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8-K - NORDSON CORP. 8-K - NORDSON CORPa6731009.htm

Exhibit 99.1

Nordson Corporation Reports Fiscal Year 2011 Second Quarter Results with All Time Records for Sales, Operating Profit, Net Income and Diluted EPS

  • Sales increase 27 percent over previous year to $319 million
  • Operating profit grows 60% to $92 million and operating margin expands to 29 percent
  • Net income more than doubles to $65 million
  • First half sales, operating profit, net income and EPS exceed record levels of 2008
  • Third quarter guidance: sales expected to increase 13 to 17 percent over prior year; EPS in the range of $0.84 to $0.91

WESTLAKE, Ohio--(BUSINESS WIRE)--May 19, 2011--Nordson Corporation (Nasdaq: NDSN) today reported second quarter sales, operating profit, net income and diluted earnings per share that were the strongest of any quarter in the company’s history. For the quarter ending April 30, 2011, sales reached $319 million, a 27 percent increase over the prior year, with volume up 23 percent and the remainder of the increase coming from the favorable effects of currency translation. Second quarter operating profit expanded to $92 million, a 60% increase over the second quarter of last year, and net income grew to $65 million, more than double the amount generated in the prior year’s second quarter. Diluted earnings per share were $0.95 as compared to $0.47 per share in the prior year’s second quarter.

“Nordson’s global team continued to raise the bar for excellence during the second quarter to deliver truly outstanding results,” said Nordson President and Chief Executive Officer Michael F. Hilton. “Our value proposition of best-in-class technology backed with application expertise and direct sales and service worldwide again produced strong top line growth, and we leveraged this growth to generate the most profitable quarter in our history. Operating margin grew to 29 percent as we maintained our focus on disciplined spending and efficiency. This strong operating performance translated to all-time quarterly records for net income and earnings per share, both of which were double the levels in the same period a year ago. In addition, we continue to generate excellent free cash flow, and our balance sheet remains strong.”


Second Quarter Segment and Regional Results
Nordson delivered double-digit percentage year-over-year volume increases in all three business segments and in every geographic region compared to the second quarter a year ago. “Sales volume in Adhesive Dispensing Systems grew 18 percent over the prior year’s second quarter. Spending control, operational efficiencies and product mix combined to drive the segment’s operating margin to 37 percent,” said Hilton. “Advanced Technology Systems continued to capture demand in its end markets, with sales volume growing by 23 percent over the same period a year ago and operating margin improving to 30 percent. Within Industrial Coating Systems, strong continued demand for our solutions by durable goods manufacturers drove a 44 percent increase in sales volume, which combined with our continued focus on operational execution generated operating margin of 16 percent.”

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 half of fiscal year 2011, sales were $590 million, operating profit was $158 million and net income was $111 million, all of which are first half records. First half earnings per share on a diluted basis are a record $1.61 and include a gain of $0.03 related to one-time tax benefits, and charges of $0.02 as described on the attached earnings per share reconciliation table. Prior year first half revenue, operating profit, net income and diluted earnings per share were $472 million, $94 million, $59 million and $0.86, respectively, inclusive of one-time gains of $0.04 and charges of $0.09, both per diluted share.

“My sincere thanks go to all the members of our global team, whose efforts generated the best first half results Nordson has ever produced,” said Hilton. “Our success continues to be driven by the innovation and value we provide to our customers, maintenance of our leaner and more efficient organization, and continued emphasis on cost control.”

Order Rates and Backlog
Order rates for the 12-week period ending May 8, 2011, measured in constant currency, increased 12 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 second quarter was approximately $159 million, an increase of 14 percent compared to the end of the second quarter a year ago, and an increase of 2 percent compared to the end of the first quarter of fiscal 2011. Backlog amounts are calculated at April 30, 2011 exchange rates.

Outlook
For the third quarter of fiscal 2011, sales are expected to be in the range of $315 million to $326 million, an increase in volume of 6 to 10 percent with an additional 7 percent currency translation benefit for a total sales increase of 13 to 17 percent as compared to the third quarter a year ago. Diluted earnings per share are expected to be in the range of $0.84 to $0.91.

“Overall orders remain at a very high level, though year-over-year growth is transitioning toward the more sustainable long term range we have expected and previously described,” said Hilton. “This is in light of a particularly strong second half in 2010 that was marked by the return in demand from durable goods manufacturers in addition to ongoing strength in technology and non-durable goods end markets. Though some uncertainty persists in the macroeconomic environment, our customers continue to demonstrate their willingness to invest, especially in emerging markets. We are confident our model of technology-leading products coupled with unmatched global support remains the preferred solution in the industries we serve, and we will continue to meet customer needs more efficiently than our competitors. We again expect to deliver solid growth and performance as our global team continues to execute.”

Nordson will broadcast its second-quarter conference call on its web site at http://www.nordson.com/investors on Friday, May 20, 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 at www.nordson.com, www.twitter.com/Nordson_Corp, and www.facebook.com/Nordson.


             
 
SECOND QUARTER PERIOD

NORDSON CORPORATION

Period Ending April 30, 2011 FINANCIAL HIGHLIGHTS
(Unaudited) (Dollars in thousands except for per-share amounts)
 

CONSOLIDATED STATEMENT OF INCOME

Second Quarter Year-to-Date
2011 2010 2011 2010
 
Net sales $ 318,924 $ 251,659 $ 589,886 $ 472,248
Cost of sales 121,172 97,792 225,963 186,706
Selling & administrative expenses   105,324     96,277     205,971     191,682  
 
Operating profit 92,428 57,590 157,952 93,860
 
Interest expense - net (1,223 ) (1,421 ) (2,493 ) (2,602 )
Other income (expense) - net   1,791     204     2,727     523  
 
Income before income taxes 92,996 56,373 158,186 91,781
Income taxes   27,754     23,942     47,047     32,618  
 
Net Income $ 65,242   $ 32,431   $ 111,139   $ 59,163  
 
 
 
Return on sales 20 % 13 % 19 % 13 %
Return on average shareholders' equity 45 % 33 % 40 % 30 %
 
 
                         
 
Average common shares outstanding (000's) 68,110 67,910 68,043 67,495

Average common shares and common share equivalents (000's)

69,002 68,836 68,921 68,417
 
Per share:
 
Basic earnings $ .96 $ .48 $ 1.63 $ .88
Diluted earnings $ .95 $ .47 $ 1.61 $ .86
 
Dividends paid $ .105 $ .095 $ .21 $ .19
 
 
 
SECOND QUARTER PERIOD
Period Ending April 30, 2011
(Unaudited)
 

CONSOLIDATED BALANCE SHEET

April 30

October 31
2011 2010
 
Cash and marketable securities $ 66,785 $ 50,169
Receivables 253,941 243,790
Inventories 133,539 117,721
Other current assets   43,114     39,351  
Total current assets 497,379 451,031
 
Property, plant & equipment - net 121,050 116,395
Other assets   440,477     418,928  
 
$ 1,058,906   $ 986,354  
 
Notes payable and debt due within one year $ 15,094 $ 16,420
Accounts payable and accrued liabilities   167,158     175,494  
Total current liabilities 182,252 191,914
 
Long-term debt 51,865 96,000
Other liabilities 203,285 193,368
Total shareholders' equity   621,504     505,072  
 
$ 1,058,906   $ 986,354  
               
 
 
Other information:
 
Employees 3,837 3,680
 
Common shares outstanding (000's) 68,248 67,871
 

                               
 
SECOND QUARTER PERIOD

NORDSON CORPORATION

Period Ending April 30, 2011 FINANCIAL HIGHLIGHTS
(Unaudited) (Dollars in thousands)
 
 
Second Quarter % Growth over 2010 Year-to-Date % Growth over 2010
SALES BY BUSINESS SEGMENT 2011 2010 Volume Currency Total 2011 2010 Volume Currency Total
 
 
Adhesive dispensing systems $ 159,432 $ 130,151 17.5 % 5.0 % 22.5 % $ 296,408 $ 247,164 17.9 % 2.0 % 19.9 %
Advanced technology systems 113,013 90,068 23.1 % 2.4 % 25.5 % 209,687 164,908 26.4 % 0.8 % 27.2 %
Industrial coating systems   46,479     31,440   44.2 % 3.6 % 47.8 %   83,791     60,176   37.3 % 1.9 % 39.2 %
 
Total sales by business segment $ 318,924   $ 251,659   22.8 % 3.9 % 26.7 % $ 589,886   $ 472,248   23.4 % 1.5 % 24.9 %
 
 
 

Second Quarter

Year-to-Date
OPERATING PROFIT BY BUSINESS SEGMENT 2011 2010 2011 2010
 
Adhesive dispensing systems $ 59,649 $ 43,611 $ 105,845 $ 75,898
Advanced technology systems 33,649 19,402 56,842 32,368
Industrial coating systems 7,576 1,713 10,708 1,830
Corporate   (8,446 )   (7,136 )   (15,443 )   (16,236 )
 
Total operating profit by business segment $ 92,428   $ 57,590   $ 157,952   $ 93,860  
 
 
 
Second Quarter % Growth over 2010 Year-to-Date % Growth over 2010
SALES BY GEOGRAPHIC REGION 2011 2010 Volume Currency Total 2011 2010 Volume Currency Total
 
United States $ 79,300 $ 66,638 19.0 % - 19.0 % $ 149,573 $ 125,384 19.3 % - 19.3 %
Americas 26,158 18,766 34.7 % 4.7 % 39.4 % 46,018 35,410 26.1 % 3.9 % 30.0 %
Europe 98,049 82,806 13.3 % 5.1 % 18.4 % 188,307 161,449 17.5 % -0.9 % 16.6 %
Japan 30,159 22,585 21.6 % 11.9 % 33.5 % 55,232 40,177 26.5 % 11.0 % 37.5 %
Asia Pacific   85,258     60,864   36.6 % 3.5 % 40.1 %   150,756     109,828   34.7 % 2.6 % 37.3 %
 
Total Sales by Geographic Region $ 318,924   $ 251,659   22.8 % 3.9 % 26.7 % $ 589,886   $ 472,248   23.4 % 1.5 % 24.9 %
 
                                                     
 
Second Quarter Year-to-Date
SELECTED SUPPLEMENTAL INFORMATION 2011 2010 2011 2010
 
Depreciation and amortization $ 6,931 $ 7,392 $ 14,246 $ 15,097
Capital expenditures $ 5,184 $ 2,515 $ 10,714 $ 4,231
Dividends paid $ 7,147 $ 6,439 $ 14,291 $ 12,837
                                                     
 

           
 

NORDSON CORPORATION

ORDER RATES FOR 12-WEEK PERIOD ENDING MAY 8, 2011
CHANGE FROM PRIOR YEAR
   
 

BUSINESS SEGMENT

% CHANGE

GEOGRAPHY

% CHANGE

 
Adhesive dispensing systems 10 % United States 16 %
Advanced technology systems 11 % Americas 40 %
Industrial coating systems 22 % Europe 2 %
Japan -12 %
Total 12 % Asia Pacific 24 %
 
Total 12 %
 
 
Note: Numbers in this table are unaudited and exclude the effects of currency movements.
   
 

             
SECOND QUARTER PERIOD NORDSON CORPORATION
Period Ending April 30, 2011 RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(Unaudited)
 
 
Second Quarter Year-to-Date
2011 2010 2011 2010
 
Diluted EPS as reported (U.S. GAAP) $ 0.95 $ 0.47 $ 1.61 $ 0.86
 
Short-term inventory purchase accounting adjustments - - 0.01 -
Fixed asset write-down 0.01 - 0.01 -
Severance and restructuring - 0.01 - 0.01
Tax expense - Medicare Part D - 0.08 - 0.08
Other discrete tax items   (0.01 )   -   (0.03 )   (0.04 )
 
Diluted EPS as adjusted (Non-GAAP) $ 0.95   $ 0.56 $ 1.60   $ 0.91  
 
 
Adjusted EPS is not a measurement of financial performance under GAAP, and such measure should not be considered 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. Our calculation of this non-GAAP measure may
not be comparable to the calculation of similarly titled measures reported by other companies.
 

CONTACT:
Nordson Corporation
James R. Jaye, 440-414-5639
Director, Communications & Investor Relations
Jim.Jaye@nordson.com