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 24, 2021
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 24, 2021, Nordson Corporation issued a press release relating to its results of operations for the second quarter of fiscal 2021. A copy is attached as Exhibit 99.1.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| 99.1 | Press release of Nordson Corporation dated May 24, 2021. |
|---|---|
| 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 24, 2021 | By: | /s/ Joseph P. Kelley |
| Joseph P. Kelley | |||
| Executive Vice President<br><br>Chief Financial Officer |
Document
Nordson Corporation Reports Record Second Quarter Results and Raises Fiscal Year 2021 Guidance
Second Quarter:
•Quarterly sales, operating profit, and earnings per share were all company records
•Sales were $590 million, an 11% increase over prior year
•Operating profit was $166 million, a 33% increase over prior year
•Earnings were $2.12 per diluted share, a 34% increase over prior year
Guidance:
•Increased prior fiscal 2021 full year earnings guidance range by approximately 13% to $7.20 to $7.50 per diluted share
WESTLAKE, Ohio--(BUSINESS WIRE)--May 24, 2021--Nordson Corporation (Nasdaq: NDSN) today reported results for the fiscal second quarter ended April 30, 2021. Sales were a quarterly company record of $590 million, an 11% increase compared to the prior year’s second quarter sales of $529 million. Robust growth in electronics and consumer non-durable end markets, as well as strengthening medical and industrial end markets, were the primary drivers of this performance. The change in second quarter 2021 sales included an organic volume increase of 10%, a favorable effect from currency translation of 4%, offset by the net unfavorable impact of acquisitions and divestitures. When excluding the divested screws and barrels product line in the prior year for comparability purposes, sales growth would have been 15% in the current year quarter.
Operating profit in the quarter was $166 million, or 28% of sales, compared to prior year adjusted operating profit of $125 million. This 33% increase in adjusted operating profit was driven by sales volume leverage, improved sales mix, and benefits from structural cost reduction actions taken in fiscal year 2020 and the recent screws and barrels product line divestiture. EBITDA for the second quarter of 2021 totaled $192 million, or 33% of sales.
Net income was $124 million, a 35% increase from the prior year adjusted earnings of $92 million. Second quarter 2021 diluted earnings per share were $2.12, a 34% increase over the prior year diluted earnings per share of $1.58.
“Broader end market demand accelerated in the quarter more quickly and to a higher level than we previously anticipated. I am very pleased with the dedication and agility of our teams as we delivered record revenue and operating results in the quarter,” said Nordson President and Chief Executive Officer Sundaram Nagarajan. “Based on our backlog and order trends, we expect this strength to continue and are raising our sales and earnings guidance for the full year fiscal 2021. Our priorities remain consistent – protect the health and safety of our employees, fully participate in the market recovery by meeting the needs of our customers, and deploy the Ascend Strategy. With this clear focus, we will continue to progress toward our long-term objectives of delivering top-tier growth with leading margins and returns.”
Second Quarter Segment Results
Industrial Precision Solutions sales of $299 million increased approximately 6% compared to the prior year second quarter, driven by an 8% organic increase and a favorable currency impact of 5%, offset 7% by a divestiture. The organic sales increase was driven by strong global demand in consumer non-durable and industrial end markets. When excluding the divested screws and barrels product line in the prior year for comparability purposes, sales growth would have been 13% in the current year quarter. Operating profit was $104 million, or 35% of sales, an increase of 36% compared to the prior year second quarter.
Advanced Technology Solutions sales of $291 million increased approximately 18% compared to the prior year second quarter. Organic sales increased 13% while favorable currency impacts added 3% and acquisitions increased sales by approximately 2%. This strong sales growth was driven by test and inspection product lines for electronics end markets and fluid management product lines for medical and industrial end markets. Operating profit totaled $77 million, or 26% of sales, an increase of 30% compared to the prior year second quarter.
“The strong incremental margins and record quarterly profitability reflects the execution of the NBS Next growth framework, including favorable mix improvement with the divestiture of the screws and barrels product line,” said Nordson Chief Financial Officer Joseph Kelley. “The continued deployment and execution of the overall Ascend Strategy is designed to deliver sales growth with attractive incremental profit margins.”
Outlook
Order entry trends consistently improved throughout the second quarter of fiscal year 2021 across most of our product lines, and remain strong entering the third quarter. Based on the current backlog, order entry trends, and the correlation to shipment timing, we expect the fiscal 2021 full year sales growth to be approximately 8% to 10% over fiscal year 2020, inclusive of a 3% headwind from the second quarter divestiture of the screws and barrels product line. Additionally, we are forecasting full year 2021 earnings per diluted share in the range of $7.20 to $7.50, representing 31% to 37% 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, May 25, 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 is a global designer and manufacturer of innovative precision technologies for critical customer applications in consumer non-durable, medical, electronics and industrial end markets. The Company’s products are supported by application expertise and direct global sales and service. 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.
Attachment 1
NORDSON CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Dollars in thousands except for per-share amounts)
| Three months ended | Six months ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| April 30, 2021 | April 30, 2020 | April 30, 2021 | April 30, 2020 | |||||||||
| Sales | $ | 589,538 | $ | 529,478 | $ | 1,116,104 | $ | 1,024,394 | ||||
| Cost of sales | 251,839 | 239,880 | 488,445 | 471,602 | ||||||||
| Gross profit | 337,699 | 289,598 | 627,659 | 552,792 | ||||||||
| Gross margin % | 57.3 | % | 54.7 | % | 56.2 | % | 54.0 | % | ||||
| Selling & administrative expenses | 171,308 | 164,569 | 352,243 | 352,670 | ||||||||
| Operating profit | 166,391 | 125,029 | 275,416 | 200,122 | ||||||||
| Interest expense - net | (6,690) | (8,015) | (13,242) | (17,167) | ||||||||
| Other expense - net | (3,843) | (429) | (8,504) | (3,275) | ||||||||
| Income before income taxes | 155,858 | 116,585 | 253,670 | 179,680 | ||||||||
| Income taxes | 31,714 | 24,506 | 51,944 | 35,597 | ||||||||
| Net income | $ | 124,144 | $ | 92,079 | $ | 201,726 | $ | 144,083 | ||||
| Weighted-average common shares outstanding: | ||||||||||||
| Basic | 58,068 | 57,677 | 58,063 | $ | 57,672 | |||||||
| Diluted | 58,652 | 58,260 | 58,703 | 58,392 | ||||||||
| Earnings per share: | ||||||||||||
| Basic earnings | $ | 2.14 | $ | 1.60 | $ | 3.47 | $ | 2.50 | ||||
| Diluted earnings | $ | 2.12 | $ | 1.58 | $ | 3.44 | $ | 2.47 |
Attachment 2
NORDSON CORPORATION
CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollars in thousands)
| April 30, 2021 | October 31, 2020 | |||
|---|---|---|---|---|
| Cash and cash equivalents | $ | 133,320 | $ | 208,293 |
| Receivables - net | 470,622 | 471,873 | ||
| Inventories - net | 295,841 | 277,033 | ||
| Other current assets | 49,642 | 43,798 | ||
| Assets held for sale | — | 19,615 | ||
| Total current assets | 949,425 | 1,020,612 | ||
| Property, plant & equipment - net | 362,622 | 358,618 | ||
| Goodwill | 1,720,990 | 1,713,354 | ||
| Other assets | 561,873 | 582,072 | ||
| $ | 3,594,910 | $ | 3,674,656 | |
| Current maturities of long-term debt | $ | 38,043 | $ | 38,043 |
| Accounts payable and accrued liabilities | 347,224 | 311,898 | ||
| Liabilities held for sale | — | 13,148 | ||
| Total current liabilities | 385,267 | 363,089 | ||
| Long-term debt | 829,044 | 1,067,952 | ||
| Other liabilities | 430,242 | 484,624 | ||
| Total shareholders' equity | 1,950,357 | 1,758,991 | ||
| $ | 3,594,910 | $ | 3,674,656 |
Attachment 3
NORDSON CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
(Dollars in thousands)
| Six Months Ended | ||||
|---|---|---|---|---|
| April 30, 2021 | April 30, 2020 | |||
| Cash flows from operating activities: | ||||
| Net income | $ | 201,726 | $ | 144,083 |
| Depreciation and amortization | 51,336 | 55,664 | ||
| Other non-cash items | 14,858 | 2,504 | ||
| Changes in working capital | 31,244 | 4,276 | ||
| Other long-term assets and liabilities | (51,450) | 11,652 | ||
| Net cash provided by operating activities | 247,714 | 218,179 | ||
| Cash flows from investing activities: | ||||
| Additions to property, plant and equipment | (18,743) | (25,835) | ||
| Other - net | 5,062 | (1,896) | ||
| Net cash used in investing activities | (13,681) | (27,731) | ||
| Cash flows from financing activities: | ||||
| Issuance (repayment) of long-term debt | (250,101) | 39,822 | ||
| Repayment of finance lease obligations | (3,399) | (3,548) | ||
| Dividends paid | (45,342) | (43,878) | ||
| Issuance of common shares | 18,783 | 18,547 | ||
| Purchase of treasury shares | (30,274) | (41,930) | ||
| Net cash used in financing activities | (310,333) | (30,987) | ||
| Effect of exchange rate change on cash | 1,327 | (4,370) | ||
| Net change in cash and cash equivalents | (74,973) | 155,091 | ||
| Cash and cash equivalents: | ||||
| Beginning of period | 208,293 | 151,164 | ||
| End of period | $ | 133,320 | $ | 306,255 |
Attachment 4
NORDSON CORPORATION
SALES BY GEOGRAPHIC SEGMENT (Unaudited)
(Dollars in thousands)
| Three Months Ended | Sales Variance | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| April 30, 2021 | April 30, 2020 | Organic | Acquisitions / Divestitures | Currency | Total | |||||||
| SALES BY SEGMENT | ||||||||||||
| Industrial precision solutions | $ | 298,775 | $ | 282,274 | 8.3 | % | (7.3) | % | 4.8 | % | 5.8 | % |
| Advanced technology solutions | 290,763 | 247,204 | 12.7 | % | 2.4 | % | 2.5 | % | 17.6 | % | ||
| Total sales | $ | 589,538 | $ | 529,478 | 10.4 | % | (2.8) | % | 3.7 | % | 11.3 | % |
| SALES BY GEOGRAPHIC REGION | ||||||||||||
| United States | $ | 202,924 | $ | 188,933 | 12.1 | % | (4.7) | % | — | % | 7.4 | % |
| Americas | 44,914 | 36,673 | 15.1 | % | 5.4 | % | 2.0 | % | 22.5 | % | ||
| Europe | 156,451 | 136,056 | 8.3 | % | (2.3) | % | 9.0 | % | 15.0 | % | ||
| Japan | 27,852 | 31,575 | (8.5) | % | (4.0) | % | 0.7 | % | (11.8) | % | ||
| Asia Pacific | 157,397 | 136,241 | 13.6 | % | (2.5) | % | 4.4 | % | 15.5 | % | ||
| Total sales | $ | 589,538 | $ | 529,478 | 10.4 | % | (2.8) | % | 3.7 | % | 11.3 | % |
| Six Months Ended | Sales Variance | |||||||||||
| April 30, 2021 | April 30, 2020 | Organic | Acquisitions / Divestitures | Currency | Total | |||||||
| SALES BY SEGMENT | ||||||||||||
| Industrial precision solutions | $ | 587,191 | $ | 546,073 | 8.0 | % | (4.7) | % | 4.2 | % | 7.5 | % |
| Advanced technology solutions | 528,913 | 478,321 | 6.0 | % | 2.3 | % | 2.3 | % | 10.6 | % | ||
| Total Sales | $ | 1,116,104 | $ | 1,024,394 | 7.0 | % | (1.3) | % | 3.3 | % | 9.0 | % |
| SALES BY GEOGRAPHIC REGION | ||||||||||||
| United States | $ | 388,240 | $ | 377,433 | 5.0 | % | (2.1) | % | — | % | 2.9 | % |
| Americas | 81,052 | 67,756 | 13.8 | % | 6.3 | % | (0.5) | % | 19.6 | % | ||
| Europe | 291,602 | 262,447 | 4.8 | % | (1.6) | % | 7.9 | % | 11.1 | % | ||
| Japan | 54,967 | 59,127 | (6.7) | % | (2.9) | % | 2.6 | % | (7.0) | % | ||
| Asia Pacific | 300,243 | 257,631 | 13.5 | % | (1.4) | % | 4.4 | % | 16.5 | % | ||
| Total Sales | $ | 1,116,104 | $ | 1,024,394 | 7.0 | % | (1.3) | % | 3.3 | % | 9.0 | % |
Attachment 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, 2021 | April 30, 2020 | April 30, 2021 | April 30, 2020 | |||||||||
| SALES BY SEGMENT | ||||||||||||
| Industrial precision solutions | $ | 298,775 | $ | 282,274 | $ | 587,191 | $ | 546,073 | ||||
| Advanced technology solutions | 290,763 | 247,204 | 528,913 | 478,321 | ||||||||
| Total sales | $ | 589,538 | $ | 529,478 | $ | 1,116,104 | $ | 1,024,394 | ||||
| OPERATING PROFIT | ||||||||||||
| Industrial precision solutions | $ | 104,283 | $ | 76,454 | $ | 187,686 | $ | 132,858 | ||||
| Advanced technology solutions | 76,585 | 58,689 | 123,786 | 90,976 | ||||||||
| Corporate | (14,477) | (10,114) | (36,056) | (23,712) | ||||||||
| Total operating profit | $ | 166,391 | $ | 125,029 | $ | 275,416 | $ | 200,122 | ||||
| OPERATING PROFIT ADJUSTMENTS (1) | ||||||||||||
| Industrial precision solutions | $ | — | $ | 364 | $ | — | $ | 664 | ||||
| Advanced technology solutions | — | — | — | 2,970 | ||||||||
| Corporate | — | — | — | — | ||||||||
| Total adjustments | $ | — | $ | 364 | $ | — | $ | 3,634 | ||||
| ADJUSTED OPERATING PROFIT (NON-GAAP) (2) | % of Sales | % of Sales | % of Sales | % of Sales | ||||||||
| Industrial precision solutions | $ | 104,283 | 35% | $ | 76,818 | 27% | $ | 187,686 | 32% | $ | 133,522 | 24% |
| Advanced technology solutions | 76,585 | 26% | 58,689 | 24% | 123,786 | 23% | 93,946 | 20% | ||||
| Corporate | (14,477) | (10,114) | (36,056) | (23,712) | ||||||||
| Total operating profit - adjusted | $ | 166,391 | 28% | $ | 125,393 | 24% | $ | 275,416 | 25% | $ | 203,756 | 20% |
| DEPRECIATION & AMORTIZATION | ||||||||||||
| Industrial precision solutions | $ | 6,468 | $ | 9,296 | $ | 13,451 | $ | 19,125 | ||||
| Advanced technology solutions | 16,421 | 15,245 | 32,965 | 31,565 | ||||||||
| Corporate | 2,427 | 2,505 | 4,920 | 4,974 | ||||||||
| Total depreciation & amortization | $ | 25,316 | $ | 27,046 | $ | 51,336 | $ | 55,664 | ||||
| EBITDA (NON-GAAP) (2) | ||||||||||||
| Industrial precision solutions | $ | 110,751 | 37% | $ | 86,114 | 31% | $ | 201,137 | 34% | $ | 152,647 | 28% |
| Advanced technology solutions | 93,006 | 32% | 73,934 | 30% | 156,751 | 30% | 125,511 | 26% | ||||
| Corporate | (12,050) | (7,609) | (31,136) | (18,738) | ||||||||
| Total EBITDA | $ | 191,707 | 33% | $ | 152,439 | 29% | $ | 326,752 | 29% | $ | 259,420 | 25% |
(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.
Attachment 6
NORDSON CORPORATION
RECONCILIATION OF NON-GAAP MEASURES - PROFITABILITY (Unaudited)
(Dollars in thousands)
| Three Months Ended | Six Months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| April 30, 2021 | April 30, 2020 | April 30, 2021 | April 30, 2020 | |||||||||
| GAAP AS REPORTED | ||||||||||||
| Operating profit | $ | 166,391 | $ | 125,029 | $ | 275,416 | $ | 200,122 | ||||
| Other / interest expense - net | (10,533) | (8,444) | (21,746) | (20,442) | ||||||||
| Net income | 124,144 | 92,079 | 201,726 | 144,083 | ||||||||
| Diluted earnings per share | $ | 2.12 | $ | 1.58 | $ | 3.44 | $ | 2.47 | ||||
| Shares outstanding - diluted | 58,652 | 58,260 | 58,703 | 58,392 | ||||||||
| OPERATING PROFIT ADJUSTMENTS | ||||||||||||
| Severance and other | $ | — | $ | 364 | — | 3,634 | ||||||
| Adjustments net of tax | $ | — | $ | 287 | $ | — | $ | 2,860 | ||||
| Other discrete tax items | $ | — | $ | (138) | $ | — | $ | (2,675) | ||||
| EPS effect of adjustments and other discrete tax items | $ | — | $ | — | $ | — | $ | — | ||||
| NON-GAAP MEASURES-ADJUSTED PROFITABILITY | ||||||||||||
| Operating profit (1) | $ | 166,391 | $ | 125,393 | $ | 275,416 | $ | 203,756 | ||||
| Operating profit % of sales | 28.2 | % | 23.7 | % | 24.7 | % | 19.9 | % | ||||
| Net income (2) | $ | 124,144 | $ | 92,228 | $ | 201,726 | $ | 144,268 | ||||
| Diluted earnings per share (3) | $ | 2.12 | $ | 1.58 | $ | 3.44 | $ | 2.47 |
(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 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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