Nordson Corporation Reports Fiscal Year 2021 First Quarter Results

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.

Contacts:

Lara Mahoney
Vice President,
Investor Relations & Corporate Communications
440.204.9985
Lara.Mahoney@nordson.com

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.