8-K
NORDSON CORP (NDSN)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 13, 2023
NORDSON CORPORATION
(Exact Name of Registrant as Specified in its Charter)
| Ohio | 000-07977 | 34-0590250 | ||
|---|---|---|---|---|
| (State or Other<br><br>Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer<br><br>Identification Number) | 28601 Clemens Road<br><br>Westlake, Ohio 44145<br><br>(Address of Principal Executive<br><br>Offices, including Zip Code) | |
| --- |
Registrant’s Telephone Number, including Area Code: 440-892-1580
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol(s) | Name of Each Exchange<br>On Which Registered |
|---|---|---|
| Common Shares, without par value | NDSN | Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933(§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On December 13, 2023, Nordson Corporation issued a press release relating to its results of operations for the fourth quarter and full fiscal year 2023. A copy is attached as Exhibit 99.1.
Item 7.01. Regulation FD Disclosure.
Nordson Corporation will provide additional commentary on fourth quarter and full year fiscal 2023 results and outlook during a 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.
As provided in General Instruction B.2 of Form 8-K, the information contained in Items 2.02 and 7.01 of this Form 8-K shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall any such information be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits.(d) Exhibits.
(d) Exhibits.
| 99.1 | Press release of Nordson Corporation dated December 13, 2023. |
|---|---|
| 104 | Cover Page Interactive Data File (embedded within the inline XBRL document). |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
| NORDSON CORPORATION | |||
|---|---|---|---|
| Date: | December 13, 2023 | By: | /s/ Stephen Shamrock |
| Stephen Shamrock | |||
| Vice President and Corporate Controller, Interim Chief Financial Officer |
Document
Nordson Corporation Reports Fourth Quarter and Record Fiscal Year 2023 Results
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
WESTLAKE, Ohio--(BUSINESS WIRE)--December 13, 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 |
Contact
Lara Mahoney
Vice President,
Investor Relations & Corporate Communications
440.204.9985
Lara.Mahoney@nordson.com
10