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): February 22, 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 February 22, 2022, Nordson Corporation issued a press release relating to its results of operations for the first 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 first quarter fiscal 2022 results and outlook during a webcast on Wednesday, February 23, 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 February 22, 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: | February 22, 2022 | By: | /s/ Joseph P. Kelley |
| Joseph P. Kelley | |||
| Executive Vice President<br><br>Chief Financial Officer |
Document
Nordson Corporation Reports Fiscal Year 2022 First Quarter Results and Updates Annual Guidance
First Quarter:
•Sales were $609 million, a 16% increase over prior year
•Earnings per share were $2.05 compared to $1.32 in the prior year
•Adjusted operating profit was $157 million, a 44% increase over prior year
•Adjusted earnings were $2.07 per diluted share, a 57% increase over the prior year
Guidance:
•Update prior full-year 2022 guidance to the high-end of the range for revenue and earnings: revenue growth in the range of 7% to 10% and adjusted earnings per diluted share growth in the range of 14% to 18% over fiscal 2021
WESTLAKE, Ohio--(BUSINESS WIRE)--February 22, 2022--Nordson Corporation (Nasdaq: NDSN) today reported results for the fiscal first quarter ended January 31, 2022. Sales were $609 million, a 16% increase compared to the prior year’s first quarter sales of $527 million. The increase in first quarter 2022 sales included organic volume growth of 16% and a favorable impact of acquisitions/divestitures of 2%, partially offset by unfavorable effects from currency translation of 2%. The organic sales increase was driven by strong demand across most end markets.
Operating profit in the first quarter was $156 million. Excluding the amortization of acquired inventory, adjusted operating profit in the quarter was $157 million, or 26% of sales, compared to prior year operating profit of $109 million. This 44% increase in adjusted operating profit was driven by volume leverage, favorable sales mix and continued cost control measures. EBITDA for the first quarter of 2022 totaled $183 million, or 30% of sales.
Net income was $120 million, or $2.05 earnings per diluted share. Adjusted net income was $122 million, a $44 million increase from the prior year earnings of $78 million. First quarter 2022 adjusted diluted earnings per share were $2.07, a 57% increase over the prior year diluted earnings per share of $1.32.
“In line with our expectations, the first quarter results sustained the strong momentum from our record performance in fiscal 2021. Our teams did an outstanding job delivering double-digit sales growth across most end markets in the midst of supply chain constraints and labor shortages. I am very thankful for our employees, who are managing dynamic market conditions, deploying the NBS Next growth framework and ensuring we meet the needs of our customers,” said Sundaram Nagarajan, president and chief executive officer.
First Quarter Segment Results
Industrial Precision Solutions sales of $324 million increased 12% compared to the prior year first quarter, driven by a 12% organic increase and a favorable acquisition/divestiture impact of 3%, partially offset by unfavorable currency impact of 3%. The organic sales increase was driven by continued demand in consumer non-durable and industrial end markets, particularly in Asia. Operating profit in the quarter was $102 million. Adjusted operating profit, excluding acquired inventory step-up amortization, was $104 million, or 32% of sales, an increase of 24% compared to the prior year first quarter operating profit.
On November 1, 2021, the Company closed its acquisition of NDC Technologies, a test and inspection business focused on measurement and controls solutions serving consumer non-durable, film extrusion & converting, cable & tubing and energy storage end markets. Upon integration, financial reporting for NDC was moved into the Industrial Precision Solutions segment to better leverage growth opportunities within shared industrial and consumer non-durable end markets and related sales channels.
Advanced Technology Solutions sales of $285 million increased 20% compared to the prior year first quarter. Organic sales increased 21%, partially offset by an unfavorable currency impact of 1%. The segment had double-digit organic sales demand across all of its end markets with particular strength in its electronics dispense and biopharma fluid component product lines.
Operating profit totaled $76 million, or 27% of sales, an increase of 62% compared to the prior year first quarter operating profit.
Outlook
Order entry remained strong throughout the first quarter with a favorable book-to-bill ratio growing backlog to over $900 million. The Company continues to see extended shipment request dates in conjunction with large orders from its customers in electronics, industrial and medical end markets. Based on anticipated sales timing, supply chain constraints and labor availability, we expect fiscal 2022 second quarter sales growth to be in the range of 6% to 10% as compared to fiscal 2021 second quarter, with adjusted earnings per diluted share in the range of $2.20 to $2.30.
For the full year, the Company is focusing its guidance to the high end of its previous ranges based upon the strong fiscal first quarter performance. It now expects full-year revenue growth in the range of 7% to 10% and adjusted earnings per diluted share growth in the range of 14% to 18% over fiscal 2021.
Nordson management will provide additional commentary on these results and outlook during its previously announced webcast on Wednesday, February 23, 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, 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 | ||||||
|---|---|---|---|---|---|---|
| January 31, 2022 | January 31, 2021 | |||||
| Sales | $ | 609,166 | $ | 526,566 | ||
| Cost of sales | 269,032 | 236,606 | ||||
| Gross profit | 340,134 | 289,960 | ||||
| Gross margin % | 55.8 | % | 55.1 | % | ||
| Selling & administrative expenses | 184,274 | 180,935 | ||||
| Operating profit | 155,860 | 109,025 | ||||
| Interest expense - net | (5,185) | (6,552) | ||||
| Other income (expense) - net | 1,292 | (4,661) | ||||
| Income before income taxes | 151,967 | 97,812 | ||||
| Income taxes | 31,558 | 20,230 | ||||
| Net income | $ | 120,409 | $ | 77,582 | ||
| Weighted-average common shares outstanding: | ||||||
| Basic | 58,152 | 58,059 | ||||
| Diluted | 58,819 | 58,755 | ||||
| Earnings per share: | ||||||
| Basic earnings | $ | 2.07 | $ | 1.34 | ||
| Diluted earnings | $ | 2.05 | $ | 1.32 |
NORDSON CORPORATION
CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollars in thousands)
| January 31, 2022 | October 31, 2021 | |||
|---|---|---|---|---|
| Cash and cash equivalents | $ | 170,539 | $ | 299,972 |
| Receivables - net | 465,721 | 489,389 | ||
| Inventories - net | 366,380 | 327,195 | ||
| Other current assets | 51,595 | 48,282 | ||
| Total current assets | 1,054,235 | 1,164,838 | ||
| Property, plant & equipment - net | 361,567 | 355,565 | ||
| Goodwill | 1,836,485 | 1,713,148 | ||
| Other assets | 582,703 | 557,410 | ||
| $ | 3,834,990 | $ | 3,790,961 | |
| Current maturities of long-term debt and notes payable | $ | 34,149 | $ | 34,188 |
| Accounts payable and accrued liabilities | 395,318 | 411,206 | ||
| Total current liabilities | 429,467 | 445,394 | ||
| Long-term debt | 773,191 | 781,709 | ||
| Other liabilities | 413,704 | 404,728 | ||
| Total shareholders' equity | 2,218,628 | 2,159,130 | ||
| $ | 3,834,990 | $ | 3,790,961 |
NORDSON CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
(Dollars in thousands)
| Three Months Ended | ||||
|---|---|---|---|---|
| January 31, 2022 | January 31, 2021 | |||
| Cash flows from operating activities: | ||||
| Net income | $ | 120,409 | $ | 77,582 |
| Depreciation and amortization | 25,390 | 26,020 | ||
| Other non-cash items | 11,023 | 10,271 | ||
| Changes in working capital | (29,217) | 16,152 | ||
| Other | (9,518) | 13,264 | ||
| Net cash provided by operating activities | 118,087 | 143,289 | ||
| Cash flows from investing activities: | ||||
| Additions to property, plant and equipment | (12,491) | (7,917) | ||
| Acquisition of businesses, net of cash acquired | (171,613) | — | ||
| Other - net | 7 | 22 | ||
| Net cash used in investing activities | (184,097) | (7,895) | ||
| Cash flows from financing activities: | ||||
| Issuance (repayment) of long-term debt | (1,257) | (100,000) | ||
| Repayment of finance lease obligations | (1,640) | (1,734) | ||
| Dividends paid | (29,724) | (22,672) | ||
| Issuance of common shares | 5,721 | 7,438 | ||
| Purchase of treasury shares | (35,002) | (5,310) | ||
| Net cash used in financing activities | (61,902) | (122,278) | ||
| Effect of exchange rate change on cash | (1,521) | 4,329 | ||
| Net change in cash and cash equivalents | (129,433) | 17,445 | ||
| Cash and cash equivalents: | ||||
| Beginning of period | 299,972 | 208,293 | ||
| End of period | $ | 170,539 | $ | 225,738 |
NORDSON CORPORATION
SALES BY GEOGRAPHIC SEGMENT (Unaudited)
(Dollars in thousands)
| Three Months Ended | Sales Variance | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| January 31, 2022 | January 31, 2021 | Organic | Acquisitions / Divestitures | Currency | Total | |||||||
| SALES BY SEGMENT | ||||||||||||
| Industrial precision solutions | $ | 323,933 | $ | 288,416 | 12.0 | % | 3.2 | % | (2.9) | % | 12.3 | % |
| Advanced technology solutions | 285,233 | 238,150 | 20.6 | % | — | % | (0.8) | % | 19.8 | % | ||
| Total sales | $ | 609,166 | $ | 526,566 | 16.0 | % | 1.6 | % | (1.9) | % | 15.7 | % |
| SALES BY GEOGRAPHIC REGION | ||||||||||||
| United States | $ | 191,377 | $ | 185,316 | 2.8 | % | 0.5 | % | — | % | 3.3 | % |
| Americas | 48,525 | 36,138 | 36.6 | % | (0.9) | % | (1.4) | % | 34.3 | % | ||
| Europe | 155,985 | 135,151 | 16.6 | % | 3.9 | % | (5.1) | % | 15.4 | % | ||
| Japan | 25,558 | 27,115 | 3.5 | % | (0.2) | % | (9.0) | % | (5.7) | % | ||
| Asia Pacific | 187,721 | 142,846 | 29.4 | % | 2.1 | % | (0.1) | % | 31.4 | % | ||
| Total sales | $ | 609,166 | $ | 526,566 | 16.0 | % | 1.6 | % | (1.9) | % | 15.7 | % |
NORDSON CORPORATION
RECONCILIATION OF NON-GAAP MEASURES - ADJUSTED OPERATING PROFIT AND EBITDA (Unaudited)
(Dollars in thousands)
| Three Months Ended | ||||||
|---|---|---|---|---|---|---|
| January 31, 2022 | January 31, 2021 | |||||
| SALES BY SEGMENT | ||||||
| Industrial precision solutions | $ | 323,933 | $ | 288,416 | ||
| Advanced technology solutions | 285,233 | 238,150 | ||||
| Total sales | $ | 609,166 | $ | 526,566 | ||
| OPERATING PROFIT | ||||||
| Industrial precision solutions | $ | 102,187 | $ | 83,403 | ||
| Advanced technology solutions | 76,327 | 47,201 | ||||
| Corporate | (22,654) | (21,579) | ||||
| Total operating profit | $ | 155,860 | $ | 109,025 | ||
| OPERATING PROFIT ADJUSTMENTS (1) | ||||||
| Industrial precision solutions | $ | 1,563 | $ | — | ||
| ADJUSTED OPERATING PROFIT (NON-GAAP) (2) | % of Sales | % of Sales | ||||
| Industrial precision solutions | $ | 103,750 | 32% | $ | 83,403 | 29% |
| Advanced technology solutions | 76,327 | 27% | 47,201 | 20% | ||
| Corporate | (22,654) | (21,579) | ||||
| Total operating profit - adjusted | $ | 157,423 | 26% | $ | 109,025 | 21% |
| DEPRECIATION & AMORTIZATION | ||||||
| Industrial precision solutions | $ | 7,442 | $ | 6,983 | ||
| Advanced technology solutions | 15,810 | 16,544 | ||||
| Corporate | 2,138 | 2,493 | ||||
| Total depreciation & amortization | $ | 25,390 | $ | 26,020 | ||
| EBITDA (NON-GAAP) (2) | ||||||
| Industrial precision solutions | $ | 111,192 | 34% | $ | 90,386 | 31% |
| Advanced technology solutions | 92,137 | 32% | 63,745 | 27% | ||
| Corporate | (20,516) | (19,086) | ||||
| Total EBITDA | $ | 182,813 | 30% | $ | 135,045 | 26% |
(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 | ||||||
|---|---|---|---|---|---|---|
| January 31, 2022 | January 31, 2021 | |||||
| GAAP AS REPORTED | ||||||
| Operating profit | $ | 155,860 | $ | 109,025 | ||
| Other / interest expense - net | (3,893) | (11,213) | ||||
| Net income | 120,409 | 77,582 | ||||
| Diluted earnings per share | $ | 2.05 | $ | 1.32 | ||
| Shares outstanding - diluted | 58,819 | 58,755 | ||||
| OPERATING PROFIT ADJUSTMENTS | ||||||
| Inventory step-up amortization | $ | 1,563 | $ | — | ||
| Adjustments net of tax | $ | 1,238 | $ | — | ||
| EPS effect of adjustments | $ | 0.02 | $ | — | ||
| NON-GAAP MEASURES-ADJUSTED PROFITABILITY | ||||||
| Operating profit (1) | $ | 157,423 | $ | 109,025 | ||
| Operating profit % of sales | 25.8 | % | 20.7 | % | ||
| Net income (2) | $ | 121,647 | $ | 77,582 | ||
| Diluted earnings per share (3) | $ | 2.07 | $ | 1.32 |
(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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