Nordson Corporation Reports First Quarter Fiscal 2024 Results and Narrows Annual Guidance
- 4% increase in sales to $633 million in Q1 2024
- $110 million net income with $1.90 earnings per diluted share
- Adjusted earnings per diluted share at $2.21
- EBITDA of $197 million, 31% of sales
- Narrowed full-year fiscal 2024 revenue guidance to 4% to 7% growth
- None.
Insights
The reported first quarter results from Nordson Corporation indicate a modest growth in sales with a 4% increase year-over-year, which is a positive signal for investors looking for stability in their portfolio. Notably, the inclusion of a favorable acquisition impact suggests that the company's strategic decisions to expand through acquisitions are beginning to bear fruit, although there is a slight concern with the 2% organic sales decrease. The narrowing of the full-year fiscal 2024 revenue guidance to 4-7% growth provides a clearer expectation for investors and may influence stock valuation positively if the company continues to meet these projections.
Adjusted earnings per diluted share showing a 3% increase is another critical metric, indicating effective cost management and operational efficiency. The EBITDA margin at 31% of sales is robust and exceeds the typical industry benchmark of 20-25%, underscoring strong profitability and cash flow generation capabilities. The backlog of $750 million entering the second quarter suggests a healthy pipeline of business, which may reassure investors about future revenue streams.
From a market perspective, the performance of Nordson's segments is telling. The Industrial Precision Solutions (IPS) segment's growth, driven by acquisitions and organic sales in industrial coatings and polymer processing, indicates a strong demand in these areas, which could signal broader industrial market health. Conversely, the Advanced Technology Solutions (ATS) segment's decline, particularly in electronics dispense products, reflects ongoing challenges in the semiconductor end markets, a concern for investors focused on the tech sector.
The guidance for the second quarter and adjusted earnings per diluted share provides transparency for market analysts to assess the company's short-term performance expectations. However, the inability to reconcile the forecasted range of adjusted earnings guidance to a comparable GAAP range due to non-routine costs may introduce some uncertainty in the analysis.
Focusing on the Medical and Fluid Solutions (MFS) segment, the reported 3% increase in sales, primarily driven by medical interventional solutions, mirrors the broader trend in the medical device industry towards more advanced interventional technologies. This suggests that Nordson's product offerings are well-aligned with market demands. Additionally, the improved gross margins within this segment highlight the company's ability to manage costs effectively in a highly regulated and competitive industry. For stakeholders in the medical device sector, Nordson's performance in this segment may indicate potential for growth and increased market share.
First Quarter:
-
Sales were
$633 million 4% increase from the prior year -
Net income was
$110 million -
Earnings per diluted share were
$1.90 -
Adjusted earnings per diluted share were
$2.21 -
EBITDA was
$197 million 31% of sales
Guidance:
-
Narrowing previously issued full-year fiscal 2024 revenue guidance to
4% to7% growth over record fiscal 2023 and adjusted earnings per diluted share to the range of$10.00 $10.50
Net income was
EBITDA in the first quarter was
Commenting on the Company’s fiscal 2024 first quarter results, Nordson President and Chief Executive Officer Sundaram Nagarajan said, “Sales results were in line with our first quarter expectations. The segments delivered a strong operating performance exceeding our first quarter earnings guidance. This is a great example of our entrepreneurial teams using NBS Next to meet the needs of our customers, while also taking strategic actions that position them for future profitable growth. I am particularly pleased with the solid performance of our IPS and MFS segments during the quarter, while ATS continued to manage the ongoing weakness of the electronics end market. The ARAG acquisition integration continued to make steady progress and contributed to our sales and EBITDA margin performance in the quarter.”
First Quarter Segment Results
Industrial Precision Solutions sales of
Medical and Fluid Solutions sales of
Advanced Technology Solutions sales of
Outlook
The Company is entering the second quarter of fiscal 2024 with approximately
As previously announced, the Company’s definition of adjusted earnings now excludes acquisition related amortization for both current and historical periods. It is not possible for the Company to identify the amount or significance of future adjustments associated with acquisition and integration costs, restructuring costs, acquisition-related amortization, certain non-operating or income tax items, or other non-routine costs that the Company adjusts in the presentation of adjusted earnings guidance. These items are dependent on future events that are not reasonably estimable at this time. Accordingly, the Company is unable to reconcile without unreasonable effort the forecasted range of adjusted earnings guidance to a comparable GAAP range.
Nordson management will provide additional commentary on these results and outlook during its previously announced webcast on Thursday, February 22, 2024, 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 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,
Nordson Corporation is an innovative precision technology company that leverages a scalable growth framework through an entrepreneurial, division-led organization 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
NORDSON CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (Dollars in thousands except for per-share amounts)
|
|||||||
|
Three Months Ended |
||||||
|
January 31, 2024 |
|
January 31, 2023 |
||||
Sales |
$ |
633,193 |
|
|
$ |
610,477 |
|
Cost of sales |
|
284,766 |
|
|
|
281,610 |
|
Gross profit |
|
348,427 |
|
|
|
328,867 |
|
Gross margin % |
|
55.0 |
% |
|
|
53.9 |
% |
|
|
|
|
||||
Selling & administrative expenses |
|
188,992 |
|
|
|
184,648 |
|
Operating profit |
|
159,435 |
|
|
|
144,219 |
|
|
|
|
|
||||
Interest expense - net |
|
(20,398 |
) |
|
|
(9,943 |
) |
Other expense - net |
|
(338 |
) |
|
|
(3,196 |
) |
Income before income taxes |
|
138,699 |
|
|
|
131,080 |
|
|
|
|
|
||||
Income taxes |
|
29,127 |
|
|
|
26,819 |
|
|
|
|
|
||||
Net income |
$ |
109,572 |
|
|
$ |
104,261 |
|
|
|
|
|
||||
Weighted-average common shares outstanding: |
|
|
|
||||
Basic |
|
57,064 |
|
|
|
57,170 |
|
Diluted |
|
57,555 |
|
|
|
57,762 |
|
|
|
|
|
||||
Earnings per share: |
|
|
|
||||
Basic earnings |
$ |
1.92 |
|
|
$ |
1.82 |
|
Diluted earnings |
$ |
1.90 |
|
|
$ |
1.81 |
|
NORDSON CORPORATION
CONSOLIDATED BALANCE SHEETS (Unaudited) (Dollars in thousands)
|
|||||||
|
January 31, 2024 |
|
October 31, 2023 |
||||
Cash and cash equivalents |
$ |
136,201 |
|
$ |
115,679 |
||
Receivables - net |
|
537,702 |
|
|
|
590,886 |
|
Inventories - net |
|
451,217 |
|
|
|
454,775 |
|
Other current assets |
|
82,992 |
|
|
|
67,970 |
|
Total current assets |
|
1,208,112 |
|
|
|
1,229,310 |
|
|
|
|
|
||||
Property, plant and equipment - net |
|
394,467 |
|
|
|
392,846 |
|
Goodwill |
|
2,805,086 |
|
|
|
2,784,201 |
|
Other assets |
|
839,412 |
|
|
|
845,413 |
|
|
$ |
5,247,077 |
|
|
$ |
5,251,770 |
|
|
|
|
|
||||
Notes payable and debt due within one year |
$ |
116,585 |
|
|
$ |
115,662 |
|
Accounts payable and accrued liabilities |
|
435,095 |
|
|
|
466,427 |
|
Total current liabilities |
|
551,680 |
|
|
|
582,089 |
|
|
|
|
|
||||
Long-term debt |
|
1,513,871 |
|
|
|
1,621,394 |
|
Other liabilities |
|
457,559 |
|
|
|
450,227 |
|
Total shareholders' equity |
|
2,723,967 |
|
|
|
2,598,060 |
|
|
$ |
5,247,077 |
|
|
$ |
5,251,770 |
|
|
|
|
|
||||
NORDSON CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) (Dollars in thousands)
|
|||||||
|
Three Months Ended |
||||||
|
January 31, 2024 |
|
January 31, 2023 |
||||
Cash flows from operating activities: |
|
|
|
||||
Net income |
$ |
109,572 |
|
|
$ |
104,261 |
|
Depreciation and amortization |
|
33,544 |
|
|
|
26,434 |
|
Other non-cash items |
|
6,552 |
|
|
|
6,224 |
|
Changes in working capital |
|
14,614 |
|
|
|
(58,371 |
) |
Other |
|
8,074 |
|
|
|
44,789 |
|
Net cash provided by operating activities |
|
172,356 |
|
|
|
123,337 |
|
|
|
|
|
||||
Cash flows from investing activities: |
|
|
|
||||
Additions to property, plant and equipment |
|
(7,530 |
) |
|
|
(9,302 |
) |
Acquisition of businesses, net of cash acquired |
|
— |
|
|
|
(377,843 |
) |
Other - net |
|
1,805 |
|
|
|
9 |
|
Net cash used in investing activities |
|
(5,725 |
) |
|
|
(387,136 |
) |
|
|
|
|
||||
Cash flows from financing activities: |
|
|
|
||||
Issuance (repayment) of long-term debt |
|
(107,195 |
) |
|
|
252,278 |
|
Repayment of finance lease obligations |
|
(1,488 |
) |
|
|
(1,318 |
) |
Dividends paid |
|
(38,855 |
) |
|
|
(37,199 |
) |
Issuance of common shares |
|
14,418 |
|
|
|
8,807 |
|
Purchase of treasury shares |
|
(7,371 |
) |
|
|
(6,875 |
) |
Net cash provided (used) in financing activities |
|
(140,491 |
) |
|
|
215,693 |
|
|
|
|
|
||||
Effect of exchange rate change on cash: |
|
(5,618 |
) |
|
|
6,643 |
|
Net change in cash and cash equivalents |
|
20,522 |
|
|
|
(41,463 |
) |
|
|
|
|
||||
Cash and cash equivalents: |
|
|
|
||||
Beginning of period |
|
115,679 |
|
|
|
163,457 |
|
End of period |
$ |
136,201 |
|
|
$ |
121,994 |
|
|
|
|
|
||||
NORDSON CORPORATION
SALES BY GEOGRAPHIC SEGMENT (Unaudited) (Dollars in thousands)
|
|||||||||||||||||||
|
Three Months Ended |
|
Sales Variance |
||||||||||||||||
|
January 31, 2024 |
|
January 31, 2023 |
|
Organic |
|
Acquisitions |
|
Currency |
|
Total |
||||||||
SALES BY SEGMENT |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Industrial Precision Solutions |
$ |
354,547 |
|
$ |
311,546 |
|
2.3 |
% |
|
10.6 |
% |
|
0.9 |
% |
|
13.8 |
% |
||
Medical and Fluid Solutions |
|
159,526 |
|
|
|
154,287 |
|
|
3.1 |
% |
|
— |
% |
|
0.3 |
% |
|
3.4 |
% |
Advanced Technology Solutions |
|
119,120 |
|
|
|
144,644 |
|
|
(17.6 |
)% |
|
— |
% |
|
— |
% |
|
(17.6 |
)% |
Total sales |
$ |
633,193 |
|
|
$ |
610,477 |
|
|
(2.2 |
)% |
|
5.4 |
% |
|
0.5 |
% |
|
3.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
SALES BY GEOGRAPHIC REGION |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
$ |
274,012 |
|
|
$ |
264,878 |
|
|
(0.3 |
)% |
|
3.1 |
% |
|
0.6 |
% |
|
3.4 |
% |
|
|
179,310 |
|
|
|
162,939 |
|
|
(7.0 |
)% |
|
14.2 |
% |
|
2.8 |
% |
|
10.0 |
% |
|
|
179,871 |
|
|
|
182,660 |
|
|
(0.5 |
)% |
|
0.7 |
% |
|
(1.7 |
)% |
|
(1.5 |
)% |
Total sales |
$ |
633,193 |
|
|
$ |
610,477 |
|
|
(2.2 |
)% |
|
5.4 |
% |
|
0.5 |
% |
|
3.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
NORDSON CORPORATION
RECONCILIATION OF NON-GAAP MEASURES - NET INCOME TO EBITDA (Unaudited) (Dollars in thousands)
|
|||||||
|
Three Months Ended |
||||||
|
January 31, 2024 |
|
January 31, 2023 |
||||
Net income |
$ |
109,572 |
|
$ |
104,261 |
||
Income taxes |
|
29,127 |
|
|
|
26,819 |
|
Interest expense - net |
|
20,398 |
|
|
|
9,943 |
|
Other expense - net |
|
338 |
|
|
|
3,196 |
|
Depreciation and amortization |
|
33,544 |
|
|
|
26,434 |
|
Inventory step-up amortization (1) |
|
2,944 |
|
|
|
4,306 |
|
Acquisition-related costs (1) |
|
597 |
|
|
|
5,989 |
|
EBITDA (non-GAAP) (2) |
$ |
196,520 |
|
|
$ |
180,948 |
|
(1) |
Represents fees, severance and non-cash inventory charges associated with acquisitions. |
(2) |
EBITDA is a non-GAAP measure used by management to evaluate the Company's ongoing operations. EBITDA is defined as operating profit plus certain adjustments, such as severance, fees and non-cash inventory charges associated with acquisitions, plus depreciation and amortization. |
NORDSON CORPORATION
RECONCILIATION OF NON-GAAP MEASURES - EBITDA (Unaudited) (Dollars in thousands)
|
|||||||||||
|
Three Months Ended |
||||||||||
|
January 31, 2024 |
|
January 31, 2023 |
||||||||
SALES BY SEGMENT |
|
|
|
|
|
|
|
||||
Industrial Precision Solutions |
$ |
354,547 |
|
|
|
|
$ |
311,546 |
|
|
|
Medical and Fluid Solutions |
|
159,526 |
|
|
|
|
|
154,287 |
|
|
|
Advanced Technology Solutions |
|
119,120 |
|
|
|
|
|
144,644 |
|
|
|
Total sales |
$ |
633,193 |
|
|
|
|
$ |
610,477 |
|
|
|
|
|
|
|
|
|
|
|
||||
OPERATING PROFIT |
|
|
|
|
|
|
|
||||
Industrial Precision Solutions |
$ |
108,364 |
|
|
|
|
$ |
102,319 |
|
|
|
Medical and Fluid Solutions |
|
46,100 |
|
|
|
|
|
39,384 |
|
|
|
Advanced Technology Solutions |
|
19,038 |
|
|
|
|
|
16,963 |
|
|
|
Corporate |
|
(14,067 |
) |
|
|
|
|
(14,447 |
) |
|
|
Total operating profit |
$ |
159,435 |
|
|
|
|
$ |
144,219 |
|
|
|
|
|
|
|
|
|
|
|
||||
OPERATING PROFIT ADJUSTMENTS (1) |
|
|
|
|
|||||||
Industrial Precision Solutions |
$ |
3,541 |
|
|
|
|
$ |
— |
|
|
|
Advanced Technology Solutions |
|
— |
|
|
|
|
|
10,295 |
|
|
|
Total adjustments |
$ |
3,541 |
|
|
|
|
$ |
10,295 |
|
|
|
|
|
|
|
|
|
|
|
||||
DEPRECIATION & AMORTIZATION |
|
|
|
|
|
|
|||||
Industrial Precision Solutions |
$ |
14,380 |
|
|
|
|
$ |
6,845 |
|
|
|
Medical and Fluid Solutions |
|
13,705 |
|
|
|
|
|
13,625 |
|
|
|
Advanced Technology Solutions |
|
3,441 |
|
|
|
|
|
3,812 |
|
|
|
Corporate |
|
2,018 |
|
|
|
|
|
2,152 |
|
|
|
Total depreciation & amortization |
$ |
33,544 |
|
|
|
|
$ |
26,434 |
|
|
|
|
|
|
|
|
|
|
|
||||
EBITDA (NON-GAAP) (2) |
|
|
|
|
|
|
|
||||
Industrial Precision Solutions |
$ |
126,285 |
|
|
|
|
$ |
109,164 |
|
|
|
Medical and Fluid Solutions |
|
59,805 |
|
|
|
|
|
53,009 |
|
|
|
Advanced Technology Solutions |
|
22,479 |
|
|
|
|
|
31,070 |
|
|
|
Corporate |
|
(12,049 |
) |
|
|
|
|
(12,295 |
) |
|
|
Total EBITDA |
$ |
196,520 |
|
|
|
|
$ |
180,948 |
|
|
|
|
|
|
|
|
|
|
|
||||
(1) |
Represents fees, severance and non-cash inventory charges associated with acquisitions. |
(2) |
EBITDA is a non-GAAP measure used by management to evaluate the Company's ongoing operations. EBITDA is defined as operating profit plus certain adjustments, such as severance, fees and non-cash inventory charges associated with acquisitions, plus depreciation and amortization. |
NORDSON CORPORATION
RECONCILIATION OF NON-GAAP MEASURES - ADJUSTED NET INCOME AND EARNINGS PER SHARE (Unaudited) (Dollars in thousands)
|
|||||||
|
Three Months Ended |
||||||
|
January 31, 2024 |
|
January 31, 2023 |
||||
GAAP AS REPORTED |
|
|
|
||||
Operating profit |
$ |
159,435 |
|
|
$ |
144,219 |
|
Other / interest expense - net |
|
(20,736 |
) |
|
|
(13,139 |
) |
Net income |
|
109,572 |
|
|
|
104,261 |
|
Diluted earnings per share |
$ |
1.90 |
|
|
$ |
1.81 |
|
|
|
|
|
||||
Shares outstanding - diluted |
|
57,555 |
|
|
|
57,762 |
|
|
|
|
|
||||
OPERATING PROFIT ADJUSTMENTS |
|
|
|
||||
Inventory step-up amortization |
$ |
2,944 |
|
|
$ |
4,306 |
|
Acquisition-related costs |
|
597 |
|
|
|
5,989 |
|
|
|
|
|
||||
ACQUISITION AMORTIZATION OF INTANGIBLES |
$ |
19,387 |
|
|
$ |
13,872 |
|
|
|
|
|
||||
Total adjustments |
$ |
22,928 |
|
|
$ |
24,167 |
|
|
|
|
|
||||
Adjustments net of tax |
$ |
18,113 |
|
|
$ |
19,223 |
|
EPS effect of adjustments and other discrete tax items |
$ |
0.31 |
|
|
$ |
0.33 |
|
|
|
|
|
||||
NON-GAAP MEASURES-ADJUSTED NET INCOME AND ADJUSTED EARNINGS PER SHARE |
|
|
|
||||
Adjusted Net income (1) |
$ |
127,685 |
|
|
$ |
123,484 |
|
Adjusted Diluted earnings per share (2) |
$ |
2.21 |
|
|
$ |
2.14 |
|
(1) |
Adjusted net income is a non-GAAP measure defined as net income plus tax effected adjustments and other discrete tax items. |
(2) |
Adjusted earnings per share is a non-GAAP measure defined as GAAP EPS adjusted for tax effected adjustments and other discrete tax items. |
|
|
|
Management uses certain non-GAAP measures, such as adjusted net income, adjusted EPS and EBITDA, 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/20240221342336/en/
Lara Mahoney
Vice President,
Investor Relations & Corporate Communications
440.204.9985
Lara.Mahoney@nordson.com
Source: Nordson Corporation
FAQ
What was Nordson Corporation's (NDSN) sales in the fiscal first quarter of 2024?
What was the net income for Nordson Corporation (NDSN) in the fiscal first quarter of 2024?
What was the EBITDA for Nordson Corporation (NDSN) in the fiscal first quarter of 2024?
What was the adjusted earnings per diluted share for Nordson Corporation (NDSN) in the fiscal first quarter of 2024?
What was the guidance provided by Nordson Corporation (NDSN) for full-year fiscal 2024 revenue growth?
