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Published: 2023-08-21 00:00:00 ET
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EX-99.1 2 ndsn-q320238kxex991.htm EX-99.1 Document






Nordson Corporation Reports Third Quarter Fiscal 2023 Results and Narrows Annual Guidance

Third Quarter:
•Sales were $649 million, a 2% decrease from the prior year
•Operating profit was $171 million
•EBITDA was $208 million, 32% of sales
•Earnings per share were $2.22
•Adjusted earnings per share were $2.35

Guidance:
•Narrowing previously issued full-year fiscal 2023 revenue guidance to 0% to 2% growth over record fiscal 2022 and adjusted earnings per diluted share to the range of $8.90 to $9.05 per share
WESTLAKE, Ohio--(BUSINESS WIRE)--August 21, 2023--Nordson Corporation (Nasdaq: NDSN) today reported results for the fiscal third quarter ended July 31, 2023. Sales were $649 million, a 2% decrease compared to the prior year’s third quarter sales of $662 million. The decrease in third quarter 2023 sales includes an organic decrease of 5%, partially offset by a favorable acquisition impact. The organic sales decrease was driven by ongoing pressure in electronics, primarily semiconductor dispense applications, and biopharma end markets, offset by strong growth in medical interventional solutions and polymer processing product lines.
Operating profit in the third quarter was $171 million. Adjusted operating profit, excluding $8 million in non-recurring acquisition costs plus severance costs, totaled $181 million, or 28% of sales, compared to prior year adjusted operating profit of $188 million. The 4% decrease in adjusted operating profit was driven by lower sales volume. EBITDA for the third quarter of fiscal 2023 totaled $208 million, or 32% of sales.
Net income was $128 million, or $2.22 of earnings per diluted share. Adjusted net income was $136 million, a $9 million decrease from the prior year earnings of $144 million. Third quarter 2023 adjusted earnings per diluted share were $2.35, a 6% decrease from the prior year adjusted earnings per diluted share of $2.49. The decrease was driven by increased interest expense and lower operating profit.
“During the fiscal third quarter, our team delivered strong profitability with 32% EBITDA and solid cash flow against persisting demand weakness in electronics and biopharma end markets. The team remains focused on the execution of our Ascend strategy to achieve top tier growth with leading margins and returns, as evidenced by the recently announced acquisition of ARAG and the steadfast deployment of the NBS Next growth framework. We are looking forward to the recovery of our cyclical end markets and the related incremental earnings power associated with the growth,” said Sundaram Nagarajan, president and chief executive officer.
Third Quarter Segment Results
Industrial Precision Solutions sales of $338 million decreased 1% from the prior year. The decrease was driven primarily by product assembly and nonwovens product lines in Asia Pacific, partially offset by continued strength in the polymer processing product lines. Operating profit in the quarter was $115 million, or 34% of sales, a 4% decrease from the prior year third quarter. The decrease in operating profit was driven by lower sales volume and changes in sales mix.
Medical and Fluid Solutions sales of $171 million decreased 4% compared to the prior year third quarter. The decrease was driven by continued softness in the medical fluid components and fluid solutions product lines, partially offset by strong double-digit demand for medical interventional solutions product lines. Operating profit was $54 million, or 32% of sales, a decrease of 11% compared to the prior year third quarter adjusted operating profit. The decreased segment profitability continued to be impacted by lower sales volume and sales mix changes within medical product lines.
Advanced Technology Solutions sales of $140 million decreased 3% compared to the prior year third quarter, as the favorable acquisition impact of 11% was more than offset by a decrease in organic sales of 13%. The organic sales decrease was driven
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by electronics dispense products serving semiconductor end markets, predominantly in Asia Pacific, slightly offset by continued growth in test and inspection product lines. Operating profit was $27 million. Adjusted operating profit, which excludes severance costs, totaled $29 million, or 21% of sales, an increase of 3% compared to the prior year third quarter operating profit. The improvement in operating profit was driven by favorable sales mix and realization of cost savings actions.

Outlook
Backlog entering the fourth quarter of fiscal 2023 remains strong at $890 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 expect fourth quarter sales to be the strongest of the year, increasing low-mid single digits over the prior year fourth quarter. This increase includes approximately $20-$30 million of sales from the acquisition of the ARAG Group, which is forecasted to close in late August. On balance, the Company is narrowing its previously issued full-year revenue growth guidance to 0% to 2% over record fiscal 2022 and adjusted earnings guidance to the range of $8.90 to $9.05.
Nordson management will provide additional commentary on these results and outlook during its previously announced webcast on Tuesday, August 22, 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 EndedNine Months Ended
July 31, 2023July 31, 2022July 31, 2023July 31, 2022
Sales$648,677 $662,128 $1,909,319 $1,906,697 
Cost of sales288,357 296,544 868,007 843,344 
Gross profit360,320 365,584 1,041,312 1,063,353 
Gross margin %55.5 %55.2 %54.5 %55.8 %
Selling & administrative expenses189,324 180,666 553,590 538,602 
Operating profit170,996 184,918 487,722 524,751 
Interest expense - net(11,486)(5,165)(30,904)(15,292)
Other income (expense) - net (1)
2,542 752 (2,059)(37,720)
Income before income taxes162,052 180,505 454,759 471,739 
Income taxes34,161 38,694 95,044 99,885 
Net income$127,891 $141,811 $359,715 $371,854 
Weighted-average common shares outstanding:
Basic56,989 57,409 57,114 57,782 
Diluted57,530 57,969 57,657 58,392 
Earnings per share:
Basic earnings$2.24 $2.47 $6.30 $6.44 
Diluted earnings$2.22 $2.45 $6.24 $6.37 
(1) Nine months ended July 31, 2022, includes pension settlement charge of $41,221.

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NORDSON CORPORATION
CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollars in thousands)
July 31, 2023October 31, 2022
Cash and cash equivalents$143,138 $163,457 
Receivables - net533,793 537,313 
Inventories - net439,741 383,398 
Other current assets60,249 48,803 
Total current assets1,176,921 1,132,971 
Property, plant and equipment - net350,735 353,442 
Goodwill2,110,780 1,804,693 
Other assets558,596 529,269 
$4,197,032 $3,820,375 
Current maturities of long-term debt and notes payable$110,643 $392,537 
Accounts payable and accrued liabilities417,966 441,666 
Total current liabilities528,609 834,203 
Long-term debt727,455 345,320 
Other liabilities361,162 346,477 
Total shareholders' equity2,579,806 2,294,375 
$4,197,032 $3,820,375 

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NORDSON CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
(Dollars in thousands)
Nine Months Ended
July 31, 2023July 31, 2022
Cash flows from operating activities:
Net income$359,715 $371,854 
Depreciation and amortization80,637 75,242 
Other non-cash items (1)
18,523 54,928 
Changes in working capital    19,197 (162,333)
Net cash provided by operating activities    478,072 339,691 
Cash flows from investing activities:
Additions to property, plant and equipment(24,244)(39,373)
Acquisition of businesses, net of cash acquired(377,843)(171,613)
Other - net91 415 
Net cash used in investing activities(401,996)(210,571)
Cash flows from financing activities:
Net issuance of long-term debt73,956 22,905 
Repayment of finance lease obligations(4,769)(3,726)
Dividends paid(111,547)(88,675)
Issuance of common shares18,449 8,845 
Purchase of treasury shares(78,163)(233,767)
Net cash used in financing activities(102,074)(294,418)
Effect of exchange rate change on cash:5,679 (5,937)
Net change in cash and cash equivalents(20,319)(171,235)
Cash and cash equivalents:
Beginning of period163,457 299,972 
End of period$143,138 $128,737 
(1) Nine months ended July 31, 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
July 31, 2023July 31, 2022OrganicAcquisitionsCurrencyTotal
SALES BY SEGMENT
Industrial Precision Solutions$338,257 $341,215 (1.5)%— %0.6 %(0.9)%
Medical and Fluid Solutions170,871 177,840 (3.9)%— %— %(3.9)%
Advanced Technology Solutions139,549 143,073 (12.8)%10.7 %(0.4)%(2.5)%
Total sales$648,677 $662,128 (4.5)%2.4 %0.1 %(2.0)%
SALES BY GEOGRAPHIC REGION
Americas$290,515 $279,205 2.2 %1.2 %0.7 %4.1 %
Europe167,536 151,659 5.7 %1.4 %3.4 %10.5 %
Asia Pacific190,626 231,264 (20.0)%4.3 %(1.9)%(17.6)%
Total sales$648,677 $662,128 (4.5)%2.4 %0.1 %(2.0)%
Nine Months EndedSales Variance
July 31, 2023July 31, 2022OrganicAcquisitionsCurrencyTotal
SALES BY SEGMENT
Industrial Precision Solutions$985,610 $981,582 2.6 %— %(2.2)%0.4 %
Medical and Fluid Solutions491,683 508,836 (2.4)%— %(1.0)%(3.4)%
Advanced Technology Solutions432,026 416,279 (6.6)%12.2 %(1.8)%3.8 %
Total sales$1,909,319 $1,906,697 (0.7)%2.6 %(1.8)%0.1 %
SALES BY GEOGRAPHIC REGION
Americas$834,125 $792,859 3.2 %1.9 %0.1 %5.2 %
Europe498,379 479,900 4.3 %1.6 %(2.0)%3.9 %
Asia Pacific576,815 633,938 (9.7)%4.4 %(3.7)%(9.0)%
Total sales$1,909,319 $1,906,697 (0.7)%2.6 %(1.8)%0.1 %
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NORDSON CORPORATION
RECONCILIATION OF NON-GAAP MEASURES - ADJUSTED OPERATING PROFIT AND EBITDA (Unaudited)
(Dollars in thousands)
Three Months EndedNine Months Ended
July 31, 2023July 31, 2022July 31, 2023July 31, 2022
SALES BY SEGMENT
Industrial Precision Solutions$338,257 $341,215 $985,610 $981,582 
Medical and Fluid Solutions170,871 177,840 491,683 508,836 
Advanced Technology Solutions139,549 143,073 432,026 416,279 
Total sales$648,677 $662,128 $1,909,319 $1,906,697 
OPERATING PROFIT
Industrial Precision Solutions$115,346 $119,706 $329,439 $324,089 
Medical and Fluid Solutions54,019 58,103 141,326 165,510 
Advanced Technology Solutions27,083 28,155 70,136 95,533 
Corporate(25,452)(21,046)(53,179)(60,381)
Total operating profit$170,996 $184,918 $487,722 $524,751 
OPERATING PROFIT ADJUSTMENTS (1)
Industrial Precision Solutions$— $— $— $1,563 
Medical and Fluid Solutions— 2,498 1,479 2,498 
Advanced Technology Solutions2,049 — 14,304 — 
Corporate7,732 897 7,731 897 
Total adjustments$9,781 $3,395 $23,514 $4,958 
ADJUSTED OPERATING PROFIT (NON-GAAP) (2)
% of Sales% of Sales% of Sales% of Sales
Industrial Precision Solutions$115,346 34%$119,706 35%$329,439 33%$325,652 33%
Medical and Fluid Solutions54,019 32%60,601 34%142,805 29%168,008 33%
Advanced Technology Solutions29,132 21%28,155 20%84,440 20%95,533 23%
Corporate(17,720)(20,149)(45,448)(59,484)
Total operating profit - adjusted$180,777 28%$188,313 28%$511,236 27%$529,709 28%
DEPRECIATION & AMORTIZATION
Industrial Precision Solutions$7,036 $6,347 $21,166 $20,705 
Medical and Fluid Solutions14,133 15,021 41,441 42,146 
Advanced Technology Solutions3,834 2,195 11,656 6,705 
Corporate2,099 1,324 6,374 5,686 
Total depreciation & amortization$27,102 $24,887 $80,637 $75,242 
EBITDA (NON-GAAP) (2)
Industrial Precision Solutions$122,382 36%$126,053 37%$350,605 36%$346,357 35%
Medical and Fluid Solutions68,152 40%75,622 43%184,246 37%210,154 41%
Advanced Technology Solutions32,966 24%30,350 21%96,096 22%102,238 25%
Corporate(15,621)(18,825)(39,074)(53,798)
Total EBITDA$207,879 32%$213,200 32%$591,873 31%$604,951 32%
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(1) Represents severance, as well as fees and non-cash inventory charges associated with acquisitions.
(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 EndedNine Months Ended
July 31, 2023July 31, 2022July 31, 2023July 31, 2022
GAAP AS REPORTED
Operating profit$170,996 $184,918 $487,722 $524,751 
Other / interest expense - net(8,944)(4,413)(32,963)(53,012)
Net income127,891 141,811 359,715 371,854 
Diluted earnings per share$2.22 $2.45 $6.24 $6.37 
Shares outstanding - diluted57,530 57,969 57,657 58,392 
OPERATING PROFIT ADJUSTMENTS
Inventory step-up amortization$— $— $4,306 $1,563 
Acquisition Costs7,732 — 13,721 — 
Severance and other 2,049 3,395 5,487 3,395 
NON-OPERATING EXPENSE ADJUSTMENTS
Pension settlement loss$— $— $— $41,221 
Total adjustments$9,781 $3,395 $23,514 $46,179 
Adjustments net of tax$7,719 $2,667 $18,600 $36,401 
EPS effect of adjustments and other discrete tax items$0.13 $0.04 $0.32 $0.62 
NON-GAAP MEASURES-ADJUSTED PROFITABILITY
Operating profit (1)
$180,777 $188,313 $511,236 $529,709 
Operating profit % of sales27.9 %28.4 %26.8 %27.8 %
Net income (2)
$135,610 $144,478 $378,315 $408,255 
Diluted earnings per share (3)
$2.35 $2.49 $6.56 $6.99 
(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,
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Investor Relations & Corporate Communications
440.204.9985
Lara.Mahoney@nordson.com
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