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Nordson Corporation Reports Results for Fourth Quarter and Fiscal Year 2009

16 Dec 2009

  • Fourth quarter sales improve 15 percent sequentially; full year sales total $819 million

  • Earnings impacted by non-cash goodwill and long-lived asset pre-tax impairment charges of $243 million

  • Fourth quarter operating margin, before impairment charges, improves sequentially to 20 percent, exceeding level of a year ago

  • Fourth quarter diluted earnings per share, before impairment charges, improve sequentially to $0.85

  • Strong free cash flow of $40 million during fourth quarter more than triples level of a year ago

  • First quarter FY2010 sales expected to increase 13 to 17 percent over prior year; midpoint of first quarter earnings per share guidance to double prior year

Westlake, Ohio, USA – December 16, 2009 -  Nordson Corporation (Nasdaq: NDSN) today reported results for the fourth quarter and fiscal year 2009.  For the quarter ending October 31, 2009, sales were $237 million, an increase of 15 percent over the third quarter of 2009.   Net loss for the quarter was $209 million, or $6.22 per diluted share, inclusive of non-cash goodwill and other long-lived asset impairment charges of $7.08 per share.  Excluding the impairment charges, adjusted earnings for the quarter were $29 million, or $0.85 per diluted share, inclusive of a $0.04 per share charge related to previously announced cost reduction activities.   Prior year fourth quarter sales, net income and diluted earnings per share were $298 million, $31 million and $0.90, respectively.

“Nordson delivered another quarter of very strong operating performance,” said Chairman, President and Chief Executive Officer Edward P. Campbell.  “Excluding non-cash impairment charges, operating margin was 20 percent, exceeding the outstanding performance of the previous quarter and the prior year’s fourth quarter.   We also continued to generate a very high level of free cash, which at $40 million in the quarter more than triples the level of a year ago.”

“While the quarter’s non-cash charges for the impairment of goodwill and other long-lived assets from various acquisitions are required under generally accepted accounting principles, the company’s market position, operating strength and cash resources are not in any way affected by the charges,” added Campbell.

 Fourth Quarter Segment & Regional Results

“All segments and geographies reported strong sequential sales growth,” said Campbell.  “I am pleased with the second consecutive quarter of 29 percent operating margin delivered by the Adhesives Dispensing Systems segment, as well as the improvement in the Industrial Coating Systems segment operating margin, which reached 6 percent before impairment charges.”  Campbell also announced that the name of the Industrial Coating and Automotive Systems segment has been changed to Industrial Coating Systems to more accurately reflect the broad composition of the segment’s customer base. 

Detailed results by operating segment and geography are included in the attached tables, as is a reconciliation of non-GAAP to GAAP results for the fourth quarter and full year.

Fiscal 2009 Full Year Results

For the full 2009 fiscal year, sales were $819 million.  Net loss for the year was $160 million, or $4.77 per diluted share, inclusive of the $7.08 per share non-cash impairment charges.  Excluding impairment charges, adjusted earnings for the year were $78 million, or $2.31 per diluted share, inclusive of $0.31 per share in charges related to previously announced cost reduction activities and $0.20 per share in gains related to one-time tax benefits and the sale of real estate.   Prior year sales, net income and diluted earnings per share on a full year basis were $1.1 billion, $118 million and $3.43, respectively.

 “Sales improved sequentially in every quarter this year, as did operating profit, operating margin and diluted earnings per share excluding the non-cash impairment charges,” said Campbell.  “These solid results were achieved despite very challenging economic conditions, and were driven by our global team’s ability to bring value to customers while also controlling costs, as evidenced by the $86 million reduction in selling and administrative expenses from the prior year.”

Order Rates and Backlog

Order rates for the 12-week period ending December 13, 2009, measured in constant currency, increased 4 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 fourth quarter was approximately $79 million, a decrease of 9 percent compared with $87 million at the end of the fourth quarter last year.  Backlog amounts are calculated at October 31, 2009 exchange rates.   

Outlook

For the first quarter of fiscal 2010, sales are expected to increase in the range of 13 to 17 percent over the first quarter a year ago.  Diluted earnings per share are expected to be in the range of $0.61 to $0.71, including an anticipated $0.10 per share one-time tax benefit and a $0.01 per share charge for restructuring activities.

“I am extremely pleased with how strongly positioned Nordson begins 2010,” said Campbell. “All of the company’s markets are showing varying degrees of recovery, more lean and effective organizational structures are in place, our market leadership positions are intact, and we continue to post strong operating results.  I have every confidence that Nordson’s leadership team will continue to deliver the excellent financial results that investors have come to expect.”

Nordson will broadcast its fourth-quarter conference call on the investor relations page of its Web site, www.nordson.com, on Thursday, December 17, 2009 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 (Nasdaq: NDSN) is one of the world’s leading producers of precision dispensing equipment that applies adhesives, sealants, 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 curing and surface treatment processes. Headquartered in Westlake, Ohio, Nordson has direct operations and sales support offices in more than 30 countries.

Media & Investor Contact:
James R. Jaye, Director, Communications & Investor Relations
440.414.5639    Jim.Jaye@nordson.com       
                                                  
A summary of sales, income and earnings is presented in the attached tables.