Nordson Corporation Reports Fiscal Year 2021 Fourth Quarter and Record Full Year Results

Rhea-AI Summary

Nordson Corporation (Nasdaq: NDSN) reported fourth quarter sales of $599 million, a 7% increase year-over-year, with a record full year sales of $2.4 billion, up 11%. Fourth quarter earnings per diluted share rose by 18% to $1.88. The company expects first quarter 2022 sales growth of 14% to 16% and full year growth of 6% to 10%. Operating profit in Q4 was $151 million, representing 25% of sales, while EBITDA reached $177 million. The backlog entering Q1 2022 is approximately $800 million, a 90% increase from the previous year.

Positive

• Fourth quarter sales increased by 7% year-over-year, reaching $599 million.
• Earnings per diluted share for the fourth quarter increased by 18% to $1.88.
• Record full year sales of $2.4 billion, an 11% year-over-year increase.
• Backlog entering Q1 2022 at $800 million, a 90% increase year-over-year.
• Q4 operating profit of $151 million, or 25% of sales.

Negative

• Logistics costs and divisional alignment efforts impacted gross margins in Q4.
• The divestiture of the screws and barrels product line negatively affected sales.

Fourth Quarter:

• Sales were $599 million, a 7% year-over-year increase, 10% organic

• Operating profit was $151 million, or 25% of sales

• Earnings were $1.88 per diluted share, an 18% increase from prior year adjusted earnings per share

Full Year:

• Full year sales, operating profit, and earnings per share were all company records

• Sales were $2.4 billion, an 11% year-over-year increase

• Earnings were $7.74 per diluted share, a 41% increase from prior year adjusted earnings per share

2022 Guidance:

• Fiscal 2022 sales growth of 6% to 10% and earnings growth of 8% to 18% over the record fiscal 2021 results

• First quarter 2022 sales growth of 14% to 16% over prior year first quarter; earnings per diluted share in the range of $1.80 to $1.95

WESTLAKE, Ohio--(BUSINESS WIRE)-- Nordson Corporation (Nasdaq: NDSN) today reported results for the fiscal fourth quarter ended October 31, 2021. Sales were $599 million, a 7% increase compared to the prior year’s fourth quarter sales of $559 million. The increase in fourth quarter 2021 sales included 10% organic volume growth, offset by an unfavorable 4% divestiture impact and favorable currency translation of 1%. Growth was strong in all product lines, particularly electronics and industrial end markets.

Operating profit in the quarter was $151 million, or 25% of sales, a 16% increase compared to the prior year adjusted operating profit of $130 million. Sales volume leverage, in addition to continued benefits from structural cost reduction actions taken in fiscal year 2020 and the divestiture of the screws and barrels product line on February 1, 2021, contributed to the quarterly increase. EBITDA in the quarter totaled $177 million, or 30% of sales, and represents an increase of 11% from the prior year EBITDA of $159 million.

Net income was $110 million, a 19% increase compared to the prior year adjusted earnings of $93 million. Fourth quarter diluted earnings per share were $1.88, an 18% increase over the prior year adjusted earnings of $1.59 per diluted share.

Commenting on the Company’s fiscal fourth quarter 2021 results, Nordson President and Chief Executive Officer Sundaram Nagarajan said, “The fourth quarter was a solid finish to an incredible year, where we surpassed our prior record annual performance in sales by $108 million and in operating profit by $111 million. I am very proud of the Nordson team. This growth was across a broad base of end markets and geographies, as a result of leveraging the NBS Next growth framework to fully participate in the accelerated economic recovery.”

Fourth Quarter Segment Results

Industrial Precision Solutions sales of $314 million increased 2% compared to the prior year fourth quarter, driven by an 8% organic increase, offset by a divestiture impact of 7% and a favorable currency impact of 1%. This organic sales increase was driven by steady demand across the majority of end markets and geographies served. Operating profit totaled $103 million in the quarter, or 33% of sales, an increase of 12% compared to the prior year adjusted operating profit.

Advanced Technology Solutions sales of $285 million increased 14% compared to the prior year fourth quarter, driven by an organic sales increase of 13% and a favorable currency impact of 1%. Sales growth was strong in all end markets during the current year quarter, with particularly high demand for products serving the electronics and medical end markets. Operating profit totaled $67 million in the quarter, or 24% of sales, an increase of 29% compared to the prior year adjusted operating profit.

“Our fourth quarter 2021 performance was very strong with double digit organic growth and incremental operating profit margins of 52%. Looking sequentially, gross margins were impacted by a spike in logistics costs and non-recurring cost increases associated with divisional alignment efforts around best growth opportunities. Pricing actions are being taken to mitigate these negative impacts on gross margin as we move into the first half of 2022,” said Nordson Chief Financial Officer Joseph Kelley.

Fiscal 2021 Full Year Results

Sales for the fiscal year ended October 31, 2021 were $2.4 billion, an increase of 11% compared to the same period a year ago. This increase in sales was driven by an 11% increase in organic volume and a favorable currency impact of 3%, offset by a net unfavorable acquisition and divestiture impact of 3%. Full year operating profit was $615 million, or 26% of sales. Net income for the full year was $454 million and diluted earnings per share were $7.74, a 41% increase from the prior year adjusted diluted earnings per share of $5.48.

Mr. Nagarajan continued, “Looking at the second half of fiscal 2021, we achieved 15% organic sales growth and 36% adjusted profit growth compared to the second half of the prior year. Based on our strong order entry and current backlog, we anticipate carrying this second half of 2021 growth rate into the first quarter of fiscal 2022. Our teams are adapting to a very dynamic macro environment, and they are taking actions to offset cost and supply chain headwinds. The Ascend Strategy with NBS Next at its core will continue to enable us to deliver top tier growth with leading margins and returns.”

Outlook

Backlog entering the first quarter of fiscal year 2022 is approximately $800 million, a 90% increase above the prior year. The current macroeconomic environment continues to drive increased order volume and extended shipment request dates. Based on these order entry trends, backlog, and anticipated sales timing, we expect fiscal 2022 first quarter sales growth to be in the range of 14% to 16% as compared to fiscal 2021 first quarter, with adjusted earnings per diluted share in the range of $1.80 to $1.95.

On a full year basis, we expect fiscal 2022 sales growth to be in the range of 6% to 10%, with adjusted earnings per diluted share growth in the range of 8% to 18%, both as compared to fiscal 2021.

Nordson management will provide additional commentary on these results and outlook during its previously announced webcast on Thursday, December 16, 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 an innovative precision technology company that leverages a scalable growth framework 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 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 STATEMENT OF INCOME (Unaudited)
(Dollars in thousands except for per-share amounts)
	Three Months Ended								Twelve Months Ended
	October 31, 2021				October 31, 2020				October 31, 2021				October 31, 2020
Sales	$	599,247			$	558,525			$	2,362,209			$	2,121,100
Cost of sales	268,097				261,657				1,038,129				990,632
Gross profit	331,150				296,868				1,324,080				1,130,468
Gross margin %	55.3		%		53.2		%		56.1		%		53.3		%
Selling & administrative expenses	179,715				172,129				708,953				693,552
Assets held for sale impairment charge	—				87,371				—				87,371
Operating profit	151,435				37,368				615,127				349,545
Interest expense - net	(4,452		)		(6,432		)		(23,341		)		(30,479		)
Other expense - net	(6,874		)		(4,634		)		(17,610		)		(17,577		)
Income before income taxes	140,109				26,302				574,176				301,489
Income taxes	29,649				7,827				119,808				51,950
Net Income	$	110,460			$	18,475			$	454,368			$	249,539
Weighted-average common shares outstanding:
Basic	58,123				57,988				58,091					57,757
Diluted	58,792				58,679				58,734				58,473
Earnings per share:
Basic earnings	$	1.90			$	0.32			$	7.82			$	4.32
Diluted earnings	$	1.88			$	0.31			$	7.74			$	4.27

NORDSON CORPORATION
CONSOLIDATED BALANCE SHEET (Unaudited)
(Dollars in thousands)
	October 31, 2021				October 31, 2020
Cash and cash equivalents	$	299,972			$	208,293
Receivables - net	489,389				471,873
Inventories - net	327,195				277,033
Other current assets	48,282				43,798
Assets held for sale	—				19,615
Total current assets	1,164,838				1,020,612
Property, plant & equipment - net	355,565				358,618
Goodwill	1,713,148				1,713,354
Other assets	557,410				582,072
	$	3,790,961			$	3,674,656
Notes payable and debt due within one year	$	34,188			$	38,043
Accounts payable and accrued liabilities	411,206				311,898
Liabilities held for sale	—				13,148
Total current liabilities	445,394				363,089
Long-term debt	781,709				1,067,952
Other liabilities	404,728				484,624
Total shareholders' equity	2,159,130				1,758,991
	$	3,790,961			$	3,674,656

NORDSON CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
(Dollars in thousands)
	Twelve Months Ended
	October 31, 2021				October 31, 2020
Cash flows from operating activities:
Net Income	$	454,368			$	249,539
Depreciation and amortization	103,883				113,302
Impairment loss on assets held for sale	—				87,371
Other non-cash items	32,356				5,278
Changes in working capital	29,011				45,113
Other - principally pension plan	(73,691		)		1,818
Net cash provided by operating activities	545,927				502,421
Cash flows from investing activities:
Additions to property, plant and equipment	(38,303		)		(50,535		)
Acquisitions	—				(142,414		)
Other - net	5,134				(1,160		)
Net cash used in investing activities	(33,169		)		(194,109		)
Cash flows from financing activities:
Repayment of long-term debt	(289,416		)		(153,816		)
Repayment of finance lease obligations	(6,624		)		(7,605		)
Dividends paid	(97,683		)		(88,347		)
Issuance of common shares	31,780				50,853
Purchase of treasury shares	(60,970		)		(52,614		)
Net cash used in financing activities	(422,913		)		(251,529		)
Effect of exchange rate change on cash	1,834				346
Net change in cash and cash equivalents	91,679				57,129
Cash and cash equivalents:
Beginning of period	208,293				151,164
End of period	$	299,972			$	208,293

NORDSON CORPORATION
SALES BY GEOGRAPHIC SEGMENT (Unaudited)
(Dollars in thousands)
	Three Months Ended								Sales Variance
	October 31, 2021				October 31, 2020				Organic			Acquisitions / Divestitures			Currency			Total
SALES BY SEGMENT
Industrial precision solutions	$	314,307			$	308,385			8.0	%		(6.6	)%		0.5	%		1.9	%
Advanced technology solutions	284,940				250,140				13.3	%		—	%		0.6	%		13.9	%
Total sales	$	599,247			$	558,525			10.4	%		(3.7	)%		0.6	%		7.3	%
SALES BY GEOGRAPHIC REGION
United States	$	199,532			$	194,701			7.8	%		(5.3	)%		—	%		2.5	%
Americas	51,038				35,452				47.2	%		(5.9	)%		2.7	%		44.0	%
Europe	163,592				142,082				17.6	%		(2.7	)%		0.2	%		15.1	%
Japan	27,659				36,248				(16.0	)%		(3.5	)%		(4.2	)%		(23.7	)%
Asia Pacific	157,426				150,042				4.6	%		(2.0	)%		2.3	%		4.9	%
Total sales	$	599,247			$	558,525			10.4	%		(3.7	)%		0.6	%		7.3	%
	Twelve Months Ended								Sales Variance
	October 31, 2021				October 31, 2020				Organic			Acquisitions / Divestitures			Currency			Total
SALES BY SEGMENT
Industrial precision solutions	$	1,246,947			$	1,143,423			11.7	%		(6.0	)%		3.4	%		9.1	%
Advanced technology solutions	1,115,262				977,677				10.9	%		1.3	%		1.9	%		14.1	%
Total sales	$	2,362,209			$	2,121,100			11.3	%		(2.6	)%		2.7	%		11.4	%
SALES BY GEOGRAPHIC REGION
United States	$	789,303			$	755,642			8.3	%		(3.8	)%		—	%		4.5	%
Americas	179,807				141,473				24.4	%		0.9	%		1.8	%		27.1	%
Europe	617,492				536,636				11.4	%		(2.0	)%		5.7	%		15.1	%
Japan	107,572				126,601				(11.0	)%		(3.5	)%		(0.5	)%		(15.0	)%
Asia Pacific	668,035				560,748				16.7	%		(1.8	)%		4.2	%		19.1	%
Total sales	$	2,362,209			$	2,121,100			11.3	%		(2.6	)%		2.7	%		11.4	%

NORDSON CORPORATION
RECONCILIATION OF NON-GAAP MEASURES - ADJUSTED OPERATING PROFIT AND EBITDA (Unaudited)
(Dollars in thousands)
	Three Months Ended														Twelve Months Ended
	October 31, 2021							October 31, 2020							October 31, 2021							October 31, 2020
SALES BY SEGMENT
Industrial precision solutions	$	314,307						$	308,385						$	1,246,947						$	1,143,423
Advanced technology solutions	284,940							250,140							1,115,262							977,677
Total sales	$	599,247						$	558,525						$	2,362,209						$	2,121,100
OPERATING PROFIT
Industrial precision solutions	$	102,677						$	425						$	414,192						$	208,028
Advanced technology solutions	67,104							50,674							271,660							191,602
Corporate	(18,346		)					(13,731		)					(70,725		)					(50,085		)
Total operating profit	$	151,435						$	37,368						$	615,127						$	349,545
OPERATING PROFIT ADJUSTMENTS (1)
Industrial precision solutions	$	—						$	91,419						$	—						$	94,896
Advanced technology solutions	—							1,424							—							7,807
Corporate	—							—							—							1,387
Total adjustments	$	—						$	92,843						$	—						$	104,090
ADJUSTED OPERATING PROFIT (NON-GAAP)					% of Sales							% of Sales							% of Sales							% of Sales
Industrial precision solutions	$	102,677			33	%		$	91,844			30	%		$	414,192			33	%		$	302,924			26	%
Advanced technology solutions	67,104				24	%		52,098				21	%		271,660				24	%		199,409				20	%
Corporate	(18,346		)					(13,731		)					(70,725		)					(48,698		)
Total operating profit - adjusted	$	151,435			25	%		$	130,211			23	%		$	615,127			26	%		$	453,635			21	%
DEPRECIATION & AMORTIZATION
Industrial precision solutions	$	6,259						$	9,951						$	25,673						$	38,939
Advanced technology solutions	16,987							16,710							68,426							64,543
Corporate	2,404							2,477							9,784							9,820
Total depreciation & amortization	$	25,650						$	29,138						$	103,883						$	113,302
EBITDA (NON-GAAP) (2)
Industrial precision solutions	$	108,936			35	%		$	101,795			33	%		$	439,865			35	%		$	341,863			30	%
Advanced technology solutions	84,091				30	%		68,808				28	%		340,086				30	%		263,952				27	%
Corporate	(15,942		)					(11,254		)					(60,941		)					(38,878		)
Total EBITDA	$	177,085			30	%		$	159,349			29	%		$	719,010			30	%		$	566,937			27	%

(1)	Represents assets held for sale impairment charge, costs and adjustments related to cost structure simplification actions, and charges associated with our 2020 acquisition.
(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 the assets held for sale impairment charge, cost structure simplification actions, and non-cash inventory charges related to acquisitions. 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								Twelve Months Ended
	October 31, 2021				October 31, 2020				October 31, 2021				October 31, 2020
GAAP AS REPORTED
Operating profit	$	151,435			$	37,368			$	615,127			$	349,545
Other / interest expense - net	(11,326		)		(11,066		)		(40,951		)		(48,056		)
Net income	110,460				18,475				454,368				249,539
Diluted earnings per share	$	1.88			$	0.31			$	7.74			$	4.27
Shares outstanding - diluted	58,792				58,679				58,734				58,473
OPERATING PROFIT ADJUSTMENTS
Inventory step-up amortization	$	—			$	1,298			$	—			$	2,527
Severance and other	—				4,174				—				14,192
Assets held for sale impairment charge	—				87,371				—				87,371
NON-OPERATING EXPENSE ADJUSTMENTS
Pension settlement loss	$	—			$	—			$	—			$	2,508
Total adjustments	$	—			$	92,843			$	—			$	106,598
Adjustments net of tax	$	—			$	76,390			$	—			$	87,214
Other discrete tax items	$	—			$	(1,820	)		$	—			$	(16,311	)
EPS effect of adjustments and other discrete tax items	$	—			$	1.27			$	—			$	1.21
NON-GAAP MEASURES-ADJUSTED PROFITABILITY
Operating profit (1)	$	151,435			$	130,211			$	615,127			$	453,635
Operating profit % of sales	25.3		%		23.3		%		26.0		%		21.4		%
Net income (2)	$	110,460			$	93,045			$	454,368			$	320,442
Diluted earnings per share (3)	$	1.88			$	1.59			$	7.74			$	5.48

(1)	Adjusted operating profit is defined as operating profit plus certain adjustments such as the assets held for sale impairment charge, cost structure simplification actions 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 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20211215005835/en/

Lara Mahoney

Vice President,

Investor Relations & Corporate Communications

440.204.9985

Lara.Mahoney@nordson.com

Source: Nordson Corporation

FAQ

What were Nordson's earnings for the fourth quarter of fiscal 2021?

Nordson reported earnings per diluted share of $1.88 for the fourth quarter of fiscal 2021.

How did Nordson's sales perform in the fourth quarter and full year of fiscal 2021?

Nordson's fourth quarter sales were $599 million, a 7% year-over-year increase, while full year sales reached $2.4 billion, up 11%.

What is Nordson's sales growth outlook for the first quarter of fiscal 2022?

Nordson expects sales growth of 14% to 16% in the first quarter of fiscal 2022 compared to the prior year.

What driving factors contributed to Nordson's sales increase in fiscal 2021?

The sales increase was driven by an 11% organic volume growth and a favorable currency impact of 3%.

What is Nordson's backlog entering the first quarter of fiscal 2022?

Nordson's backlog entering Q1 2022 is approximately $800 million, representing a 90% increase from the previous year.