While Fiscal 2022 turned out to be another challenging year, Chase Corporation met the moment to achieve increased revenue. Revenue grew to $325,660,000 in Fiscal 2022 from $293,336,000 in the previous fiscal year.
Despite the continued headwinds, Fiscal 2022 was also a milestone year for Chase, culminating in a definitive agreement to acquire NuCera Solutions—the largest acquisition in the Company’s history. NuCera, a recognized global leader in the production and development of highly differentiated specialty polymers and polymerization technologies, offers products critical to enabling end-product functionality, performance and reliability. The acquisition aligns closely with Chase’s strategic objectives, significantly enhancing our growth and providing long term integration opportunities.
Our strategic focus on acquisitions remained on track, but continued uncertainty around Covid-19’s overhang delays throughout the supply chain remained on our radar as an ongoing constraint to the business. Given our success to date, the protocols put in place over the past two years will continue to guide our efforts in managing potential flare-ups during Fiscal 2023.
As the pandemic eased in calendar year 2021, Chase implemented a hybrid work model. This proved effective, resulting in no impact on productivity. In light of that success, we elected to continue with this model. While not unaffected by the “great resignation”, we translated staff departures into opportunities by evaluating our staffing needs—and hired exceptional new talent with strengths ideally suited to our longer-term growth objectives. We also elected to capitalize on the shift to hybrid work schedules, seizing the opportunity to reduce costs by downsizing our headquarters facility.
The flexibility of hybrid work schedules also presented the opportunity to source employee prospects from a broader, richer talent pool—enabling us to fill openings from a larger population of exceptionally talented individuals.
On other fronts, ongoing supply chain challenges persisted during Fiscal 2022—exacerbated by the consequences related to the February 2021 violent winter storm in Texas that overwhelmed the state’s power grid and significantly affected our Houston plant. While our Texas team has proven its mettle by addressing those issues in their control, we see little evidence that other impacts—including broader supply chain issues—are on the wane.
We have worked to turn the challenge to our advantage as resource-starved customers seek reliable, domestic sources for their needs. By “living our mission”, we embraced our role as a trusted business partner to our customers—and delivered consistently on our commitments by balancing long-and short-term objectives, managing risk, implementing sustainable practices, and leveraging continuous improvement. As a result of that ongoing effort, Chase saw an increasing order backlog throughout Fiscal 2022 as customers grew inventories to hedge against ongoing supply shortages and delays.
Fiscal 2022 reinforced our commitment to ‘stay the course’ and focus on the following proven core drivers:
– Organic Growth: Grow our global presence through new products and deeper end market penetration.
– Inorganic Growth: Expand our market position in top end markets and drive share gains through strategic mergers & acquisitions.
– Consolidation & Optimization: Enhance margins and return on investment through strategic consolidation and optimization of management and operations.
In the pursuit of those priorities, Chase will continue its commitment to Environmental, Social, and Governance (ESG) sustainability Initiatives, remaining focused on three essential principles:
– Complying with all applicable environmental, health and safety laws and regulations as well as internal standards;
– Operating our business with minimal environmental impact by preventing pollution and protecting ecosystems through continual improvement of our environmental, health and safety performance; and
– Maintaining a safe and healthy workplace for the people working for and on behalf of our organization where all have equal access to opportunity and merit-based career growth.
Review of Operations
Chase’s operations consist of three reporting segments: Adhesives, Sealants and Additives; Industrial Tapes; and Corrosion Protection and Waterproofing.
The Adhesives, Sealants and Additives segment increased revenue to $135,770,000 over Fiscal 2021. The segment realized increased revenue from its North American-focused functional additives product line, which included inorganic growth attributable to the ETi business acquired in Fiscal 2021. Revenue increases were primarily the result of sales price increases, counteracting downward pressure on margins.
Sales volumes were negatively impacted by the segment’s world-wide focused electronic and industrial coatings line, where customer and prospect production were hampered by supply chain delays, computer chip shortages, and demand.
The Industrial Tapes segment revenue increased to $143,954,000 compared to $120,873,000 in Fiscal 2021. Sales price and volume-driven increases were attributable to the segment’s wire and cable, specialty products, and pulling and detection product lines. The electronic materials product line revenue decreased due to soft demand in Asian markets.
Revenue for the Corrosion Protection and Waterproofing segment increased to $45,936,000 compared to $45,599,000 in Fiscal 2021. The gain was due largely to sales price-driven increases to counteract margin compression in the segment’s coating and lining, building envelope, and bridge and highway product lines. Sales decreased in its pipeline coatings product line, due to Covid-19 overhang delays in Middle East and Asian markets, which outpaced North American sales gains in oil pipeline repair and construction markets.
During Fiscal 2022 business progressively moved toward a ‘new normal’. In many cases the impacts from Covid-19 eased, marked by disruptions that continued to persist—and, in some instances, to grow. Despite, and in some cases because of those shifts, Chase Corporation remained focused on its principle-driven mission, and continued to grow and thrive, marked by management team enhancements, vital board growth and leadership, and strong year-over-year performance.
During the coming year, Chase will remain focused on its mission—and on the growth strategy that paved the way for the NuCera acquisition. While this acquisition promises transformational potential for our R&D and manufacturing capabilities, our M&A efforts will continue apace—marking a new chapter in the growth and success of Chase Corporation.
We owe our continued success—and our gratitude—to our exceptional team of global employees. Through their hard work, diligence, and innovation—and the strong support of our Board of Directors and Shareholders—we feel well justified in our optimism that Fiscal 2023 will mark another record year for Chase Corporation, and a bright future for all the stakeholders responsible for our success.
Adam P. Chase
President and Chief Executive Officer
Peter R. Chase
Michael J. Bourque
Treasurer and Chief Financial Officer
Jeffery D. Haigh
Vice President, General Counsel and Corporate Secretary