Nordson Corporation Reports First Quarter Fiscal 2023 Results and Updates Annual Guidance
Nordson Corporation (Nasdaq: NDSN) reported Q1 fiscal 2023 results, with sales of $610 million, a 1% organic increase year-over-year. The operating profit was $144 million, while adjusted operating profit reached $155 million, comprising 25% of sales. Earnings per diluted share decreased to $1.81 from $2.07 the previous year, with adjusted EPS at $1.95. The company updated its full-year guidance, projecting revenue growth of 0% to 3% and adjusted earnings per share between $8.75 and $9.50. Key growth was noted in Europe and the Americas, despite challenges in Asia Pacific due to COVID-19 and currency fluctuations.
- Sales growth of 1% organic increase compared to last year.
- Strong performance in Europe and Americas, driving growth.
- Acquisition of CyberOptics positively impacted sales.
- Robust backlog of approximately $1 billion.
- Earnings per share decreased to $1.81 from $2.07 last year.
- Adjusted EPS fell by 6% compared to the previous year.
- Operating profit affected by unfavorable currency translation.
- Softness in Asia Pacific, particularly China, impacting sales.
First Quarter:
-
Sales were
, a$610 million 1% organic increase over the prior year -
Operating profit was
$144 million -
Adjusted operating profit was
,$155 million 25% of sales -
Earnings per share were
$1.81 -
Adjusted earnings per share were
compared to$1.95 in the prior year$2.07
Guidance:
-
Updating previously issued full-year fiscal 2023 guidance: revenue growth of
0% to3% over record fiscal 2022 and adjusted earnings per diluted share in the range of to$8.75 per share$9.50
Operating profit in the first quarter was
Net income was
“First quarter results were in line with our expectations. Our team delivered sales growth comparable to a record fiscal first quarter 2022 despite unfavorable currency headwinds, the timing of the
First Quarter Segment Results
Industrial Precision Solutions sales of
Medical and Fluid Solutions sales of
Outlook
While the backlog remains robust at approximately
Nordson management will provide additional commentary on these results and outlook during its previously announced webcast on
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 these 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,
CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (Dollars in thousands except for per-share amounts) |
|||||||
|
Three Months Ended |
||||||
|
|
|
|
||||
Sales |
$ |
610,477 |
|
|
$ |
609,166 |
|
Cost of sales |
|
281,610 |
|
|
|
269,032 |
|
Gross profit |
|
328,867 |
|
|
|
340,134 |
|
Gross margin % |
|
53.9 |
% |
|
|
55.8 |
% |
|
|
|
|
||||
Selling & administrative expenses |
|
184,648 |
|
|
|
184,274 |
|
Operating profit |
|
144,219 |
|
|
|
155,860 |
|
|
|
|
|
||||
Interest expense - net |
|
(9,943 |
) |
|
|
(5,185 |
) |
Other income (expense) - net |
|
(3,196 |
) |
|
|
1,292 |
|
Income before income taxes |
|
131,080 |
|
|
|
151,967 |
|
|
|
|
|
||||
Income taxes |
|
26,819 |
|
|
|
31,558 |
|
|
|
|
|
||||
Net income |
$ |
104,261 |
|
|
$ |
120,409 |
|
|
|
|
|
||||
Weighted-average common shares outstanding: |
|
|
|
||||
Basic |
|
57,170 |
|
|
|
58,152 |
|
Diluted |
|
57,762 |
|
|
|
58,819 |
|
|
|
|
|
||||
Earnings per share: |
|
|
|
||||
Basic earnings |
$ |
1.82 |
|
|
$ |
2.07 |
|
Diluted earnings |
$ |
1.81 |
|
|
$ |
2.05 |
|
CONSOLIDATED BALANCE SHEETS (Unaudited) (Dollars in thousands) |
|||||
|
|
|
|
||
Cash and cash equivalents |
$ |
121,994 |
|
$ |
163,457 |
Receivables - net |
|
546,649 |
|
|
537,313 |
Inventories - net |
|
447,727 |
|
|
383,398 |
Other current assets |
|
62,046 |
|
|
48,803 |
Total current assets |
|
1,178,416 |
|
|
1,132,971 |
|
|
|
|
||
Property, plant & equipment - net |
|
361,447 |
|
|
353,442 |
|
|
2,107,113 |
|
|
1,804,693 |
Other assets |
|
590,447 |
|
|
529,269 |
|
$ |
4,237,423 |
|
$ |
3,820,375 |
|
|
|
|
||
Current maturities of long-term debt and notes payable |
$ |
420,947 |
|
$ |
392,537 |
Accounts payable and accrued liabilities |
|
404,514 |
|
|
441,666 |
Total current liabilities |
|
825,461 |
|
|
834,203 |
|
|
|
|
||
Long-term debt |
|
595,166 |
|
|
345,320 |
Other liabilities |
|
370,111 |
|
|
346,477 |
Total shareholders' equity |
|
2,446,685 |
|
|
2,294,375 |
|
$ |
4,237,423 |
|
$ |
3,820,375 |
CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) (Dollars in thousands) |
|||||||
|
Three Months Ended |
||||||
|
|
|
|
||||
Cash flows from operating activities: |
|
|
|
||||
Net income |
$ |
104,261 |
|
|
$ |
120,409 |
|
Depreciation and amortization |
|
26,434 |
|
|
|
25,390 |
|
Other non-cash items |
|
6,224 |
|
|
|
11,023 |
|
Changes in working capital |
|
(58,371 |
) |
|
|
(29,217 |
) |
Other |
|
44,789 |
|
|
|
(9,518 |
) |
Net cash provided by operating activities |
|
123,337 |
|
|
|
118,087 |
|
|
|
|
|
||||
Cash flows from investing activities: |
|
|
|
||||
Additions to property, plant and equipment |
|
(9,302 |
) |
|
|
(12,491 |
) |
Acquisition of businesses, net of cash acquired |
|
(377,843 |
) |
|
|
(171,613 |
) |
Other - net |
|
9 |
|
|
|
7 |
|
Net cash used in investing activities |
|
(387,136 |
) |
|
|
(184,097 |
) |
|
|
|
|
||||
Cash flows from financing activities: |
|
|
|
||||
Issuance (repayment) of long-term debt |
|
252,278 |
|
|
|
(1,257 |
) |
Repayment of finance lease obligations |
|
(1,318 |
) |
|
|
(1,640 |
) |
Dividends paid |
|
(37,199 |
) |
|
|
(29,724 |
) |
Issuance of common shares |
|
8,807 |
|
|
|
5,721 |
|
Purchase of treasury shares |
|
(6,875 |
) |
|
|
(35,002 |
) |
Net cash provided (used) in financing activities |
|
215,693 |
|
|
|
(61,902 |
) |
|
|
|
|
||||
Effect of exchange rate change on cash: |
|
6,643 |
|
|
|
(1,521 |
) |
Net change in cash and cash equivalents |
|
(41,463 |
) |
|
|
(129,433 |
) |
|
|
|
|
||||
Cash and cash equivalents: |
|
|
|
||||
Beginning of period |
|
163,457 |
|
|
|
299,972 |
|
End of period |
$ |
121,994 |
|
|
$ |
170,539 |
|
SALES BY GEOGRAPHIC SEGMENT (Unaudited) (Dollars in thousands) |
|||||||||||||||||
|
Three Months Ended |
|
Sales Variance |
||||||||||||||
|
|
|
|
|
Organic |
|
Acquisitions |
|
Currency |
|
Total |
||||||
SALES BY SEGMENT |
|
|
|
|
|
|
|
|
|
|
|
||||||
Industrial precision solutions |
$ |
311,546 |
|
$ |
323,933 |
|
1.2 |
% |
|
— |
% |
|
(5.0 |
) % |
|
(3.8 |
) % |
Medical and fluid solutions |
|
154,287 |
|
|
158,784 |
|
(0.8 |
) % |
|
— |
% |
|
(2.0 |
) % |
|
(2.8 |
) % |
Advanced technology solutions |
|
144,644 |
|
|
126,449 |
|
4.6 |
% |
|
13.5 |
% |
|
(3.7 |
) % |
|
14.4 |
% |
Total sales |
$ |
610,477 |
|
$ |
609,166 |
|
1.4 |
% |
|
2.8 |
% |
|
(4.0 |
) % |
|
0.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
SALES BY GEOGRAPHIC REGION |
|
|
|
|
|
|
|
|
|
|
|
||||||
|
$ |
264,878 |
|
$ |
239,901 |
|
8.6 |
% |
|
2.1 |
% |
|
(0.3 |
) % |
|
10.4 |
% |
|
|
162,939 |
|
|
155,985 |
|
10.7 |
% |
|
1.3 |
% |
|
(7.5 |
) % |
|
4.5 |
% |
|
|
182,660 |
|
|
213,280 |
|
(13.3 |
) % |
|
4.7 |
% |
|
(5.8 |
) % |
|
(14.4 |
) % |
Total sales |
$ |
610,477 |
|
$ |
609,166 |
|
1.4 |
% |
|
2.8 |
% |
|
(4.0 |
) % |
|
0.2 |
% |
RECONCILIATION OF NON-GAAP MEASURES - ADJUSTED OPERATING PROFIT AND EBITDA (Unaudited) (Dollars in thousands) |
|||||||||||||
|
Three Months Ended |
||||||||||||
|
|
|
|
||||||||||
SALES BY SEGMENT |
|
|
|
|
|
|
|
||||||
Industrial precision solutions |
$ |
311,546 |
|
|
|
|
$ |
323,933 |
|
|
|
||
Medical and fluid solutions |
|
154,287 |
|
|
|
|
|
158,784 |
|
|
|
||
Advanced technology solutions |
|
144,644 |
|
|
|
|
|
126,449 |
|
|
|
||
Total sales |
$ |
610,477 |
|
|
|
|
$ |
609,166 |
|
|
|
||
|
|
|
|
|
|
|
|
||||||
OPERATING PROFIT |
|
|
|
|
|
|
|
||||||
Industrial precision solutions |
$ |
102,319 |
|
|
|
|
$ |
102,187 |
|
|
|
||
Medical and fluid solutions |
|
39,384 |
|
|
|
|
|
49,093 |
|
|
|
||
Advanced technology solutions |
|
16,963 |
|
|
|
|
|
27,234 |
|
|
|
||
Corporate |
|
(14,447 |
) |
|
|
|
|
(22,654 |
) |
|
|
||
Total operating profit |
$ |
144,219 |
|
|
|
|
$ |
155,860 |
|
|
|
||
|
|
|
|
|
|
|
|
||||||
OPERATING PROFIT ADJUSTMENTS (1) |
|
|
|
|
|
|
|||||||
Industrial precision solutions |
$ |
— |
|
|
|
|
$ |
1,563 |
|
|
|
||
Advanced technology solutions |
|
10,295 |
|
|
|
|
|
— |
|
|
|
||
Total adjustments |
$ |
10,295 |
|
|
|
|
$ |
1,563 |
|
|
|
||
|
|
|
|
|
|
|
|
||||||
ADJUSTED OPERATING PROFIT (NON-GAAP) (2) |
|
|
% of Sales |
|
|
|
% of Sales |
||||||
Industrial precision solutions |
$ |
102,319 |
|
|
33 |
% |
|
$ |
103,750 |
|
|
32 |
% |
Medical and fluid solutions |
|
39,384 |
|
|
26 |
% |
|
|
49,093 |
|
|
31 |
% |
Advanced technology solutions |
|
27,258 |
|
|
19 |
% |
|
|
27,234 |
|
|
22 |
% |
Corporate |
|
(14,447 |
) |
|
|
|
|
(22,654 |
) |
|
|
||
Total operating profit - adjusted |
$ |
154,514 |
|
|
25 |
% |
|
$ |
157,423 |
|
|
26 |
% |
|
|
|
|
|
|
|
|
||||||
DEPRECIATION & AMORTIZATION |
|
|
|
|
|
|
|||||||
Industrial precision solutions |
$ |
6,845 |
|
|
|
|
$ |
7,442 |
|
|
|
||
Medical and fluid solutions |
|
13,625 |
|
|
|
|
|
13,547 |
|
|
|
||
Advanced technology solutions |
|
3,812 |
|
|
|
|
|
2,263 |
|
|
|
||
Corporate |
|
2,152 |
|
|
|
|
|
2,138 |
|
|
|
||
Total depreciation & amortization |
$ |
26,434 |
|
|
|
|
$ |
25,390 |
|
|
|
||
|
|
|
|
|
|
|
|
||||||
EBITDA (NON-GAAP) (2) |
|
|
|
|
|
|
|
||||||
Industrial precision solutions |
$ |
109,164 |
|
|
35 |
% |
|
$ |
111,192 |
|
|
34 |
% |
Medical and fluid solutions |
|
53,009 |
|
|
34 |
% |
|
|
62,640 |
|
|
39 |
% |
Advanced technology solutions |
|
31,070 |
|
|
21 |
% |
|
|
29,497 |
|
|
23 |
% |
Corporate |
|
(12,295 |
) |
|
|
|
|
(20,516 |
) |
|
|
||
Total EBITDA |
$ |
180,948 |
|
|
30 |
% |
|
$ |
182,813 |
|
|
30 |
% |
(1) |
Represents fees, severance and non-cash inventory charges associated with acquisitions. |
|
(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 fees, severance and non-cash inventory charges associated with acquisitions. EBITDA is defined as adjusted operating profit plus depreciation and amortization. |
RECONCILIATION OF NON-GAAP MEASURES - PROFITABILITY (Unaudited) (Dollars in thousands) |
|||||||
|
Three Months Ended |
||||||
|
|
|
|
||||
GAAP AS REPORTED |
|
|
|
||||
Operating profit |
$ |
144,219 |
|
|
$ |
155,860 |
|
Other / interest expense - net |
|
(13,139 |
) |
|
|
(3,893 |
) |
Net income |
|
104,261 |
|
|
|
120,409 |
|
Diluted earnings per share |
$ |
1.81 |
|
|
$ |
2.05 |
|
|
|
|
|
||||
Shares outstanding - diluted |
|
57,762 |
|
|
|
58,819 |
|
|
|
|
|
||||
OPERATING PROFIT ADJUSTMENTS |
|
|
|
||||
Inventory step-up amortization |
$ |
4,306 |
|
|
$ |
1,563 |
|
Severance and other |
|
5,989 |
|
|
|
— |
|
|
|
|
|
||||
Total adjustments |
$ |
10,295 |
|
|
$ |
1,563 |
|
|
|
|
|
||||
Adjustments net of tax |
$ |
8,189 |
|
|
$ |
1,238 |
|
EPS effect of adjustments and other discrete tax items |
$ |
0.14 |
|
|
$ |
0.02 |
|
|
|
|
|
||||
NON-GAAP MEASURES-ADJUSTED PROFITABILITY |
|
|
|
||||
Operating profit (1) |
$ |
154,514 |
|
|
$ |
157,423 |
|
Operating profit % of sales |
|
25.3 |
% |
|
|
25.8 |
% |
Net income (2) |
$ |
112,450 |
|
|
$ |
121,647 |
|
Diluted earnings per share (3) |
$ |
1.95 |
|
|
$ |
2.07 |
|
(1) |
Adjusted operating profit is defined as operating profit plus certain adjustments, such as fees, severance, and non-cash inventory charges related to acquisitions. 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. |
The Company also uses the non-GAAP financial measure “constant currency” sales or sales “on a constant currency basis” to show changes in our revenue without giving effect to period-to-period currency fluctuations. Constant currency is defined as sales growth excluding the impacts of changes in foreign currencies. We express period over period revenue variances that are calculated in constant currency as a percentage. Because the reconciliation is inherent in the disclosure, we believe that a separate reconciliation would not provide any benefit.
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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20230220005225/en/
Vice President, Investor Relations & Corporate Communications
440.204.9985
Lara.Mahoney@nordson.com
Source:
FAQ
What were Nordson's Q1 2023 sales figures?
How did Nordson's operating profit change in Q1 2023?
What is Nordson's guidance for fiscal 2023?
What factors contributed to Nordson's sales growth in Q1 2023?