WESTWOOD, MA – Chase Corp. reported quarterly sales volume fell in its electronic and industrial coatings product line due to a slowdown in Asian markets. Overall fiscal first quarter revenue decreased 8% year-over-year to $66.8 million, the firm said.

Net income for the quarter ended Nov. 30 decreased 17% to $7.4 million. Operating income was down 13% to $10.7 million.

Net cash provided by operating activities increased 57% to $18.2 million. EBITDA decreased 14% to $14.1 million.

"In the first quarter of fiscal 2020, prior year macroeconomic challenges to our top-line persisted, but so too did many of the improvements realized in the second half of fiscal 2019,” said Adam P. Chase, president and CEO. “Our focus and discipline on executing operational initiatives enabled us to achieve a period-over-period increase in relative gross margin and growth in cash flows from operations.

"Revenue volume for the quarter compared unfavorably to the prior year. This was driven internationally by continued tightness in Asian and Middle Eastern markets, and domestically by a current quarter slowdown in demand for wire and cable materials and toll manufacturing services, as well as the non-repeating of large-scale infrastructure projects observed in the prior year.

"Despite the sales volume challenges, the quarter saw improvement in gross margin as a percentage of revenue over the prior year due to efficiencies realized through our facility consolidation and rationalization efforts, an improved sales mix bolstered by a planned reduction in low-margin tolling services, and price increases enacted in the prior fiscal year."

"Revenue for the Adhesives, Sealants and Additives segment compared unfavorably for the first quarter of fiscal 2020, driven by sales volume decreases in our electronic and industrial coatings product line, which bore the brunt of the slowdown in Asian markets. The segment benefited from a favorable revenue performance by the specialty chemical intermediates product line, which, given its robust sales in North American markets, helped to partially offset the Asian shortfalls of the segment’s other product line."

"In the first quarter of fiscal 2020, our strong operational cash flows continued, with free cash flow for the period exceeding the prior year by 60%,” said CFO Christian J. Talma. “With our debt paid off in full in the prior year, these results have allowed us to increase our cash balance to $66.06 million, providing us improved liquidity and complementing our strong balance sheet. While no acquisition event was consummated in the current period, we did utilize cash on hand to continue our operations optimization efforts, continuing the process of consolidating our pulling and detection operations into our Hickory, NC facility, and beginning an exploratory process into upgrading our companywide ERP system.”

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