CHASE CORP (Form: 10-Q, Received: 04/09/2009 14:24:02)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended February 28, 2009

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.)

26 Summer Street, Bridgewater, Massachusetts 02324

(Address of Principal Executive Offices, Including Zip Code)

(508) 279-1789

(Registrant’s Telephone Number, Including Area Code)

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, and (2) has been subject to such filing requirements for the past 90 days. YES x NO o

Indicate by check mark 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” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o	Accelerated filer x
Non-accelerated filer o (Do not check if a smaller reporting company)	Smaller reporting company o

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

The number of shares of Common Stock outstanding as of March 31, 2009 was 8,544,372.

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CHASE CORPORATION

INDEX TO FO RM 10-Q

For the Quarter Ended February 28, 2009

Part I – FINANCIAL INFORMATION

Item 1 – Unaudited Financial Statements

Consolidated Balance Sheets as of February 28, 2009 and August 31, 2008	3

Consolidated Statements of Operations for the three and six months ended February 28, 2009 and February 29, 2008	4

Consolidated Statement of Stockholders’ Equity for the six months ended February 28, 2009	5

Consolidated Statements of Cash Flows for the six months ended February 28, 2009 and February 29, 2008	6

Notes to Consolidated Financial Statements	7

Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations	14

Item 3 – Quantitative and Qualitative Disclosures About Market Risk	21

Item 4 – Controls and Procedures	21

Part II – OTHER INFORMATION

Item 1 – Legal Proceedings	22

Item 1A – Risk Factors	22

Item 4 – Submission of Matters to a Vote of Security Holders	22

Item 6 – Exhibits	23

SIGNATURES	24

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Part 1 — FINANCIAL INFORMATION

Item 1 — Unaudited Financial Statements

CHASE CORPORATION
CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

	February 28, 2009			August 31, 2008
ASSETS
Current Assets
Cash & cash equivalents	$	2,571,573		$	3,917,018
Accounts receivable, less allowance for doubtful accounts of $354,965 and $446,840	12,681,270			18,968,989
Inventories	15,945,015			16,460,923
Prepaid expenses and other current assets	1,140,120			767,187
Deferred income taxes	1,309,801			1,309,801
Total current assets	33,647,779			41,423,918

Property, plant and equipment, net	23,774,385			21,904,742

Other Assets
Goodwill	14,014,746			15,131,187
Intangible assets, less accumulated amortization of $4,168,042 and $4,112,600	4,490,086			5,874,505
Cash surrender value of life insurance	5,190,698			5,111,099
Restricted investments	519,626			825,282
Other assets	25,005			26,009
	$	81,662,325		$	90,296,742
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable	$	4,545,228		$	7,695,539
Accrued payroll and other compensation	1,053,558			3,649,271
Accrued stock based compensation	2,057,595			1,676,076
Accrued expenses - current	2,691,609			4,843,295
Total current liabilities	10,347,990			17,864,181

Long-term debt	655,422			—
Deferred compensation	1,542,916			2,259,617
Accrued pension obligation	3,683,002			3,350,998
Accrued expenses	183,842			—
Deferred income taxes	323,835			635,842

Commitments and Contingencies (Note 7)

Stockholders’ 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; 8,544,372 at February 28, 2009 and 8,396,162 at August 31, 2008 issued and outstanding	854,437			839,616
Additional paid-in capital	5,434,232			4,276,872
Accumulated other comprehensive income	(3,109,420		)	(1,132,129		)
Retained earnings	61,746,069			62,201,745
Total stockholders’ equity	64,925,318			66,186,104
Total liabilities and stockholders’ equity	$	81,662,325		$	90,296,742

See accompanying notes to the consolidated financial statements

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CHASE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED )

	Three Months Ended						Six Months Ended
	February 28, 2009			February 29, 2008			February 28, 2009			February 29, 2008

Revenue
Sales	$	22,751,118		$	27,871,519		$	53,357,764		$	62,095,397
Royalty and commissions	252,929			375,058			714,788			787,018
	23,004,047			28,246,577			54,072,552			62,882,415
Costs and Expenses
Cost of products and services sold	17,639,696			19,708,382			39,199,050			42,672,334
Selling, general and administrative expenses	4,847,097			5,660,308			10,880,642			11,863,485

Operating income	517,254			2,877,887			3,992,860			8,346,596

Interest expense	(5,046		)	(62,751		)	(10,335		)	(145,703		)
Other income, net	209,168			144,808			326,011			273,965

Income before income taxes	721,376			2,959,944			4,308,536			8,474,858

Income taxes	266,909			1,095,179			1,594,158			3,135,697

Net income	$	454,467		$	1,864,765		$	2,714,378		$	5,339,161

Net income per common and common equivalent share
Basic	$	0.05		$	0.23		$	0.32		$	0.65
Diluted	$	0.05		$	0.22		$	0.31		$	0.62

Weighted average shares outstanding
Basic	8,402,995			8,280,098			8,401,041			8,226,315
Diluted	8,729,540			8,633,253			8,715,448			8,570,050

See accompanying notes to the consolidated financial statements

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CHASE CORPORATION
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

SIX MONTHS ENDED FEBRUARY 28, 2009

(UNAUDITED)

							Accumulated
				Additional			Other						Total
	Common Stock			Paid-In			Comprehensive			Retained			Stockholders’			Comprehensive
	Shares	Amount		Capital			Income			Earnings			Equity			Income
Balance at August 31, 2008	8,396,162	$	839,616	$	4,276,872		$	(1,132,129	)	$	62,201,745		$	66,186,104
Change in accounting for split dollar life insurance arrangement pursuant to adoption of EITF 06-04 and 06-10 (Note 9)										(183,842		)	(183,842		)
Restricted stock grants	145,210	14,521		(14,521		)							—
Amortization of restricted stock grants				582,607									582,607
Amortization of stock option grants				124,333									124,333
Reclass of previously accrued stock based compensation related to restricted stock and stock options from accrued liabilities to equity				443,263									443,263
Exercise of stock options	3,000	300		15,450									15,750
Tax benefit from exercise of stock options				6,228									6,228
Cash dividend paid, $0.35 per share										(2,986,212		)	(2,986,212		)
Foreign currency translation adjustment, net of tax							(1,944,533		)				(1,944,533		)	$	(1,944,533	)
Net unrealized loss on restricted investments, net of tax							(32,758		)				(32,758		)	(32,758		)
Net income										2,714,378			2,714,378			2,714,378
Comprehensive income													—			$	737,087
Balance at February 28, 2009	8,544,372	$	854,437	$	5,434,232		$	(3,109,420	)	$	61,746,069		$	64,925,318

See accompanying notes to the consolidated financial statements

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CHASE CORPORATION

CONSOLIDATED STATEMENT OF CASH FLOWS

(UNAUDITED)

	Six Months Ended
	February 28, 2009			February 29, 2008
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	2,714,378		$	5,339,161
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation	1,416,212			1,342,836
Amortization	468,546			587,484
Provision for losses on trade receivables	(76,991		)	28,039
Stock based compensation	1,120,677			925,590
Realized loss (gain) on restricted investments	190,213			(63,242		)
Excess tax benefit from exercise of stock options	(6,228		)	(308,759		)
Increase (decrease) from changes in assets and liabilities
Accounts receivable	5,948,666			1,418,424
Inventories	255,091			(3,290,128		)
Prepaid expenses & other assets	(407,091		)	(178,182		)
Accounts payable	(3,125,163		)	284,944
Accrued expenses	(3,457,741		)	(125,630		)
Accrued income taxes	1,414,779			(234,754		)
Deferred compensation	(716,701		)	(823,531		)
Net cash provided by operating activities	5,738,647			4,902,252

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment	(3,606,880		)	(1,497,078		)
Contingent purchase price for acquisition	—			(5,277		)
Payments for acquisitions, net of cash acquired	(334,507		)	(1,489,769		)
Withdrawals from restricted investments, net of contributions	60,846			148,066
Distributions from cost based investment	1,004			20,619
Payments for cash surrender value life insurance, net of valuation decrease	(79,599		)	(61,599		)
Net cash used in investing activities	(3,959,136		)	(2,885,038		)

CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings on long-term debt	12,290,479			14,719,810
Payments of principal on debt	(11,635,057		)	(16,336,601		)
Dividend paid	(2,986,212		)	(2,067,715		)
Proceeds from exercise of common stock options	15,750			127,437
Excess tax benefit from exercise of stock options	6,228			308,759
Net cash used in financing activities	(2,308,812		)	(3,248,310		)

DECREASE IN CASH & CASH EQUIVALENTS	(529,301		)	(1,231,096		)
Effect of foreign exchange rates on cash	(816,144		)	(73,358		)
CASH & CASH EQUIVALENTS, BEGINNING OF PERIOD	3,917,018			2,443,750

CASH & CASH EQUIVALENTS, END OF PERIOD	$	2,571,573		$	1,139,296


Non-cash Investing and Financing Activities
Issuance of stock based compensation previously accrued for	$	105,000		$	105,000
Common stock received for payment of stock option exercises	$	—		$	21,000
Property, plant & equipment additions included in accounts payable	$	132,052		$	—
Acquisition holdback payments, previously accrued for	$	302,869		$	—

See accompanying notes to the consolidated financial statements

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CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Note 1 - Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial reporting and instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Therefore, they do not include all information and footnote disclosure necessary for a complete presentation of Chase Corporation’s financial position, results of operations and cash flows, in conformity with generally accepted accounting principles. Chase Corporation (“Chase” or the “Company”) filed audited financial statements which included all information and notes necessary for such presentation for the three years ended August 31, 2008 in conjunction with the Company’s 2008 Annual Report on Form 10-K.

The accompanying unaudited consolidated financial statements contain all adjustments (consisting of normal recurring items) which are, in the opinion of management, necessary for a fair presentation of the Company’s financial position as of February 28, 2009, the results of operations and cash flows for the interim periods ended February 28, 2009 and February 29, 2008, and changes in stockholders’ equity for the interim period ended February 28, 2009.

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 reporting currency for financial reporting. 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.

Certain amounts reported in prior years have been reclassified to be consistent with the current year presentation. In the quarter ended November 30, 2008, the Company reclassed $443,263 of stock based compensation awards from accrued liabilities to stockholders’ equity. The Company determined that the stock based compensation previously recorded in fiscal 2008 as a liability should be recorded in stockholder’s equity due to the fact that these awards were going to be settled in equity shares. This reclassification entry had no impact on the statement of operations or cash flows.

The results of operations for the interim period ended February 28, 2009 are not necessarily indicative of the results to be expected for any future period or the entire fiscal year. These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended August 31, 2008, which are contained in the Company’s 2008 Annual Report on Form 10-K.

Note 2 — Inventories

Inventories consist of the following as of February 28, 2009 and August 31, 2008:

	February 28, 2009		August 31, 2008
Raw materials	$	9,297,574	$	8,984,695
Finished and in process	6,647,441		7,476,228
Total Inventories	$	15,945,015	$	16,460,923

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CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Note 3 — Net Income Per Share

Net income per share is calculated as follows:

	Three Months Ended				Six Months Ended
	February 28, 2009		February 29, 2008		February 28, 2009		February 29, 2008
Net income	$	454,467	$	1,864,765	$	2,714,378	$	5,339,161

Weighted average common shares outstanding	8,402,995		8,280,098		8,401,041		8,226,315
Additional dilutive common stock equivalents	326,545		353,155		314,407		343,735
Diluted shares outstanding	8,729,540		8,633,253		8,715,448		8,570,050

Net income per share - Basic	$	0.05	$	0.23	$	0.32	$	0.65
Net income per share - Diluted	$	0.05	$	0.22	$	0.31	$	0.62

For the three and six months ended February 28, 2009 and February 29, 2008, stock options to purchase 250,000 and 0 shares of common stock, respectively, were outstanding but were not included in the calculation of diluted income per share because the options’ exercise prices were greater than the average market price of the common stock and thus would be anti-dilutive.

Note 4 — Stock Based Compensation

In August 2007, the Board of Directors of Chase Corporation approved a plan for issuing a performance and service based restricted stock grant of 48,600 shares to key members of management with an issue date of September 1, 2007 and a vesting date of August 31, 2010. Based on the fiscal year 2008 financial results, 82,214 additional shares of restricted stock (total of 130,814 shares) were granted in the quarter ended November 30, 2008 in accordance with the performance measurement criteria. Subsequent to fiscal year 2008, no further performance-based measurements apply to this award. Compensation expense is being recognized on a ratable basis over the vesting period.

In August 2008, the Board of Directors of Chase Corporation approved a plan for issuing a performance and service based restricted stock grant of 50,657 shares to key members of management with an issue date of September 1, 2008 and a vesting date of August 31, 2011. These shares are subject to a performance measurement based upon the results of fiscal year 2009 which will determine the final calculation of the number of shares that will be issued (which may be greater than or less than 50,657 shares). Compensation expense is being recognized on a ratable basis over the vesting period based on quarterly probability assessments.

As part of their annual retainer, non-employee members of the Board of Directors receive a combined total of $135,000 of Chase Corporation common stock, in the form of Restricted Stock valued at the closing price of the day preceding the first day of the new year of Board service which generally coincides with the Company’s annual shareholder meeting. The stock award vests one year from the date of grant. In January 2009, non-employee members of the Board received a total grant of 12,339 shares of restricted stock for service for the period from February 1, 2009 through February 1, 2010. 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.

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CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Note 5 — Segment Information

The Company operates in two business segments, a Specialized Manufacturing segment and an Electronic Manufacturing Services segment. Specialized Manufacturing products include insulating and conducting materials for wire and cable manufacturers, protective coatings for pipeline applications and moisture protective coatings for electronics and printing services. Electronic Manufacturing Services include printed circuit board and electromechanical assembly services for the electronics industry. The Company evaluates segment performance based upon income before income taxes.

The following table summarizes information about the Company’s reportable segments:

	Three Months Ended						Six Months Ended
	February 28, 2009			February 29, 2008			February 28, 2009			February 29, 2008
Revenues from external customers
Specialized Manufacturing	$	18,963,495		$	24,205,162		$	45,671,197		$	53,795,869
Electronic Manufacturing Services	4,040,552			4,041,415			8,401,355			9,086,546
Total	$	23,004,047		$	28,246,577		$	54,072,552		$	62,882,415

Income before income taxes
Specialized Manufacturing	$	1,429,121		$	3,752,907		$	6,351,704		$	10,200,770
Electronic Manufacturing Services	397,153			470,253			722,603			1,046,220
Total for reportable segments	1,826,274			4,223,160			7,074,307			11,246,990
Corporate and Common Costs	(1,104,898		)	(1,263,216		)	(2,765,771		)	(2,772,132		)
Total	$	721,376		$	2,959,944		$	4,308,536		$	8,474,858

The Company’s products are sold world-wide with no foreign geographic area accounting for more than 10% of revenues for the three and six month periods ended February 28, 2009 and February 29, 2008.

	February 28, 2009		August 31, 2008
Total assets
Specialized Manufacturing	$	59,257,523	$	63,242,063
Electronic Manufacturing Services	12,742,861		13,819,114
Total for reportable segments	72,000,384		77,061,177
Corporate and Common Assets	9,771,941		13,235,565
Total	$	81,772,325	$	90,296,742

As of February 28, 2009 and August 31, 2008, the Company had long-lived assets (defined as providing the company with a future economic benefit beyond the current year or operating period, including buildings, equipment, goodwill and other intangibles) of $8,161,524 and $10,793,325, respectively, located in the United Kingdom. The decrease in gross carrying value of these long-lived assets for the six months ended February 28, 2009 is primarily due to foreign currency translation loss.

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CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Note 6 — Goodwill and Other Intangibles

The changes in the carrying value of goodwill, by reportable segment, are as follows:

	Specialized Manufacturing			Electronic Manufacturing Services		Consolidated
Balance at August 31, 2008	$	9,132,299		$	5,998,888	$	15,131,187
Acquisition of Capital Services - working capital adjustment	31,638			—		31,638
FX translation adjustment	(1,148,079		)	—		(1,148,079		)
Balance at February 28, 2009	$	8,015,858		$	5,998,888	$	14,014,746

The Company evaluates the possible impairment of goodwill annually each fourth quarter and whenever events or circumstances indicate the carrying value of goodwill may not be recoverable.

Intangible assets subject to amortization consist of the following at February 28, 2009 and August 31, 2008:

	Weighted-Average	Gross Carrying		Accumulated		Net Carrying
	Amortization Period	Value		Amortization		Value
February 28, 2009
Patents and agreements	12.7 years	$	2,226,571	$	1,974,994	$	251,577
Formulas	9.5 years	1,117,627		455,302		662,325
Trade names	3.7 years	269,277		226,274		43,003
Customer lists and relationships	10.3 years	5,033,038		1,511,472		3,521,566
		$	8,646,513	$	4,168,042	$	4,478,471

August 31, 2008
Patents and agreements	12.5 years	$	2,280,827	$	1,893,566	$	387,261
Formulas	9.2 years	1,261,235		431,204		830,031
Trade names	3.8 years	281,294		204,269		77,025
Customer lists and relationships	10.4 years	6,152,134		1,583,561		4,568,573
		$	9,975,490	$	4,112,600	$	5,862,890

In addition to the intangible assets summarized above, the Company also has corporate trademarks with an indefinite life and a carrying value of $11,615 at February 28, 2009 and August 31, 2008.

The decrease in gross carrying value of intangible assets for the six months ended February 28, 2009 is due to a foreign currency translation loss of $1,328,977 related to the intangible assets associated with the Company’s European operations.

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CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Aggregate amortization expense related to intangible assets for the six months ended February 28, 2009 and February 29, 2008 was $468,546 and $587,484, respectively. Estimated amortization expense for the remainder of fiscal year 2009 and for each of the five succeeding fiscal years is as follows:

Years ending August 31,
2009 (remaining six months)	$	503,206
2010	915,309
2011	775,566
2012	754,988
2013	638,099
2014	581,595
	$	4,168,763

Note 7 – Commitments and Contingencies

From time to time, the Company is involved in litigation incidental to the conduct of its business. The Company is not party to any lawsuit or proceeding that, in management’s opinion, is likely to seriously harm the Company’s business, results of operations, financial conditions or cash flows.

The Company is one of over 100 defendants in a personal injury lawsuit, pending in Ohio, which alleges personal injury from exposure to asbestos contained in certain Chase products. The plaintiff in the case issued discovery requests to Chase in August 2005, to which Chase timely responded in September 2005. The trial had initially been scheduled to begin on April 30, 2007. However, that date was postponed and no new trial date has been set. As of March 31, 2009, there have been no new developments as this Ohio lawsuit has been inactive with respect to Chase.

Note 8 - Pensions and Other Post Retirement Benefits

The components of net periodic benefit cost for the three and six months ended February 28, 2009 and February 29, 2008 are as follows:

	Three Months Ended						Six Months Ended
	February 28, 2009			February 29, 2008			February 28, 2009			February 29, 2008
Service cost	$	107,990		$	103,313		$	215,980		$	206,626
Interest cost	136,705			125,913			273,410			251,826
Expected return on plan assets	(112,034		)	(101,714		)	(224,068		)	(203,428		)
Amortization of prior service cost	22,855			21,996			45,710			43,992
Amortization of unrecognized loss	13,518			10,122			27,036			20,244
Net periodic benefit cost	$	169,034		$	159,630		$	338,068		$	319,260

When funding is required, the Company’s policy is to contribute amounts that are deductible for federal income tax purposes. As of February 28, 2009, the Company had not made any contributions in the current fiscal year to fund its obligations under the pension plan. However, the Company plans to contribute $250,000 to fund pension plan obligations in the fiscal year ending August 31, 2009.

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CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Note 9 – Split-Dollar Life Insurance Arrangements

In September 2006, the Emerging Issues Task Force (“EITF”) reached a final consensus on Issue 06-04, Accounting for Deferred Compensation and Postretirement Benefit Aspects of Endorsement Split-Dollar Life Insurance Arrangements. In March 2007, the EITF reached a final conclusion on Issue 06–10, Accounting for Collateral Assignment Split-Dollar Life Insurance Arrangements. Both of these Issues stipulate that an agreement by an employer to make life insurance premium payments and/or share a portion of the proceeds of a life insurance policy with an employee during the postretirement period is a postretirement benefit arrangement required to be accounted for by the employer. The Issues conclude that the purchase of a split-dollar life insurance policy does not constitute a settlement and, therefore, a liability for the postretirement obligation must be recognized. EITF Issues 06-04 and 06-10 allow the Company to record the initial recognition of the liability through stockholders’ equity.

The Company adopted EITF Issues 06-04 and 06-10 on September 1, 2008. The net liability related to these postretirement benefits was calculated as the difference between the present value of future premiums to be paid by the Company reduced by the present value of the expected proceeds to be returned to the Company upon the insured’s death. The Company prepared its calculation by using mortality assumptions which were based on the 2008 Combined Static Mortality Table, and an appropriate discount rate. Upon the adoption of EITF Issues 06-04 and 06-10, the Company recorded a decrease of $183,842 to stockholders’ equity which represents the Company’s net liability related to these postretirement obligations. Ongoing expenses in future years will be recognized through operations.

Note 10 – Fair Value Measurements

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“FAS 157”). The provisions of FAS 157 define fair value, establish a framework for measuring fair value in generally accepted accounting principles, and expand disclosures about fair value measurements. FAS 157 is effective for financial assets and financial liabilities for fiscal years beginning after November 15, 2007. FSP 157-2 “Partial Deferral of the Effective Date of Statement 157,” deferred the effective date of FAS 157 for all nonfinancial assets and nonfinancial liabilities except for those that are recognized at fair value on a recurring basis (at least annually) to fiscal years beginning after November 15, 2008.

The implementation of FAS 157 for financial assets and financial liabilities, effective September 1, 2008 for the Company, did not have a material impact on the Company’s consolidated financial position and results of operations. The Company is currently assessing the impact of FAS 157 for nonfinancial assets and nonfinancial liabilities on its consolidated financial position and results of operations.

FAS 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). FAS 157 establishes a three-tier fair value hierarchy, which classifies the inputs used in measuring fair value. 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.

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CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

The Company endeavors to utilize the best available information in measuring fair value. 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 and that its financial assets are currently all classified within Level 1 in the fair value hierarchy. The following table sets forth the Company’s financial assets that were accounted for at fair value on a recurring basis as of February 28, 2009:

			Fair value measurements at February 28, 2009 using:
	Balance at 02/28/09		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Restricted investments	$	519,626	$	519,626	$	—	$	—
	$	519,626	$	519,626	$	—	$	—

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities — including an amendment of FAS No. 115”, (“FAS 159”). FAS 159 permits entities to choose to measure many financial instruments and certain other assets and liabilities at fair value on an instrument-by-instrument basis (the fair value option). Unrealized gains and losses on items for which the fair value option has been elected are to be recognized in earnings at each subsequent reporting date. Upon adoption of FAS 159 as of September 1, 2008, the Company elected to not apply the provisions of FAS 159 to its eligible assets and liabilities. As such, the adoption of FAS 159 did not impact the Company’s consolidated financial statements.

Note 11 – Recent Accounting Pronouncements

In December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business Combinations” (“FAS 141R”), which replaces FAS 141. FAS 141R establishes principles and requirements for how an acquirer in a business combination recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed and any noncontrolling interest in the acquiree; recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase; expensing acquisition related costs as incurred; and determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. FAS 141R is to be applied prospectively to business combinations with an acquisition date in fiscal years beginning after December 15, 2008. Earlier adoption is prohibited. The Company expects that FAS 141R will have an impact on accounting for future business combinations once adopted, but the effect is dependent upon acquisitions at that time.

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Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion provides an analysis of the Company’s financial condition and results of operations and should be read in conjunction with the Consolidated Financial Statements and notes thereto included in Item 1 of Part I of this Quarterly Report on Form 10-Q and the Company’s Annual Report on Form 10-K filed for the fiscal year ended August 31, 2008.

Overview

The Company continues to face challenges in the current economic environment as both sales and profits across most of the Company’s product lines remain down from the prior year. While the Company’s second quarter ending in February is traditionally a slower time of year for many of its product offerings, this year has also been influenced by the global recession that has led to decreased demand and uncertainty for consumer and industrial products. As discussed in the prior quarter, the financial results of the Company’s European Operations continue to be negatively impacted by the weakening pound sterling and euro whose values against the dollar have decreased 28% and 16%, respectively, from February 2008 to February 2009. In spite of the decreased demand that has impacted sales volumes, management continues to be focused on maximizing production efficiencies across all product lines to maintain profit margins.

Revenues for the Chase Electronic Manufacturing Services business remained relatively flat in the second quarter as compared to the prior year period, as the focus on expanding this segment’s customer base has helped offset reduced demand for products and services from many of this segment’s key customers as they continue to assess inventory levels and their own customer demand. We expect this segment’s operating results to continue to be profitable, but not at the same level observed in the prior fiscal year. For the remainder of fiscal 2009, management’s attention will be on maintaining a healthy backlog of customer orders and proactively managing overhead costs.

Given the current economy, the Company has placed added importance on its supply chain management, consolidation goals and continuous improvement programs. Cost control efforts have been intensified but are balanced with strategic investment to increase capabilities and productivity. As part of this effort, the Company has acquired property (land and building) in Oxford, MA to reduce off-site storage expenses and provide capacity for future growth. The Company has a strong balance sheet with substantial borrowing capacity for acquisition opportunities and facility reorganization needs.

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The Company has two reportable segments summarized below:

Segment	Product Lines	Manufacturing Focus and Products
Specialized Manufacturing	· Wire and Cable · Electronic Coatings · Transportation · Pipeline · Construction · Packaging and Industrial · Digital and Print Media	Produces protective coatings and tape products including insulating and conducting materials for wire and cable manufacturers, protective coatings for pipeline applications, moisture protective coatings for electronics, high performance polymeric asphalt additives, expansion and control joint systems for use in the transportation and architectural markets, and custom pressure sensitive labels.

Electronic Manufacturing Services	· Contract Electronic Manufacturing Services	Provides assembly and turnkey contract manufacturing services including printed circuit board and electromechanical assembly services to the electronics industry operating principally in the United States.

Results of Operations

Revenues and Operating Profit by Segment are as follows (dollars in thousands)

	Three Months Ended										Six Months Ended
	February 28, 2009					February 29, 2008					February 28, 2009					February 29, 2008
Revenues from external customers
Specialized Manufacturing	$	18,963		82	%	$	24,205		86	%	$	45,671		84	%	$	53,796		86	%
Electronic Manufacturing Services	4,041			18	%	4,042			14	%	8,402			16	%	9,086			14	%
Total	$	23,004				$	28,247				$	54,073				$	62,882

Income before income taxes
Specialized Manufacturing	$	1,429		8	%	$	3,753		16	%	$	6,352		14	%	$	10,201		19	%
Electronic Manufacturing Services	397			10	%	470			12	%	722			9	%	1,046			12	%
Total for reportable segments	1,826			8	%	4,223			15	%	7,074			13	%	11,247			18	%
Corporate and Common Costs	(1,105		)			(1,263		)			(2,765		)			(2,772		)
Total	$	721		3	%	$	2,960		10	%	$	4,309		8	%	$	8,475		13	%

Note: Percentages listed represent % of Revenues from External Customers (for each respective segment and period)

Total Revenues

Total revenues decreased $5,243,000 or 19% to $23,004,000 for the quarter ended February 28, 2009 compared to $28,247,000 in the same quarter of the prior year. Total revenues decreased $8,809,000 or 14% to $54,073,000 in the fiscal year to date period compared to $62,882,000 in the same period in fiscal 2008.

Revenues from the Company’s Specialized Manufacturing segment decreased $5,242,000 and $8,125,000, in the current quarter and year to date periods, respectively. The decrease in revenues as compared to the prior year periods is primarily due to the following for the current quarter and year to date periods, respectively: (a) decreased sales of $1,699,000 and $2,546,000 in the Electronic Coatings product lines due to decreased demand in the electronic and automotive markets; (b) decreased sales of $1,058,000 and $2,435,000 in the Pipeline and Construction product lines; (c) decreased sales of $26,000 and $1,258,000 in the Transportation product line (primarily a result of the strike at Boeing which negatively impacted sales of our Insulfab product); (d) decreased sales of $358,000 and $958,000 in the Digital & Print Media product line; and (e) decreased sales of $1,445,000 and $1,559,000 in the Wire & Cable market primarily due to decreased demand in the energy and communications markets. These decreases in revenues were partially offset by increased year to date sales of $815,000 from Chase Protective Coatings Ltd., which was formed by the Company in September 2007.

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Compared to the prior year periods, revenues from the Company’s Electronic Manufacturing Services segment decreased $1,000 and $685,000 in the current quarter and year to date periods, respectively. Although this business is facing softness in some key market segments, revenues remained relatively flat in the current quarter compared to the prior year period. Sales from new customers and increased orders received from several existing customers offset reduced demand due to the economic recession. This segment’s decrease in year to date sales compared to the prior year period is primarily a result of decreased customer orders as many of the Company’s key customers continue to assess their inventory levels and closely monitor their own customers’ demand during this economic downturn.

Cost of Products and Services Sold

Cost of products and services sold decreased $2,068,000 or 10% to $17,640,000 for the quarter ended February 28, 2009 compared to $19,708,000 in the prior year quarter. Cost of products and services sold decreased $3,473,000 or 8% to $39,199,000 in the fiscal year to date period compared to $42,672,000 in the same period in fiscal 2008.

Cost of products and services sold in the Company’s Specialized Manufacturing segment were $14,279,000 and $32,117,000 in the current quarter and year to date periods compared to $16,436,000 and $35,242,000 in the comparable periods in the prior year. Cost of products and services sold in the Company’s Electronic Manufacturing Services segment were $3,361,000 and $7,082,000 in the current quarter and year to date periods compared to $3,272,000 and $7,430,000 in the comparable periods in the prior year.

The following table summarizes the relative percentages of revenues for costs of products and services sold for both of the Company’s reporting segments:

	Three Months Ended				Six Months Ended
	February 28, 2009		February 29, 2008		February 28, 2009		February 29, 2008
Specialized Manufacturing	75	%	68	%	70	%	66	%
Electronic Manufacturing Services	83	%	81	%	84	%	82	%
Total	77	%	70	%	72	%	68	%

As a percentage of revenues, cost of products and services sold in the Specialized Manufacturing segment was higher primarily due to decreased sales of higher margin products and the increased share of total sales that were made up of lower margin products, coupled with the impact of fixed manufacturing overhead costs on a lower revenue base. Additionally, margin pressures across many of the Company’s key product lines remain a challenge as management works to hold selling prices firm in light of the decrease in the cost of petroleum based raw materials compared to last year.

The increase in dollar value of cost of products and services sold for the current quarter as compared to the prior year period for the Electronic Manufacturing Services segment is primarily due to additional costs related to facility and production improvements which were incurred as a result of this segment’s focus on new customer business. As a percentage of revenues, cost of products and services sold in this segment increased due to continued competitive pricing pressures and the previously mentioned additional facility and production improvement costs.

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Selling, General and Administrative Expenses

Selling, general and administrative expenses decreased $813,000 or 14% to $4,847,000 for the quarter ended February 28, 2009 compared to $5,660,000 in the prior year quarter. Selling, general and administrative expenses decreased $982,000 or 8% to $10,881,000 in the fiscal year to date period compared to $11,863,000 in the same period in fiscal 2008.

The decrease in the current quarter and year to date period over the prior year periods is primarily attributable to the Company’s continued emphasis on cost control with selling and administrative expenses, including reduced annual incentive compensation and external consulting costs. Additionally, lower revenues for the current quarter and year to date periods as compared to the prior year periods have led to decreased sales commissions and other selling related expenses. The year to date decrease was partially offset by increased stock based compensation of $195,000 in fiscal 2009 primarily related to additional shares of restricted stock issued in September 2008 based on the Company’s financial results for the fiscal year ending August 31, 2008. In accordance with the Company’s long term incentive plan, compensation expense related to these shares is being recognized on a ratable basis over the three year vesting period ending August 31, 2010.

Interest Expense

Interest expense decreased $58,000 or 92% to $5,000 for the quarter ended February 28, 2009 compared to $63,000 in the prior year quarter. Interest expense decreased $136,000 or 93% to $10,000 for the fiscal year to date period ended February 28, 2009 compared to $146,000 in the same period in fiscal 2008. The decrease in interest expense in both the current quarter and year to date period is a direct result of a reduction in the Company’s overall debt balances through principal payments from operating cash flow and an overall decrease in interest rates.

Other Income (Expense)

Other income increased $64,000 or 44% to $209,000 for the quarter ended February 28, 2009 compared to $145,000 in the prior year quarter. Other income increased $52,000 or 19% to $326,000 for the fiscal year to date period ended February 28, 2009 compared to $274,000 in the same period in fiscal 2008. Other income includes bank interest earned by the Company’s Humiseal Europe division and monthly rental income of $14,875 on property (building and land) owned by the Company and leased to Sunburst Electronic Manufacturing Solutions, Inc. under a thirty-six month rental agreement commencing on December 1, 2006 and expiring on November 30, 2009.

Net Income

Net income decreased $1,411,000 or 76% to $454,000 in the quarter ended February 28, 2009 compared to $1,865,000 in the prior year quarter. Net income decreased $2,625,000 or 49% to $2,714,000 for the fiscal year to date period ended February 28, 2009 compared to $5,339,000 in the same period in fiscal 2008. The decrease in net income in both the current quarter and year to date periods compared to the prior year periods is a direct result of decreased revenue across the Company’s core product lines as discussed previously.

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Liquidity and Sources of Capital

The Company’s cash balance decreased $1,345,000 to $2,572,000 at February 28, 2009 from $3,917,000 at August 31, 2008. Generally, the Company manages its borrowings and payments under its revolving line of credit in order to utilize cash flows to pay down outstanding bank debt. The increased cash balance at August 31, 2008 was a result of cash flow generated during the year, after repaying all outstanding balances on the Company’s existing debt. Management continues to review its current cash balances denominated in foreign currency in light of current tax guidelines and potential acquisitions.

Cash flow provided by operations was $5,739,000 in the first six months of fiscal year 2009 compared to $4,902,000 in the prior year period. Cash provided by operations during the first half of fiscal 2009 was primarily due to operating income and increased collection of accounts receivable offset by decreased accounts payable and accrued expenses.

The ratio of current assets to current liabilities was 3.3 as of February 28, 2009 compared to 2.3 as of August 31, 2008. The increase in the Company’s current ratio at February 28, 2009 was primarily attributable to decreases in accounts payable, accrued payroll and accrued expenses which were partially offset by decreases in cash and accounts receivable coupled with an increase in accrued stock based compensation.

Cash flow used in investing activities of $3,959,000 was primarily due to $2,351,000 paid for the purchase of real property in Oxford, MA, $605,000 paid for purchases related to the build out of the Company’s manufacturing facility in greater Pittsburgh, PA, and cash paid for purchases of machinery and equipment at the Company’s other manufacturing locations.

Cash flow used in financing activities of $2,309,000 reflects the $2,986,000 paid for the Company’s annual dividend payment offset by increased borrowings under the existing line of credit.

On October 14, 2008, the Company announced a cash dividend of $0.35 per share (totaling $2,986,212) to shareholders of record on October 31, 2008, which was paid on December 3, 2008.

The Company continues to have long-term unsecured credit available up to $10 million at the bank’s base lending rate or, at the option of the Company, at the effective 30-Day London Interbank Offered Rate (LIBOR) plus 1.25 percent. The outstanding balance and weighted average interest rate on this credit facility was $0.7 million and 1.66%, respectively, at February 28, 2009. Accordingly, the Company had $9.3 million in unused credit under this facility and plans to utilize this to help finance its cash needs, including acquisitions, in fiscal 2009 and future periods.

As of March 31, 2009, the Company had $9.6 million in unused credit under this facility.

Under the terms of the Company’s credit facility, the Company must comply with certain debt covenants related to (a) the ratio of total liabilities to tangible net worth and (b) the ratio of operating cash flow to debt service on a rolling twelve month basis. The Company was in compliance with its debt covenants as of February 28, 2009. The credit facility currently has a maturity date of March 31, 2011.

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The Company currently has an ongoing capital project that is related to the build out of its manufacturing facility in greater Pittsburgh, PA. It also plans to add machinery and equipment as needed to increase capacity or to enhance operating efficiencies in its other manufacturing plants. Furthermore, the Company may consider the acquisitions of companies or other assets in fiscal 2009 which are complementary to its business. The Company believes that its existing resources, including its primary credit facility, together with cash generated from operations and additional bank borrowings, will be sufficient to fund its cash flow requirements through at least the next twelve months. However, there can be no assurances that additional financing will be available at favorable terms, if at all.

To the extent that interest rates increase in future periods, the Company will assess the impact of these higher interest rates on the financial and cash flow projections of its potential acquisitions.

The Company does not have any significant off balance sheet arrangements.

Contractual Obligations

Please refer to Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section in the Company’s Form 10-K for the fiscal year ended August 31, 2008 for a complete discussion of the Company’s contractual obligations. There were no material changes to the Company’s contractual obligations for the quarter ended February 28, 2009.

Recently Issued Accounting Standards

In February 2008, the FASB issued SFAS 157-2, “Effective Date of FASB Statement No. 157” (“FAS 157-2”), which provides a one-year deferral of the effective date of FAS 157 for nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed in the financial statements at fair value at least annually. The implementation of FAS 157 for financial assets and financial liabilities, effective September 1, 2008, did not have a material impact on the Company’s consolidated financial position and results of operations. The Company is currently assessing the impact of FAS 157-2 for nonfinancial assets and nonfinancial liabilities on its consolidated financial position and results of operations.

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Critical Accounting Policies

The Company’s financial statements are prepared in accordance with accounting principles generally accepted in the United States. To apply these principles, management must make estimates and judgments that affect its reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. In many instances, the Company reasonably could have used different accounting estimates and, in other instances, changes in the accounting estimates are reasonably likely to occur from period to period. Accordingly, actual results could differ significantly from its estimates. To the extent that there are material differences between these estimates and actual results, the Company’s financial condition or results of operations will be affected. The Company bases its estimates and judgments on historical experience and other assumptions that it believes to be reasonable at the time and under the circumstances, and it evaluates these estimates and judgments on an ongoing basis. The Company refers to accounting estimates and judgments of this type as critical accounting policies, judgments, and estimates. Management believes there have been no material changes during the six months ended February 28, 2009 to the critical accounting policies reported in Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section in the Company’s Form 10-K for the fiscal year ended August 31, 2008.

Forward Looking Information

The part of this Quarterly Report on Form 10-Q captioned “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contains certain forward-looking statements, which involve risks and uncertainties. These statements are based on current expectations, estimates and projections about the industries in which we operate, management’s beliefs and assumptions made by management. Readers should refer to the discussions under “Forward Looking Information” and “Risk Factors” contained in the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2008 concerning certain factors that could cause the Company’s actual results to differ materially from the results anticipated in such forward-looking statements. These discussions and Risk Factors are hereby incorporated by reference into this Quarterly Report.

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Item 3 - Quantitative and Qualitative Disclosures about Market Risk

The Company limits the amount of credit exposure to any one issuer. At February 28, 2009, other than the Company’s restricted investments (which are restricted for use in a non qualified retirement savings plan for certain key employees and Directors), all of the Company’s 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.

The Company’s domestic operations have limited currency exposure since substantially all transactions are denominated in U.S. dollars. However, the Company’s European operations are subject to currency exchange fluctuations. The Company continues to review its policies and procedures to reduce this exposure while maintaining the benefit from these operations and sales to other European customers. As of February 28, 2009, the Company had cash balances in the United Kingdom for its Humiseal Europe Ltd and Chase Protective Coatings divisions denominated primarily in pounds sterling and equal to US $2,060,000 and cash balances in France for its HumiSeal Europe SARL division denominated primarily in euros and equal to US $503,000. Management will continue to review its current cash balances denominated in foreign currency in light of current tax guidelines and potential acquisitions.

The Company incurred a foreign currency translation loss, net of tax, for the six months ended February 28, 2009 in the amount of $1,945,000 related to its European operations which is recorded in other comprehensive income (loss) within the Company’s Statement of Stockholders’ Equity. The Company does not have or utilize any derivative financial instruments.

Item 4 - Controls and Procedures

Evaluation of disclosure controls and procedures

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s reports under the Securities Exchange Act of 1934, as amended, 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.

Changes in internal control over financial reporting

There was no change in the Company’s internal control over financial reporting during the Company’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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Part II — OTHER INFORMATION

Item 1 — Legal Proceedings

Item 1A — Risk Factors

Please refer to Item 1A in the Company’s Form 10-K for the fiscal year ended August 31, 2008 for a complete discussion of the risk factors which could materially affect the Company’s business, financial condition or future results.

Item 4 - Submission of Matters to a Vote of Security Holders

The following matters were approved at the Company’s Annual Stockholders Meeting, which was held on January 30, 2009.

Proposal 1- For the election of nominees for the Board of Directors

Name of Director	In Favor	Authority Withheld
Peter R. Chase	7,039,988	60,325
Mary Claire Chase	7,039,819	60,494
J. Brooks Fenno	6,795,808	304,505
Lewis P. Gack	7,012,339	87,974
George M. Hughes	5,789,088	1,311,225
Ronald Levy	7,003,823	96,490
Thomas Wroe, Jr.	7,043,225	57,088

Proposal 2 — For the ratification of PricewaterhouseCoopers LLP as the corporation’s independent registered public accounting firm for the fiscal year ending August 31, 2009

In Favor		Against		Abstained
7,036,424		55,759		8,131

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Item 6 - Exhibits

Exhibit Number		Description
10.1		Chase Corporation Non-Qualified Retirement Savings Plan for the Board of Directors, amended and restated effective January 1, 2009
10.2		Amendment, dated December 30, 2008, to the Endorsement Split Dollar Agreement between Chase Corporation and the Trustees of the Edward L. Chase Irrevocable Life Insurance Trust
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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SIGNATURES

Pursuant to the requirements 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


Dated: April 9, 2009	By:	/s/ Peter R. Chase
		Peter R. Chase,
		Chairman and Chief Executive Officer


Dated: April 9, 2009	By:	/s/ Kenneth L. Dumas
		Kenneth L. Dumas
		Chief Financial Officer and Treasurer

Exhibit 10.1

CHASE CORPORATION

NON-QUALIFIED RETIREMENT SAVINGS PLAN

FOR THE BOARD OF DIRECTORS

As amended and restated effective January 1, 2009

ARTICLE I
PURPOSE

The purpose of the Chase Corporation Non-Qualified Retirement Savings Plan for the Board of Directors (the “Plan”) is to provide specified benefits to Directors who contribute materially to the continued growth, development and future business success the Company. This Plan shall be unfunded for tax purposes and for purposes of Title I of ERISA.

The Plan was originally effective as of January 1, 1997. The Plan is amended and restated effective January 1, 2009. The Plan has been operated in good faith compliance with Section 409A of the Code since January 1, 2005. The Plan is intended to satisfy the requirements of Section 409A of the Code and the regulations thereunder.

ARTICLE II
DEFINITIONS

The following words and phrases as used herein shall have the following meanings:

2.1 “ Administrator ” or “ Plan Administrator ” means the individual or individuals appointed by the Company to administer the Plan.

2.2 “ Annual Deferral Amount ” means that portion of a Participant’s Director Fees that such Participant defers in accordance with Article IV for any Plan Year, without regard to whether such amounts are withheld and credited during such Plan Year.

2.3 “ Beneficiary ” means one or more persons, trusts, estates or other entities designated by the Participant to receive benefits payable under the Plan upon the death of a Participant.

2.4 “ Change in Control ” means any “change in control event” as defined in accordance with Section 409A of the Code and regulations thereunder.

2.5 “ Company ” means Chase Corporation., a corporation organized under the laws of the Commonwealth of Massachusetts, or any successor corporation.

2.6 “ Deferral Election Agreement ” means the written deferral election agreement, on such form as may be prescribed by the Administrator, executed and filed by a Participant prior to the beginning of the first period for which the Participant’s Director Compensation is to be deferred pursuant to the Plan.

2.7 “ Director ” means an individual who is a member of the Board and who is not an officer or employee of the Company or a subsidiary.

2.8 “ Director Fees ” means the cash portion of the amount paid to a Director by the Company for serving as a member of the Board, including without limitation retainer fees, Board meeting fees, committee meeting fees and fees for serving as chairman of a committee.

2.9 “ Investment Fund ” means the fund or funds in which a Participant’s Plan Account are deemed invested.

2.10 “ Participant ” means each individual who participates in the Plan, as provided in Section 4.01 of the Plan.

2.11 “ Plan ” means the Chase Corporation Non-Qualified Retirement Savings Plan for the Board of Directors, as amended from time to time.

2.12 “ Plan Account ” means a bookkeeping record of each Participant’s Annual Deferral Amount, together with earnings and losses pursuant to Section 5.2 hereof.

2.13 “ Plan Year ” means the calendar year; provided that the last Plan Year with respect to a Director who ceases to be a Participant during a calendar year, shall begin on the first day of such calendar year and end on the day such Director ceases to be a Participant.

2.14 “ Separation from Service ” means a Participant’s cessation of service as a Board member, for any reason, provided the cessation of service is a good-faith and complete termination of the Participant’s relationship with the Company within the meaning of Section 409A of the Code. If, at the time the Participant’s service as a Board member end, the Participant begins providing services to the Company as an employee or consultant, the Participant shall not incur a Separation from Service under the terms of the Plan until the Participant has a separation from service from the Company as an employee within the meaning of Section 409A of the Code.

2.15 “ Unforeseeable Emergency ” means a severe financial hardship to the Participant resulting from (i) an illness or accident of the Participant or the Participant’s spouse or dependent (as defined in Section 152 of the Code without regard to Sections 152(b)(1), (b)(2) and (d)(1)(B)) or Beneficiary under the Plan; (ii) loss of the Participant’s property due to casualty or (iii) other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant.

2.16 “ Valuation Date ” means the date on which the amount of a Participant’s Plan Account is determined as provided in Article V of the Plan.

ARTICLE III
ELIGIBILITY

3.1 Eligibility . Each Director shall be eligible to become a Participant on the date the individual is first elected to become a Director. Each Director who was a Participant in the Plan as of December 31, 2008 shall continue in participation hereunder on January 1. 2009.

ARTICLE IV
ELECTIONS TO DEFER/PARTICIPANT ACCOUNTS

4.1 Initial Election to Defer Compensation . In the first year a Director is elected to the Board, such Director may elect to defer all or any part of his Director Fees by executing and returning to the Company a Deferral Election Agreement within the first thirty (30) days after

being elected to the Board. Such Deferral Election Agreement shall be effective with respect to Director Fees paid to the Director by the Company for services provided by the Director after the first day of the calendar month following the date of the Director’s deferral election. The Deferral Election Agreement in effect as of the last day of the thirty (30) days election period shall be irrevocable for the remainder of the Plan Year to which it applies, except as provided in Section 6.4.

4.2 Annual Elections to Defer Compensation . A Director may elect to defer all or any part of his Director Fees for the following year by executing and returning to the Company a Deferral Election Agreement prior to the beginning of each Plan Year. As of the first day of the Plan Year for which the election is made, the Participant’s deferral election shall be irrevocable except as provided in Section 6.4.

4.3 Deferral Election Agreements . All Deferral Election Agreements shall be made in the form and manner and within such time period as the Administrator shall prescribe in order to be effective.

ARTICLE V

ACCOUNTS

5.1 Plan Accounts . Director Fees deferred by a Participant under the Plan shall be credited to the Participant’s Plan Account as soon as practicable after the amounts would have otherwise been paid to the Participant.

5.2 Investment of Accounts . Amounts credited to a Participant’s Plan Account shall reflect the investment experience of the Investment Funds selected by the Participant. The Participant may make an initial investment election in whole increments at the time the Participant elects to participate in the Plan. The Administrator may permit changes in the Investment Funds at whatever frequency it deems appropriate and within whatever limitations are applicable to any Investment Fund. 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.

5.3 Accounts are for Recordkeeping Purposes Only . Plan Accounts are solely a device for determining the amount of benefits accumulated by a Participant under the Plan, and shall not constitute or imply an obligation on the part of the Company to fund such benefits.

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

ARTICLE VI

DISTRIBUTION OF A PARTICIPANT’S PLAN ACCOUNT

6.1 Distribution Event . Upon a Participant’s Separation from Service for any reason, the Participant, or his Beneficiary in the event of his death, shall be entitled to payment of the amount accumulated in the Participant’s Plan Account.

6.2 Manner of Distribution . A Participant, at the time he makes an initial deferral election under Article III of the Plan, shall elect the form of distribution with respect to his Plan Account. Such election shall be made in such form and manner as the Administrator may prescribe. The election shall specify whether distributions shall be made in a single lump sum or in annual installments over five (5) or ten (10) years. In the absence of a distribution election, payment shall be made in a single lump sum.

If payment is to be made in a lump sum, payment shall be made within ninety (90) days following the Participant’s Separation from Service. The lump sum payment shall equal the balance of the Participant’s Plan Account as of the Valuation Date immediately preceding the distribution date.

If payment is to be made in annual installments, the first annual payment shall be made within ninety (90) days following the Participant’s Separation from Service.

6.3 Death of a Participant . In the event of a Participant’s death prior to receiving all payments due under this Article VI, the balance of the Participant’s Plan Account shall be paid to the Participant’s Beneficiary in a lump sum within ninety (90) days of the Participant’s death.

6.4 Unforeseeable Emergency . The Administrator may, in its sole discretion, distribute amounts to a Participant from the Participant’s Plan Account to satisfy an Unforeseeable Emergency. The amount of any distribution on account of an Unforeseeable Emergency must be limited to the amount needed to satisfy the emergency, which may include amounts necessary to pay any federal, state, local or foreign taxes or penalties reasonably anticipated to result from the distribution. A Participant’s deferral election pursuant to Section 3.1 for a Plan Year may be canceled in their entirety to satisfy an Unforeseeable Emergency. Distribution may not be allowed to the extent that the hardship may be relieved through reimbursement or compensation by insurance or otherwise, by liquidation of the Participant’s assets (to the extent such liquidation would not itself cause a severe financial hardship) or by cessation of deferrals under the Plan. In no event shall the need to pay college tuition or the purchase of a home qualify as an Unforeseeable Emergency. Notwithstanding any form of payment election made by a Participant, any distribution made pursuant to an Unforeseeable Emergency shall be paid in a lump sum within thirty (30) days of determination by the Administrator.

6.5 Change of Form of Payment . No change in a Participant’s payment election shall be valid unless it is made in accordance with this Section 6.05. Any change in a Participant’s payment election with respect to his Plan Account may not take effect until at least twelve (12) months after the date on which the election is made in a Deferral Election Agreement executed and filed with the Company and the first payment with respect to which the election is made must be deferred for a period of not less than five (5) years from the date such payment would otherwise have been made.

6.6 Change in Control Payment . Notwithstanding any other provision of this Plan, each Participant (or any Beneficiary thereof entitled to receive payment hereunder), including Participants receiving installment payments under the Plan, shall be entitled to receive a lump

sum payment of all amounts accumulated in the Participant’s Plan Account. Such payment shall be made not more than sixty (60) days following the Change in Control.

ARTICLE VII
ADMINISTRATION

7.1 Duties of the Plan Administrator . The Plan shall be administered by the 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 Company accordingly.

7.2 Finality of Decisions . The 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 Administrator in the administration of the Plan shall be final and conclusive on all persons, and neither the Plan Administrator nor the Company shall be subject to individual liability with respect to the Plan.

7.3 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 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 VIII
MISCELLANEOUS

8.1 Designation of Beneficiary . Each Participant may designate a Beneficiary in such form and manner and within such time periods as the Administrator may prescribe. A Participant can change his beneficiary designation at any time, provided that each beneficiary designation shall revoke the most recent designation and the last designation received by the Administrator while the Participant is alive shall be given effect. If there is no valid beneficiary designation in effect at the time of the Participant’s death or in the event the Beneficiary does not survive the Participant, the Participant’s estate will be deemed the Beneficiary and will be entitled to receive payment. If a Participant designates his spouse as a Beneficiary, such beneficiary designation automatically shall become null and void on the date the Administrator receives notice of the Participant’s divorce or legal separation.

8.2 Amendments/Termination . The Company reserves the right to make from time to time amendments to or terminate this Plan , 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. The Company 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. Notwithstanding the foregoing, the Company may amend this Plan at any time, without the consent of Participants or their Beneficiary to the extent necessary or desirable to comply with Section 409A of the Code to avoid taxation under Section 409A of the Code, even if such amendment divests a Participant or

Beneficiary of rights to which the Participant or Beneficiary would otherwise have been entitled under the Plan.

8.3 Rights Unsecured . No person shall have any right, other than the right of an unsecured general creditor, against the Company 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 Company 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 Company and shall be available to its general creditors in the event of the Company’s bankruptcy or insolvency. The Company’s obligation under this Plan shall be that of an unfounded and unsecured promise to pay money in the future.

8.4 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.

8.5 Entire Agreement; Successors . This Plan, including any subsequently adopted amendments, shall constitute the entire agreement or contract between the Company and any Participant regarding the Plan. There are no covenants, promises, agreements, conditions or understandings, either oral or written, between the Company 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.

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

8.7 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 24th day of December, 2008.

	CHASE CORPORATION

Exhibit 10.2

AMENDMENT

TO THE

ENDORSEMENT SPLIT-DOLLAR AGREEMENT

This Amendment to the Endorsement Split-Dollar Agreement is made and entered into as of this 30th day of December 2008 by and among CHASE CORPORATION, a Massachusetts corporation (the “Corporation”) and Sarah Chase, in her capacity as the trustee of the ELC Irrevocable Life Insurance Trust, an agreement of trust dated May 27, 1995 (referred to hereunder, together with any additional or successor trustee serving under said agreement, as the “Trustee”).

WHEREAS, the Corporation and the Trust entered into that certain Endorsement Split-Dollar Agreement dated June 1995 (the “Agreement”) to govern the respective rights and obligations of the parties in and to certain life insurance policies described in Schedule A of the Agreement (the “Policy”);

WHEREAS, the parties have determined that Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”) is applicable to the Agreement and that the Agreement may not comply with the requirements of Section 409A (based on a reasonable applicable to Section 409A, the regulations and other guidance thereunder);

WHEREAS, the parties wish to amend the Agreement to modify certain of their respective rights and obligations with respect to the Agreement and the Policy to comply with Section 409A;

WHEREAS, the modifications are made solely to comply with Section 409A and do not materially enhance the value of the benefits provided under the Agreement;

WHEREAS, the modifications are intended by the parties to comply with the provisions of IRS Notice 2007-34 so as not to be a material modification of the arrangement under the final split-dollar regulations.

NOW, THEREFORE, in consideration of the mutual promises contained herein, the parties agree as follows:

1. Section 10 of the Agreement is deleted in its entirety and is replaced with the following:

“10 . Option to Purchase Policy .

For sixty (60) days following the termination of this Agreement, the Trustee shall have the option to purchase the Corporation’s ownership interest in the Policy from the Corporation. The purchase price for the Policy shall be the total amount of the premium payments made by the Corporation hereunder, less any indebtedness secured by the Policy which remains outstanding as of the date of such termination, including interest on such indebtedness, which amount shall be paid to the Corporation within such sixty (60)

day period but no later than the last day of the calendar year in which the termination occurs. Upon receipt of such amount, the Corporation shall transfer all of its right, title and interest in and to the Policy to the Trustee, by the execution and delivery of an appropriate instrument of transfer.”

2. A new Section 10A of the Agreement is added to read as follows:

“10A. Termination of the Agreement .

“This Agreement shall terminate upon the occurrence of any of the following events: (i) the Corporation’s dissolution taxed under Section 331 of the Code or (ii) the Corporation’s bankruptcy (within the approval of the bankruptcy court pursuant to 11 U.S.C. Section 503(b)(1)(A)).

3. Except as expressly provided herein, no other modifications or amendments to the Agreement are being made and, with the exception of the amendment set forth herein, the terms and conditions of the Agreement are hereby ratified and confirmed.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.

	CHASE CORPORATION


	By:




	Sarah Chase, as trustee of the ELC Irrevocable Life Insurance Trust dated May 27, 1995

Exhibit 31.1

CERTIFICATION

I, Peter R. Chase, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q 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 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 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 controls over financial reporting.

Date: April 9, 2009

	/s/ Peter R. Chase

	Peter R. Chase
	Chairman and Chief Executive Officer
	(Principal executive officer)

Exhibit 31.2

CERTIFICATION

I, Kenneth L. Dumas, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Chase Corporation;

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Date: April 9, 2009


	/s/ Kenneth L. Dumas

	Kenneth L. Dumas
	Chief Financial Officer and Treasurer
	(Principal financial officer)

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 Quarterly Report on Form 10-Q for the period ended February 28, 2009 (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: April 9, 2009

/s/ Peter R. Chase

Peter R. Chase
Chairman and Chief Executive Officer
(Principal executive officer)

Exhibit 32.2

CERTIFICATION

PURSUANT TO

18 U.S.C. 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Date: April 9, 2009

/s/ Kenneth L. Dumas

Kenneth L. Dumas
Chief Financial Officer and Treasurer
(Principal financial officer)