Segment Data and Foreign Operations

9 Months Ended

May 31, 2023

Segment Data and Foreign Operations

Segment Data and Foreign Operations

Note 6 — Segment Data and Foreign Operations

The Company is organized into three reportable operating segments: Adhesives, Sealants and Additives; Industrial Tapes; and Corrosion Protection and Waterproofing. The segments are distinguished by the nature of the products manufactured and how they are delivered to their respective markets.

The Adhesives, Sealants and Additives segment offers innovative and specialized product offerings consisting of both end-use products and intermediates that are used in, or integrated into, another company’s product. Demand for the segment’s product offerings is typically dependent upon general economic conditions. The Adhesives, Sealants and Additives segment leverages the core specialty chemical competencies of the Company and serves diverse markets and applications. The segment sells predominantly into the transportation, appliances, medical, general industrial and environmental market verticals. The segment’s products include moisture protective coatings and cleaners, customized sealant and adhesive systems for electronics, synthesized specialty waxes and polymers, polymeric microspheres, polyurethane dispersions and superabsorbent polymers. Beginning September 1, 2022, the Adhesives, Sealants and Additives segment includes the acquired operations of NuCera, within the functional additives product line.

The Industrial Tapes segment features wire and cable materials, specialty tapes and other laminated and coated products. The segment derives its competitive advantage through its proven chemistries, its 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 wire and cable manufacturing, utilities and telecommunications, and electronics packaging. The segment’s offerings include insulating and conducting materials for wire and cable manufacturers; laminated durable papers; laminates for the packaging and industrial laminate markets; custom manufacturing services; pulling and detection tapes used in the installation, measurement and location of fiber optic cables and water and natural gas lines; and cover tapes essential to delivering semiconductor components via tape-and-reel packaging.

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

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

	Three Months Ended May 31,						Nine Months Ended May 31,
	2023			2022			2023			2022
Revenue
Adhesives, Sealants and Additives	$	55,083		$	36,771		$	159,370		$	99,600
Industrial Tapes		40,927			38,329			116,987			104,420
Corrosion Protection and Waterproofing		10,635			13,519			27,461			33,562
Total	$	106,645		$	88,619		$	303,818		$	237,582
Income before income taxes
Adhesives, Sealants and Additives	$	9,523	(a)	$	12,320	(d)	$	19,268	(a), (b)	$	27,719	(d)
Industrial Tapes		12,710			10,985			36,915			30,525
Corrosion Protection and Waterproofing		3,689			5,353			8,703			12,683
Total for reportable segments		25,922			28,658			64,886			70,927
Corporate and common costs		(9,774)	(c)		(9,310)	(e)		(29,146)	(c)		(26,095)	(e)
Total	$	16,148		$	19,348		$	35,740		$	44,832
Includes the following costs by segment:
Adhesives, Sealants and Additives
Interest	$	2,361		$	36		$	6,886		$	105
Depreciation		1,583			234			4,828			697
Amortization		4,940			2,541			18,716			7,939
Industrial Tapes
Interest	$	—		$	36		$	—		$	105
Depreciation		293			363			969			1,184
Amortization		—			383			2			1,150
Corrosion Protection and Waterproofing
Interest	$	—		$	17		$	—		$	52
Depreciation		118			138			365			385
Amortization		1			1			3			3

(a) Includes a $129 loss in the third quarter and a $563 year-to-date loss on the upward adjustment of the performance-based earn out contingent consideration associated with the September 2020 acquisition of ABchimie, $82 and $516 in operations optimization costs related to the move from Woburn, MA to O’Hara Township, PA in the third quarter and year-to-date period, respectively, $0 and $862 loss on impairment/write-off of long-term asset related to the Woburn, MA facility in the third quarter and year-to-date period, respectively, and $331 and $331 loss on impairment/write-off of long-term asset related to the relocation of the Woodlands, TX facility to the new NuCera-related R&D facility in Houston, TX in the third quarter and year-to-date period, respectively

(b) Includes $2,200 of purchase accounting inventory adjustment related to the Company’s NuCera business and $2,820 of backlog amortization fully amortized related to the Company’s NuCera business both incurred during the first quarter of the fiscal year

(c) Includes $133 and $990 of operations optimization costs in the third quarter and year-to-date period, respectively, related to the Company’s ERP upgrade

(d) For 2022, includes $474 gain in the third quarter and a $199 year-to-date gain on the adjustment of the performance-based earn-out contingent consideration associated with the September 2020 acquisition of ABchimie, $27 and $328 in operation optimization costs in the third quarter and year-to-date period related to the move from Woburn, MA to O’Hara Township, PA and $0 and $147 of operation optimization costs in the third and year-to-date period related to the move from Newark, CA to Hickory, NC

(e) For 2022, includes $32 and $232 of operations optimization costs in the three- and nine-month period, respectively, related to the Company’s move to the new Corporate Headquarters within Westwood, MA substantially completed in the second quarter of the fiscal year

Total assets for the Company’s reportable segments as of May 31, 2023 and August 31, 2022 were as follows:

	May 31,		August 31,
	2023		2022
Total Assets
Adhesives, Sealants and Additives	$	434,885	$	153,784
Industrial Tapes		85,567		87,751
Corrosion Protection and Waterproofing		32,012		33,037
Total for reportable segments		552,464		274,572
Corporate and common assets (a)		64,832		337,008
Total	$	617,296	$	611,580

(a) Corporate and common assets at August 31, 2022 include $180,000 in cash drawn from the Company’s revolving credit facility and $70,000 of cash on hand in anticipation of the acquisition of NuCera, which closed on the first day of fiscal year 2023.

The Company’s products are sold worldwide. Revenue for the three- and nine-month periods ended May 31, 2023 and 2022 was attributed to operations located in the following countries:

	Three Months Ended May 31,				Nine Months Ended May 31,
	2023		2022		2023		2022
Revenue
United States	$	92,061	$	76,140	$	259,807	$	204,009
United Kingdom		5,995		6,604		17,304		17,125
France		5,795		2,667		18,906		7,638
All other foreign (1)		2,794		3,208		7,801		8,810
Total	$	106,645	$	88,619	$	303,818	$	237,582

(1) Consists of sales from royalty revenue attributable to its licensed manufacturer in Asia and sales originated from the Company’s foreign operations in China, India and Singapore.

As of May 31, 2023 and August 31, 2022 the Company had long-lived assets (defined as tangible assets providing the Company with a future economic benefit beyond the current year or operating period, including buildings, equipment and leasehold improvements) and goodwill and intangible assets, less accumulated amortization, in the following countries:

	May 31,		August 31,
	2023		2022
Long-Lived Assets
United States
Property, plant and equipment, net	$	58,950	$	21,300
Goodwill and Intangible assets, less accumulated amortization		307,636		105,216
United Kingdom
Property, plant and equipment, net		1,786		1,832
Goodwill and Intangible assets, less accumulated amortization		3,516		3,318
France
Property, plant and equipment, net		314		239
Goodwill and Intangible assets, less accumulated amortization		29,885		20,130
All other foreign
Property, plant and equipment, net		868		877
Goodwill and Intangible assets, less accumulated amortization		653		157
Total
Property, plant and equipment, net	$	61,918	$	24,248
Goodwill and Intangible assets, less accumulated amortization	$	341,690	$	128,821