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Published: 2023-05-22 16:41:33 ET
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EX-99.1 2 ndsn-q220238kxex991.htm EX-99.1 Document






Nordson Corporation Reports Second Quarter Fiscal 2023 Results and Updates Annual Guidance

Second Quarter:
•Sales were $650 million, a 2% increase over the prior year
•Operating profit was $173 million
•Adjusted operating profit was $176 million, 27% of sales
•Earnings per share were $2.21
•Adjusted earnings per share were $2.26 compared to $2.43 in the prior year

Guidance:
•Maintaining previously issued full-year fiscal 2023 revenue guidance of 0% to 3% growth over record fiscal 2022 and narrowing adjusted earnings per diluted share to the range of $8.90 to $9.30 per share
WESTLAKE, Ohio--(BUSINESS WIRE)--May 22, 2023--Nordson Corporation (Nasdaq: NDSN) today reported results for the fiscal second quarter ended April 30, 2023. Sales were $650 million, a 2% increase compared to the prior year’s second quarter sales of $635 million. The increase in second quarter 2023 sales includes an organic increase of 1% and a favorable acquisition impact of 3%, offset by unfavorable currency translation of 2%. The organic sales increase was driven by strong 7% growth in Asia Pacific.
Operating profit in the second quarter was $173 million. Adjusted operating profit, excluding severance costs, totaled $176 million, or 27% of sales, compared to prior year adjusted operating profit of $184 million. The 4% decrease in operating profit was driven by the impact of unfavorable currency translation and sales mix. EBITDA for the second quarter of 2023 totaled $203 million, or 31% of sales.
Net income was $128 million, or $2.21 earnings per diluted share. Adjusted net income was $130 million, a $12 million decrease from the prior year earnings of $142 million. The decrease was driven by lower operating profit and increased interest expense. Second quarter 2023 adjusted earnings per diluted share were $2.26, a 7% decrease from the prior year adjusted earnings per diluted share of $2.43.
“The diversification of our business came through once again in our second quarter performance. Solid growth in our industrials, consumer non-durable and medical interventional solutions product lines helped offset the sales decrease in our products serving the semiconductor and the biopharmaceutical end markets enabling strong profitability of 31% EBITDA. While we remain invested in our direct sales teams and NBS Next training programs, our segments are taking targeted cost actions to address the current business environment. The combination of these choices will continue driving long-term profitable growth,” said Sundaram Nagarajan, president and chief executive officer.
Second Quarter Segment Results
Industrial Precision Solutions sales of $336 million represents organic growth of 9% over the prior year, offset by unfavorable currency translation impacts. The growth was driven primarily by robust demand in the polymer processing product lines and for products in the consumer non-durable end market across most regions. Operating profit in the quarter was $112 million, or 33% of sales, a 9% increase over the prior year second quarter.
Medical and Fluid Solutions sales of $167 million decreased 3% compared to the prior year second quarter. Organic sales decreased 2% and currency had an unfavorable impact of 1%. The organic sales decrease was driven by significant softness in the medical fluid components and fluid solutions product lines, offset by strong demand for medical interventional solutions product lines. Operating profit totaled $48 million. Adjusted operating profit, which excludes severance, was $49 million, or 30% of sales, a decrease of 15% compared to the prior year second quarter operating profit. The decreased segment profitability continued to be impacted by meaningful sales mix changes within medical product lines and related factory inefficiencies due to reduced volumes.
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Advanced Technology Solutions sales of $148 million increased 1% compared to the prior year second quarter. Sales benefited from the acquisition impact of 12% partially offset by a decrease in organic sales of 10% and an unfavorable currency impact of 2%. The organic sales decrease was driven by electronics dispense products serving semiconductor end markets in the Americas and Asia, slightly offset by continued growth in test and inspection product lines. Operating profit was $26 million. Adjusted operating profit, which excludes severance, totaled $28 million, or 19% of sales, was down 30% compared to the prior year second quarter operating profit. The decline in operating profit during the quarter was driven by the organic sales decrease, partially offset by profitable acquisition growth.

Outlook
Backlog entering the second half of fiscal 2023 remains strong at $950 million and continues to be heavily weighted toward systems and medical interventional solutions. Order entry has been steady throughout the quarter. Based on current visibility, we now expect fourth quarter sales to be the strongest of the year, increasing low-mid single digits over the prior year fourth quarter. We expect third quarter sales to be comparable to the prior year, as a result of the pull forward of certain systems sales into the second quarter. On balance, the Company is maintaining its previously issued full-year revenue growth guidance of 0% to 3% over record fiscal 2022 and narrowing adjusted earnings guidance to the range of $8.90 to $9.30.

Nordson management will provide additional commentary on these results and outlook during its previously announced webcast on Tuesday, May 23, 2023, 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, www.twitter.com/Nordson_Corp or www.facebook.com/nordson.
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NORDSON CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Dollars in thousands except for per-share amounts)
Three Months EndedSix Months Ended
April 30, 2023April 30, 2022April 30, 2023April 30, 2022
Sales$650,165 $635,403 $1,260,642 $1,244,569 
Cost of sales298,040 277,768 579,650 546,800 
Gross profit352,125 357,635 680,992 697,769 
Gross margin %54.2 %56.3 %54.0 %56.1 %
Selling & administrative expenses179,618 173,662 364,266 357,936 
Operating profit172,507 183,973 316,726 339,833 
Interest expense - net(9,475)(4,942)(19,418)(10,127)
Other expense - net (1)
(1,405)(39,764)(4,601)(38,472)
Income before income taxes161,627 139,267 292,707 291,234 
Income taxes34,064 29,633 60,883 61,191 
Net income$127,563 $109,634 $231,824 $230,043 
Weighted-average common shares outstanding:
Basic57,184 57,784 57,177 57,971 
Diluted57,680 58,382 57,721 58,606 
Earnings per share:
Basic earnings$2.23 $1.90 $4.05 $3.97 
Diluted earnings$2.21 $1.88 $4.02 $3.93 
(1) Three and six months ended April 30, 2022, include pension settlement charge of $41,221.

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NORDSON CORPORATION
CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollars in thousands)
April 30, 2023October 31, 2022
Cash and cash equivalents$129,073 $163,457 
Receivables - net527,851 537,313 
Inventories - net440,179 383,398 
Other current assets58,338 48,803 
Total current assets1,155,441 1,132,971 
Property, plant and equipment - net354,669 353,442 
Goodwill2,110,471 1,804,693 
Other assets572,534 529,269 
$4,193,115 $3,820,375 
Current maturities of long-term debt and notes payable$603,343 $392,537 
Accounts payable and accrued liabilities387,049 441,666 
Total current liabilities990,392 834,203 
Long-term debt345,899 345,320 
Other liabilities359,822 346,477 
Total shareholders' equity2,497,002 2,294,375 
$4,193,115 $3,820,375 

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NORDSON CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
(Dollars in thousands)
Six Months Ended
April 30, 2023April 30, 2022
Cash flows from operating activities:
Net income$231,824 $230,043 
Depreciation and amortization53,535 50,355 
Other non-cash items (1)
11,458 51,449 
Changes in working capital    (45,857)(85,070)
Other36,945 (32,276)
Net cash provided by operating activities    287,905 214,501 
Cash flows from investing activities:
Additions to property, plant and equipment(15,349)(24,776)
Acquisition of businesses, net of cash acquired(377,843)(171,613)
Other - net39 15 
Net cash used in investing activities(393,153)(196,374)
Cash flows from financing activities:
Net issuance of long-term debt184,617 1,654 
Repayment of finance lease obligations(2,775)(2,620)
Dividends paid(74,463)(59,301)
Issuance of common shares11,808 7,798 
Purchase of treasury shares(54,365)(140,466)
Net cash provided (used) in financing activities64,822 (192,935)
Effect of exchange rate change on cash:6,042 (4,272)
Net change in cash and cash equivalents(34,384)(179,080)
Cash and cash equivalents:
Beginning of period163,457 299,972 
End of period$129,073 $120,892 
(1) Six months ended April 30, 2022, includes pension settlement charge of $41,221.

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NORDSON CORPORATION
SALES BY GEOGRAPHIC SEGMENT (Unaudited)
(Dollars in thousands)
Three Months EndedSales Variance
April 30, 2023April 30, 2022OrganicAcquisitionsCurrencyTotal
SALES BY SEGMENT
Industrial Precision Solutions$335,807 $316,434 8.5 %— %(2.4)%6.1 %
Medical and Fluid Solutions166,526 172,212 (2.3)%— %(1.0)%(3.3)%
Advanced Technology Solutions147,832 146,757 (9.9)%12.3 %(1.7)%0.7 %
Total sales$650,165 $635,403 1.3 %2.8 %(1.8)%2.3 %
SALES BY GEOGRAPHIC REGION
Americas$278,731 $273,753 (0.6)%2.4 %— %1.8 %
Europe167,904 172,256 (2.3)%2.1 %(2.3)%(2.5)%
Asia Pacific203,530 189,394 7.4 %4.2 %(4.1)%7.5 %
Total sales$650,165 $635,403 1.3 %2.8 %(1.8)%2.3 %
Six Months EndedSales Variance
April 30, 2023April 30, 2022OrganicAcquisitionsCurrencyTotal
SALES BY SEGMENT
Industrial Precision Solutions$647,353 $640,367 4.8 %— %(3.7)%1.1 %
Medical and Fluid Solutions320,813 330,996 (1.5)%— %(1.6)%(3.1)%
Advanced Technology Solutions292,476 273,206 (3.3)%12.9 %(2.5)%7.1 %
Total sales$1,260,642 $1,244,569 1.3 %2.8 %(2.8)%1.3 %
SALES BY GEOGRAPHIC REGION
Americas$543,610 $513,654 3.7 %2.2 %(0.1)%5.8 %
Europe330,843 328,241 3.6 %1.7 %(4.5)%0.8 %
Asia Pacific386,189 402,674 (3.6)%4.4 %(4.9)%(4.1)%
Total sales$1,260,642 $1,244,569 1.3 %2.8 %(2.8)%1.3 %
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NORDSON CORPORATION
RECONCILIATION OF NON-GAAP MEASURES - ADJUSTED OPERATING PROFIT AND EBITDA (Unaudited)
(Dollars in thousands)
Three Months EndedSix Months Ended
April 30, 2023April 30, 2022April 30, 2023April 30, 2022
SALES BY SEGMENT
Industrial Precision Solutions$335,807 $316,434 $647,353 $640,367 
Medical and Fluid Solutions166,526 172,212 320,813 330,996 
Advanced Technology Solutions147,832 146,757 292,476 273,206 
Total sales$650,165 $635,403 $1,260,642 $1,244,569 
OPERATING PROFIT
Industrial Precision Solutions$111,773 $102,196 $214,093 $204,383 
Medical and Fluid Solutions47,922 58,314 87,307 107,407 
Advanced Technology Solutions26,090 40,144 43,053 67,378 
Corporate(13,278)(16,681)(27,727)(39,335)
Total operating profit$172,507 $183,973 $316,726 $339,833 
OPERATING PROFIT ADJUSTMENTS (1)
Industrial Precision Solutions$— $— $— $1,563 
Medical and Fluid Solutions1,479 — 1,479 — 
Advanced Technology Solutions1,960 — 12,255 — 
Total adjustments$3,439 $— $13,734 $1,563 
ADJUSTED OPERATING PROFIT (NON-GAAP) (2)
% of Sales% of Sales% of Sales% of Sales
Industrial Precision Solutions$111,773 33%$102,196 32%$214,093 33%$205,946 32%
Medical and Fluid Solutions49,401 30%58,314 34%88,786 28%107,407 32%
Advanced Technology Solutions28,050 19%40,144 27%55,308 19%67,378 25%
Corporate(13,278)(16,681)(27,727)(39,335)
Total operating profit - adjusted$175,946 27%$183,973 29%$330,460 26%$341,396 27%
DEPRECIATION & AMORTIZATION
Industrial Precision Solutions$7,285 $6,916 $14,130 $14,358 
Medical and Fluid Solutions13,683 13,578 27,308 27,125 
Advanced Technology Solutions4,010 2,247 7,822 4,510 
Corporate2,122 2,224 4,275 4,362 
Total depreciation & amortization$27,100 $24,965 $53,535 $50,355 
EBITDA (NON-GAAP) (2)
Industrial Precision Solutions$119,058 35%$109,112 34%$228,223 35%$220,304 34%
Medical and Fluid Solutions63,084 38%71,892 42%116,094 36%134,532 41%
Advanced Technology Solutions32,060 22%42,391 29%63,130 22%71,888 26%
Corporate(11,156)(14,457)(23,452)(34,973)
Total EBITDA$203,046 31%$208,938 33%$383,995 30%$391,751 31%
(1) Represents severance, as well as fees and non-cash inventory charges associated with acquisitions.
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(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, fees and non-cash inventory charges associated with acquisitions. EBITDA is defined as adjusted operating profit plus depreciation and amortization.
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NORDSON CORPORATION
RECONCILIATION OF NON-GAAP MEASURES - PROFITABILITY (Unaudited)
(Dollars in thousands)
Three Months EndedSix Months Ended
April 30, 2023April 30, 2022April 30, 2023April 30, 2022
GAAP AS REPORTED
Operating profit$172,507 $183,973 $316,726 $339,833 
Other / interest expense - net(10,880)(44,706)(24,019)(48,599)
Net income127,563 109,634 231,824 230,043 
Diluted earnings per share$2.21 $1.88 $4.02 $3.93 
Shares outstanding - diluted57,680 58,382 57,721 58,606 
OPERATING PROFIT ADJUSTMENTS
Inventory step-up amortization$— $— $4,306 $1,563 
Severance and other 3,439 — $9,428 $— 
NON-OPERATING EXPENSE ADJUSTMENTS
Pension settlement loss$— $41,221 $— $41,221 
Total adjustments$3,439 $41,221 $13,734 $42,784 
Adjustments net of tax$2,714 $32,450 $10,877 $33,795 
EPS effect of adjustments and other discrete tax items$0.05 $0.56 $0.19 $0.58 
NON-GAAP MEASURES-ADJUSTED PROFITABILITY
Operating profit (1)
$175,946 $183,973 $330,460 $341,396 
Operating profit % of sales27.1 %29.0 %26.2 %27.4 %
Net income (2)
$130,277 $142,084 $242,701 $263,838 
Diluted earnings per share (3)
$2.26 $2.43 $4.21 $4.50 
(1) Adjusted operating profit is defined as operating profit plus certain adjustments, such as severance, fees and non-cash inventory charges related to acquisitions. 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.
Contact
Lara Mahoney
Vice President,
Investor Relations & Corporate Communications
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440.204.9985
Lara.Mahoney@nordson.com
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