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, 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 February 22, 2021, Nordson Corporation issued a press release relating to its results of operations for the first quarter of fiscal 2021. A copy is attached as Exhibit 99.1.
Item 9.01 Financial Statements and Exhibits.(d) Exhibits.
(d) Exhibits.
| 99.1 | Press release of Nordson Corporation dated February 22, 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: | February 22, 2021 | By: | /s/ Joseph P. Kelley |
| Joseph P. Kelley | |||
| Executive Vice President<br><br>Chief Financial Officer |
Document
Exhibit 99.1
Nordson Corporation Reports Fiscal Year 2021 First Quarter Results
First Quarter:
•Sales were $527 million, a 6% increase over prior year
•Operating profit was $109 million, or 21% of sales, a 39% increase over prior year
•Earnings were $1.32 per diluted share, a 48% increase over prior year
Guidance:
•Fiscal 2021 full year sales growth of 4% to 6% and full year diluted earnings per share in the range of $6.30 to $6.70
WESTLAKE, Ohio--(BUSINESS WIRE)--February 22, 2021--Nordson Corporation (Nasdaq: NDSN) today reported results for the fiscal first quarter ended January 31, 2021. Sales were $527 million, a 6% increase compared to the prior year’s first quarter sales of $495 million. Strength in consumer non-durable and industrial end markets were the primary drivers of the growth. The change in first quarter 2021 sales included an organic volume increase of 3%, a favorable effect from currency translation of 3%, and benefits from acquisitions.
Operating profit in the quarter was $109 million or 21% of sales, compared to prior year adjusted operating profit of $78 million. This 39% increase in profit was driven by leveraging sales volume growth, benefits from structural cost reduction actions taken in fiscal year 2020, and an improved sales mix. EBITDA for the first quarter of 2021 totaled $135 million, or 26% of sales.
Net income was $78 million, a 49% increase from the prior year earnings of $52 million. First quarter 2021 diluted earnings per share were $1.32, a 48% increase over the prior year earnings of $0.89 per diluted share.
“I am very pleased with the solid start to the year, particularly in our return to year-over-year organic sales growth and the significant profit margin expansion as strategic actions taken in fiscal year 2020 began delivering results. While this remains a dynamic macro-environment, we are encouraged by the order entry momentum we started to see within the quarter, particularly in product lines serving the medical and electronics end markets,” said Nordson President and Chief Executive Officer Sundaram Nagarajan. “I am very thankful for the energy and commitment of our employees, who continue to manage through the uncertainty of COVID-19 while also deploying our new NBS Next growth framework and making a strong Nordson even stronger.”
First Quarter Segment Results
Industrial Precision Solutions sales of $288 million increased approximately 9% compared to the prior year first quarter, driven by a 6% organic increase and a favorable currency impact of 3%. The organic sales increase was driven by solid demand in consumer non-durable and industrial end markets. Operating profit was $83 million, or 29% of sales compared to 21% in the prior year first quarter.
Advanced Technology Solutions sales of $238 million increased approximately 3% compared to the prior year first quarter. Acquisitions increased sales by approximately 2% and favorable currency impacts also added 2%, which was offset by an organic volume decrease of 1%. Sales growth in test and inspection and fluid dispense product lines was offset by weaker shipments in electronic dispense and medical interventional solutions product lines during the quarter. Operating profit totaled $47 million, or 20% of sales, compared to adjusted operating profit of 15% of sales in the prior year first quarter.
Outlook
On February 1, the divestiture of the screws and barrels product line was completed. This was an important strategic portfolio realignment that will lead to improved profitability.
Order entry trends consistently improved throughout the first quarter of fiscal year 2021 across the majority of our product lines, and backlog entering the second quarter of fiscal year 2021 was approximately $495 million, an increase of 7% compared to the same period a year ago. Based on this backlog and order entry trend, and the correlation to sales timing, we expect the fiscal 2021 full year sales growth to be approximately 4% to 6% over fiscal year 2020, inclusive of a 3% headwind from the divestiture. Additionally, we are forecasting full year 2021 earnings per diluted share in the range of $6.30 to $6.70, representing 15% to 22% 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, February 23, 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 engineers, manufactures and markets differentiated products and systems used for the precision dispensing of adhesives, coatings, sealants, biomaterials, polymers, plastics and other materials, fluid management, test and inspection, UV curing and plasma surface treatment, all supported by application expertise and direct global sales and service. Nordson serves a wide variety of consumer non-durable, durable and technology end markets including packaging, nonwovens, electronics, medical, appliances, energy, transportation, construction, and general product assembly and finishing. Founded in 1954 and headquartered in Westlake, Ohio, the Company has operations and support offices in more than 35 countries. Visit Nordson on the web at http://www.nordson.com, @Nordson_Corp, or www.facebook.com/nordson.
Attachment 1
NORDSON CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Dollars in thousands except for per-share amounts)
| Three months ended | ||||||
|---|---|---|---|---|---|---|
| January 31, 2021 | January 31, 2020 | |||||
| Sales | $ | 526,566 | $ | 494,916 | ||
| Cost of sales | 236,606 | 231,722 | ||||
| Gross profit | 289,960 | 263,194 | ||||
| Gross margin % | 55.1 | % | 53.2 | % | ||
| Selling & administrative expenses | 180,935 | 188,101 | ||||
| Operating profit | 109,025 | 75,093 | ||||
| Interest expense - net | (6,552) | (9,152) | ||||
| Other expense - net | (4,661) | (2,846) | ||||
| Income before income taxes | 97,812 | 63,095 | ||||
| Income taxes | 20,230 | 11,091 | ||||
| Net income | $ | 77,582 | $ | 52,004 | ||
| Weighted-average common shares outstanding: | ||||||
| Basic | 58,059 | 57,668 | ||||
| Diluted | 58,755 | 58,524 | ||||
| Earnings per share: | ||||||
| Basic earnings | $ | 1.34 | $ | 0.90 | ||
| Diluted earnings | $ | 1.32 | $ | 0.89 |
Attachment 2
NORDSON CORPORATION
CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollars in thousands)
| January 31, 2021 | October 31, 2020 | |||
|---|---|---|---|---|
| Cash and cash equivalents | $ | 225,738 | $ | 208,293 |
| Receivables - net | 455,376 | 471,873 | ||
| Inventories - net | 282,440 | 277,033 | ||
| Other current assets | 45,124 | 43,798 | ||
| Assets held for sale | 19,451 | 19,615 | ||
| Total current assets | 1,028,129 | 1,020,612 | ||
| Property, plant & equipment - net | 358,670 | 358,618 | ||
| Goodwill | 1,722,824 | 1,713,354 | ||
| Other assets | 573,778 | 582,072 | ||
| $ | 3,683,401 | $ | 3,674,656 | |
| Current maturities of long-term debt | $ | 38,043 | $ | 38,043 |
| Accounts payable and accrued liabilities | 307,355 | 311,898 | ||
| Liabilities held for sale | 14,211 | 13,148 | ||
| Total current liabilities | 359,609 | 363,089 | ||
| Long-term debt | 981,284 | 1,067,952 | ||
| Other liabilities | 485,325 | 484,624 | ||
| Total shareholders' equity | 1,857,183 | 1,758,991 | ||
| $ | 3,683,401 | $ | 3,674,656 |
Attachment 3
NORDSON CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
(Dollars in thousands)
| Three Months Ended | ||||
|---|---|---|---|---|
| January 31, 2021 | January 31, 2020 | |||
| Cash flows from operating activities: | ||||
| Net income | $ | 77,582 | $ | 52,004 |
| Depreciation and amortization | 26,020 | 28,618 | ||
| Other non-cash items | 10,271 | 7,167 | ||
| Changes in working capital | 29,416 | 28,486 | ||
| Net cash provided by operating activities | 143,289 | 116,275 | ||
| Cash flows from investing activities: | ||||
| Additions to property, plant and equipment | (7,917) | (13,881) | ||
| Other - net | 22 | 65 | ||
| Net cash used in investing activities | (7,895) | (13,816) | ||
| Cash flows from financing activities: | ||||
| Repayment of long-term debt | (100,000) | (125,951) | ||
| Repayment of finance lease obligations | (1,734) | (2,421) | ||
| Dividends paid | (22,672) | (21,915) | ||
| Issuance of common shares | 7,438 | 16,379 | ||
| Purchase of treasury shares | (5,310) | (4,311) | ||
| Net cash used in financing activities | (122,278) | (138,219) | ||
| Effect of exchange rate change on cash | 4,329 | (307) | ||
| Net change in cash and cash equivalents | 17,445 | (36,067) | ||
| Cash and cash equivalents: | ||||
| Beginning of period | 208,293 | 151,164 | ||
| End of period | $ | 225,738 | $ | 115,097 |
Attachment 4
NORDSON CORPORATION
SALES BY GEOGRAPHIC SEGMENT (Unaudited)
(Dollars in thousands)
| Three Months Ended | Sales Variance | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| January 31, 2021 | January 31, 2020 | Organic | Acquisitions | Currency | Total | |||||||
| SALES BY SEGMENT | ||||||||||||
| Industrial precision solutions | $ | 288,416 | $ | 263,799 | 5.9 | % | — | % | 3.4 | % | 9.3 | % |
| Advanced technology solutions | 238,150 | 231,117 | (1.3) | % | 2.2 | % | 2.1 | % | 3.0 | % | ||
| Total sales | $ | 526,566 | $ | 494,916 | 2.6 | % | 1.0 | % | 2.8 | % | 6.4 | % |
| SALES BY GEOGRAPHIC REGION | ||||||||||||
| United States | $ | 185,316 | $ | 188,500 | (2.8) | % | 1.1 | % | — | % | (1.7) | % |
| Americas | 36,138 | 31,083 | 9.9 | % | 9.8 | % | (3.4) | % | 16.3 | % | ||
| Europe | 135,151 | 126,391 | 0.3 | % | — | % | 6.6 | % | 6.9 | % | ||
| Japan | 27,115 | 27,552 | (6.3) | % | — | % | 4.7 | % | (1.6) | % | ||
| Asia Pacific | 142,846 | 121,390 | 13.4 | % | — | % | 4.3 | % | 17.7 | % | ||
| Total sales | $ | 526,566 | $ | 494,916 | 2.6 | % | 1.0 | % | 2.8 | % | 6.4 | % |
Attachment 5
NORDSON CORPORATION
RECONCILIATION OF NON-GAAP MEASURES - ADJUSTED OPERATING PROFIT AND EBITDA (Unaudited)
(Dollars in thousands)
| Three months ended | ||||||
|---|---|---|---|---|---|---|
| January 31, 2021 | January 31, 2020 | |||||
| SALES BY SEGMENT | ||||||
| Industrial precision solutions | $ | 288,416 | $ | 263,799 | ||
| Advanced technology solutions | 238,150 | 231,117 | ||||
| Total sales | $ | 526,566 | $ | 494,916 | ||
| OPERATING PROFIT | ||||||
| Industrial precision solutions | $ | 83,403 | $ | 56,404 | ||
| Advanced technology solutions | 47,201 | 32,287 | ||||
| Corporate | (21,579) | (13,598) | ||||
| Total operating profit | $ | 109,025 | $ | 75,093 | ||
| OPERATING PROFIT ADJUSTMENTS (1) | ||||||
| Industrial precision solutions | $ | — | $ | 299 | ||
| Advanced technology solutions | — | 2,970 | ||||
| Corporate | — | — | ||||
| Total adjustments | $ | — | $ | 3,269 | ||
| ADJUSTED OPERATING PROFIT (NON-GAAP) (2) | % of Sales | % of Sales | ||||
| Industrial precision solutions | $ | 83,403 | 29% | $ | 56,703 | 21% |
| Advanced technology solutions | 47,201 | 20% | 35,257 | 15% | ||
| Corporate | (21,579) | (13,598) | ||||
| Total operating profit - adjusted | $ | 109,025 | 21% | $ | 78,362 | 16% |
| DEPRECIATION & AMORTIZATION | ||||||
| Industrial precision solutions | $ | 6,983 | $ | 9,827 | ||
| Advanced technology solutions | 16,544 | 16,320 | ||||
| Corporate | 2,493 | 2,471 | ||||
| Total depreciation & amortization | $ | 26,020 | $ | 28,618 | ||
| EBITDA (NON-GAAP) (2) | ||||||
| Industrial precision solutions | $ | 90,386 | 31% | $ | 66,530 | 25% |
| Advanced technology solutions | 63,745 | 27% | 51,577 | 22% | ||
| Corporate | (19,086) | (11,127) | ||||
| Total EBITDA | $ | 135,045 | 26% | $ | 106,980 | 22% |
(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 | ||||||
|---|---|---|---|---|---|---|
| January 31, 2021 | January 31, 2020 | |||||
| GAAP AS REPORTED | ||||||
| Operating profit | $ | 109,025 | $ | 75,093 | ||
| Other / interest expense - net | (11,213) | (11,998) | ||||
| Net income | 77,582 | 52,004 | ||||
| Diluted earnings per share | $ | 1.32 | $ | 0.89 | ||
| Shares outstanding - diluted | 58,755 | 58,524 | ||||
| OPERATING PROFIT ADJUSTMENTS | ||||||
| Severance and other | $ | — | $ | 3,269 | ||
| Adjustments net of tax | $ | — | $ | 2,563 | ||
| Other discrete tax items | $ | — | $ | (2,537) | ||
| EPS effect of adjustments and other discrete tax items | $ | — | $ | — | ||
| NON-GAAP MEASURES-ADJUSTED PROFITABILITY | ||||||
| Operating profit (1) | $ | 109,025 | $ | 78,362 | ||
| Operating profit % of sales | 20.7 | % | 15.8 | % | ||
| Net income (2) | $ | 77,582 | $ | 52,030 | ||
| Diluted earnings per share (3) | $ | 1.32 | $ | 0.89 |
(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 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.
Contacts
Lara Mahoney
Vice President,
Investor Relations & Corporate Communications
440.204.9985
Lara.Mahoney@nordson.com
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