Fourth Quarter:
- Sales were $719 million, a 5% increase over prior
year
- Operating profit was $185 million
- EBITDA was a quarterly record of $227 million, 32% of
sales
- Earnings per diluted share were $2.22
- Adjusted earnings per diluted share were $2.46
Full Year:
- Record sales of $2.6 billion, reflecting 2% growth over last
year’s record sales
- EBITDA was a record $819 million, 31% of sales
- Earnings per diluted share were $8.46
- Adjusted earnings per diluted share were $9.03
2024 Guidance:
- Fiscal 2024 forecasted sales growth of 4% to 9% and adjusted
earnings in the range of 1% to 8% growth over fiscal 2023
Nordson Corporation (Nasdaq: NDSN) today reported results for
the fiscal fourth quarter ended October 31, 2023. Sales were $719
million, a 5% increase compared to the prior year’s fourth quarter
sales of $684 million. The increase in fourth quarter 2023 sales
included the favorable 7% impact of acquisitions and favorable
currency translation of 1%, offset by an organic decrease of 3%.
The organic sales decrease was driven by electronics dispense and
biopharma product lines, offset by strong growth in medical
interventional solutions, industrial coatings and polymer
processing product lines.
Operating profit in the quarter was $185 million, or 26% of
sales. Adjusted operating profit, excluding $11 million in
non-recurring acquisition costs, totaled $196 million, or 27% of
sales. This was a 10% increase compared to prior year adjusted
operating profit of $178 million. EBITDA in the quarter totaled a
record $227 million, or 32% of sales, and represents an increase of
12% from the prior year EBITDA of $202 million.
Net income was $128 million, or earnings per diluted share of
$2.22. Adjusted net income was $142 million, excluding $7 million
of non-recurring financing costs related to the ARAG acquisition.
Fourth quarter 2023 adjusted earnings per diluted share were $2.46
compared to prior year adjusted earnings per diluted share of
$2.44. The increase was driven by higher sales, offset by higher
interest expense.
Commenting on the Company’s fiscal 2023 fourth quarter results,
Nordson President and Chief Executive Officer Sundaram Nagarajan
said, “The diversification of Nordson’s precision technology
portfolio and the progress of the Ascend strategy shined through
again this quarter. Our medical interventional solutions and
several industrial precision product lines delivered double-digit
growth in the quarter, while demand weakness in electronics and
biopharma end markets persisted as expected. Throughout this
dynamic year, our winning teams have remained focused on meeting
the needs of our customers. They demonstrated an owner mindset and
responded rapidly over the course of the year to changing market
conditions. This led to total company performance exceeding our
incremental profit targets. I am also very pleased with the
integration progress of our recent ARAG acquisition, which
contributed favorably to the fourth quarter results.”
Fourth Quarter Segment
Results
Industrial Precision Solutions sales of $405 million increased
14% compared to the prior year fourth quarter, driven by a 4%
organic sales increase, a favorable acquisition impact of 7%, and a
favorable currency impact of 2%. The organic sales increase was
driven by record sales in our packaging, industrial coating and
polymer processing product lines, largely driven by strong system
sales in the Americas and Asia Pacific. Adjusted operating profit,
which excludes non-recurring charges related to the ARAG
acquisition, totaled $136 million in the quarter, or 34% of sales,
an increase of 23% compared to the prior year operating profit. The
increase in operating profit was driven by higher sales and
improved sales mix.
Medical and Fluid Solutions sales of $169 million decreased 7%
compared to the prior year fourth quarter, driven by an organic
sales decrease of 8% that was partially offset by a favorable
currency impact of 1%. The organic sales decrease was driven by
continued softness in medical fluid components and fluid solutions
product lines, partially offset by double-digit growth in our
medical interventional solutions product lines. Operating profit
totaled $48 million in the quarter, or 28% of sales, a decrease of
7% compared to the prior year operating profit due to lower sales
volumes.
Advanced Technology Solutions sales of $145 million decreased 1%
compared to the prior year fourth quarter, driven by an organic
sales decrease of 16% that was principally offset by a favorable
acquisition impact of 15% and a favorable currency impact of 1%.
The organic sales decline was primarily driven by continued
softness in our electronic dispense product lines, which serves the
cyclical semiconductor end markets. Operating profit totaled $32
million in the quarter, or 22% of sales, a decrease of 16% compared
to the prior year operating profit due to lower organic sales
volume.
Fiscal 2023 Full Year
Results
Sales for the fiscal year ended October 31, 2023, were a record
$2.6 billion, an increase of 2% compared to the prior year. This
sales growth was driven by a favorable acquisition impact of 4%,
partially offset by a 1% decrease in organic volume and an
unfavorable currency impact of 1%. Full year operating profit was
$673 million. Net income was $487 million and diluted earnings per
share were $8.46.
Adjusted operating profit, excluding $34 million in
non-recurring costs, was $707 million, or 27% of sales, comparable
to prior year adjusted operating profit of $707 million. EBITDA
totaled a record $819 million, or 31% of sales. Adjusted diluted
earnings per share were $9.03, a 4% decrease from the prior year
earnings per diluted share of $9.43, primarily due to higher
interest expense.
Reflecting on fiscal 2023, Mr. Nagarajan continued, “In 2021, we
launched our Ascend strategy with the milestone of achieving $3
billion in annual sales and greater than 30% EBITDA margins by
2025. As we complete the third year of our strategy, we are on
track toward achieving this objective. This is our third
consecutive year of record sales, demonstrating the execution of
the NBS Next growth framework, exciting acquisitions reflecting our
strategic capital deployment, entrepreneurial owner mindset and the
continued development of winning teams at every level of our
organization. In fiscal 2024, we are well positioned for the
recovery of select end markets and the related incremental earnings
power that will come with that growth. The Ascend strategy is
creating a scalable, high quality earnings growth engine. I want to
thank Nordson’s employees and customers for all of their continued
support.”
Outlook
Following three consecutive years of record setting performance
and a strong finish to fiscal 2023, we enter fiscal 2024 with
approximately $800 million in backlog. The book-to-bill in the
fourth quarter and the majority of 2023 was unfavorable as over
$200 million in backlog was consumed.
Based on the combination of order entry, backlog and current
exchange rates, we anticipate delivering sales growth in the range
of 4% to 9% in fiscal 2024 when compared to fiscal 2023. Full year
fiscal 2024 adjusted earnings are forecasted in the range of 1% to
8% growth per diluted share.
First quarter fiscal 2024 sales are forecasted in the range of
$615 to $640 million with adjusted earnings in the range of $2.00
to $2.10 per diluted share. Starting in fiscal 2024, the Company’s
definition of adjusted earnings will exclude acquisition related
amortization for both current and historical periods (see the
appendix for historical amounts).
Nordson management will provide additional commentary on these
results and outlook during its previously announced webcast on
Thursday, December 14, 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 conflicts in Europe and the Middle
East, 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.
NORDSON
CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
(Dollars in thousands except for
per-share amounts)
Three Months Ended
Twelve Months Ended
October 31, 2023
October 31, 2022
October 31, 2023
October 31, 2022
Sales
$
719,313
$
683,581
$
2,628,632
$
2,590,278
Cost of sales
335,220
320,398
1,203,227
1,163,742
Gross profit
384,093
363,183
1,425,405
1,426,536
Gross margin %
53.4
%
53.1
%
54.2
%
55.1
%
Selling & administrative expenses
199,054
185,574
752,644
724,176
Operating profit
185,039
177,609
672,761
702,360
Interest expense - net
(25,921
)
(5,095
)
(56,825
)
(20,387
)
Other income (expense) - net
1,462
5,026
(597
)
(32,694
)
Income before income taxes
160,580
177,540
615,339
649,279
Income taxes
32,802
36,291
127,846
136,176
Net Income
$
127,778
$
141,249
$
487,493
$
513,103
Weighted-average common shares
outstanding:
Basic
57,020
57,170
57,090
57,629
Diluted
57,552
57,823
57,631
58,249
Earnings per share:
Basic earnings
$
2.24
$
2.47
$
8.54
$
8.90
Diluted earnings
$
2.22
$
2.44
$
8.46
$
8.81
NORDSON
CORPORATION
CONSOLIDATED BALANCE SHEET
(Unaudited)
(Dollars in thousands)
October 31, 2023
October 31, 2022
Cash and cash equivalents
$
115,679
$
163,457
Receivables - net
590,886
537,313
Inventories - net
454,775
383,398
Other current assets
67,970
48,803
Total current assets
1,229,310
1,132,971
Property, plant & equipment - net
392,846
353,442
Goodwill
2,784,201
1,804,693
Other assets
845,413
529,269
$
5,251,770
$
3,820,375
Notes payable and debt due within one
year
$
115,662
$
392,537
Accounts payable and accrued
liabilities
466,427
441,666
Total current liabilities
582,089
834,203
Long-term debt
1,621,394
345,320
Other liabilities
450,227
346,477
Total shareholders' equity
2,598,060
2,294,375
$
5,251,770
$
3,820,375
NORDSON
CORPORATION
CONSOLIDATED STATEMENT OF CASH
FLOWS (Unaudited)
(Dollars in thousands)
Twelve Months Ended
October 31, 2023
October 31, 2022
Cash flows from operating activities:
Net Income
$
487,493
$
513,103
Depreciation and amortization
111,898
99,923
Other non-cash items
16,105
63,174
Changes in working capital
(3,571
)
(107,314
)
Other
29,357
(55,755
)
Net cash provided by operating
activities
641,282
513,131
Cash flows from investing activities:
Additions to property, plant and
equipment
(34,583
)
(51,428
)
Acquisitions
(1,422,780
)
(171,613
)
Other - net
20,484
280
Net cash used in investing activities
(1,436,879
)
(222,761
)
Cash flows from financing activities:
Borrowing (repayment) of long-term
debt
976,043
(33,908
)
Repayment of finance lease obligations
(6,840
)
(5,439
)
Dividends paid
(150,356
)
(125,914
)
Issuance of common shares
21,373
12,124
Purchase of treasury shares
(89,708
)
(262,869
)
Net cash used in financing activities
750,512
(416,006
)
Effect of exchange rate change on cash
(2,693
)
(10,879
)
Net change in cash and cash
equivalents
(47,778
)
(136,515
)
Cash and cash equivalents:
Beginning of period
163,457
299,972
End of period
$
115,679
$
163,457
NORDSON
CORPORATION
SALES BY GEOGRAPHIC SEGMENT
(Unaudited)
(Dollars in thousands)
Three Months Ended
Sales Variance
October 31, 2023
October 31, 2022
Organic
Acquisitions
Currency
Total
SALES BY
SEGMENT
Industrial precision solutions
$
405,436
$
355,659
4.4
%
7.2
%
2.4
%
14.0
%
Medical and fluid solutions
168,632
181,342
(7.6
) %
—
%
0.6
%
(7.0
) %
Advanced technology solutions
145,245
146,580
(16.4
) %
15.0
%
0.5
%
(0.9
) %
Total sales
$
719,313
$
683,581
(3.1
) %
6.9
%
1.4
%
5.2
%
SALES BY
GEOGRAPHIC REGION
Americas
315,635
303,738
(0.9
) %
4.0
%
0.8
%
3.9
%
Europe
184,297
165,702
(6.3
) %
12.0
%
5.5
%
11.2
%
Asia Pacific
219,381
214,141
(3.8
) %
7.2
%
(1.0
) %
2.4
%
Total sales
$
719,313
$
683,581
(3.1
) %
6.9
%
1.4
%
5.2
%
Twelve Months Ended
Sales Variance
October 31, 2023
October 31, 2022
Organic
Acquisitions
Currency
Total
SALES BY
SEGMENT
Industrial precision solutions
$
1,391,046
$
1,337,242
3.1
%
1.9
%
(1.0
) %
4.0
%
Medical and fluid solutions
660,316
690,177
(3.7
) %
—
%
(0.6
) %
(4.3
) %
Advanced technology solutions
577,270
562,859
(9.2
) %
12.9
%
(1.1
) %
2.6
%
Total sales
$
2,628,632
$
2,590,278
(1.4
) %
3.8
%
(0.9
) %
1.5
%
SALES BY
GEOGRAPHIC REGION
Americas
1,149,760
1,096,596
2.0
%
2.4
%
0.4
%
4.8
%
Europe
682,676
645,603
1.4
%
4.2
%
0.1
%
5.7
%
Asia Pacific
796,196
848,079
(8.2
) %
5.2
%
(3.1
) %
(6.1
) %
Total sales
$
2,628,632
$
2,590,278
(1.4
) %
3.8
%
(0.9
) %
1.5
%
NORDSON
CORPORATION
RECONCILIATION OF NON-GAAP
MEASURES - ADJUSTED OPERATING PROFIT AND EBITDA (Unaudited)
(Dollars in thousands)
Three Months Ended
Twelve Months Ended
October 31, 2023
October 31, 2022
October 31, 2023
October 31, 2022
SALES BY
SEGMENT
Industrial precision solutions
$
405,436
$
355,659
$
1,391,046
$
1,337,242
Medical and fluid solutions
168,632
181,342
660,316
690,177
Advanced technology solutions
145,245
146,580
577,270
562,859
Total sales
$
719,313
$
683,581
$
2,628,632
$
2,590,278
OPERATING
PROFIT
Industrial precision solutions
$
131,450
$
110,387
$
460,889
$
434,476
Medical and fluid solutions
48,041
51,689
189,367
217,199
Advanced technology solutions
31,526
37,720
101,662
133,253
Corporate
(25,978
)
(22,187
)
(79,157
)
(82,568
)
Total operating profit
$
185,039
$
177,609
$
672,761
$
702,360
OPERATING PROFIT
ADJUSTMENTS (1)
Industrial precision solutions
$
4,658
$
—
$
4,658
$
1,563
Medical and fluid solutions
—
—
1,479
2,498
Advanced technology solutions
—
—
14,304
—
Corporate
6,142
—
13,874
897
Total adjustments
$
10,800
$
—
$
34,315
$
4,958
ADJUSTED
OPERATING PROFIT (NON-GAAP)
% of Sales
% of Sales
% of Sales
% of Sales
Industrial precision solutions
$
136,108
34
%
$
110,387
31
%
$
465,547
33
%
$
436,039
33
%
Medical and fluid solutions
48,041
28
%
51,689
29
%
190,846
29
%
219,697
32
%
Advanced technology solutions
31,526
22
%
37,720
26
%
115,966
20
%
133,253
24
%
Corporate
(19,836
)
(22,187
)
(65,283
)
(81,671
)
Total operating profit - adjusted
$
195,839
27
%
$
177,609
26
%
$
707,076
27
%
$
707,318
27
%
DEPRECIATION
& AMORTIZATION
Industrial precision solutions
$
12,062
$
7,186
$
33,228
$
27,891
Medical and fluid solutions
13,547
12,528
54,988
54,674
Advanced technology solutions
3,529
2,075
15,185
8,780
Corporate
2,123
2,892
8,497
8,578
Total depreciation & amortization
$
31,261
$
24,681
$
111,898
$
99,923
EBITDA
(NON-GAAP) (2)
Industrial precision solutions
$
148,170
37
%
$
117,573
33
%
$
498,775
36
%
$
463,930
35
%
Medical and fluid solutions
61,588
37
%
64,217
35
%
245,834
37
%
274,371
40
%
Advanced technology solutions
35,055
24
%
39,795
27
%
131,151
23
%
142,033
25
%
Corporate
(17,713
)
(19,295
)
(56,786
)
(73,093
)
Total EBITDA
$
227,100
32
%
$
202,290
30
%
$
818,974
31
%
$
807,241
31
%
(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.
NORDSON
CORPORATION
RECONCILIATION OF NON-GAAP
MEASURES - PROFITABILITY (Unaudited)
(Dollars in thousands)
Three Months Ended
Twelve Months Ended
October 31, 2023
October 31, 2022
October 31, 2023
October 31, 2022
GAAP AS
REPORTED
Operating profit
$
185,039
$
177,609
$
672,761
$
702,360
Other / interest expense - net
(24,459
)
(69
)
(57,422
)
(53,081
)
Net income
127,778
141,249
487,493
513,103
Diluted earnings per share
$
2.22
$
2.44
$
8.46
$
8.81
Shares outstanding - diluted
57,552
57,823
57,631
58,249
OPERATING PROFIT
ADJUSTMENTS
Inventory step-up amortization
$
4,556
$
—
$
8,862
$
1,563
Severance and other
—
—
5,487
3,395
Acquisition costs
6,244
—
19,966
—
NON-OPERATING
EXPENSE ADJUSTMENTS
Pension settlement loss
$
—
$
—
$
—
$
41,221
Interest
6,817
—
6,817
—
Total adjustments
$
17,617
$
—
$
41,132
$
46,179
Adjustments net of tax
$
14,019
$
—
$
32,641
$
36,355
EPS effect of adjustments and other
discrete tax items
$
0.24
$
—
$
0.57
$
0.62
NON-GAAP
MEASURES-ADJUSTED PROFITABILITY
Operating profit (1)
$
195,839
$
177,609
$
707,076
$
707,318
Operating profit % of sales
27.2
%
26.0
%
26.9
%
27.3
%
Net income (2)
$
141,797
$
141,249
$
520,134
$
549,458
Diluted earnings per share (3)
$
2.46
$
2.44
$
9.03
$
9.43
(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.
NORDSON
CORPORATION
APPENDIX - RECONCILIATION OF
NON-GAAP MEASURES - PROFITABILITY (Unaudited)
(Dollars in thousands)
Three Months Ended
Twelve Months Ended
October 31, 2023
July 31, 2023
April 30, 2023
January 31, 2023
October 31, 2023
GAAP net income as reported
$
127,778
$
127,891
$
127,563
$
104,261
$
487,493
Diluted earnings per share
$
2.22
$
2.22
$
2.21
$
1.81
$
8.46
Operating and non-operating
adjustments
$
17,617
$
9,781
$
3,439
$
10,295
$
41,132
Adjustments net of tax
$
14,019
$
7,719
$
2,714
$
8,189
$
32,641
EPS effect of non-recurring
adjustments
$
0.24
$
0.13
$
0.05
$
0.14
$
0.57
Adjusted EPS (as previously reported)
$
2.46
$
2.35
$
2.26
$
1.95
$
9.03
Acquisition amortization of
intangibles
$
17,881
$
13,922
$
14,044
$
13,872
$
59,719
Acquisition amortization net of tax
$
14,228
$
10,987
$
11,084
$
11,034
$
47,333
EPS effect of acquisition amortization
$
0.25
$
0.19
$
0.19
$
0.19
$
0.82
Revised adjusted EPS
$
2.71
$
2.54
$
2.45
$
2.14
$
9.85
Three Months Ended
Twelve Months Ended
October 31, 2022
July 31, 2022
April 30, 2022
January 31, 2022
October 31, 2022
GAAP net income as reported
$
141,249
$
141,811
$
109,634
$
120,409
$
513,103
Diluted earnings per share
$
2.44
$
2.45
$
1.88
$
2.05
$
8.81
Operating and non-operating
adjustments
$
—
$
3,395
$
41,221
$
1,563
$
46,179
Adjustments net of tax
$
—
$
2,667
$
32,450
$
1,238
$
36,355
EPS effect of non-recurring
adjustments
$
—
$
0.04
$
0.56
$
0.02
$
0.62
Adjusted EPS (as previously reported)
$
2.44
$
2.49
$
2.43
$
2.07
$
9.43
Acquisition amortization of
intangibles
$
12,459
$
12,766
$
12,753
$
12,847
$
50,825
Acquisition amortization net of tax
$
9,911
$
10,029
$
10,039
$
10,179
$
40,158
EPS effect of acquisition amortization
$
0.17
$
0.17
$
0.17
$
0.17
$
0.68
Revised adjusted EPS
$
2.61
$
2.67
$
2.61
$
2.24
$
10.13
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231213945051/en/
Lara Mahoney Vice President, Investor Relations & Corporate
Communications 440.204.9985 Lara.Mahoney@nordson.com
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