Pension Plan for Employees of Chase Corporation and the Chase Corporation Deferred Salary Savings Plan. In order to provide greater flexibility and in light of the enactment of Section 409A of the Internal Revenue Code of 1986, as amended as part of the American Jobs Creation Act of 2004, and the issuance of various guidance thereunder, the Board of Directors of Chase Corporation amended and restated the Prior Plan to create two plans, the Chase Corporation Employees' Supplemental Pension Plan and the Chase Corporation Employees' Supplemental Savings Plan. Effective as of January 1, 2008, the portion of the Prior Plan that consisted of the Supplemental Pension Plan Benefit was transferred to and governed by the terms f the Chase Corporation Employees' Supplemental Pension Plan and the portion of the Prior Plan that consisted of the Supplemental Savings Plan Benefit was transferred to and governed by this plan, which shall be known as the Chase Corporation Employees' Supplemental Savings Plan. This Plan is now being amended and restated to provide Participants with an opportunity to elect forms of payment other than a lump sum.

1.2       Effective Date.

This amended and restated Supplemental Savings Plan shall be effective December 31, 2016. The Plan was originally effective as of January 1, 2008.

1.3       Plan Unfunded and Limited to Select Group of Management or Highly Compensated Employees.

The Supplemental Savings Plan is unfunded and is maintained primarily for the purpose of providing deferred compensation to a select group of management or highly compensated employees within the meaning of Sections 201, 301 and 401 of the Employee Retirement Income Security Act of 1974, as amended, and shall be interpreted and administered accordingly.

ARTICLE II

DEFINITIONS

When used herein, the following terms defined hereinafter shall have the following meanings unless a different meaning is clearly required by the context of the Plan:

2.1        "Account" means the bookkeeping accounts established pursuant to Article VI and maintained by the Employer in the names of the respective Participants, to which all

2

amounts deferred, Employer contributions and earnings allocated under the Plan shall be credited, and from which all amounts distributed pursuant to the Plan shall be debited. A Participant shall have one Account for amounts deferred under deferral elections that first took effect prior to January 1, 2017, and separate Accounts to reflect amounts deferred each calendar year under deferral elections first taking effect on or after January 1, 2017.

2.2        "Board " means the Board of Directors of the Employer.

2.3        "Change in Control" means a "change in ownership" of the Employer, a "change in effective control" of the Employer or a "change in the ownership of a substantial portion of the assets" of the Employer, within the meaning of Section 409A of the Code.

2.4        "Code" means the Internal Revenue Code of 1986, as amended from time to time.

Reference to a specific provision of the Code shall include such provision, any valid regulation or ruling promulgated thereunder, and any provision of future law that amends, supplements, or supersedes such provision.

2.5        "Compensation" means the annual compensation paid to a Participant by the Employer for the calendar year (after any requisite tax withholding and payroll deductions), including base pay, other regular earnings, performance-based cash bonuses or incentive bonus payments , any amounts deferred under a salary reduction agreement pursuant to the Savings Plan or under a "cafeteria plan" (within the meaning of Section 125 of the Code) maintained by the Employer, but exclusive of severance pay or salary continuation payments, expense reimbursements, special executive bonus payments paid by the Employer, awards, any moving expenses paid by the Employer, car allowance, taxable fringe benefits, group-term life insurance in excess of $50,000, exercised stock options and short and long-term disability paid by a third party.

2.6        "Employer" means Chase Corporation and any subsidiary and/or affiliated corporation which has adopted this Plan.

2.7        "Participant " means an employee of the Employer who has been designated a Participant in this Plan in the manner set forth in Article III.

2.8        "Plan Administrator " means Chase Corporation, or its duly authorized representative.

2.9        "Plan" or "Supplemental Savings Plan" means Chase Corporation Employees' Supplemental Savings Plan.

2.10      "Savings Plan" means the Chase Corporation Deferred Salary Savings Plan, as amended thereafter from time to time.

3

ARTICLE III

ELIGIBILITY

An employee shall be eligible to participate in the Plan if he has satisfied the eligibility requirements for participation under the Savings Plan and the Board, acting upon the recommendation of the Compensation and Management Development Committee, authorizes his participation in the Plan. In order to make contributions or have contributions made on his behalf under Article IV, an Employee who becomes a Participant must make an election to defer compensation in the manner provided under Article IV.

ARTICLE IV

ELECTIONS TO DEFER/PARTICIPANT ACCOUNTS

4.1         Election to Defer Compensation.

A Participant shall have the right to defer all or any portion of his Compensation that he would otherwise be entitled to receive for a calendar year by filing a deferral election at the time and in the manner described in this Article IV. Such deferral election shall be made on the form provided by the Plan Administrator for this purpose. Except as provided in Section 4.02, no such election shall be effective with respect to Compensation unless it is filed with the Plan Administrator on or before December 31 of the calendar year preceding the calendar year to which such election applies.

4.2        Newly Eligible Employees.

Notwithstanding Section 4.01, a new Participant may elect to defer all or any portion of his Compensation that he would otherwise be entitled to receive based on the services performed in the calendar year in which the new Participant became eligible to participate in the Plan, beginning with the payroll period next following the filing of a deferral election form with the Plan Administrator and before the close of such calendar year. The new Participant must file the deferral election with the Plan Administrator within 30 days of the date such new Participant first becomes eligible to participate in the Plan. Any deferral elections by such new Participants for succeeding calendar years shall be made in accordance with Section 4.01.

ARTICLE V

EMPLOYER CONTRIBUTIONS

5.1         Employer Matching Contribution.

Each year, the Employer shall contribute to the Plan on behalf of each Participant a matching contribution equal to 50% of the first six percent (6%) of the Participant's Compensation (excluding bonuses) deferred under the Plan. The Employer shall not make a matching contribution on any bonus compensation for any Participant.

4

5.2        Additional Employer Contributions.

In addition to the matching contribution described in Section 5.01, for any Plan Year, the Employer may elect to allocate an additional discretionary contribution to the account of any Participant or group of Participants, as selected by the Board, in any amount and manner determined by the Board.

ARTICLE VI

ACCOUNTS

6.1        Participant Account.

Compensation deferred by a Participant under the Plan shall be credited to the Participant's Account as soon as practicable after the amounts would have otherwise been paid to the Participant. Employer contributions shall also be credited to the Participant's Account.

6.2        Investment of Accounts.

The Company shall periodically credit gains, losses and earnings to a Participant's Account, until the full balance has been distributed. Amounts shall be credited to a Participant's Account under this Article VI based on the results that would have been achieved had amounts credited to the Account been invested as soon as practicable after crediting into the investment options designated by the Plan Administrator (which investment options may include the investment options offered under the Savings Plan) and selected by the Participant. The Plan Administrator may permit changes in those investment directions at whatever frequency it deems appropriate and within whatever limitations are applicable to any investment option. If a Participant makes an investment selection, the Plan Administrator may follow such investment selection but shall not be legally bound to do so and no provision of this Plan will require the Company to actually invest any amounts in such investment options or otherwise.

6.3        Vesting.

A Participant shall be fully vested at all times in his Account in this Plan.

ARTICLE VII

DISTRIBUTION OF A PARTICIPANT'S ACCOUNT

7.1        Distribution.

A Participant shall be entitled to a distribution of his or her Account in the Plan upon the Participant 's separation from service with the Employer (within the meaning of Section 409A of the Code), including retirement and death. Subject to the provisions of Section 7.02, amounts credited to a Participant's Account shall be distributed to the Participant in a lump sum as soon as administratively practicable after the Participant's separation from service but no later than the

5

end of the calendar year in which the Participant separated from service with the Employer, including retirement.

Notwithstanding anything to the contrary in this Section 7.01, a Participant may elect to receive a distribution of (i) all amounts credited to his or her Account pursuant to deferral elections that took effect prior to January 1, 2017, and (ii) amounts credited to his or her Account for a calendar year pursuant to a deferral election that takes effect on or after January 1, 2017, in substantially equal annual installments over a period of up to fifteen (15) years; provided , however , that in the event the value of all of his or her Accounts at the time he or she separates from service does not exceed the applicable dollar limit under Code Section 402(g)(l)(B), his or her entire interest in the Plan and any other plans or arrangements that are treated as a single plan under Code Section 409A shall be distributed in a single lump sum. Any election submitted in accordance with (ii) above shall be made at the time the Participant files his or her deferral election for a calendar year pursuant to Article IV. A Participant may also modify any election previously submitted in accordance with this paragraph, provided that such modification (and any initial election made in accordance with (i) above) (A) shall not take effect for a period of twelve (12) months, (B) must be submitted no later than twelve (12) months before such amounts would otherwise be distributed , and (C) will result in a five (5)-year delay in the commencement of payment of such amounts.

7.2        Section 409A Delay ed Distribution for Specified Employees.

If a Participant is a "specified employee" of the Employer, within the meaning of Section 409A(a)(2)(B)(i) of the Code at the time the Participant separates from service with the Employer, distribution of the Participant's account shall be made in a lump sum on the earlier of (i) the first business day that is six (6) months and one day following the date of the Participant 's "separation from service" (as such term is defined by Code Section 409A and the regulations promulgated thereunder) , or (ii) the date of the Participant 's death, but only to the extent such delayed commencement is otherwise required in order to avoid a prohibited distribution under Code Section 409A(a)(2). For purposes of identifying a "specified employee", the definition of compensation under Treas. Reg. Section 1.415(c)(-2(d)(2), the specified employee identification date shall be December 31, and the specified employee effective date shall be the first day of the fourth month following the identification date.

7.3        Death Benefit.

If a Participant's service providing relationship with the Employer terminates by reason of his death or if he dies after he is no longer in a service providing relationship with the Employer but prior to the distribution to him of all amounts payable to him under the Plan, the amounts that would otherwise be distributable to him, if living, shall be distributed to his designated beneficiary or beneficiaries in a single lump sum payment no later than December 31 of the calendar year following the calendar year of his or her death, and any reference to a Participant in Section 4.01, above, shall be deemed to include a reference to his designated beneficiary or beneficiaries. All beneficiary designations shall be made in such form and manner as from time to time may be prescribed by the Plan Administrator. A Participant from time to time may revoke or change any beneficiary designation on file with the Plan Administrator. If there is no effective beneficiary designation on file with the Plan Administrator at the time of

6

Participant 's death, distribution of amounts otherwise payable to the deceased Participant under this Plan shall be made to his estate. If a beneficiary designated by a Participant to receive his benefit shall survive the Participant but die before receiving all distributions hereunder, the balance thereof shall be paid to such deceased beneficiary's estate, unless the deceased Participant's beneficiary designation provides otherwise.

ARTICLE VIII

ADMINISTRATION

8.1        Duties of the Plan Administrator.

The Plan shall be administered by the Plan Administrator in accordance with its terms and purposes. The Plan Administrator shall determine the amount and manner of payment of the benefits due to or on behalf of each Participant from the Plan and shall cause them to be paid by the Employer accordingly.

8.2        Finality of Decisions.

The Plan Administrator is expressly granted, without intending any limitation, the discretion to construe the terms of the Plan and to determine eligibility for benefits hereunder. The decisions made by and the actions taken by the Plan Administrator in the administration of the Plan shall be final and conclusive on all persons, and neither the Plan Administrator nor the Employer shall be subject to individual liability with respect to the Plan.

8.3        Claims Procedure.

(a)         Application for Benefits. The Plan Administrator shall furnish to each Participant information about the benefits to which he or she is entitled under the Plan. The Plan Administrator may require any person claiming benefits under the Plan to submit a written application, together with such documents, evidence, and information as it considers necessary to process the claim.

Any request for benefits by a Participant or Beneficiary will be filed in writing with the Plan Administrator. Within a reasonable period after receipt of a claim, the Plan Administrator will provide written notice to any claimant whose claim has been wholly or partly denied, including: (a) the reasons for the denial, (b) the Plan provisions on which the denial is based,(c)  any additional material or information necessary to perfect the claim and the reasons it is necessary, and (d) the Plan 's claims review procedure.

(b)        Action on Application. Within ninety (90) days after receipt of an application and all necessary documents and information, the Plan Administrator shall furnish the claimant with a written notice of its decision. If the Administrator denies the claim in whole or in part, the notice will set forth (1 ) specific reasons for the denial, with specific reference to Plan provisions upon which the denial is based; (2) a description of any additional information or material necessary to process the application with an explanation why such material or information is necessary; and (3) an explanation of the Plan's claim review procedure. If special circumstances

7

require an extension of time for processing the claim, the Plan Administrator shall furnish the claimant written notice of the extension before the end of the initial ninety (90)-day period. In no event shall the extension exceed a period of ninety (90) days from the end of the initial period. The notice shall explain the circumstances requiring an extension of time and the date by which the Plan Administrator expects to render a decision.

(c)        Claim Review. The claimant who does not agree with the decision rendered on his application may request that the Plan Administrator review the decision. The request must be made within sixty (60) days after the claimant receives the decision, or if the application has neither been approved nor denied within the ninety (90)-day period specified in subsection (b), then the request must be made within sixty (60) days after expiration of the ninety (90)-day period. Each request for review must be in writing and addressed to the Plan Administrator. Concurrently with filing the request for review, or within the sixty (60) days request period, the claimant may submit in writing to the Plan Administrator a statement of the issues raised by his appeal and supporting arguments and comments. During the pendency of his appeal, the claimant may inspect all documents which are reasonably pertinent to his case, upon reasonable notice to the Plan Administrator. However, under no circumstance shall the Plan Administrator be required to disclose to any claimant information concerning any person other than the Participant whose benefit is being claimed, to the extent such information is normally treated as confidential. The Plan Administrator will render its decision on review promptly and in writing and will include specific reasons for the decision and references to the plan provision on which the decision is based, within sixty (60) days following receipt of the claimant's request for review. If special circumstances require an extension of time, the Plan Administrator shall render a decision as soon as possible, but not later than one hundred and twenty (120) days after receipt of the request for review. If an extension is required, the Plan Administrator shall furnish to the claimant written notice of the extension, including an explanation of the circumstances requiring the extension, before the extension period begins.

ARTICLE IX

MISCELLANEOUS

9.1        Non-Guarantee Of Employment.

Nothing contained in this Plan shall be construed as a contract of employment between the Employer and any Participant , or as a right of any such Participant to be continued in the employment of the Employer, or as a limitation on the right of the Employer to deal with any Participant , as to their hiring, discharge, layoff, compensation, and all other conditions of employment in all respects as though this Plan did not exist.

9.2        Amendments/Termination.

The Employer reserves the right to make from time to time amendments to or terminate this Plan by vote duly adopted by the Board of Directors, provided that no such amendment or termination shall reduce any benefits earned under the terms of this Plan prior to the date of termination or amendment. No amendment shall reduce the amount credited to the Participants '

8

Accounts. The Employer may elect to terminate the Plan within thirty (30) days preceding or the twelve (12) months following a Change in Control, subject to the provisions of Section 409A of the Code. For the purpose of the immediately preceding sentence, the Plan shall be treated as terminated only if substantially similar arrangements sponsored by the Company are terminated, so that all Participants in the Plan and all participants under substantially similar arrangements are required to receive all amounts deferred under the terminated arrangements within twelve

(12) months of the date of termination of the arrangements.

9.3        Rights Unsecured.

No person shall have any right, other than the right of an unsecured general creditor, against the Employer with respect to the benefits payable hereunder, or which may be payable hereunder, to any Participant, surviving spouse or beneficiary hereunder. The Plan shall be operated at all times as an unfunded plan as required under ERISA. Any funds set aside by the Employer for the purpose of meeting its obligations under the Plan, including any amounts held by a trustee, shall continue for all purposes to be part of the general assets of the Employer and shall be available to its general creditors in the event of the Company's bankruptcy or insolvency. The Employer 's obligation under this Plan shall be that of an unfounded and unsecured promise to pay money in the future.

9.4        Nonassignability.

The benefits payable under this Plan shall not be subject to alienation , assignment, garnishment, execution or levy of any kind and any attempt to cause any benefits to he so subjected shall not be recognized , except to the extent required by applicable law.

9.5        Entire Agreement; Successors.

This Plan, including any subsequently adopted amendments, shall constitute the entire agreement or contract between the Employer and any Participant regarding the Plan. There are no covenants, promises, agreements, conditions or understandings, either oral or written, between the Employer and any Participant relating to the subject matter hereof, other than those set forth in this Plan. This Plan and any amendment shall be binding on the parties hereto and their respective heirs, administrators, trustees, successors and assigns, and on all designated beneficiaries of the Participant.

9.6        Successor Company.

In the event of the dissolution, merger, consolidation or reorganization of the Employer, provision may be made by which a successor to all or a major portion of the Employer's property or business shall continue this Plan, and the successor shall have all of the powers, duties and responsibilities of the Employer under this Plan.

9

9.7        Governing Law.

To the extent not governed by federal law, this Plan shall be construed and enforced in accordance with, and governed by, the laws of the Commonwealth of Massachusetts.

IN WITNESS WHEREOF, Chase Corporation has caused this instrument to be executed in its name and on its behalf this 23 day of December , 2016.

CHASE CORPORATION

Name

Title

10

EX-10.3.2

Exhibit 10.3.2

AMENDMENT NO. 1

CHASE CORPORATION

EMPLOYEES’ SUPPLEMENTAL SAVINGS PLAN

WHEREAS, Chase Corporation (the “Company”) established and maintains the Chase Corporation Employees’ Supplemental Savings Plan, effective January 1, 1994, amended effective January 1, 2005 and further amended and restated effective December 31, 2016 (the “Plan”); and

WHEREAS, Section 9.02 of the Plan grants the Compensation and Management Development Committee of the Company (the “Committee”) and the Board of Directors, authority to amend the Plan for the purpose of facilitating its administration; and

WHEREAS, the Company desires to amend the Plan as set forth below, effective July 15, 2020.

NOW, THEREFORE, the Plan is hereby amended, in the following respects:

Section 5.01 – Employer Matching Contribution is amended to read as follows:

“Each year, the Employer may elect to contribute to the Plan on behalf of each Participant a matching contribution equal to 100% of the first 1% and 50% between 2% and 6% of the Participant’s Compensation (excluding bonuses) deferred under the Plan. The Employer shall not make a matching contribution on any bonus compensation for any Participant.”

Except as amended above the terms of the Plan remain in full force and effect.

IN WITNESS WHEREOF, this Amendment No. 1 is executed this 15th day of July, 2020 to be effective as of the date first written above.

CHASE CORPORATION

Name

Title

EX-21

Exhibit 21

SUBSIDIARIES OF THE REGISTRANT

Subsidiaries of Chase Corporation as of August 31, 2020 are as follows:

Name	Jurisdiction of Incorporation
C.I.M. Industries, Inc.	New Hampshire
Capital Services of New York, Inc.	New York
Chase & Sons Limited	United Kingdom
HumiSeal Europe SARL	France
HumiSeal Europe Limited	United Kingdom
HumiSeal India Private Limited	India
Chase Protective Coatings Limited	United Kingdom
NEPTCO Holdings, Inc.	Delaware
NEPTCO Incorporated	Rhode Island
NEPTCO (Suzhou) Materials Co., Ltd.	People’s Republic of China
NEPTCO JV LLC (wholly owned)	Delaware
Stewart Superabsorbents, LLC	North Carolina
Stewart SA, Inc.	North Carolina

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We have issued our reports dated November 12, 2020, with respect to the consolidated financial statements and internal control over financial reporting included in the Annual Report of Chase Corporation on Form 10-K for the year ended August 31, 2020. We consent to the incorporation by reference of said reports in the Registration Statements of Chase Corporation on Forms S-8 (File No. 333-189961 and File No. 333-131929).

/s/ GRANT THORNTON LLP

Boston, Massachusetts

November 12, 2020

EX-23.2

Exhibit 23.2

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (Nos. 333-189961 and 333-131929) of Chase Corporation of our report dated November 27, 2018, except for the change in composition of reportable segments discussed in Note 11 to the consolidated financial statements, as to which the date is November 13, 2019, relating to the financial statements, which appears in this Form 10-K.

/s/PricewaterhouseCoopers LLP
Boston, Massachusetts

November 12, 2020

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Adam P. Chase, certify that:

1. I have reviewed this Annual Report on Form 10-K 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(s) 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(s) 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 control over financial reporting.

Date:  November 12, 2020
	/s/ Adam P. Chase
	Adam P. Chase President and Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Christian J. Talma, certify that:

1. I have reviewed this Annual Report on Form 10-K 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(s) 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(s) 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 control over financial reporting.

Date:  November 12, 2020
	/s/ Christian J. Talma
	Christian J. Talma Treasurer and Chief Financial Officer (Principal Financial and Accounting Officer)

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 Annual Report on Form 10-K for the year ended August 31, 2020 (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:  November 12, 2020

/s/ Adam P. Chase

Adam P. Chase

President and Chief Executive Officer

(Principal Executive Officer)

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 Annual Report on Form 10-K for the year ended August 31, 2020 (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:  November 12, 2020

/s/ Christian J. Talma

Christian J. Talma

Treasurer and Chief Financial Officer

(Principal Financial and Accounting Officer)

XML

Document and Entity Information - USD ($)	12 Months Ended
	Aug. 31, 2020	Oct. 31, 2020	Feb. 29, 2020
Document and Entity Information
Document Type	10-K
Document Period End Date	Aug. 31, 2020
Entity Registrant Name	CHASE CORP
Title of 12(b) Security	Common stock, $.10 par value
Trading Symbol	CCF
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		9,445,474
Entity Central Index Key	0000830524
Current Fiscal Year End Date	--08-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	FY
Amendment Flag	false
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Public Float			$ 465,871,000

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Aug. 31, 2020	Aug. 31, 2019
Current Assets
Cash and cash equivalents	$ 99,068	$ 47,771
Accounts receivable, less allowance for doubtful accounts of $438 and $739	36,993	39,324
Inventory	39,058	42,354
Prepaid expenses and other current assets	2,470	2,418
Assets held for sale		1,064
Prepaid income taxes	231	1,451
Total current assets	177,820	134,382
Property, plant and equipment, less accumulated depreciation of $52,283 and $49,730	25,574	29,326
Other Assets
Goodwill	82,402	81,986
Intangible assets, less accumulated amortization of $78,351 and $65,862	41,200	52,704
Cash surrender value of life insurance	4,450	4,450
Restricted investments	1,619	1,260
Deferred income taxes	4,929	3,804
Operating lease right-of-use asset (Note 8)	8,821
Other assets	15	56
Total assets	346,830	307,968
Current Liabilities
Accounts payable	12,525	12,105
Accrued payroll and other compensation	5,751	6,300
Accrued expenses	4,867	4,035
Total current liabilities	23,143	22,440
Operating lease long-term liabilities (Note 8)	6,395
Deferred compensation	1,629	1,275
Accumulated pension obligation	10,930	10,485
Other liabilities		217
Accrued income taxes	1,941	2,324
Commitments and contingencies (Notes 6, 8, 21)
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; 9,439,082 shares at August 31, 2020 and 9,400,748 shares at August 31, 2019 issued and outstanding	944	940
Additional paid-in capital	16,674	14,351
Accumulated other comprehensive loss	(13,092)	(14,324)
Retained earnings	298,266	270,260
Total equity	302,792	271,227
Total liabilities and equity	$ 346,830	$ 307,968

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Aug. 31, 2020	Aug. 31, 2019
CONSOLIDATED BALANCE SHEETS
Accounts receivable, allowance for doubtful accounts (in dollars)	$ 438	$ 739
Property, plant and equipment, accumulated depreciation (in dollars)	52,283	49,730
Intangible assets, accumulated amortization (in dollars)	$ 78,351	$ 65,862
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	9,439,082	9,400,748
Common stock, shares outstanding	9,439,082	9,400,748

XML

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	12 Months Ended
	Aug. 31, 2020	Aug. 31, 2019	Aug. 31, 2018
Revenue
Revenue	$ 261,162	$ 281,351	$ 284,188
Costs and Expenses
Cost of products and services sold	161,615	180,163	175,136
Selling, general and administrative expenses	49,364	48,707	47,703
Research and product development costs	4,007	4,021	3,940
Operations optimization costs (Note 20)	807	986	1,272
Acquisition-related costs (Note 14)	274		393
Gain on sale of real estate (Note 19)	(2,551)
Write-down of certain assets under construction (Note 20)	405
Loss on impairment of goodwill (Note 4)		2,410
Operating income	47,241	45,064	55,744
Interest expense	(246)	(519)	(1,172)
Gain on sale of license (Note 15)			1,085
Gain on sale of businesses (Note 18)			1,480
Other income (expense)	(1,675)	(992)	(172)
Income before income taxes	45,320	43,553	56,965
Income taxes (Note 7)	11,163	10,842	13,822
Net income	$ 34,157	$ 32,711	$ 43,143
Net income available to common shareholders, per common and common equivalent share (Note 17)
Basic	$ 3.62	$ 3.48	$ 4.60
Diluted	$ 3.59	$ 3.46	$ 4.56
Weighted average shares outstanding
Basic	9,359,940	9,334,232	9,296,648
Diluted	9,439,750	9,379,207	9,366,071
Cash dividends paid per share (in dollars per share)	$ 0.80	$ 0.80	$ 0.80
Annual cash dividends declared per share	$ 0.80	$ 0.80	$ 0.80
Product
Revenue
Revenue	$ 257,742	$ 276,839	$ 278,962
Royalties and commissions
Revenue
Revenue	$ 3,420	$ 4,512	$ 5,226

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	12 Months Ended
	Aug. 31, 2020	Aug. 31, 2019	Aug. 31, 2018
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net income	$ 34,157	$ 32,711	$ 43,143
Other comprehensive income (loss):
Net unrealized gain on restricted investments, net of tax	115	28	5
Change in funded status of pension plans, net of tax	(658)	(475)	385
Foreign currency translation adjustment	3,163	(1,541)	743
Total other comprehensive income (loss)	2,620	(1,988)	1,133
Comprehensive income	$ 36,777	$ 30,723	$ 44,276

XML

CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Income (Loss)	Retained Earnings	Total
Balance at Aug. 31, 2017	$ 935	$ 14,060	$ (13,469)	$ 209,403	$ 210,929
Balance (in shares) at Aug. 31, 2017	9,354,136
Increase (Decrease) in Stockholders' Equity
Restricted stock grants, net of forfeitures	$ 2	(2)
Restricted stock grants, net of forfeitures (in shares)	16,701
Amortization of restricted stock grants		1,669			1,669
Amortization of stock option grants		459			459
Exercise of stock options	$ 6	1,214			1,220
Exercise of stock options (in shares)	64,012
Common stock received for payment of stock option exercises	$ (1)	(1,027)			(1,028)
Common stock received for payment of stock option exercises (in shares)	(9,693)
Common stock retained to pay statutory minimum withholding taxes on common stock	$ (3)	(3,269)			(3,272)
Common stock retained to pay statutory minimum withholding taxes on common stock (in shares)	(28,209)
Cash dividend on common stock				(7,497)	(7,497)
Change in funded status of pension plans, net of tax			385		385
Foreign currency translation adjustment			743		743
Net unrealized gain (loss) on restricted investments, net of tax			5		5
Net income				43,143	43,143
Balance at Aug. 31, 2018	$ 939	13,104	(12,336)	245,049	246,756
Balance (in shares) at Aug. 31, 2018	9,396,947
Increase (Decrease) in Stockholders' Equity
Restricted stock grants, net of forfeitures	$ 1	(1)
Restricted stock grants, net of forfeitures (in shares)	8,818
Amortization of restricted stock grants		1,673			1,673
Amortization of stock option grants		503			503
Exercise of stock options	$ 1	300			301
Exercise of stock options (in shares)	7,022
Common stock received for payment of stock option exercises		(119)			(119)
Common stock received for payment of stock option exercises (in shares)	(954)
Common stock retained to pay statutory minimum withholding taxes on common stock	$ (1)	(1,109)			(1,110)
Common stock retained to pay statutory minimum withholding taxes on common stock (in shares)	(11,085)
Cash dividend on common stock				(7,522)	(7,522)
Change in funded status of pension plans, net of tax			(475)		(475)
Foreign currency translation adjustment			(1,541)		(1,541)
Net unrealized gain (loss) on restricted investments, net of tax			28		28
Net income				32,711	32,711
Balance at Aug. 31, 2019	$ 940	14,351	(14,324)	270,260	271,227
Balance (in shares) at Aug. 31, 2019	9,400,748
Increase (Decrease) in Stockholders' Equity
Adoption of new accounting standard | ASU 2014-09				22	22
Restricted stock grants, net of forfeitures	$ 5	(5)
Restricted stock grants, net of forfeitures (in shares)	45,621
Amortization of restricted stock grants		2,290			2,290
Amortization of stock option grants		918			918
Exercise of stock options		123			123
Exercise of stock options (in shares)	3,618
Common stock received for payment of stock option exercises		(123)			(123)
Common stock received for payment of stock option exercises (in shares)	(1,057)
Common stock retained to pay statutory minimum withholding taxes on common stock	$ (1)	(880)			(881)
Common stock retained to pay statutory minimum withholding taxes on common stock (in shares)	(9,848)
Cash dividend on common stock				(7,539)	(7,539)
Change in funded status of pension plans, net of tax			(658)		(658)
Foreign currency translation adjustment			3,163		3,163
Net unrealized gain (loss) on restricted investments, net of tax			115		115
Net income				34,157	34,157
Balance at Aug. 31, 2020	$ 944	$ 16,674	(13,092)	298,266	$ 302,792
Balance (in shares) at Aug. 31, 2020	9,439,082
Increase (Decrease) in Stockholders' Equity
Adoption of new accounting standard | ASU 2018-02			(1,388)	$ 1,388
Adoption of new accounting standard			$ (1,388)

XML

CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Aug. 31, 2020	Aug. 31, 2019	Aug. 31, 2018
STATEMENTS OF EQUITY
Cash dividends paid per share (in dollars per share)	$ 0.80	$ 0.80	$ 0.80
Change in funded status of pension plans, tax	$ (215)	$ 218	$ 130
Net unrealized gain (loss) on restricted investments, tax	$ 40	$ (5)	$ 2
Cash dividend on common stock per share (in dollars per share)	$ 0.80	$ 0.80	$ 0.80

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Aug. 31, 2020	Aug. 31, 2019	Aug. 31, 2018
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 34,157	$ 32,711	$ 43,143
Adjustments to reconcile net income to net cash provided by operating activities
Gain on sale of real estate	(2,551)
Gain on sale of license			(1,085)
Loss on impairment of goodwill		2,410
Write-down of certain assets under construction	405
Gain on sale of businesses			(1,480)
Depreciation	4,015	4,762	5,817
Amortization	11,576	12,445	11,807
Cost of sale of inventory step-up			1,070
(Recovery) provision for allowance for doubtful accounts	(307)	183	101
Stock-based compensation	3,208	2,176	2,128
Realized gain on restricted investments	(37)	(11)	(97)
Pension curtailment and settlement loss	155	511
Deferred taxes	(769)	(2,312)	(2,473)
Increase (decrease) from changes in assets and liabilities
Accounts receivable	3,092	4,858	(2,968)
Inventory	3,562	(2,864)	(8,845)
Prepaid expenses and other assets	43	356	569
Accounts payable	260	(5,493)	2,847
Accrued compensation and other expenses	(1,865)	(1,536)	(501)
Accrued income taxes	790	1,339	(3,962)
Net cash provided by operating activities	55,734	49,535	46,071
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment	(1,371)	(2,488)	(3,488)
Cost to acquire intangible assets		(36)	(18)
Payments for acquisitions			(73,469)
Proceeds from sale of real estate	3,615
Proceeds from sale of license			1,000
Proceeds from sale of businesses		400	2,232
Changes in restricted investments	(167)	(122)	(23)
Proceeds from settlement of life insurance policies		80
Net cash provided by (used in) investing activities	2,077	(2,166)	(73,766)
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings on debt			65,000
Payments of principal on debt		(25,000)	(40,000)
Dividend paid	(7,539)	(7,522)	(7,497)
Proceeds from exercise of common stock options		182	192
Payments of taxes on stock options and restricted stock	(881)	(1,110)	(3,272)
Net cash (used in) provided by financing activities	(8,420)	(33,450)	14,423
INCREASE IN CASH & CASH EQUIVALENTS	49,391	13,919	(13,272)
Effect of foreign exchange rates on cash	1,906	(976)	746
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	47,771	34,828	47,354
CASH AND CASH EQUIVALENTS, END OF PERIOD	$ 99,068	$ 47,771	$ 34,828

XML

Summary of Significant Accounting Policies

12 Months Ended

Aug. 31, 2020

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Note 1—Summary of Significant Accounting Policies

The principal accounting policies of Chase Corporation (the “Company”) and its subsidiaries are as follows:

Products and Markets

Our principal products are specialty tapes, laminates, adhesives, sealants, coatings and chemical intermediates that are sold by our salespeople, manufacturers' representatives and distributors.  In our Adhesives, Sealants and Additives segment, these products consist of:

(i) moisture protective coatings, which are sold to the electronics industry for circuitry manufacturing, including circuitry used in automobiles, industrial controls and home appliances;

(ii) advanced adhesives, sealants, and coatings for automotive and industrial applications that require specialized bonding, encapsulating, environmental protection, or thermal management functionality;

(iii) polymeric microspheres utilized by various industries to allow for weight and density reduction and sound dampening;

(iv) polyurethane dispersions utilized for various coating products; and

(v) superabsorbent polymers, which are utilized for water and liquid management, remediation and protection in diverse markets including wire and cable, medical, environmental, infrastructure, energy and consumer products.

 In our Industrial Tapes segment, these products consist of:

(i) insulating and conducting materials for the manufacture of electrical and telephone wire and cable, electrical splicing, and terminating and repair tapes, which are marketed to wire and cable manufacturers;

(ii) laminated film foils, including EMI/RFI shielding tapes, used in communication and local area network (LAN) cable;

(iii) industrial coated or laminate products and custom manufacturing services sold into medical, consumer, automotive, packaging, energy, telecommunications and other specialized markets;

(iv) laminated durable papers, including laminated paper with an inner security barrier used in personal and mail‑stream privacy protection, which are sold primarily to the envelope converting and commercial printing industries;

(v) pulling and detection tapes used in the installation, measurement and location of fiber optic cable, water and natural gas lines, and power, data and video cable for commercial buildings; and

(vi) cover tapes with reliable adhesive and anti‑static properties essential to delivering semiconductor components via tape and reel packaging.

In our Corrosion Protection and Waterproofing segment, these products consist of:

(i) protective coatings, tapes and protectants for pipelines, valves, casings and other metals, which are sold to oil companies, gas companies and water/wastewater utilities for use in both the construction and maintenance of oil, gas, water and wastewater pipelines;

(ii) fluid applied coating and lining systems for use in the water and wastewater industry;

(iii) waterproofing tapes and coatings used in waterproofing of the exterior of both commercial and industrial structures;

(iv) waterproofing membranes for highway bridge deck metal supported surfaces, which are sold to municipal transportation authorities, and high-performance polymeric asphalt additives; and

(v) expansion and control joint systems designed for roads, bridges, stadiums and airport runways.

Basis of Presentation

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 functional currency for financial reporting. Certain reclassifications have been made to the prior year amounts to conform to the current year’s presentation.

Other Business Developments

On September 1, 2020 (subsequent to fiscal 2020), the Company acquired all the capital stock of ABchimie for €18,000 (approximately $21,420 at the time of the transaction) net of cash and marketable securities acquired, subject to final working capital adjustment, excluding acquisition-related costs of $274 and with a potential earn out based on performance potentially worth an additional €7,000 (approximately $8,330 at the time of the transaction). ABchimie is a Corbelin, France headquartered solutions provider for the cleaning and the protection of electronic assemblies, with ‎further formulation, production, and research and development capabilities‎. The transaction was funded 100% with cash on hand.  The financial results of the business will be included in the Company's fiscal 2021 financial statements within the Adhesives, Sealants and Additives operating segment in the electronic and industrial coatings product line. The Company is currently in the process of finalizing purchase accounting, regarding a final allocation of the purchase price to tangible and identifiable intangible assets assumed and anticipates completion within fiscal 2021.  The ABchimie acquisition does not represent a significant business combination so pro forma financial information is not provided.

The second, third and fourth fiscal quarters of 2020 saw the global spread of the coronavirus pandemic (COVID-19), which grew to create significant volatility, uncertainty and global economic disruption. During the third fiscal quarter, the Company implemented changes to its cost structure designed to address market changes brought on by COVID-19 and demonstrate its commitment to fiscal prudence: (a) the Company made a targeted reduction in its global workforce, contemplated pre-pandemic but catalyzed by COVID-19, which resulted in the recognition of $183 in severance costs during the period; and (b) the Company also instituted a temporary 20% reduction in the base salaries of its named executive officers and select members of senior management, as well as the cash compensation of the non-employee members of its Board of Directors. The reduction in force, which impacted operations in the Company’s U.S. facilities, and the adjustments in compensation, were both effective May 2020.

During the first quarter of fiscal 2020, the Company commissioned third party led studies regarding the potential upgrading of the Company’s current worldwide ERP system. Chase Corporation is currently reviewing the data and recommendations provided by the study and may further utilize third-party engineering, IT and other professional services firms in the future for similar work, as well as work around the facilities rationalization and consolidation initiative. The Company recognized $150 in expense related to these services in the first quarter of fiscal 2020, with no expense recognized in the second, third or fourth fiscal quarters. Given the ongoing nature of the review, an estimate of future costs, including those that may be capitalized, cannot currently be determined.

During the third quarter of fiscal 2019, the Company began moving the pulling and detection operations housed in its Granite Falls, NC location to its Hickory, NC facility. This is in line with the Company’s ongoing initiative to consolidate its manufacturing plants and streamline its existing processes. At the time, the pulling and detection operations were the only Chase-owned production operations in Granite Falls, NC, with the remaining portions of the building being either utilized for research and development or leased to a third party. The process of moving, including moving internal research and development capabilities, was substantially completed during the second quarter of fiscal 2020. The Company recognized $559 in expense related to the move in the six-month periods ended February 29, 2020, having recognized $526 in expense during the second half of fiscal 2019. No costs were recognized in the six months ended August 31, 2020, and future costs related to this move are not anticipated to be significant to the consolidated financial statements.

During the fourth quarter of fiscal 2019 (prior year), Chase Corporation commissioned engineering studies of certain legacy operations, machinery and locations related to the Company’s ongoing facility rationalization and consolidation initiative. Chase completed its review of the data and recommendations provided by the study in the fourth quarter of fiscal 2020 (current year). The Company recognized $200 in expense related to these services in fiscal 2019, and a gain of $170 in fiscal 2020, as certain amounts expensed in fiscal 2019 were refunded.Also in the fourth quarter of fiscal 2020 and related to the recommendations of the commissioned engineering studies, the Company wrote down the value of certain non-operating production assets related to the pipeline coatings product line, within the Corrosion Protection and Waterproofing segment. Given the nature and prospects of the equipment, the Company determined its then carrying value exceeded its fair value and recognized an expense of $405related to the machinery. Chase may utilize third party engineering, IT and other professional services firms in the future for similar optimization-related work. Given the ongoing nature of the facility rationalization and consolidation initiative, an estimate of future costs cannot currently be determined.

On June 25, 2018, the Company announced to its employees the planned closing of its Pawtucket, RI manufacturing facility effective August 31, 2018. This is in line with the Company’s ongoing efforts to consolidate its manufacturing plants and streamline its existing processes. The manufacture of products previously produced in the Pawtucket, RI facility was substantially moved to Company facilities in Oxford, MA and Lenoir, NC during a two-month transition period.  In the fourth quarter of fiscal 2018, the Company expensed $1,272 related to the closure. The Company also recognized $260 in expense related to the move in the three-month period ended November 30, 2018, with no additional expense recognized in the remainder of fiscal 2019. The Company completed the sale of its Pawtucket, RI location to a third party in the third quarter of fiscal 2020 for net proceeds totaling $1,810, recognizing a gain on sale of real estate of $760. Also, during the third quarter of fiscal 2020, the Company recognized $85 in final Pawtucket, RI transition and exit costs, with no further costs related to this initiative anticipated in future periods.

On April 20, 2018, Chase Corporation finalized an agreement with an unrelated party to sell all inventory, operational machinery and equipment and intangible assets of the Company’s structural composites rod business, as well as a license related to the production and sale of rod, for proceeds of $2,232, net of transaction costs and following certain working capital adjustments. This business, which was part of the structural composites product line within the Industrial Tapes segment, had limited growth and profitability prospects as part of the Company, and was outside the areas Chase has identified for strategic emphasis. The resulting pre-tax gain on sale of $1,480 was recognized in the third quarter of fiscal 2018 as a gain on sale of businesses within the consolidated statement of operations. Chase received $2,075, net of transaction costs, in the third quarter of fiscal 2018, with the remaining $157 received in the fourth quarter of fiscal 2018 as a result of a working capital true-up. Chase Corporation will provide certain transitional manufacturing and administrative support to the purchaser for which the Company will receive additional consideration upon the performance of services.

On December 29, 2017, Chase Corporation entered an agreement to acquire Stewart Superabsorbents, LLC (“SSA, LLC”), an advanced superabsorbent polymer (SAP) formulator and solutions provider, with operations located in Hickory and McLeansville, NC. The transaction closed on December 31, 2017. In its final fiscal year before its acquisition, SSA, LLC, and its then recently-acquired Zappa-Tec business (collectively “Zappa Stewart”) had combined revenue in excess of $24,000. This acquisition proved to be immediately accretive to the Company’s earnings in the period of acquisition, after adjusting for nonrecurring costs associated with the transaction and financing. The business was acquired for a purchase price of $73,469 after final working capital adjustments and excluding acquisition-related costs.  As part of this transaction, Chase Corporation acquired all assets of the business, and entered multiyear leases at both locations. The Company expensed $393 of acquisition-related costs during the second quarter of fiscal 2018.  The purchase was funded from a combination of Chase’s existing revolving credit facility and available cash on hand. Zappa Stewart’s protective materials technology complements Chase’s current specialty chemicals offerings. This acquisition is aligned with the Company’s core strategies and extends its reach into growing medical, environmental and consumer applications. The Company finalized purchase accounting in the first quarter of fiscal 2019, without any adjustment to amounts recorded at August 31, 2018. Following the effective date of the acquisition the financial results of Zappa Stewart’s operations have been included in the Company’s financial statements in the specialty chemical intermediates product line, contained within the Adhesives, Sealants and Additives operating segment.

The Company has evaluated events and transactions subsequent to the balance sheet date. Based on this evaluation, and other than: (a) the cash dividend announced on November 12, 2020 of $0.80 per share to shareholders of record on November 27, 2020 and payable on December 7, 2020; and (b) the acquisition of ABchimie discussed in Note 14, the Company is not aware of any other 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.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash and cash equivalents consist primarily of demand deposit accounts or investment instruments that meet high credit quality standards such as money market funds, government securities, or commercial paper. The Company considers all highly liquid debt instruments purchased with an original maturity of three months or less from the date of purchase to be cash equivalents.

Accounts Receivable

The Company evaluates the collectability of accounts receivable balances based on a combination of factors. In cases where the Company is aware of circumstances that may impair a specific customer’s ability to meet its financial obligations to it, a specific allowance against amounts due to the Company is recorded, and thereby reduces the net recognized receivable to the amount the Company reasonably believes will be collected. For all other customers, the Company recognizes allowances for doubtful accounts based on the length of time the receivables are past due, industry and geographic factors, the current business environment and its historical experience. Receivables are written off against these reserves in the period they are determined to be uncollectable.

Inventory

The Company values inventory at the lower of cost or net realizable value using the first in, first out (FIFO) method. Management assesses the recoverability of inventory based on types and levels of inventory held, forecasted demand and changes in technology. These assessments require management judgments and estimates, and valuation adjustments for excess and obsolete inventory may be recorded based on these assessments. The Company estimates excess and obsolescence exposures based upon assumptions about future demand, product transitions and market conditions, and records adjustments to reduce inventories to their estimated net realizable value. The failure to accurately forecast demand may lead to additional excess and obsolete inventory and future charges.

Goodwill

The Company accounts for goodwill in accordance with ASC Topic 350, “Intangibles — Goodwill and Other.” The Company performs impairment reviews annually each fourth quarter and whenever events or circumstances indicate the carrying value of goodwill may not be recoverable.

During the three-month period ended February 28, 2019, the ordering patterns of the polyurethane dispersions reporting unit’s customers, especially those in the automotive industry, combined with a decrease in the reporting unit’s backlog of customer orders believed to be firm as of February 28, 2019, indicated that an impairment in the carrying value of the reporting unit might have occurred. The Company performed an impairment test on the indefinite-lived and long-lived assets related to the polyurethane dispersions reporting unit, now part of the Adhesives, Sealants and Additives operating segment and reporting unit (part of the former Industrial Materials segment during the second fiscal quarter of 2019), in accordance with ASC Topic 350, “Intangibles — Goodwill and Other” and ASC Topic 360, “Disclosure — Impairment or Disposal of Long-Lived Assets.” As a result of impairment testing, which included first testing long-lived assets other than goodwill for impairment under applicable guidance, the Company recorded a charge of $2,410 to loss on impairment of goodwill within the consolidated statement of operations during the quarter ended February 28, 2019. The polyurethane dispersions reporting unit’s fair value was determined based on the income approach (discounted cash flow method).

In fiscal 2017, we early adopted Accounting Standards Update (“ASU”)  No. 2017-04 “Intangibles — Goodwill and Other Topics (Topic 350): Simplifying the Test for Goodwill Impairment.” When evaluating the potential impairment of goodwill, we first assess a range of qualitative factors, including but not limited to, industry conditions, the competitive environment, changes in the market for our products and services, entity-specific factors such as strategy and changes in key personnel, and the overall financial performance for each of our reporting units relative to historical or projected future operating results.  If after completing this assessment, it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying value, we then assess goodwill for impairment by comparing the fair value of the reporting unit to its carrying amount. If the fair value of a reporting unit is less than its carrying value, an impairment loss, limited to the amount of goodwill allocated to that reporting unit, is recorded. Fair values for reporting units are determined based on the income approach (discounted cash flow method).

For the annual fiscal 2020 fourth quarter review, no goodwill impairment, nor at-risk reporting units, was indicated as of August 31, 2020.For the annual fiscal 2020 goodwill impairment test, we performed a qualitative assessment of goodwill impairment and concluded that it was more likely than not that our reporting units' fair values exceeded their carrying values (i.e. indicated no impairment of goodwill). Accordingly, it was not necessary for us to perform the quantitative analysis.

Intangible Assets

Intangible assets consist of patents, formulas, trade names, customer relationships and trademarks. The Company capitalizes costs related to patent applications and technology agreements. The costs of these assets are amortized over the lesser of the useful life of the asset or its statutory life. Capitalized costs are periodically reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.

Property, Plant and Equipment

Property, plant and equipment are stated at cost and depreciated using the straight‑line method over the assets’ estimated useful lives. Expenditures for maintenance repairs and minor renewals are charged to expense as incurred. Betterments and major renewals are capitalized. Upon retirement or other disposition of assets, related allowances for depreciation and amortization are eliminated from the accounts and any resulting gain or loss is included in the determination of income or loss. The estimated useful lives of property, plant and equipment are as follows:

Buildings and improvements	15	to	40	years
Machinery and equipment	3	to	10	years

Leasehold improvements are depreciated over the lesser of the useful life or the term of the lease.

Restricted Investments and Deferred Compensation

The Company has a non-qualified deferred savings plan that covers its Board of Directors and a separate plan covering selected employees.  Participants may elect to defer a portion of their compensation for payment in a future tax year. The plans are funded by trusteed assets that are restricted to the payment of deferred compensation or satisfaction of the Company’s general creditors. The Company’s restricted investments under the plans were $1,619 and $1,260 at August 31, 2020 and 2019, respectively, and corresponding deferred compensation liabilities were $1,629 and $1,275 at August 31, 2020 and 2019, respectively. The Company accounts for the restricted investments as available for sale by recording net unrealized gains or losses in other comprehensive income as a component of stockholders’ equity.

 Revenue

Effective September 1, 2018, the Company adopted accounting standard ASU No. 2014-09, “Revenue from Contracts with Customers” (ASC 606) using the modified retrospective method for contracts that were not completed as of August 31, 2018. We recognized the cumulative effect of initially applying the new revenue standard as an adjustment to the opening balance of retained earnings, whereby the cumulative impact of all prior periods is recorded in retained earnings or other impacted balance sheet line items upon adoption. The comparative information (for all periods prior to September 1, 2018) has not been adjusted and continues to be reported under ASU No. 2009-13 “Revenue Recognition” (ASC 605). The impact on the Company’s consolidated balance sheets, and statements of operations, equity or cash flows as of the adoption date as a result of applying ASC 606 have been reflected within those respective financial statements. The Company’s accounting policy has been updated to align with ASC 606.

The adoption of ASC 606 represents a change in accounting principle that provides enhanced revenue recognition disclosures. The Company accounts for revenue from contracts with customers when: (a) there is approval and commitment from both parties; (b) the rights of the parties are identified; (c) payment terms are identified; (d) the contract has commercial substance; and (e) collectability of consideration is probable. Revenue is primarily derived from customer purchase orders, master sales agreements, and negotiated contracts, all of which represent contracts with customers. See Note 26 to the consolidated financial statements for more information on our accounting for revenue.

Research and Product Development Costs

Research and product development costs are expensed as incurred and include primarily engineering salaries, overhead and materials used in connection with research and development projects. Research and development expense amounted to $4,007,  $4,021 and $3,940 for the years ended August 31, 2020, 2019 and 2018, respectively, and was recorded within Research and product development costs on the consolidated statements of operations.

Pension Plans

The Company accounts for its pension plans following the requirements of ASC Topic 715, “Compensation —Retirement Benefits” (“ASC 715”). ASC 715 requires an employer to: (a) recognize in its statement of financial position the funded status of a benefit plan; (b) measure defined benefit plan assets and obligations as of the end of the employer’s fiscal year (with limited exceptions); and (c) recognize as a component of other comprehensive income, net of tax, the gains or losses and prior service costs or credits that arise but are not recognized as components of net periodic benefit costs pursuant to prior existing guidance.

Stock-Based Compensation

In accordance with the accounting for stock-based compensation guidance, ASC Topic 718 “Compensation – Stock Compensation” (“ASC 718”), the Company measures and recognizes compensation expense for all share‑based payment awards made to employees and directors based on estimated fair values. This includes restricted stock, restricted stock units and stock options. The guidance allows for the continued use of the simplified method as the Company has concluded that its historical share option exercise experience does not provide a reasonable basis for estimating expected term.

Stock‑based compensation expense recognized in fiscal years 2020, 2019 and 2018 was $3,208,  $2,176 and $2,128, respectively.

The fair value of options granted was estimated on the date of grant using the Black‑Scholes option pricing model with the following weighted average assumptions for the years ending August 31, 2020, 2019 and 2018:

	2020		2019		2018
Expected dividend yield	0.7	%	0.7	%	0.9	%
Expected life	6.0	years	6.0	years	6.0	years
Expected volatility	31.0	%	31.4	%	34.7	%
Risk-free interest rate	1.4	%	2.7	%	1.9	%

Expected volatility is determined by looking at a combination of historical volatility over the past six years as well as implied future volatility.

Translation of Foreign Currency

The financial position and results of operations of the Company’s HumiSeal Europe Ltd and Chase Protective Coatings Ltd businesses are measured using the British pound as the functional currency. The financial position and results of operations of the Company’s HumiSeal Europe SARL business in France are measured using euros as the functional currency.  The financial position and results of the Company’s HumiSeal India Private Limited business in India are measured using the Indian rupee as the functional currency. The functional currency for all our other operations is the U.S. dollar. Revenue and expenses of these international businesses have been translated at average exchange rates. 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 (a component of stockholders’ equity).  Transaction gains and losses generated from the remeasurement of assets and liabilities denominated in currencies other than the functional currency of these international operations are included in other income (expense) on the consolidated statements of operations and were gains (losses) of ($911),  ($48) and $85 for the fiscal years ended August 31, 2020, 2019 and 2018, respectively.

Income Taxes

The Company accounts for income taxes under the asset and liability method. Under this method, a deferred tax asset or liability is determined based upon the differences between the financial statement and tax bases of assets and liabilities as measured by the enacted tax rates that will be in effect when these differences reverse. Tax credits are recorded as a reduction in income taxes. Valuation allowances are provided if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

The Company estimates contingent income tax liabilities based on the guidance for accounting for uncertain tax positions as prescribed in ASC Topic 740, “Income Taxes.” See Note 7 for more information on the Company’s income taxes, including information on the effects of the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) on our financial position and results of operations, including adjustments that were recorded during fiscal 2018 and 2019 related to the Tax Act.

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” (“ASC 260”). The Company allocates earnings to participating securities and computes earnings per share using the two-class method.

Comprehensive Income

Comprehensive income is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non‑owner sources, including foreign currency translation adjustments, unrealized gains and losses on marketable securities and adjustments related to the change in the funded status of the pension plans.

Segments

ASC Topic 280 “Segment Reporting” of the Financial Accounting Standards Board (“FASB”) codification establishes standards for reporting information about operating segments. In the fourth quarter of its 2019 fiscal year (prior year), the Company reorganized into three reportable operating segments, an Adhesives, Sealants and Additives segment, an Industrial Tapes segment and a Corrosion Protection and Waterproofing segment. The segments are distinguished by the nature of the products manufactured and how they are delivered to their respective markets.

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 products.  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. Beginning December 31, 2017, the Adhesives, Sealants and Additives segment includes the acquired operations of Zappa Stewart, within the specialty chemical intermediates product line.

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 cable 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.

Recently Issued Accounting Standards

In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which modifies the measurement approach for credit losses on financial assets measured on an amortized cost basis from an 'incurred loss' method to an 'expected loss' method. In November 2019, the FASB issued ASU 2019-11, “Codification Improvements to Topic 326, Financial Instruments – Credit Losses.” ASU 2019-11 is an accounting pronouncement that amends ASU 2016-13. The ASU 2019-11 amendment provides clarity and improves the codification to ASU 2016-13. The pronouncements are concurrently effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years (effective fiscal 2021). The Company is currently evaluating the effects of this pronouncement on its consolidated financial statements.

Recently Adopted Accounting Standards

Fiscal 2020

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” Under the new guidance, lessees are required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: (a) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (b) a right-of-use asset, which represents the lessee’s right to use, or control the use of, a specified asset for the lease term.  In July 2018, the FASB issued ASU 2018-11, “Leases (Topic 842) Targeted Improvements.”  The updated guidance provided an optional transition method, which allows for the application of the standard as of the adoption date with no restatement of prior period amounts.  The Company adopted the standard on September 1, 2019 (start of fiscal 2020) under the optional transition method described above.  Consequently, historical financial information was not updated, and the disclosures required under the new standard are not provided for dates and periods prior to September 1, 2019.

The new standard provides several optional practical expedients in transition. The Company has elected to apply the “package of practical expedients” which allows it to not reassess i) whether existing or expired arrangements contain a lease, ii) the lease classification of existing or expired leases, or iii) whether previous initial direct costs would qualify for capitalization under the new lease standard. In preparation for adoption of the standard, the Company enhanced its internal controls to enable the preparation of financial information including the assessment of the impact of the standard. The initial adoption of the ASU resulted in the recognition of additional lease liabilities of $9,644  ($2,071 short-term and $7,573 long-term) and right-of-use assets of $10,200 as of September 1, 2019 on the consolidated balance sheet as it relates to the Company’s operating leases. The new standard did not have a material impact on the Company’s consolidated statement of operations or cash flows.

In February 2018, the FASB issued ASU 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220) - Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” This ASU was issued to address a narrow-scope financial reporting issue that arose as a result of the enactment of the Tax Cuts and Jobs Act (“Tax Reform”) on December 22, 2017. The objective of ASU 2018-02 is to address the tax effects of items within accumulated other comprehensive income (referred to as “stranded tax effects”) that do not reflect the appropriate tax rate enacted in the Tax Reform. As a result, the ASU 2018-02 allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the newly enacted federal corporate income tax rate. The amount of the reclassification would be the difference between the historical corporate income tax rate of 35 percent and the current enacted corporate income tax rate of 21 percent. ASU 2018-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted, including adoption in an interim period. The amendments in this ASU may be applied retrospectively to each period in which the effect of the change in the U.S. Federal corporate income tax rate in the Tax Reform is recognized. Therefore, the Company adopted ASU 2018-02 in the first quarter of the year ending August 31, 2020, and has elected to reclassify the income tax effects of the Tax Reform related to its pension funding from accumulated other comprehensive loss to retained earnings.

Fiscal 2019

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606).” The amended guidance establishes a single comprehensive model for companies to use in accounting for revenue arising from contracts with customers and supersedes most of the existing revenue recognition guidance, including industry-specific guidance.

The amended guidance clarifies that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In applying the amended guidance, an entity will (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the contract’s performance obligations; and (5) recognize revenue when (or as) the entity satisfies a performance obligation. ASC 606 was effective for the Company’s interim and annual reporting periods beginning September 1, 2018 (fiscal 2019), and could have been adopted using either a full retrospective or modified retrospective transition method. 

The Company adopted the amended guidance and all related amendments using the modified retrospective approach on September 1, 2018.  The Company recognized the cumulative effect of initially applying the new revenue standard to all open contracts requiring recognition over time that were not completed on the date of adoption as an adjustment to the opening balance of retained earnings.

At the adoption date, the cumulative impact of revenue that would have been recognized over time was $80. The related adoption impact to retained earnings was $22, net of tax. The impact to net sales and net income as a result of applying ASC 606 was an increase of $67 and $5, respectively, for the year ended August 31, 2019. See Note 26 — “Revenue from Contracts with Customers” for further discussion of the effects of adoption.

In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230).” This ASU provides guidance on the presentation and classification of specific cash flow items to improve consistency within the statement of cash flows. The Company adopted ASU No. 2016-15 on September 1, 2018, and the adoption did not have a material effect on its financial statements and related disclosures.

In January 2017, the FASB issued ASU No. 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business.”  The new guidance dictates that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, it should be treated as an acquisition or disposal of an asset. The Company adopted the ASU on September 1, 2018. The adoption had no material effect on the financial statements and related disclosures in fiscal 2020 and 2019. The effect ASU No. 2017-01 will have on the financial statements and related disclosures of the Company in future periods will be dependent on the nature of potential future acquisitions and divestitures.

In March 2017, the FASB issued ASU No. 2017-07, “Compensation — Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.” This ASU applies to all employers that offer to their employees defined benefit pension plans, other postretirement benefit plans, or other types of benefits accounted for under Topic 715, Compensation — Retirement Benefits. The ASU requires that an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. If a separate line item or items are used to present the other components of net benefit cost, that line item or items must be appropriately described. If a separate line item or items are not used, the line item or items used in the income statement to present the other components of net benefit cost must be disclosed. The ASU also allows only the service cost component to be eligible for capitalization when applicable (e.g., as a cost of internally manufactured inventory or a self-constructed asset). The Company adopted ASU No. 2017-07 on September 1, 2018, which resulted in the reclassification of $654 and $1,065, previously reported in selling, general and administrative expense, to other income (expense) for the years ended August 31, 2018 and 2017 (prior years), respectively.

Fiscal 2018

The Company did not adopt any new accounting standards in fiscal 2018.

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Inventory

12 Months Ended

Aug. 31, 2020

Inventory

Inventory

Note 2—Inventory

Inventory consisted of the following as of August 31, 2020 and 2019:

	August 31,		August 31,
	2020		2019
Raw materials	$	18,993	$	20,325
Work in process		7,761		8,748
Finished goods		12,304		13,281
Total Inventory	$	39,058	$	42,354

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Property, Plant and Equipment

12 Months Ended

Aug. 31, 2020

Property, Plant and Equipment

Property, Plant and Equipment

Note 3—Property, Plant and Equipment

Property, plant and equipment consisted of the following as of August 31, 2020 and 2019:

	2020		2019
Land and improvements	$	4,997	$	6,079
Buildings		17,992		17,900
Machinery and equipment		51,942		51,934
Leasehold improvements		2,212		1,828
Construction in progress		714		1,315
		77,857		79,056
Accumulated depreciation		(52,283)		(49,730)
Property, plant and equipment, net	$	25,574	$	29,326

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Goodwill and Other Intangibles

12 Months Ended

Aug. 31, 2020

Goodwill and Other Intangibles

Goodwill and Other Intangibles

Note 4—Goodwill and Intangible Assets

The changes in the carrying value of goodwill, by operating segment, were as follows:

	Adhesives, Sealants and Additives		Industrial Tapes		Corrosion Protection and Waterproofing		Consolidated
Balance at August 31, 2018	$	52,787	$	21,215	$	10,694	$	84,696
Loss on impairment of polyurethane dispersions business		(2,410)		—		—		(2,410)
Foreign currency translation adjustment		(287)		—		(13)		(300)
Balance at August 31, 2019	$	50,090	$	21,215	$	10,681	$	81,986
Foreign currency translation adjustment		397		—		19		416
Balance at August 31, 2020	$	50,487	$	21,215	$	10,700	$	82,402

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 has identified a total of three reporting units, corresponding to its three reportable 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, including the anticipated future impact of the coronavirus disease 2019 (COVID-19) pandemic. When testing, fair values of the reporting units and the related implied fair values of their respective goodwill are established using discounted cash flows.

In fiscal 2017, we early adopted Accounting Standards Update (“ASU”)  No. 2017-04 “Intangibles — Goodwill and Other Topics (Topic 350): Simplifying the Test for Goodwill Impairment.” When evaluating the potential impairment of goodwill, we first assess a range of qualitative factors, including but not limited to, industry conditions, the competitive environment, changes in the market for our products and services, entity-specific factors such as strategy and changes in key personnel, and the overall financial performance for each of our reporting units relative to historical or projected future operating results.  If after completing this assessment, it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying value, we then assess goodwill for impairment by comparing the fair value of the reporting unit to its carrying amount. If the fair value of a reporting unit is less than its carrying value, an impairment loss, limited to the amount of goodwill allocated to that reporting unit, is recorded. Fair values for reporting units are determined based on the income approach (discounted cash flow method).

During the three-month period ended February 28, 2019, the ordering patterns of the polyurethane dispersions reporting unit’s customers, especially those in the automotive industry, combined with a decrease in the reporting unit’s backlog of customer orders believed to be firm as of February 28, 2019, indicated that an impairment in the carrying value of the reporting unit might have occurred. The Company performed an impairment test on the indefinite-lived and long-lived assets related to the polyurethane dispersions reporting unit, now part of the Adhesives, Sealants and Additives operating segment and reporting unit (part of the former Industrial Materials segment during the second fiscal quarter of 2019), in accordance with ASC Topic 350, “Intangibles — Goodwill and Other” and ASC Topic 360, “Disclosure — Impairment or Disposal of Long-Lived Assets.” As a result of impairment testing, which included first testing long-lived assets other than goodwill for impairment under applicable guidance, the Company recorded a charge of $2,410 to loss on impairment of goodwill within the consolidated statement of operations during the quarter ended February 28, 2019. The polyurethane dispersions reporting unit’s fair value was determined based on the income approach (discounted cash flow method).

The Company performs impairment reviews annually each fourth quarter and whenever events or circumstances indicate the carrying value of goodwill may not be recoverable. For the annual fiscal 2020 goodwill impairment test, we performed a qualitative assessment of goodwill impairment and concluded that it was more likely than not that our reporting units' fair values exceeded their carrying values (i.e. indicated no impairment of goodwill). Accordingly, it was not necessary for us to perform the quantitative analysis.

As of August 31, 2020 and 2019, the Company had a total goodwill balance of $82,402 and $81,986, respectively, related to its acquisitions, of which $31,591 and $34,778, respectively, remained deductible for income taxes.

Intangible assets subject to amortization consisted of the following as of August 31, 2020 and 2019:

	Weighted Average		Gross Carrying		Accumulated		Net Carrying
	Amortization Period		Value		Amortization		Value
August 31, 2020
Patents and agreements	14.6	years	$	1,760	$	1,705	$	55
Formulas and technology	7.8	years		10,250		9,121		1,129
Trade names	5.8	years		8,575		7,781		794
Customer lists and relationships	9.1	years		98,966		59,744		39,222
			$	119,551	$	78,351	$	41,200
August 31, 2019
Patents and agreements	14.6	years	$	1,760	$	1,693	$	67
Formulas and technology	7.8	years		10,164		7,969		2,195
Trade names	5.8	years		8,503		7,261		1,242
Customer lists and relationships	9.1	years		98,139		48,939		49,200
			$	118,566	$	65,862	$	52,704

Aggregate amortization expense related to intangible assets for the years ended August 31, 2020, 2019 and 2018 was $11,576,  $12,445 and $11,807, respectively. As of August 31, 2020 estimated amortization expense for the next five fiscal years is as follows:

Years ending August 31,
2021	11,066
2022	10,036
2023	6,768
2024	5,560
2025	3,961

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Cash Surrender Value of Life Insurance

12 Months Ended

Aug. 31, 2020

Cash Surrender Value of Life Insurance.

Cash Surrender Value of Life Insurance

Note 5—Cash Surrender Value of Life Insurance

The Company recognized cash surrender value of a life insurance policy with the following carrier as of August 31, 2020 and 2019:

	2020		2019
John Hancock	$	4,450	$	4,450
Cash surrender value of life insurance policies	$	4,450	$	4,450

The policy is subject to periodic review. The Company currently intends to maintain the policy through the life or retirement of the insured, and records at the premium paid balance.

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Long-Term Debt

12 Months Ended

Aug. 31, 2020

Long-Term Debt

Long-Term Debt

Note 6—Long-Term Debt

Long‑term debt consisted of the following at August 31, 2020 and 2019:

	2020		2019
All-revolving credit facility with a borrowing capacity of $150,000	$	—	$	—
Long-term debt	$	—	$	—

On December 15, 2016, the Company entered an Amended and Restated Credit Agreement (the “Credit Agreement”) with Bank of America, acting as administrative agent, and with participation from Citizens Bank and JPMorgan Chase Bank (collectively with Bank of America, the “Lenders”). The Credit Agreement is initially an all-revolving credit facility with a borrowing capacity of $150,000, which can be increased by an additional $50,000 at the request of the Company and the individual or collective option of any of the Lenders. The Credit Agreement contains customary affirmative and negative covenants that, among other things, restrict our ability to incur additional indebtedness and require certain lender approval for acquisitions by the Company and its subsidiaries over a certain size.  It also requires us to maintain certain financial ratios on a consolidated basis, including a consolidated net leverage ratio (as defined in the facility) of no more than 3.25 to 1.00, and a consolidated fixed charge coverage ratio (as defined in the facility) of at least 1.25 to 1.00. We were in compliance with our debt covenants as of August 31, 2020 and 2019. The Credit Agreement is guaranteed by all of Chase Corporation’s direct and indirect domestic subsidiaries, which collectively had a carrying value of $246,096 at August 31, 2020.  The Credit Agreement was entered both to refinance our previously existing term loan and revolving line of credit, and to provide for additional liquidity to finance potential acquisitions, working capital, capital expenditures, and for other general corporate purposes.

The applicable interest rate for the revolver portion of the Credit Agreement (the “Revolving Facility”) and any Term Loan (defined below) is based on the effective London Interbank Offered Rate (LIBOR) plus an additional amount in the range of 1.00% to 1.75%, depending on the consolidated net leverage ratio of Chase Corporation and its subsidiaries. At August 31, 2020 and 2019, there was no outstanding principal balance, and therefore no applicable interest rate.  The Credit Agreement has a five-year term with interest payments due at the end of the applicable LIBOR period (but in no event less frequently than the three-month anniversary of the commencement of such LIBOR period) and principal payment due at the expiration of the agreement, December 15, 2021. The Company may elect a base rate option for all or a portion of the Revolving Facility, in which case, interest payments shall be due with respect to such portion of the Revolving Facility on the last business day of each quarter.

Subject to certain conditions set forth in the Credit Agreement, the Company may elect to convert all or a portion of the outstanding Revolving Facility into a term loan (each, a “Term Loan”), which shall be payable quarterly in equal installments sufficient to amortize the original principal amount of such Term Loan on a seven year amortization schedule; provided, however, that the final principal repayment installment shall be repaid on December 15, 2021 and in any event shall be in an amount equal to the aggregate principal amount of all Term Loans outstanding on such date. Prepayment is allowed by the Credit Agreement at any time during the term of the agreement, subject to customary notice requirements.

In December 2017 (fiscal year 2018), the Company utilized $65,000 of the Credit Agreement to finance the majority of the acquisition cost of Zappa Stewart. See Note 14 to the consolidated financial statements for additional information on this acquisition. The Company paid down $40,000 of the outstanding balance in fiscal 2018, and made additional principal payments totaling $25,000 in fiscal 2019, resulting in an outstanding balance of $0 at August 31, 2020 and 2019.

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Income Taxes

12 Months Ended

Aug. 31, 2020

Income Taxes

Income Taxes

Note 7—Income Taxes

On December 22, 2017 (fiscal 2018), President Trump signed into law the Tax Cuts and Jobs Act of 2017 (the "Tax Act"). The Tax Act impacted the U.S. statutory Federal tax rate that the Company will use going forward, reducing it from 35% to 21%. As the Company has an August 31 fiscal year-end, the lower corporate income tax rate was phased in, resulting in a U.S. statutory Federal rate of 25.7% for our fiscal year ended August 31, 2018, and a rate of 21% for fiscal 2019 and 2020.

To transition to the reduced U.S. corporate tax rate, we were required to make an adjustment to our net U.S. deferred tax assets. During fiscal 2018, predominantly in the three months ended February 28, 2018 (the second fiscal quarter of 2018), the Company recorded initial provisional adjustments to the U.S. deferred tax assets and liabilities and uncertain tax positions resulting in a net discrete tax expense of $681 recorded to the consolidated statement of operations. This net discrete tax expense recorded in fiscal 2018 is the result of the following: (a) a $379 tax benefit resulting from the remeasurement and reclassification of our then existing deferred tax liability related to unrepatriated foreign earnings to accrued income tax balance (discussed in more detail below); (b) a $917 tax expense for the remeasurement of the remaining net U.S. deferred tax assets in recognition of the new lower Federal rate; and (c) a $143 tax expense recorded as the result of remeasuring the Federal benefit on our uncertain tax positions. During fiscal 2019, no additional transitional adjustments were made related to the adoption of the Tax Act in the quarters ended November 30, 2018, May 31, 2019 and August 31, 2019, and only immaterial adjustments were made in the quarter ended February 28, 2019. During fiscal 2020, no additional transitional adjustments were made.

The Tax Act includes a transition tax or “toll charge,” which is a one-time tax charge on unrepatriated foreign earnings. The calculation of accumulated foreign earnings requires an analysis of each foreign entity’s financial results going back to 1986.  During fiscal 2018, the Company recorded a provisional transition tax adjustment associated with its accumulated unrepatriated foreign earnings reducing long-term deferred tax liabilities by $2,298 and increasing short and long-term accrued income taxes by $153 and $1,766, respectively (the short-term payable representing eight percent of the total amount due, the amount payable within the first year as per the Tax Act). The difference between the decrease in the deferred tax liabilities for unrepatriated foreign earnings and the increase in accrued income taxes, $379, was recorded as a discrete tax benefit in fiscal 2018. During fiscal 2019 (prior year), the Company paid the entire long-term and short-term toll charge balances that had been accrued at August 31, 2018.

Under the guidance set forth in the SEC's Staff Accounting Bulletin No. 118 (“SAB 118”), the Company may record provisional amounts for the impact of the Tax Act. For the second quarter of fiscal 2018, the Company made a provisional and reasonable estimate of the effects of the Tax Act on its existing deferred tax balances, including a provisional adjustment for the toll charge, and made provisional adjustments to these initially recorded amounts in the third and fourth quarters of fiscal 2018. The Company made complete and final adjustments during the quarter ended February 28, 2019 (the second quarter of fiscal 2019), which were not material in nature.

In fiscal 2019, the Company began recognizing an additional component of total Federal tax expense, the tax on Global Intangible Low-Taxed Income (“GILTI”) provision of the Tax Act, which became applicable to the Company in fiscal 2019. The Company elected to account for GILTI as a period cost, and therefore included GILTI expense in the effective tax rate calculation. This provision did not have a material effect on the effective tax rate for the years ended August 31, 2020 and 2019.

The Company concluded that the Base Erosion and Anti Abuse Tax (“BEAT”) provision of the Tax Act, which also became applicable to the Company in fiscal 2019, had no effect on our effective tax rate for fiscal 2019 or 2020. Additionally, the Company has deferred the application of Foreign-Derived Intangible Income (“FDII”) for 2019 and 2020, in anticipation of further guidance and the establishment of industry standards by the U.S. Treasury Department and trade associations.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted in response to the COVID-19 pandemic. The CARES Act, among other things, included a technical correction to the Tax Act which will allow accelerated deductions for qualified improvement property.  The Company is currently evaluating the impact of the CARES Act, but at present does not expect that the qualified improvement property correction nor other provisions of the CARES Act would result in a material tax benefit to us in future periods. The CARES Act had no material effect on the effective tax rate for fiscal 2020.

Domestic and foreign pre‑tax income for the years ended August 31, 2020, 2019 and 2018 was:

	Year Ended August 31,
	2020		2019		2018
United States	$	42,027	$	37,088	$	48,962
Foreign		3,293		6,465		8,003
	$	45,320	$	43,553	$	56,965

The provision (benefit) for income taxes for the years ended August 31, 2020, 2019 and 2018 was:

	Year Ended August 31,
	2020		2019		2018
Current:
Federal	$	9,157	$	9,880	$	12,872
State		1,813		1,699		1,662
Foreign		962		1,575		1,761
Total current income tax provision		11,932		13,154		16,295
Deferred:
Federal		(520)		(1,699)		(2,214)
State		(184)		(529)		(263)
Foreign		(65)		(84)		4
Total deferred income tax benefit		(769)		(2,312)		(2,473)
Total income tax provision	$	11,163	$	10,842	$	13,822

The provision (benefit) for income taxes differs from the amount computed by applying the Federal statutory income tax rate to income before income taxes. The Company’s combined federal, state and foreign effective tax rate as a percentage of income before taxes for fiscal 2020, 2019 and 2018, net of offsets generated by federal, state and foreign tax benefits, was 24.6%,  24.9% and 24.3%, respectively. The following is a reconciliation of the effective income tax rate with the U.S. Federal statutory income tax rate for the years ended August 31, 2020, 2019 and 2018:

	Year Ended August 31,
	2020		2019		2018
Federal statutory rates	21.0	%	21.0	%	25.7	%
Adjustment resulting from the tax effect of:
State and local taxes, net of federal benefit	3.0	%	2.1	%	1.9	%
Domestic production deduction	0.0	%	0.0	%	(1.6)	%
Foreign tax rate differential	0.0	%	0.1	%	(0.3)	%
Adjustment to uncertain tax position	(1.1)	%	1.0	%	1.1	%
Transaction costs not deductible	0.5	%	0.0	%	0.0	%
Research credit generated	(0.1)	%	(0.3)	%	(0.2)	%
Stock Compensation	(0.3)	%	(0.4)	%	(3.4)	%
Permanent items	0.9	%	1.1	%	0.9	%
Tax effect of undistributed earnings	0.3	%	0.6	%	(0.8)	%
Other	0.4	%	(0.4)	%	(0.8)	%
Change in valuation allowance	0.0	%	0.1	%	0.1	%
Deferred income tax remeasurement	0.0	%	0.0	%	1.7	%
Effective income tax rate	24.6	%	24.9	%	24.3	%

The following table summarizes the tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities:

	As of August 31,
	2020		2019
Deferred tax assets:
Allowance for doubtful accounts	$	309	$	432
Inventories		994		1,193
Accruals		504		541
Warranty reserve		14		22
Pension accrual		2,749		2,623
Deferred compensation		391		300
Foreign currency loss on previously taxed income		96		96
Loan finance costs		7		34
Restricted stock grants		823		456
Non-qualified stock options		211		258
Right-of-use asset		2,354		—
Foreign net operating loss, net of valuation allowance		247		—
Other		572		353
		9,271		6,308
Deferred tax liabilities:
Prepaid liabilities		(16)		(8)
Lease liability		(2,693)		—
Depreciation and amortization		(1,633)		(2,496)
		(4,342)		(2,504)
Net deferred tax assets (liabilities)	$	4,929	$	3,804

As of August 31, 2020, the Company had $727 of gross foreign operating loss carry forwardsto offset future taxable income, the net balance of which was included within deferred income taxes. The net operating losses will begin to expire in fiscal year ending August 31, 2027. 

Chase Corporation is required to apply a valuation allowance to reduce the deferred tax assets reported if based on the weight of the evidence it is more likely than not that some portion or all of the deferred tax assets will not be realized. As of August 31, 2020, the Company determined that a valuation allowance was not needed.

Consistent with the Company’s practice prior to the passage of the Tax Act, we do not currently take the position that undistributed foreign subsidiaries’ earnings are considered to be permanently reinvested.

A summary of the Company’s adjustments to its uncertain tax positions, included within long-term accrued income taxes on the consolidated balance sheet, in fiscal years ended August 31, 2020, 2019 and 2018 are as follows:

	2020		2019		2018
Balance, at beginning of the year	$	2,324	$	1,889	$	1,257
Increase for tax positions related to the current year		101		55		47
(Decrease) increase for tax positions related to prior years		(609)		300		595
Increase for interest and penalties		125		106		71
Decrease for lapses of statute of limitations		—		(26)		(81)
Balance, at end of year	$	1,941	$	2,324	$	1,889

The unrecognized tax benefits mentioned above include an aggregate of $1,002 of accrued interest and penalty balances related to uncertain tax positions. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. An increase in accrued interest and penalty charges of approximately $125, net of Federal tax expense, was recorded as a tax expense during the current fiscal year. The Company does not anticipate that its accrual for uncertain tax positions will change by a material amount over the next twelve-month period, as it does not expect to settle any potential disputed items with the appropriate taxing authorities nor does it expect the statute of limitations to expire for any material items.

The Company is subject to U.S. Federal income tax, as well as to income tax of multiple state, local and foreign tax jurisdictions. The statute of limitations for all material U.S. Federal, state, and local tax filings remains open for fiscal years subsequent to 2016. For foreign jurisdictions, the statute of limitations remains open in the U.K. for fiscal years subsequent to 2016 and in France for fiscal years subsequent to 2019.

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Leases

12 Months Ended

Aug. 31, 2020

Leases

Leases

Note 8—Leases

Effective September 1, 2019 (the start of fiscal 2020), the Company adopted ASU 2016-02, Leases (Topic 842), using the modified retrospective approach and utilizing the effective date as its date of initial application. As a result, prior periods are presented in accordance with the previous guidance in ASC 840, Leases (“ASC 840”). The Company has elected to apply the ‘package of practical expedients’ which allows it to not reassess i) whether existing or expired arrangements contain a lease, ii) the lease classification of existing or expired leases, or iii) whether previous initial direct costs would qualify for capitalization under the new lease standard.

At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present in the arrangement. Leases with a term greater than one year are recognized on the balance sheet as right-of-use (ROU) assets and short-term and long-term lease liabilities, as applicable. The Company does not have any financing leases that are material in nature.

Operating lease liabilities and their corresponding right-of-use assets are initially recorded based on the present value of lease payments over the expected remaining lease term. The interest rate implicit in lease contracts is typically not readily determinable. As a result, the Company utilizes its incremental borrowing rate to discount lease payments, which reflects the fixed rate at which the Company believes it could borrow on a collateralized basis the amount of the lease payments in the same currency, for a similar term, in a similar economic environment.

The Company has elected not to recognize leases with an original term of one year or less on the balance sheet. The Company typically only includes an initial lease term in its assessment of a lease arrangement. Options to renew a lease are not included in the Company’s assessment unless there is reasonable certainty that the Company will renew.

The following table presents the right-of-use asset and short-term and long-term lease liabilities amounts recorded on the consolidated balance sheet as of August 31, 2020:

	August 31,
	2020
Assets
Operating lease right-of-use asset	$	8,821
Liabilities
Current (accrued expense)	$	1,865
Operating lease long-term liabilities		6,395
Total lease liability	$	8,260

Lease cost

The components of lease costs for the year ended August 31, 2020 are as follows:

	Year Ended
	August 31, 2020
Operating lease cost (a)	$	3,783

(a) Includes short-term leases and variable lease costs (e.g. common area maintenance), which are immaterial.    

Maturity of lease liability

The maturity of the Company's lease liabilities on August 31, 2020 was as follows:

	Future Operating
Year ending August 31,	Lease Payments
2021	$	2,085
2022		1,500
2023		1,346
2024		1,360
2025 and thereafter		2,687
Less: Interest		(718)
Present value of lease liabilities	$	8,260

The weighted average remaining lease term and discount rates are as follows:

	August 31,
	2020
Lease Term and Discount Rate
Weighted average remaining lease term (years)
Operating leases		5.5
Weighted average discount rate (percentage)
Operating leases		3.1	%

Other Information

Supplemental cash flow information related to leases is as follows:

	Year Ended
	August 31, 2020
Operating cash outflows from operating leases	$	2,444
Total cash paid for amounts included in the measurement of lease liabilities	$	2,444

Minimum lease payments under operating leases prior to adoption of ASU 2016-02 were as follows:

	Future Operating
Year ending August 31,	Lease Payments
2020	$	2,468
2021		2,059
2022		1,371
2023		1,187
2024		1,200
2025 and thereafter		2,608
Total future minimum lease payments	$	10,893

Total rental expense for all operating leases amounted to $3,783, $3,734 and $3,114 for the years ended August 31, 2020, 2019 and 2018, respectively.

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Benefits and Pension Plans

12 Months Ended

Aug. 31, 2020

Benefits and Pension Plans

Benefits and Pension Plans

Note 9—Benefits and Pension Plans

401(k) Plans

The Company has a defined contribution plan adopted pursuant to section 401(k) of the Internal Revenue Code of 1986 (the “Chase 401(k) Plan”). Any qualified employee who has attained age 21 and has been employed by the Company for at least six months may contribute a portion of his or her salary to the plan and the Company will match 100% of the first one percent of salary contributed and 50% thereafter, up to an amount equal to three and one-half percent of such employee’s annual salary.

Through our wholly-owned subsidiary NEPTCO, the Company had two additional 401(k) savings plans, one for union employees and one for nonunion employees.  Under these plans, substantially all employees of NEPTCO were eligible to participate by making pre‑tax contributions to these plans. Participants could elect to defer between 1% and 10% of their annual compensation. The Company could contribute $0.75 for each $1.00 of participant deferrals up to 6% of the nonunion participant’s compensation. The Company could match union employee contributions by $0.50 for each $1.00 of participant deferrals up to 6% of the participant’s compensation. The nonunion plan was merged into the Chase 401(k) Plan effective January 1, 2018 and the union plan was merged into the Chase 401(k) Plan effective November 15, 2018.

The Company’s contribution expense for all 401(k) plans was $852,  $787 and $702 for the years ended August 31, 2020, 2019 and 2018, respectively.

Non-Qualified Deferred Savings Plans

The Company has a non-qualified deferred savings plan covering the Board of Directors and a separate plan covering selected employees. Participants may elect to defer a portion of their compensation for future payment. The plans are funded by trusteed assets that are restricted to the payment of deferred compensation or satisfaction of the Company’s general creditors. The Company’s liability under the plans was $1,629 and $1,275 on August 31, 2020 and 2019, respectively.

Pension Plans

The Company has noncontributory defined benefit pension plans covering employees of certain divisions of the Company. The Company has a funded, qualified plan (“Qualified Plan”) and an unfunded supplemental plan (“Supplemental Plan”) designed to maintain benefits for certain employees at the plan formula level. The plans provide for pension benefits determined by a participant’s years of service and final average compensation. The Qualified Plan assets consist of separate pooled investment accounts with a trust company. The measurement date for the plans is August 31, 2020.

Effective December 1, 2008, a “soft freeze” in the Qualified Plan was adopted whereby no new employees hired would be admitted to the Qualified Plan, with the exception of employees who were members of the International Association of Machinists and Aerospace Workers Union whose contract was amended in June 2012 to include a soft freeze with an effective date of July 15, 2012. All eligible participants who were admitted to the plan prior to the applicable soft freeze dates continue to accrue benefits as detailed in the plan agreements.

Through our wholly-owned subsidiary NEPTCO, the Company had a third defined benefit pension plan (“NEPTCO Pension Plan”) covering our union employees at our Pawtucket facility. This plan was frozen effective October 31, 2006, and as a result, no new participants could enter the plan and the benefits of current participants were frozen as of that date. The benefits were based on years of service and the employee’s average compensation during the earlier of five years before retirement, or October 31, 2006. The NEPTCO Pension Plan assets consisted of separate pooled investment accounts with a trust company. The measurement date for the NEPTCO Pension Plan was historically the same as the Company’s fiscal year end.

In August 2019, the Board of Directors approved a plan to terminate the NEPTCO Pension Plan. The Company established November 15, 2019 as the plan termination date and during fiscal 2020 performed the administrative actions required to carry out the termination. In relation to the Company’s intention to terminate the plan in less than one year following the prior year balance sheet date, the liability associated with the NEPTCO Pension Plan was classified as a current liability, within accrued payroll and other compensation, on the consolidated balance sheet as of August 31, 2019 (prior year). No balance related to the NEPTCO defined benefit plan was carried on the Company’s consolidated balance sheet as of August 31, 2020.

The following tables reflect the status of the Company’s pension plans for the years ended August 31, 2020 2019 and 2018:

	Year Ended August 31,
	2020		2019		2018
Change in benefit obligation
Projected benefit obligation at beginning of year	$	20,087	$	21,860	$	22,673
Service cost		295		283		283
Interest cost		451		696		629
Actuarial (gain) loss		2,253		995		17
Settlements		—		—		—
Benefits paid		(2,423)		(3,747)		(1,742)
Projected benefit obligation at end of year	$	20,663	$	20,087	$	21,860
Change in plan assets
Fair value of plan assets at beginning of year	$	7,859	$	9,855	$	9,003
Actual return on plan assets		868		181		509
Employer contribution		1,864		1,570		2,085
Settlements		—		—		—
Benefits paid		(2,423)		(3,747)		(1,742)
Fair value of plan assets at end of year	$	8,168	$	7,859	$	9,855
Funded status at end of year	$	(12,495)	$	(12,228)	$	(12,005)

	Year Ended August 31,
	2020		2019		2018
Amounts recognized in consolidated balance sheets
Noncurrent assets	$	—	$	—	$	301
Current liabilities		(1,565)		(1,743)		(1,570)
Noncurrent liabilities		(10,930)		(10,485)		(10,736)
Net amount recognized in consolidated balance sheets	$	(12,495)	$	(12,228)	$	(12,005)
Actuarial present value of benefit obligation and funded status
Accumulated benefit obligations	$	18,307	$	18,244	$	20,075
Projected benefit obligations	$	20,663	$	20,087	$	21,858
Plan assets at fair value	$	8,168	$	7,859	$	9,855
Amounts recognized in accumulated other comprehensive income
Prior service cost	$	44	$	47	$	54
Net actuarial loss		10,595		9,638		9,377
Adjustment to pre-tax accumulated other comprehensive income	$	10,639	$	9,685	$	9,431

	Year Ended August 31,
	2020		2019		2018
Other changes in plan assets and benefit obligations recognized in other comprehensive income
Net (gain)/loss	$	711	$	1,863	$	(704)
Amortization of loss		(664)		(472)		(484)
Supplemental plan assumption change		1,065		(620)		676
Amortization of prior service cost		(3)		(3)		(3)
Effect of settlement on accumulated other comprehensive income		(155)		(511)		—
Total recognized in other comprehensive income		954		257		(515)
Net periodic pension cost		1,178		1,537		937
Total recognized in net periodic pension cost and other comprehensive income	$	2,132	$	1,794	$	422
Estimated amounts that will be amortized from accumulated comprehensive income over the next fiscal year
Prior service cost	$	3	$	3	$	3
Net actuarial loss		656		500		475

Prior service cost arose from the amendment of the plan’s benefit schedules to comply with the Tax Reform Act of 1986 and adoption of the unfunded supplemental pension plan.

Components of net periodic pension cost for the fiscal years ended August 31, 2020, 2019 and 2018 included the following:

	2020		2019		2018
Components of net periodic benefit cost
Service cost	$	295	$	283	$	283
Interest cost		451		696		629
Expected return on plan assets		(390)		(428)		(462)
Amortization of prior service cost		3		3		3
Amortization of accumulated loss		664		472		484
Curtailment and settlement loss		155		511		—
Net periodic benefit cost	$	1,178	$	1,537	$	937

Weighted average assumptions used to determine benefit obligations as of August 31, 2020, 2019 and 2018 are as follows:

	2020		2019		2018
Discount rate
Qualified plan	1.92	%	2.58	%	3.80	%
Supplemental plan	1.65	%	2.37	%	3.57	%
NEPTCO plan	—	%	2.29	%	3.59	%
Rate of compensation increase
Qualified and Supplemental plan	3.50	%	3.50	%	3.50	%
NEPTCO plan	—	%	—	%	—	%

Weighted average assumptions used to determine net periodic benefit cost for the years ended August 31, 2020, 2019 and 2018 are as follows:

	2020		2019		2018
Discount rate
Qualified plan	2.58	%	3.80	%	3.30	%
Supplemental plan	2.37	%	3.57	%	2.73	%
NEPTCO plan	2.29	%	3.59	%	2.95	%
Expected long-term return on plan assets
Qualified plan	5.60	%	5.40	%	5.40	%
Supplemental plan	—	%	—	%	—	%
NEPTCO plan	5.60	%	5.40	%	5.20	%
Rate of compensation increase
Qualified and Supplemental plan	3.50	%	3.50	%	3.50	%
NEPTCO plan	—	%	—	%	—	%

It is the Company’s policy to evaluate, on an annual basis, the discount rate used to determine the projected benefit obligation to approximate rates on high quality, long-term obligations. The Moody’s Corporate Aa Bond index has generally been used as a benchmark for this purpose, with adjustments made if the duration of the index differed from that of the plan. The discount rate is determined by matching the expected payouts from the respective plans to the spot rates inherent in the FTSE Pension Discount Curve (formerly Citigroup Pension Discount Curve). A single rate is then developed, that when applied to the expected cash flows, results in the same present value as determined using the various spot rates. The Company believes that this approach produces the most appropriate approximation of the plan liability.

The Company estimates that each 100-basis point reduction in the discount rate would result in additional (decreased) net periodic pension cost, the Company’s primary pension obligation, of approximately $41 for the Qualified Plan and ($57) for the Supplemental Plan. For the current fiscal year, the NEPTCO Pension Plan expense is insignificant so sensitivity disclosure is not presented. The expected return on plan assets is derived from a periodic study of long-term historical rates of return on the various asset classes included in the Company’s targeted pension plan asset allocation. The Company estimates that each 100-basis point reduction in the expected return on plan assets would result in additional net periodic pension cost of approximately $68 for the Qualified Plan. No rate of return is assumed for the Supplemental Plan since that plan is currently not funded. The rate of compensation increase is also evaluated and is adjusted by the Company, if necessary, periodically.

Qualified Plan Assets

The investment policy for the Qualified Plan is based on ERISA standards for prudent investing. The fundamental goal underlying the investment policy is to ensure that the assets of the plans are invested in a prudent manner to meet the obligations of the plans as these obligations come due. The primary investment objectives include providing a total return which will promote the goal of benefit security by attaining an appropriate ratio of plan assets to plan obligations, to provide for real asset growth while also tracking plan obligations, to diversify investments across and within asset classes, to reduce the impact of losses in single investments, and to follow investment practices that comply with applicable laws and regulations.

The primary policy objectives will be met by investing assets to achieve a reasonable tradeoff between return and risk relative to the plan’s obligations. This includes investing a portion of the assets in funds selected in part to hedge the interest rate sensitivity to plan obligations.

The Qualified Plan assets are invested in a diversified mix of both domestic and foreign equity investments and fixed income securities. Asset manager performance is reviewed at least annually and benchmarked against the peer universe for the given investment style. The Company’s expected return for the Qualified Plan is 5.25%. To determine the expected long‑term rate of return on the assets for the Qualified Plan, the Company considered the historical and expected return on the plan assets, as well as the current and expected allocation of the plan assets.

Asset allocation is monitored on an ongoing basis relative to the established asset class targets. The interaction between plan assets and benefit obligations is periodically studied to assist in the establishment of strategic asset allocation targets. The investment policy permits variances from the targets within certain parameters. Asset rebalancing occurs when the underlying asset class allocations move outside these parameters, at which time the asset allocation is rebalanced back to the policy target weight.

The Qualified Plan has the following target allocation and weighted average asset allocations as of August 31, 2020, 2019 and 2018:

	Target
	Allocation		Percentage of Plan Assets as of August 31,
Asset Category	Range		2020		2019		2018
Equity securities	10-80	%	49	%	44	%	46	%
Debt securities	20-70	%	51	%	56	%	54	%
Other	0-100	%	—	%	—	%	—	%
Total	100	%	100	%	100	%	100	%

NEPTCO Pension Plan Assets

Prior to the NEPTCO Pensions Plan’s termination and full payout in fiscal 2020, the investment policy for the NEPTCO Pension Plan was based on ERISA standards for prudent investing. The fundamental goal underlying the investment policy was to ensure that the assets of the plans were invested in a prudent manner to meet the obligations of the plan as these obligations come due. The primary investment objectives included maximization of return within reasonable and prudent levels of risk, provision of returns comparable to returns for similar investment options, provision of exposure to a wide range of investment opportunities in various asset classes and vehicles, control of administrative and management costs, and provision of appropriate diversification within investment vehicles.

The primary policy objectives were met by investing assets to achieve a reasonable tradeoff between return and risk relative to the plan’s obligations. This included investing a portion of the assets in funds selected in part to hedge the interest rate sensitivity to plan obligations.

The NEPTCO Pension Plan assets were invested in a diversified mix of fixed income, and both domestic and foreign equity investments. The ongoing monitoring of investments was a regular and disciplined process and confirmed that the criteria remain satisfied. The process of monitoring investment performance relative to specified guidelines was consistently applied.

Historically, to determine the expected long‑term rate of return on the assets for the NEPTCO Pension Plan, the Company considered the historical and expected return on the plan assets, as well as the current and expected allocation of the plan assets.

Given the plan’s termination and full payout in 2020, the plan no longer holds assets as of August 31, 2020. The NEPTCO Pension Plan had the following target allocation and weighted average asset allocations as of August 31, 2020, 2019 and 2018:

	Target
	Allocation		Percentage of Plan Assets as of August 31,
Asset Category	Range		2020		2019		2018
Equity securities	10-80	%	—	%	44	%	46	%
Debt securities	20-70	%	—	%	56	%	54	%
Other	0-100	%	—	%	—	%	—	%
Total	100	%	—	%	100	%	100	%

Fair Market Value of Pension Plan Assets

The Company is required to categorize pension plan assets using 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 following table presents the Company’s pension plan assets at August 31, 2020 and 2019 by asset category:

			Fair value measurements at								Fair value measurements at
			August 31, 2020								August 31, 2019
					Significant								Significant
			Quoted prices		other		Significant				Quoted prices		other		Significant
			in active		observable		unobservable				in active		observable		unobservable
	August 31,		markets		inputs		inputs		August 31,		markets		inputs		inputs
	2020		(Level 1)		(Level 2)		(Level 3)		2019		(Level 1)		(Level 2)		(Level 3)
Asset Category
Equity securities	$	3,986	$	3,986	$	—	$	—	$	3,474	$	3,474	$	—	$	—
Debt securities		4,182		4,182		—		—		4,385		4,385		—		—
Total	$	8,168	$	8,168	$	—	$	—	$	7,859	$	7,859	$	—	$	—

Level 1 Assets: The fair values of the common stocks, corporate bonds and U.S. Government securities included in this tier are based on the closing price reported on the active market where the individual securities are traded.

Estimated Future Benefit Payments

The following pension benefit payments (which include expected future service) are assumed to be paid in each of the following fiscal years based on the participants’ normal retirement age, and giving consideration to the termination of the NEPTCO Pension plan:

Year ending August 31,	Pension Benefits
2021	$	2,996
2022		1,759
2023		2,507
2024		1,948
2025		1,788
2026-2030	$	5,393

The Company contributed $1,864,  $1,570 and $2,085 to fund its obligations under the pension plans for the years ended August 31, 2020, 2019 and 2018, respectively, including final cash outlays related to the termination of the NEPTCO plan in fiscal 2020. The Company plans to make the necessary contributions during fiscal 2021 to ensure its pension plans continue to be adequately funded given the current market conditions and does not anticipate a material change from amounts contributed during the current fiscal year.

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Stockholders' Equity

12 Months Ended

Aug. 31, 2020

Stockholders' Equity

Stockholders' Equity

Note 10—Stockholders’ Equity

2013 Equity Incentive Plan

In October 2012, the Company adopted, and the stockholders subsequently approved, the 2013 Equity Incentive Plan (the “2013 Plan”). The 2013 Plan permits the grant of restricted stock, stock options, deferred stock, stock payments or other awards to employees, participating officers, directors, consultants and advisors who are linked directly to increases in shareholder value. The aggregate number of shares available for grant under the 2013 Plan was initially 1,200,000. Additional shares may become available in connection with share splits, share dividends or similar transactions. As of August 31, 2020, 949,398 shares remained available for future grant under the 2013 Plan.

2005 Incentive Plan

In November 2005, the Company adopted, and the stockholders subsequently approved, the 2005 Incentive Plan (the “2005 Plan”). The 2005 Plan permits the grant of restricted stock, stock options, deferred stock, stock payments or other awards to employees, participating officers, directors, consultants and advisors who are linked directly to increases in shareholder value. The aggregate number of shares available for grant under the 2005 Plan was initially 1,000,000. The Company is no longer granting equity awards under the 2005 Plan. Options to purchase 39,473 shares of common stock remained outstanding under the 2005 as of August 31, 2020.

Restricted Stock

Employees and Executive Management

During the third quarter of fiscal 2015, 16,000 restricted shares were issued to non-executive members of management; 15,000 with a vesting date of April 16, 2020 and 1,000 with a vesting date of January 31, 2018. Compensation expense was being recognized on a ratable basis over the vesting period.

In August 2015, the Board of Directors of the Company approved the fiscal year 2016 Long Term Incentive Plan (“LTIP”) for the executive officers and other members of management.  The 2016 LTIP was an equity-based plan with a grant date of September 1, 2015. In addition to the stock option component described below, the plan contained the following restricted stock components: (a) a performance and service-based restricted stock grant of 6,962 shares in the aggregate, subject to adjustment based on fiscal 2016 results, with a vesting date of August 31, 2018 for which compensation expense was recognized on a ratable basis over the vesting period based on quarterly probability assessments; and (b) a time-based restricted stock grant of 7,683 shares in the aggregate, with a vesting date of August 31, 2018, for which compensation expense was recognized on a ratable basis over the vesting period.

Based on the fiscal year 2016 financial results, 6,277 additional shares of restricted stock (total of 13,239 shares) were earned and granted subsequent to the end of fiscal year 2016 in accordance with the performance measurement criteria.  No further performance-based measurements apply to this award.

During the first quarter of fiscal 2016, an additional grant of 5,000 restricted shares was made to a non-executive member of management with a vesting date of October 20, 2020. Compensation expense is being recognized on a ratable basis over the vesting period.

In August 2016, the Board of Directors of the Company approved the fiscal year 2017 LTIP for the executive officers and other members of management.  The 2017 LTIP was an equity-based plan with a grant date of September 1, 2016. In addition to the stock option component described below, the plan contained the following restricted stock components: (a) a performance and service-based restricted stock grant of 5,399 shares in the aggregate, subject to adjustment based on fiscal 2017 results, with a vesting date of August 31, 2019, for which compensation expense was recognized on a ratable basis over the vesting period based on quarterly probability assessments; and (b) a time-based restricted stock grant of 5,367 shares in the aggregate, with a vesting date of August 31, 2019, for which compensation expense was recognized on a ratable basis over the vesting period.

Based on the fiscal year 2017 financial results, 5,399 additional shares of restricted stock (total of 10,798 shares) were earned and granted subsequent to the end of fiscal year 2017 in accordance with the performance measurement criteria.  No further performance-based measurements apply to this award.

In August 2016, the Board of Directors of the Company approved equity retention agreements with certain executive officers.  The equity-based retention agreements had a grant date of September 1, 2016. In addition to the stock option component described below, the equity retention agreements contain a time-based restricted stock grant of 16,312 shares in the aggregate, with 7,768 shares having a vesting date of August 31, 2019, and 8,544 shares initially having a vesting date of August 31, 2021. The latter award was amended in August 2017 to vest in five equal annual installments over the five-year period following the grant date. Compensation expense is being recognized on a ratable basis over the vesting period.

During the first quarter of fiscal 2017, additional grants totaling 8,805 shares of restricted stock were issued to non-executive members of management with a vesting date of August 31, 2021. Compensation expense is being recognized on a ratable basis over the vesting period.

In August 2017, the Board of Directors of the Company approved the fiscal year 2018 LTIP for the executive officers and other members of management.  The 2018 LTIP was an equity-based plan with a grant date of September 1, 2017. In addition to the stock option component described below, the plan contained the following restricted stock components: (a) a performance and service-based restricted stock grant of 4,249 shares in the aggregate, subject to adjustment based on fiscal 2018 results, with a vesting date of August 31, 2020, for which compensation expense was recognized on a ratable basis over the vesting period based on quarterly probability assessments; and (b) a time-based restricted stock grant of 3,473 shares in the aggregate, with a vesting date of August 31, 2020. Compensation expense was recognized on a ratable basis over the vesting period.

Based on the fiscal year 2018 financial results, 572 additional shares of restricted stock (total of 4,821 shares) were earned and granted subsequent to the end of fiscal year 2018 in accordance with the performance measurement criteria.  No further performance-based measurements apply to this award.

During the third quarter of fiscal 2018, an additional grant totaling 192 shares of restricted stock was issued to a non-executive member of management with a vesting date of August 31, 2020. Compensation expense was recognized on a ratable basis over the vesting period.

During the fourth quarter of fiscal 2018, an additional grant totaling 609 shares of restricted stock was issued to an executive member of management with a vesting date of August 20, 2019. Compensation expense was recognized on a ratable basis over the vesting period.

In August 2018, the Board of Directors of the Company approved the fiscal year 2019 LTIP for the executive officers and other members of management.  The 2019 LTIP is an equity-based plan with a grant date of September 1, 2018. In addition to the stock option component described below, the plan contains the following restricted stock components: (a) a performance and service-based restricted stock grant of 3,541 shares in the aggregate, subject to adjustment based on fiscal 2019 results, with a vesting date of August 31, 2021, for which compensation expense is being recognized on a ratable basis over the vesting period based on quarterly probability assessments; and (b) a time-based restricted stock grant of 3,068 shares in the aggregate, with a vesting date of August 31, 2021. Compensation expense is being recognized on a ratable basis over the vesting period.

In September 2018, restricted stock in the amount of 2,472 shares related to a first quarter of fiscal 2017 grant was forfeited in conjunction with the termination of employment of a non-executive member of management of the Company.

During the fourth quarter of fiscal 2019, an additional grant of restricted stock was made related to the 2019 LTIP grant in conjunction with an amendment to the equity compensation program for a promoted employee.  The additional grant contains the following restricted stock components: (a) a performance and service-based restricted stock grant of 211 shares in the aggregate, subject to adjustment based on fiscal 2019 results, with a vesting date of August 31, 2021, for which compensation expense is being recognized on a ratable basis over the vesting period based on quarterly probability assessments; and (b) a time-based restricted stock grant of 132 shares in the aggregate, with a vesting date of August 31, 2021, for which compensation expense is being recognized on a ratable basis over the vesting period.

In August 2019, restricted stock in the amount of 833 shares related to the 2019 LTIP grant was forfeited in conjunction with an amendment in the equity compensation agreement of an employee.

Based on the fiscal year 2019 financial results, 2,694 shares of restricted stock already granted were forfeited subsequent to the end of fiscal year 2019 in accordance with the performance measurement criteria.  No further performance-based measurements apply to this award.  Compensation expense relating to the remaining portion is being recognized on a ratable basis over the vesting period.

In August 2019, the Board of Directors of the Company approved the fiscal year 2020 LTIP for the executive officers and other members of management.  The 2020 LTIP is an equity-based plan with a grant date of September 1, 2019 and contains the following equity components: (a) a performance and service-based restricted stock grant of 3,697 shares in the aggregate, subject to adjustment based on fiscal 2020 results, with a vesting date of August 31, 2022. Compensation expense is recognized on a ratable basis over the vesting period based on quarterly probability assessments; and (b) a time-based restricted stock grant of 3,689 shares in the aggregate, with a vesting date of August 31, 2022. Compensation expense is being recognized on a ratable basis over the vesting period.

In August 2019, the Board of Directors of the Company approved equity retention agreements with certain executive officers. The equity-based retention agreements have a grant date of September 1, 2019 and contained time-based restricted stock grants of 15,945 shares in the aggregate, and have a vesting date of August 31, 2022. Compensation expense is being recognized on a ratable basis over the vesting period.

During the second quarter of fiscal 2020, additional grants of 432, 616 and 18,720 shares of restricted stock (total of 19,768) were issued to non-executive members of management with vesting dates of December 31, 2021, 2022 and 2024, respectively. Compensation expense is being recognized on a ratable basis over the vesting period.

In May 2020, restricted stock in the amount of 432 shares related to a second quarter of fiscal 2020 grant was forfeited in conjunction with the termination of employment of a non-executive member of management of the Company.

During the fourth quarter of fiscal 2020, two additional grants totaling 481 shares and 261 shares of restricted stock were issued to two non-executive members of management, with vesting dates of July 27, 2021 and June 15, 2021, respectively. Compensation expense is being recognized on a ratable basis over the vesting period.

Non-employee Board of Directors

In February 2017, as part of their standard compensation for board service, non-employee members of the Board received a total grant of 2,407 shares of restricted stock for service for the period from January 31, 2017 through January 31, 2018.  The shares of restricted stock vested at the conclusion of this service period.  Compensation was recognized on a ratable basis over the twelve-month vesting period.

In February 2018, as part of their standard compensation for board service, non-employee members of the Board received a total grant of 2,779 shares of restricted stock for service for the period from January 31, 2018 through January 31, 2019.  The shares of restricted stock vested at the conclusion of this service period.  Compensation was recognized on a ratable basis over the twelve-month vesting period.

In February 2019, as part of their standard compensation for board service, non-employee members of the Board received a total grant of 4,599 shares of restricted stock for service for the period from January 31, 2019 through January 31, 2020.  The shares of restricted stock will vest at the conclusion of this service period.  Compensation was recognized on a ratable basis over the twelve-month vesting period.

In February 2020, as part of their standard compensation for board service, non-employee members of the Board received a total grant of 4,906 shares of restricted stock for service for the period from January 31, 2020 through January 31, 2021.  The shares of restricted stock will vest at the conclusion of this service period.  Compensation is being recognized on a ratable basis over the twelve-month vesting period.

A summary of the transactions of the Company’s restricted stock plans for the years ended August 31, 2020, 2019 and 2018 is presented below:

	Non Employee Directors	Weighted Average Grant Date Fair Value		Officers and Employees	Weighted Average Grant Date Fair Value
Unvested restricted stock at August 31, 2017	2,407	$	91.05	73,972	$	51.56
Granted	2,779	$	101.05	13,922	$	83.65
Vested	(2,407)	$	91.05	(22,315)	$	41.35
Forfeited or cancelled	—			—
Unvested restricted stock at August 31, 2018	2,779	$	101.05	65,579	$	61.85
Granted	4,599	$	101.92	7,524	$	121.64
Vested	(2,779)	$	101.05	(25,443)	$	65.79
Forfeited or cancelled	—			(3,305)	$	79.39
Unvested restricted stock at August 31, 2019	4,599	$	101.92	44,355	$	67.18
Granted	4,906	$	95.59	43,841	$	108.47
Vested	(4,599)	$	101.92	(25,195)	$	61.51
Forfeited or cancelled	—			(3,126)	$	123.19
Unvested restricted stock at August 31, 2020	4,906	$	95.59	59,875	$	97.72

Stock Options

In August 2015, the Board of Directors of the Company approved the fiscal year 2016 LTIP for the executive officers and other members of management.  The 2016 LTIP was an equity-based plan with a grant date of September 1, 2015 and included options to purchase 21,275 shares of common stock in the aggregate with an exercise price of $39.50 per share.  The options vested in three equal annual installments ending on August 31, 2018. The options granted will expire on September 1, 2025. Compensation expense was recognized over the period of the award consistent with the vesting terms.

In August 2016, the Board of Directors of the Company approved the fiscal year 2017 LTIP for the executive officers and other members of management.  The 2017 LTIP is an equity-based plan with a grant date of September 1, 2016 and included options to purchase 15,028 shares of common stock in the aggregate with an exercise price of $64.37 per share.  The options vested in three equal annual installments ending on August 31, 2019. Of the options granted, 5,596 options will expire on August 31, 2026, and 9,432 options will expire on September 1, 2026.  Compensation expense was recognized over the period of the award consistent with the vesting terms.

In August 2016, the Board of Directors of the Company approved equity retention agreements with certain executive officers.  The equity-based retention agreements have a grant date of September 1, 2016 and included options to purchase 23,563 shares of common stock in the aggregate with an exercise price of $64.37 per share.  These options cliff vested on August 31, 2019 and will expire on August 31, 2026. Compensation expense was recognized over the period of the award consistent with the vesting terms.

In August 2017, the Board of Directors of the Company approved the fiscal year 2018 LTIP for the executive officers and other members of management.  The 2018 LTIP is an equity-based plan with a grant date of September 1, 2017 and included options to purchase 9,622 shares of common stock in the aggregate with an exercise price of $93.50 per share.  The options vested in three equal annual installments ending on August 31, 2020. Of the options granted, 4,591 options will expire on August 31, 2027, and 5,031 options will expire on September 1, 2027.  Compensation expense was recognized over the period of the award consistent with the vesting terms.

During the third quarter of fiscal 2018, an additional grant of options to purchase 606 shares of common stock with an exercise price of $104.00 was issued to a non-executive member of management. The options vested in three equal annual installments ending on August 31, 2020 and will expire on March 1, 2028. Compensation expense was recognized on a ratable basis over the vesting period.

In August 2018, the Board of Directors of the Company approved the fiscal year 2019 LTIP for the executive officers and other members of management.  The 2019 LTIP is an equity-based plan with a grant date of September 1, 2018 and included options to purchase 8,603 shares of common stock in the aggregate with an exercise price of $123.95 per share.  The options vest in three equal annual installments ending on August 31, 2021. Of the options granted, 3,927 options will expire on August 31, 2028, and 4,676 options will expire on September 1, 2028.  Compensation expense is being recognized over the period of the award consistent with the vesting terms.

During the fourth quarter of fiscal 2019, an additional grant of 483 options to purchase shares of common stock with an exercise price of $99.38 per share was made related to the 2019 LTIP grant and in conjunction with an amendment to the equity compensation program for a promotion of an employee. The options vest in three equal installments on August 31, 2019, 2020 and 2021, and will expire on August 31, 2028. Compensation expense is being recognized on a ratable basis over the vesting period.

In August 2019, the Board of Directors of the Company approved the fiscal year 2020 LTIP for the executive officers and other members of management.  The 2020 LTIP is an equity-based plan with a grant date of September 1, 2019 and included options to purchase 13,418 shares of common stock in the aggregate with an exercise price of $100.22 per share.  The options vest in three equal annual installments ending on August 31, 2022. Of the options granted, 6,218 options will expire on August 31, 2029, and 7,200 options will expire on September 1, 2029.  Compensation expense is being recognized over the period of the award consistent with the vesting terms.

In August 2019, the Board of Directors of the Company approved equity retention agreements with certain executive officers. The equity-based retention agreements have a grant date of September 1, 2019 and contain stock options to purchase 53,642 shares of common stock in the aggregate with an exercise price of $100.22 per share. The options will cliff vest on August 31, 2022 and will expire on August 31, 2029. Compensation expense is being recognized on a ratable basis over the vesting period.

The following table summarizes information about stock options outstanding as of August 31, 2020:

		Options Outstanding						Options Exercisable
Exercise Prices		Number Outstanding	Weighted Avg. Remaining Contractual Life	Weighted Average Exercise Price		Aggregate Intrinsic Value		Number Exercisable	Weighted Average Exercise Price		Aggregate Intrinsic Value
$	16.00	5,065	2.1	$	16.00	$	413	5,065	$	16.00	$	413
$	29.72	13,790	3.0	$	29.72	$	936	13,790	$	29.72	$	936
$	35.50	13,372	4.0	$	35.50	$	830	13,372	$	35.50	$	830
$	39.50	12,753	5.0	$	39.50	$	741	12,753	$	39.50	$	741
$	64.37	34,260	6.0	$	64.37	$	1,137	34,260	$	64.37	$	1,137
$	93.50	8,704	7.0	$	93.50	$	35	8,704	$	93.50	$	35
$	99.38	483	8.0	$	99.38	$	—	322	$	99.38	$	—
$	100.22	67,060	9.0	$	100.22	$	—	4,473	$	100.22	$	—
$	104.00	606	7.5	$	104.00	$	—	606	$	104.00	$	—
$	123.95	8,603	8.0	$	123.95	$	—	5,735	$	123.95	$	—
		164,696	6.8	$	75.21	$	4,092	99,080	$	57.96	$	4,092

Options are granted with an exercise price that is equal to the closing market value of the Company’s common stock on the day preceding the grant date, which is determined not to be materially different from the opening market value on the date of grant.

A summary of the transactions of the Company’s stock option plans for the years ended August 31, 2020, 2019 and 2018 is presented below:

	Officers and Employees	Weighted Average Exercise Price
Options outstanding at August 31, 2017	152,974	$	34.21
Granted	10,228	$	94.12
Exercised	(64,012)	$	19.06
Forfeited or cancelled	—
Options outstanding at August 31, 2018	99,190	$	50.17
Granted	9,086	$	122.64
Exercised	(7,022)	$	42.86
Forfeited or cancelled	—
Options outstanding at August 31, 2019	101,254	$	57.18
Granted	67,060	$	100.22
Exercised	(3,618)	$	34.21
Forfeited or cancelled	—
Options outstanding at August 31, 2020	164,696	$	75.21
Options exercisable at August 31, 2020	99,080	$	57.96

The weighted average grant date fair value of options granted in the years ended August 31, 2020, 2019 and 2018 was $29.79,  $40.12 and $30.99 per share, respectively.

The total pretax intrinsic value of stock options exercised was $311,  $403 and $6,714 for the years ended August 31, 2020, 2019, and 2018, respectively.

Excluding the effects of common stock reserved for issuance upon exercise of the 164,696 outstanding options, there were 949,398 shares of common stock available for future issuance under the Company’s 2013 Equity Incentive Plan on August 31, 2020. Based on historic experience, management estimates all outstanding stock options will vest.

The income tax benefit realized from stock options exercised, vesting of restricted stock and issuance of stock pursuant to grants of restricted stock units was $149, $157 and $1,921 for the years ended August 31, 2020, 2019 and 2018, respectively.

As of August 31, 2020, unrecognized expense related to all stock-based compensation described above was $5,397 (including $4,136 for restricted stock and $1,261 for stock options), which will be recognized over the next five fiscal years.

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Segment Data

12 Months Ended

Aug. 31, 2020

Segment Data

Segment Data

Note 11—Segment Data

In fiscal 2019 (prior year), due to the recent changes in our business structure, including several recent acquisitions and divestitures within the previously existing Industrial Materials segment, changes in senior management and the establishment of our Chief Executive Officer as our sole chief operating decision maker, the Company's management team has restructured its internal and external reporting process to more accurately reflect the manner in which the current business is being managed and operated. In the fourth quarter of fiscal 2019 (prior year), the Company reorganized into three reportable operating segments: an Adhesives, Sealants and Additives segment, an Industrial Tapes segment and a Corrosion Protection and Waterproofing segment. The segments are distinguished by the nature of the products manufactured and how they are delivered to their respective markets.

The Adhesives, Sealants and Additives segment (formerly included within the Industrial Materials 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. This 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. Beginning December 31, 2017, the Adhesives, Sealants and Additives segment includes the acquired operations of Zappa Stewart within the Company’s specialty chemicals intermediates product line.

The Industrial Tapes segment (formerly included within the Industrial Materials 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. This 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 cable 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 (formerly known as the Construction Materials 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 segments:

	Years Ended August 31,
	2020			2019			2018
Revenue
Adhesives, Sealants and Additives	$	96,208		$	104,796		$	101,690
Industrial Tapes		118,960			129,845			130,598
Corrosion Protection and Waterproofing		45,994			46,710			51,900
Total	$	261,162		$	281,351		$	284,188
Income before income taxes
Adhesives, Sealants and Additives	$	25,953		$	27,142	(d)	$	35,190	(h)
Industrial Tapes		31,237	(a)		28,216	(e)		30,886	(i)
Corrosion Protection and Waterproofing		16,638	(b)		15,909	(f)		18,178
Total for reportable segments		73,828			71,267			84,254
Corporate and common costs		(28,508)	(c)		(27,714)	(g)		(27,289)	(j)
Total	$	45,320		$	43,553		$	56,965
Includes the following costs by segment:
Adhesives, Sealants and Additives
Interest	$	98		$	177		$	422
Depreciation		994			1,467			1,285
Amortization		9,313			9,359			7,895
Industrial Tapes
Interest	$	111		$	216		$	516
Depreciation		1,746			1,755			2,748
Amortization		1,800			1,800			2,604
Corrosion Protection and Waterproofing
Interest	$	37		$	126		$	234
Depreciation		615			674			753
Amortization		463			1,286			1,308

(a) 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 six months of fiscal 2020

(b) Includes $170 gain on the refund of a payment made in fiscal 2019 related to engineering studies performed to assess potential operational changes and further plant rationalization and consolidation and an expense of $405 for the write-down of certain assets under construction.

(c) Includes $150 of expense related to exploratory IT work performed to assess potential future upgrades to the Company’s companywide ERP system, a $760 gain related to the April 2020 sale of the Company’s Pawtucket, RI location, a  $1,791 gain related to the August 2020 sale of the Company’s Randolph, MA property, $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, $155 of pension-related settlement costs due to the timing of lump-sum distribution and $274 in acquisition-related costs attributable to the September 2020 (fiscal 2021) acquisition of ABchimie

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

(e) Includes $260 of expense related to the closure and exit of our Pawtucket, RI location recognized in the first quarter of fiscal 2019, and $526 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 second half of fiscal 2019

(f) Includes $200 of expense related to engineering studies performed to assess potential future operational changes and further plant rationalization and consolidation, see note (b)

(g) Includes $511 of pension-related settlement costs due to the timing of lump-sum distributions

(h) Includes $1,070 of expense related to inventory step-up in fair value attributable to the acquisition of Zappa Stewart

(i) Includes $1,085 gain on sale of license related to the structural composites product line recorded in the second quarter of fiscal 2018, $1,480 gain on sale of business related to the April 2018 sale of the structural composites rod business and $1,272 of expense related to the exit of our Pawtucket, RI location in the fourth quarter of fiscal 2018

(j) Includes $393 in acquisition-related expense attributable to the December 2017 acquisition of Zappa Stewart

	August 31,		August 31,
	2020		2019
Total Assets
Adhesives, Sealants and Additives	$	129,457	$	135,583
Industrial Tapes		71,229		77,085
Corrosion Protection and Waterproofing		32,642		32,478
Total for reportable segments		233,328		245,146
Corporate and common assets		113,502		62,822
Total	$	346,830	$	307,968

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Export Sales and Foreign Operations

12 Months Ended

Aug. 31, 2020

Export Sales and Foreign Operations

Export Sales and Foreign Operations

Note 12—Export Sales and Foreign Operations

Export sales from continuing domestic operations to unaffiliated third parties were $30,067,  $30,582 and $42,883 for the years ended August 31, 2020, 2019 and 2018, respectively. The decrease in export sales in fiscal 2020 against fiscal 2019 in a reflection of the overall year-over-year decrease in sales results. The decrease in export sales in fiscal 2019 against fiscal 2018 resulted from decreased export sales into China and Europe.

The Company’s products are sold worldwide. Revenue for the years ended August 31, 2020, 2019 and 2018, are attributed to operations located in the following countries:

	Years Ended August 31,
	2020		2019		2018
Revenue
United States	$	226,690	$	248,281	$	244,225
United Kingdom		20,543		17,504		20,598
All other foreign (1)		13,929		15,566		19,365
Total	$	261,162	$	281,351	$	284,188

(1) Inclusive of sales originated from our Paris, France location, royalty revenue attributable to our licensed manufacturer in Asia, and Chase foreign manufacturing operations.

As of August 31, 2020 and 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:

	August 31,		August 31,
	2020		2019
Long-Lived Assets
United States
Property, plant and equipment, net	$	22,427	$	24,993
Goodwill and Intangible assets, less accumulated amortization		117,930		129,057
United Kingdom
Property, plant and equipment, net		2,320		2,493
Goodwill and Intangible assets, less accumulated amortization		4,403		4,446
All other foreign
Property, plant and equipment, net		827		1,840
Goodwill and Intangible assets, less accumulated amortization		1,269		1,187
Total
Property, plant and equipment, net	$	25,574	$	29,326
Goodwill and Intangible assets, less accumulated amortization	$	123,602	$	134,690

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Supplemental Cash Flow Data

12 Months Ended

Aug. 31, 2020

Supplemental Cash Flow Data

Supplemental Cash Flow Data

Note 13—Supplemental Cash Flow Data

Supplemental cash flow information for the years ended August 31, 2020, 2019 and 2018 is as follows:

	2020		2019		2018
Income taxes paid	$	11,186	$	11,714	$	20,142
Interest paid	$	230	$	728	$	915
Noncash Investing and Financing Activities
Common stock received for payment of stock option exercises	$	123	$	119	$	1,028
Property, plant and equipment additions included in accounts payable	$	92	$	67	$	197

Supplemental cash flow information as related to acquisitions and divestitures for the years ended August 31, 2020, 2019 and 2018 is as follows:

		2020		2019		2018
Sale of Randolph, MA Property
Asset held for sale	$	(14)
Gain on sale of real estate		(1,791)
Cash received from sale of real estate, net		1,805
Sale of Pawtucket, RI Location
Asset held for sale	$	(1,050)
Gain on sale of real estate		(760)
Cash received from sale of real estate, net		1,810
Acquisition of Zappa Stewart
Current assets					$	10,478
Property, plant & equipment						1,872
Goodwill and Intangible assets						64,378
Deferred tax liability						(2,626)
Accounts payable and accrued liabilities						(633)
Payments for acquisitions						(73,469)
Sale of Structural Composites Rod Business
Inventory					$	(522)
Goodwill						(230)
Gain on sale of business						(1,480)
Cash received from sale of business, net of transaction costs						2,232
Sale of Structural Composites License
Property and equipment					$	(26)
Gain on sale of license						(1,085)
Accrued income taxes						111
Cash received from sale of license						1,000
Sale of Fiber Optic Cable Components Product Line
Due from sale of business			$	(400)
Cash received from sale of product line, net of transaction costs				400

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Acquisitions

12 Months Ended

Aug. 31, 2020

Acquisitions

Acquisitions

Note 14—Acquisitions

Acquisition of ABchimie

On September 1, 2020 (subsequent to fiscal 2020), the Company acquired all the capital stock of ABchimie for €18,000 (approximately $21,420 at the time of the transaction) net of cash and marketable securities acquired, subject to final working capital adjustment, excluding acquisition-related costs of $274 and with a potential earn out based on performance potentially worth an additional €7,000 (approximately $8,330 at the time of the transaction). ABchimie is a Corbelin, France headquartered solutions provider for the cleaning and the protection of electronic assemblies, with ‎further formulation, production, and research and development capabilities‎. The transaction was funded 100% with cash on hand.  The financial results of the business will be included in the Company's fiscal 2021 financial statements within the Adhesives, Sealants and Additives operating segment in the electronic and industrial coatings product line. The Company is currently in the process of finalizing purchase accounting, regarding a final allocation of the purchase price to tangible and identifiable intangible assets assumed and anticipates completion within fiscal 2021.  The ABchimie acquisition does not represent a significant business combination so pro forma financial information is not provided.

Acquisition of Zappa Stewart

On December 31, 2017, the Company acquired Zappa Stewart, an advanced superabsorbent polymer (SAP) formulator and solutions provider, with operations located in Hickory and McLeansville, NC. The business was acquired for a purchase price of $73,469, after final working capital adjustments and excluding acquisition-related costs.  Chase Corporation acquired all equity of the business and entered multiyear leases at both locations. The purchase was funded by a combination of a $65,000 draw on the Company’s existing revolving credit facility and available cash on hand. Zappa Stewart’s protective materials technology is complementary to Chase Corporation’s current specialty chemicals offerings. This acquisition is in line with our core strategies and extends our reach into growing medical and consumer applications.

Since the effective date for this acquisition, December 31, 2017, the financial results of the acquired business have been included in the Company’s financial statements within the Adhesives, Sealants and Additives operating segment, in the specialty chemicals intermediates product line. The acquisition was accounted for as a business combination under ASC Topic 805, “Business Combinations.” In accordance with this accounting standard, the Company expensed $393 of acquisition-related costs during the second quarter of 2018 to acquisition-related costs.

The Company finalized purchase accounting in the three-month period ended November 30, 2018 (the first quarter of fiscal 2019), with no adjustments made to the preliminary amounts recorded at August 31, 2018. The purchase price has been allocated to the acquired tangible and identifiable intangible assets assumed, based on their fair values as of the date of the acquisition:

Assets and Liabilities	Amount
Accounts receivable	$	3,670
Inventory		6,796
Prepaid expenses and other current assets		12
Property, plant & equipment		1,872
Goodwill		34,138
Intangible assets		30,240
Deferred tax liability		(2,626)
Accounts payable and accrued expenses		(633)
Total purchase price	$	73,469

The excess of the purchase price over the net tangible and intangible assets acquired resulted in goodwill of $34,138 that is largely attributable to the synergies and economies of scale from combining the operations, technologies and research and development capabilities of Zappa Stewart and Chase, particularly as it pertains to the expansion of the Company's product and service offerings, the established workforce and marketing efforts. A portion of this goodwill, $23,990, is deductible for income tax purposes.

All assets, including goodwill, acquired as part of the Zappa Stewart acquisition are included in the Adhesives, Sealants and Additives operating segment. Identifiable intangible assets purchased with this transaction are as follows:

			Weighted Average
Intangible Asset	Amount		Useful Life
Customer relationships	$	28,500	7.9	years
Technology		900	7	years
Trade names		840	4	years
Total intangible assets	$	30,240

Supplemental Pro Forma Data (unaudited)

The following table presents the pro forma results of the Company for the year ended August 31, 2018 as though the Zappa Stewart acquisition described above occurred on September 1, 2016 (the first day of fiscal 2017). The actual revenue and expenses for the acquired business are included in the Company’s consolidated results beginning on December 31, 2017. From the date of acquisition (December 31, 2017) through August 31, 2018, revenue and net income for the Zappa Stewart operations included in the consolidated statement of operations were $16,324 and $578, respectively, with results inclusive of sale of $1,070 in inventory step-up cost, $393 inacquisition-related costs and amortization expense of $2,672 recognized related to intangible assets recorded as part of the transaction, but not inclusive of any interest or financing costs. The pro forma results include adjustments for the estimated amortization of intangibles, acquisition-related costs, sale of inventory step-up cost, interest expense assuming the entire $65,000 draw remained outstanding through December 31, 2017 (at the interest rate effective at the date of borrowing) and the income tax impact of the pro forma adjustments at the statutory rate of 26% for fiscal 2018. The following pro forma information is not necessarily indicative of the results that would have been achieved if the acquisition had been effective on September 1, 2016.

	Years Ended August 31,
	2018
Revenue	$	292,609
Net income		44,508
Net income available to common shareholders, per common and common equivalent share
Basic earnings per share	$	4.75
Diluted earnings per share	$	4.70

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Sale of License

12 Months Ended

Aug. 31, 2020

Sale of License

Sale of License

Note 15—Sale of License

In November 2017 (fiscal 2018), the Company entered a license agreement with an unrelated party to sell a license, including intellectual property, and certain construction in process assets, with a net book value of $26, all of which related to the manufacturing of certain structural composite materials. In the second fiscal quarter of 2018, the transaction was finalized for gross consideration of $1,111 comprising cash proceeds of $1,000 and $111 in foreign tax consideration paid by the buyer on Chase Corporation’s behalf. This transaction resulted in a gain of $1,085, which was recorded in the Company’s consolidated statement of operations as a gain on sale of license during the fiscal quarter ended February 28, 2018.

In relation to this license agreement, the purchaser also entered into a royalty agreement with the Company under which the purchaser agreed to make royalty payments to the Company based on the volume of future sales of certain structural composite material manufactured by the purchaser. Revenue recognized related to this royalty agreement was not material in fiscal 2019 and 2018, and this royalty agreement was terminated in fiscal 2019.

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Fair Value Measurements

12 Months Ended

Aug. 31, 2020

Fair Value Measurements

Fair Value Measurements

Note 16—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 (exit price) in an orderly transaction between market participants at the measurement date. The Company uses a three‑tier fair value hierarchy, which classifies the inputs used in measuring fair values. These tiers are: 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.

Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company has determined that it does not have any financial liabilities measured at fair value other than long‑term debt and that its financial assets are currently all classified within Level 1 or Level 2 in the fair value hierarchy. The financial assets classified as Level 1 and Level 2 as of August 31, 2020 and 2019 represent investments which are restricted for use in non-qualified retirement savings plans 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 August 31, 2020 and 2019:

				Fair value measurement category
				Quoted prices		Significant other		Significant
	Fair value			in active markets		observable inputs		unobservable inputs
	measurement date	Total		(Level 1)		(Level 2)		(Level 3)
Assets:
Restricted investments	August 31, 2020	$	1,619	$	1,395	$	224	$	—
Restricted investments	August 31, 2019	$	1,260	$	1,091	$	169	$	—

The following table presents the fair values of the Company’s long‑term debt as of August 31, 2020 and 2019 which is recorded at its carrying amount:

				Fair value measurement category
				Quoted prices		Significant other		Significant
	Fair value			in active markets		observable inputs		unobservable inputs
	measurement date	Total		(Level 1)		(Level 2)		(Level 3)
Liabilities:
Long-term debt	August 31, 2020	$	—	$	—	$	—	$	—
Long-term debt	August 31, 2019	$	—	$	—	$	—	$	—

The long-term debt had no outstanding balance as of August 31, 2020 and August 31, 2019. The carrying value of the long-term debt approximates its fair value, as the interest rate is set based on the movement of the underlying market rates. See Note 6 to the consolidated financial statements for additional information on long-term debt.

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Net Income Per Share

12 Months Ended

Aug. 31, 2020

Net Income Per Share

Net Income Per Share

Note 17—Net Income Per Share

The determination of earnings per share under the two‑class method is as follows:

	Years Ended August 31,
	2020		2019		2018
Net income	$	34,157	$	32,711	$	43,143
Less:  Allocated to participating securities		273		257		410
Available to common shareholders	$	33,884	$	32,454	$	42,733
Basic weighted average shares outstanding		9,359,940		9,334,232		9,296,648
Additional dilutive common stock equivalents		79,810		44,975		69,423
Diluted weighted average shares outstanding		9,439,750		9,379,207		9,366,071
Net income available to common shareholders, per common and common equivalent share
Basic	$	3.62	$	3.48	$	4.60
Diluted	$	3.59	$	3.46	$	4.56

For the years ended August 31, 2020, 2019 and 2018, stock options to purchase 11,183, 12,901 and 404 shares of common stock were outstanding but were not included in the calculation of diluted net income per share because their inclusion would be antidilutive. Included in the calculation of dilutive common stock equivalents are the unvested portion of restricted stock and stock options.

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Sale of Businesses

12 Months Ended

Aug. 31, 2020

Sale of Businesses

Sale of Businesses

Note 18—Sale of Businesses

Sale ofStructural Composites Rod Business

On April 20, 2018, Chase Corporation finalized an agreement with an unrelated party to sell all inventory, operational machinery and equipment and intangible assets of the Company’s structural composites rod business, as well as a license related to the production and sale of rod, for proceeds of $2,232, net of transaction costs and following all working capital adjustments. This business, which was part of the structural composites product line within the Industrial Tapes segment (previously within the former Industrial Materials segment), had limited growth and profitability prospects as part of the Company, and was outside the areas Chase has identified for strategic emphasis. The divestiture was accounted for under ASC Topic 360, “Disclosure—Impairment or Disposal of Long-Lived Assets.” In accordance with this accounting standard, the resulting pre-tax gain on sale of $1,480 was recognized in the third quarter of fiscal 2018 as a gain on sale of businesses within the consolidated statement of operations. Chase received $2,075, net of transaction costs, in the third quarter of fiscal 2018, with the remaining $157 received in the fourth quarter of fiscal 2018 as a result of a working capital true-up.

Related to this transaction, the purchaser entered into a royalty agreement with the Company, under which the purchaser agreed to make royalty payments to the Company based on future sales of certain structural composite material manufactured by the purchaser. Royalty revenue recognized in fiscal 2019 and 2018 related to this agreement was not material, and this royalty agreement was terminated in fiscal 2019.

The sale of the structural components rod business followed the Company’s sale of the RodPack® wind blade components business in November 2015, and the licensing of certain composite technologies during the second quarter of fiscal 2018 (see further discussion in Note 15 to the consolidated financial statements). Subsequent to the third quarter of fiscal 2018, Chase Corporation has included the results of its remaining structural composites wind energy business (inclusive of the royalties and the custom manufacturing services) within the specialty products product line.

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Sale of Real Estate

12 Months Ended

Aug. 31, 2020

Sale of Real Estate

Sale of Real Estate

Note 19—Sale of Real Estate

Sale of Randolph, MA Property

In August 2020, the Company finalized the sale of its Randolph, MA property for net proceeds of $1,805. This transaction resulted in a gain of $1,791, which was recorded during the fourth quarter of fiscal 2020.

Sale of Pawtucket, RI Location

In April 2020, the Company finalized the sale of its Pawtucket, RI location for net proceeds of $1,810. This transaction resulted in a gain of $760, which was recorded during the third quarter of fiscal 2020.

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Operations Optimization Costs

12 Months Ended

Aug. 31, 2020

Operations Optimization Costs

Operations Optimization Costs

Note 20—Operations Optimization Costs

Strategic Actions Taken Related to COVID-19

The second, third and fourth fiscal quarters of 2020 saw the global spread of the coronavirus pandemic (COVID-19), which grew to create significant volatility, uncertainty and global economic disruption. During the third fiscal quarter, the Company implemented changes to its cost structure designed to address market changes brought on by COVID-19 and demonstrate its commitment to fiscal prudence: (a) the Company made a targeted reduction in its global workforce, contemplated pre-pandemic but catalyzed by COVID-19, which resulted in the recognition of $183 in severance costs during the period; and (b) the Company also instituted a temporary 20% reduction in the base salaries of its named executive officers and select members of senior management, as well as the cash compensation of the non-employee members of its Board of Directors. The reduction in force, which impacted operations in the Company’s U.S. facilities, and the adjustments in compensation, were both effective May 2020.

ERP System Upgrade

During the first quarter of fiscal 2020, the Company commissioned third party led studies regarding the potential upgrading of the Company’s current worldwide ERP system. Chase Corporation is currently reviewing the data and recommendations provided by the study and may further utilize third-party engineering, IT and other professional services firms in the future for similar work, as well as work around the facilities rationalization and consolidation initiative. The Company recognized $150 in expense related to these services in the first quarter of fiscal 2020, with no expense recognized in the second, third or fourth fiscal quarters. Given the ongoing nature of the review, an estimate of future costs, including those that may be capitalized, cannot currently be determined.

Relocation of Pulling and Detection Manufacturing to Hickory, NC

During the third quarter of fiscal 2019, Chase Corporation began moving the pulling and detection operations housed in its Granite Falls, NC location to its Hickory, NC facility. This is in line with the Company’s ongoing initiative to consolidate its manufacturing plants and streamline its existing processes. At the time, the pulling and detection operations were the only Chase-owned production operations in Granite Falls, NC, with the remaining portions of the building being either utilized for research and development or leased to a third party. The process of moving, including moving internal research and development capabilities, was substantially completed during the second quarter of fiscal 2020. The Company recognized $559 in expense related to the move in the six-month period ended February 29, 2020, having recognized $526 in expense during the second half of fiscal 2019. No costs were recognized in the six months ended August 31, 2020, and future costs related to this move are not anticipated to be significant to the consolidated financial statements.

Engineering Studies Related to Facility Consolidation and Rationalization Initiative

During the fourth quarter of fiscal 2019 (prior year), the Company commissioned engineering studies of certain legacy operations, machinery and locations related to the Company’s facility rationalization and consolidation initiative. Chase Corporation completed its review of the data and recommendations provided by the study in the fourth quarter of fiscal 2020 (current year). The Company recognized $200 in expense related to these services in fiscal 2019, and a gain of $170 in fiscal 2020, as certain amounts expensed in fiscal 2019 were refunded. Also in the fourth quarter of fiscal 2020 and related to the recommendations of the commissioned engineering studies, the Company wrote down the value of certain non-operating production assets related to the pipeline coatings product line, within the Corrosion Protection and Waterproofing segment. Given the nature and prospects of the equipment, the Company determined its then carrying value exceeded its fair value and recognized an expense of $405 related to the machinery. The Company may utilize third party engineering, IT and other professional services firms in the future for similar optimization-related work. Given the ongoing nature of the facility rationalization and consolidation initiative, an estimate of future costs cannot currently be determined.

Closure of Pawtucket, RI Facility

On June 25, 2018, the Company announced to its employees the planned closing of its Pawtucket, RI manufacturing facility effective August 31, 2018. This is in line with the Company’s ongoing efforts to consolidate its manufacturing plants and streamline its existing processes. The manufacture of products previously produced in the Pawtucket, RI facility was substantially moved to Company facilities in Oxford, MA and Lenoir, NC during a two-month transition period.  In the fourth quarter of fiscal 2018, the Company expensed $1,272 related to the closure. The Company also recognized $260 in expense related to the move in the three-month period ended November 30, 2018, with no additional expense recognized in the remainder of fiscal 2019. The Company completed the sale of its Pawtucket, RI location to a third party in the third quarter of fiscal 2020 for net proceeds totaling $1,810, recognizing a gain on sale of real estate of $760. Also, during the third quarter of fiscal 2020, the Company recognized $85 in final Pawtucket, RI transition and exit costs, with no further costs related to this initiative anticipated in future periods.

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Commitments and Contingencies

12 Months Ended

Aug. 31, 2020

Commitments and Contingencies

Commitments and Contingencies

Note 21—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 cash flows, litigation is inherently unpredictable. Therefore, judgments could be rendered, or settlements agreed to that could adversely affect the Company’s operating results or cash flows in a particular period. The Company routinely assesses all 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 we assess the likelihood of loss as probable.

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Assets Held for Sale

12 Months Ended

Aug. 31, 2020

Assets Held for Sale

Assets Held for Sale

Note 22—Assets Held for Sale

The Company periodically reviews long-lived assets against its plans to retain or ultimately dispose of these assets. If the Company decides to dispose of an asset and commits to a plan to actively market and sell the asset, it will be moved to assets held for sale. The Company analyzes market conditions each reporting period, and, if applicable, records additional impairments due to declines in market values of like assets. The fair value of the asset is determined by observable inputs such as appraisals and prices of comparable assets in active markets for assets like the Company's. Gains are not recognized until the assets are sold. 

Assets held for sale as of August 31, 2020 and 2019 were:

	August 31, 2020		August 31, 2019
Pawtucket, RI - Property, plant and equipment	$	—	$	1,050
Randolph, MA - Property		—		14
Total	$	—	$	1,064

The Randolph, MA and Pawtucket, RI locations were sold for gains of $1,791 and $760, respectively, during fiscal 2020. See Note 19 to the consolidated financial statements for additional information on the sale of the Randolph, MA and Pawtucket, RI properties during fiscal 2020.

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Selected Quarterly Financial Data (Unaudited)

12 Months Ended

Aug. 31, 2020

Selected Quarterly Financial Data (Unaudited)

Selected Quarterly Financial Data (Unaudited)

Note 23—Selected Quarterly Financial Data (Unaudited)

The following table presents unaudited operating results for each of the Company’s quarters in the years ended August 31, 2020 and 2019:

	Fiscal Year 2020 Quarters
	First		Second		Third		Fourth		Year
Net Sales	$	65,757	$	64,626	$	64,157	$	63,202	$	257,742
Gross Profit on Sales		23,974		23,960		24,468		23,725		96,127
Net income	$	7,362	$	7,879	$	9,908	$	9,008	$	34,157
Net income available to common shareholders, per common and common equivalent share:
Basic	$	0.78	$	0.83	$	1.05	$	0.95	$	3.62
Diluted	$	0.77	$	0.83	$	1.04	$	0.95	$	3.59

	Fiscal Year 2019 Quarters
	First		Second		Third		Fourth		Year
Net Sales	$	71,364	$	65,442	$	70,883	$	69,150	$	276,839
Gross Profit on Sales		24,789		22,229		24,477		25,181		96,676
Net income	$	8,823	$	5,273	$	8,541	$	10,074	$	32,711
Net income available to common shareholders, per common and common equivalent share:
Basic	$	0.94	$	0.56	$	0.91	$	1.07	$	3.48
Diluted	$	0.93	$	0.56	$	0.90	$	1.07	$	3.46

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Valuation and Qualifying Accounts

12 Months Ended

Aug. 31, 2020

Valuation and Qualifying Accounts

Valuation and Qualifying Accounts

Note 24—Valuation and Qualifying Accounts

The following table sets forth activity in the Company’s accounts receivable and sales return reserve:

Year ended	Balance at Beginning of Year		Charges to Operations		Deductions to Reserves		Balance at End of Year
August 31, 2020	$	739	$	921	$	(1,222)	$	438
August 31, 2019	$	559	$	1,775	$	(1,595)	$	739
August 31, 2018	$	456	$	1,138	$	(1,035)	$	559

The following table sets forth activity in the Company’s warranty reserve (the warranty reserve is included within accrued expenses on the consolidated balance sheet):

Year ended	Balance at Beginning of Year		Charges to Operations		Deductions to Reserves		Balance at End of Year
August 31, 2020	$	37	$	—	$	(37)	$	—
August 31, 2019	$	—	$	37	$	—	$	37
August 31, 2018	$	220	$	—	$	(220)	$	—

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Accumulated Other Comprehensive Income

12 Months Ended

Aug. 31, 2020

Accumulated Other Comprehensive Income

Accumulated Other Comprehensive Income

Note 25—Accumulated Other Comprehensive Income

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

			Change in Funded		Foreign Currency
	Restricted		Status of		Translation
	Investments		Pension Plans		Adjustment		Total
Balance at August 31, 2018	$	126	$	(5,796)	$	(6,666)	$	(12,336)
Other comprehensive gains (losses) before reclassifications		36		(1,215)		(1,541)		(2,720)
Reclassifications to net income of previously deferred (gains) losses		(8)		740		—		732
Other comprehensive income (loss)		28		(475)		(1,541)		(1,988)
Balance at August 31, 2019	$	154	$	(6,271)	$	(8,207)	$	(14,324)
Other comprehensive gains (losses) before reclassifications		143		(1,278)		3,163		2,028
Reclassifications to net income of previously deferred (gains) losses		(28)		620		—		592
Other comprehensive income (loss)		115		(658)		3,163		2,620
Adoption of ASU 2018-02		—		(1,388)		—		(1,388)
Balance at August 31, 2020	$	269	$	(8,317)	$	(5,044)	$	(13,092)

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

	Amount of Gain (Loss) Reclassified from
	Accumulated Other Comprehensive Income
	(Loss) into Income
	Year Ended		Year Ended		Location of Gain (Loss) Reclassified from Accumulated
	August 31, 2020		August 31, 2019		Other Comprehensive Income (Loss) into Income
Gains on Restricted Investments:
Realized loss (gain) on sale of restricted investments	$	(37)	$	(11)	Selling, general and administrative expenses
Tax expense (benefit)		9		3
Gain net of tax	$	(28)	$	(8)
Loss on Funded Pension Plan adjustments:
Amortization of prior pension service costs and unrecognized losses	$	667	$	475	Other income (expense)
Settlement and curtailment loss		155		511	Other income (expense)
Tax expense (benefit)		(202)		(246)
Loss net of tax	$	620	$	740
Total net loss reclassified for the period	$	592	$	732

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Revenue from Contracts with Customers

12 Months Ended

Aug. 31, 2020

Revenue from Contracts with Customers

Revenue from Contracts with Customers

Note 26—Revenue from Contracts with Customers

The Company accounts for revenue in accordance with ASC 606, “Revenue from Contracts with Customers,” adopted September 1, 2018 (proceeding periods are accounted for under the historic accounting standards of ASC 605). This revenue is generated from the manufacture of specialty chemical products including coatings, linings, adhesives, sealants, specialty tapes, polymers and laminates. Certain of these manufactured products can incorporate customer-owned materials. The Company also recognizes, to a lesser extent, revenue through royalties and commissions from licensed manufacturers and from providing custom manufacturing-related services. The Company’s revenue recognition policies require the Company to make significant judgments and estimates. In applying the Company’s revenue recognition policy, determinations must be made as to when control of products passes to the Company’s customers, which can be either at a point in time or over time based on contractual terms with customers. Revenue is generally recognized at a point in time when control passes upon either shipment to or receipt by the customer of the Company’s products, while revenue is generally recognized over time when control of the Company’s products transfers to customers during the manufacturing process. The Company analyzes several factors, including but not limited to, the nature of the products being sold and contractual terms and conditions in contracts with customers to help the Company make such judgments about revenue recognition.

Contract Balances

The Company’s contract assets primarily relate to unbilled revenue for products currently in production at the Company’s facilities and which incorporate customer-owned material. Revenue is recognized in advance of billing to the customer in these specific circumstances, whereas billing is typically performed at the time of shipment to or receipt by the customer. Contract assets are included in prepaid expenses and other current assets on the Company’s consolidated balance sheet. The following table presents contract assets by reportable operating segment as of August 31, 2020 and 2019:

	August 31,		August 31,
	2020		2019
Contract Assets
Adhesives, Sealants and Additives	$	20	$	42
Industrial Tapes		21		26
Corrosion Protection and Waterproofing		41		79
Total	$	82	$	147

The Company did not have any contract liabilities as of August 31, 2020 and 2019.

Disaggregated Revenue

The Company disaggregates revenue from customers by geographic region, as it believes this disclosure best depicts how the nature, amount, timing and uncertainty of the Company's revenue and cash flows are affected by economic factors. Disaggregated revenue by geographical region for the years ended August 31, 2020 and 2019 was as follows:

	Year Ended August 31, 2020
	Adhesives, Sealants		Industrial		Corrosion Protection		Consolidated
	and Additives		Tapes		and Waterproofing		Revenue
Revenue
North America	$	64,611	$	105,911	$	36,252	$	206,774
Asia		17,977		7,150		6,361		31,488
Europe		13,201		3,286		3,047		19,534
All other foreign		419		2,613		334		3,366
Total Revenue	$	96,208	$	118,960	$	45,994	$	261,162
	Year Ended August 31, 2019
	Adhesives, Sealants		Industrial		Corrosion Protection		Consolidated
	and Additives		Tapes		and Waterproofing		Revenue
Revenue
North America	$	70,320	$	117,955	$	37,463	$	225,738
Asia		19,430		7,126		6,524		33,080
Europe		14,773		2,637		2,455		19,865
All other foreign		273		2,127		268		2,668
Total Revenue	$	104,796	$	129,845	$	46,710	$	281,351

Practical Expedients and Policy Elections

Shipping and Handling Policy Election — the Company has made an accounting policy election to record shipping and handling activities occurring after control has passed to the customer to be treated as a fulfillment cost rather than as a distinct performance obligation. Shipping and handling expenses consist primarily of costs incurred to deliver products to customers and internal costs related to preparing products for shipment and are recorded within cost of products and services sold. Amounts billed to customers as shipping and handling are classified as revenue when services are performed.

Considering Existence of a Significant Financing Component — as a practical expedient, an entity need not adjust the promised amount of consideration for the effects of a significant financing component if the entity expects, at contract inception, that the period between when the entity transfers a promised good or service to the customer and when the customer pays for that good or service will be one year or less. Given the time between the Company transferring a promised good or service to the customer and the customer paying for that good or service is less than one year based on the terms of arrangements with customers, the Company does not adjust the promised amount of consideration for effects of a significant financing component.

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Aug. 31, 2020

Summary of Significant Accounting Policies

Products and Markets

Products and Markets

Our principal products are specialty tapes, laminates, adhesives, sealants, coatings and chemical intermediates that are sold by our salespeople, manufacturers' representatives and distributors.  In our Adhesives, Sealants and Additives segment, these products consist of:

(i) moisture protective coatings, which are sold to the electronics industry for circuitry manufacturing, including circuitry used in automobiles, industrial controls and home appliances;

(ii) advanced adhesives, sealants, and coatings for automotive and industrial applications that require specialized bonding, encapsulating, environmental protection, or thermal management functionality;

(iii) polymeric microspheres utilized by various industries to allow for weight and density reduction and sound dampening;

(iv) polyurethane dispersions utilized for various coating products; and

(v) superabsorbent polymers, which are utilized for water and liquid management, remediation and protection in diverse markets including wire and cable, medical, environmental, infrastructure, energy and consumer products.

 In our Industrial Tapes segment, these products consist of:

(i) insulating and conducting materials for the manufacture of electrical and telephone wire and cable, electrical splicing, and terminating and repair tapes, which are marketed to wire and cable manufacturers;

(ii) laminated film foils, including EMI/RFI shielding tapes, used in communication and local area network (LAN) cable;

(iii) industrial coated or laminate products and custom manufacturing services sold into medical, consumer, automotive, packaging, energy, telecommunications and other specialized markets;

(iv) laminated durable papers, including laminated paper with an inner security barrier used in personal and mail‑stream privacy protection, which are sold primarily to the envelope converting and commercial printing industries;

(v) pulling and detection tapes used in the installation, measurement and location of fiber optic cable, water and natural gas lines, and power, data and video cable for commercial buildings; and

(vi) cover tapes with reliable adhesive and anti‑static properties essential to delivering semiconductor components via tape and reel packaging.

In our Corrosion Protection and Waterproofing segment, these products consist of:

(i) protective coatings, tapes and protectants for pipelines, valves, casings and other metals, which are sold to oil companies, gas companies and water/wastewater utilities for use in both the construction and maintenance of oil, gas, water and wastewater pipelines;

(ii) fluid applied coating and lining systems for use in the water and wastewater industry;

(iii) waterproofing tapes and coatings used in waterproofing of the exterior of both commercial and industrial structures;

(iv) waterproofing membranes for highway bridge deck metal supported surfaces, which are sold to municipal transportation authorities, and high-performance polymeric asphalt additives; and

(v) expansion and control joint systems designed for roads, bridges, stadiums and airport runways.

Basis of Presentation

Basis of Presentation

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 functional currency for financial reporting. Certain reclassifications have been made to the prior year amounts to conform to the current year’s presentation.

Other Business Developments

Other Business Developments

On September 1, 2020 (subsequent to fiscal 2020), the Company acquired all the capital stock of ABchimie for €18,000 (approximately $21,420 at the time of the transaction) net of cash and marketable securities acquired, subject to final working capital adjustment, excluding acquisition-related costs of $274 and with a potential earn out based on performance potentially worth an additional €7,000 (approximately $8,330 at the time of the transaction). ABchimie is a Corbelin, France headquartered solutions provider for the cleaning and the protection of electronic assemblies, with ‎further formulation, production, and research and development capabilities‎. The transaction was funded 100% with cash on hand.  The financial results of the business will be included in the Company's fiscal 2021 financial statements within the Adhesives, Sealants and Additives operating segment in the electronic and industrial coatings product line. The Company is currently in the process of finalizing purchase accounting, regarding a final allocation of the purchase price to tangible and identifiable intangible assets assumed and anticipates completion within fiscal 2021.  The ABchimie acquisition does not represent a significant business combination so pro forma financial information is not provided.

The second, third and fourth fiscal quarters of 2020 saw the global spread of the coronavirus pandemic (COVID-19), which grew to create significant volatility, uncertainty and global economic disruption. During the third fiscal quarter, the Company implemented changes to its cost structure designed to address market changes brought on by COVID-19 and demonstrate its commitment to fiscal prudence: (a) the Company made a targeted reduction in its global workforce, contemplated pre-pandemic but catalyzed by COVID-19, which resulted in the recognition of $183 in severance costs during the period; and (b) the Company also instituted a temporary 20% reduction in the base salaries of its named executive officers and select members of senior management, as well as the cash compensation of the non-employee members of its Board of Directors. The reduction in force, which impacted operations in the Company’s U.S. facilities, and the adjustments in compensation, were both effective May 2020.

During the first quarter of fiscal 2020, the Company commissioned third party led studies regarding the potential upgrading of the Company’s current worldwide ERP system. Chase Corporation is currently reviewing the data and recommendations provided by the study and may further utilize third-party engineering, IT and other professional services firms in the future for similar work, as well as work around the facilities rationalization and consolidation initiative. The Company recognized $150 in expense related to these services in the first quarter of fiscal 2020, with no expense recognized in the second, third or fourth fiscal quarters. Given the ongoing nature of the review, an estimate of future costs, including those that may be capitalized, cannot currently be determined.

During the third quarter of fiscal 2019, the Company began moving the pulling and detection operations housed in its Granite Falls, NC location to its Hickory, NC facility. This is in line with the Company’s ongoing initiative to consolidate its manufacturing plants and streamline its existing processes. At the time, the pulling and detection operations were the only Chase-owned production operations in Granite Falls, NC, with the remaining portions of the building being either utilized for research and development or leased to a third party. The process of moving, including moving internal research and development capabilities, was substantially completed during the second quarter of fiscal 2020. The Company recognized $559 in expense related to the move in the six-month periods ended February 29, 2020, having recognized $526 in expense during the second half of fiscal 2019. No costs were recognized in the six months ended August 31, 2020, and future costs related to this move are not anticipated to be significant to the consolidated financial statements.

During the fourth quarter of fiscal 2019 (prior year), Chase Corporation commissioned engineering studies of certain legacy operations, machinery and locations related to the Company’s ongoing facility rationalization and consolidation initiative. Chase completed its review of the data and recommendations provided by the study in the fourth quarter of fiscal 2020 (current year). The Company recognized $200 in expense related to these services in fiscal 2019, and a gain of $170 in fiscal 2020, as certain amounts expensed in fiscal 2019 were refunded.Also in the fourth quarter of fiscal 2020 and related to the recommendations of the commissioned engineering studies, the Company wrote down the value of certain non-operating production assets related to the pipeline coatings product line, within the Corrosion Protection and Waterproofing segment. Given the nature and prospects of the equipment, the Company determined its then carrying value exceeded its fair value and recognized an expense of $405related to the machinery. Chase may utilize third party engineering, IT and other professional services firms in the future for similar optimization-related work. Given the ongoing nature of the facility rationalization and consolidation initiative, an estimate of future costs cannot currently be determined.

On June 25, 2018, the Company announced to its employees the planned closing of its Pawtucket, RI manufacturing facility effective August 31, 2018. This is in line with the Company’s ongoing efforts to consolidate its manufacturing plants and streamline its existing processes. The manufacture of products previously produced in the Pawtucket, RI facility was substantially moved to Company facilities in Oxford, MA and Lenoir, NC during a two-month transition period.  In the fourth quarter of fiscal 2018, the Company expensed $1,272 related to the closure. The Company also recognized $260 in expense related to the move in the three-month period ended November 30, 2018, with no additional expense recognized in the remainder of fiscal 2019. The Company completed the sale of its Pawtucket, RI location to a third party in the third quarter of fiscal 2020 for net proceeds totaling $1,810, recognizing a gain on sale of real estate of $760. Also, during the third quarter of fiscal 2020, the Company recognized $85 in final Pawtucket, RI transition and exit costs, with no further costs related to this initiative anticipated in future periods.

On April 20, 2018, Chase Corporation finalized an agreement with an unrelated party to sell all inventory, operational machinery and equipment and intangible assets of the Company’s structural composites rod business, as well as a license related to the production and sale of rod, for proceeds of $2,232, net of transaction costs and following certain working capital adjustments. This business, which was part of the structural composites product line within the Industrial Tapes segment, had limited growth and profitability prospects as part of the Company, and was outside the areas Chase has identified for strategic emphasis. The resulting pre-tax gain on sale of $1,480 was recognized in the third quarter of fiscal 2018 as a gain on sale of businesses within the consolidated statement of operations. Chase received $2,075, net of transaction costs, in the third quarter of fiscal 2018, with the remaining $157 received in the fourth quarter of fiscal 2018 as a result of a working capital true-up. Chase Corporation will provide certain transitional manufacturing and administrative support to the purchaser for which the Company will receive additional consideration upon the performance of services.

On December 29, 2017, Chase Corporation entered an agreement to acquire Stewart Superabsorbents, LLC (“SSA, LLC”), an advanced superabsorbent polymer (SAP) formulator and solutions provider, with operations located in Hickory and McLeansville, NC. The transaction closed on December 31, 2017. In its final fiscal year before its acquisition, SSA, LLC, and its then recently-acquired Zappa-Tec business (collectively “Zappa Stewart”) had combined revenue in excess of $24,000. This acquisition proved to be immediately accretive to the Company’s earnings in the period of acquisition, after adjusting for nonrecurring costs associated with the transaction and financing. The business was acquired for a purchase price of $73,469 after final working capital adjustments and excluding acquisition-related costs.  As part of this transaction, Chase Corporation acquired all assets of the business, and entered multiyear leases at both locations. The Company expensed $393 of acquisition-related costs during the second quarter of fiscal 2018.  The purchase was funded from a combination of Chase’s existing revolving credit facility and available cash on hand. Zappa Stewart’s protective materials technology complements Chase’s current specialty chemicals offerings. This acquisition is aligned with the Company’s core strategies and extends its reach into growing medical, environmental and consumer applications. The Company finalized purchase accounting in the first quarter of fiscal 2019, without any adjustment to amounts recorded at August 31, 2018. Following the effective date of the acquisition the financial results of Zappa Stewart’s operations have been included in the Company’s financial statements in the specialty chemical intermediates product line, contained within the Adhesives, Sealants and Additives operating segment.

The Company has evaluated events and transactions subsequent to the balance sheet date. Based on this evaluation, and other than: (a) the cash dividend announced on November 12, 2020 of $0.80 per share to shareholders of record on November 27, 2020 and payable on December 7, 2020; and (b) the acquisition of ABchimie discussed in Note 14, the Company is not aware of any other 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.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash and Cash Equivalents

Cash and cash equivalents consist primarily of demand deposit accounts or investment instruments that meet high credit quality standards such as money market funds, government securities, or commercial paper. The Company considers all highly liquid debt instruments purchased with an original maturity of three months or less from the date of purchase to be cash equivalents.

Accounts Receivable

Accounts Receivable

The Company evaluates the collectability of accounts receivable balances based on a combination of factors. In cases where the Company is aware of circumstances that may impair a specific customer’s ability to meet its financial obligations to it, a specific allowance against amounts due to the Company is recorded, and thereby reduces the net recognized receivable to the amount the Company reasonably believes will be collected. For all other customers, the Company recognizes allowances for doubtful accounts based on the length of time the receivables are past due, industry and geographic factors, the current business environment and its historical experience. Receivables are written off against these reserves in the period they are determined to be uncollectable.

Inventory

Inventory

The Company values inventory at the lower of cost or net realizable value using the first in, first out (FIFO) method. Management assesses the recoverability of inventory based on types and levels of inventory held, forecasted demand and changes in technology. These assessments require management judgments and estimates, and valuation adjustments for excess and obsolete inventory may be recorded based on these assessments. The Company estimates excess and obsolescence exposures based upon assumptions about future demand, product transitions and market conditions, and records adjustments to reduce inventories to their estimated net realizable value. The failure to accurately forecast demand may lead to additional excess and obsolete inventory and future charges.

Goodwill

Goodwill

The Company accounts for goodwill in accordance with ASC Topic 350, “Intangibles — Goodwill and Other.” The Company performs impairment reviews annually each fourth quarter and whenever events or circumstances indicate the carrying value of goodwill may not be recoverable.

During the three-month period ended February 28, 2019, the ordering patterns of the polyurethane dispersions reporting unit’s customers, especially those in the automotive industry, combined with a decrease in the reporting unit’s backlog of customer orders believed to be firm as of February 28, 2019, indicated that an impairment in the carrying value of the reporting unit might have occurred. The Company performed an impairment test on the indefinite-lived and long-lived assets related to the polyurethane dispersions reporting unit, now part of the Adhesives, Sealants and Additives operating segment and reporting unit (part of the former Industrial Materials segment during the second fiscal quarter of 2019), in accordance with ASC Topic 350, “Intangibles — Goodwill and Other” and ASC Topic 360, “Disclosure — Impairment or Disposal of Long-Lived Assets.” As a result of impairment testing, which included first testing long-lived assets other than goodwill for impairment under applicable guidance, the Company recorded a charge of $2,410 to loss on impairment of goodwill within the consolidated statement of operations during the quarter ended February 28, 2019. The polyurethane dispersions reporting unit’s fair value was determined based on the income approach (discounted cash flow method).

In fiscal 2017, we early adopted Accounting Standards Update (“ASU”)  No. 2017-04 “Intangibles — Goodwill and Other Topics (Topic 350): Simplifying the Test for Goodwill Impairment.” When evaluating the potential impairment of goodwill, we first assess a range of qualitative factors, including but not limited to, industry conditions, the competitive environment, changes in the market for our products and services, entity-specific factors such as strategy and changes in key personnel, and the overall financial performance for each of our reporting units relative to historical or projected future operating results.  If after completing this assessment, it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying value, we then assess goodwill for impairment by comparing the fair value of the reporting unit to its carrying amount. If the fair value of a reporting unit is less than its carrying value, an impairment loss, limited to the amount of goodwill allocated to that reporting unit, is recorded. Fair values for reporting units are determined based on the income approach (discounted cash flow method).

For the annual fiscal 2020 fourth quarter review, no goodwill impairment, nor at-risk reporting units, was indicated as of August 31, 2020.For the annual fiscal 2020 goodwill impairment test, we performed a qualitative assessment of goodwill impairment and concluded that it was more likely than not that our reporting units' fair values exceeded their carrying values (i.e. indicated no impairment of goodwill). Accordingly, it was not necessary for us to perform the quantitative analysis.

Intangible Assets

Intangible Assets

Intangible assets consist of patents, formulas, trade names, customer relationships and trademarks. The Company capitalizes costs related to patent applications and technology agreements. The costs of these assets are amortized over the lesser of the useful life of the asset or its statutory life. Capitalized costs are periodically reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.

Property, Plant and Equipment

Property, Plant and Equipment

Property, plant and equipment are stated at cost and depreciated using the straight‑line method over the assets’ estimated useful lives. Expenditures for maintenance repairs and minor renewals are charged to expense as incurred. Betterments and major renewals are capitalized. Upon retirement or other disposition of assets, related allowances for depreciation and amortization are eliminated from the accounts and any resulting gain or loss is included in the determination of income or loss. The estimated useful lives of property, plant and equipment are as follows:

Buildings and improvements	15	to	40	years
Machinery and equipment	3	to	10	years

Leasehold improvements are depreciated over the lesser of the useful life or the term of the lease.

Restricted Investments and Deferred Compensation

Restricted Investments and Deferred Compensation

The Company has a non-qualified deferred savings plan that covers its Board of Directors and a separate plan covering selected employees.  Participants may elect to defer a portion of their compensation for payment in a future tax year. The plans are funded by trusteed assets that are restricted to the payment of deferred compensation or satisfaction of the Company’s general creditors. The Company’s restricted investments under the plans were $1,619 and $1,260 at August 31, 2020 and 2019, respectively, and corresponding deferred compensation liabilities were $1,629 and $1,275 at August 31, 2020 and 2019, respectively. The Company accounts for the restricted investments as available for sale by recording net unrealized gains or losses in other comprehensive income as a component of stockholders’ equity.

Revenue

Revenue

Effective September 1, 2018, the Company adopted accounting standard ASU No. 2014-09, “Revenue from Contracts with Customers” (ASC 606) using the modified retrospective method for contracts that were not completed as of August 31, 2018. We recognized the cumulative effect of initially applying the new revenue standard as an adjustment to the opening balance of retained earnings, whereby the cumulative impact of all prior periods is recorded in retained earnings or other impacted balance sheet line items upon adoption. The comparative information (for all periods prior to September 1, 2018) has not been adjusted and continues to be reported under ASU No. 2009-13 “Revenue Recognition” (ASC 605). The impact on the Company’s consolidated balance sheets, and statements of operations, equity or cash flows as of the adoption date as a result of applying ASC 606 have been reflected within those respective financial statements. The Company’s accounting policy has been updated to align with ASC 606.

The adoption of ASC 606 represents a change in accounting principle that provides enhanced revenue recognition disclosures. The Company accounts for revenue from contracts with customers when: (a) there is approval and commitment from both parties; (b) the rights of the parties are identified; (c) payment terms are identified; (d) the contract has commercial substance; and (e) collectability of consideration is probable. Revenue is primarily derived from customer purchase orders, master sales agreements, and negotiated contracts, all of which represent contracts with customers. See Note 26 to the consolidated financial statements for more information on our accounting for revenue.

Research and Product Development Costs

Research and Product Development Costs

Research and product development costs are expensed as incurred and include primarily engineering salaries, overhead and materials used in connection with research and development projects. Research and development expense amounted to $4,007,  $4,021 and $3,940 for the years ended August 31, 2020, 2019 and 2018, respectively, and was recorded within Research and product development costs on the consolidated statements of operations.

Pension Plan

Pension Plans

The Company accounts for its pension plans following the requirements of ASC Topic 715, “Compensation —Retirement Benefits” (“ASC 715”). ASC 715 requires an employer to: (a) recognize in its statement of financial position the funded status of a benefit plan; (b) measure defined benefit plan assets and obligations as of the end of the employer’s fiscal year (with limited exceptions); and (c) recognize as a component of other comprehensive income, net of tax, the gains or losses and prior service costs or credits that arise but are not recognized as components of net periodic benefit costs pursuant to prior existing guidance.

Stock Based Compensation

Stock-Based Compensation

In accordance with the accounting for stock-based compensation guidance, ASC Topic 718 “Compensation – Stock Compensation” (“ASC 718”), the Company measures and recognizes compensation expense for all share‑based payment awards made to employees and directors based on estimated fair values. This includes restricted stock, restricted stock units and stock options. The guidance allows for the continued use of the simplified method as the Company has concluded that its historical share option exercise experience does not provide a reasonable basis for estimating expected term.

Stock‑based compensation expense recognized in fiscal years 2020, 2019 and 2018 was $3,208,  $2,176 and $2,128, respectively.

The fair value of options granted was estimated on the date of grant using the Black‑Scholes option pricing model with the following weighted average assumptions for the years ending August 31, 2020, 2019 and 2018:

	2020		2019		2018
Expected dividend yield	0.7	%	0.7	%	0.9	%
Expected life	6.0	years	6.0	years	6.0	years
Expected volatility	31.0	%	31.4	%	34.7	%
Risk-free interest rate	1.4	%	2.7	%	1.9	%

Expected volatility is determined by looking at a combination of historical volatility over the past six years as well as implied future volatility.

Translation of Foreign Currency

Translation of Foreign Currency

The financial position and results of operations of the Company’s HumiSeal Europe Ltd and Chase Protective Coatings Ltd businesses are measured using the British pound as the functional currency. The financial position and results of operations of the Company’s HumiSeal Europe SARL business in France are measured using euros as the functional currency.  The financial position and results of the Company’s HumiSeal India Private Limited business in India are measured using the Indian rupee as the functional currency. The functional currency for all our other operations is the U.S. dollar. Revenue and expenses of these international businesses have been translated at average exchange rates. 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 (a component of stockholders’ equity).  Transaction gains and losses generated from the remeasurement of assets and liabilities denominated in currencies other than the functional currency of these international operations are included in other income (expense) on the consolidated statements of operations and were gains (losses) of ($911),  ($48) and $85 for the fiscal years ended August 31, 2020, 2019 and 2018, respectively.

Income Taxes

Income Taxes

The Company accounts for income taxes under the asset and liability method. Under this method, a deferred tax asset or liability is determined based upon the differences between the financial statement and tax bases of assets and liabilities as measured by the enacted tax rates that will be in effect when these differences reverse. Tax credits are recorded as a reduction in income taxes. Valuation allowances are provided if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

The Company estimates contingent income tax liabilities based on the guidance for accounting for uncertain tax positions as prescribed in ASC Topic 740, “Income Taxes.” See Note 7 for more information on the Company’s income taxes, including information on the effects of the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) on our financial position and results of operations, including adjustments that were recorded during fiscal 2018 and 2019 related to the Tax Act.

Net Income Per Share

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” (“ASC 260”). The Company allocates earnings to participating securities and computes earnings per share using the two-class method.

Comprehensive Income

Comprehensive Income

Comprehensive income is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non‑owner sources, including foreign currency translation adjustments, unrealized gains and losses on marketable securities and adjustments related to the change in the funded status of the pension plans.

Segments

Segments

ASC Topic 280 “Segment Reporting” of the Financial Accounting Standards Board (“FASB”) codification establishes standards for reporting information about operating segments. In the fourth quarter of its 2019 fiscal year (prior year), the Company reorganized into three reportable operating segments, an Adhesives, Sealants and Additives segment, an Industrial Tapes segment and a Corrosion Protection and Waterproofing segment. The segments are distinguished by the nature of the products manufactured and how they are delivered to their respective markets.

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 products.  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. Beginning December 31, 2017, the Adhesives, Sealants and Additives segment includes the acquired operations of Zappa Stewart, within the specialty chemical intermediates product line.

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 cable 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.

Recently Issued Accounting Standards and Recently Adopted Accounting Standards

Recently Issued Accounting Standards

In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which modifies the measurement approach for credit losses on financial assets measured on an amortized cost basis from an 'incurred loss' method to an 'expected loss' method. In November 2019, the FASB issued ASU 2019-11, “Codification Improvements to Topic 326, Financial Instruments – Credit Losses.” ASU 2019-11 is an accounting pronouncement that amends ASU 2016-13. The ASU 2019-11 amendment provides clarity and improves the codification to ASU 2016-13. The pronouncements are concurrently effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years (effective fiscal 2021). The Company is currently evaluating the effects of this pronouncement on its consolidated financial statements.

Recently Adopted Accounting Standards

Fiscal 2020

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” Under the new guidance, lessees are required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: (a) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (b) a right-of-use asset, which represents the lessee’s right to use, or control the use of, a specified asset for the lease term.  In July 2018, the FASB issued ASU 2018-11, “Leases (Topic 842) Targeted Improvements.”  The updated guidance provided an optional transition method, which allows for the application of the standard as of the adoption date with no restatement of prior period amounts.  The Company adopted the standard on September 1, 2019 (start of fiscal 2020) under the optional transition method described above.  Consequently, historical financial information was not updated, and the disclosures required under the new standard are not provided for dates and periods prior to September 1, 2019.

The new standard provides several optional practical expedients in transition. The Company has elected to apply the “package of practical expedients” which allows it to not reassess i) whether existing or expired arrangements contain a lease, ii) the lease classification of existing or expired leases, or iii) whether previous initial direct costs would qualify for capitalization under the new lease standard. In preparation for adoption of the standard, the Company enhanced its internal controls to enable the preparation of financial information including the assessment of the impact of the standard. The initial adoption of the ASU resulted in the recognition of additional lease liabilities of $9,644  ($2,071 short-term and $7,573 long-term) and right-of-use assets of $10,200 as of September 1, 2019 on the consolidated balance sheet as it relates to the Company’s operating leases. The new standard did not have a material impact on the Company’s consolidated statement of operations or cash flows.

In February 2018, the FASB issued ASU 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220) - Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” This ASU was issued to address a narrow-scope financial reporting issue that arose as a result of the enactment of the Tax Cuts and Jobs Act (“Tax Reform”) on December 22, 2017. The objective of ASU 2018-02 is to address the tax effects of items within accumulated other comprehensive income (referred to as “stranded tax effects”) that do not reflect the appropriate tax rate enacted in the Tax Reform. As a result, the ASU 2018-02 allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the newly enacted federal corporate income tax rate. The amount of the reclassification would be the difference between the historical corporate income tax rate of 35 percent and the current enacted corporate income tax rate of 21 percent. ASU 2018-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted, including adoption in an interim period. The amendments in this ASU may be applied retrospectively to each period in which the effect of the change in the U.S. Federal corporate income tax rate in the Tax Reform is recognized. Therefore, the Company adopted ASU 2018-02 in the first quarter of the year ending August 31, 2020, and has elected to reclassify the income tax effects of the Tax Reform related to its pension funding from accumulated other comprehensive loss to retained earnings.

Fiscal 2019

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606).” The amended guidance establishes a single comprehensive model for companies to use in accounting for revenue arising from contracts with customers and supersedes most of the existing revenue recognition guidance, including industry-specific guidance.

The amended guidance clarifies that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In applying the amended guidance, an entity will (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the contract’s performance obligations; and (5) recognize revenue when (or as) the entity satisfies a performance obligation. ASC 606 was effective for the Company’s interim and annual reporting periods beginning September 1, 2018 (fiscal 2019), and could have been adopted using either a full retrospective or modified retrospective transition method. 

The Company adopted the amended guidance and all related amendments using the modified retrospective approach on September 1, 2018.  The Company recognized the cumulative effect of initially applying the new revenue standard to all open contracts requiring recognition over time that were not completed on the date of adoption as an adjustment to the opening balance of retained earnings.

At the adoption date, the cumulative impact of revenue that would have been recognized over time was $80. The related adoption impact to retained earnings was $22, net of tax. The impact to net sales and net income as a result of applying ASC 606 was an increase of $67 and $5, respectively, for the year ended August 31, 2019. See Note 26 — “Revenue from Contracts with Customers” for further discussion of the effects of adoption.

In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230).” This ASU provides guidance on the presentation and classification of specific cash flow items to improve consistency within the statement of cash flows. The Company adopted ASU No. 2016-15 on September 1, 2018, and the adoption did not have a material effect on its financial statements and related disclosures.

In January 2017, the FASB issued ASU No. 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business.”  The new guidance dictates that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, it should be treated as an acquisition or disposal of an asset. The Company adopted the ASU on September 1, 2018. The adoption had no material effect on the financial statements and related disclosures in fiscal 2020 and 2019. The effect ASU No. 2017-01 will have on the financial statements and related disclosures of the Company in future periods will be dependent on the nature of potential future acquisitions and divestitures.

In March 2017, the FASB issued ASU No. 2017-07, “Compensation — Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.” This ASU applies to all employers that offer to their employees defined benefit pension plans, other postretirement benefit plans, or other types of benefits accounted for under Topic 715, Compensation — Retirement Benefits. The ASU requires that an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. If a separate line item or items are used to present the other components of net benefit cost, that line item or items must be appropriately described. If a separate line item or items are not used, the line item or items used in the income statement to present the other components of net benefit cost must be disclosed. The ASU also allows only the service cost component to be eligible for capitalization when applicable (e.g., as a cost of internally manufactured inventory or a self-constructed asset). The Company adopted ASU No. 2017-07 on September 1, 2018, which resulted in the reclassification of $654 and $1,065, previously reported in selling, general and administrative expense, to other income (expense) for the years ended August 31, 2018 and 2017 (prior years), respectively.

Fiscal 2018

The Company did not adopt any new accounting standards in fiscal 2018.

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Summary of Significant Accounting Policies (Tables)

12 Months Ended

Aug. 31, 2020

Summary of Significant Accounting Policies

Schedule of estimated useful lives of property, plant and equipment

Buildings and improvements	15	to	40	years
Machinery and equipment	3	to	10	years

Schedule of weighted average assumptions used to estimate the fair value of options granted on the date of grant using the Black-Scholes option pricing model

	2020		2019		2018
Expected dividend yield	0.7	%	0.7	%	0.9	%
Expected life	6.0	years	6.0	years	6.0	years
Expected volatility	31.0	%	31.4	%	34.7	%
Risk-free interest rate	1.4	%	2.7	%	1.9	%

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Inventory (Tables)

12 Months Ended

Aug. 31, 2020

Inventory

Schedule of inventory

	August 31,		August 31,
	2020		2019
Raw materials	$	18,993	$	20,325
Work in process		7,761		8,748
Finished goods		12,304		13,281
Total Inventory	$	39,058	$	42,354

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Property, Plant and Equipment (Tables)

12 Months Ended

Aug. 31, 2020

Property, Plant and Equipment

Schedule of property, plant and equipment

	2020		2019
Land and improvements	$	4,997	$	6,079
Buildings		17,992		17,900
Machinery and equipment		51,942		51,934
Leasehold improvements		2,212		1,828
Construction in progress		714		1,315
		77,857		79,056
Accumulated depreciation		(52,283)		(49,730)
Property, plant and equipment, net	$	25,574	$	29,326

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Goodwill and Other Intangibles (Tables)

12 Months Ended

Aug. 31, 2020

Goodwill and Other Intangibles

Schedule of changes in the carrying value of goodwill

	Adhesives, Sealants and Additives		Industrial Tapes		Corrosion Protection and Waterproofing		Consolidated
Balance at August 31, 2018	$	52,787	$	21,215	$	10,694	$	84,696
Loss on impairment of polyurethane dispersions business		(2,410)		—		—		(2,410)
Foreign currency translation adjustment		(287)		—		(13)		(300)
Balance at August 31, 2019	$	50,090	$	21,215	$	10,681	$	81,986
Foreign currency translation adjustment		397		—		19		416
Balance at August 31, 2020	$	50,487	$	21,215	$	10,700	$	82,402

Schedule of intangible assets subject to amortization

	Weighted Average		Gross Carrying		Accumulated		Net Carrying
	Amortization Period		Value		Amortization		Value
August 31, 2020
Patents and agreements	14.6	years	$	1,760	$	1,705	$	55
Formulas and technology	7.8	years		10,250		9,121		1,129
Trade names	5.8	years		8,575		7,781		794
Customer lists and relationships	9.1	years		98,966		59,744		39,222
			$	119,551	$	78,351	$	41,200
August 31, 2019
Patents and agreements	14.6	years	$	1,760	$	1,693	$	67
Formulas and technology	7.8	years		10,164		7,969		2,195
Trade names	5.8	years		8,503		7,261		1,242
Customer lists and relationships	9.1	years		98,139		48,939		49,200
			$	118,566	$	65,862	$	52,704

Schedule of estimated amortization expense

Years ending August 31,
2021	11,066
2022	10,036
2023	6,768
2024	5,560
2025	3,961

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Cash Surrender Value of Life Insurance (Tables)

12 Months Ended

Aug. 31, 2020

Cash Surrender Value of Life Insurance.

Schedule of cash surrender value of life insurance policies

	2020		2019
John Hancock	$	4,450	$	4,450
Cash surrender value of life insurance policies	$	4,450	$	4,450

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Long-Term Debt (Tables)

12 Months Ended

Aug. 31, 2020

Long-Term Debt

Schedule of long-term debt

	2020		2019
All-revolving credit facility with a borrowing capacity of $150,000	$	—	$	—
Long-term debt	$	—	$	—

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Income Taxes (Tables)

12 Months Ended

Aug. 31, 2020

Income Taxes

Schedule of domestic and foreign pre-tax income

	Year Ended August 31,
	2020		2019		2018
United States	$	42,027	$	37,088	$	48,962
Foreign		3,293		6,465		8,003
	$	45,320	$	43,553	$	56,965

Schedule of provision (benefit) for income taxes

	Year Ended August 31,
	2020		2019		2018
Current:
Federal	$	9,157	$	9,880	$	12,872
State		1,813		1,699		1,662
Foreign		962		1,575		1,761
Total current income tax provision		11,932		13,154		16,295
Deferred:
Federal		(520)		(1,699)		(2,214)
State		(184)		(529)		(263)
Foreign		(65)		(84)		4
Total deferred income tax benefit		(769)		(2,312)		(2,473)
Total income tax provision	$	11,163	$	10,842	$	13,822

Schedule of reconciliation of the effective income tax rate with the U.S. federal statutory income tax rate

	Year Ended August 31,
	2020		2019		2018
Federal statutory rates	21.0	%	21.0	%	25.7	%
Adjustment resulting from the tax effect of:
State and local taxes, net of federal benefit	3.0	%	2.1	%	1.9	%
Domestic production deduction	0.0	%	0.0	%	(1.6)	%
Foreign tax rate differential	0.0	%	0.1	%	(0.3)	%
Adjustment to uncertain tax position	(1.1)	%	1.0	%	1.1	%
Transaction costs not deductible	0.5	%	0.0	%	0.0	%
Research credit generated	(0.1)	%	(0.3)	%	(0.2)	%
Stock Compensation	(0.3)	%	(0.4)	%	(3.4)	%
Permanent items	0.9	%	1.1	%	0.9	%
Tax effect of undistributed earnings	0.3	%	0.6	%	(0.8)	%
Other	0.4	%	(0.4)	%	(0.8)	%
Change in valuation allowance	0.0	%	0.1	%	0.1	%
Deferred income tax remeasurement	0.0	%	0.0	%	1.7	%
Effective income tax rate	24.6	%	24.9	%	24.3	%

Summary of tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities

	As of August 31,
	2020		2019
Deferred tax assets:
Allowance for doubtful accounts	$	309	$	432
Inventories		994		1,193
Accruals		504		541
Warranty reserve		14		22
Pension accrual		2,749		2,623
Deferred compensation		391		300
Foreign currency loss on previously taxed income		96		96
Loan finance costs		7		34
Restricted stock grants		823		456
Non-qualified stock options		211		258
Right-of-use asset		2,354		—
Foreign net operating loss, net of valuation allowance		247		—
Other		572		353
		9,271		6,308
Deferred tax liabilities:
Prepaid liabilities		(16)		(8)
Lease liability		(2,693)		—
Depreciation and amortization		(1,633)		(2,496)
		(4,342)		(2,504)
Net deferred tax assets (liabilities)	$	4,929	$	3,804

Summary of the Company's adjustments to its uncertain tax positions

	2020		2019		2018
Balance, at beginning of the year	$	2,324	$	1,889	$	1,257
Increase for tax positions related to the current year		101		55		47
(Decrease) increase for tax positions related to prior years		(609)		300		595
Increase for interest and penalties		125		106		71
Decrease for lapses of statute of limitations		—		(26)		(81)
Balance, at end of year	$	1,941	$	2,324	$	1,889

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Leases (Tables)

12 Months Ended

Aug. 31, 2020

Leases

Schedule of Lessee's balance sheet disclosure

	August 31,
	2020
Assets
Operating lease right-of-use asset	$	8,821
Liabilities
Current (accrued expense)	$	1,865
Operating lease long-term liabilities		6,395
Total lease liability	$	8,260

Schedule of components of lease costs

	Year Ended
	August 31, 2020
Operating lease cost (a)	$	3,783

(a) Includes short-term leases and variable lease costs (e.g. common area maintenance), which are immaterial.    

Schedule of Maturity of lease liability

	Future Operating
Year ending August 31,	Lease Payments
2021	$	2,085
2022		1,500
2023		1,346
2024		1,360
2025 and thereafter		2,687
Less: Interest		(718)
Present value of lease liabilities	$	8,260

Schedule of weighted average remaining lease term and discount rates

	August 31,
	2020
Lease Term and Discount Rate
Weighted average remaining lease term (years)
Operating leases		5.5
Weighted average discount rate (percentage)
Operating leases		3.1	%

Schedule of supplemental cash flow information

	Year Ended
	August 31, 2020
Operating cash outflows from operating leases	$	2,444
Total cash paid for amounts included in the measurement of lease liabilities	$	2,444

Schedule of future minimum lease payments under noncancelable operating leases

	Future Operating
Year ending August 31,	Lease Payments
2020	$	2,468
2021		2,059
2022		1,371
2023		1,187
2024		1,200
2025 and thereafter		2,608
Total future minimum lease payments	$	10,893

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Benefits and Pension Plans (Tables)

12 Months Ended

Aug. 31, 2020

Pensions and Other Postretirement Benefits

Schedule of the status of the Company's pension plans

	Year Ended August 31,
	2020		2019		2018
Change in benefit obligation
Projected benefit obligation at beginning of year	$	20,087	$	21,860	$	22,673
Service cost		295		283		283
Interest cost		451		696		629
Actuarial (gain) loss		2,253		995		17
Settlements		—		—		—
Benefits paid		(2,423)		(3,747)		(1,742)
Projected benefit obligation at end of year	$	20,663	$	20,087	$	21,860
Change in plan assets
Fair value of plan assets at beginning of year	$	7,859	$	9,855	$	9,003
Actual return on plan assets		868		181		509
Employer contribution		1,864		1,570		2,085
Settlements		—		—		—
Benefits paid		(2,423)		(3,747)		(1,742)
Fair value of plan assets at end of year	$	8,168	$	7,859	$	9,855
Funded status at end of year	$	(12,495)	$	(12,228)	$	(12,005)

	Year Ended August 31,
	2020		2019		2018
Amounts recognized in consolidated balance sheets
Noncurrent assets	$	—	$	—	$	301
Current liabilities		(1,565)		(1,743)		(1,570)
Noncurrent liabilities		(10,930)		(10,485)		(10,736)
Net amount recognized in consolidated balance sheets	$	(12,495)	$	(12,228)	$	(12,005)
Actuarial present value of benefit obligation and funded status
Accumulated benefit obligations	$	18,307	$	18,244	$	20,075
Projected benefit obligations	$	20,663	$	20,087	$	21,858
Plan assets at fair value	$	8,168	$	7,859	$	9,855
Amounts recognized in accumulated other comprehensive income
Prior service cost	$	44	$	47	$	54
Net actuarial loss		10,595		9,638		9,377
Adjustment to pre-tax accumulated other comprehensive income	$	10,639	$	9,685	$	9,431

	Year Ended August 31,
	2020		2019		2018
Other changes in plan assets and benefit obligations recognized in other comprehensive income
Net (gain)/loss	$	711	$	1,863	$	(704)
Amortization of loss		(664)		(472)		(484)
Supplemental plan assumption change		1,065		(620)		676
Amortization of prior service cost		(3)		(3)		(3)
Effect of settlement on accumulated other comprehensive income		(155)		(511)		—
Total recognized in other comprehensive income		954		257		(515)
Net periodic pension cost		1,178		1,537		937
Total recognized in net periodic pension cost and other comprehensive income	$	2,132	$	1,794	$	422
Estimated amounts that will be amortized from accumulated comprehensive income over the next fiscal year
Prior service cost	$	3	$	3	$	3
Net actuarial loss		656		500		475

Schedule of components of net periodic benefit cost

	2020		2019		2018
Components of net periodic benefit cost
Service cost	$	295	$	283	$	283
Interest cost		451		696		629
Expected return on plan assets		(390)		(428)		(462)
Amortization of prior service cost		3		3		3
Amortization of accumulated loss		664		472		484
Curtailment and settlement loss		155		511		—
Net periodic benefit cost	$	1,178	$	1,537	$	937

Schedule of weighted-average assumptions used to determine benefit obligations

	2020		2019		2018
Discount rate
Qualified plan	1.92	%	2.58	%	3.80	%
Supplemental plan	1.65	%	2.37	%	3.57	%
NEPTCO plan	—	%	2.29	%	3.59	%
Rate of compensation increase
Qualified and Supplemental plan	3.50	%	3.50	%	3.50	%
NEPTCO plan	—	%	—	%	—	%

Schedule of weighted-average assumptions used to determine net periodic benefit cost

	2020		2019		2018
Discount rate
Qualified plan	2.58	%	3.80	%	3.30	%
Supplemental plan	2.37	%	3.57	%	2.73	%
NEPTCO plan	2.29	%	3.59	%	2.95	%
Expected long-term return on plan assets
Qualified plan	5.60	%	5.40	%	5.40	%
Supplemental plan	—	%	—	%	—	%
NEPTCO plan	5.60	%	5.40	%	5.20	%
Rate of compensation increase
Qualified and Supplemental plan	3.50	%	3.50	%	3.50	%
NEPTCO plan	—	%	—	%	—	%

Schedule of pension plans' assets by asset category

			Fair value measurements at								Fair value measurements at
			August 31, 2020								August 31, 2019
					Significant								Significant
			Quoted prices		other		Significant				Quoted prices		other		Significant
			in active		observable		unobservable				in active		observable		unobservable
	August 31,		markets		inputs		inputs		August 31,		markets		inputs		inputs
	2020		(Level 1)		(Level 2)		(Level 3)		2019		(Level 1)		(Level 2)		(Level 3)
Asset Category
Equity securities	$	3,986	$	3,986	$	—	$	—	$	3,474	$	3,474	$	—	$	—
Debt securities		4,182		4,182		—		—		4,385		4,385		—		—
Total	$	8,168	$	8,168	$	—	$	—	$	7,859	$	7,859	$	—	$	—

Schedule of pension benefit payments (which include expected future service) expected to be paid

Year ending August 31,	Pension Benefits
2021	$	2,996
2022		1,759
2023		2,507
2024		1,948
2025		1,788
2026-2030	$	5,393

Qualified Plan

Pensions and Other Postretirement Benefits

Schedule of target allocation and weighted-average asset allocations

	Target
	Allocation		Percentage of Plan Assets as of August 31,
Asset Category	Range		2020		2019		2018
Equity securities	10-80	%	49	%	44	%	46	%
Debt securities	20-70	%	51	%	56	%	54	%
Other	0-100	%	—	%	—	%	—	%
Total	100	%	100	%	100	%	100	%

NEPTCO | Qualified Plan

Pensions and Other Postretirement Benefits

Schedule of target allocation and weighted-average asset allocations

	Target
	Allocation		Percentage of Plan Assets as of August 31,
Asset Category	Range		2020		2019		2018
Equity securities	10-80	%	—	%	44	%	46	%
Debt securities	20-70	%	—	%	56	%	54	%
Other	0-100	%	—	%	—	%	—	%
Total	100	%	—	%	100	%	100	%

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Stockholders' Equity (Tables)

12 Months Ended

Aug. 31, 2020

Stockholders' Equity

Summary of restricted stock plan

	Non Employee Directors	Weighted Average Grant Date Fair Value		Officers and Employees	Weighted Average Grant Date Fair Value
Unvested restricted stock at August 31, 2017	2,407	$	91.05	73,972	$	51.56
Granted	2,779	$	101.05	13,922	$	83.65
Vested	(2,407)	$	91.05	(22,315)	$	41.35
Forfeited or cancelled	—			—
Unvested restricted stock at August 31, 2018	2,779	$	101.05	65,579	$	61.85
Granted	4,599	$	101.92	7,524	$	121.64
Vested	(2,779)	$	101.05	(25,443)	$	65.79
Forfeited or cancelled	—			(3,305)	$	79.39
Unvested restricted stock at August 31, 2019	4,599	$	101.92	44,355	$	67.18
Granted	4,906	$	95.59	43,841	$	108.47
Vested	(4,599)	$	101.92	(25,195)	$	61.51
Forfeited or cancelled	—			(3,126)	$	123.19
Unvested restricted stock at August 31, 2020	4,906	$	95.59	59,875	$	97.72

Summary of information about stock options outstanding

		Options Outstanding						Options Exercisable
Exercise Prices		Number Outstanding	Weighted Avg. Remaining Contractual Life	Weighted Average Exercise Price		Aggregate Intrinsic Value		Number Exercisable	Weighted Average Exercise Price		Aggregate Intrinsic Value
$	16.00	5,065	2.1	$	16.00	$	413	5,065	$	16.00	$	413
$	29.72	13,790	3.0	$	29.72	$	936	13,790	$	29.72	$	936
$	35.50	13,372	4.0	$	35.50	$	830	13,372	$	35.50	$	830
$	39.50	12,753	5.0	$	39.50	$	741	12,753	$	39.50	$	741
$	64.37	34,260	6.0	$	64.37	$	1,137	34,260	$	64.37	$	1,137
$	93.50	8,704	7.0	$	93.50	$	35	8,704	$	93.50	$	35
$	99.38	483	8.0	$	99.38	$	—	322	$	99.38	$	—
$	100.22	67,060	9.0	$	100.22	$	—	4,473	$	100.22	$	—
$	104.00	606	7.5	$	104.00	$	—	606	$	104.00	$	—
$	123.95	8,603	8.0	$	123.95	$	—	5,735	$	123.95	$	—
		164,696	6.8	$	75.21	$	4,092	99,080	$	57.96	$	4,092

Summary of the transactions of the Company's stock option plans

	Officers and Employees	Weighted Average Exercise Price
Options outstanding at August 31, 2017	152,974	$	34.21
Granted	10,228	$	94.12
Exercised	(64,012)	$	19.06
Forfeited or cancelled	—
Options outstanding at August 31, 2018	99,190	$	50.17
Granted	9,086	$	122.64
Exercised	(7,022)	$	42.86
Forfeited or cancelled	—
Options outstanding at August 31, 2019	101,254	$	57.18
Granted	67,060	$	100.22
Exercised	(3,618)	$	34.21
Forfeited or cancelled	—
Options outstanding at August 31, 2020	164,696	$	75.21
Options exercisable at August 31, 2020	99,080	$	57.96

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Segment Data (Tables)

12 Months Ended

Aug. 31, 2020

Segment Data

Summary of information about the Company's reportable segments

	Years Ended August 31,
	2020			2019			2018
Revenue
Adhesives, Sealants and Additives	$	96,208		$	104,796		$	101,690
Industrial Tapes		118,960			129,845			130,598
Corrosion Protection and Waterproofing		45,994			46,710			51,900
Total	$	261,162		$	281,351		$	284,188
Income before income taxes
Adhesives, Sealants and Additives	$	25,953		$	27,142	(d)	$	35,190	(h)
Industrial Tapes		31,237	(a)		28,216	(e)		30,886	(i)
Corrosion Protection and Waterproofing		16,638	(b)		15,909	(f)		18,178
Total for reportable segments		73,828			71,267			84,254
Corporate and common costs		(28,508)	(c)		(27,714)	(g)		(27,289)	(j)
Total	$	45,320		$	43,553		$	56,965
Includes the following costs by segment:
Adhesives, Sealants and Additives
Interest	$	98		$	177		$	422
Depreciation		994			1,467			1,285
Amortization		9,313			9,359			7,895
Industrial Tapes
Interest	$	111		$	216		$	516
Depreciation		1,746			1,755			2,748
Amortization		1,800			1,800			2,604
Corrosion Protection and Waterproofing
Interest	$	37		$	126		$	234
Depreciation		615			674			753
Amortization		463			1,286			1,308

(a) 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 six months of fiscal 2020

(b) Includes $170 gain on the refund of a payment made in fiscal 2019 related to engineering studies performed to assess potential operational changes and further plant rationalization and consolidation and an expense of $405 for the write-down of certain assets under construction.

(c) Includes $150 of expense related to exploratory IT work performed to assess potential future upgrades to the Company’s companywide ERP system, a $760 gain related to the April 2020 sale of the Company’s Pawtucket, RI location, a  $1,791 gain related to the August 2020 sale of the Company’s Randolph, MA property, $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, $155 of pension-related settlement costs due to the timing of lump-sum distribution and $274 in acquisition-related costs attributable to the September 2020 (fiscal 2021) acquisition of ABchimie

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

(e) Includes $260 of expense related to the closure and exit of our Pawtucket, RI location recognized in the first quarter of fiscal 2019, and $526 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 second half of fiscal 2019

(f) Includes $200 of expense related to engineering studies performed to assess potential future operational changes and further plant rationalization and consolidation, see note (b)

(g) Includes $511 of pension-related settlement costs due to the timing of lump-sum distributions

(h) Includes $1,070 of expense related to inventory step-up in fair value attributable to the acquisition of Zappa Stewart

(i) Includes $1,085 gain on sale of license related to the structural composites product line recorded in the second quarter of fiscal 2018, $1,480 gain on sale of business related to the April 2018 sale of the structural composites rod business and $1,272 of expense related to the exit of our Pawtucket, RI location in the fourth quarter of fiscal 2018

(j) Includes $393 in acquisition-related expense attributable to the December 2017 acquisition of Zappa Stewart

Schedule of total assets for the Company's reportable segments

	August 31,		August 31,
	2020		2019
Total Assets
Adhesives, Sealants and Additives	$	129,457	$	135,583
Industrial Tapes		71,229		77,085
Corrosion Protection and Waterproofing		32,642		32,478
Total for reportable segments		233,328		245,146
Corporate and common assets		113,502		62,822
Total	$	346,830	$	307,968

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Export Sales and Foreign Operations (Tables)

12 Months Ended

Aug. 31, 2020

Export Sales and Foreign Operations

Schedule of revenue by country

	Years Ended August 31,
	2020		2019		2018
Revenue
United States	$	226,690	$	248,281	$	244,225
United Kingdom		20,543		17,504		20,598
All other foreign (1)		13,929		15,566		19,365
Total	$	261,162	$	281,351	$	284,188

(1) Inclusive of sales originated from our Paris, France location, royalty revenue attributable to our licensed manufacturer in Asia, and Chase foreign manufacturing operations.

Schedule of long-lived assets by country

	August 31,		August 31,
	2020		2019
Long-Lived Assets
United States
Property, plant and equipment, net	$	22,427	$	24,993
Goodwill and Intangible assets, less accumulated amortization		117,930		129,057
United Kingdom
Property, plant and equipment, net		2,320		2,493
Goodwill and Intangible assets, less accumulated amortization		4,403		4,446
All other foreign
Property, plant and equipment, net		827		1,840
Goodwill and Intangible assets, less accumulated amortization		1,269		1,187
Total
Property, plant and equipment, net	$	25,574	$	29,326
Goodwill and Intangible assets, less accumulated amortization	$	123,602	$	134,690

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Supplemental Cash Flow Data (Tables)

12 Months Ended

Aug. 31, 2020

Supplemental Cash Flow Data

Schedule of supplemental cash flow information

	2020		2019		2018
Income taxes paid	$	11,186	$	11,714	$	20,142
Interest paid	$	230	$	728	$	915
Noncash Investing and Financing Activities
Common stock received for payment of stock option exercises	$	123	$	119	$	1,028
Property, plant and equipment additions included in accounts payable	$	92	$	67	$	197

Supplemental cash flow information as related to acquisitions and divestitures for the years ended August 31, 2020, 2019 and 2018 is as follows:

		2020		2019		2018
Sale of Randolph, MA Property
Asset held for sale	$	(14)
Gain on sale of real estate		(1,791)
Cash received from sale of real estate, net		1,805
Sale of Pawtucket, RI Location
Asset held for sale	$	(1,050)
Gain on sale of real estate		(760)
Cash received from sale of real estate, net		1,810
Acquisition of Zappa Stewart
Current assets					$	10,478
Property, plant & equipment						1,872
Goodwill and Intangible assets						64,378
Deferred tax liability						(2,626)
Accounts payable and accrued liabilities						(633)
Payments for acquisitions						(73,469)
Sale of Structural Composites Rod Business
Inventory					$	(522)
Goodwill						(230)
Gain on sale of business						(1,480)
Cash received from sale of business, net of transaction costs						2,232
Sale of Structural Composites License
Property and equipment					$	(26)
Gain on sale of license						(1,085)
Accrued income taxes						111
Cash received from sale of license						1,000
Sale of Fiber Optic Cable Components Product Line
Due from sale of business			$	(400)
Cash received from sale of product line, net of transaction costs				400

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Acquisitions (Tables) - Zappa Stewart

12 Months Ended

Aug. 31, 2020

Schedule of allocation of acquisition cost to the acquired tangible and identifiable intangible assets and liabilities assumed based on their fair values as of the date of the acquisition

Assets and Liabilities	Amount
Accounts receivable	$	3,670
Inventory		6,796
Prepaid expenses and other current assets		12
Property, plant & equipment		1,872
Goodwill		34,138
Intangible assets		30,240
Deferred tax liability		(2,626)
Accounts payable and accrued expenses		(633)
Total purchase price	$	73,469

Schedule of identifiable intangible assets purchased as part of business acquisition

			Weighted Average
Intangible Asset	Amount		Useful Life
Customer relationships	$	28,500	7.9	years
Technology		900	7	years
Trade names		840	4	years
Total intangible assets	$	30,240

Schedule of pro forma information

	Years Ended August 31,
	2018
Revenue	$	292,609
Net income		44,508
Net income available to common shareholders, per common and common equivalent share
Basic earnings per share	$	4.75
Diluted earnings per share	$	4.70

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Fair Value Measurements (Tables)

12 Months Ended

Aug. 31, 2020

Fair Value Measurements

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

				Fair value measurement category
				Quoted prices		Significant other		Significant
	Fair value			in active markets		observable inputs		unobservable inputs
	measurement date	Total		(Level 1)		(Level 2)		(Level 3)
Assets:
Restricted investments	August 31, 2020	$	1,619	$	1,395	$	224	$	—
Restricted investments	August 31, 2019	$	1,260	$	1,091	$	169	$	—

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

				Fair value measurement category
				Quoted prices		Significant other		Significant
	Fair value			in active markets		observable inputs		unobservable inputs
	measurement date	Total		(Level 1)		(Level 2)		(Level 3)
Liabilities:
Long-term debt	August 31, 2020	$	—	$	—	$	—	$	—
Long-term debt	August 31, 2019	$	—	$	—	$	—	$	—

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Net Income Per Share (Tables)

12 Months Ended

Aug. 31, 2020

Net Income Per Share

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

	Years Ended August 31,
	2020		2019		2018
Net income	$	34,157	$	32,711	$	43,143
Less:  Allocated to participating securities		273		257		410
Available to common shareholders	$	33,884	$	32,454	$	42,733
Basic weighted average shares outstanding		9,359,940		9,334,232		9,296,648
Additional dilutive common stock equivalents		79,810		44,975		69,423
Diluted weighted average shares outstanding		9,439,750		9,379,207		9,366,071
Net income available to common shareholders, per common and common equivalent share
Basic	$	3.62	$	3.48	$	4.60
Diluted	$	3.59	$	3.46	$	4.56

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Assets Held for Sale (Tables)

12 Months Ended

Aug. 31, 2020

Assets Held for Sale

Summary of assets held for sale

	August 31, 2020		August 31, 2019
Pawtucket, RI - Property, plant and equipment	$	—	$	1,050
Randolph, MA - Property		—		14
Total	$	—	$	1,064

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Selected Quarterly Financial Data (Unaudited) (Tables)

12 Months Ended

Aug. 31, 2020

Selected Quarterly Financial Data (Unaudited)

Schedule of unaudited operating results for each of the Company's quarters

	Fiscal Year 2020 Quarters
	First		Second		Third		Fourth		Year
Net Sales	$	65,757	$	64,626	$	64,157	$	63,202	$	257,742
Gross Profit on Sales		23,974		23,960		24,468		23,725		96,127
Net income	$	7,362	$	7,879	$	9,908	$	9,008	$	34,157
Net income available to common shareholders, per common and common equivalent share:
Basic	$	0.78	$	0.83	$	1.05	$	0.95	$	3.62
Diluted	$	0.77	$	0.83	$	1.04	$	0.95	$	3.59

	Fiscal Year 2019 Quarters
	First		Second		Third		Fourth		Year
Net Sales	$	71,364	$	65,442	$	70,883	$	69,150	$	276,839
Gross Profit on Sales		24,789		22,229		24,477		25,181		96,676
Net income	$	8,823	$	5,273	$	8,541	$	10,074	$	32,711
Net income available to common shareholders, per common and common equivalent share:
Basic	$	0.94	$	0.56	$	0.91	$	1.07	$	3.48
Diluted	$	0.93	$	0.56	$	0.90	$	1.07	$	3.46

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Valuation and Qualifying Accounts (Tables)

12 Months Ended

Aug. 31, 2020

Valuation and Qualifying Accounts

Schedule of Company's accounts receivable reserve

Year ended	Balance at Beginning of Year		Charges to Operations		Deductions to Reserves		Balance at End of Year
August 31, 2020	$	739	$	921	$	(1,222)	$	438
August 31, 2019	$	559	$	1,775	$	(1,595)	$	739
August 31, 2018	$	456	$	1,138	$	(1,035)	$	559

Schedule of Company's warranty reserve

Year ended	Balance at Beginning of Year		Charges to Operations		Deductions to Reserves		Balance at End of Year
August 31, 2020	$	37	$	—	$	(37)	$	—
August 31, 2019	$	—	$	37	$	—	$	37
August 31, 2018	$	220	$	—	$	(220)	$	—

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Accumulated Other Comprehensive Income (Tables)

12 Months Ended

Aug. 31, 2020

Accumulated Other Comprehensive Income

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

			Change in Funded		Foreign Currency
	Restricted		Status of		Translation
	Investments		Pension Plans		Adjustment		Total
Balance at August 31, 2018	$	126	$	(5,796)	$	(6,666)	$	(12,336)
Other comprehensive gains (losses) before reclassifications		36		(1,215)		(1,541)		(2,720)
Reclassifications to net income of previously deferred (gains) losses		(8)		740		—		732
Other comprehensive income (loss)		28		(475)		(1,541)		(1,988)
Balance at August 31, 2019	$	154	$	(6,271)	$	(8,207)	$	(14,324)
Other comprehensive gains (losses) before reclassifications		143		(1,278)		3,163		2,028
Reclassifications to net income of previously deferred (gains) losses		(28)		620		—		592
Other comprehensive income (loss)		115		(658)		3,163		2,620
Adoption of ASU 2018-02		—		(1,388)		—		(1,388)
Balance at August 31, 2020	$	269	$	(8,317)	$	(5,044)	$	(13,092)

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

	Amount of Gain (Loss) Reclassified from
	Accumulated Other Comprehensive Income
	(Loss) into Income
	Year Ended		Year Ended		Location of Gain (Loss) Reclassified from Accumulated
	August 31, 2020		August 31, 2019		Other Comprehensive Income (Loss) into Income
Gains on Restricted Investments:
Realized loss (gain) on sale of restricted investments	$	(37)	$	(11)	Selling, general and administrative expenses
Tax expense (benefit)		9		3
Gain net of tax	$	(28)	$	(8)
Loss on Funded Pension Plan adjustments:
Amortization of prior pension service costs and unrecognized losses	$	667	$	475	Other income (expense)
Settlement and curtailment loss		155		511	Other income (expense)
Tax expense (benefit)		(202)		(246)
Loss net of tax	$	620	$	740
Total net loss reclassified for the period	$	592	$	732

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Revenue from Contracts with Customers (Tables)

12 Months Ended

Aug. 31, 2020

Revenue from Contracts with Customers

Schedule of contract assets by reportable operating segment

	August 31,		August 31,
	2020		2019
Contract Assets
Adhesives, Sealants and Additives	$	20	$	42
Industrial Tapes		21		26
Corrosion Protection and Waterproofing		41		79
Total	$	82	$	147

Schedule of disaggregation of revenue

	Year Ended August 31, 2020
	Adhesives, Sealants		Industrial		Corrosion Protection		Consolidated
	and Additives		Tapes		and Waterproofing		Revenue
Revenue
North America	$	64,611	$	105,911	$	36,252	$	206,774
Asia		17,977		7,150		6,361		31,488
Europe		13,201		3,286		3,047		19,534
All other foreign		419		2,613		334		3,366
Total Revenue	$	96,208	$	118,960	$	45,994	$	261,162
	Year Ended August 31, 2019
	Adhesives, Sealants		Industrial		Corrosion Protection		Consolidated
	and Additives		Tapes		and Waterproofing		Revenue
Revenue
North America	$	70,320	$	117,955	$	37,463	$	225,738
Asia		19,430		7,126		6,524		33,080
Europe		14,773		2,637		2,455		19,865
All other foreign		273		2,127		268		2,668
Total Revenue	$	104,796	$	129,845	$	46,710	$	281,351

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Summary of Significant Accounting Policies - Acquisition (Details) $ / shares in Units, € in Thousands, $ in Thousands						1 Months Ended		3 Months Ended								6 Months Ended				9 Months Ended	12 Months Ended
	Nov. 06, 2020 $ / shares	Sep. 01, 2020 EUR (€)	Sep. 01, 2020 USD ($)	Jun. 25, 2018	Dec. 31, 2017 USD ($)	Apr. 30, 2020 USD ($)	Dec. 31, 2017 USD ($)	Aug. 31, 2020 USD ($)	May 31, 2020 USD ($)	Feb. 29, 2020 USD ($)	Nov. 30, 2019 USD ($)	Nov. 30, 2018 USD ($)	Aug. 31, 2018 USD ($)	May 31, 2018 USD ($)	Feb. 28, 2018 USD ($)	Aug. 31, 2020 USD ($)	Feb. 29, 2020 USD ($)	Aug. 31, 2019 USD ($)	Feb. 28, 2019 USD ($)	Aug. 31, 2019 USD ($)	Aug. 31, 2020 USD ($) $ / shares	Aug. 31, 2019 USD ($) $ / shares	Aug. 31, 2018 USD ($) $ / shares	Sep. 01, 2020 USD ($)	Apr. 20, 2018 USD ($)
Basis of Presentation
Severance costs									$ 183
Percentage of temporary reduction in the base salaries of its named Executive Officers and select members of Senior Management, as well as the cash compensation of the non-employee members of the Board									20.00%
Exit costs related to facilities																					$ 807	$ 986	$ 1,272
Proceeds from sale of businesses																						$ 400	$ 2,232
Annual cash dividends declared per share | $ / shares	$ 0.80																				$ 0.80	$ 0.80	$ 0.80
Asset Impairment Charges																					$ 405
Gain on sale of property																					2,551
Granite Falls Location
Basis of Presentation
Exit costs related to facilities																$ 0	$ 559	$ 526	$ 526
Structural Composites Rod Business
Basis of Presentation
Total proceeds received or to be received																									$ 2,232
Gain on assets sold														$ 1,480
Proceeds from sale of businesses													$ 157	$ 2,075
Pawtucket, RI manufacturing facility
Basis of Presentation
Exit costs related to facilities									$ 85			$ 260	$ 1,272							$ 0
Anticipated future exit costs									0
Proceeds from the sale of property						$ 1,810			1,810
Gain on sale of property									760												760
Transition period				2 months
Zappa Stewart
Basis of Presentation
Acquisition related expenses															$ 393
Purchase price					$ 73,469		$ 73,469
Subsequent Events | ABchime
Basis of Presentation
Consideration paid in cash		€ 18,000	$ 21,420
Acquisition related expenses			$ 274
Potential earn out		€ 7,000																						$ 8,330
Minimum | Zappa Stewart
Basis of Presentation
Combined revenue					$ 24,000
Engineering Studies related to Facility Consolidation and Rationalization Initiative
Basis of Presentation
Business development cost								$ 0	$ 0	$ 0	$ 150											$ 200
Gain on refund																					170
Asset Impairment Charges																					405
Gain on sale of property																					$ 170

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Summary of Significant Accounting Policies - PPE (Details) $ in Thousands	3 Months Ended			12 Months Ended
	Aug. 31, 2020 USD ($)	Aug. 31, 2019 segment	Feb. 28, 2019 USD ($)	Aug. 31, 2020 segment	Aug. 31, 2019 USD ($)
Goodwill
Number of reporting units				3
Number of operating segments		3		3
Loss on impairment of goodwill | $	$ 0		$ 2,410		$ 2,410
Buildings and improvements | Minimum
Property, plant and equipment
Estimated useful life				15 years
Buildings and improvements | Maximum
Property, plant and equipment
Estimated useful life				40 years
Machinery and equipment | Minimum
Property, plant and equipment
Estimated useful life				3 years
Machinery and equipment | Maximum
Property, plant and equipment
Estimated useful life				10 years

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Summary of Significant Accounting Policies - Restricted Investments (Details) - USD ($) $ in Thousands	12 Months Ended
	Aug. 31, 2020	Aug. 31, 2019	Aug. 31, 2018
Restricted Investments and Deferred Compensation
Restricted investments	$ 1,619	$ 1,260
Deferred compensation liabilities	1,629	1,275
Research and Product Development Costs
Research and development expense	4,007	4,021	$ 3,940
Stock Based Compensation
Stock-based compensation expense	$ 3,208	$ 2,176	$ 2,128
Weighted average assumptions used to estimate the fair value of options granted
Expected Dividend yield (as a percent)	0.70%	0.70%	0.90%
Expected life	6 years	6 years	6 years
Expected volatility (as a percent)	31.00%	31.40%	34.70%
Risk-free interest rate (as a percent)	1.40%	2.70%	1.90%

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Summary of Significant Accounting Policies - Translation of Foreign Currency (Details) - USD ($) $ in Thousands	Aug. 31, 2020	Aug. 31, 2019	Aug. 31, 2018
Foreign currency translation adjustment
Translation of Foreign Currency
Foreign currency translation adjustment	$ (911)	$ (48)	$ 85

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Summary of Significant Accounting Policies - ASU update (Details) - USD ($) $ in Thousands		3 Months Ended								4 Months Ended	8 Months Ended	12 Months Ended				32 Months Ended
	Sep. 01, 2018	Aug. 31, 2020	May 31, 2020	Feb. 29, 2020	Nov. 30, 2019	Aug. 31, 2019	May 31, 2019	Feb. 28, 2019	Nov. 30, 2018	Dec. 31, 2017	Aug. 31, 2018	Aug. 31, 2020	Aug. 31, 2019	Aug. 31, 2018	Aug. 31, 2017	Aug. 31, 2020	Sep. 01, 2019
Recently Adopted Accounting Pronouncements
Package of practical expedients												true
Operating lease liability		$ 8,260										$ 8,260				$ 8,260
Operating lease liability, short-term		1,865										1,865				1,865
Operating lease long-term liabilities		6,395										6,395				6,395
Operating lease right-of-use asset (Note 8)		8,821										8,821				8,821
Net sales												261,162	$ 281,351	$ 284,188
Retained earnings		298,266				$ 270,260						298,266	270,260			$ 298,266
Net income		$ 9,008	$ 9,908	$ 7,879	$ 7,362	$ 10,074	$ 8,541	$ 5,273	$ 8,823			34,157	32,711	43,143
Selling, general and administrative expense												$ 49,364	$ 48,707	$ 47,703
Statutory tax rate (as a percent)										35.00%	21.00%	21.00%	21.00%	25.70%		21.00%
ASU 2016-02
Recently Adopted Accounting Pronouncements
Operating lease liability																	$ 9,644
Operating lease liability, short-term																	2,071
Operating lease long-term liabilities																	7,573
Operating lease right-of-use asset (Note 8)																	$ 10,200
ASU 2014-09
Recently Adopted Accounting Pronouncements
Net sales	$ 80
Retained earnings	22
ASU 2014-09 | Restatement adjustment
Recently Adopted Accounting Pronouncements
Net sales	67
Net income	$ 5
ASU 2017-07
Recently Adopted Accounting Pronouncements
Selling, general and administrative expense														$ 654	$ 1,065

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Inventory (Details) - USD ($) $ in Thousands	Aug. 31, 2020	Aug. 31, 2019
Inventory
Raw materials	$ 18,993	$ 20,325
Work in process	7,761	8,748
Finished goods	12,304	13,281
Total Inventory	$ 39,058	$ 42,354

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Property, Plant and Equipment (Details) - USD ($) $ in Thousands	Aug. 31, 2020	Aug. 31, 2019
Property, plant and equipment
Property, plant and equipment, gross	$ 77,857	$ 79,056
Accumulated depreciation	(52,283)	(49,730)
Property, plant and equipment, net	25,574	29,326
Land and improvements
Property, plant and equipment
Property, plant and equipment, gross	4,997	6,079
Buildings
Property, plant and equipment
Property, plant and equipment, gross	17,992	17,900
Machinery and equipment
Property, plant and equipment
Property, plant and equipment, gross	51,942	51,934
Leasehold improvements
Property, plant and equipment
Property, plant and equipment, gross	2,212	1,828
Construction in progress
Property, plant and equipment
Property, plant and equipment, gross	$ 714	$ 1,315

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Goodwill and Other Intangibles - Goodwill (Details) $ in Thousands	3 Months Ended			12 Months Ended
	Aug. 31, 2020 USD ($)	Aug. 31, 2019 USD ($) segment	Feb. 28, 2019 USD ($)	Aug. 31, 2020 USD ($) segment	Aug. 31, 2019 USD ($)
Changes in the carrying value of goodwill
Balance at the beginning of the period				$ 81,986	$ 84,696
Loss on impairment of polyurethane dispersions business	$ 0		$ (2,410)		(2,410)
Foreign currency translation adjustment				416	(300)
Balance at the end of the period	82,402	$ 81,986		$ 82,402	81,986
Number of reporting units | segment				3
Number of operating segments | segment		3		3
Goodwill deductible for income tax purposes	31,591	$ 34,778		$ 31,591	34,778
Adhesives, Sealants and Additives
Changes in the carrying value of goodwill
Balance at the beginning of the period				50,090	52,787
Loss on impairment of polyurethane dispersions business			$ (2,410)		(2,410)
Foreign currency translation adjustment				397	(287)
Balance at the end of the period	50,487	50,090		50,487	50,090
Industrial Tapes
Changes in the carrying value of goodwill
Balance at the beginning of the period				21,215	21,215
Balance at the end of the period	21,215	21,215		21,215	21,215
Corrosion Protection and Waterproofing
Changes in the carrying value of goodwill
Balance at the beginning of the period				10,681	10,694
Foreign currency translation adjustment				19	(13)
Balance at the end of the period	$ 10,700	$ 10,681		$ 10,700	$ 10,681

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Goodwill and Other Intangibles - Intangible Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Aug. 31, 2020	Aug. 31, 2019	Aug. 31, 2018
Goodwill and Other Intangibles
Gross Carrying Value	$ 119,551	$ 118,566
Accumulated Amortization	78,351	65,862
Net Carrying Value	41,200	52,704
Aggregate amortization expense	11,576	$ 12,445	$ 11,807
Estimated amortization expense
2021	11,066
2022	10,036
2023	6,768
2024	5,560
2025	$ 3,961
Patents and agreements
Goodwill and Other Intangibles
Weighted-Average Amortization Period	14 years 7 months 6 days	14 years 7 months 6 days
Gross Carrying Value	$ 1,760	$ 1,760
Accumulated Amortization	1,705	1,693
Net Carrying Value	$ 55	$ 67
Formulas and technology
Goodwill and Other Intangibles
Weighted-Average Amortization Period	7 years 9 months 18 days	7 years 9 months 18 days
Gross Carrying Value	$ 10,250	$ 10,164
Accumulated Amortization	9,121	7,969
Net Carrying Value	$ 1,129	$ 2,195
Trade names
Goodwill and Other Intangibles
Weighted-Average Amortization Period	5 years 9 months 18 days	5 years 9 months 18 days
Gross Carrying Value	$ 8,575	$ 8,503
Accumulated Amortization	7,781	7,261
Net Carrying Value	$ 794	$ 1,242
Customer lists and relationships
Goodwill and Other Intangibles
Weighted-Average Amortization Period	9 years 1 month 6 days	9 years 1 month 6 days
Gross Carrying Value	$ 98,966	$ 98,139
Accumulated Amortization	59,744	48,939
Net Carrying Value	$ 39,222	$ 49,200

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Cash Surrender Value of Life Insurance (Details) - USD ($) $ in Thousands	Aug. 31, 2020	Aug. 31, 2019
Cash Surrender Value of Life Insurance
Cash surrender value of life insurance	$ 4,450	$ 4,450
John Hancock
Cash Surrender Value of Life Insurance
Cash surrender value of life insurance, gross	$ 4,450	$ 4,450

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Long-Term Debt (Details) $ in Thousands		1 Months Ended	8 Months Ended		12 Months Ended
	Dec. 15, 2016 USD ($)	Dec. 31, 2017 USD ($)	Aug. 31, 2019 USD ($)	Aug. 31, 2018 USD ($)	Aug. 31, 2020 USD ($)	Aug. 31, 2019 USD ($)	Aug. 31, 2018 USD ($)
Long-term debt
Principal payment						$ 25,000	$ 40,000
Zappa Stewart
Long-term debt
Amount drawn remained outstanding				$ 65,000			$ 65,000
New Credit Agreement
Long-term debt
Maximum borrowing capacity	$ 150,000				$ 150,000
Additional borrowing capacity	$ 50,000
Carrying value of direct and indirect domestic subsidiaries					$ 246,096
Term of debt					5 years
Amount drawn remained outstanding			$ 0		$ 0	$ 0
Term of potential debt					7 years
Amount drew in relation to acquisition		$ 65,000
Principal payment			$ 25,000	$ 40,000
New Credit Agreement | Minimum
Long-term debt
Consolidated fixed charge coverage ratio	1.25
New Credit Agreement | Maximum
Long-term debt
Net leverage ratio	3.25
New Credit Agreement | London Interbank Offered Rate (LIBOR)
Long-term debt
Interest payment due						3 months
New Credit Agreement | London Interbank Offered Rate (LIBOR) | Minimum
Long-term debt
Interest rate margin on variable rate basis (as a percent)					1.00%
New Credit Agreement | London Interbank Offered Rate (LIBOR) | Maximum
Long-term debt
Interest rate margin on variable rate basis (as a percent)					1.75%

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Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended			4 Months Ended	8 Months Ended	12 Months Ended			32 Months Ended
	Aug. 31, 2019	May 31, 2019	Nov. 30, 2018	Dec. 31, 2017	Aug. 31, 2018	Aug. 31, 2020	Aug. 31, 2019	Aug. 31, 2018	Aug. 31, 2020
Effective income tax rate
Income taxes						$ 11,163	$ 10,842	$ 13,822
Income before income taxes						$ 45,320	$ 43,553	$ 56,965
Effective income tax rate						24.60%	24.90%	24.30%
Statutory tax rate (as a percent)				35.00%	21.00%	21.00%	21.00%	25.70%	21.00%
Tax benefit/(expense)	$ 0	$ 0	$ 0					$ 681
Tax benefit resulting from remeasurement and reclassification of existing deferred tax liability								379
Provision tax expenses								917
Tax expense recorded as the result of remeasuring the Federal benefit on our uncertain tax positions								143
Transition tax adjustment associated with its accumulated, undistributed foreign earnings								2,298
Short term payable								153
Long taxes payable								$ 1,766
Percentage of short term tax payable								8.00%
Discrete tax benefit								$ 379
Additional component of total federal expense						$ 9,157	$ 9,880	$ 12,872

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Income Taxes - Reconciliation (Details) - USD ($) $ in Thousands	4 Months Ended	8 Months Ended	12 Months Ended			32 Months Ended
	Dec. 31, 2017	Aug. 31, 2018	Aug. 31, 2020	Aug. 31, 2019	Aug. 31, 2018	Aug. 31, 2020
Domestic and foreign pre-tax income
United States			$ 42,027	$ 37,088	$ 48,962
Foreign			3,293	6,465	8,003
Income before income taxes			45,320	43,553	56,965
Current:
Federal			9,157	9,880	12,872
State			1,813	1,699	1,662
Foreign			962	1,575	1,761
Total current income tax provision			11,932	13,154	16,295
Deferred:
Federal			(520)	(1,699)	(2,214)
State			(184)	(529)	(263)
Foreign			(65)	(84)	4
Total deferred income tax provision (benefit)			(769)	(2,312)	(2,473)
Total income tax provision			$ 11,163	$ 10,842	$ 13,822
Reconciliation of the effective income tax rate on continuing operations with the U.S. federal statutory income tax rate
Federal statutory rates (as a percent)	35.00%	21.00%	21.00%	21.00%	25.70%	21.00%
Adjustment resulting from the tax effect of:
State and local taxes, net of federal benefit (as a percent)			3.00%	2.10%	1.90%
Domestic production deduction (as a percent)			(0.00%)	(0.00%)	(1.60%)
Foreign tax rate differential (as a percent)			0.00%	0.10%	(0.30%)
Adjustment to uncertain tax position (as a percent)			1.10%	(1.00%)	(1.10%)
Transaction costs not deductible			0.50%	0.00%	0.00%
Research credit generated (as a percent)			(0.10%)	(0.30%)	(0.20%)
Stock Compensation (as a percent)			(0.30%)	(0.40%)	(3.40%)
Permanent items (as a percent)			0.90%	1.10%	0.90%
Tax effect of undistributed earnings (as a percent)			0.30%	0.60%	(0.80%)
Other (as a percent)			0.40%	(0.40%)	(0.80%)
Change in valuation allowance (as a percent)			0.00%	0.10%	0.10%
Deferred income tax remeasurement (as a percent)			0.00%	0.00%	1.70%
Effective income tax rate (as a percent)			24.60%	24.90%	24.30%

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Income Taxes - Deferred Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Aug. 31, 2020	Aug. 31, 2019	Aug. 31, 2018
Income Taxes
Current income tax provision	$ 11,932	$ 13,154	$ 16,295
Total deferred income tax provision (benefit)	(769)	(2,312)	(2,473)
Total income tax provision	$ 11,163	$ 10,842	$ 13,822

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Income Taxes - Uncertain Tax Positions (Details) - USD ($) $ in Thousands	12 Months Ended
	Aug. 31, 2020	Aug. 31, 2019	Aug. 31, 2018
Deferred tax assets:
Allowance for doubtful accounts	$ 309	$ 432
Inventories	994	1,193
Accruals	504	541
Warranty reserve	14	22
Pension accrual	2,749	2,623
Deferred compensation	391	300
Foreign currency loss on previously taxed income	96	96
Loan finance costs	7	34
Restricted stock grants	823	456
Non-qualified stock options	211	258
Right-of-use asset	2,354
Foreign net operating loss, net of valuation allowance	247
Other	572	353
Deferred tax assets, net	9,271	6,308
Deferred tax liabilities:
Prepaid liabilities	(16)	(8)
Lease liability	(2,693)
Depreciation and amortization	(1,633)	(2,496)
Noncurrent deferred tax liabilities	(4,342)	(2,504)
Net deferred tax assets (liabilities)	4,929	3,804
Gross foreign operating loss carry forwards	727
Adjustments to uncertain tax positions
Balance, at beginning of the year	2,324	1,889	$ 1,257
Increase for tax positions related to the current year	101	55	47
(Decrease) increase for tax positions related to prior years	(609)	300	595
Increase for interest and penalties	125	106	71
Decrease for lapses of statute of limitations		(26)	(81)
Balance, at end of year	1,941	$ 2,324	$ 1,889
Accrued balances related to uncertain tax positions
Accrued interest and penalty	1,002
Increase in accrued interest and penalty charges recorded as tax benefit	$ 125

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Leases (Details) - USD ($) $ in Thousands	12 Months Ended
	Aug. 31, 2020	Aug. 31, 2019	Aug. 31, 2018
Leases
Package of practical expedients	true
Assets
Operating leas e right-of-use asset	$ 8,821
Current (accrued expense)	$ 1,865
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]	us-gaap:AccruedLiabilitiesMember
Operating lease long-term liabilities	$ 6,395
Total lease liability	8,260
Rental expense	$ 3,783
Rental expense		$ 3,734	$ 3,114

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Leases - Components Of Lease Costs (Details) $ in Thousands	12 Months Ended
	Aug. 31, 2020 USD ($)
Leases
Operating lease cost	$ 3,783

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Leases - Maturity Of Lease Liability (Details) $ in Thousands	Aug. 31, 2020 USD ($)
Maturity of lease liability
2021	$ 2,085
2022	1,500
2023	1,346
2024	1,360
2025 and thereafter	2,687
Less: Interest	(718)
Total lease liability	$ 8,260

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Leases - Weighted Average Remaining Lease Term (Details) $ in Thousands	12 Months Ended
	Aug. 31, 2020 USD ($)
Operating lease
Operating leases, Weighted average remaining lease term (years)	5 years 6 months
Operating leases, Weighted average discount rate (percentage)	3.10%
Operating cash outflows from operating leases	$ 2,444
Total cash paid for amounts included in the measurement of lease liabilities	$ 2,444

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Leases - Minimum Lease Payments Prior to ASU 2016-02 (Details) $ in Thousands	Aug. 31, 2020 USD ($)
Future minimum payments due under operating leases
2020	$ 2,468
2021	2,059
2022	1,371
2023	1,187
2024	1,200
2025 and thereafter	2,608
Total future minimum lease payments	$ 10,893

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Benefits and Pension Plans (Details)		12 Months Ended
	Nov. 15, 2018 USD ($) item	Aug. 31, 2020 USD ($)	Aug. 31, 2019 USD ($)	Aug. 31, 2018 USD ($)
401(k) Plan
Percent of participant's compensation		3.50%
401(k) Plan
Eligibility age for defined contribution plan		21 years
Minimum eligibility service period		6 months
Employer match of employee contributions of first percent of eligible compensation (as a percent)		100.00%
Percentage of eligible compensation, matched 100% by employer		1.00%
Employer match of employee contributions after the first percent of eligible compensation (as a percent)		50.00%
Maximum percentage of employee's annual salary, matched by employer		3.50%
Contribution expense		$ 852,000	$ 787,000	$ 702,000
Non-Qualified Deferred Savings Plan
Recorded liability for Board of Directors and selected employees savings plan		$ 1,629,000	$ 1,275,000
NEPTCO
401(k) Plan
Number of 401(k) savings plans | item	2
NEPTCO | Union Employees
401(k) Plan
Number of 401(k) savings plans | item	1
Amount for each $1.00 of participant deferrals the company may contribute	$ 0.50
Base amount of participant deferrals for company contributions	$ 1.00
Percent of participant's compensation	6.00%
401(k) Plan
Maximum percentage of employee's annual salary, matched by employer	6.00%
NEPTCO | Non-union Employees
401(k) Plan
Number of 401(k) savings plans | item	1
Amount for each $1.00 of participant deferrals the company may contribute	$ 0.75
Base amount of participant deferrals for company contributions	$ 1.00
Percent of participant's compensation	6.00%
401(k) Plan
Maximum percentage of employee's annual salary, matched by employer	6.00%
Maximum | NEPTCO
401(k) Plan
Percent of annual compensation participants may defer	10.00%
Minimum | NEPTCO
401(k) Plan
Percent of annual compensation participants may defer	1.00%

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Benefits and Pension Plans - Changes in Plan Components (Details) - USD ($) $ in Thousands	12 Months Ended
	Aug. 31, 2020	Aug. 31, 2019	Aug. 31, 2018
Change in benefit obligation
Projected benefit obligation at beginning of year	$ 20,087	$ 21,860	$ 22,673
Service cost	295	283	283
Interest cost	451	696	629
Actuarial (gain) loss	2,253	995	17
Benefits paid	(2,423)	(3,747)	(1,742)
Projected benefit obligation at end of year	20,663	20,087	21,860
Change in plan assets
Fair value of plan assets at beginning of year	7,859	9,855	9,003
Actual return on plan assets	868	181	509
Employer contribution	1,864	1,570	2,085
Benefits paid	(2,423)	(3,747)	(1,742)
Fair value of plan assets at end of year	8,168	7,859	9,855
Funded status
Funded status at end of year	(12,495)	(12,228)	(12,005)
Amounts recognized in consolidated balance sheets
Noncurrent assets			301
Current liabilities	(1,565)	(1,743)	(1,570)
Noncurrent liabilities	(10,930)	(10,485)	(10,736)
Net amount recognized in consolidated balance sheets	(12,495)	(12,228)	(12,005)
Actuarial present value of benefit obligation and funded status
Accumulated benefit obligations	18,307	18,244	20,075
Projected benefit obligations	20,663	20,087	21,858
Plan assets at fair value	8,168	7,859	9,855
Amounts recognized in accumulated other comprehensive income
Prior service cost	44	47	54
Net actuarial loss	10,595	9,638	9,377
Adjustment to pre-tax accumulated other comprehensive income	10,639	9,685	9,431
Other changes in plan assets and benefit obligations recognized in other comprehensive income
Net (gain)/loss	711	1,863	(704)
Amortization of loss	(664)	(472)	(484)
Supplemental plan assumption change	1,065	(620)	676
Amortization of prior service cost	(3)	(3)	(3)
Effect of settlement on accumulated other comprehensive income	(155)	(511)
Total recognized in other comprehensive income	954	257	(515)
Net periodic pension cost	1,178	1,537	937
Total recognized in net periodic pension cost and other comprehensive income	2,132	1,794	422
Estimated amounts that will be amortized from accumulated comprehensive income over the next fiscal year
Prior service cost	3	3	3
Net actuarial loss	656	500	475
Components of net periodic benefit cost
Service cost	295	283	283
Interest cost	451	696	629
Expected return on plan assets	(390)	(428)	(462)
Amortization of prior service cost	3	3	3
Amortization of accumulated loss	664	472	484
Curtailment and settlement loss	155	511
Net periodic benefit cost	1,178	$ 1,537	$ 937
NEPTCO
Change in plan assets
Fair value of plan assets at end of year	$ 0
NEPTCO | Union Employees
Pensions and Other Postretirement Benefits
Period before retirement for determination of employee's average compensation	5 years

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Benefits and Pension Plans - Weighted Average Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Aug. 31, 2020	Aug. 31, 2019	Aug. 31, 2018
Weighted-average assumptions used to determine benefit obligations
Rate of compensation increase (as a percent)	3.50%	3.50%	3.50%
Weighted-average assumptions used to determine net periodic benefit cost
Rate of compensation increase (as a percent)	3.50%	3.50%	3.50%
Qualified Plan
Weighted-average assumptions used to determine benefit obligations
Discount rate (as a percent)	1.92%	2.58%	3.80%
Weighted-average assumptions used to determine net periodic benefit cost
Discount rate (as a percent)	2.58%	3.80%	3.30%
Expected long term return on plan assets (as a percent)	5.60%	5.40%	5.40%
Reduction in discount rate used to estimate additional net periodic pension cost (as a percent)	1.00%
Additional net periodic pension cost from each 100 basis point reduction in the discount rate	$ 41
Reduction in expected return on plan assets used to estimate the increase in net periodic pension cost (as a percent)	1.00%
Additional net periodic pension cost from each 100 basis point reduction in the expected return on plan assets	$ 68
Supplemental plan
Weighted-average assumptions used to determine benefit obligations
Discount rate (as a percent)	1.65%	2.37%	3.57%
Weighted-average assumptions used to determine net periodic benefit cost
Discount rate (as a percent)	2.37%	3.57%	2.73%
Additional net periodic pension cost from each 100 basis point reduction in the discount rate	$ (57)
NEPTCO | Qualified Plan
Weighted-average assumptions used to determine benefit obligations
Discount rate (as a percent)		2.29%	3.59%
Weighted-average assumptions used to determine net periodic benefit cost
Discount rate (as a percent)	2.29%	3.59%	2.95%
Expected long term return on plan assets (as a percent)	5.60%	5.40%	5.20%

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Benefits and Pension Plans - Asset Categories (Details)	12 Months Ended
	Aug. 31, 2020	Aug. 31, 2019	Aug. 31, 2018
Qualified Plan
Target allocation and weighted-average asset allocations
Expected long term return on plan assets (as a percent)	5.25%
Qualified Plan
Target allocation and weighted-average asset allocations
Total target allocation (as a percent)	100.00%	100.00%	100.00%
Percentage of Plan Assets	100.00%	100.00%	100.00%
Expected long term return on plan assets (as a percent)	5.60%	5.40%	5.40%
Equity Securities | Qualified Plan
Target allocation and weighted-average asset allocations
Percentage of Plan Assets	49.00%	44.00%	46.00%
Equity Securities | Qualified Plan | Minimum
Target allocation and weighted-average asset allocations
Total target allocation (as a percent)	10.00%	10.00%	10.00%
Equity Securities | Qualified Plan | Maximum
Target allocation and weighted-average asset allocations
Total target allocation (as a percent)	80.00%	80.00%	80.00%
Debt Securities | Qualified Plan
Target allocation and weighted-average asset allocations
Percentage of Plan Assets	51.00%	56.00%	54.00%
Debt Securities | Qualified Plan | Minimum
Target allocation and weighted-average asset allocations
Total target allocation (as a percent)	20.00%	20.00%	20.00%
Debt Securities | Qualified Plan | Maximum
Target allocation and weighted-average asset allocations
Total target allocation (as a percent)	70.00%	70.00%	70.00%
Other | Qualified Plan | Minimum
Target allocation and weighted-average asset allocations
Total target allocation (as a percent)	0.00%	0.00%	0.00%
Other | Qualified Plan | Maximum
Target allocation and weighted-average asset allocations
Total target allocation (as a percent)	100.00%	100.00%	100.00%
NEPTCO | Qualified Plan
Target allocation and weighted-average asset allocations
Total target allocation (as a percent)	100.00%	100.00%	100.00%
Percentage of Plan Assets		100.00%	100.00%
Expected long term return on plan assets (as a percent)	5.60%	5.40%	5.20%
NEPTCO | Equity Securities
Target allocation and weighted-average asset allocations
Total target allocation (as a percent)	80.00%	80.00%	80.00%
NEPTCO | Equity Securities | Qualified Plan
Target allocation and weighted-average asset allocations
Percentage of Plan Assets		44.00%	46.00%
NEPTCO | Equity Securities | Qualified Plan | Minimum
Target allocation and weighted-average asset allocations
Total target allocation (as a percent)	10.00%	10.00%	10.00%
NEPTCO | Debt Securities | Qualified Plan
Target allocation and weighted-average asset allocations
Percentage of Plan Assets		56.00%	54.00%
NEPTCO | Debt Securities | Qualified Plan | Minimum
Target allocation and weighted-average asset allocations
Total target allocation (as a percent)	20.00%	20.00%	20.00%
NEPTCO | Debt Securities | Qualified Plan | Maximum
Target allocation and weighted-average asset allocations
Total target allocation (as a percent)	70.00%	70.00%	70.00%
NEPTCO | Other | Qualified Plan | Minimum
Target allocation and weighted-average asset allocations
Total target allocation (as a percent)	0.00%	0.00%	0.00%
NEPTCO | Other | Qualified Plan | Maximum
Target allocation and weighted-average asset allocations
Total target allocation (as a percent)	100.00%	100.00%	100.00%

XML

Benefits and Pension Plans - Fair Value (Details) - USD ($) $ in Thousands	Aug. 31, 2020	Aug. 31, 2019	Aug. 31, 2018	Aug. 31, 2017
Pensions and Other Postretirement Benefits
Fair value of plan assets	$ 8,168	$ 7,859	$ 9,855	$ 9,003
Equity securities
Pensions and Other Postretirement Benefits
Fair value of plan assets	3,986	3,474
Debt securities
Pensions and Other Postretirement Benefits
Fair value of plan assets	4,182	4,385
Quoted prices in active markets (Level 1)
Pensions and Other Postretirement Benefits
Fair value of plan assets	8,168	7,859
Quoted prices in active markets (Level 1) | Equity securities
Pensions and Other Postretirement Benefits
Fair value of plan assets	3,986	3,474
Quoted prices in active markets (Level 1) | Debt securities
Pensions and Other Postretirement Benefits
Fair value of plan assets	$ 4,182	$ 4,385

XML

Benefits and Pension Plans - Future Benefit Payments (Details) - USD ($) $ in Thousands	12 Months Ended
	Aug. 31, 2020	Aug. 31, 2019	Aug. 31, 2018
Estimated future pension benefit payments
2021	$ 2,996
2022	1,759
2023	2,507
2024	1,948
2025	1,788
2026-2030	5,393
Employer contribution	$ 1,864	$ 1,570	$ 2,085

XML

Stockholders' Equity (Details)						1 Months Ended										3 Months Ended								12 Months Ended
	Sep. 01, 2019 installment $ / shares shares	Sep. 01, 2018 installment $ / shares shares	Sep. 01, 2017 $ / shares shares	Sep. 01, 2016 installment shares	Sep. 01, 2015 shares	May 31, 2020 shares	Feb. 29, 2020 shares	Aug. 31, 2019 $ / shares shares	Feb. 28, 2019 shares	Sep. 30, 2018 $ / shares shares	Feb. 28, 2018 shares	Aug. 31, 2017 installment $ / shares shares	Feb. 28, 2017 shares	Aug. 31, 2016 installment $ / shares shares	Aug. 31, 2015 installment $ / shares shares	Aug. 31, 2020 individual item $ / shares shares	Feb. 29, 2020 shares	Aug. 31, 2019 installment $ / shares shares	Aug. 31, 2018 $ / shares shares	May 31, 2018 installment $ / shares shares	Nov. 30, 2016 shares	Nov. 30, 2015 shares	May 31, 2015 shares	Aug. 31, 2020 individual item $ / shares shares	Aug. 31, 2019 $ / shares shares	Aug. 31, 2018 $ / shares shares	Aug. 31, 2017 $ / shares shares	Oct. 31, 2012 shares	Nov. 30, 2005 shares
Non-employee members of BOD
Stock-Based Compensation
Shares granted																								4,906	4,599	2,779
Number of Shares
Unvested restricted stock, beginning balance (in shares)	4,599	2,779	2,407							2,779														4,599	2,779	2,407
Granted (in shares)																								4,906	4,599	2,779
Vested (in shares)																								(4,599)	(2,779)	(2,407)
Unvested restricted stock, ending balance (in shares)								4,599				2,407				4,906		4,599	2,779					4,906	4,599	2,779	2,407
Weighted Average Grant Date Fair Value
Unvested restricted stock, beginning balance (in dollars per share) | $ / shares	$ 101.92	$ 101.05	$ 91.05							$ 101.05														$ 101.92	$ 101.05	$ 91.05
Granted (in dollars per share) | $ / shares																								95.59	101.92	101.05
Vested (in dollars per share) | $ / shares																								101.92	101.05	91.05
Unvested restricted stock, ending balance (in dollars per share) | $ / shares								$ 101.92				$ 91.05				$ 95.59		$ 101.92	$ 101.05					$ 95.59	$ 101.92	$ 101.05	$ 91.05
Officers and employees
Stock-Based Compensation
Shares granted																								43,841	7,524	13,922
Weighted Average Exercise Price (in dollars per share) | $ / shares																57.96								$ 57.96
Shares forfeited																								3,126	3,305
Exercise price (in dollar per share) | $ / shares								$ 57.18				$ 34.21				$ 75.21		$ 57.18	$ 50.17					$ 75.21	$ 57.18	$ 50.17	$ 34.21
Number of Shares
Unvested restricted stock, beginning balance (in shares)	44,355	65,579	73,972							65,579														44,355	65,579	73,972
Granted (in shares)																								43,841	7,524	13,922
Vested (in shares)																								(25,195)	(25,443)	(22,315)
Forfeited or cancelled (in shares)																								(3,126)	(3,305)
Unvested restricted stock, ending balance (in shares)								44,355				73,972				59,875		44,355	65,579					59,875	44,355	65,579	73,972
Weighted Average Grant Date Fair Value
Unvested restricted stock, beginning balance (in dollars per share) | $ / shares	$ 67.18	$ 61.85	$ 51.56							$ 61.85														$ 67.18	$ 61.85	$ 51.56
Granted (in dollars per share) | $ / shares																								108.47	121.64	83.65
Vested (in dollars per share) | $ / shares																								61.51	65.79	41.35
Forfeited or cancelled (in dollars per share) | $ / shares																								123.19	79.39
Unvested restricted stock, ending balance (in dollars per share) | $ / shares								$ 67.18				$ 51.56				$ 97.72		$ 67.18	$ 61.85					97.72	$ 67.18	$ 61.85	$ 51.56
Stock options
Stock-Based Compensation
Common stock available for future issuance (in shares)								949,398										949,398							949,398
Weighted Average Exercise Price (in dollars per share) | $ / shares																$ 57.96								$ 57.96
Stock options | Executive officers and other members of management
Stock-Based Compensation
Number of equal annual installments | installment	3
Stock options | Executive officers | August 31, 2019 vesting date
Stock-Based Compensation
Shares authorized														23,563
Exercise price (in dollar per share) | $ / shares														$ 64.37
Restricted stock
Stock-Based Compensation
Shares forfeited										2,472														2,694
Number of Shares
Forfeited or cancelled (in shares)										(2,472)														(2,694)
Restricted stock | Non-executive members of management
Stock-Based Compensation
Number of grants | item																2								2
Number of non-executive members of management | individual																2								2
Shares forfeited						432
Number of Shares
Forfeited or cancelled (in shares)						(432)
Restricted stock | Non-executive members of management | July 27, 2021 vesting date
Stock-Based Compensation
Shares granted																481
Number of Shares
Granted (in shares)																481
Restricted stock | Non-executive members of management | June 15, 2021 vesting date
Stock-Based Compensation
Shares granted																261
Number of Shares
Granted (in shares)																261
Restricted stock | Non-employee members of BOD
Stock-Based Compensation
Shares granted							4,906		4,599		2,779		2,407
Vesting period							12 months		12 months		12 months		12 months
Number of Shares
Granted (in shares)							4,906		4,599		2,779		2,407
Time-based restricted stock | Executive officers
Stock-Based Compensation
Shares granted				16,312
Number of equal annual installments | installment				5
Vesting period				5 years
Number of Shares
Granted (in shares)				16,312
Time-based restricted stock | Executive officers | August 31, 2019 vesting date
Stock-Based Compensation
Shares granted				7,768
Number of Shares
Granted (in shares)				7,768
Time-based restricted stock | Executive officers | August 31, 2021 vesting date
Stock-Based Compensation
Shares granted				8,544
Number of Shares
Granted (in shares)				8,544
2013 Plan
Stock-Based Compensation
Shares authorized																												1,200,000
Common stock available for future issuance (in shares)																949,398								949,398
2005 Incentive Plan
Stock-Based Compensation
Shares authorized																													1,000,000
Common stock available for future issuance (in shares)																39,473								39,473
2015 LTIP | Time-based restricted stock | Non-executive members of management
Stock-Based Compensation
Shares granted																							16,000
Number of Shares
Granted (in shares)																							16,000
2015 LTIP | Time-based restricted stock | Non-executive members of management | April 16, 2020 vesting date
Stock-Based Compensation
Shares granted																							15,000
Number of Shares
Granted (in shares)																							15,000
2015 LTIP | Time-based restricted stock | Non-executive members of management | January 31, 2018 vesting date
Stock-Based Compensation
Shares granted																							1,000
Number of Shares
Granted (in shares)																							1,000
2016 LTIP | Executive officers and other members of management
Stock-Based Compensation
Adjusted shares																											6,277
Cumulative shares granted																											13,239
2016 LTIP | Stock options | Executive officers and other members of management | August 31, 2018 vesting date
Stock-Based Compensation
Shares granted															21,275
Number of equal annual allotments in which awards will vest | installment															3
Exercise price (in dollar per share) | $ / shares															$ 39.50
Number of Shares
Granted (in shares)															21,275
2016 LTIP | Restricted stock | Non-executive members of management | October 20, 2020 Vesting date
Stock-Based Compensation
Shares granted																						5,000
Number of Shares
Granted (in shares)																						5,000
2016 LTIP | Performance and service based restricted stock | Executive officers and other members of management | August 31, 2018 vesting date
Stock-Based Compensation
Shares granted					6,962
Number of Shares
Granted (in shares)					6,962
2016 LTIP | Time-based restricted stock | Executive officers and other members of management | August 31, 2018 vesting date
Stock-Based Compensation
Shares granted					7,683
Number of Shares
Granted (in shares)					7,683
2017 LTIP | Executive officers and other members of management
Stock-Based Compensation
Adjusted shares																										5,399
2017 LTIP | Non-employee members of BOD
Stock-Based Compensation
Cumulative shares granted																										10,798
2017 LTIP | Stock options | Executive officers and other members of management
Stock-Based Compensation
Shares authorized														15,028
Stock options expiring earlier (in shares)														5,596
Stock options expiring later (in shares)														9,432
Number of equal annual allotments in which awards will vest | installment														3
Exercise price (in dollar per share) | $ / shares														$ 64.37
2017 LTIP | Restricted stock | Non-executive members of management | August 31, 2021 vesting date
Stock-Based Compensation
Shares granted																					8,805
Number of Shares
Granted (in shares)																					8,805
2017 LTIP | Performance and service based restricted stock | Executive officers and other members of management | August 31, 2019 vesting date
Stock-Based Compensation
Shares granted				5,399
Number of Shares
Granted (in shares)				5,399
2017 LTIP | Time-based restricted stock | Executive officers and other members of management | August 31, 2019 vesting date
Stock-Based Compensation
Shares granted				5,367
Number of Shares
Granted (in shares)				5,367
2018 LTIP | Executive officers and other members of management
Stock-Based Compensation
Shares granted																										572
Cumulative shares granted																										4,821
Number of Shares
Granted (in shares)																										572
2018 LTIP | Stock options | Non-executive members of management
Stock-Based Compensation
Shares authorized																				606
Number of equal annual allotments in which awards will vest | installment																				3
Exercise price (in dollar per share) | $ / shares																				$ 104.00
2018 LTIP | Stock options | Executive officers and other members of management
Stock-Based Compensation
Shares authorized												9,622															9,622
Number of equal annual installments | installment												3
Stock options expiring earlier (in shares)												4,591
Stock options expiring later (in shares)												5,031
Exercise price (in dollar per share) | $ / shares												$ 93.50															$ 93.50
2018 LTIP | Restricted stock | Non-executive members of management | 31 August, 2020 vesting date
Stock-Based Compensation
Shares granted																				192
Number of Shares
Granted (in shares)																				192
2018 LTIP | Restricted stock | Executive officers | August 20, 2019 vesting date
Stock-Based Compensation
Shares granted																			609
Number of Shares
Granted (in shares)																			609
2018 LTIP | Performance and service based restricted stock | Executive officers and other members of management | 31 August, 2020 vesting date
Stock-Based Compensation
Shares granted			4,249
Number of Shares
Granted (in shares)			4,249
2018 LTIP | Time-based restricted stock | Executive officers and other members of management | 31 August, 2020 vesting date
Stock-Based Compensation
Shares granted			3,473
Number of Shares
Granted (in shares)			3,473
2019 LTIP | Stock options | Non-executive members of management
Stock-Based Compensation
Shares authorized								483										483							483
Number of equal annual allotments in which awards will vest | installment																		3
Exercise price (in dollar per share) | $ / shares								$ 99.38										$ 99.38							$ 99.38
2019 LTIP | Stock options | Executive officers and other members of management
Stock-Based Compensation
Shares granted		8,603
Number of equal annual allotments in which awards will vest | installment		3
Exercise price (in dollar per share) | $ / shares		$ 123.95
Number of Shares
Granted (in shares)		8,603
2019 LTIP | Stock options | Executive officers and other members of management | August 31, 2028 vesting date
Stock-Based Compensation
Shares forfeited		3,927
Number of Shares
Forfeited or cancelled (in shares)		(3,927)
2019 LTIP | Stock options | Executive officers and other members of management | September 1, 2028 Vesting date
Stock-Based Compensation
Shares forfeited		4,676
Number of Shares
Forfeited or cancelled (in shares)		(4,676)
2019 LTIP | Restricted stock
Stock-Based Compensation
Shares forfeited								833
Number of Shares
Forfeited or cancelled (in shares)								(833)
2019 LTIP | Performance and service based restricted stock | Executive officers and other members of management | August 31, 2021 vesting date
Stock-Based Compensation
Shares granted		3,541																211
Number of Shares
Granted (in shares)		3,541																211
2019 LTIP | Time-based restricted stock | Executive officers and other members of management | August 31, 2021 vesting date
Stock-Based Compensation
Shares granted		3,068																132
Number of Shares
Granted (in shares)		3,068																132
2020 LTIP | Stock options | Executive officers and other members of management
Stock-Based Compensation
Shares authorized	13,418
Weighted Average Exercise Price (in dollars per share) | $ / shares	$ 100.22
Stock options expiring earlier (in shares)	6,218
Stock options expiring later (in shares)	7,200
2020 LTIP | Restricted stock | Non-executive members of management | December 31 2021 vesting date
Stock-Based Compensation
Shares granted																	432,616
Number of Shares
Granted (in shares)																	432,616
2020 LTIP | Restricted stock | Non-executive members of management | December 31 2022 vesting date
Stock-Based Compensation
Shares granted																	18,720
Number of Shares
Granted (in shares)																	18,720
2020 LTIP | Restricted stock | Non-executive members of management | December 31 2024 vesting date
Stock-Based Compensation
Shares granted																	19,768
Number of Shares
Granted (in shares)																	19,768
2020 LTIP | Performance and service based restricted stock | Executive officers and other members of management | August 31, 2022 vesting date
Stock-Based Compensation
Shares granted	3,697
Number of Shares
Granted (in shares)	3,697
2020 LTIP | Time-based restricted stock | Executive officers and other members of management | August 31, 2022 vesting date
Stock-Based Compensation
Shares granted	3,689
Number of Shares
Granted (in shares)	3,689
Equity Retention Agreement | Stock options | Executive officers | August 31, 2022 vesting date
Stock-Based Compensation
Shares authorized	53,642
Exercise price (in dollar per share) | $ / shares	$ 100.22
Equity Retention Agreement | Time-based restricted stock | Executive officers | August 31, 2022 vesting date
Stock-Based Compensation
Shares granted	15,945
Number of Shares
Granted (in shares)	15,945

XML

Stockholders' Equity - Additional Disclosures (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended				12 Months Ended
	Feb. 29, 2020	Feb. 28, 2019	Feb. 28, 2018	Feb. 28, 2017	Aug. 31, 2020	Aug. 31, 2019	Aug. 31, 2018	Aug. 31, 2017
Additional disclosures
Unrecognized expense related to all stock-based compensation (in dollars)					$ 5,397
Period over which unrecognized expense related to all stock based compensation will be recognized					5 years
2005 Incentive Plan
Additional disclosures
Common stock available for future issuance (in shares)					39,473
Non-employee members of BOD
Additional disclosures
Outstanding at the end of the period (in shares)					4,906	4,599	2,779	2,407
Officers and employees
Options Exercisable
Number Exercisable (in shares)					99,080
Weighted Average Exercise Price (in dollars per share)					$ 57.96
Options outstanding
Options outstanding at the beginning of the period (in shares)					101,254	99,190	152,974
Granted (in shares)					67,060	9,086	10,228
Exercised (in shares)					(3,618)	(7,022)	(64,012)
Options outstanding at the end of the period (in shares)					164,696	101,254	99,190
Weighted Average Exercise Price
Options outstanding at the beginning of the period (in dollars per share)					$ 57.18	$ 50.17	$ 34.21
Exercise price (in dollars per share)					100.22	122.64	94.12
Exercised (in dollars per share)					34.21	42.86	19.06
Options outstanding at the end of the period (in dollars per share)					$ 75.21	$ 57.18	$ 50.17
Additional disclosures
Outstanding at the end of the period (in shares)					59,875	44,355	65,579	73,972
Stock options
Options Outstanding
Number Outstanding (in shares)					164,696
Weighted Avg. Remaining Contractual Life					6 years 9 months 18 days
Weighted Average Exercise Price (in dollars per share)					$ 75.21
Aggregate Intrinsic Value (in dollars)					$ 4,092
Options Exercisable
Number Exercisable (in shares)					99,080
Weighted Average Exercise Price (in dollars per share)					$ 57.96
Aggregate Intrinsic Value (in dollars)					$ 4,092
Additional disclosures
Weighted average grant date fair value of options granted (in dollars per share)					$ 29.79	$ 40.12	$ 30.99
Total pretax intrinsic value of stock options exercised (in dollars)					$ 311	$ 403	$ 6,714
Common stock available for future issuance (in shares)						949,398
Tax (expense) / benefit realized from stock options exercised, vesting of restricted stock and issuance of stock pursuant to grants of restricted stock units (in dollars)					149	$ 157	$ 1,921
Unrecognized expense related to all stock-based compensation (in dollars)					$ 1,261
Stock options | $16.00
Options Outstanding
Number Outstanding (in shares)					5,065
Weighted Avg. Remaining Contractual Life					2 years 1 month 6 days
Weighted Average Exercise Price (in dollars per share)					$ 16.00
Aggregate Intrinsic Value (in dollars)					$ 413
Options Exercisable
Number Exercisable (in shares)					5,065
Weighted Average Exercise Price (in dollars per share)					$ 16.00
Aggregate Intrinsic Value (in dollars)					$ 413
Stock options | $29.72
Options Outstanding
Number Outstanding (in shares)					13,790
Weighted Avg. Remaining Contractual Life					3 years
Weighted Average Exercise Price (in dollars per share)					$ 29.72
Aggregate Intrinsic Value (in dollars)					$ 936
Options Exercisable
Number Exercisable (in shares)					13,790
Weighted Average Exercise Price (in dollars per share)					$ 29.72
Aggregate Intrinsic Value (in dollars)					$ 936
Stock options | $35.50
Options Outstanding
Number Outstanding (in shares)					13,372
Weighted Avg. Remaining Contractual Life					4 years
Weighted Average Exercise Price (in dollars per share)					$ 35.50
Aggregate Intrinsic Value (in dollars)					$ 830
Options Exercisable
Number Exercisable (in shares)					13,372
Weighted Average Exercise Price (in dollars per share)					$ 35.50
Aggregate Intrinsic Value (in dollars)					$ 830
Stock options | $39.50
Options Outstanding
Number Outstanding (in shares)					12,753
Weighted Avg. Remaining Contractual Life					5 years
Weighted Average Exercise Price (in dollars per share)					$ 39.50
Aggregate Intrinsic Value (in dollars)					$ 741
Options Exercisable
Number Exercisable (in shares)					12,753
Weighted Average Exercise Price (in dollars per share)					$ 39.50
Aggregate Intrinsic Value (in dollars)					$ 741
Stock options | $64.37
Options Outstanding
Number Outstanding (in shares)					34,260
Weighted Avg. Remaining Contractual Life					6 years
Weighted Average Exercise Price (in dollars per share)					$ 64.37
Aggregate Intrinsic Value (in dollars)					$ 1,137
Options Exercisable
Number Exercisable (in shares)					34,260
Weighted Average Exercise Price (in dollars per share)					$ 64.37
Aggregate Intrinsic Value (in dollars)					$ 1,137
Stock options | $93.50
Options Outstanding
Number Outstanding (in shares)					8,704
Weighted Avg. Remaining Contractual Life					7 years
Weighted Average Exercise Price (in dollars per share)					$ 93.50
Aggregate Intrinsic Value (in dollars)					$ 35
Options Exercisable
Number Exercisable (in shares)					8,704
Weighted Average Exercise Price (in dollars per share)					$ 93.50
Aggregate Intrinsic Value (in dollars)					$ 35
Stock options | $99.38
Options Outstanding
Number Outstanding (in shares)					483
Weighted Avg. Remaining Contractual Life					8 years
Weighted Average Exercise Price (in dollars per share)					$ 99.38
Options Exercisable
Number Exercisable (in shares)					322
Weighted Average Exercise Price (in dollars per share)					$ 99.38
Stock options | 100.22
Options Outstanding
Number Outstanding (in shares)					67,060
Weighted Avg. Remaining Contractual Life					9 years
Weighted Average Exercise Price (in dollars per share)					$ 100.22
Options Exercisable
Number Exercisable (in shares)					4,473
Weighted Average Exercise Price (in dollars per share)					$ 100.22
Stock options | 104.00
Options Outstanding
Number Outstanding (in shares)					606
Weighted Avg. Remaining Contractual Life					7 years 6 months
Weighted Average Exercise Price (in dollars per share)					$ 104.00
Options Exercisable
Number Exercisable (in shares)					606
Weighted Average Exercise Price (in dollars per share)					$ 104.00
Stock options | 123.95
Options Outstanding
Number Outstanding (in shares)					8,603
Weighted Avg. Remaining Contractual Life					8 years
Weighted Average Exercise Price (in dollars per share)					$ 123.95
Options Exercisable
Number Exercisable (in shares)					5,735
Weighted Average Exercise Price (in dollars per share)					$ 123.95
Restricted stock
Additional disclosures
Unrecognized expense related to all stock-based compensation (in dollars)					$ 4,136
Restricted stock | Non-employee members of BOD
Stockholders' Equity
Vesting period	12 months	12 months	12 months	12 months

XML

Segment Data (Details) $ in Thousands	3 Months Ended							6 Months Ended				8 Months Ended	9 Months Ended	12 Months Ended
	Aug. 31, 2020 USD ($)	May 31, 2020 USD ($)	Aug. 31, 2019 USD ($) segment	Feb. 28, 2019 USD ($)	Nov. 30, 2018 USD ($)	Aug. 31, 2018 USD ($)	Feb. 28, 2018 USD ($)	Aug. 31, 2020 USD ($)	Feb. 29, 2020 USD ($)	Aug. 31, 2019 USD ($)	Feb. 28, 2019 USD ($)	Aug. 31, 2018 USD ($)	Aug. 31, 2019 USD ($)	Aug. 31, 2020 USD ($) segment	Aug. 31, 2019 USD ($)	Aug. 31, 2018 USD ($)
Segment data
Revenue														$ 261,162	$ 281,351	$ 284,188
Income before income taxes														45,320	43,553	56,965
Total assets	$ 346,830		$ 307,968					$ 346,830		$ 307,968			$ 307,968	346,830	307,968
Interest														246	519	1,172
Depreciation														4,015	4,762	5,817
Amortization														$ 11,576	12,445	11,807
Loss on impairment of goodwill	0			$ 2,410											2,410
Number of operating segments | segment			3											3
Severance costs		$ 183
Inventory Step up to Fair Value																1,070
Gain on sale of license																1,085
Write-down of certain assets under construction														$ 405
Expenses related to acquisition														274		393
Pension related settlement costs														(155)	(511)
Gain on sale of real estate (Note 19)														2,551
Exit costs related to facilities														807	986	1,272
Zappa Stewart
Segment data
Expenses related to acquisition							$ 393					$ 393
Pawtucket, RI manufacturing facility
Segment data
Gain on sale of real estate (Note 19)		760												760
Exit costs related to facilities		$ 85			$ 260	$ 1,272							0
Granite Falls Location
Segment data
Exit costs related to facilities								0	$ 559	526	$ 526
Randolph, MA - Property
Segment data
Gain on sale of real estate (Note 19)														1,791
Adhesives, Sealants and Additives
Segment data
Revenue														96,208	104,796	101,690
Income before income taxes														25,953	27,142	35,190
Total assets	129,457		$ 135,583					129,457		135,583			135,583	129,457	135,583
Interest														98	177	422
Depreciation														994	1,467	1,285
Amortization														9,313	9,359	7,895
Loss on impairment of goodwill				$ 2,410											2,410
Adhesives, Sealants and Additives | Zappa Stewart
Segment data
Inventory Step up to Fair Value																1,070
Industrial Tapes
Segment data
Revenue														118,960	129,845	130,598
Income before income taxes														31,237	28,216	30,886
Total assets	71,229		77,085					71,229		77,085			77,085	71,229	77,085
Interest														111	216	516
Depreciation														1,746	1,755	2,748
Amortization														1,800	1,800	2,604
Gain on sale of license							$ 1,085
Industrial Tapes | Pawtucket, RI manufacturing facility
Segment data
Exit costs related to facilities					$ 260											1,272
Industrial Tapes | Granite Falls Location
Segment data
Exit costs related to facilities									$ 559	526
Industrial Tapes | Structural composites product line
Segment data
Gain on sale of license																1,480
Corrosion Protection and Waterproofing
Segment data
Revenue														45,994	46,710	51,900
Income before income taxes														16,638	15,909	18,178
Total assets	32,642		32,478					32,642		32,478			32,478	32,642	32,478
Interest														37	126	234
Depreciation														615	674	753
Amortization														463	1,286	1,308
Construction Materials | Engineering Studies related to Facility Consolidation and Rationalization Initiative
Segment data
Write-down on certain other structural composites assets															405
Gain on refund															170
Reportable segments
Segment data
Income before income taxes														73,828	71,267	84,254
Total assets	233,328		245,146					233,328		245,146			245,146	233,328	245,146
Corporate and common costs
Segment data
Income before income taxes														(28,508)	(27,714)	(27,289)
Total assets	$ 113,502		$ 62,822					$ 113,502		$ 62,822			$ 62,822	113,502	62,822
Severance costs														183
Expenses related to acquisition														274
Pension related settlement costs														155	511
Corporate and common costs | Zappa Stewart
Segment data
Expenses related to acquisition																$ 393
Corporate and common costs | Pawtucket, RI manufacturing facility
Segment data
Gain on sale of real estate (Note 19)														760
Exit costs related to facilities														85
Corporate and common costs | Randolph, MA - Property
Segment data
Gain on sale of real estate (Note 19)														1,791
Corporate and common costs | Engineering Studies related to Facility Consolidation and Rationalization Initiative
Segment data
Business development cost														$ 150	$ 200

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Export Sales and Foreign Operations (Details) - USD ($) $ in Thousands	12 Months Ended
	Aug. 31, 2020	Aug. 31, 2019	Aug. 31, 2018
Concentration risk
Export sales	$ 30,067	$ 30,582	$ 42,883
Revenue	261,162	281,351	284,188
Property, plant and equipment, net	25,574	29,326
United States
Concentration risk
Revenue	226,690	248,281	244,225
United Kingdom
Concentration risk
Revenue	20,543	17,504	20,598
All other Foreign
Concentration risk
Revenue	13,929	15,566	$ 19,365
Long-lived assets
Concentration risk
Property, plant and equipment, net	25,574	29,326
Goodwill and Intangible assets, less accumulated amortization	123,602	134,690
Long-lived assets | United States
Concentration risk
Property, plant and equipment, net	22,427	24,993
Goodwill and Intangible assets, less accumulated amortization	117,930	129,057
Long-lived assets | United Kingdom
Concentration risk
Property, plant and equipment, net	2,320	2,493
Goodwill and Intangible assets, less accumulated amortization	4,403	4,446
Long-lived assets | All other Foreign
Concentration risk
Property, plant and equipment, net	827	1,840
Goodwill and Intangible assets, less accumulated amortization	$ 1,269	$ 1,187

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Supplemental Cash Flow Data (Details) - USD ($) $ in Thousands	12 Months Ended
	Aug. 31, 2020	Aug. 31, 2019	Aug. 31, 2018
Supplemental Cash Flow Data
Income taxes paid	$ 11,186	$ 11,714	$ 20,142
Interest paid	230	728	915
Common stock received for payment of stock option exercises	123	119	1,028
Property, plant and equipment additions included in accounts payable	92	67	197
Randolph, MA - Property
Sale of business
Asset held for sale	(14)
Gain on sale of business	(1,791)
Cash received from sale of business, net of transaction costs	1,805
Pawtucket, RI manufacturing facility
Sale of business
Asset held for sale	(1,050)
Gain on sale of business	(760)
Cash received from sale of business, net of transaction costs	$ 1,810
Zappa Stewart
Acquisition of certain assets
Current assets			10,478
Property, plant and equipment			1,872
Goodwill and Intangible assets			64,378
Deferred tax liability			(2,626)
Accounts payable and accrued liabilities			(633)
Payments for acquisitions, net of cash acquired			(73,469)
Structural Composites Rod Business
Sale of business
Inventory			(522)
Goodwill and Intangible assets			(230)
Gain on sale of business			(1,480)
Cash received from sale of business, net of transaction costs			2,232
Structural Composites License
Sale of business
Property and equipment			(26)
Gain on sale of business			(1,085)
Accrued income taxes			111
Cash received from sale of business, net of transaction costs			$ 1,000
Fiber Optic Cable Components Product Line
Sale of business
Due from sale of business		(400)
Cash received from sale of business, net of transaction costs		$ 400

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Acquisitions (Details) € in Thousands, $ in Thousands				1 Months Ended	3 Months Ended	8 Months Ended	12 Months Ended
	Sep. 01, 2020 EUR (€)	Sep. 01, 2020 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2017 USD ($)	Feb. 28, 2018 USD ($)	Aug. 31, 2018 USD ($)	Aug. 31, 2020 USD ($)	Aug. 31, 2018 USD ($)	Sep. 01, 2020 USD ($)	Aug. 31, 2019 USD ($)
Acquisitions
Consideration paid in cash								$ 73,469
Expenses related to acquisition							$ 274	393
Goodwill deductible for income tax purposes							31,591			$ 34,778
Acquisition cost has been allocated to the acquired tangible and identifiable intangible assets assumed based on their fair values
Goodwill						$ 84,696	82,402	$ 84,696		$ 81,986
New Credit Agreement
Acquisitions
Amount drew in relation to acquisition				$ 65,000
ABchime | Subsequent Events
Acquisitions
Consideration paid in cash	€ 18,000	$ 21,420
Acquisition related expenses		$ 274
Potential earn out	€ 7,000								$ 8,330
Zappa Stewart
Acquisitions
Purchase price			$ 73,469	73,469
Expenses related to acquisition					$ 393	$ 393
Acquisition related expenses					$ 393
Goodwill deductible for income tax purposes							$ 23,990
Acquisition cost has been allocated to the acquired tangible and identifiable intangible assets assumed based on their fair values
Accounts receivable			3,670	3,670
Inventory			6,796	6,796
Prepaid expenses and other current assets			12	12
Property, plant and equipment			1,872	1,872
Goodwill			34,138	34,138
Intangible assets			30,240	30,240
Deferred tax liability			(2,626)	(2,626)
Accounts payable and accrued expenses			(633)	(633)
Total purchase price			73,469	73,469
Zappa Stewart | Customer Relationships
Acquisition cost has been allocated to the acquired tangible and identifiable intangible assets assumed based on their fair values
Intangible assets			$ 28,500	$ 28,500

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Acquisitions - Intangible assets purchase transaction (Details) - Zappa Stewart $ in Thousands	1 Months Ended
	Dec. 31, 2017 USD ($)
Identifiable intangible assets purchased
Intangible assets	$ 30,240
Customer Relationships
Identifiable intangible assets purchased
Intangible assets	$ 28,500
Useful life	7 years 10 months 24 days
Technology
Identifiable intangible assets purchased
Intangible assets	$ 900
Useful life	7 years
Trade names
Identifiable intangible assets purchased
Intangible assets	$ 840
Useful life	4 years

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Acquisitions - Supplemental Pro Forma Data (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended									4 Months Ended	8 Months Ended	12 Months Ended			32 Months Ended
	Aug. 31, 2020	May 31, 2020	Feb. 29, 2020	Nov. 30, 2019	Aug. 31, 2019	May 31, 2019	Feb. 28, 2019	Nov. 30, 2018	Feb. 28, 2018	Dec. 31, 2017	Aug. 31, 2018	Aug. 31, 2020	Aug. 31, 2019	Aug. 31, 2018	Aug. 31, 2020
Acquisition of Specialty Chemical Intermediates Businesses
Revenue												$ 261,162	$ 281,351	$ 284,188
Net income	$ 9,008	$ 9,908	$ 7,879	$ 7,362	$ 10,074	$ 8,541	$ 5,273	$ 8,823				34,157	$ 32,711	43,143
Acquisition-related costs (Note 14)												$ 274		$ 393
Statutory tax rate (as a percent)										35.00%	21.00%	21.00%	21.00%	25.70%	21.00%
New Credit Agreement
Acquisition of Specialty Chemical Intermediates Businesses
Amount drawn remained outstanding	$ 0				$ 0							$ 0	$ 0		$ 0
Zappa Stewart
Acquisition of Specialty Chemical Intermediates Businesses
Revenue since acquisition date											$ 16,324
Net income (loss) since acquisition date											578
Inventory step-up costs											1,070
Acquisition-related costs (Note 14)									$ 393		393
Amortization expense											2,672
Amount drawn remained outstanding											$ 65,000			$ 65,000
Statutory tax rate (as a percent)											26.00%
Pro Forma Information
Revenue														292,609
Net income														$ 44,508
Net income available to common shareholders, per common and common equivalent share
Basic earnings per share (in dollars per share)														$ 4.75
Diluted earning per share (in dollars per share)														$ 4.70

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Sale of License (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Feb. 28, 2018	Aug. 31, 2018	Aug. 31, 2020	Aug. 31, 2019	Nov. 30, 2017
Assets held for sale
Net book value			$ 41,200	$ 52,704
Proceeds from sale of license		$ 1,000
Gain on sale of license		$ 1,085
Unrelated Party
Assets held for sale
Net book value					$ 26
Gross consideration	$ 1,111
Proceeds from sale of license	1,000
Foreign tax consideration paid by buyer	111
Gain on sale of license	$ 1,085

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Fair Value Measurements (Details) - USD ($) $ in Thousands	Aug. 31, 2020	Aug. 31, 2019
Fair value measurements
Long term debt outstanding	$ 0	$ 0
Recurring basis
Fair value measurements
Restricted investments	1,619	1,260
Recurring basis | Quoted prices in active markets (Level 1)
Fair value measurements
Restricted investments	1,395	1,091
Recurring basis | Significant other observable inputs (Level 2)
Fair value measurements
Restricted investments	$ 224	$ 169

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Net Income Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Aug. 31, 2020	May 31, 2020	Feb. 29, 2020	Nov. 30, 2019	Aug. 31, 2019	May 31, 2019	Feb. 28, 2019	Nov. 30, 2018	Aug. 31, 2020	Aug. 31, 2019	Aug. 31, 2018
Basic Earnings per Share
Net income	$ 9,008	$ 9,908	$ 7,879	$ 7,362	$ 10,074	$ 8,541	$ 5,273	$ 8,823	$ 34,157	$ 32,711	$ 43,143
Less: Allocated to participating securities									273	257	410
Available to common shareholders									$ 33,884	$ 32,454	$ 42,733
Basic weighted average shares outstanding									9,359,940	9,334,232	9,296,648
Net income per share - Basic (in dollars per share)	$ 0.95	$ 1.05	$ 0.83	$ 0.78	$ 1.07	$ 0.91	$ 0.56	$ 0.94	$ 3.62	$ 3.48	$ 4.60
Diluted Earnings per Share
Net income	$ 9,008	$ 9,908	$ 7,879	$ 7,362	$ 10,074	$ 8,541	$ 5,273	$ 8,823	$ 34,157	$ 32,711	$ 43,143
Basic weighted average shares outstanding									9,359,940	9,334,232	9,296,648
Additional dilutive common stock equivalents (in shares)									79,810	44,975	69,423
Diluted weighted average shares outstanding									9,439,750	9,379,207	9,366,071
Net income per share - Diluted (in dollars per share)	$ 0.95	$ 1.04	$ 0.83	$ 0.77	$ 1.07	$ 0.90	$ 0.56	$ 0.93	$ 3.59	$ 3.46	$ 4.56
Antidilutive securities
Antidilutive stock options excluded from computation of earnings per share amount (in shares)									11,183	12,901	404

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Sale of Businesses (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Aug. 31, 2018	May 31, 2018	Aug. 31, 2020	Aug. 31, 2019	Aug. 31, 2018	Apr. 20, 2018
Sale of Businesses
Revenue from Contract with Customer, Excluding Assessed Tax			$ 261,162	$ 281,351	$ 284,188
Proceeds from the sale of property and assets				$ 400	$ 2,232
Structural Composites Rod Business
Sale of Businesses
Total proceeds received or to be received						$ 2,232
Pre-tax book gain from the sale of property and assets		$ 1,480
Proceeds from the sale of property and assets	$ 157	$ 2,075

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Sale of Real Estate (Details) - USD ($) $ in Thousands	1 Months Ended		3 Months Ended	12 Months Ended
	Aug. 31, 2020	Apr. 30, 2020	May 31, 2020	Aug. 31, 2020
Assets held for sale
Gain on sale of assets				$ 2,551
Randolph, MA - Property
Assets held for sale
Proceeds from the sale of property	$ 1,805
Gain on sale of assets	$ 1,791
Pawtucket, RI manufacturing facility
Assets held for sale
Proceeds from the sale of property		$ 1,810	$ 1,810
Gain on sale of assets		$ 760

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Operations Optimization Costs (Details) - USD ($) $ in Thousands		1 Months Ended	3 Months Ended						6 Months Ended				9 Months Ended	12 Months Ended
	Jun. 25, 2018	Apr. 30, 2020	Aug. 31, 2020	May 31, 2020	Feb. 29, 2020	Nov. 30, 2019	Nov. 30, 2018	Aug. 31, 2018	Aug. 31, 2020	Feb. 29, 2020	Aug. 31, 2019	Feb. 28, 2019	Aug. 31, 2019	Aug. 31, 2020	Aug. 31, 2019	Aug. 31, 2018
Operations Optimization Costs
Percentage of temporary reduction in the base salaries of its named Executive Officers and select members of Senior Management, as well as the cash compensation of the non-employee members of the Board				20.00%
Severance costs				$ 183
Write-down of certain assets under construction														$ 405
Exit costs related to facilities														807	$ 986	$ 1,272
Gain on sale of property														2,551
Granite Falls Location
Operations Optimization Costs
Exit costs related to facilities									$ 0	$ 559	$ 526	$ 526
Pawtucket, RI manufacturing facility
Operations Optimization Costs
Restructuring Period	2 months
Exit costs related to facilities				85			$ 260	$ 1,272					$ 0
Anticipated future exit costs				0
Proceeds from the sale of property		$ 1,810		1,810
Gain on sale of property				760										760
Engineering Studies related to Facility Consolidation and Rationalization Initiative
Operations Optimization Costs
Business Development			$ 0	$ 0	$ 0	$ 150									$ 200
Write-down of certain assets under construction														405
Gain on sale of property														$ 170

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Assets Held for Sale (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	May 31, 2020	Aug. 31, 2020	Aug. 31, 2019
Assets held for sale
Assets held for sale			$ 1,064
Gain on sale of property		$ 2,551
Pawtucket, RI manufacturing facility
Assets held for sale
Assets held for sale			1,050
Gain on sale of property	$ 760	760
Randolph, MA - Property
Assets held for sale
Assets held for sale			$ 14
Gain on sale of property		$ 1,791

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Selected Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Aug. 31, 2020	May 31, 2020	Feb. 29, 2020	Nov. 30, 2019	Aug. 31, 2019	May 31, 2019	Feb. 28, 2019	Nov. 30, 2018	Aug. 31, 2020	Aug. 31, 2019	Aug. 31, 2018
Net sales									$ 261,162	$ 281,351	$ 284,188
Gross Profit on Sales	$ 23,725	$ 24,468	$ 23,960	$ 23,974	$ 25,181	$ 24,477	$ 22,229	$ 24,789	96,127	96,676
Net income	$ 9,008	$ 9,908	$ 7,879	$ 7,362	$ 10,074	$ 8,541	$ 5,273	$ 8,823	$ 34,157	$ 32,711	$ 43,143
Net income available to common shareholders, per common and common equivalent share:
Basic	$ 0.95	$ 1.05	$ 0.83	$ 0.78	$ 1.07	$ 0.91	$ 0.56	$ 0.94	$ 3.62	$ 3.48	$ 4.60
Diluted	$ 0.95	$ 1.04	$ 0.83	$ 0.77	$ 1.07	$ 0.90	$ 0.56	$ 0.93	$ 3.59	$ 3.46	$ 4.56
Product
Net sales	$ 63,202	$ 64,157	$ 64,626	$ 65,757	$ 69,150	$ 70,883	$ 65,442	$ 71,364	$ 257,742	$ 276,839	$ 278,962

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Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands	12 Months Ended
	Aug. 31, 2020	Aug. 31, 2019	Aug. 31, 2018
Accounts receivable reserve
Changes in valuation allowances and reserves
Balance at Beginning of Year	$ 739	$ 559	$ 456
Charges to Operations	921	1,775	1,138
Deductions to Reserves	(1,222)	(1,595)	(1,035)
Balance at End of Year	438	739	559
Warranty reserve
Changes in valuation allowances and reserves
Balance at Beginning of Year	37	0	220
Charges to Operations		37
Deductions to Reserves	(37)		(220)
Balance at End of Year	$ 0	$ 37	$ 0

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Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands	12 Months Ended
	Aug. 31, 2020	Aug. 31, 2019	Aug. 31, 2018
Accumulated other comprehensive income
Balance	$ 271,227	$ 246,756	$ 210,929
Total other comprehensive income (loss)	2,620	(1,988)	1,133
Balance	302,792	271,227	246,756
Accumulated Other Comprehensive Income (Loss)
Accumulated other comprehensive income
Balance	(14,324)	(12,336)	(13,469)
Other comprehensive gains (losses) before reclassifications	2,028	(2,720)
Reclassifications to net income of previously deferred (gains) losses	592	732
Total other comprehensive income (loss)	2,620	(1,988)
Adoption of ASU 2018-02	(1,388)
Balance	(13,092)	(14,324)	(12,336)
Restricted investments
Accumulated other comprehensive income
Balance	154	126
Other comprehensive gains (losses) before reclassifications	143	36
Reclassifications to net income of previously deferred (gains) losses	(28)	(8)
Total other comprehensive income (loss)	115	28
Balance	269	154	126
Change in funded status of pension plans
Accumulated other comprehensive income
Balance	(6,271)	(5,796)
Other comprehensive gains (losses) before reclassifications	(1,278)	(1,215)
Reclassifications to net income of previously deferred (gains) losses	620	740
Total other comprehensive income (loss)	(658)	(475)
Adoption of ASU 2018-02	(1,388)
Balance	(8,317)	(6,271)	(5,796)
Foreign currency translation adjustment
Accumulated other comprehensive income
Balance	(8,207)	(6,666)
Other comprehensive gains (losses) before reclassifications	3,163	(1,541)
Total other comprehensive income (loss)	3,163	(1,541)
Balance	$ (5,044)	$ (8,207)	$ (6,666)

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Accumulated Other Comprehensive Income - Reclassifications (Details) - USD ($) $ in Thousands	12 Months Ended
	Aug. 31, 2020	Aug. 31, 2019	Aug. 31, 2018
Accumulated other comprehensive income
Selling, general and administrative expenses	$ (49,364)	$ (48,707)	$ (47,703)
Amortization of prior pension service costs and unrecognized losses	3	3	3
Settlement and curtailment loss	(155)	(511)
Tax expense (benefit)	(11,163)	(10,842)	(13,822)
Net income (loss)	34,157	32,711	$ 43,143
Reclassification out of accumulated other comprehensive income (loss)
Accumulated other comprehensive income
Net income (loss)	592	732
Restricted investments | Reclassification out of accumulated other comprehensive income (loss)
Accumulated other comprehensive income
Selling, general and administrative expenses	(37)	(11)
Tax expense (benefit)	9	3
Net income (loss)	(28)	(8)
Change in funded status of pension plans | Reclassification out of accumulated other comprehensive income (loss)
Accumulated other comprehensive income
Tax expense (benefit)	(202)	(246)
Net income (loss)	620	740
Change in funded status of pension plans | Reclassification out of accumulated other comprehensive income (loss) | Other income (expense)
Accumulated other comprehensive income
Amortization of prior pension service costs and unrecognized losses	667	475
Settlement and curtailment loss	$ 155	$ 511

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Revenue from Contracts with Customers - Contract Assets and Contract Liabilities (Details) - USD ($) $ in Thousands	Aug. 31, 2020	Aug. 31, 2019
Contract Assets
Contract assets	$ 82	$ 147
Contract liabilities	0	0
Adhesives, Sealants and Additives
Contract Assets
Contract assets	20	42
Industrial Tapes
Contract Assets
Contract assets	21	26
Corrosion Protection and Waterproofing
Contract Assets
Contract assets	$ 41	$ 79

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Revenue from Contracts with Customers - Disaggregation of revenue (Details) - USD ($) $ in Thousands	12 Months Ended
	Aug. 31, 2020	Aug. 31, 2019	Aug. 31, 2018
Revenue from Contracts with Customers
Revenue	$ 261,162	$ 281,351	$ 284,188
Practical expedient - financing component	true
North America
Revenue from Contracts with Customers
Revenue	$ 206,774	225,738
Asia
Revenue from Contracts with Customers
Revenue	31,488	33,080
Europe
Revenue from Contracts with Customers
Revenue	19,534	19,865
All other foreign
Revenue from Contracts with Customers
Revenue	3,366	2,668
Adhesives, Sealants and Additives
Revenue from Contracts with Customers
Revenue	96,208	104,796	101,690
Adhesives, Sealants and Additives | North America
Revenue from Contracts with Customers
Revenue	64,611	70,320
Adhesives, Sealants and Additives | Asia
Revenue from Contracts with Customers
Revenue	17,977	19,430
Adhesives, Sealants and Additives | Europe
Revenue from Contracts with Customers
Revenue	13,201	14,773
Adhesives, Sealants and Additives | All other foreign
Revenue from Contracts with Customers
Revenue	419	273
Industrial Tapes
Revenue from Contracts with Customers
Revenue	118,960	129,845	130,598
Industrial Tapes | North America
Revenue from Contracts with Customers
Revenue	105,911	117,955
Industrial Tapes | Asia
Revenue from Contracts with Customers
Revenue	7,150	7,126
Industrial Tapes | Europe
Revenue from Contracts with Customers
Revenue	3,286	2,637
Industrial Tapes | All other foreign
Revenue from Contracts with Customers
Revenue	2,613	2,127
Corrosion Protection and Waterproofing
Revenue from Contracts with Customers
Revenue	45,994	46,710	$ 51,900
Corrosion Protection and Waterproofing | North America
Revenue from Contracts with Customers
Revenue	36,252	37,463
Corrosion Protection and Waterproofing | Asia
Revenue from Contracts with Customers
Revenue	6,361	6,524
Corrosion Protection and Waterproofing | Europe
Revenue from Contracts with Customers
Revenue	3,047	2,455
Corrosion Protection and Waterproofing | All other foreign
Revenue from Contracts with Customers
Revenue	$ 334	$ 268