- Sales grow 9 percent over prior year’s second quarter to $417
million, inclusive of 4 percent organic growth
- Operating profit increases 13 percent to $93
million compared to $82 million a year ago, with operating margin of 22
percent
- GAAP diluted EPS increases 14% to
$0.96 for the quarter compared to $0.84 a year ago
- Pro-forma 12 week order rates increase 9
percent over same period a year ago
- Third quarter 2014 guidance: sales expected to
increase 9 to 13 percent over prior year, inclusive of 3 to 7 percent organic
volume growth; GAAP diluted EPS in the range of $1.06 to $1.16
Westlake, Ohio, USA – May 22, 2014 – Nordson Corporation (Nasdaq:
NDSN) today reported results for the second quarter of fiscal year 2014.
For the quarter ending April 30, 2014, sales were $417 million, a 9
percent increase over the prior year’s second quarter. This
increase in sales included a 4 percent increase in organic volume and a 5
percent increase related to the first year effect of acquisitions.
The effect of currency translation compared to the same period a year ago
was not material. Operating profit was $93 million, net income was
$62 million, and diluted earnings per share were $0.96. Prior year
second quarter sales, operating profit, net income and diluted earnings per
share were $382 million, $82 million, $55 million and $0.84,
respectively. A reconciliation of GAAP diluted EPS to normalized
amounts and a calculation of free cash flow are included in the attached
tables.
“Our global team delivered excellent results in the quarter, as
innovative products and a strong focus on meeting customer needs helped drive
solid organic growth in sales in the majority of our product lines and regions,”
said Nordson President and Chief Executive Officer Michael F.
Hilton. “Sales, operating profit, and
earnings per share were all second quarter records for Nordson. On
a sequential basis, we leveraged strong top line growth of 16 percent to
generate incremental operating margin of 67 percent.
We also executed on our strategy of returning value to our
shareholders by investing $53 million for the repurchase of shares and by
distributing approximately $12 million in dividends during the quarter.
Free cash flow in the quarter before dividends was $46 million and our
balance sheet has significant capacity for ongoing investments.”
Second Quarter Segment Results
Sales volume in Adhesive Dispensing Systems improved 18 percent
compared to the second quarter a year ago, inclusive of 8 percent organic growth
and 10 percent growth from the first year effect of the Kreyenborg acquisition.
“The organic growth was driven by rigid packaging, general product assembly,
disposable hygiene and polymer processing end markets, and by growth in every
geography, with the exception of Japan which was flat,” said Hilton.
The Adhesive Dispensing segment’s operating margin was 27 percent, up 4
percentage points from the first quarter and up 1 percentage point over the
prior year’s second quarter.
In Advanced Technology Systems, second quarter sales volume decreased 3
percent over the prior year. “Similar to conditions we reported
last quarter, solid organic growth in products for electronics test and
inspection and fluid management, along with surface treatment markets, was
offset by softness in demand for automated dispensing equipment in selected
mobile electronic device end markets,” said Hilton.
“Encouragingly, we have begun to see an increase in orders for these
automated systems in recent weeks and we expect to generate solid sales growth
in our third quarter within this segment.”
Geographically, organic sales growth in the second quarter
over the prior year in the U.S. and Europe was offset by softness in other
regions. Operating margin for the Advanced Technology segment was
24 percent in the second quarter, up 13 percentage points from the first
quarter.
Industrial Coating Systems sales volume increased 4 percent compared to
the second quarter a year ago. “Nordson
generated strong organic growth in most all product lines, driven by demand in
consumer durable and industrial end markets, food and beverage end markets,
and UV curing systems for industrial and electronics end markets,”
said Hilton. “The organic growth was broad based, with increases
in all regions except the Americas as compared to the same period a year
ago. Overall segment operating margin was 16 percent
in the second quarter, an increase of 7 percentage points compared to the first
quarter and 1 percentage point over the prior year’s second
quarter.
Detailed results by operating segment and geography are included in the
attached tables, as is an earnings per share reconciliation table.
Fiscal Year-to-Date Results
For the first half of fiscal year 2014, sales were $777 million, a 7
percent volume increase over the prior year’s first half. This
increase in sales included a 1 percent increase in organic volume and a 6
percent increase related to the first year effect of acquisitions.
The effect of currency translation compared to the same period a year ago
was not material. First half operating profit was $147 million,
net income was $97 million and GAAP diluted earnings per share were $1.50.
Prior year first half sales, operating profit, net income and
diluted earnings per share were $729 million, $144 million, $97 million and
$1.49, respectively.
“After a soft start to our year, Nordson began to gain momentum during
our second quarter, a trend we expect to continue as the year progresses,” said
Hilton. “Sequential sales volume improvement drove improved profitability while
we continued to execute on initiatives that will drive growth, performance and
sustainable competitive advantage over the long term.”
Order Rates and Backlog
Order rates for the 12-week period ending May 18, 2014, measured in
constant currency, increased by 9 percent over the same period a year
ago. Order rates by segment and geography are provided in the
accompanying financial tables, with pro-forma growth in order rates calculated
as though fiscal year 2013 acquisitions were owned in both years.
Backlog for the quarter ended April 30, 2014 was approximately $247
million, an increase of 25 percent compared to the same period a year ago, and
inclusive of 10 percent organic growth and 15 percent growth due to the
Kreyenborg acquisition. Current backlog increased 7 percent
compared to the first quarter ended January 31, 2014.
Backlog amounts are calculated at April 30, 2014 exchange
rates.
Outlook
For the third quarter of fiscal 2014, sales growth is expected to be in
the range of 9 percent to 13 percent as compared to the third quarter a year
ago. This growth is inclusive of organic volume growth of 3 to 7
percent, 5 percent growth from the first year effect of acquisitions, and a
positive 1 percent currency translation effect based on the current exchange
rate environment. GAAP diluted earnings per share are expected to
be in the range of $1.06 to $1.16.
“Based on our backlog and current 12 week order rates, the midpoint of
our sales guidance includes organic growth of 5 percent over the prior year’s
third quarter, a strong level given the current macroeconomic environment,” said
Hilton. “This growth is being driven by the value we provide to
our customers and the many opportunities in the diverse end markets we serve.
At the midpoint of our guidance we are forecasting operating
margin of about 24 percent in the third quarter, an improvement both on a
year-over-year and sequential basis. Our global team
can be counted on to continue executing at a high level, and we expect our
ongoing focus on customer satisfaction, global support, differentiated
technology and continuous improvement should result in strong long-term returns
for our shareholders.”
Nordson will broadcast its second-quarter conference call on its web
site at www.nordson.com/investors on Friday,
May 23, 2014 at 8:30 a.m. eastern time. 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 James R. Jaye, Director of
Communications & Investor Relations at (440) 414-5639 or jim.jaye@nordson.com.
Except for historical information and comparisons contained herein,
statements included in this release may constitute “forward-looking statements,”
as defined by the Private Securities Litigation Reform Act of 1995. These
statements involve a number of risks, uncertainties and other factors, as
discussed in the company’s filing with the Securities and Exchange Commission
that could cause actual results to differ.
Nordson Corporation engineers, manufactures and markets differentiated
products and systems used for the precision dispensing
of adhesives,
coatings,
sealants, biomaterials, polymers, plastics and other materials,
fluid
management, test and
inspection, UV curing and
plasma
surface treatment, all supported by application
expertise and direct global sales and service. Nordson serves a
wide variety of consumer non-durable, durable and technology end markets
including packaging, nonwovens, electronics, medical, appliances, energy,
transportation, construction, and general product assembly and finishing.
Founded in 1954 and headquartered in Westlake, Ohio, the company has
operations and support offices in more than 30 countries.
Visit Nordson on the web at http://www.nordson.com, @Nordson_Corp,
or www.facebook.com/nordson.
# # #
CONTACT: Nordson Corporation
James R. Jaye (Director,
Communications and Investor Relations)
440.414.5639
Jim.Jaye@nordson.com