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Nordson Corporation Reports First Quarter Fiscal 2024 Results and Narrows Annual Guidance

First Quarter:

  • Sales were $633 million, a 4% increase from the prior year

  • Net income was $110 million

  • Earnings per diluted share were $1.90

  • Adjusted earnings per diluted share were $2.21

  • EBITDA was $197 million, 31% of sales

Guidance:

  • Narrowing previously issued full-year fiscal 2024 revenue guidance to 4% to 7% growth over record fiscal 2023 and adjusted earnings per diluted share to the range of $10.00 to $10.50 per share

WESTLAKE, Ohio, February 21, 2024--(BUSINESS WIRE)--Nordson Corporation (Nasdaq: NDSN) today reported results for the fiscal first quarter ended January 31, 2024. Sales were $633 million, a 4% increase compared to the prior year’s first quarter sales of $610 million. The increase in first quarter 2024 sales included a favorable acquisition impact of 5%, partially offset by an organic sales decrease of 2%. The organic sales decrease was driven by ongoing pressure in electronics product lines, partially offset by growth in medical interventional, industrial and polymer processing product lines.

Net income was $110 million, or $1.90 of earnings per diluted share, compared to prior year’s first quarter net income of $104 million, or $1.81 of earnings per diluted share. Adjusted net income was $128 million, a $4 million increase from the prior year adjusted net income of $123 million. First quarter 2024 adjusted earnings per diluted share were $2.21, a 3% increase from the prior year adjusted earnings per diluted share of $2.14. The increase was driven by higher operating profit, partially offset by increased interest expense.

EBITDA in the first quarter was $197 million, or 31% of sales, compared to prior year EBITDA of $181 million, or 30% of sales. The 9% increase in EBITDA was a result of higher operating profit, driven by improved gross margins year-over-year.

Commenting on the Company’s fiscal 2024 first quarter results, Nordson President and Chief Executive Officer Sundaram Nagarajan said, "Sales results were in line with our first quarter expectations. The segments delivered a strong operating performance exceeding our first quarter earnings guidance. This is a great example of our entrepreneurial teams using NBS Next to meet the needs of our customers, while also taking strategic actions that position them for future profitable growth. I am particularly pleased with the solid performance of our IPS and MFS segments during the quarter, while ATS continued to manage the ongoing weakness of the electronics end market. The ARAG acquisition integration continued to make steady progress and contributed to our sales and EBITDA margin performance in the quarter."

First Quarter Segment Results

Industrial Precision Solutions sales of $355 million increased 14% from the prior year, inclusive of an 11% acquisition impact. The organic sales increase of 2% was driven primarily by industrial coatings, polymer processing and nonwovens product lines. Operating profit was $108 million, an increase of $6 million from the prior year. EBITDA in the quarter was $126 million, or 36% of sales, a 16% increase from the prior year first quarter EBITDA of $109 million, or 35% of sales. The year-over-year increase was driven by the ARAG acquisition and higher organic sales and gross profit.

Medical and Fluid Solutions sales of $160 million increased 3% compared to the prior year first quarter. The increase was driven by growth in the medical interventional solutions product lines. Operating profit was $46 million, an increase of $7 million from the prior year. EBITDA in the quarter was $60 million, or 37% of sales, a 13% increase from the prior year first quarter EBITDA of $53 million, or 34% of sales. The increase in EBITDA was driven by both higher sales and improved gross margins.

Advanced Technology Solutions sales of $119 million decreased 18% compared to the prior year first quarter. The organic sales decrease was driven by weakness across the segment, primarily electronics dispense products serving semiconductor end markets. Operating profit was $19 million, an increase of $2 million from the prior year amount, which included acquisition-related expenses for the CyberOptics acquisition. EBITDA in the quarter was $22 million, or 19% of sales, a 28% decrease from the prior year first quarter EBITDA of $31 million, or 21% of sales. The decrease was driven by lower sales.

Outlook

The Company is entering the second quarter of fiscal 2024 with approximately $750 million in backlog, which continues to normalize and remain concentrated in systems businesses. Based on current visibility and order entry trends, the Company is narrowing its previously issued full-year revenue growth to 4% to 7% over record fiscal 2023 and adjusted earnings per diluted share to the range of $10.00 to $10.50 per diluted share. Second quarter fiscal 2024 sales are forecasted in the range of $645 to $670 million with adjusted earnings in the range of $2.20 to $2.35 per diluted share.

As previously announced, the Company’s definition of adjusted earnings now excludes acquisition related amortization for both current and historical periods. It is not possible for the Company to identify the amount or significance of future adjustments associated with acquisition and integration costs, restructuring costs, acquisition-related amortization, certain non-operating or income tax items, or other non-routine costs that the Company adjusts in the presentation of adjusted earnings guidance. These items are dependent on future events that are not reasonably estimable at this time. Accordingly, the Company is unable to reconcile without unreasonable effort the forecasted range of adjusted earnings guidance to a comparable GAAP range.

Nordson management will provide additional commentary on these results and outlook during its previously announced webcast on Thursday, February 22, 2024, at 8:30 a.m. eastern time, which can be accessed at https://investors.nordson.com. For persons unable to listen to the live broadcast, a replay will be available for 14 days after the event. Information about Nordson’s investor relations and shareholder services is available from Lara Mahoney, vice president, investor relations and corporate communications at (440) 204-9985 or lara.mahoney@nordson.com.

Certain statements contained in this release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by terminology such as "may," "will," "should," "could," "expects," "anticipates," "believes," "projects," "forecasts," "outlook," "guidance," "continue," "target," or the negative of these terms or comparable terminology. These statements reflect management’s current expectations and involve a number of risks and uncertainties. These risks and uncertainties include, but are not limited to, U.S. and international economic conditions; financial and market conditions; currency exchange rates and devaluations; possible acquisitions, including the Company’s ability to successfully integrate acquisitions; the Company’s ability to successfully divest or dispose of businesses that are deemed not to fit with its strategic plan; the effects of changes in U.S. trade policy and trade agreements; the effects of changes in tax law; and the possible effects of events beyond our control, such as political unrest, including the conflict between Russia and Ukraine, acts of terror, natural disasters and pandemics, including the recent coronavirus (COVID-19) pandemic and the other factors discussed in Item 1A (Risk Factors) in the Company’s most recently filed Annual Report on Form 10-K and in its Forms 10-Q filed with the Securities and Exchange Commission, which should be reviewed carefully. The Company undertakes no obligation to update or revise any forward-looking statement in this press release.

Nordson Corporation is an innovative precision technology company that leverages a scalable growth framework through an entrepreneurial, division-led organization to deliver top tier growth with leading margins and returns. The Company’s direct sales model and applications expertise serves global customers through a wide variety of critical applications. Its diverse end market exposure includes consumer non-durable, medical, electronics and industrial end markets. Founded in 1954 and headquartered in Westlake, Ohio, the Company has operations and support offices in over 35 countries. Visit Nordson on the web at www.nordson.com, linkedin/Nordson, or www.facebook.com/nordson.

 

NORDSON CORPORATION

 

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(Dollars in thousands except for per-share amounts)

 

 

Three Months Ended

 

January 31,

2024

 

January 31,

2023

Sales

$

633,193

 

 

$

610,477

 

Cost of sales

 

284,766

 

 

 

281,610

 

Gross profit

 

348,427

 

 

 

328,867

 

Gross margin %

 

55.0

%

 

 

53.9

%

 

 

 

 

Selling & administrative expenses

 

188,992

 

 

 

184,648

 

Operating profit

 

159,435

 

 

 

144,219

 

 

 

 

 

Interest expense - net

 

(20,398

)

 

 

(9,943

)

Other expense - net

 

(338

)

 

 

(3,196

)

Income before income taxes

 

138,699

 

 

 

131,080

 

 

 

 

 

Income taxes

 

29,127

 

 

 

26,819

 

 

 

 

 

Net income

$

109,572

 

 

$

104,261

 

 

 

 

 

Weighted-average common shares outstanding:

 

 

 

Basic

 

57,064

 

 

 

57,170

 

Diluted

 

57,555

 

 

 

57,762

 

 

 

 

 

Earnings per share:

 

 

 

Basic earnings

$

1.92

 

 

$

1.82

 

Diluted earnings

$

1.90

 

 

$

1.81

 

 

NORDSON CORPORATION

 

CONSOLIDATED BALANCE SHEETS (Unaudited)

(Dollars in thousands)

 

 

January 31, 2024

 

October 31, 2023

Cash and cash equivalents

$

136,201

 

$

115,679

Receivables - net

 

537,702

 

 

 

590,886

 

Inventories - net

 

451,217

 

 

 

454,775

 

Other current assets

 

82,992

 

 

 

67,970

 

Total current assets

 

1,208,112

 

 

 

1,229,310

 

 

 

 

 

Property, plant and equipment - net

 

394,467

 

 

 

392,846

 

Goodwill

 

2,805,086

 

 

 

2,784,201

 

Other assets

 

839,412

 

 

 

845,413

 

 

$

5,247,077

 

 

$

5,251,770

 

 

 

 

 

Notes payable and debt due within one year

$

116,585

 

 

$

115,662

 

Accounts payable and accrued liabilities

 

435,095

 

 

 

466,427

 

Total current liabilities

 

551,680

 

 

 

582,089

 

 

 

 

 

Long-term debt

 

1,513,871

 

 

 

1,621,394

 

Other liabilities

 

457,559

 

 

 

450,227

 

Total shareholders' equity

 

2,723,967

 

 

 

2,598,060

 

 

$

5,247,077

 

 

$

5,251,770

 

 

 

 

 

 

NORDSON CORPORATION

 

CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)

(Dollars in thousands)

 

 

Three Months Ended

 

January 31,

2024

 

January 31,

2023

Cash flows from operating activities:

 

 

 

Net income

$

109,572

 

 

$

104,261

 

Depreciation and amortization

 

33,544

 

 

 

26,434

 

Other non-cash items

 

6,552

 

 

 

6,224

 

Changes in working capital

 

14,614

 

 

 

(58,371

)

Other

 

8,074

 

 

 

44,789

 

Net cash provided by operating activities

 

172,356

 

 

 

123,337

 

 

 

 

 

Cash flows from investing activities:

 

 

 

Additions to property, plant and equipment

 

(7,530

)

 

 

(9,302

)

Acquisition of businesses, net of cash acquired

 

 

 

 

(377,843

)

Other - net

 

1,805

 

 

 

9

 

Net cash used in investing activities

 

(5,725

)

 

 

(387,136

)

 

 

 

 

Cash flows from financing activities:

 

 

 

Issuance (repayment) of long-term debt

 

(107,195

)

 

 

252,278

 

Repayment of finance lease obligations

 

(1,488

)

 

 

(1,318

)

Dividends paid

 

(38,855

)

 

 

(37,199

)

Issuance of common shares

 

14,418

 

 

 

8,807

 

Purchase of treasury shares

 

(7,371

)

 

 

(6,875

)

Net cash provided (used) in financing activities

 

(140,491

)

 

 

215,693

 

 

 

 

 

Effect of exchange rate change on cash:

 

(5,618

)

 

 

6,643

 

Net change in cash and cash equivalents

 

20,522

 

 

 

(41,463

)

 

 

 

 

Cash and cash equivalents:

 

 

 

Beginning of period

 

115,679

 

 

 

163,457

 

End of period

$

136,201

 

 

$

121,994

 

 

 

 

 

 

NORDSON CORPORATION

 

SALES BY GEOGRAPHIC SEGMENT (Unaudited)

(Dollars in thousands)

 

 

Three Months Ended

 

Sales Variance

 

January 31,

2024

 

January 31,

2023

 

Organic

 

Acquisitions

 

Currency

 

Total

SALES BY SEGMENT

 

 

 

 

 

 

 

 

 

 

 

Industrial Precision Solutions

$

354,547

 

$

311,546

 

2.3

%

 

10.6

%

 

0.9

%

 

13.8

%

Medical and Fluid Solutions

 

159,526

 

 

 

154,287

 

 

3.1

%

 

%

 

0.3

%

 

3.4

%

Advanced Technology Solutions

 

119,120

 

 

 

144,644

 

 

(17.6

)%

 

%

 

%

 

(17.6

)%

Total sales

$

633,193

 

 

$

610,477

 

 

(2.2

)%

 

5.4

%

 

0.5

%

 

3.7

%

 

 

 

 

 

 

 

 

 

 

 

 

SALES BY GEOGRAPHIC REGION

 

 

 

 

 

 

 

 

 

 

 

Americas

$

274,012

 

 

$

264,878

 

 

(0.3

)%

 

3.1

%

 

0.6

%

 

3.4

%

Europe

 

179,310

 

 

 

162,939

 

 

(7.0

)%

 

14.2

%

 

2.8

%

 

10.0

%

Asia Pacific

 

179,871

 

 

 

182,660

 

 

(0.5

)%

 

0.7

%

 

(1.7

)%

 

(1.5

)%

Total sales

$

633,193

 

 

$

610,477

 

 

(2.2

)%

 

5.4

%

 

0.5

%

 

3.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

NORDSON CORPORATION

 

RECONCILIATION OF NON-GAAP MEASURES - NET INCOME TO EBITDA (Unaudited)

(Dollars in thousands)

 

 

Three Months Ended

 

January 31,

2024

 

January 31,

2023

Net income

$

109,572

 

$

104,261

Income taxes

 

29,127

 

 

 

26,819

 

Interest expense - net

 

20,398

 

 

 

9,943

 

Other expense - net

 

338

 

 

 

3,196

 

Depreciation and amortization

 

33,544

 

 

 

26,434

 

Inventory step-up amortization (1)

 

2,944

 

 

 

4,306

 

Acquisition-related costs (1)

 

597

 

 

 

5,989

 

EBITDA (non-GAAP) (2)

$

196,520

 

 

$

180,948

 

(1)

Represents fees, severance and non-cash inventory charges associated with acquisitions.

(2)

EBITDA is a non-GAAP measure used by management to evaluate the Company's ongoing operations. EBITDA is defined as operating profit plus certain adjustments, such as severance, fees and non-cash inventory charges associated with acquisitions, plus depreciation and amortization.

 

NORDSON CORPORATION

 

RECONCILIATION OF NON-GAAP MEASURES - EBITDA (Unaudited)

(Dollars in thousands)

 

 

Three Months Ended

 

January 31, 2024

 

January 31, 2023

SALES BY SEGMENT

 

 

 

 

 

 

 

Industrial Precision Solutions

$

354,547

 

 

 

 

$

311,546

 

 

 

Medical and Fluid Solutions

 

159,526

 

 

 

 

 

154,287

 

 

 

Advanced Technology Solutions

 

119,120

 

 

 

 

 

144,644

 

 

 

Total sales

$

633,193

 

 

 

 

$

610,477

 

 

 

 

 

 

 

 

 

 

 

OPERATING PROFIT

 

 

 

 

 

 

 

Industrial Precision Solutions

$

108,364

 

 

 

 

$

102,319

 

 

 

Medical and Fluid Solutions

 

46,100

 

 

 

 

 

39,384

 

 

 

Advanced Technology Solutions

 

19,038

 

 

 

 

 

16,963

 

 

 

Corporate

 

(14,067

)

 

 

 

 

(14,447

)

 

 

Total operating profit

$

159,435

 

 

 

 

$

144,219

 

 

 

 

 

 

 

 

 

 

 

OPERATING PROFIT ADJUSTMENTS (1)

 

 

 

 

Industrial Precision Solutions

$

3,541

 

 

 

 

$

 

 

 

Advanced Technology Solutions

 

 

 

 

 

 

10,295

 

 

 

Total adjustments

$

3,541

 

 

 

 

$

10,295

 

 

 

 

 

 

 

 

 

 

 

DEPRECIATION & AMORTIZATION

 

 

 

 

 

 

Industrial Precision Solutions

$

14,380

 

 

 

 

$

6,845

 

 

 

Medical and Fluid Solutions

 

13,705

 

 

 

 

 

13,625

 

 

 

Advanced Technology Solutions

 

3,441

 

 

 

 

 

3,812

 

 

 

Corporate

 

2,018

 

 

 

 

 

2,152

 

 

 

Total depreciation & amortization

$

33,544

 

 

 

 

$

26,434

 

 

 

 

 

 

 

 

 

 

 

EBITDA (NON-GAAP) (2)

 

 

 

 

 

 

 

Industrial Precision Solutions

$

126,285

 

 

36%

 

$

109,164

 

 

35%

Medical and Fluid Solutions

 

59,805

 

 

37%

 

 

53,009

 

 

34%

Advanced Technology Solutions

 

22,479

 

 

19%

 

 

31,070

 

 

21%

Corporate

 

(12,049

)

 

 

 

 

(12,295

)

 

 

Total EBITDA

$

196,520

 

 

31%

 

$

180,948

 

 

30%

 

 

 

 

 

 

 

 

(1)

Represents fees, severance and non-cash inventory charges associated with acquisitions.

(2)

EBITDA is a non-GAAP measure used by management to evaluate the Company's ongoing operations. EBITDA is defined as operating profit plus certain adjustments, such as severance, fees and non-cash inventory charges associated with acquisitions, plus depreciation and amortization.

 

NORDSON CORPORATION

 

RECONCILIATION OF NON-GAAP MEASURES - ADJUSTED NET INCOME AND EARNINGS PER SHARE (Unaudited)

(Dollars in thousands)

 

 

Three Months Ended

 

January 31,

2024

 

January 31,

2023

GAAP AS REPORTED

 

 

 

Operating profit

$

159,435

 

 

$

144,219

 

Other / interest expense - net

 

(20,736

)

 

 

(13,139

)

Net income

 

109,572

 

 

 

104,261

 

Diluted earnings per share

$

1.90

 

 

$

1.81

 

 

 

 

 

Shares outstanding - diluted

 

57,555

 

 

 

57,762

 

 

 

 

 

OPERATING PROFIT ADJUSTMENTS

 

 

 

Inventory step-up amortization

$

2,944

 

 

$

4,306

 

Acquisition-related costs

 

597

 

 

 

5,989

 

 

 

 

 

ACQUISITION AMORTIZATION OF INTANGIBLES

$

19,387

 

 

$

13,872

 

 

 

 

 

Total adjustments

$

22,928

 

 

$

24,167

 

 

 

 

 

Adjustments net of tax

$

18,113

 

 

$

19,223

 

EPS effect of adjustments and other discrete tax items

$

0.31

 

 

$

0.33

 

 

 

 

 

NON-GAAP MEASURES-ADJUSTED NET INCOME AND ADJUSTED EARNINGS PER SHARE

 

 

 

Adjusted Net income (1)

$

127,685

 

 

$

123,484

 

Adjusted Diluted earnings per share (2)

$

2.21

 

 

$

2.14

 

(1)

Adjusted net income is a non-GAAP measure defined as net income plus tax effected adjustments and other discrete tax items.

(2)

Adjusted earnings per share is a non-GAAP measure defined as GAAP EPS adjusted for tax effected adjustments and other discrete tax items.

 

 

 

Management uses certain non-GAAP measures, such as adjusted net income, adjusted EPS and EBITDA, internally to make strategic decisions, forecast future results, and evaluate the Company's current performance. Given management's use of these non-GAAP measures, the Company believes these measures are important to investors in understanding the Company's current and future operating results as seen through the eyes of management. In addition, management believes these non-GAAP measures are useful to investors in enabling them to better assess changes in the Company's core business across different time periods. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures to other companies' non-GAAP financial measures, even if they have similar names. Amounts may not add due to rounding.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240221342336/en/

Contacts

Lara Mahoney
Vice President,
Investor Relations & Corporate Communications
440.204.9985
Lara.Mahoney@nordson.com

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