- Sales increase 12 percent over previous year to $312 million, a third quarter record
- Operating profit in the quarter grows 16 percent over previous year to $79 million with operating margin of 25 percent
- Net income and diluted EPS reach third quarter records
- First-nine-months sales, operating profit, net income and EPS exceed record levels of 2010
- Current 12 week order rates up 6 percent
- Fourth quarter guidance: sales expected to increase 9 to 13 percent over prior year
Westlake, Ohio, USA – August 18, 2011 - Nordson Corporation (Nasdaq: NDSN) today reported the strongest third quarter sales, operating profit, net income and diluted EPS in its history. For the quarter ending July 31, 2011, sales reached $312 million, a 12 percent increase over the prior year, with volume up 5 percent and the remainder of the increase coming from the favorable effects of currency translation. Third quarter operating profit was $79 million, a 16 percent increase over the third quarter of last year, and operating margin reached 25 percent, also an increase from the level of a year ago. Third quarter net income was $57 million and diluted earnings per share were $0.82 compared to $55 million and $0.80 a year ago. Included with this news release is a table highlighting one-time items. Excluding these one-time items in the third quarter of both years, operating profit grew by 21%, operating margin expanded to 26% and EPS grew by 25%.
“Nordson’s global team remained focused on performance in all aspects of the business, resulting in another very strong quarter,” said Nordson President and Chief Executive Officer Michael F. Hilton. “Our offering of differentiated technology combined with direct sales and service on a global basis enabled us to generate solid top line growth, despite a sluggish global recovery impacted by the disaster in Japan, heightened macroeconomic and political uncertainty, and comparisons against a very strong period of recovery a year ago. As we have consistently demonstrated, we are adept at leveraging growth into profitable results. The quarter’s strong performance is the result of continued spending discipline and an ongoing focus on continuous improvement initiatives. Our balance sheet remains strong and we continue to generate excellent free cash flow. In addition, we continued to execute on our acquisition strategy during the quarter, completing one transaction and announcing another. These high-quality growth businesses will add momentum and new capability to our existing positions in the packaging and medical markets, respectively.”
Third Quarter Segment and Regional Results
Nordson delivered year-over-year sales increases in all three business segments and in every geographic region except Japan compared to the third quarter a year ago. “Sales in Adhesive Dispensing Systems grew 13 percent over the prior year’s third quarter, and our continued focus on spending control and operational efficiencies generated increased operating margin of 34 percent,” said Hilton. “In Advanced Technology Systems, sales increased by 8 percent against a very strong quarter a year ago and operating margin improved to 28 percent through continued solid execution. Industrial Coating Systems continued to capitalize on returning demand by durable goods manufacturers, as sales increased by 17 percent. The business’ strong operating margin of 18 percent is an increase of more than five percentage points over the level of a year ago and continued evidence of the segment’s more effective operating structure.”
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-nine-months of fiscal year 2011, sales were $902 million, operating profit was $237 million and net income was $168 million, all of which are first-nine-months records. First-nine-months earnings per share on a diluted basis are a record $2.44 and include one-time gains of $0.07 and one-time charges of $0.05 as described on the attached earnings per share reconciliation table. Prior year first-nine-months revenue, operating profit, net income and diluted earnings per share were $751 million, $162 million, $114 million and $1.67, respectively, inclusive of one-time gains of $0.20 and charges of $0.09, both per diluted share.
“Our team continues to demonstrate their ability to execute everywhere in the world, and our customers continue to respond to our compelling value proposition of innovative technology and service,” said Hilton. “Diluted earnings per share in the first-nine-months increased by 55 percent excluding one-time items in both years.”
Order Rates and Backlog
Order rates for the 12-week period ending August 14, 2011, measured in constant currency, increased 6 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 third quarter was approximately $176 million, an increase of 20 percent compared to the end of the third quarter a year ago, and an increase of 11 percent compared to the end of the second quarter of fiscal 2011. Backlog amounts are calculated at July 31, 2011 exchange rates.
For the fourth quarter of fiscal 2011, sales are expected to be in the range of $315 million to $327 million. This represents an increase in volume of 5 to 9 percent, inclusive of 2 percent from acquisitions, with an additional 4 percent currency translation benefit, for a total sales increase of 9 to 13 percent as compared to the fourth quarter a year ago. Diluted earnings per share are expected to be in the range of $0.77 to $0.84, inclusive of a $0.02 per share charge related to anticipated restructuring activities. Even at the low end of this guidance, Nordson will deliver full year records for sales, operating profit, net income and diluted EPS.
“Our order rates remain positive, but are reflective of current lower macroeconomic growth,” said Hilton. “We are on pace to deliver record full year results, and the fundamentals of our business remain strong and intact. These fundamentals include innovative and differentiated technology, direct sales and service, global reach, market leading positions, outstanding margins, a consistent parts and consumables revenue stream, and a team that executes better than our competition. We will continue to leverage our strengths to capitalize on the numerous growth opportunities we see in a variety of attractive niches, in the near term and over the next several years. We are well positioned to capture these opportunities in both developed and emerging markets. We will continue to supplement our organic growth with the addition of high performing businesses that fit our strategic criteria. While we are not immune from global macroeconomic conditions, we have previously demonstrated our ability to adjust if and when necessary. We remain focused on what we can control, which is delivering precision technology solutions that enable our customers to succeed at the highest levels. Our outlook is for continued solid growth and performance and delivering on our goal of increasing shareholder value.”
Nordson will broadcast its third quarter conference call on its web site at /investors on Friday, August 19, 2011 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 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. 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. 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 tables
CONTACT: Nordson Corporation
James R. Jaye (Director, Communications and Investor Relations)