- Sales increase 23 percent over previous year to $271 million
- Operating profit grows to $66 million and operating margin improves to 24 percent
- Diluted EPS increases 71 percent over previous year to $1.33
- Second quarter 2011 guidance: sales expected to increase 22 to 26 percent over prior year; EPS in the range of $1.70 to $1.82
Nordson Corporation (Nasdaq: NDSN) today reported the strongest first quarter sales, operating profit, net income and diluted earnings per share in its history. For the quarter ending January 31, 2011, sales were $271 million, a 23 percent increase over the prior year’s first quarter sales. This sales improvement included a 24 percent increase in volume offset by a 1 percent decrease related to unfavorable currency translation effects. Operating profit for the quarter was $66 million compared to $36 million in the first quarter a year ago. First quarter diluted earnings per share were $1.33 as compared to $0.78 a year ago. Current year earnings included a $0.04 per share one-time tax benefit and a $0.01 per share charge for short-term inventory purchase accounting related to the company’s acquisition of Micromedics Inc.
Westlake, Ohio, USA – February 22, 2011 -
“Our global team delivered the best first quarter performance in Nordson’s history,” said Nordson President and Chief Executive Officer Michael F. Hilton. “Our model of differentiated technology, application know-how, and direct sales and service enabled us to capture business in both established and emerging markets. The organization continues to deliver superior value to our customers, leading to excellent operating margins and earnings per share growth. In addition, we continued to generate solid levels of cash, and our balance sheet remains strong.”
First Quarter Segment and Regional Results
Nordson generated double digit percentage year-over-year sales increases in all three business segments and in every geographic region compared to the first quarter a year ago. All three segments also delivered significantly improved operating margin. “Volume in Adhesive Dispensing Systems improved by 19 percent, and operating efficiencies and cost controls combined to drive operating margin to a very strong 34 percent, an increase of six percentage points from the same period in the prior year,” said Hilton. “Advanced Technology Systems’ ongoing ability to provide solutions with greater efficiency to technology end markets enabled it to grow volume by 31 percent and improve its operating margin by seven percentage points over the prior year, to 24 percent. Within Industrial Coating Systems, volume improved 30 percent over the prior year as demand from manufacturers of consumer durable goods continued to recover. This additional volume, combined with the segment’s lower cost structure, pushed operating margin to 8 percent in the quarter. The margin improvement within Industrial Coatings over the same period a year ago was the largest among our three businesses.” Hilton also announced that Industrial Coating results now include Nordson’s industrial UV curing product line, previously reported as part of the Advanced Technology segment. This external reporting change more closely reflects Nordson’s management of the industrial UV curing product line and its related growth opportunities. Excluding the industrial UV curing product line in both years, Industrial Coating segment volume improved 27 percent in the quarter over the same period a year ago and the operating margin would have been 7 percent in the current quarter.
Detailed results by operating segment and geography are included in the attached tables, as is an earnings per share reconciliation.
Order Rates and Backlog
Order rates for the 12-week period ending February 13, 2011, measured in constant currency, increased 22 percent over the same period a year ago. Order rates by segment and geography are provided in the accompanying financial tables.
Backlog at the end of the first quarter was approximately $151 million, an increase of 45 percent compared with $104 million at the end of the first quarter a year ago, and an increase of 19 percent compared to the end of the fourth quarter of fiscal 2010. Backlog amounts are calculated at January 31, 2011 exchange rates.
For the second quarter of fiscal 2011, based on current exchange rates, sales are expected to be in the range of $308 to $318 million, an increase in volume of 20 to 24 percent with an additional 2 percent currency translation benefit, for a total sales increase of 22 to 26 percent compared to the second quarter a year ago. Diluted earnings per share are expected to be in the range of $1.70 to $1.82.
“The global economy is now in its second full year of recovery,” said Hilton. “Growing consumer confidence, improving credit flow, clearer tax policy, and greater ability to manage sovereign debt issues have combined to encourage customers to invest. The strong year-over-year sales growth we have delivered over the past several quarters and have forecasted for the second quarter of 2011 is reflective of this environment. Though Nordson’s current order rates remain healthy, we expect the rapid growth associated with the recovery phase of the cycle to moderate toward more normal and sustainable levels of growth as the year progresses. Overall, we remain confident that our customer relationships, geographic footprint, and innovative technology continue to position us as the preferred supplier in all of our end markets. Going forward, we will maintain our aggressive management of costs while also continuing to fund those organic and external opportunities most likely to drive profitable growth.”
Nordson will broadcast its first-quarter conference call on the investor relations page of its Web site, www.nordson.com/investors, on Wednesday, February 23, 2010 at 8:30 a.m. EST. 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 is one of the world’s leading producers of precision dispensing equipment that applies adhesives, sealants, liquid and powder coatings and other materials to a broad range of consumer and industrial products during manufacturing operations. The company also manufactures equipment used in the testing and inspection of electronic components as well as technology-based systems for UV curing and surface treatment processes. Headquartered in Westlake, Ohio, Nordson has direct operations and sales 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.
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Click here for document and accompanying financial table
James R. Jaye, Director, Communications & Investor Relations