[February 20, 2019] |
|
Nordson Corporation Reports Fiscal Year 2019 First Quarter Results
Nordson
Corporation (Nasdaq: NDSN) today reported results for the
first quarter of fiscal year 2019. For the quarter ended January 31,
2019, sales were $498 million, a 10 percent decrease compared to the
prior year's first quarter, where organic sales volume grew 19 percent
compared to the first quarter of 2017. This change in first quarter 2019
sales included a decrease of 9 percent organic volume, growth related to
the first year effect of acquisitions of 1 percent, and a decrease
related to the unfavorable effects of currency translation as compared
to the prior year's first quarter of 2 percent.
In the first quarter of fiscal year 2019, reported operating profit was
$84 million, net income was $49 million, and GAAP diluted earnings per
share were $0.83, inclusive of a $0.09 per share charge related to
one-time items. Prior year first quarter sales, operating profit, net
income and GAAP diluted earnings per share were $550 million, $119
million, $105 million and $1.78, respectively. A reconciliation of GAAP
diluted earnings per share to adjusted diluted earnings per share and
calculations for EBITDA, adjusted EBITDA, free cash flow before
dividends, and adjusted free cash flow before dividends are included in
the attached financial exhibits.
The current quarter's results include a non-recurring restructuring
charge of approximately $1.5 million, or $0.02 per diluted share.
Additionally, net discrete tax expense of approximately $4 million, or
$0.07 per diluted share, primarily related to the U.S. federal income
tax reform legislation was recognized in the quarter.
First Quarter Segment Results
Adhesive Dispensing Systems sales decreased approximately 4 percent
compared to the prior year's first quarter, inclusive of a decrease in
organic volume of approximately 2 percent and a decrease of
approximately 3 percent related to the unfavorable effects of currency
translation as compared to the prior year. Reported operating margin in
the segment was 23 percent in the quarter.
Advanced Technology Systems sales decreased approximately 14 percent
compared to the prior year's first quarter, inclusive of a decrease in
organic volume of approximately 15 percent, an increase of approximately
2 percent related to the first year effect of acquisitions, and a
decrease of approximately 1 percent related to the unfavorable effects
of currency translation as compared to the prior year. The first
quarter's acquisitive growth includes the fiscal 2018 acquisition of
Clada Medical Devices and two months of the fiscal 2018 acquisition of
Sonoscan. Sales growth in the first quarter of 2018 increased 87 percent
compared to the same period of 2017, inclusive of 50 percent organic
sales volume growth. In the first of quarter 2019, reported operating
margin in the segment was 17 percent.
Industrial Coating Systems sales decreased approximately 10 percent
compared to the prior year's first quarter, inclusive of a decrease in
organic volume of approximately 9 percent and a decrease of
approximately 2 percent related to the unfavorable effects of currency
translation as compared to the prior year. Reported operating margin in
the segment was 14 percent in the quarter.
Detailed results by operating segment and geography are included in the
attached financial exhibits.
"Given the difficult comparisons to the strong first quarter of fiscal
2018, where total company organic sales growth was 19 percent, this
quarter's performance was in line with our expectations for a more
typical seasonal pattern of sequential quarterly sales growth. As our
spending is generally consistent throughout the year, segment operating
margins in the quarter were impacted by the decline in sales," said
Michael F. Hilton, President and Chief Executive Officer. "In line with
our capital allocation strategy, we invested $102 million for the
repurchase of approximately 856,000 shares and distributed $20 million
in dividends during the quarter. We are pleased to return this value to
our shareholders."
Backlog
Backlog for the quarter ended January 31, 2019 was $439 million, an
increase of 9 percent compared to the same period a year ago. Impact
from acquisitions was not significant. Backlog amounts are calculated at
January 31, 2019 exchange rates.
Commenting on the company's fiscal 2019 outlook, Hilton said, "While we
will continue to monitor macroeconomic challenges, as well as the
resolution of the international tariff legislation, we believe the
strength of our diverse end markets and our ability to execute on our
growth initiatives continue to support organic growth guidance of 3 to 5
percent for fiscal 2019. Our global team also remains committed to
achieving the operational improvements that support our previously
announced operating and EBITDA margin enhancement targets for the full
fiscal year 2019."
Nordson management will provide additional commentary on these results
and outlook during a conference call Thursday, February 21, 2019 at 8:30
a.m. eastern time which can be accessed at www.nordson.com/investors.
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) 414-5639 or [email protected].
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 engineers, manufactures and markets differentiated
products and systems used for the precision dispensing
of adhesives,
coatings,
sealants, biomaterials, polymers, plastics 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 35 countries. Visit Nordson on the web at http://www.nordson.com,
@Nordson_Corp,
or www.facebook.com/nordson.
|
NORDSON CORPORATION
|
FINANCIAL HIGHLIGHTS
|
(Dollars in thousands except for per-share amounts)
|
|
FIRST QUARTER PERIOD
|
Period Ended January 31, 2019
|
(Unaudited)
|
|
CONSOLIDATED STATEMENT OF INCOME(1)
|
|
|
First Quarter
|
|
|
2019
|
|
2018
|
|
|
|
|
|
Sales
|
|
$
|
497,910
|
|
|
$
|
550,424
|
|
Cost of sales
|
|
|
228,934
|
|
|
|
249,451
|
|
Selling & administrative expenses
|
|
|
184,695
|
|
|
|
181,623
|
|
|
|
|
|
|
Operating profit
|
|
|
84,281
|
|
|
|
119,350
|
|
|
|
|
|
|
Interest expense - net
|
|
|
(12,049
|
)
|
|
|
(11,028
|
)
|
Other income (expense) - net
|
|
|
(4,189
|
)
|
|
|
(4,804
|
)
|
|
|
|
|
|
Income before income taxes
|
|
|
68,043
|
|
|
|
103,518
|
|
Income taxes
|
|
|
19,476
|
|
|
|
(1,037
|
)
|
|
|
|
|
|
Net Income
|
|
$
|
48,567
|
|
|
$
|
104,555
|
|
|
|
|
|
|
|
|
|
|
|
Return on sales
|
|
|
10
|
%
|
|
|
19
|
%
|
Return on average shareholders' equity
|
|
|
14
|
%
|
|
|
34
|
%
|
|
|
|
|
|
|
|
|
|
|
Average common shares outstanding (000's)
|
|
|
57,702
|
|
|
|
57,755
|
|
Average common shares and common share equivalents (000's)
|
|
|
58,372
|
|
|
|
58,874
|
|
|
|
|
|
|
Per share:
|
|
|
|
|
|
|
|
|
|
Basic earnings
|
|
$
|
.84
|
|
|
$
|
1.81
|
|
Diluted earnings
|
|
$
|
.83
|
|
|
$
|
1.78
|
|
|
|
|
|
|
Dividends paid
|
|
$
|
.35
|
|
|
$
|
.30
|
|
|
|
|
|
|
Total dividends
|
|
$
|
20,210
|
|
|
$
|
17,321
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED BALANCE SHEET
|
|
|
January 31
|
|
October 31
|
|
|
2019
|
|
2018
|
|
|
|
|
|
Cash and marketable securities
|
|
$
|
85,546
|
|
$
|
95,678
|
Receivables
|
|
|
463,228
|
|
|
491,423
|
Inventories
|
|
|
271,156
|
|
|
264,477
|
Other current assets
|
|
|
47,271
|
|
|
32,524
|
Total current assets
|
|
|
867,201
|
|
|
884,102
|
|
|
|
|
|
Property, plant & equipment - net
|
|
|
387,719
|
|
|
386,666
|
Other assets
|
|
|
2,142,827
|
|
|
2,150,244
|
|
|
$
|
3,397,747
|
|
$
|
3,421,012
|
|
|
|
|
|
Notes payable and debt due within one year
|
|
$
|
53,734
|
|
$
|
28,734
|
Accounts payable and accrued liabilities
|
|
|
270,763
|
|
|
321,546
|
Total current liabilities
|
|
|
324,497
|
|
|
350,280
|
|
|
|
|
|
Long-term debt
|
|
|
1,331,392
|
|
|
1,285,357
|
Other liabilities
|
|
|
340,317
|
|
|
334,634
|
Total shareholders' equity
|
|
|
1,401,541
|
|
|
1,450,741
|
|
|
$
|
3,397,747
|
|
$
|
3,421,012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employees
|
|
|
7,569
|
|
|
7,545
|
|
|
|
|
|
Common shares outstanding (000's)
|
|
|
57,325
|
|
|
57,973
|
(1) Results for the three months ended January 31, 2018
have been revised to reflect the retrospective adoption of
Accounting Standards Update No. 2017-07, Compensation - Retirement
Benefits (Topic 715): Improving the Presentation of Net Periodic
Pension Cost and Net Periodic Postretirement Cost ("ASU 2017-07").
The adoption of ASU 2017-07 resulted in a net increase to previously
reported operating income of $1.6 million for the three months ended
January 31, 2018, and a corresponding increase of $1.6 million to
other expense for the three months ended January 31, 2018, with no
net impact to net income or earnings per share.
|
|
|
NORDSON CORPORATION
|
FINANCIAL HIGHLIGHTS
|
(Dollars in thousands)
|
|
FIRST QUARTER PERIOD
|
Period Ended January 31, 2019
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Quarter
|
|
% Growth over 2018
|
SALES BY BUSINESS SEGMENT
|
|
2019
|
|
2018
|
|
Volume
|
|
Currency
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adhesive dispensing systems
|
|
$
|
211,517
|
|
|
$
|
220,864
|
|
|
-1.6
|
%
|
|
-2.6
|
%
|
|
-4.2
|
%
|
Advanced technology systems
|
|
|
234,458
|
|
|
|
271,701
|
|
|
-12.4
|
%
|
|
-1.3
|
%
|
|
-13.7
|
%
|
Industrial coating systems
|
|
|
51,935
|
|
|
|
57,859
|
|
|
-8.6
|
%
|
|
-1.6
|
%
|
|
-10.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Total sales by business segment
|
|
$
|
497,910
|
|
|
$
|
550,424
|
|
|
-7.7
|
%
|
|
-1.8
|
%
|
|
-9.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Quarter
|
|
|
|
|
|
|
OPERATING PROFIT BY BUSINESS SEGMENT(1)
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adhesive dispensing systems
|
|
$
|
47,892
|
|
|
$
|
53,990
|
|
|
|
|
|
|
|
Advanced technology systems
|
|
|
40,785
|
|
|
|
67,493
|
|
|
|
|
|
|
|
Industrial coating systems
|
|
|
7,516
|
|
|
|
10,545
|
|
|
|
|
|
|
|
Corporate
|
|
|
(11,912
|
)
|
|
|
(12,678
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating profit by business segment
|
|
$
|
84,281
|
|
|
$
|
119,350
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Quarter
|
|
% Growth over 2018
|
SALES BY GEOGRAPHIC REGION
|
|
2019
|
|
2018
|
|
Volume
|
|
Currency
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
$
|
170,350
|
|
|
$
|
165,831
|
|
|
2.7
|
%
|
|
-
|
|
|
2.7
|
%
|
Americas
|
|
|
32,437
|
|
|
|
34,279
|
|
|
-3.0
|
%
|
|
-2.4
|
%
|
|
-5.4
|
%
|
Europe
|
|
|
132,675
|
|
|
|
141,938
|
|
|
-2.1
|
%
|
|
-4.4
|
%
|
|
-6.5
|
%
|
Japan
|
|
|
29,047
|
|
|
|
65,869
|
|
|
-56.2
|
%
|
|
0.3
|
%
|
|
-55.9
|
%
|
Asia Pacific
|
|
|
133,401
|
|
|
|
142,507
|
|
|
-4.1
|
%
|
|
-2.3
|
%
|
|
-6.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Total Sales by Geographic Region
|
|
$
|
497,910
|
|
|
$
|
550,424
|
|
|
-7.7
|
%
|
|
-1.8
|
%
|
|
-9.5
|
%
|
(1) Results for the three months ended January 31, 2018
have been revised to reflect the retrospective adoption of ASU
2017-07.
|
|
NORDSON CORPORATION
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
|
(Dollars in thousands except for per-share amounts)
|
|
FIRST QUARTER ENDED
|
Period Ended January 31, 2019
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
First Quarter
|
|
|
2019
|
|
2018
|
|
|
|
|
|
|
Net income
|
|
$
|
48,567
|
|
|
$
|
104,555
|
|
Adjustments:
|
|
|
|
|
|
Depreciation and amortization expense
|
|
|
27,748
|
|
|
|
26,285
|
|
Interest expense, net
|
|
|
12,049
|
|
|
|
11,028
|
|
Income taxes
|
|
|
19,476
|
|
|
|
(1,037
|
)
|
EBITDA
|
|
$
|
107,840
|
|
|
$
|
140,831
|
|
Adjustments:
|
|
|
|
|
|
Acquisition costs and adjustments (1)
|
|
|
-
|
|
|
|
1,053
|
|
EBITDA As Adjusted
|
|
$
|
107,840
|
|
|
$
|
141,884
|
|
|
|
|
|
|
|
EBITDA per diluted share
|
|
$
|
1.85
|
|
|
$
|
2.39
|
|
EBITDA As Adjusted per diluted share
|
|
$
|
1.85
|
|
|
$
|
2.41
|
|
(1) Represents costs and adjustments associated with
our 2018 acquisitions, including accounting adjustments to
inventory that were charged to cost of sales when the inventory
was sold; transaction-related costs comprising of acquisition
fees, legal, financial and tax due diligence expenses; and
valuation costs that are required to be expensed as incurred.
|
|
EBITDA, EBITDA As Adjusted, EBITDA per diluted share and EBITDA As
Adjusted per diluted share are non-GAAP financial measures used by
management to evaluate the Company's ongoing operations. EBITDA is
defined as earnings before interest, taxes, depreciation and
amortization and EBITDA As Adjusted is defined as EBITDA plus
certain acquisition costs and adjustments. EBITDA per diluted
share is defined as EBITDA divided by the Company's diluted
weighted average shares outstanding. EBITDA As Adjusted per
diluted share is defined as EBITDA As Adjusted divided by the
Company's diluted weighted average shares outstanding.
|
|
|
|
|
|
|
First Quarter
|
|
|
2019
|
|
2018
|
|
|
|
|
|
Diluted EPS as reported (U.S. GAAP)
|
|
$
|
0.83
|
|
|
$
|
1.78
|
|
|
|
|
|
|
Short-term inventory purchase accounting adjustments
|
|
|
-
|
|
|
|
0.01
|
|
Severance and restructuring
|
|
|
0.02
|
|
|
|
0.01
|
|
U.S. Tax Reform discrete item
|
|
|
0.08
|
|
|
|
(0.37
|
)
|
Other discrete tax items
|
|
|
(0.02
|
)
|
|
|
(0.08
|
)
|
|
|
|
|
|
Diluted EPS as adjusted (Non-GAAP)
|
|
$
|
0.92
|
|
|
$
|
1.35
|
|
Adjusted EPS is not a measurement of financial performance under
GAAP, and should not be considered as an alternative to EPS
determined in accordance with GAAP. Management believes that EPS
as adjusted to exclude the items in the table above assist in
understanding the results of Nordson Corporation. Amounts may not
add due to rounding.
|
|
|
|
|
Free Cash Flow Before Dividends
|
|
First Quarter
|
|
|
2019
|
|
2018
|
|
|
|
|
|
Net income
|
|
$
|
48,567
|
|
|
$
|
104,555
|
|
Depreciation and amortization
|
|
|
27,748
|
|
|
|
26,285
|
|
Other non-cash charges
|
|
|
6,340
|
|
|
|
(37,893
|
)
|
Changes in operating assets and liabilities
|
|
|
(25,808
|
)
|
|
|
16,331
|
|
Net cash provided by operating activities
|
|
|
56,847
|
|
|
|
109,278
|
|
|
|
|
|
|
Additions to property, plant and equipment
|
|
|
(14,121
|
)
|
|
|
(16,681
|
)
|
Proceeds from the sale of property, plant and equipment
|
|
|
260
|
|
|
|
68
|
|
|
|
|
|
|
Free cash flow before dividends
|
|
$
|
42,986
|
|
|
$
|
92,665
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
Acquisition costs and adjustments, net of tax(1)
|
|
|
-
|
|
|
|
790
|
|
Free cash flow before dividends, adjusted
|
|
$
|
42,986
|
|
|
$
|
93,455
|
|
(1) Represents costs and adjustments associated with
our 2018 acquisitions, including accounting adjustments to
inventory that were charged to cost of sales when the inventory
was sold; transaction-related costs comprising of acquisition
fees, legal, financial and tax due diligence expenses; and
valuation costs that are required to be expensed as incurred.
|
|
Free cash flow before dividends, a non-GAAP financial measure, is
defined as net cash provided by operating activities less
purchased property, plant and equipment and proceeds from the sale
of property, plant and equipment. It is a financial measure used
by management to assess its ability to generate cash in excess of
its operating needs. Therefore, the Company believes this
financial measure provides useful information to investors. Free
cash flow before dividends is not a measure of financial
performance under GAAP and should be considered in addition to,
and not as a substitute for, operating cash flows or other
financial measures prepared in accordance with GAAP. Our
calculations of non-GAAP measures may not be comparable to the
calculations of similarly titled measures reported by other
companies.
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View source version on businesswire.com: https://www.businesswire.com/news/home/20190220005825/en/
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