WESTWOOD, MA – Chase reported fiscal second quarter Adhesives, Sealants and Additives segment revenue declined 6% year-over-year to $24.4 million, as a result of certain reductions in North America and continued headwinds from Asia in the electronic and industrial coating product lines.

Declines in the latter part of the quarter were amplified by temporary regional manufacturer shutdowns due to Covid-19. The cost of products and services sold declined 7% to $14.3 million compared to the year-ago period.

The firm reported total revenue of $65.6 million for the quarter ended Feb. 29, down 1.5% year-over-year.

Total net Income was $7.9 million, up 49% year-over-year. Adjusted EBITDA was $14.8 million, up 5%.

"Positive trends from the first quarter continued with increased relative gross margins and cash flows from operations," said Adam P. Chase, president and CEO of Chase. "These improvements came despite a challenging trading environment, which saw continued headwinds in Asian markets, coupled with certain North American retractions and the usual seasonal softness in the quarter. Financial flexibility is a core component of our strategy, and we are in a strong financial position during the coronavirus (Covid-19) pandemic, with our $67.7 million cash on hand and a $150 million credit facility fully available to support our global operations.

"Currently, all but one of our facilities are operating, with our smallest location, Pune, India, temporarily suspending operations in response to a general order issued by the Indian government. This speaks to the essential nature of our products and the industries that purchase them. Chase is a strategically diversified manufacturer serving a varied customer base. It is important for us to reinforce our strengths and tenets as we report on the second fiscal quarter of 2020 and comment on the global effects the Covid-19 pandemic may have on our people and our business as we move forward.”

Free Cash Flow in the fiscal second quarter was $9.2 million, compared to $5.1 million in the prior-year quarter.

"Our manufacturing footprint rationalization yielded positive improvements in our business during the second quarter of fiscal 2020, as we improved the relative gross margin of each of our three operating segments," said Christian J. Talma, treasurer and CFO of Chase. "As we see the full benefit of the plant rationalization initiatives throughout the balance of 2020, we remain focused on growing the profitability of our product lines and elevating our company’s market leadership. With ample liquidity on the balance sheet, we remain opportunistic in our capital allocation strategy and continue to take a diligent approach in evaluating potential acquisitions. We are in a good position to capitalize on inorganic opportunities."

“While the coronavirus caused some temporary business disruptions in certain geographies, our balance sheet strength and liquidity have us well-positioned to drive performance and emerge from these uncertain times with continued resiliency and strength,” said Chase. “Although there remain some short-term uncertainties in the global economies in which we operate, we continue to see a long-term path toward growth through both organic and inorganic methods, while streamlining our operations to drive positive free cash flows and continue creating value for our shareholders."

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