- Sales and net income improve 9 percent and 73 percent over second quarter
- Operating margin improves to 18 percent and return on sales improves to 12 percent
- Strong third quarter free cash flow of $35 million more than doubles level of a year ago
WESTLAKE, Ohio – August 20, 2009 – Nordson Corporation (Nasdaq:NDSN) today reported results for the third quarter of its 2009 fiscal year. For the quarter ending July 31, 2009, sales of $206 million generated net income of $24 million. Diluted earnings per share were $0.71, inclusive of a $0.02 per share charge related to previously announced cost reduction activities and a $0.02 per share gain related to a one-time tax benefit. Prior year sales, net income and diluted earnings per share were $288 million, $32 million and $0.93, respectively.
“Rising sequential demand in technology end markets coupled with continued execution of our enterprise-wide cost reduction initiatives enabled Nordson to deliver outstanding performance in the quarter,” said Chairman, President and Chief Executive Officer Edward P. Campbell. “Operating margin for the quarter reached 18 percent, equal to the margin achieved during 2008’s record third quarter. Return on sales increased to 12 percent in the current quarter, exceeding the strong level of the third quarter last year. This excellent performance highlights our management team’s solid execution. This level of profitability led to strong free cash flow of $35 million in the quarter, more than double the amount generated in the same period a year ago.”
Third Quarter Segment & Regional Results
“The Advanced Technology segment returned to excellent profitability in the quarter on 38 percent sequential sales growth and a lower cost structure,” said Campbell. “Within Adhesive Dispensing, operating margin improved to 29 percent, driven by excellent expense control and stable revenue in consumer non-durables end markets. Industrial Coatings & Automotive continued to be impacted by reduced capital spending in consumer durables end markets. On a company-wide basis, demand for replacement parts and consumables remained more stable than did demand for systems.”
Detailed sales by operating segment and geography are included in the accompanying tables.
Fiscal Year-to-Date Results
For the first nine months of fiscal 2009, sales were $582 million and net income was $49 million. Earnings per share on a diluted basis for the period were $1.46, inclusive of $0.27 in charges related to restructuring activities and $0.20 in gains related to the sale of real estate assets and one-time tax benefits. Sales, net income and diluted earnings per share for the first nine months in the prior year were $827 million, $87 million and $2.53, respectively. “The company remains on pace to realize its estimate of an $80 million reduction in total selling and administrative expenses, before restructuring charges and currency benefits, for the fiscal year,” added Campbell.
Order Rates and Backlog
Order rates for the 12-week period ending August 16, 2009, measured in constant currency, decreased 21 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 $95 million, a decrease of 23 percent compared with $124 million at the end of the third quarter last year, and an increase of 14 percent compared with $83 million at the end of the second quarter of fiscal year 2009. Backlog amounts are calculated at July 31, 2009 exchange rates.
“Due to the still challenging current economic conditions and our record performance in 2008, we continue to view patterns in sequential order rates as more indicative of the direction of our business than year-over-year comparisons at this time,” said Campbell. “In the current 12-week period versus the immediately preceding 12-week period, order rates continued to improve in all segments.”
For the fourth quarter of fiscal year 2009, sales are expected to be in the range of $224 million to $235 million, the third consecutive quarter of sequential improvement. Diluted earnings per share are expected to be in the range of $0.75 to $0.87, inclusive of a $0.04 per share charge associated with restructuring activities. Prior year fourth quarter sales and diluted earnings per share were $298 million and $0.90, respectively. With this forecast, sales for the full year of fiscal 2009 would be between $806 million and $817 million, with diluted earnings per share ranging between $2.21 and $2.33.
”We are encouraged by continuing sequential improvement in our order trends and by general signs of resilience in the global economy,” said Campbell. “Our strong balance sheet, solid margins, strong free cash flow and ample sources of credit provide us with much flexibility. While the cost reduction actions we have taken thus far have been far-reaching, they are not impacting our ability to serve customers or compete effectively. We remain well positioned and are actively making the ongoing investments that enable us to expand our long-term competitive advantages.”
Nordson will broadcast its third-quarter conference call on the investor relations page of its Web site, www.nordson.com, on Friday, August 21, 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 firstname.lastname@example.org.
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 and coatings 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 32 countries.
Media & Investor Contact:
James R. Jaye, Director, Communications & Investor Relations
A summary of sales, income and earnings is presented in the attached tables.