Nordson Corporation Reports Fiscal Year 2020 First Quarter Results

  • Sales were $495 million
  • Operating profit was $75 million, or 15 percent of sales
  • EBITDA was $101 million, or 20 percent of sales
  • GAAP diluted EPS was $0.89

WESTLAKE, Ohio--(BUSINESS WIRE)--Nordson Corporation (Nasdaq: NDSN) today reported results for the first quarter of fiscal year 2020. For the quarter ended January 31, 2020, sales were $495 million, a 1 percent decrease compared to the prior year’s first quarter sales of $498 million. This change in first quarter 2020 sales included a decrease in organic volume of less than 1 percent, growth from the first year effect of acquisitions of less than 1 percent, and a decrease related to the unfavorable effect of currency translation as compared to the prior year’s first quarter of approximately 1 percent.


In the first quarter of fiscal year 2020, reported operating profit was $75 million, net income was $52 million, and GAAP diluted earnings per share were $0.89, inclusive of $0.04 per share charge related to restructuring and a $0.04 per share benefit related to discrete tax items. Prior year first quarter sales, operating profit, net income and GAAP diluted earnings per share were $498 million, $84 million, $49 million and $0.83, respectively. A reconciliation of GAAP diluted earnings per share to adjusted diluted earnings per share and calculations for EBITDA and free cash flow before dividends are included in the attached financial exhibits.

First Quarter Segment Results

Adhesive Dispensing Systems sales decreased 2 percent compared to the prior year’s first quarter, inclusive of a decrease in organic volume of 1 percent and a decrease of 1 percent related to the unfavorable effects of currency translation as compared to the prior year. Reported operating margin in the segment was 23 percent in the quarter.

Advanced Technology Systems sales decreased approximately 1 percent compared to the prior year’s first quarter, inclusive of a decrease in organic volume of 2 percent, an increase of 1 percent related to the first year effect of acquisitions, and a decrease of less than 1 percent related to the unfavorable effects of currency translation as compared to the prior year. The first quarter’s acquisitive growth includes the fiscal 2019 acquisition of Optical Control GmbH. Reported operating margin in the segment was 14 percent in the quarter, or 15 percent when excluding approximately $3 million of restructuring charges.

Industrial Coating Systems sales increased 9 percent compared to the prior year’s first quarter, inclusive of organic volume growth of 9 percent and a decrease of less than 1 percent related to the unfavorable effect of currency translation as compared to the prior year. Reported operating margin in the segment was 14 percent in the quarter.

Detailed results by operating segment and geography are included in the attached financial exhibits.

Commenting on the company’s fiscal first quarter 2020 results, Sundaram Nagarajan, Nordson President and Chief Executive Officer, said, “Our first quarter performance for both sales and operating margin was in line with expectations and reflects our normal seasonality. Our spending is generally consistent throughout the year due to our direct sales model and strong customer focus, resulting in lower operating margin in our first fiscal quarter.”

Backlog

Backlog for the quarter ended January 31, 2020 was approximately $430 million, a decrease of 1 percent compared to the same period a year ago. Impact from the fiscal 2019 acquisition of Optical Control GmbH was not significant. Backlog amounts are calculated at January 31, 2020 exchange rates.

Commenting on the company’s fiscal 2020 outlook, Nagarajan said, “We remain on track with fiscal 2020 guidance, where we expect organic sales growth in the range of 1 to 3 percent compared to fiscal 2019. With our typical seasonality, we expect our second half of the fiscal year to drive this growth.”

Nordson management will provide additional commentary on these results and outlook during a conference call Thursday, February 20, 2020 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) 414-5639 or lara.mahoney@nordson.com.

Except for historical information and comparisons contained herein, statements included in this release may constitute “forward-looking statements,” as defined by the Private Securities Litigation Reform Act of 1995. These statements involve a number of risks, uncertainties and other factors, as discussed in the company’s filing with the Securities and Exchange Commission that could cause actual results to differ.

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

FINANCIAL HIGHLIGHTS

(Dollars in thousands except for per-share amounts)

   
FIRST QUARTER PERIOD
Period Ended January 31, 2020
(Unaudited)
   
CONSOLIDATED STATEMENT OF INCOME
 

First Quarter

 

2020

 

2019

   
Sales  

$

494,916

 

$

497,910

 

Cost of sales  

 

231,722

 

 

228,934

 

Selling & administrative expenses  

 

188,101

 

 

184,695

 

   
Operating profit  

 

75,093

 

 

84,281

 

   
Interest expense - net  

 

(9,152

)

 

(12,049

)

Other expense - net  

 

(2,846

)

 

(4,189

)

   
Income before income taxes  

 

63,095

 

 

68,043

 

Income taxes  

 

11,091

 

 

19,476

 

   
Net Income  

$

52,004

 

$

48,567

 

   
   
Return on sales  

 

11

%

 

10

%

Return on average shareholders' equity  

 

13

%

 

14

%

   
   
   
Average common shares outstanding (000's)  

 

57,668

 

 

57,702

 

Average common shares and  
common share equivalents (000's)  

 

58,524

 

 

58,372

 

   
Per share:  
   
Basic earnings  

$

.90

 

$

.84

 

Diluted earnings  

$

.89

 

$

.83

 

   
Dividends paid  

$

.38

 

$

.35

 

   
Total dividends  

$

21,915

 

$

20,210

 

 

NORDSON CORPORATION

FINANCIAL HIGHLIGHTS

(Dollars in thousands)

     
CONSOLIDATED BALANCE SHEET
   

January 31

 

October 31

   

2020

 

2019

     
Cash and cash equivalents    

$

115,097

$

151,164

Receivables - net    

 

471,626

 

530,765

Inventories - net    

 

294,768

 

283,399

Other current assets    

 

48,833

 

45,867

Total current assets    

 

930,324

 

1,011,195

     
Property, plant & equipment - net    

 

400,636

 

398,895

Other assets    

 

2,219,907

 

2,106,357

   

$

3,550,867

$

3,516,447

     
Notes payable and debt due within one year    

$

43,598

$

168,738

Accounts payable and accrued liabilities    

 

299,723

 

308,888

Total current liabilities    

 

343,321

 

477,626

     
Long-term debt    

 

1,074,314

 

1,075,404

Other liabilities    

 

498,958

 

382,372

Total shareholders' equity    

 

1,634,274

 

1,581,045

   

$

3,550,867

$

3,516,447

     
     
     
Other information:    
     
Employees    

 

7,606

 

7,579

     
Common shares outstanding (000's)    

 

57,847

 

57,600

NORDSON CORPORATION

FINANCIAL HIGHLIGHTS

(Dollars in thousands)

 
FIRST QUARTER PERIOD
Period Ended January 31, 2020
(Unaudited)
 

First Quarter

 

% Growth over 2019

SALES BY BUSINESS SEGMENT

2020

 

2019

 

Volume

 

Currency

 

Total

 
 
Adhesive dispensing systems

$

207,225

 

$

211,517

 

-1.1

%

-0.9

%

-2.0

%

Advanced technology systems

 

231,117

 

 

234,458

 

-1.1

%

-0.3

%

-1.4

%

Industrial coating systems

 

56,574

 

 

51,935

 

9.2

%

-0.3

%

8.9

%

 
Total sales by business segment

$

494,916

 

$

497,910

 

0.0

%

-0.6

%

-0.6

%

 
 
 

First Quarter

OPERATING PROFIT BY BUSINESS SEGMENT

2020

 

2019

 
Adhesive dispensing systems

$

48,618

 

$

47,892

 

Advanced technology systems

 

32,287

 

 

40,785

 

Industrial coating systems

 

7,786

 

 

7,516

 

Corporate

 

(13,598

)

 

(11,912

)

 
Total operating profit by business segment

$

75,093

 

$

84,281

 

 
 
 

First Quarter

% Growth over 2019

SALES BY GEOGRAPHIC REGION

2020

 

2019

 

Volume

 

Currency

 

Total

 
United States

$

188,500

 

$

170,350

 

10.7

%

-

 

10.7

%

Americas

 

31,083

 

 

32,437

 

-3.9

%

-0.3

%

-4.2

%

Europe

 

126,391

 

 

132,675

 

-2.8

%

-1.9

%

-4.7

%

Japan

 

27,552

 

 

29,047

 

-6.5

%

1.4

%

-5.1

%

Asia Pacific

 

121,390

 

 

133,401

 

-8.5

%

-0.5

%

-9.0

%

 
Total Sales by Geographic Region

$

494,916

 

$

497,910

 

0.0

%

-0.6

%

-0.6

%

 
 
NORDSON CORPORATION

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(Dollars in thousands except for per-share amounts)

 

FIRST QUARTER ENDED

Period Ended January 31, 2020
(Unaudited)
 
 
EBITDA

First Quarter

2020

2019

 
Net income

$

52,004

 

$

48,567

 

Adjustments:
Depreciation and amortization expense

 

28,618

 

 

27,748

 

Interest expense - net

 

9,152

 

 

12,049

 

Income taxes

 

11,091

 

 

19,476

 

EBITDA

$

100,865

 

$

107,840

 

 
EBITDA per diluted share

$

1.72

 

$

1.85

 

 
 
EBITDA and EBITDA per diluted share are non-GAAP financial measures used by management to evaluate the Company's ongoing operations. Therefore, the Company believes these financial measures provide useful information to investors. EBITDA is defined as earnings before interest, taxes, depreciation and amortization. EBITDA per diluted share is defined as EBITDA divided by the Company's diluted weighted average shares outstanding.
 
 

First Quarter

2020

2019

 
Diluted EPS as reported (U.S. GAAP)

$

0.89

 

$

0.83

 

 
Severance and restructuring

 

0.04

 

 

0.02

 

U.S. Tax Reform discrete item

 

-

 

 

0.08

 

Other discrete tax items

 

(0.04

)

 

(0.02

)

 
Diluted EPS as adjusted (Non-GAAP)

$

0.89

 

$

0.92

 

 
 
Adjusted EPS is not a measurement of financial performance under GAAP, and should not be considered as an alternative to EPS determined in accordance with GAAP. Management believes that EPS as adjusted to exclude the items in the table above assist in understanding the results of Nordson Corporation. Amounts may not add due to rounding.
 
 
Free Cash Flow Before Dividends

First Quarter

2020

2019

 
Net income

$

52,004

 

$

48,567

 

Depreciation and amortization

 

28,618

 

 

27,748

 

Other non-cash charges

 

7,167

 

 

6,340

 

Changes in operating assets and liabilities

 

28,486

 

 

(25,808

)

Net cash provided by operating activities

 

116,275

 

 

56,847

 

 
Additions to property, plant and equipment

 

(13,880

)

 

(14,121

)

Proceeds from the sale of property, plant and equipment

 

65

 

 

260

 

 
Free cash flow before dividends

$

102,460

 

$

42,986

 

 
 
Free cash flow before dividends, a non-GAAP financial measure, is defined as net cash provided by operating activities less purchased property, plant and equipment and proceeds from the sale of property, plant and equipment. It is a financial measure used by management to assess its ability to generate cash in excess of its operating needs. Therefore, the Company believes this financial measure provides useful information to investors. Free cash flow before dividends is not a measure of financial performance under GAAP and should be considered in addition to, and not as a substitute for, operating cash flows or other financial measures prepared in accordance with GAAP. Our calculations of non-GAAP measures may not be comparable to the calculations of similarly titled measures reported by other companies.

 


Contacts

Nordson Corporation
Lara Mahoney
Vice President,
Investor Relations & Corporate Communications
440.414.5639
Lara.Mahoney@nordson.com