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Nordson Corporation Reports Strong Second Quarter Fiscal 2022 Results and Raises Annual Earnings Guidance

May 23, 2022

Second Quarter:

  • Sales were $635 million, an 8% increase over prior year
  • Operating profit was $184 million, an 11% increase over prior year
  • Earnings per share were $1.88 compared to $2.12 in the prior year
  • Adjusted earnings were $2.43 per diluted share, a 15% increase over the prior year

Guidance:

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

WESTLAKE, Ohio--(BUSINESS WIRE)-- Nordson Corporation (Nasdaq: NDSN) today reported results for the fiscal second quarter ended April 30, 2022. Sales were $635 million, an 8% increase compared to the prior year’s second quarter sales of $590 million. The increase in second quarter 2022 sales included organic volume growth of 7% and a favorable acquisition impact of 4%, partially offset by unfavorable effects from currency translation of 3%. The organic sales increase was driven by strong demand across most end markets, offset by unfavorable impacts from COVID-related lockdowns in China.

Operating profit in the second quarter was $184 million, or 29% of sales, compared to prior year operating profit of $166 million. This 11% increase in operating profit was driven primarily by sales volume leverage. EBITDA for the second quarter of 2022 totaled $209 million, or 33% of sales.

Net income was $110 million, or $1.88 earnings per diluted share. Adjusted net income, which excludes the $41 million non-cash pension annuitization charge ($32 million after tax), was $142 million, an $18 million increase from the prior year earnings of $124 million. Second quarter 2022 adjusted diluted earnings per share were $2.43, a 15% increase over the prior year diluted earnings per share of $2.12.

“I am very proud of the Nordson team’s efforts and our impressive second quarter financial performance, despite the ongoing COVID-related lockdowns in China and foreign currency headwinds. We remain focused on the safety of our employees and delivering on the strong broad-based demand from our customers. The ongoing deployment of the NBS Next growth framework is delivering tangible results in terms of strong order entry and 70% organic incremental margins,” said Sundaram Nagarajan, president and chief executive officer.

Second Quarter Segment Results

Industrial Precision Solutions sales of $316 million increased 6% compared to the prior year second quarter, driven by a 3% organic sales increase and a favorable acquisition impact of 7%, partially offset by an unfavorable currency impact of 4%. The organic sales increase was driven by continued demand in consumer non-durable and industrial end markets, which was offset by weakness in Asia-Pacific related to the COVID shutdowns in China. Operating profit in the quarter was $102 million, or 32% of sales, a decrease of 2% compared to the prior year second quarter, as favorable sales volume leverage was offset by unfavorable sales mix compared to the prior year second quarter.

Advanced Technology Solutions sales of $319 million increased 10% compared to the prior year second quarter. Organic sales increased 11%, partially offset by an unfavorable currency impact. The organic sales increase was driven by robust demand across electronics dispense, test and inspection, and biopharma fluid component product lines. Operating profit totaled $98 million, or 31% of sales, an increase of 29% compared to the prior year second quarter operating profit.

Outlook

The Company continues to be encouraged as order entry remained strong throughout the second quarter with a favorable book-to-bill ratio. Backlog entering the second half 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, the Company is increasing its previously issued adjusted earnings guidance to growth in the range of 18% to 21% and narrowing its previously issued year-over-year revenue guidance to growth of 8% to 9% over fiscal 2021.

Fiscal 2022 third quarter revenue and adjusted earnings are forecasted to be comparable to the prior year results.

Nordson management will provide additional commentary on these results and outlook during its previously announced webcast on Tuesday, May 24, 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 such 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 current 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 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

 

Six Months Ended

 

 

April 30, 2022

 

April 30, 2021

 

April 30, 2022

 

April 30, 2021

Sales

 

$

635,403

 

 

$

589,538

 

 

$

1,244,569

 

 

$

1,116,104

 

Cost of sales

 

 

277,768

 

 

 

251,839

 

 

 

546,800

 

 

 

488,445

 

Gross profit

 

 

357,635

 

 

 

337,699

 

 

 

697,769

 

 

 

627,659

 

Gross margin %

 

 

56.3

%

 

 

57.3

%

 

 

56.1

%

 

 

56.2

%

 

 

 

 

 

 

 

 

 

Selling & administrative expenses

 

 

173,662

 

 

 

171,308

 

 

 

357,936

 

 

 

352,243

 

Operating profit

 

 

183,973

 

 

 

166,391

 

 

 

339,833

 

 

 

275,416

 

 

 

 

 

 

 

 

 

 

Interest expense - net

 

 

(4,942

)

 

 

(6,690

)

 

 

(10,127

)

 

 

(13,242

)

Other income (expense) - net (1)

 

 

(39,764

)

 

 

(3,843

)

 

 

(38,472

)

 

 

(8,504

)

Income before income taxes

 

 

139,267

 

 

 

155,858

 

 

 

291,234

 

 

 

253,670

 

 

 

 

 

 

 

 

 

 

Income taxes

 

 

29,633

 

 

 

31,714

 

 

 

61,191

 

 

 

51,944

 

 

 

 

 

 

 

 

 

 

Net income

 

$

109,634

 

 

$

124,144

 

 

$

230,043

 

 

$

201,726

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

Basic

 

 

57,784

 

 

 

58,068

 

 

 

57,971

 

 

58,063

 

Diluted

 

 

58,382

 

 

 

58,652

 

 

 

58,606

 

 

 

58,703

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

Basic earnings

 

$

1.90

 

 

$

2.14

 

 

$

3.97

 

 

$

3.47

 

Diluted earnings

 

$

1.88

 

 

$

2.12

 

 

$

3.93

 

 

$

3.44

 

 

(1) Includes pension settlement charge of $41,221.

NORDSON CORPORATION

CONSOLIDATED BALANCE SHEETS (Unaudited)

(Dollars in thousands)

 

 

 

April 30, 2022

 

October 31, 2021

Cash and cash equivalents

 

$

120,892

 

$

299,972

Receivables - net

 

 

499,535

 

 

489,389

Inventories - net

 

 

383,215

 

 

327,195

Other current assets

 

 

56,197

 

 

48,282

Total current assets

 

 

1,059,839

 

 

1,164,838

 

 

 

 

 

Property, plant & equipment - net

 

 

357,561

 

 

355,565

Goodwill

 

 

1,821,091

 

 

1,713,148

Other assets

 

 

557,852

 

 

557,410

 

 

$

3,796,343

 

$

3,790,961

 

 

 

 

 

Current maturities of long-term debt and notes payable

 

$

310,892

 

$

34,188

Accounts payable and accrued liabilities

 

 

411,606

 

 

411,206

Total current liabilities

 

 

722,498

 

 

445,394

 

 

 

 

 

Long-term debt

 

 

479,703

 

 

781,709

Other liabilities

 

 

403,526

 

 

404,728

Total shareholders' equity

 

 

2,190,616

 

 

2,159,130

 

 

$

3,796,343

 

$

3,790,961

 

 

 

 

 

NORDSON CORPORATION

CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)

(Dollars in thousands)

   

 

 

Six Months Ended

 

 

April 30, 2022

 

April 30, 2021

Cash flows from operating activities:

 

 

 

 

Net income

 

$

230,043

 

 

$

201,726

 

Depreciation and amortization

 

 

50,355

 

 

 

51,336

 

Other non-cash items (1)

 

 

51,449

 

 

 

14,858

 

Changes in working capital

 

 

(85,070

)

 

 

20,206

 

Other

 

 

(32,276

)

 

 

(40,412

)

Net cash provided by operating activities

 

 

214,501

 

 

 

247,714

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

Additions to property, plant and equipment

 

 

(24,776

)

 

 

(18,743

)

Acquisition of businesses, net of cash acquired

 

 

(171,613

)

 

 

 

Other - net

 

 

15

 

 

 

5,062

 

Net cash used in investing activities

 

 

(196,374

)

 

 

(13,681

)

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

Issuance (repayment) of long-term debt

 

 

1,654

 

 

 

(250,101

)

Repayment of finance lease obligations

 

 

(2,620

)

 

 

(3,399

)

Dividends paid

 

 

(59,301

)

 

 

(45,342

)

Issuance of common shares

 

 

7,798

 

 

 

18,783

 

Purchase of treasury shares

 

 

(140,466

)

 

 

(30,274

)

Net cash used in financing activities

 

 

(192,935

)

 

 

(310,333

)

 

 

 

 

 

Effect of exchange rate change on cash

 

 

(4,272

)

 

 

1,327

 

Net change in cash and cash equivalents

 

 

(179,080

)

 

 

(74,973

)

 

 

 

 

 

Cash and cash equivalents:

 

 

 

 

Beginning of period

 

 

299,972

 

 

 

208,293

 

End of period

 

$

120,892

 

 

$

133,320

 

 

 

 

 

 

(1) Includes pension settlement charge of $41,221.

NORDSON CORPORATION

SALES BY GEOGRAPHIC SEGMENT (Unaudited)

(Dollars in thousands)

 

 

 

Three Months Ended

 

Sales Variance

 

 

April 30, 2022

 

April 30, 2021

 

Organic

 

Acquisitions / Divestitures

 

Currency

 

Total

SALES BY SEGMENT

 

 

 

 

 

 

 

 

 

 

 

 

Industrial precision solutions

 

$

316,434

 

$

298,775

 

2.8

%

 

7.1

%

 

(4.0

)%

 

5.9

%

Advanced technology solutions

 

 

318,969

 

 

290,763

 

11.3

%

 

%

 

(1.6

)%

 

9.7

%

Total sales

 

$

635,403

 

$

589,538

 

7.0

%

 

3.6

%

 

(2.8

)%

 

7.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

SALES BY GEOGRAPHIC REGION

 

 

 

 

 

 

 

 

 

 

 

 

United States

 

$

218,508

 

$

202,924

 

3.9

%

 

3.8

%

 

%

 

7.7

%

Americas

 

 

55,244

 

 

44,914

 

20.8

%

 

1.9

%

 

0.3

%

 

23.0

%

Europe

 

 

172,256

 

 

156,451

 

14.4

%

 

3.7

%

 

(8.0

)%

 

10.1

%

Japan

 

 

25,443

 

 

27,852

 

(5.0

)%

 

6.3

%

 

(10.0

)%

 

(8.7

)%

Asia Pacific

 

 

163,952

 

 

157,397

 

1.8

%

 

3.3

%

 

(0.9

)%

 

4.2

%

Total sales

 

$

635,403

 

$

589,538

 

7.0

%

 

3.6

%

 

(2.8

)%

 

7.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended

 

Sales Variance

 

 

April 30, 2022

 

April 30, 2021

 

Organic

 

Acquisitions / Divestitures

 

Currency

 

Total

SALES BY SEGMENT

 

 

 

 

 

 

 

 

 

 

 

 

Industrial precision solutions

 

$

640,367

 

$

587,191

 

7.3

%

 

5.3

%

 

(3.5

)%

 

9.1

%

Advanced technology solutions

 

 

604,202

 

 

528,913

 

15.4

%

 

%

 

(1.2

)%

 

14.2

%

Total sales

 

$

1,244,569

 

$

1,116,104

 

11.2

%

 

2.7

%

 

(2.4

)%

 

11.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

SALES BY GEOGRAPHIC REGION

 

 

 

 

 

 

 

 

 

 

 

 

United States

 

$

409,885

 

$

388,240

 

3.3

%

 

2.3

%

 

%

 

5.6

%

Americas

 

 

103,769

 

 

81,052

 

27.7

%

 

0.7

%

 

(0.4

)%

 

28.0

%

Europe

 

 

328,241

 

 

291,602

 

15.5

%

 

3.8

%

 

(6.7

)%

 

12.6

%

Japan

 

 

51,001

 

 

54,967

 

(0.9

)%

 

3.2

%

 

(9.5

)%

 

(7.2

)%

Asia Pacific

 

 

351,673

 

 

300,243

 

14.8

%

 

2.8

%

 

(0.5

)%

 

17.1

%

Total sales

 

$

1,244,569

 

$

1,116,104

 

11.2

%

 

2.7

%

 

(2.4

)%

 

11.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

NORDSON CORPORATION

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

(Dollars in thousands)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

April 30, 2022

 

April 30, 2021

 

April 30, 2022

 

April 30, 2021

SALES BY SEGMENT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial precision solutions

 

$

316,434

 

 

 

 

$

298,775

 

 

 

 

$

640,367

 

 

 

 

$

587,191

 

 

 

Advanced technology solutions

 

 

318,969

 

 

 

 

 

290,763

 

 

 

 

 

604,202

 

 

 

 

 

528,913

 

 

 

Total sales

 

$

635,403

 

 

 

 

$

589,538

 

 

 

 

$

1,244,569

 

 

 

 

$

1,116,104

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING PROFIT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial precision solutions

 

$

102,196

 

 

 

 

$

104,283

 

 

 

 

$

204,384

 

 

 

 

$

187,686

 

 

 

Advanced technology solutions

 

 

98,458

 

 

 

 

 

76,585

 

 

 

 

 

174,785

 

 

 

 

 

123,786

 

 

 

Corporate

 

 

(16,681

)

 

 

 

 

(14,477

)

 

 

 

 

(39,336

)

 

 

 

 

(36,056

)

 

 

Total operating profit

 

$

183,973

 

 

 

 

$

166,391

 

 

 

 

$

339,833

 

 

 

 

$

275,416

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING PROFIT ADJUSTMENTS (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial precision solutions

 

$

 

 

 

 

$

 

 

 

 

$

1,563

 

 

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ADJUSTED OPERATING PROFIT (NON-GAAP) (2)

 

 

 

% of Sales

 

 

 

% of Sales

 

 

 

% of Sales

 

 

 

% of Sales

Industrial precision solutions

 

$

102,196

 

 

32

%

 

$

104,283

 

 

35

%

 

$

205,947

 

 

32

%

 

$

187,686

 

 

32

%

Advanced technology solutions

 

 

98,458

 

 

31

%

 

 

76,585

 

 

26

%

 

 

174,785

 

 

29

%

 

 

123,786

 

 

23

%

Corporate

 

 

(16,681

)

 

 

 

 

(14,477

)

 

 

 

 

(39,336

)

 

 

 

 

(36,056

)

 

 

Total operating profit - adjusted

 

$

183,973

 

 

29

%

 

$

166,391

 

 

28

%

 

$

341,396

 

 

27

%

 

$

275,416

 

 

25

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DEPRECIATION & AMORTIZATION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial precision solutions

 

$

6,916

 

 

 

 

$

6,468

 

 

 

 

$

14,358

 

 

 

 

$

13,451

 

 

 

Advanced technology solutions

 

 

15,825

 

 

 

 

 

16,421

 

 

 

 

 

31,635

 

 

 

 

 

32,965

 

 

 

Corporate

 

 

2,224

 

 

 

 

 

2,427

 

 

 

 

 

4,362

 

 

 

 

 

4,920

 

 

 

Total depreciation & amortization

 

$

24,965

 

 

 

 

$

25,316

 

 

 

 

$

50,355

 

 

 

 

$

51,336

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA (NON-GAAP) (2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial precision solutions

 

$

109,112

 

 

34

%

 

$

110,751

 

 

37

%

 

$

220,305

 

 

34

%

 

$

201,137

 

 

34

%

Advanced technology solutions

 

 

114,283

 

 

36

%

 

 

93,006

 

 

32

%

 

 

206,420

 

 

34

%

 

 

156,751

 

 

30

%

Corporate

 

 

(14,457

)

 

 

 

 

(12,050

)

 

 

 

 

(34,974

)

 

 

 

 

(31,136

)

 

 

Total EBITDA

 

$

208,938

 

 

33

%

 

$

191,707

 

 

33

%

 

$

391,751

 

 

31

%

 

$

326,752

 

 

29

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Represents 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 and non-cash inventory charges related to the NDC acquisition. Adjusted operating profit is defined as operating profit plus certain adjustments, such as non-cash inventory charges associated with the NDC acquisition. EBITDA is defined as adjusted operating profit plus depreciation and amortization.

NORDSON CORPORATION

RECONCILIATION OF NON-GAAP MEASURES - PROFITABILITY (Unaudited)

(Dollars in thousands)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

April 30, 2022

 

April 30, 2021

 

April 30, 2022

 

April 30, 2021

GAAP AS REPORTED

 

 

 

 

 

 

 

 

Operating profit

 

$

183,973

 

 

$

166,391

 

 

$

339,833

 

 

$

275,416

 

Other / interest expense - net

 

 

(44,706

)

 

 

(10,533

)

 

 

(48,599

)

 

 

(21,746

)

Net income

 

 

109,634

 

 

 

124,144

 

 

 

230,043

 

 

 

201,726

 

Diluted earnings per share

 

$

1.88

 

 

$

2.12

 

 

$

3.93

 

 

$

3.44

 

 

 

 

 

 

 

 

 

 

Shares outstanding - diluted

 

 

58,382

 

 

 

58,652

 

 

 

58,606

 

 

 

58,703

 

 

 

 

 

 

 

 

 

 

OPERATING PROFIT ADJUSTMENTS

 

 

 

 

 

 

 

 

Inventory step-up amortization

 

$

 

 

$

 

 

$

1,563

 

 

$

 

 

 

 

 

 

 

 

 

 

NON-OPERATING EXPENSE ADJUSTMENTS

 

 

 

 

 

 

 

 

Pension settlement loss

 

$

41,221

 

 

$

 

 

$

41,221

 

 

$

 

 

 

 

 

 

 

 

 

 

Total adjustments

 

$

41,221

 

 

$

 

 

$

42,784

 

 

$

 

 

 

 

 

 

 

 

 

 

Adjustments net of tax

 

$

32,450

 

 

$

 

 

$

33,795

 

 

$

 

EPS effect of adjustments

 

$

0.56

 

 

$

 

 

$

0.58

 

 

$

 

 

 

 

 

 

 

 

 

 

NON-GAAP MEASURES-ADJUSTED PROFITABILITY

 

 

 

 

 

 

 

 

Operating profit (1)

 

$

183,973

 

 

$

166,391

 

 

$

341,396

 

 

$

275,416

 

Operating profit % of sales

 

 

29.0

%

 

 

28.2

%

 

 

27.4

%

 

 

24.7

%

Net income (2)

 

$

142,084

 

 

$

124,144

 

 

$

263,838

 

 

$

201,726

 

Diluted earnings per share (3)

 

$

2.43

 

 

$

2.12

 

 

$

4.50

 

 

$

3.44

 

(1) Adjusted operating profit is defined as operating profit plus certain adjustments such as non-cash inventory charges related to the NDC acquisition. 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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