Nordson Corporation Reports Fiscal Year 2012 Second Quarter Results

Nordson Corporation (Nasdaq: NDSN) today reported results for the second quarter of fiscal year 2012. For the quarter ending April 30, 2012, sales were $315 million, a 1 percent decrease over the prior year’s second quarter sales. This change in sales included a 3 percent increase related to the first year effect of acquisitions, offset by a 3 percent decrease in organic volume and a negative 1 percent impact related to unfavorable effects of currency translation. As reported, operating profit was $77 million, net income was $52 million, and diluted earnings per share were $0.80. Excluding one-time charges of $4 million in the quarter, operating profit was $81 million, net income was $55 million, and earnings per share were $0.84. Prior year second quarter sales, operating profit, net income and diluted earnings per share were $319 million, $92 million, $65 million and $0.95, respectively.

“Nordson’s team delivered another excellent quarter by continuing to provide our customers with precision technology solutions, application expertise and strong global support,” said Nordson President and Chief Executive Officer Michael F. Hilton. “On a sequential basis, we leveraged strong top line growth of 14 percent to generate incremental operating margin of 52 percent excluding one-time charges. Operating margin in the quarter was a strong 26 percent excluding one-time charges, and we remain committed to future performance enhancements through continuous improvement efforts. We also continued to generate excellent free cash flow and maintain our strong balance sheet which gives us the capacity to invest in strategic growth opportunities going forward.”

Second Quarter Segment and Regional Results

“All three of our segments performed in line with our expectation for the quarter,” said Hilton. “Sales improved strongly on a sequential basis, though year-over-year comparisons were impacted by continuing macro economic uncertainty in some end markets and geographies and very challenging comparisons against our prior year’s second quarter. We leveraged the sequential sales increase and our continuous improvement activities to drive operating margin well above our first quarter level and to the range of outstanding performance we have sustained over the past two years.”

“Sales volume in Adhesive Dispensing Systems was down 1 percent compared to the second quarter a year ago, with the positive first year effect of acquisitions and solid organic growth in certain consumer non-durable end markets being offset by softness in some durable goods end markets and the timing of some larger dollar system orders. The Adhesive segment’s operating margin in the second quarter was an excellent 33 percent, or 35 percent excluding one-time charges. In Advanced Technology Systems, second quarter sales volume grew by 3 percent over the prior year. The first year effect of acquisitions drove the improvement, as organic sales volume decreased over the previous year due to softness in certain non-dispense product lines. Sequential volume growth and operating efficiencies drove this segment’s operating margin to 25 percent, an increase of 9 percentage points over the first quarter of 2012. Industrial Coating Systems sales volume in the quarter decreased 2 percent on a year-over-year basis due to softness in durable goods end markets and the timing of some large engineered system orders. Industrial Coating operating margin in the quarter was 12 percent, or 13 percent excluding one-time charges related to severance costs. On a sequential basis, reported operating margin in this segment improved by 9 percentage points over the first quarter, as our team efficiently leveraged existing resources to meet a strong increase in sequential volume.”

Detailed results by operating segment and geography are included in the attached tables, as is an earnings per share reconciliation table.

Fiscal Year-to-Date Results

For the first half of fiscal year 2012, sales were $591 million, operating profit was $133 million and net income was $90 million. First half diluted earnings per share were $1.38, inclusive of $0.08 in one time charges as described on the attached earnings per share reconciliation table. Prior year first half revenue, operating profit, net income and diluted earnings per share were $590 million, $158 million, $111 million and $1.61.

“Our team delivered strong first half results, especially against an uncertain macroeconomic backdrop,” said Hilton. “Operating margin is still well above our pre-recession level and is inclusive of continuous improvement and other strategic investments that will drive growth and performance for Nordson over the long-term.”

Order Rates and Backlog

Order rates for the 12-week period ending May 13, 2012, measured in constant currency, increased by 9 percent over the same period a year ago. Order rates by segment and geography are provided in the accompanying financial tables, with pro-forma growth in order rates calculated as though fiscal year 2011 acquisitions were owned in both years.

Backlog at the end of the second quarter was approximately $197 million, an increase of 29 percent compared to the end of the second quarter a year ago, and an increase of 30 percent compared to the end of the first quarter of fiscal 2012. Backlog amounts are calculated at April 30, 2012 exchange rates.

Outlook

For the third quarter of fiscal 2012, sales are expected to be in the range of $337 million to $349 million, an increase of 8 to 12 percent as compared to the third quarter a year ago. This growth is inclusive of organic volume up 9 to 13 percent, 3 percent growth from the first year effect of acquisitions, and a negative 4 percent currency translation effect based on the current exchange rate environment. Diluted earnings per share are expected to be in the range of $0.96 to $1.04. This outlook does not include any impact associated with the agreement to acquire EDI Holdings announced earlier today.

“Our current order rates are encouraging and exceed the levels we saw during the first half of our year, which are driving strong expectations for our third quarter,” said Hilton. At the same time, uncertainties in the macroeconomic environment add a conservative view to the positive expectations we have for growth in future quarters. Over the long term, we will continue to win in the diverse end markets we serve through the continuous introduction of differentiated, best-in-class technology that increases customers’ productivity and reduces their costs. And in all aspects of the organization, our lean and decentralized global team has proven it can execute better than our competitors. Overall, we will continue to invest in our future, we look forward to providing our customers with the highest level of value, and we expect to continue delivering top quartile returns for our shareholders.”

Nordson will broadcast its second-quarter conference call on its web site at http://www.nordson.com/investors on Tuesday, May 22, 2012 at 8:30 a.m. EDT. 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 James R. Jaye, Director of Communications & Investor Relations at (440) 414-5639 or Jim.Jaye@nordson.com.

Except for historical information and comparisons contained herein, statements included in this release may constitute “forward-looking statements,” as defined by the Private Securities Litigation Reform Act of 1995. These statements involve a number of risks, uncertainties and other factors, as discussed in the company’s filing with the Securities and Exchange Commission that could cause actual results to differ.

Nordson Corporation delivers precision technology solutions that help customers increase throughput, productivity and up-time, enable new products and features, and decrease material usage. The company engineers, manufactures and markets differentiated products and systems used for dispensingadhesives, coatings, sealants, biomaterials 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 30 countries. Visit Nordson on the web at www.nordson.com, www.twitter.com/Nordson_Corp or www.facebook.com/nordson.

SECOND QUARTER PERIOD

NORDSON CORPORATION

Period Ending April 30, 2012 FINANCIAL HIGHLIGHTS
(Unaudited) (Dollars in thousands except for per-share amounts)

CONSOLIDATED STATEMENT OF INCOME

Second Quarter Year-to-Date
2012 2011 2012 2011
Net sales $ 315,193 $ 318,924 $ 591,029 $ 589,886
Cost of sales 125,537 121,172 232,027 225,963
Selling & administrative expenses 112,799 105,324 225,658 205,971
Operating profit 76,857 92,428 133,344 157,952
Interest expense - net (2,014 ) (1,223 ) (3,863 ) (2,493 )
Other income (expense) - net 137 1,791 1,129 2,727
Income before income taxes 74,980 92,996 130,610 158,186
Income taxes 22,869 27,754 40,161 47,047
Net Income $ 52,111 $ 65,242 $ 90,449 $ 111,139
Return on sales 17 % 20 % 15 % 19 %
Return on average shareholders' equity 37 % 45 % 32 % 40 %
Average common shares outstanding (000's) 64,426 68,110 64,749 68,043
Average common shares and
common share equivalents (000's) 65,179 69,002 65,407 68,921
Per share:
Basic earnings $ .81 $ .96 $ 1.40 $ 1.63
Diluted earnings $ .80 $ .95 $ 1.38 $ 1.61
Dividends paid $ .125 $ .105 $ .25 $ .21

SECOND QUARTER PERIOD
Period Ending April 30, 2012
(Unaudited)

CONSOLIDATED BALANCE SHEET

April 30 October 31
2012 2011
Cash and marketable securities $ 57,537 $ 37,408
Receivables 249,184 254,310
Inventories 154,934 141,912
Other current assets 44,877 43,327
Total current assets 506,532 476,957
Property, plant & equipment - net 141,610 130,883
Other assets 689,075 696,610
$ 1,337,217 $ 1,304,450
Notes payable and debt due within one year $ 55,668 $ 5,697
Accounts payable and accrued liabilities 168,558 176,464
Total current liabilities 224,226 182,161
Long-term debt 286,480 313,459
Other liabilities 248,668 237,507
Total shareholders' equity 577,843 571,323
$ 1,337,217 $ 1,304,450
Other information:
Employees 4,156 4,094
Common shares outstanding (000's) 64,313 65,601

SECOND QUARTER PERIOD

NORDSON CORPORATION

Period Ending April 30, 2012 FINANCIAL HIGHLIGHTS
(Unaudited) (Dollars in thousands)
Second Quarter % Growth over 2011 Year-to-Date % Growth over 2011

SALES BY BUSINESS SEGMENT

2012 2011 Volume Currency Total 2012 2011 Volume Currency Total
Adhesive dispensing systems $ 154,698 $ 159,432 -0.9 % -2.1 % -3.0 % $ 293,870 $ 296,408 0.2 % -1.1 % -0.9 %
Advanced technology systems 114,998 112,603 2.8 % -0.7 % 2.1 % 215,105 209,235 3.2 % -0.4 % 2.8 %
Industrial coating systems 45,497 46,889 -1.8 % -1.2 % -3.0 % 82,054 84,243 -1.9 % -0.7 % -2.6 %
Total sales by business segment $ 315,193 $ 318,924 0.3 % -1.5 % -1.2 % $ 591,029 $ 589,886 1.0 % -0.8 % 0.2 %
Second Quarter Year-to-Date
OPERATING PROFIT BY BUSINESS SEGMENT 2012 2011 2012 2011
Adhesive dispensing systems $ 51,518 $ 59,649 $ 98,745 $ 105,845
Advanced technology systems 28,683 33,563 44,683 56,839
Industrial coating systems 5,362 7,662 6,500 10,711
Corporate (8,706 ) (8,446 ) (16,584 ) (15,443 )
Total operating profit by business segment $ 76,857 $ 92,428 $ 133,344 $ 157,952
Second Quarter % Growth over 2011 Year-to-Date % Growth over 2011

SALES BY GEOGRAPHIC REGION

2012 2011 Volume Currency Total 2012 2011 Volume Currency Total
United States $ 85,647 $ 79,300 8.0 % - 8.0 % $ 160,849 $ 149,573 7.5 % - 7.5 %
Americas 25,927 26,158 2.4 % -3.3 % -0.9 % 46,126 46,018 3.6 % -3.4 % 0.2 %
Europe 91,430 98,049 -1.9 % -4.9 % -6.8 % 178,013 188,307 -2.1 % -3.4 % -5.5 %
Japan 30,004 30,159 -1.8 % 1.3 % -0.5 % 60,039 55,232 4.8 % 3.9 % 8.7 %
Asia Pacific 82,185 85,258 -4.1 % 0.5 % -3.6 % 146,002 150,756 -3.8 % 0.6 % -3.2 %
Total Sales by Geographic Region $ 315,193 $ 318,924 0.3 % -1.5 % -1.2 % $ 591,029 $ 589,886 1.0 % -0.8 % 0.2 %
Second Quarter Year-to-Date
SELECTED SUPPLEMENTAL INFORMATION 2012 2011 2012 2011
Depreciation and amortization $ 7,990 $ 6,931 $ 15,959 $ 14,246
Capital expenditures $ 5,726 $ 5,184 $ 14,370 $ 10,714
Dividends paid $ 8,058 $ 7,147 $ 16,191 $ 14,291

NORDSON CORPORATION

ORDER RATES FOR 12-WEEK PERIOD ENDING MAY 13, 2012
CHANGE FROM PRIOR YEAR

BUSINESS SEGMENT

% CHANGE

GEOGRAPHY

% CHANGE

Adhesive dispensing systems -5 % United States 11 %
Advanced technology systems 22 % Americas -12 %
Industrial coating systems 29 % Europe -9 %
Japan 12 %
Total 9 % Asia Pacific 36 %
Total 9 %
Notes:
1. Numbers in this table are unaudited and exclude the effects of currency movements.
2. Pro-forma changes in order rates were calculated as though 2011 acquisitions were owned in both years.

SECOND QUARTER PERIOD NORDSON CORPORATION
Period Ending April 30, 2012 RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(Unaudited)
Second Quarter Year-to-Date
2012 2011 2012 2011
Diluted EPS as reported (U.S. GAAP) $ 0.80 $ 0.95 $ 1.38 $ 1.61
Short-term inventory purchase accounting adjustments - - 0.02 0.01
Fixed asset write-down - 0.01 - 0.01
Severance and restructuring 0.04 - 0.05 -
Pension termination expense - - 0.01 -
Discrete tax items - (0.01 ) - (0.03 )
Diluted EPS as adjusted (Non-GAAP) $ 0.84 $ 0.95 $ 1.46 $ 1.60
Second Quarter Year-to-Date
2012 2011 2012 2011
Net income as reported (U.S. GAAP) $ 52,111 $ 65,242 $ 90,449 $ 111,139
Short-term inventory purchase accounting adjustments - - 1,538 415
Fixed asset write-down - 912 - 912
Severance and restructuring 2,624 - 3,188 -
Pension termination expense - - 466 -
Discrete tax items - (769 ) - (1,991 )
Net income as adjusted (Non-GAAP) $ 54,735 $ 65,385 $ 95,641 $ 110,475
Second Quarter Year-to-Date
2012 2011 2012 2011
Operating profit as reported (U.S. GAAP) $ 76,857 $ 92,428 $ 133,344 $ 157,952
Short-term inventory purchase accounting adjustments - - 2,213 602
Fixed asset write-down - 1,322 - 1,322
Severance and restructuring 3,776 - 4,587 -
Pension termination expense - - 670 -
Operating profit as adjusted (Non-GAAP) $ 80,633 $ 93,750 $ 140,814 $ 159,876
Operating profit (loss) by business segment
Second Quarter 2012 Operating Operating
Operating Profit (Loss) Margin
Profit (Loss) Severance and As Adjusted As Adjusted
(U.S. GAAP) Restructuring (Non-GAAP) (Non-GAAP)
Adhesive dispensing systems $ 51,518 $ 3,215 $ 54,733 35 %
Advanced technology systems 28,683 - 28,683 25 %
Industrial coating systems 5,362 561 5,923 13 %
Corporate (8,706 ) - (8,706 ) NA
Total operating profit by business segment $ 76,857 $ 3,776 $ 80,633 26 %

Adjusted EPS, net income and operating profit are not measurements of financial performance under GAAP, and such measures should not be considered as alternatives to EPS, net income and operating profit determined in accordance with GAAP. Management believes that EPS, net income and operating profit as adjusted to exclude the items in the tables below assist in understanding the results of Nordson Corporation. Our calculation of these non-GAAP measures may not be comparable to the calculation of similarly titled measures reported by other companies.

Contacts:

Nordson Corporation
James R. Jaye, Director, Communications & Investor Relations, 440-414-5639
Jim.Jaye@nordson.com
Related Stocks:
Stock Market XML and JSON Data API provided by FinancialContent Services, Inc.
Nasdaq quotes delayed at least 15 minutes, all others at least 20 minutes.
Markets are closed on certain holidays. Stock Market Holiday List
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.
Press Release Service provided by PRConnect.
Stock quotes supplied by Six Financial
Postage Rates Bots go here