Nordson Corporation Reports Record Second Quarter Results and Raises Fiscal Year 2021 Guidance

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May 24, 2021 20:30 UTC

 

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)--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.

 

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

 

                               

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

 

 

 

 

 

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

 

 

 

 

 

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

%

 

 

 

 

 

 

 

 

 

 

 

 

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.

   

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.

Contacts

Lara Mahoney
Vice President,
Investor Relations & Corporate Communications
440.204.9985
Lara.Mahoney@nordson.com

 
 

Source: Nordson Corporation

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