Nordson Corp (NDSN) Reports Record Fiscal Year 2023 Results with Strong EBITDA Margin

• Fourth quarter sales increased by 5% to $719 million, with a record EBITDA of $227 million.

• Full year sales hit a record $2.6 billion, a 2% growth over the previous year.

• Adjusted earnings per diluted share for the fourth quarter were $2.46, slightly higher than the previous year's $2.44.

• Fiscal 2024 guidance anticipates sales growth of 4% to 9% and adjusted earnings growth of 1% to 8% over fiscal 2023.

On December 13, 2023, Nordson Corp (NASDAQ:NDSN) released its 8-K filing, announcing its financial results for the fourth quarter and the full fiscal year of 2023. The company reported a 5% increase in fourth-quarter sales, reaching $719 million, and a record EBITDA of $227 million, representing 32% of sales. The full year saw Nordson achieve record sales of $2.6 billion, reflecting a 2% growth over the previous year's record sales. The company's EBITDA for the year was a record $819 million, 31% of sales.

Financial Performance Overview

Nordson Corp (NASDAQ:NDSN) experienced a robust fourth quarter, with sales climbing to $719 million, up from $684 million in the prior year's quarter. This increase included a favorable impact from acquisitions and currency translation, despite a slight organic decrease. The company's operating profit for the quarter was $185 million, or 26% of sales. Adjusted for non-recurring acquisition costs, the operating profit reached $196 million, or 27% of sales, marking a 10% increase from the previous year.

For the full fiscal year, Nordson reported record sales of $2.6 billion, with an operating profit of $673 million. Net income for the year stood at $487 million, resulting in diluted earnings per share of $8.46. Adjusted for non-recurring costs, the operating profit was consistent with the prior year at $707 million, or 27% of sales. Adjusted diluted earnings per share were $9.03, a slight decrease from the previous year, primarily due to higher interest expenses.

Segment and Regional Performance

The Industrial Precision Solutions segment saw a 14% increase in sales for the quarter, driven by organic growth and favorable acquisition and currency impacts. The Medical and Fluid Solutions segment experienced a 7% decrease in sales, attributed to softness in certain product lines, while the Advanced Technology Solutions segment's sales decreased by 1% due to softness in electronic dispense product lines.

Geographically, the Americas and Europe showed positive sales growth, while the Asia Pacific region faced a decline. The company's backlog entering fiscal 2024 stands at approximately $800 million, despite an unfavorable book-to-bill ratio in the fourth quarter and most of 2023.

Management Commentary and Outlook

Nordson President and CEO Sundaram Nagarajan commented on the results, highlighting the company's diversified portfolio and strategic progress.

The diversification of Nordsons precision technology portfolio and the progress of the Ascend strategy shined through again this quarter,"

Nagarajan said. He also expressed confidence in the company's positioning for fiscal 2024, anticipating a recovery in select end markets and related incremental earnings.

For fiscal 2024, Nordson forecasts sales growth of 4% to 9% and adjusted earnings per diluted share growth of 1% to 8% over fiscal 2023. The first quarter of fiscal 2024 is expected to see sales in the range of $615 to $640 million, with adjusted earnings per diluted share between $2.00 and $2.10.

Financial Statements Highlights

The consolidated statement of income shows a gross margin of 53.4% for the fourth quarter and 54.2% for the full year. Selling and administrative expenses were managed effectively, contributing to the strong operating profit margins. The balance sheet reflects a solid financial position, with total current assets of $1.229 billion and shareholders' equity of $2.598 billion as of October 31, 2023.

The cash flow statement indicates healthy cash generation from operations, totaling $641.282 million for the year, despite significant cash used in investing activities, primarily for acquisitions. The company's geographic segment sales data reveal growth in the Americas and Europe, while the Asia Pacific region faced challenges.

In conclusion, Nordson Corp (NASDAQ:NDSN) has reported a strong fiscal year 2023, with record sales and EBITDA. The company's diversified portfolio and strategic initiatives have positioned it for continued growth in fiscal 2024. Investors and potential GuruFocus.com members can find more detailed information and analysis on Nordson's financial performance by accessing the full 8-K filing.

Explore the complete 8-K earnings release (here) from Nordson Corp for further details.

This article first appeared on GuruFocus.