Company Announcements

Nordson Corporation Reports Fiscal Year 2021 First Quarter Results

First Quarter:

  • Sales were $527 million, a 6% increase over prior year
  • Operating profit was $109 million, or 21% of sales, a 39% increase over prior year
  • Earnings were $1.32 per diluted share, a 48% increase over prior year

Guidance:

  • Fiscal 2021 full year sales growth of 4% to 6% and full year diluted earnings per share in the range of $6.30 to $6.70

WESTLAKE, Ohio--(BUSINESS WIRE)--Feb. 22, 2021-- Nordson Corporation (Nasdaq: NDSN) today reported results for the fiscal first quarter ended January 31, 2021. Sales were $527 million, a 6% increase compared to the prior year’s first quarter sales of $495 million. Strength in consumer non-durable and industrial end markets were the primary drivers of the growth. The change in first quarter 2021 sales included an organic volume increase of 3%, a favorable effect from currency translation of 3%, and benefits from acquisitions.

Operating profit in the quarter was $109 million or 21% of sales, compared to prior year adjusted operating profit of $78 million. This 39% increase in profit was driven by leveraging sales volume growth, benefits from structural cost reduction actions taken in fiscal year 2020, and an improved sales mix. EBITDA for the first quarter of 2021 totaled $135 million, or 26% of sales.

Net income was $78 million, a 49% increase from the prior year earnings of $52 million. First quarter 2021 diluted earnings per share were $1.32, a 48% increase over the prior year earnings of $0.89 per diluted share.

“I am very pleased with the solid start to the year, particularly in our return to year-over-year organic sales growth and the significant profit margin expansion as strategic actions taken in fiscal year 2020 began delivering results. While this remains a dynamic macro-environment, we are encouraged by the order entry momentum we started to see within the quarter, particularly in product lines serving the medical and electronics end markets,” said Nordson President and Chief Executive Officer Sundaram Nagarajan. “I am very thankful for the energy and commitment of our employees, who continue to manage through the uncertainty of COVID-19 while also deploying our new NBS Next growth framework and making a strong Nordson even stronger.”

First Quarter Segment Results

Industrial Precision Solutions sales of $288 million increased approximately 9% compared to the prior year first quarter, driven by a 6% organic increase and a favorable currency impact of 3%. The organic sales increase was driven by solid demand in consumer non-durable and industrial end markets. Operating profit was $83 million, or 29% of sales compared to 21% in the prior year first quarter.

Advanced Technology Solutions sales of $238 million increased approximately 3% compared to the prior year first quarter. Acquisitions increased sales by approximately 2% and favorable currency impacts also added 2%, which was offset by an organic volume decrease of 1%. Sales growth in test and inspection and fluid dispense product lines was offset by weaker shipments in electronic dispense and medical interventional solutions product lines during the quarter. Operating profit totaled $47 million, or 20% of sales, compared to adjusted operating profit of 15% of sales in the prior year first quarter.

Outlook

On February 1, the divestiture of the screws and barrels product line was completed. This was an important strategic portfolio realignment that will lead to improved profitability.

Order entry trends consistently improved throughout the first quarter of fiscal year 2021 across the majority of our product lines, and backlog entering the second quarter of fiscal year 2021 was approximately $495 million, an increase of 7% compared to the same period a year ago. Based on this backlog and order entry trend, and the correlation to sales timing, we expect the fiscal 2021 full year sales growth to be approximately 4% to 6% over fiscal year 2020, inclusive of a 3% headwind from the divestiture. Additionally, we are forecasting full year 2021 earnings per diluted share in the range of $6.30 to $6.70, representing 15% to 22% growth over the prior year adjusted earnings.

Nordson management will provide additional commentary on these results and outlook during its previously announced webcast on Tuesday, February 23, 2021 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, 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 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 35 countries. Visit Nordson on the web at http://www.nordson.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

 

January 31, 2021

 

January 31, 2020

 

 

 

 

Sales

$

526,566

 

 

$

494,916

 

Cost of sales

236,606

 

 

231,722

 

Gross profit

289,960

 

 

263,194

 

Gross margin %

55.1

%

 

53.2

%

 

 

 

 

Selling & administrative expenses

180,935

 

 

188,101

 

Operating profit

109,025

 

 

75,093

 

 

 

 

 

Interest expense - net

(6,552

)

 

(9,152

)

Other expense - net

(4,661

)

 

(2,846

)

Income before income taxes

97,812

 

 

63,095

 

 

 

 

 

Income taxes

20,230

 

 

11,091

 

 

 

 

 

Net income

$

77,582

 

 

$

52,004

 

 

 

 

 

Weighted-average common shares outstanding:

 

 

 

Basic

58,059

 

 

57,668

 

Diluted

58,755

 

 

58,524

 

 

 

 

 

Earnings per share:

 

 

 

Basic earnings

$

1.34

 

 

$

0.90

 

Diluted earnings

$

1.32

 

 

$

0.89

 

 

NORDSON CORPORATION

CONSOLIDATED BALANCE SHEETS (Unaudited)

(Dollars in thousands)

 

 

January 31, 2021

 

October 31, 2020

 

 

 

 

Cash and cash equivalents

$

225,738

 

 

$

208,293

 

Receivables - net

455,376

 

 

471,873

 

Inventories - net

282,440

 

 

277,033

 

Other current assets

45,124

 

 

43,798

 

Assets held for sale

19,451

 

 

19,615

 

Total current assets

1,028,129

 

 

1,020,612

 

 

 

 

 

Property, plant & equipment - net

358,670

 

 

358,618

 

Goodwill

1,722,824

 

 

1,713,354

 

Other assets

573,778

 

 

582,072

 

 

$

3,683,401

 

 

$

3,674,656

 

 

 

 

 

Current maturities of long-term debt

$

38,043

 

 

$

38,043

 

Accounts payable and accrued liabilities

307,355

 

 

311,898

 

Liabilities held for sale

14,211

 

 

13,148

 

Total current liabilities

359,609

 

 

363,089

 

 

 

 

 

Long-term debt

981,284

 

 

1,067,952

 

Other liabilities

485,325

 

 

484,624

 

Total shareholders' equity

1,857,183

 

 

1,758,991

 

 

$

3,683,401

 

 

$

3,674,656

 

 

NORDSON CORPORATION

CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)

(Dollars in thousands)

 

 

Three Months Ended

 

January 31, 2021

 

January 31, 2020

Cash flows from operating activities:

 

 

 

Net income

$

77,582

 

 

$

52,004

 

Depreciation and amortization

26,020

 

 

28,618

 

Other non-cash items

10,271

 

 

7,167

 

Changes in working capital

29,416

 

 

28,486

 

Net cash provided by operating activities

143,289

 

 

116,275

 

 

 

 

 

Cash flows from investing activities:

 

 

 

Additions to property, plant and equipment

(7,917

)

 

(13,881

)

Other - net

22

 

 

65

 

Net cash used in investing activities

(7,895

)

 

(13,816

)

 

 

 

 

Cash flows from financing activities:

 

 

 

Repayment of long-term debt

(100,000

)

 

(125,951

)

Repayment of finance lease obligations

(1,734

)

 

(2,421

)

Dividends paid

(22,672

)

 

(21,915

)

Issuance of common shares

7,438

 

 

16,379

 

Purchase of treasury shares

(5,310

)

 

(4,311

)

Net cash used in financing activities

(122,278

)

 

(138,219

)

 

 

 

 

Effect of exchange rate change on cash

4,329

 

 

(307

)

Net change in cash and cash equivalents

17,445

 

 

(36,067

)

 

 

 

 

Cash and cash equivalents:

 

 

 

Beginning of period

208,293

 

 

151,164

 

End of period

$

225,738

 

 

$

115,097

 

 

NORDSON CORPORATION

SALES BY GEOGRAPHIC SEGMENT (Unaudited)

(Dollars in thousands)

 

 

Three Months Ended

 

Sales Variance

 

January 31, 2021

 

January 31, 2020

 

Organic

 

Acquisitions

 

Currency

 

Total

SALES BY SEGMENT

 

 

 

 

 

 

 

 

 

 

 

Industrial precision solutions

$

288,416

 

 

$

263,799

 

 

5.9

%

 

%

 

3.4

%

 

9.3

%

Advanced technology solutions

238,150

 

 

231,117

 

 

(1.3

)%

 

2.2

%

 

2.1

%

 

3.0

%

Total sales

$

526,566

 

 

$

494,916

 

 

2.6

%

 

1.0

%

 

2.8

%

 

6.4

%

 

 

 

 

 

 

 

 

 

 

 

 

SALES BY GEOGRAPHIC REGION

 

 

 

 

 

 

 

 

 

 

 

United States

$

185,316

 

 

$

188,500

 

 

(2.8

)%

 

1.1

%

 

%

 

(1.7

)%

Americas

36,138

 

 

31,083

 

 

9.9

%

 

9.8

%

 

(3.4

)%

 

16.3

%

Europe

135,151

 

 

126,391

 

 

0.3

%

 

%

 

6.6

%

 

6.9

%

Japan

27,115

 

 

27,552

 

 

(6.3

)%

 

%

 

4.7

%

 

(1.6

)%

Asia Pacific

142,846

 

 

121,390

 

 

13.4

%

 

%

 

4.3

%

 

17.7

%

Total sales

$

526,566

 

 

$

494,916

 

 

2.6

%

 

1.0

%

 

2.8

%

 

6.4

%

 

NORDSON CORPORATION

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

(Dollars in thousands)

 

 

Three months ended

 

January 31, 2021

 

January 31, 2020

SALES BY SEGMENT

 

 

 

 

 

 

 

Industrial precision solutions

$

288,416

 

 

 

 

$

263,799

 

 

 

Advanced technology solutions

238,150

 

 

 

 

231,117

 

 

 

Total sales

$

526,566

 

 

 

 

$

494,916

 

 

 

 

 

 

 

 

 

 

 

OPERATING PROFIT

 

 

 

 

 

 

 

Industrial precision solutions

$

83,403

 

 

 

 

$

56,404

 

 

 

Advanced technology solutions

47,201

 

 

 

 

32,287

 

 

 

Corporate

(21,579

)

 

 

 

(13,598

)

 

 

Total operating profit

$

109,025

 

 

 

 

$

75,093

 

 

 

 

 

 

 

 

 

 

 

OPERATING PROFIT ADJUSTMENTS (1)

 

 

 

 

 

 

 

Industrial precision solutions

$

 

 

 

 

$

299

 

 

 

Advanced technology solutions

 

 

 

 

2,970

 

 

 

Corporate

 

 

 

 

 

 

 

Total adjustments

$

 

 

 

 

$

3,269

 

 

 

 

 

 

 

 

 

 

 

ADJUSTED OPERATING PROFIT (NON-GAAP) (2)

 

 

% of Sales

 

 

 

% of Sales

Industrial precision solutions

$

83,403

 

 

29

%

 

$

56,703

 

 

21

%

Advanced technology solutions

47,201

 

 

20

%

 

35,257

 

 

15

%

Corporate

(21,579

)

 

 

 

(13,598

)

 

 

Total operating profit - adjusted

$

109,025

 

 

21

%

 

$

78,362

 

 

16

%

 

 

 

 

 

 

 

 

DEPRECIATION & AMORTIZATION

 

 

 

 

 

 

 

Industrial precision solutions

$

6,983

 

 

 

 

$

9,827

 

 

 

Advanced technology solutions

16,544

 

 

 

 

16,320

 

 

 

Corporate

2,493

 

 

 

 

2,471

 

 

 

Total depreciation & amortization

$

26,020

 

 

 

 

$

28,618

 

 

 

 

 

 

 

 

 

 

 

EBITDA (NON-GAAP) (2)

 

 

 

 

 

 

 

Industrial precision solutions

$

90,386

 

 

31

%

 

$

66,530

 

 

25

%

Advanced technology solutions

63,745

 

 

27

%

 

51,577

 

 

22

%

Corporate

(19,086

)

 

 

 

(11,127

)

 

 

Total EBITDA

$

135,045

 

 

26

%

 

$

106,980

 

 

22

%

(1)

Represents costs and adjustments related to cost structure simplification actions.

(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 cost structure simplification actions. 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

 

January 31, 2021

 

January 31, 2020

GAAP AS REPORTED

 

 

 

Operating profit

$

109,025

 

 

$

75,093

 

Other / interest expense - net

(11,213

)

 

(11,998

)

Net income

77,582

 

 

52,004

 

Diluted earnings per share

$

1.32

 

 

$

0.89

 

 

 

 

 

Shares outstanding - diluted

58,755

 

 

58,524

 

 

 

 

 

OPERATING PROFIT ADJUSTMENTS

 

 

 

Severance and other

$

 

 

$

3,269

 

 

 

 

 

Adjustments net of tax

$

 

 

$

2,563

 

Other discrete tax items

$

 

 

$

(2,537

)

EPS effect of adjustments and other discrete tax items

$

 

 

$

 

 

 

 

 

NON-GAAP MEASURES-ADJUSTED PROFITABILITY

 

 

 

Operating profit (1)

$

109,025

 

 

$

78,362

 

Operating profit % of sales

20.7

%

 

15.8

%

Net income (2)

$

77,582

 

 

$

52,030

 

Diluted earnings per share (3)

$

1.32

 

 

$

0.89

 

(1)

Adjusted operating profit is defined as operating profit plus certain adjustments such as cost structure simplification actions. 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 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