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): May 23, 2022
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 May 23, 2022, Nordson Corporation issued a press release relating to its results of operations for the second quarter of fiscal 2022. A copy is attached as Exhibit 99.1.
Item 7.01. Regulation FD Disclosure.
Nordson Corporation will provide additional commentary on second quarter fiscal 2022 results and outlook during a webcast on Tuesday, May 24, 2022 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.
| 99.1 | Press release of Nordson Corporation dated May 23, 2022. |
|---|---|
| 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: | May 23, 2022 | By: | /s/ Joseph P. Kelley |
| Joseph P. Kelley | |||
| Executive Vice President<br><br>Chief Financial Officer |
Document
Nordson Corporation Reports Strong Second Quarter Fiscal 2022 Results and Raises Annual Earnings Guidance
Second Quarter:
•Sales were $635 million, an 8% increase over prior year
•Operating profit was $184 million, an 11% increase over prior year
•Earnings per share were $1.88 compared to $2.12 in the prior year
•Adjusted earnings were $2.43 per diluted share, a 15% increase over the prior year
Guidance:
•Updating previously issued full-year fiscal 2022 guidance: increasing adjusted earnings per diluted share growth to 18% to 21% and narrowing revenue growth to 8% to 9% over fiscal 2021
WESTLAKE, Ohio--(BUSINESS WIRE)--May 23, 2022--Nordson Corporation (Nasdaq: NDSN) today reported results for the fiscal second quarter ended April 30, 2022. Sales were $635 million, an 8% increase compared to the prior year’s second quarter sales of $590 million. The increase in second quarter 2022 sales included organic volume growth of 7% and a favorable acquisition impact of 4%, partially offset by unfavorable effects from currency translation of 3%. The organic sales increase was driven by strong demand across most end markets, offset by unfavorable impacts from COVID-related lockdowns in China.
Operating profit in the second quarter was $184 million, or 29% of sales, compared to prior year operating profit of $166 million. This 11% increase in operating profit was driven primarily by sales volume leverage. EBITDA for the second quarter of 2022 totaled $209 million, or 33% of sales.
Net income was $110 million, or $1.88 earnings per diluted share. Adjusted net income, which excludes the $41 million non-cash pension annuitization charge ($32 million after tax), was $142 million, an $18 million increase from the prior year earnings of $124 million. Second quarter 2022 adjusted diluted earnings per share were $2.43, a 15% increase over the prior year diluted earnings per share of $2.12.
“I am very proud of the Nordson team’s efforts and our impressive second quarter financial performance, despite the ongoing COVID-related lockdowns in China and foreign currency headwinds. We remain focused on the safety of our employees and delivering on the strong broad-based demand from our customers. The ongoing deployment of the NBS Next growth framework is delivering tangible results in terms of strong order entry and 70% organic incremental margins,” said Sundaram Nagarajan, president and chief executive officer.
Second Quarter Segment Results
Industrial Precision Solutions sales of $316 million increased 6% compared to the prior year second quarter, driven by a 3% organic sales increase and a favorable acquisition impact of 7%, partially offset by an unfavorable currency impact of 4%. The organic sales increase was driven by continued demand in consumer non-durable and industrial end markets, which was offset by weakness in Asia-Pacific related to the COVID shutdowns in China. Operating profit in the quarter was $102 million, or 32% of sales, a decrease of 2% compared to the prior year second quarter, as favorable sales volume leverage was offset by unfavorable sales mix compared to the prior year second quarter.
Advanced Technology Solutions sales of $319 million increased 10% compared to the prior year second quarter. Organic sales increased 11%, partially offset by an unfavorable currency impact. The organic sales increase was driven by robust demand across electronics dispense, test and inspection, and biopharma fluid component product lines. Operating profit totaled $98 million, or 31% of sales, an increase of 29% compared to the prior year second quarter operating profit.
Outlook
The Company continues to be encouraged as order entry remained strong throughout the second quarter with a favorable book-to-bill ratio. Backlog entering the second half of fiscal 2022 exceeds $1 billion, as the Company continues to see extended shipment request dates in conjunction with large orders from its customers in electronics, industrial and medical end markets.
For the full year, the Company is increasing its previously issued adjusted earnings guidance to growth in the range of 18% to 21% and narrowing its previously issued year-over-year revenue guidance to growth of 8% to 9% over fiscal 2021.
Fiscal 2022 third quarter revenue and adjusted earnings are forecasted to be comparable to the prior year results.
Nordson management will provide additional commentary on these results and outlook during its previously announced webcast on Tuesday, May 24, 2022 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, including the conflict between Russia and Ukraine, 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 is an innovative precision technology company that leverages a scalable growth framework 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 STATEMENTS OF INCOME (Unaudited)
(Dollars in thousands except for per-share amounts)
| Three Months Ended | Six Months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| April 30, 2022 | April 30, 2021 | April 30, 2022 | April 30, 2021 | |||||||||
| Sales | $ | 635,403 | $ | 589,538 | $ | 1,244,569 | $ | 1,116,104 | ||||
| Cost of sales | 277,768 | 251,839 | 546,800 | 488,445 | ||||||||
| Gross profit | 357,635 | 337,699 | 697,769 | 627,659 | ||||||||
| Gross margin % | 56.3 | % | 57.3 | % | 56.1 | % | 56.2 | % | ||||
| Selling & administrative expenses | 173,662 | 171,308 | 357,936 | 352,243 | ||||||||
| Operating profit | 183,973 | 166,391 | 339,833 | 275,416 | ||||||||
| Interest expense - net | (4,942) | (6,690) | (10,127) | (13,242) | ||||||||
| Other income (expense) - net (1) | (39,764) | (3,843) | (38,472) | (8,504) | ||||||||
| Income before income taxes | 139,267 | 155,858 | 291,234 | 253,670 | ||||||||
| Income taxes | 29,633 | 31,714 | 61,191 | 51,944 | ||||||||
| Net income | $ | 109,634 | $ | 124,144 | $ | 230,043 | $ | 201,726 | ||||
| Weighted-average common shares outstanding: | ||||||||||||
| Basic | 57,784 | 58,068 | 57,971 | 58,063 | ||||||||
| Diluted | 58,382 | 58,652 | 58,606 | 58,703 | ||||||||
| Earnings per share: | ||||||||||||
| Basic earnings | $ | 1.90 | $ | 2.14 | $ | 3.97 | $ | 3.47 | ||||
| Diluted earnings | $ | 1.88 | $ | 2.12 | $ | 3.93 | $ | 3.44 |
(1) Includes pension settlement charge of $41,221.
NORDSON CORPORATION
CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollars in thousands)
| April 30, 2022 | October 31, 2021 | |||
|---|---|---|---|---|
| Cash and cash equivalents | $ | 120,892 | $ | 299,972 |
| Receivables - net | 499,535 | 489,389 | ||
| Inventories - net | 383,215 | 327,195 | ||
| Other current assets | 56,197 | 48,282 | ||
| Total current assets | 1,059,839 | 1,164,838 | ||
| Property, plant & equipment - net | 357,561 | 355,565 | ||
| Goodwill | 1,821,091 | 1,713,148 | ||
| Other assets | 557,852 | 557,410 | ||
| $ | 3,796,343 | $ | 3,790,961 | |
| Current maturities of long-term debt and notes payable | $ | 310,892 | $ | 34,188 |
| Accounts payable and accrued liabilities | 411,606 | 411,206 | ||
| Total current liabilities | 722,498 | 445,394 | ||
| Long-term debt | 479,703 | 781,709 | ||
| Other liabilities | 403,526 | 404,728 | ||
| Total shareholders' equity | 2,190,616 | 2,159,130 | ||
| $ | 3,796,343 | $ | 3,790,961 |
NORDSON CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
(Dollars in thousands)
| Six Months Ended | ||||
|---|---|---|---|---|
| April 30, 2022 | April 30, 2021 | |||
| Cash flows from operating activities: | ||||
| Net income | $ | 230,043 | $ | 201,726 |
| Depreciation and amortization | 50,355 | 51,336 | ||
| Other non-cash items (1) | 51,449 | 14,858 | ||
| Changes in working capital | (85,070) | 20,206 | ||
| Other | (32,276) | (40,412) | ||
| Net cash provided by operating activities | 214,501 | 247,714 | ||
| Cash flows from investing activities: | ||||
| Additions to property, plant and equipment | (24,776) | (18,743) | ||
| Acquisition of businesses, net of cash acquired | (171,613) | — | ||
| Other - net | 15 | 5,062 | ||
| Net cash used in investing activities | (196,374) | (13,681) | ||
| Cash flows from financing activities: | ||||
| Issuance (repayment) of long-term debt | 1,654 | (250,101) | ||
| Repayment of finance lease obligations | (2,620) | (3,399) | ||
| Dividends paid | (59,301) | (45,342) | ||
| Issuance of common shares | 7,798 | 18,783 | ||
| Purchase of treasury shares | (140,466) | (30,274) | ||
| Net cash used in financing activities | (192,935) | (310,333) | ||
| Effect of exchange rate change on cash | (4,272) | 1,327 | ||
| Net change in cash and cash equivalents | (179,080) | (74,973) | ||
| Cash and cash equivalents: | ||||
| Beginning of period | 299,972 | 208,293 | ||
| End of period | $ | 120,892 | $ | 133,320 |
(1) Includes pension settlement charge of $41,221.
NORDSON CORPORATION
SALES BY GEOGRAPHIC SEGMENT (Unaudited)
(Dollars in thousands)
| Three Months Ended | Sales Variance | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| April 30, 2022 | April 30, 2021 | Organic | Acquisitions / Divestitures | Currency | Total | |||||||
| SALES BY SEGMENT | ||||||||||||
| Industrial precision solutions | $ | 316,434 | $ | 298,775 | 2.8 | % | 7.1 | % | (4.0) | % | 5.9 | % |
| Advanced technology solutions | 318,969 | 290,763 | 11.3 | % | — | % | (1.6) | % | 9.7 | % | ||
| Total sales | $ | 635,403 | $ | 589,538 | 7.0 | % | 3.6 | % | (2.8) | % | 7.8 | % |
| SALES BY GEOGRAPHIC REGION | ||||||||||||
| United States | $ | 218,508 | $ | 202,924 | 3.9 | % | 3.8 | % | — | % | 7.7 | % |
| Americas | 55,244 | 44,914 | 20.8 | % | 1.9 | % | 0.3 | % | 23.0 | % | ||
| Europe | 172,256 | 156,451 | 14.4 | % | 3.7 | % | (8.0) | % | 10.1 | % | ||
| Japan | 25,443 | 27,852 | (5.0) | % | 6.3 | % | (10.0) | % | (8.7) | % | ||
| Asia Pacific | 163,952 | 157,397 | 1.8 | % | 3.3 | % | (0.9) | % | 4.2 | % | ||
| Total sales | $ | 635,403 | $ | 589,538 | 7.0 | % | 3.6 | % | (2.8) | % | 7.8 | % |
| Six Months Ended | Sales Variance | |||||||||||
| April 30, 2022 | April 30, 2021 | Organic | Acquisitions / Divestitures | Currency | Total | |||||||
| SALES BY SEGMENT | ||||||||||||
| Industrial precision solutions | $ | 640,367 | $ | 587,191 | 7.3 | % | 5.3 | % | (3.5) | % | 9.1 | % |
| Advanced technology solutions | 604,202 | 528,913 | 15.4 | % | — | % | (1.2) | % | 14.2 | % | ||
| Total sales | $ | 1,244,569 | $ | 1,116,104 | 11.2 | % | 2.7 | % | (2.4) | % | 11.5 | % |
| SALES BY GEOGRAPHIC REGION | ||||||||||||
| United States | $ | 409,885 | $ | 388,240 | 3.3 | % | 2.3 | % | — | % | 5.6 | % |
| Americas | 103,769 | 81,052 | 27.7 | % | 0.7 | % | (0.4) | % | 28.0 | % | ||
| Europe | 328,241 | 291,602 | 15.5 | % | 3.8 | % | (6.7) | % | 12.6 | % | ||
| Japan | 51,001 | 54,967 | (0.9) | % | 3.2 | % | (9.5) | % | (7.2) | % | ||
| Asia Pacific | 351,673 | 300,243 | 14.8 | % | 2.8 | % | (0.5) | % | 17.1 | % | ||
| Total sales | $ | 1,244,569 | $ | 1,116,104 | 11.2 | % | 2.7 | % | (2.4) | % | 11.5 | % |
NORDSON CORPORATION
RECONCILIATION OF NON-GAAP MEASURES - ADJUSTED OPERATING PROFIT AND EBITDA (Unaudited)
(Dollars in thousands)
| Three Months Ended | Six Months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| April 30, 2022 | April 30, 2021 | April 30, 2022 | April 30, 2021 | |||||||||
| SALES BY SEGMENT | ||||||||||||
| Industrial precision solutions | $ | 316,434 | $ | 298,775 | $ | 640,367 | $ | 587,191 | ||||
| Advanced technology solutions | 318,969 | 290,763 | 604,202 | 528,913 | ||||||||
| Total sales | $ | 635,403 | $ | 589,538 | $ | 1,244,569 | $ | 1,116,104 | ||||
| OPERATING PROFIT | ||||||||||||
| Industrial precision solutions | $ | 102,196 | $ | 104,283 | $ | 204,384 | $ | 187,686 | ||||
| Advanced technology solutions | 98,458 | 76,585 | 174,785 | 123,786 | ||||||||
| Corporate | (16,681) | (14,477) | (39,336) | (36,056) | ||||||||
| Total operating profit | $ | 183,973 | $ | 166,391 | $ | 339,833 | $ | 275,416 | ||||
| OPERATING PROFIT ADJUSTMENTS (1) | ||||||||||||
| Industrial precision solutions | $ | — | $ | — | $ | 1,563 | $ | — | ||||
| ADJUSTED OPERATING PROFIT (NON-GAAP) (2) | % of Sales | % of Sales | % of Sales | % of Sales | ||||||||
| Industrial precision solutions | $ | 102,196 | 32% | $ | 104,283 | 35% | $ | 205,947 | 32% | $ | 187,686 | 32% |
| Advanced technology solutions | 98,458 | 31% | 76,585 | 26% | 174,785 | 29% | 123,786 | 23% | ||||
| Corporate | (16,681) | (14,477) | (39,336) | (36,056) | ||||||||
| Total operating profit - adjusted | $ | 183,973 | 29% | $ | 166,391 | 28% | $ | 341,396 | 27% | $ | 275,416 | 25% |
| DEPRECIATION & AMORTIZATION | ||||||||||||
| Industrial precision solutions | $ | 6,916 | $ | 6,468 | $ | 14,358 | $ | 13,451 | ||||
| Advanced technology solutions | 15,825 | 16,421 | 31,635 | 32,965 | ||||||||
| Corporate | 2,224 | 2,427 | 4,362 | 4,920 | ||||||||
| Total depreciation & amortization | $ | 24,965 | $ | 25,316 | $ | 50,355 | $ | 51,336 | ||||
| EBITDA (NON-GAAP) (2) | ||||||||||||
| Industrial precision solutions | $ | 109,112 | 34% | $ | 110,751 | 37% | $ | 220,305 | 34% | $ | 201,137 | 34% |
| Advanced technology solutions | 114,283 | 36% | 93,006 | 32% | 206,420 | 34% | 156,751 | 30% | ||||
| Corporate | (14,457) | (12,050) | (34,974) | (31,136) | ||||||||
| Total EBITDA | $ | 208,938 | 33% | $ | 191,707 | 33% | $ | 391,751 | 31% | $ | 326,752 | 29% |
(1) Represents non-cash inventory charges associated with the NDC acquisition.
(2) Adjusted operating profit and EBITDA are non-GAAP measures used by management to evaluate the Company's ongoing operations and non-cash inventory charges related to the NDC acquisition. Adjusted operating profit is defined as operating profit plus certain adjustments, such as non-cash inventory charges associated with the NDC acquisition. 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 | Six Months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| April 30, 2022 | April 30, 2021 | April 30, 2022 | April 30, 2021 | |||||||||
| GAAP AS REPORTED | ||||||||||||
| Operating profit | $ | 183,973 | $ | 166,391 | $ | 339,833 | $ | 275,416 | ||||
| Other / interest expense - net | (44,706) | (10,533) | (48,599) | (21,746) | ||||||||
| Net income | 109,634 | 124,144 | 230,043 | 201,726 | ||||||||
| Diluted earnings per share | $ | 1.88 | $ | 2.12 | $ | 3.93 | $ | 3.44 | ||||
| Shares outstanding - diluted | 58,382 | 58,652 | 58,606 | 58,703 | ||||||||
| OPERATING PROFIT ADJUSTMENTS | ||||||||||||
| Inventory step-up amortization | $ | — | $ | — | $ | 1,563 | $ | — | ||||
| NON-OPERATING EXPENSE ADJUSTMENTS | ||||||||||||
| Pension settlement loss | $ | 41,221 | $ | — | $ | 41,221 | $ | — | ||||
| Total adjustments | $ | 41,221 | $ | — | $ | 42,784 | $ | — | ||||
| Adjustments net of tax | $ | 32,450 | $ | — | $ | 33,795 | $ | — | ||||
| EPS effect of adjustments | $ | 0.56 | $ | — | $ | 0.58 | $ | — | ||||
| NON-GAAP MEASURES-ADJUSTED PROFITABILITY | ||||||||||||
| Operating profit (1) | $ | 183,973 | $ | 166,391 | $ | 341,396 | $ | 275,416 | ||||
| Operating profit % of sales | 29.0 | % | 28.2 | % | 27.4 | % | 24.7 | % | ||||
| Net income (2) | $ | 142,084 | $ | 124,144 | $ | 263,838 | $ | 201,726 | ||||
| Diluted earnings per share (3) | $ | 2.43 | $ | 2.12 | $ | 4.50 | $ | 3.44 |
(1) Adjusted operating profit is defined as operating profit plus certain adjustments such as non-cash inventory charges related to the NDC acquisition. 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.
Contact
Lara Mahoney
Vice President,
Investor Relations & Corporate Communications
440.204.9985
Lara.Mahoney@nordson.com
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