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Nordson Corporation Reports Record Third Quarter Fiscal 2022 Results and Confirms Annual Guidance

August 22, 2022

Third Quarter:

  • Sales were $662 million, a 2% increase over prior year’s record sales
  • Constant currency sales increased 7% over prior year’s record sales
  • Earnings per share were $2.45 compared to $2.42 in the prior year
  • Adjusted earnings were $2.49 per share, a 3% increase over the prior year

Guidance:

  • Confirming previously issued full-year fiscal 2022 guidance: revenue growth of 8% to 9% over fiscal 2021 and adjusted earnings per diluted share growth of 18% to 21%

WESTLAKE, Ohio--(BUSINESS WIRE)-- Nordson Corporation (Nasdaq: NDSN) today reported results for the fiscal third quarter ended July 31, 2022. Sales were $662 million, a 2% increase compared to the prior year’s third quarter record sales of $647 million. In constant currency, the increase in third quarter 2022 sales was approximately 7% driven by strong organic volume growth of 4% and a favorable acquisition impact. The organic sales increase was driven by strong demand across most end markets, particularly in electronics and medical.

Operating profit in the third quarter was $185 million, or 28% of sales. Adjusted operating profit, excluding facility closure and restructuring costs, totaled $188 million, comparable to prior year operating profit. The relatively flat profit level compared to the strong prior year third quarter was driven primarily by organic sales volume growth offset by unfavorable currency impacts and inflationary pressures. EBITDA for the third quarter of 2022 totaled $213 million, or 32% of sales.

Net income was $142 million, or $2.45 earnings per diluted share. Adjusted net income was $144 million, a $2 million increase from the prior year earnings of $142 million. Third quarter 2022 adjusted earnings per diluted share were $2.49, a 3% increase over the prior year earnings per diluted share of $2.42.

“The Nordson team delivered another outstanding record sales performance, responding to the steady and broad-based demand of our customers. In fiscal 2022, we have faced persistent headwinds of inflation, labor shortages, and increasing currency pressures, yet order entry remains strong with another favorable book-to-bill ratio in the quarter and our teams have proven resilient. The combination of our differentiated precision technology, customer-centric model, NBS Next growth framework and dedicated employees continues to drive our strong profitable growth,” said Sundaram Nagarajan, president and chief executive officer.

Third Quarter Segment Results

Industrial Precision Solutions sales of $341 million decreased 1% compared to the prior year third quarter, and on a constant currency basis grew 5% over the prior year driven primarily by the acquisition impact of 7%. Prior year third quarter was a record sales result for this segment. Operating profit in the quarter was $120 million, or 35% of sales, a decrease of 3% compared to the prior year third quarter, primarily due to unfavorable currency impact.

Advanced Technology Solutions sales of $321 million increased 7% compared to the prior year third quarter. Organic sales increased 10%, partially offset by an unfavorable currency impact of 3%. The organic sales increase was driven by robust demand across all product lines. Operating profit totaled $86 million, or 27% of sales, an increase of 7% compared to the prior year third quarter operating profit. Adjusted operating profit, excluding facility closure costs, totaled $89 million, or 28% of sales, an increase of 10% compared to the prior year third quarter operating profit.

Outlook

The Company continues to be encouraged as order entry remained strong throughout the third quarter with a favorable book-to-bill ratio. Backlog entering the fourth quarter of fiscal 2022 exceeds $1 billion, as the Company continues to see extended shipment request dates in conjunction with large orders from its customers in electronics, industrial and medical end markets.

For the full year, despite significant currency headwinds, the Company is confirming its previously issued revenue growth guidance of 8% to 9% over fiscal 2021 and adjusted earnings guidance growth in the range of 18% to 21%.

Nordson management will provide additional commentary on these results and outlook during its previously announced webcast on Tuesday, August 23, 2022 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 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, www.twitter.com/Nordson_Corp or www.facebook.com/nordson.

NORDSON CORPORATION

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(Dollars in thousands except for per-share amounts)

 

 

Three Months Ended

 

Nine Months Ended

 

July 31, 2022

 

July 31, 2021

 

July 31, 2022

 

July 31, 2021

Sales

$

662,128

 

 

$

646,858

 

 

$

1,906,697

 

 

$

1,762,962

 

Cost of sales

 

296,544

 

 

 

281,587

 

 

 

843,344

 

 

 

770,032

 

Gross profit

 

365,584

 

 

 

365,271

 

 

 

1,063,353

 

 

 

992,930

 

Gross margin %

 

55.2

%

 

 

56.5

%

 

 

55.8

%

 

 

56.3

%

 

 

 

 

 

 

 

 

Selling & administrative expenses

 

180,666

 

 

 

176,995

 

 

 

538,602

 

 

 

529,238

 

Operating profit

 

184,918

 

 

 

188,276

 

 

 

524,751

 

 

 

463,692

 

 

 

 

 

 

 

 

 

Interest expense - net

 

(5,165

)

 

 

(5,647

)

 

 

(15,292

)

 

 

(18,889

)

Other income (expense) - net (1)

 

752

 

 

 

(2,232

)

 

 

(37,720

)

 

 

(10,736

)

Income before income taxes

 

180,505

 

 

 

180,397

 

 

 

471,739

 

 

 

434,067

 

 

 

 

 

 

 

 

 

Income taxes

 

38,694

 

 

 

38,215

 

 

 

99,885

 

 

 

90,159

 

 

 

 

 

 

 

 

 

Net income

$

141,811

 

 

$

142,182

 

 

$

371,854

 

 

$

343,908

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

Basic

 

57,409

 

 

 

58,112

 

 

 

57,782

 

 

 

58,080

 

Diluted

 

57,969

 

 

 

58,735

 

 

 

58,392

 

 

 

58,714

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

Basic earnings

$

2.47

 

 

$

2.45

 

 

$

6.44

 

 

$

5.92

 

Diluted earnings

$

2.45

 

 

$

2.42

 

 

$

6.37

 

 

$

5.86

(1)

The nine months ended July 31,2022 includes a pension settlement charge of $41,221.

NORDSON CORPORATION

CONSOLIDATED BALANCE SHEETS (Unaudited)

(Dollars in thousands)

 

 

July 31, 2022

 

October 31, 2021

Cash and cash equivalents

$

128,737

 

$

299,972

Receivables - net

 

530,761

 

 

489,389

Inventories - net

 

399,579

 

 

327,195

Other current assets

 

56,529

 

 

48,282

Total current assets

 

1,115,606

 

 

1,164,838

 

 

 

 

Property, plant & equipment - net

 

359,231

 

 

355,565

Goodwill

 

1,813,234

 

 

1,713,148

Other assets

 

535,753

 

 

557,410

 

$

3,823,824

 

$

3,790,961

 

 

 

 

Current maturities of long-term debt and notes payable

$

401,728

 

$

34,188

Accounts payable and accrued liabilities

 

425,554

 

 

411,206

Total current liabilities

 

827,282

 

 

445,394

 

 

 

 

Long-term debt

 

401,698

 

 

781,709

Other liabilities

 

395,799

 

 

404,728

Total shareholders' equity

 

2,199,045

 

 

2,159,130

 

$

3,823,824

 

$

3,790,961

NORDSON CORPORATION

CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)

(Dollars in thousands)

 

 

Nine Months Ended

 

July 31, 2022

 

July 31, 2021

Cash flows from operating activities:

 

 

 

Net income

$

371,854

 

 

$

343,908

 

Depreciation and amortization

 

75,242

 

 

 

78,233

 

Other non-cash items (1)

 

54,928

 

 

 

18,947

 

Changes in working capital

 

(125,573

)

 

 

12,565

 

Other

 

(36,760

)

 

 

(78,197

)

Net cash provided by operating activities

 

339,691

 

 

 

375,456

 

 

 

 

 

Cash flows from investing activities:

 

 

 

Additions to property, plant and equipment

 

(39,373

)

 

 

(28,073

)

Acquisition of businesses, net of cash acquired

 

(171,613

)

 

 

 

Other - net

 

415

 

 

 

5,076

 

Net cash used in investing activities

 

(210,571

)

 

 

(22,997

)

 

 

 

 

Cash flows from financing activities:

 

 

 

Issuance (repayment) of long-term debt

 

22,905

 

 

 

(292,290

)

Repayment of finance lease obligations

 

(3,726

)

 

 

(5,111

)

Dividends paid

 

(88,675

)

 

 

(68,021

)

Issuance of common shares

 

8,845

 

 

 

24,136

 

Purchase of treasury shares

 

(233,767

)

 

 

(46,840

)

Net cash used in financing activities

 

(294,418

)

 

 

(388,126

)

 

 

 

 

Effect of exchange rate change on cash

 

(5,937

)

 

 

1,609

 

Net change in cash and cash equivalents

 

(171,235

)

 

 

(34,058

)

 

 

 

 

Cash and cash equivalents:

 

 

 

Beginning of period

 

299,972

 

 

 

208,293

 

End of period

$

128,737

 

 

$

174,235

 

(1)

The nine months ended July 31,2022 includes pension settlement charge of $41,221.

NORDSON CORPORATION

SALES BY GEOGRAPHIC SEGMENT (Unaudited)

(Dollars in thousands)

 

 

Three Months Ended

 

Sales Variance

 

July 31, 2022

 

July 31, 2021

 

Organic

 

Acquisitions /
Divestitures

 

Currency

 

Total

SALES BY SEGMENT

 

 

 

 

 

 

 

 

 

 

 

Industrial precision solutions

$

341,215

 

$

345,449

 

(1.1

)%

 

6.5

%

 

(6.6

)%

 

(1.2

)%

Advanced technology solutions

 

320,913

 

 

301,409

 

9.6

%

 

%

 

(3.1

)%

 

6.5

%

Total sales

$

662,128

 

$

646,858

 

3.9

%

 

3.5

%

 

(5.0

)%

 

2.4

%

 

 

 

 

 

 

 

 

 

 

 

 

SALES BY GEOGRAPHIC REGION

 

 

 

 

 

 

 

 

 

 

 

United States

$

219,067

 

$

201,531

 

5.0

%

 

3.7

%

 

%

 

8.7

%

Americas

 

60,138

 

 

47,717

 

25.7

%

 

1.6

%

 

(1.3

)%

 

26.0

%

Europe

 

151,659

 

 

162,298

 

1.6

%

 

3.8

%

 

(12.0

)%

 

(6.6

)%

Japan

 

23,080

 

 

24,946

 

9.3

%

 

2.2

%

 

(19.0

)%

 

(7.5

)%

Asia Pacific

 

208,184

 

 

210,366

 

(1.0

)%

 

3.5

%

 

(3.5

)%

 

(1.0

)%

Total sales

$

662,128

 

$

646,858

 

3.9

%

 

3.5

%

 

(5.0

)%

 

2.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended

 

Sales Variance

 

July 31, 2022

 

July 31, 2021

 

Organic

 

Acquisitions /
Divestitures

 

Currency

 

Total

SALES BY SEGMENT

 

 

 

 

 

 

 

 

 

 

 

Industrial precision solutions

$

981,582

 

$

932,640

 

4.2

%

 

5.7

%

 

(4.7

)%

 

5.2

%

Advanced technology solutions

 

925,115

 

 

830,322

 

13.3

%

 

%

 

(1.9

)%

 

11.4

%

Total sales

$

1,906,697

 

$

1,762,962

 

8.4

%

 

3.1

%

 

(3.3

)%

 

8.2

%

 

 

 

 

 

 

 

 

 

 

 

 

SALES BY GEOGRAPHIC REGION

 

 

 

 

 

 

 

 

 

 

 

United States

$

628,952

 

$

589,771

 

3.9

%

 

2.7

%

 

%

 

6.6

%

Americas

 

163,907

 

 

128,769

 

27.0

%

 

1.1

%

 

(0.8

)%

 

27.3

%

Europe

 

479,900

 

 

453,900

 

10.5

%

 

3.8

%

 

(8.6

)%

 

5.7

%

Japan

 

74,081

 

 

79,913

 

2.3

%

 

2.9

%

 

(12.5

)%

 

(7.3

)%

Asia Pacific

 

559,857

 

 

510,609

 

8.3

%

 

3.1

%

 

(1.8

)%

 

9.6

%

Total sales

$

1,906,697

 

$

1,762,962

 

8.4

%

 

3.1

%

 

(3.3

)%

 

8.2

%

NORDSON CORPORATION

RECONCILIATION OF NON-GAAP MEASURES - ADJUSTED OPERATING PROFIT AND EBITDA (Unaudited)

(Dollars in thousands)

 

 

Three Months Ended

 

Nine Months Ended

 

July 31, 2022

 

July 31, 2021

 

July 31, 2022

 

July 31, 2021

SALES BY SEGMENT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial precision solutions

$

341,215

 

 

 

 

$

345,449

 

 

 

 

$

981,582

 

 

 

 

$

932,640

 

 

 

Advanced technology solutions

 

320,913

 

 

 

 

 

301,409

 

 

 

 

 

925,115

 

 

 

 

 

830,322

 

 

 

Total sales

$

662,128

 

 

 

 

$

646,858

 

 

 

 

$

1,906,697

 

 

 

 

$

1,762,962

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING PROFIT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial precision solutions

$

119,706

 

 

 

 

$

123,829

 

 

 

 

$

324,089

 

 

 

 

$

311,515

 

 

 

Advanced technology solutions

 

86,258

 

 

 

 

 

80,769

 

 

 

 

 

261,043

 

 

 

 

 

204,556

 

 

 

Corporate

 

(21,046

)

 

 

 

 

(16,322

)

 

 

 

 

(60,381

)

 

 

 

 

(52,379

)

 

 

Total operating profit

$

184,918

 

 

 

 

$

188,276

 

 

 

 

$

524,751

 

 

 

 

$

463,692

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING PROFIT ADJUSTMENTS (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial precision solutions

$

 

 

 

 

$

 

 

 

 

$

1,563

 

 

 

 

$

 

 

 

Advanced technology solutions

 

2,498

 

 

 

 

 

 

 

 

 

 

2,498

 

 

 

 

 

 

 

 

Corporate

 

897

 

 

 

 

 

 

 

 

 

 

897

 

 

 

 

 

 

 

 

Total adjustments

$

3,395

 

 

 

 

$

 

 

 

 

$

4,958

 

 

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ADJUSTED OPERATING PROFIT (NON-GAAP) (2)

 

 

% of Sales

 

 

 

% of Sales

 

 

 

% of Sales

 

 

 

% of Sales

Industrial precision solutions

$

119,706

 

 

35

%

 

$

123,829

 

 

36

%

 

$

325,652

 

 

33

%

 

$

311,515

 

 

33

%

Advanced technology solutions

 

88,756

 

 

28

%

 

 

80,769

 

 

27

%

 

 

263,541

 

 

28

%

 

 

204,556

 

 

25

%

Corporate

 

(20,149

)

 

 

 

 

(16,322

)

 

 

 

 

(59,484

)

 

 

 

 

(52,379

)

 

 

Total operating profit - adjusted

$

188,313

 

 

28

%

 

$

188,276

 

 

29

%

 

$

529,709

 

 

28

%

 

$

463,692

 

 

26

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DEPRECIATION & AMORTIZATION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial precision solutions

$

6,347

 

 

 

 

$

5,964

 

 

 

 

$

20,705

 

 

 

 

$

19,414

 

 

 

Advanced technology solutions

 

17,216

 

 

 

 

 

18,474

 

 

 

 

 

48,851

 

 

 

 

 

51,439

 

 

 

Corporate

 

1,324

 

 

 

 

 

2,460

 

 

 

 

 

5,686

 

 

 

 

 

7,380

 

 

 

Total depreciation & amortization

$

24,887

 

 

 

 

$

26,898

 

 

 

 

$

75,242

 

 

 

 

$

78,233

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA (NON-GAAP) (2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial precision solutions

$

126,053

 

 

37

%

 

$

129,793

 

 

38

%

 

$

346,357

 

 

35

%

 

$

330,929

 

 

35

%

Advanced technology solutions

 

105,972

 

 

33

%

 

 

99,243

 

 

33

%

 

 

312,392

 

 

34

%

 

 

255,995

 

 

31

%

Corporate

 

(18,825

)

 

 

 

 

(13,862

)

 

 

 

 

(53,798

)

 

 

 

 

(44,999

)

 

 

Total EBITDA

$

213,200

 

 

32

%

 

$

215,174

 

 

33

%

 

$

604,951

 

 

32

%

 

$

541,925

 

 

31

%

(1)

Represents severance and non-cash inventory charges associated with the NDC acquisition.

(2)

Adjusted operating profit and EBITDA are non-GAAP measures used by management to evaluate the Company's ongoing operations. Adjusted operating profit is defined as operating profit plus certain adjustments, such as severance and non-cash inventory charges associated with acquisitions or facility closures. EBITDA is defined as adjusted operating profit plus depreciation and amortization.

The Company also uses the non-GAAP financial measure “constant currency” sales or sales “on a constant currency basis” to show changes in our revenue without giving effect to period-to-period currency fluctuations. Constant currency is defined as sales growth excluding the impacts of changes in foreign currencies. We express period over period revenue variances that are calculated in constant currency as a percentage. Because the reconciliation is inherent in the disclosure, we believe that a separate reconciliation would not provide any benefit.

NORDSON CORPORATION

RECONCILIATION OF NON-GAAP MEASURES - PROFITABILITY (Unaudited)

(Dollars in thousands)

 

 

Three Months Ended

 

Nine Months Ended

 

July 31, 2022

 

July 31, 2021

 

July 31, 2022

 

July 31, 2021

GAAP AS REPORTED

 

 

 

 

 

 

 

Operating profit

$

184,918

 

 

$

188,276

 

 

$

524,751

 

 

$

463,692

 

Other / interest expense - net

 

(4,413

)

 

 

(7,879

)

 

 

(53,012

)

 

 

(29,625

)

Net income

 

141,811

 

 

 

142,182

 

 

 

371,854

 

 

 

343,908

 

Diluted earnings per share

$

2.45

 

 

$

2.42

 

 

$

6.37

 

 

$

5.86

 

 

 

 

 

 

 

 

 

Shares outstanding - diluted

 

57,969

 

 

 

58,735

 

 

 

58,392

 

 

 

58,714

 

 

 

 

 

 

 

 

 

OPERATING PROFIT ADJUSTMENTS

 

 

 

 

 

 

 

Inventory step-up amortization

$

 

 

$

 

 

$

1,563

 

 

$

 

Severance and other

$

3,395

 

 

$

 

 

$

3,395

 

 

$

 

 

 

 

 

 

 

 

 

NON-OPERATING EXPENSE ADJUSTMENTS

 

 

 

 

 

 

 

Pension settlement loss

$

 

 

$

 

 

$

41,221

 

 

$

 

 

 

 

 

 

 

 

 

Total adjustments

$

3,395

 

 

$

 

 

$

46,179

 

 

$

 

 

 

 

 

 

 

 

 

Adjustments net of tax

$

2,667

 

 

$

 

 

$

36,401

 

 

$

 

EPS effect of adjustments

$

0.04

 

 

$

 

 

$

0.62

 

 

$

 

 

 

 

 

 

 

 

 

NON-GAAP MEASURES-ADJUSTED PROFITABILITY

 

 

 

 

 

 

 

Operating profit (1)

$

188,313

 

 

$

188,276

 

 

$

529,709

 

 

$

463,692

 

Operating profit % of sales

 

28.4

%

 

 

29.1

%

 

 

27.8

%

 

 

26.3

%

Net income (2)

$

144,478

 

 

$

142,182

 

 

$

408,255

 

 

$

343,908

 

Diluted earnings per share (3)

$

2.49

 

 

$

2.42

 

 

$

6.99

 

 

$

5.86

 

(1)

Adjusted operating profit is defined as operating profit plus certain adjustments, such as severance, non-cash inventory charges related to the NDC acquisition, and facility closures. Adjusted operating profit as a percentage of sales is defined as adjusted operating profit divided by sales.

(2)

Adjusted net income is defined as net income plus tax effected adjustments and other discrete tax items.

(3)

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

Management uses these non-GAAP measures 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.

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

Source: Nordson Corporation

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