INVESTOR
PRESENTATION
January 15, 2020 | NASDAQ: NDSN
Nordson MEDICAL Products (see detail on page two)
Safe Harbor Statement
Under the Private Securities Litigation Reform Act of 1995
Information in this presentation may contain "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as "may," "will," "should," "expects," "intends," "plans," "anticipates," "believes," "estimates," "predicts," "projects," or "potential" or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters.
All statements regarding our future performance, earnings projections, events or developments are forward-looking statements. These forward-looking statements are made based on known events and circumstances at the time of release, and as such, are subject in the future to unforeseen uncertainties and risks that could cause actual results to differ materially from those contained in any forward-looking statement. Such risks and uncertainties are described under "Risk Factors" in Item 1A of our annual report on Form 10-K and any updates to those factors set forth in our subsequent quarterly reports on Form 10-Q or current reports on Form 8-K. We make these statements as of the date of this disclosure, and undertake no obligation to update them unless otherwise required by law.
ON THE COVER: Nordson MEDICAL products: Top left - High-pressure urethane balloons for use in dilation, stent delivery, and occlusion procedures; Top right - Nitinol components can be braided and formed in | |
2 | virtually any shape for the urology, neurology, or vascular markets; Bottom left - Fluid management components find their way into virtually every medical space where quality and safety are paramount |
requirements for life saving fluid management; Bottom right - Biomaterial delivery devices make the transfer of valuable autologous and synthetic biomaterials safe, efficient and effective for surgeons and clinicians |
the world over.
A premier industrial technology company focused on precision dispensing,
fluid control and related processes and proprietary technology.
1954 $2.2B $587M 7,500+ 35+
Company Founded | *Sales | *EBITDA | Employees | Countries with |
Direct Presence |
3
*Sales and EBITDA for the full fiscal year ended 10/31/19.
Investment Highlights
Strong Average
Annual Sales
Growth
5%
Average
2015-2019
High Level of | Outstanding | ||||
Excellent | Free Cash Flow | Strong Cash | Reliable and | Long Term Total | |
Outstanding | EBITDA | Before | Returns to | Consistent | Shareholder |
Gross Margins | Margins | Dividends | Shareholders | Dividend | Returns |
55% | 26% | $1.2B | $895M | 56 yrs | 21% |
Gross Margins | EBITDA | 100% of | Share | of Annual | TSR CAGR |
Average | Margin | Net Income | Repurchases & | Increases | 2009-2019 |
Dividends | |||||
2015-2019 | Average | 24% payout ratio | |||
2015-2019 | |||||
2015-2019 | in 2019 | ||||
2015-2019 | |||||
4
Diversified Sources of Sales
FY2019 Profile - $2.2 Billion
Product Type | Geographies |
7% | |||||||
23% | 6% | ||||||
Parts and | United States | ||||||
Consumables | 35% | Europe | |||||
Standard Product | 26% | ||||||
54% | Asia Pacific | ||||||
Japan | |||||||
23% | Engineered | ||||||
Americas | |||||||
Systems | |||||||
26% | |||||||
High percentage of recurring | Nearly 70% of sales outside USA. |
sales from parts and | Direct presence in over |
consumables. | 35 countries. |
5
Diversified End Markets
FY2019 Profile - $2.2 Billion
4%
6%
23%
12%
16%
22% | |
17% | |
Electronics | Consumer Non-Durable |
Medical | OEM |
Industrial | Automotive |
Consumer Durable |
6
End markets include:
- Electronic Components: semiconductors, printed circuit boards, computing, communications/mobile, consumer electronics (i.e., gaming, wearables, automotive electronics)
- Consumer Non-Durable: beverage, disposable hygiene, food, paper, textiles, packaging
- Medical: minimally invasive interventional delivery devices, catheters, medical balloons, fluid connection components, specialty tubing
- Original Equipment Manufacturer (OEM)/Distributors: Nordson products used to build manufacturing line, not end market specific
- Industrial: aerospace, chemical, construction, energy, farm and construction machinery, industrial machinery, rigid container, metal, transportation
- Consumer Durable: appliance, furniture, lighting
- Automotive: applications for new vehicle platforms
*Percentages are for directional use only; may not add to 100% due to rounding.
Nordson Business Segments
ADVANCED TECHNOLOGY SYSTEMS* | ADHESIVE DISPENSING SYSTEMS* | INDUSTRIAL COATINGS SYSTEMS* |
45% | 43% | 12% |
Precision dispense, fluid management, | Hot melt dispense solutions for recession- | Standard and highly-engineered systems used |
surface treatment, test & inspection and | resistant, consumer non-durable end markets. | primarily for applying coatings, paint, finishes, |
proprietary solutions for electronics, medical | Additional components for use in the | sealants, and more, for the consumer durable |
and general industrial end markets. | thermoplastic melt stream. | goods and industrial end markets. |
Targeted organic growth rate: | Targeted organic growth rate: | Targeted organic growth rate: |
2-3x Global GDP | 1.5-2x Global GDP | Global GDP+ |
7 |
*Segment mix for the full fiscal year ended 10/31/19
Advanced
Technology
Systems
Organic 5.2%
Acquisitive 8.3%
Currency (0.9%)
2015-19 Average
Annual Sales Growth
20.9%
2019 Annual
Operating Margin
What We Do
Precision dispense, fluid management, test, inspection, surface treatment and proprietary solutions for medical, electronics and general industrial markets.
2-3X Global GDP Growth Driven by:
- Medical - Aging population, trends toward non- invasive surgical techniques and medical OEM outsourcing
- Broad product use across the electronics supply chain from integrated circuit to printed circuit board to end product assembly
- Circuit shrinkage / new architectures / flip chips
- New applications including automotive electronics, electric batteries, and flexible circuits
- Emerging markets
▪ Product tiering
8
Advanced Technology
FY2019 Profile - Diverse End Markets
1% 1%
4%
5%
6%
37%
7%
15%
24% | ||
Medical | Electronic Components | |
Semiconductors | OEM | |
Printed Circuit Boards | Industrial | |
Automotive | Consumer Non-Durable | |
Consumer Durable |
9
End markets include:
- Medical: minimally invasive interventional delivery devices, catheters, medical balloons, fluid connection components, specialty tubing
- Electronics: electronic components (i.e., computing; communications/mobile; consumer electronics - gaming, wearables; automotive electronics), semiconductors, printed circuit boards
- OEM/Distributor: Nordson products used to build manufacturing line, not end market specific
- Industrial: aerospace, construction, defense, energy, industrial machinery
- Consumer Durable: general applications (i.e., furniture, lighting)
- Consumer Non-Durable: disposable hygiene, food, textiles
*Percentages are for directional use only
Adhesive
Dispensing
Systems
Organic 3.3%
Acquisitive 0.2%
Currency (2.3%)
2015-19 Average
Annual Sales Growth
28.9%
2019 Annual
Operating Margin
10
What We Do
Products to melt, filter, pump, transport, dispense and deposit adhesives, polymers and other materials in the manufacturing of a wide range of goods.
1.5-2X Global GDP Growth Driven By:
- Increased use of disposable hygiene products (diapers, feminine care, etc.) and packaged convenience foods and plastics; demand increase driven by growing middle class
- Recapitalization of large installed base
- Productivity and efficiency investments
- New applications, including electric battery and fabric bonding
- Material, machinery and process innovations
- Emerging markets
▪ Product tiering
Adhesive Dispensing
FY2019 Profile - Diverse end markets
4%
5%
8%
30%
4%
49%
End markets include:
- Consumer Non-Durable:beverage, disposable hygiene, food, paper, textiles, non-wovens,packaging
- OEM/Distributor: Nordson products used to build manufacturing line, not end market specific
- Industrial: aerospace, chemical, construction, defense, energy, farm and construction machinery, industrial machinery, rigid container, metal, transportation
- Consumer Durable: appliance, furniture, lighting
- Automotive: applications for new vehicle platforms
- Electronics: electronic products (i.e., wearables), printed circuit boards
Consumer Non-Durable | OEM |
Industrial | Consumer Durable |
Electronics | Automotive |
11
*Percentages are for directional use only
Industrial
Coatings
Systems
Organic 2.9%
Acquisitive 0.0%
Currency (1.6%)
2015-19 Average
Annual Sales Growth
20.9%
2019 Annual
Operating Margin
What We Do
Precision equipment and systems to apply and cure paints, sealants, coatings, ambient temperature adhesives, and other materials to a wide range of products.
GDP+ Growth Driven By:
- Environmental advantages of powder coatings
- Adhesives replacing mechanical fasteners
- Light-weightingof vehicles
- Productivity investments
- Quick color change
- Product tiering
- Diverse end markets, including appliance, lawn and garden, food and beverage, aerospace, automotive assembly, and more
12
Industrial Coatings
FY2019 Profile - Diverse end markets
1%
8%
10%
10%
53%
19%
Industrial | Automotive | ||
Consumer Non-Durable | Consumer Durable | ||
13 | Electronics | OEM | |
End markets include:
- Industrial: aerospace, chemical, construction, defense, energy, farm and construction machinery, industrial machinery, rigid container, metal
- Automotive: applications for new vehicle platforms; upgrades of current vehicle lines
- Consumer Non-Durable:beverage, food, general applications
- Consumer Durable: appliance, furniture
- Electronics: UV curing of semi-conductor wafers and other electronic components
- OEM/Distributor: Nordson products used to build manufacturing line, not end market specific
*Percentages are for directional use only
Why Invest in Nordson?
Our Priorities
Our plan is to deliver top shareholder returns by growing and extending our high value business model in precision dispensing and adjacent technologies.
1
2
3
4
Accelerate organic growth
Diversify through acquisitions
Leverage NBS for profitable growth
Sustain our cultures and values
15
1 Organic Growth
We expect to accelerate organic growth by creating our own demand.
Multiple Paths to Organic Growth:
- New Products
- New Applications
- Recapitalize Installed Base
- Emerging Markets
- Product Tiering
Reported Organic Sales Growth (2015-2019):
4% Average Annual Growth
16
2 Key Acquisitions
Additional growth comes through the acquisition of companies that share our business model characteristics and can leverage our global infrastructure.
Key Criteria for Acquisitions:
- Strategic Fit
- High Quality Businesses: Strong Performers & Proprietary Technology
- Growth Rate at or Above Nordson
- High % of Recurring Sales
- Sales and Cost Synergies
Sales Growth from Acquisitions (2015-2019):
3% Average Annual Growth
17
Strong Growth: Organic and Acquisitive
On average across the past five years, Nordson has delivered annual sales growth of 5 percent, inclusive of
4 percent organic growth, 3 percent growth related to the first year effects of acquisitions and a
decrease of 2 percent related to the unfavorable effects of foreign currency.
15.0%
13.0%
11.0%
9.0%
7.0%
5.0%
3.0%
1.0%
-1.0%
-3.0%
-5.0%
-7.0%
18
14.3% | ||||
6.9% | ||||
9.1% | ||||
2.0% | 2.0% | |||
7.1% | ||||
2.4% | 4.6% | |||
7.9% | ||||
6.5% | ||||
3.4% | 2.5% | 0.4% | ||
-0.9% | -1.4% | -0.5% | -1.1% | |
-2.0% | ||||
-6.7% | -2.7% |
2015 | 2016 | 2017 | 2018 | 2019 | ||
Organic Growth | Acquisitive Growth | Currency Impact | Total Growth | |||
3 Optimize Business
Driving continuous improvements across the organization.
Key Performance Indicators:
- Growth Initiatives
- Price Effectiveness
- Cost Reduction Initiatives
- Cost of Poor Quality
- Customer Delivery Performance
- Days of Sales in Inventory
- Productivity
- Sales from New Products
19
4 Culture & Values
We have a long and proud history of investing in the communities where we live and work. We invest approximately five percent of domestic pretax earnings to human welfare services, education and other charitable activities.
Our Commitment to Giving Back:
- Over $109M in overall giving to date
- More than 100K total hours volunteered
- $3M towards BUILDS scholarships
- Investing in locations where we have significant operations (over 20 communities in the United States and 11 countries)
20
Financial Results
Fiscal 4Q2019 Results & FY2020 Guidance
4QF19 Results
$585M | $140M | $164M | $1.76 | $128M | ||||||
Sales | Operating Profit | EBITDA | GAAP Diluted EPS | Free Cash Flow | ||||||
(24% of Sales) | (28% of Sales) | Before Dividends | ||||||||
(125% of net income) | ||||||||||
2020 Guidance | ||||||||||
- Organic sales volume growth in the range of 1 to 3 percent compared to Fiscal 2019
- Interest expense expected to be appx. $36 million
- Maintenance capital expenditures expected to be appx. $50 million
- Growth from acquisitions adding 20 bps
▪ Estimated effective tax rate 22 percent
- Unfavorable currency translation effect of 30 bps
▪ GAAP diluted EPS growth in the range of 2 to 6
22 | ▪ Hold reported operating margin and EBITDA margin | percent compared to Fiscal 2019 |
equal to Fiscal 2019 | ||
Total Shareholder Return Above Our Peers
Comparison of 10 Year Cumulative Total Return
800.00 | ||||||||||
700.00 | ||||||||||
600.00 | ||||||||||
500.00 | ||||||||||
400.00 | ||||||||||
300.00 | ||||||||||
200.00 | ||||||||||
100.00 | ||||||||||
0.00 | ||||||||||
2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 |
Nordson Corporation | S&P 500 Index | S&P MidCap 400 | S&P 500 Ind. Machinery | S&P MidCap 400 Ind. Machinery | Peer Group |
23Assumes Initial Investment of $100 on November 1, 2009 Fiscal Year Ending October 31, 2019
Source: Zack's Investment Research
Industry Leading Gross Margins
Consistently Mid 50s
70% | ||||
60% | 54.9% | 55.1% | 54.8% | 54.3% |
54.1% | ||||
50% | ||||
40% | ||||
30% | ||||
20% | ||||
10% | ||||
0% | ||||
2015 | 2016 | 2017 | 2018 | 2019 |
24
$000
$700,000
$600,000
$500,000
$400,000
$300,000
$200,000
$100,000
$0
Strong EBITDA Margins
Continuous Improvement Initiatives
5 Year CAGR = 6.6%
26.8%26.7%
26.4%
25.4%
22.7%
*2015 | 2016 | 2017 | 2018 | 2019 |
25 | *FY15 results impacted by significant negative currency translation effects compared to the prior year. |
EPS Growth
High gross margins lead to significant volume leverage
5 Year CAGR = 8.6% | ||||
$7.00 | $6.40 | |||
$6.00 | $5.79 | |||
$4.73 | $5.08 | |||
$5.00 | ||||
$4.00 | ||||
$3.45 | ||||
$3.00 | ||||
$2.00 | ||||
$1.00 | ||||
$0.00 | ||||
* 2015 | 2016 | 2017 | 2018 | 2019 |
26 | *FY15 results impacted by significant negative currency translation effects compared to the prior year. |
Strong Cash Generation
Funds Growth and Returns to Shareholders
Strong Cash Conversion: 2015 - 2019
2019 Free Cash Flow Before Dividends
= 95% of Net Income
$450,000 $400,000 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000
$-
*
27
2015 | 2016 | 2017 | 2018 | 2019 |
Free cash flow before dividends | Net income |
*FY15 results impacted by significant negative currency translation effects compared to the prior year.
100%
80%
60%
40%
20%
0%
-20%
28
Disciplined Capital Deployment
37% or $894.5 Million to Shareholders via Share Repurchases and Dividends
▪ Self funding business model | ||||||||||||||||||||
$37.7 | $21.3 | $62.5 | $3.2 | Working | $192.1 | |||||||||||||||
$24.0 | Capital 8% | generates excess cash | ||||||||||||||||||
$63.8 | $79.7 | |||||||||||||||||||
Share Repurchases | ▪ | Low working capital | ||||||||||||||||||
$33.4 | ||||||||||||||||||||
23% | $565.0 | requirements | ||||||||||||||||||
$72.4 | ▪ | Low capital expenditures | ||||||||||||||||||
$383.9 | $56.4 | Dividends | $329.5 | (approx. 3% of sales) | ||||||||||||||||
$120.5 | 14% | |||||||||||||||||||
▪ | Strong free cash | |||||||||||||||||||
$805.9 | $50.6 | ▪ | 56 consecutive years of | |||||||||||||||||
dividend increases - 14th | ||||||||||||||||||||
$42.7 | ||||||||||||||||||||
$82.1 | $987.3 | among publicly traded | ||||||||||||||||||
Acquisitions | ||||||||||||||||||||
40% | companies | |||||||||||||||||||
$54.8 | ||||||||||||||||||||
$75.6 | $64.6 | $94.7 | $12.5 | |||||||||||||||||
$67.8 | PP&E/Leases | $366.6 | ||||||||||||||||||
$66.7 | $72.8 | 15% | ||||||||||||||||||
2015 | 2016 | 2017 | $(9.1) | 2019 | TOTAL | |||||||||||||||
2018 | ||||||||||||||||||||
PP&E / Capital Leases | Acquisitions | Dividends | Share Repurchases | Working Capital | ||||
Investment Summary
- Clear Strategy and Goals
- Strong Execution and Performance
- Leading Global Businesses
- Numerous Growth Opportunities
- Outstanding Culture and Values
- Committed to Community
Appendix
- Product Innovation
- Historic Financials
- 4QF19 Financial Exhibits
Appendix:
Product Innovation
Solder paste
inspection
Solder paste
printer
32
Our Electronics Industry Position
Surface Mount Manufacturing
Flux spray | Optical | Inline Systems | Plasma | Underfill, | Optical | X-ray | Conformal |
coating | inspection | surface | encapsulation | inspection | inspection | coating | |
treatment | or | ||||||
precise coating |
Component placement | Reflow oven |
QA Lab / Island of Automation
X-ray inspection | Acoustic inspection | Bond testing |
Our Role in the Semiconductor Process
33
Advanced Technology - Fluid Management
Precision Low-Volume Dispensing | Optimum® Syringe Barrels and Tips | Life Sciences | |
Fluid Management Components | |||
From benchtop dispensers to industry-best | Optimum® components are designed as a | From specialty tubing, catheters, | |
jetting valves and automated dispensing | complete system to help companies | medical balloons, quick-connect | |
robots, Nordson EFD systems deliver | improve yields and reduce costs. | couplings and couplers, Nordson is an | |
accurate, repeatable deposits of glues, | expert in the design, development and | ||
greases, and other industrial fluids in | Dispense tips deliver a clean, smooth flow | manufacture of complex medical | |
precise, low-volume applications. | path, free of flash and burrs. In 200+ sizes | devices and component technologies. | |
and styles, tips are lot-tracked for process | |||
control and traceability. |
34
Core Adhesives Innovative Technology
Auto-fill Tankless | Variable Dispense | Foaming | Jetting | Precision dispense |
Technology | Technology | Technology | Technology | technology |
Adhesive fill systems | Delivering different | Maintains bond strength | Dispenses adhesive | Increases production |
monitor and maintain | add-on rates with one | while reducing volume | using non-contact jetting | |
efficiency for nonwovens | ||||
optimum adhesive levels | applicator | of adhesive required | into channels as small | |
manufacturing process | ||||
as 0.3mm or 300 micron | ||||
per second |
35
Industrial Coating Systems
36
Appendix:
Historic Financials
Strong Capital Management
Net Debt to EBITDA*
Strong cash generation lets Nordson de-lever quickly
At 10/31/2019 Net Debt to TTM EBITDA = 1.9 times
Acquisitions &
3.00 | Share | ||||
Repurchases | |||||
Vention | |||||
2.50 | Acquisition | ||||
2.00 | |||||
1.50 | |||||
1.00 | |||||
0.50 | |||||
0.00 | |||||
2015 | 2016 | 2017 | 2018 | 2019 |
38At fiscal years ending 10/31
* Net Debt to EBITDA calculated net of cash
Strong Capital Management
Debt Position (as of 10/31/19)
$900 | ||||||||||||||||||||||||||||||||||||||
Drawn | Available | |||||||||||||||||||||||||||||||||||||
$800 | $850 | |||||||||||||||||||||||||||||||||||||
$700 | ||||||||||||||||||||||||||||||||||||||
$600 | ||||||||||||||||||||||||||||||||||||||
$500 | ||||||||||||||||||||||||||||||||||||||
$505 | ||||||||||||||||||||||||||||||||||||||
$400 | ||||||||||||||||||||||||||||||||||||||
$300 | $350 | |||||||||||||||||||||||||||||||||||||
$200 | ||||||||||||||||||||||||||||||||||||||
$100 | ||||||||||||||||||||||||||||||||||||||
$128 | $141 | |||||||||||||||||||||||||||||||||||||
$93 | ||||||||||||||||||||||||||||||||||||||
$0 | $31 | |||||||||||||||||||||||||||||||||||||
Term Loan A | NYL | Term Loan A | 2012 Private | 2015 Private | 2018 Private Revolver | |||||||||||||||||||||||||||||||||
(US) & PNC | (EUR) | Placement | Placement | Placement | ||||||||||||||||||||||||||||||||||
Loan | ||||||||||||||||||||||||||||||||||||||
▪$100M -at 65.0 bps, | ▪Amortizing avg | |
maturity 3/31/20 | rate: 2.50% | |
▪$200M -at 70.0 bps, | ▪Remaining avg. | |
39 | maturity 9/30/22 | life: 0.34 yrs |
▪Maturity 10/15/21 at 100.0 bps over EUR Libor
▪EUR denominated
▪Amortizing avg | ▪Amortizing avg. | ▪Amortizing avg. | ▪Ends April, 2024 |
rate: 3.05% | rate: 3.05% | rate: 3.90% | ▪78.5 bps over |
▪Remaining avg. | ▪Remaining avg. | ▪Remaining avg. | USD Libor at |
life: 2.76 yrs | life: 4.59 yrs | life: 6.05 yrs | 7/31/19 |
▪$205M -at 80.0 bps, maturity 3/31/24
Innovation Drives Organic Growth
Steady Stream of New Products
$60,000 | 80 | |||||||
$50,000 | 63 | 70 | ||||||
62 | Number of U.S. Patents Granted | |||||||
58 | 60 | |||||||
R&D Spend (in thousands) | ||||||||
$40,000 | 51 | |||||||
47 | 50 | |||||||
$30,000 | 40 | |||||||
$20,000 | 30 | |||||||
20 | ||||||||
$10,000 | 10 | |||||||
$0 | 0 | |||||||
2015 | 2016 | 2017 | 2018 | 2019 |
40 | R & D Spend | U.S. Patents Granted | ||
Currency Impact
Annual Sales Growth and EPS
20.0%
15.0%
10.0%
5.0%
0.0%
-5.0%
-10.0%
2015 | 2016 | 2017 | 2018 | 2019 |
Currency Effect Volume Growth
41 | FX Impact to EPS: | ($0.54) | ($0.19) | ($0.03) | $0.24 | ($0.30) |
Appendix:
Financial Exhibits
Nordson Corporation
2015 - 2019 Sales Growth
Nordson Corporation
Organic | Acquisitive | Currency | Total | ||||
FY2015 | 3.4% | 2.4% | -6.7% | -0.9% | |||
FY2016 | 6.5% | 2.0% | -1.4% | 7.1% | |||
FY2017 | 7.9% | 6.9% | -0.5% | 14.3% | |||
FY2018 | 2.5% | 4.6% | 2.0% | 9.1% | |||
FY2019 | -1.1% | 0.4% | -2.0% | -2.7% | |||
5 yr avg | 3.8% | 3.3% | -1.7% | 5.4% | |||
Advanced Technology Systems
Organic | Acquisitive | Currency | Total | ||||
FY2015 | 1.7% | 6.9% | -2.9% | 5.7% | |||
FY2016 | 10.1% | 4.6% | -0.8% | 13.9% | |||
FY2017 | 15.1% | 18.3% | -0.7% | 32.7% | |||
FY2018 | 3.8% | 10.7% | 1.3% | 15.8% | |||
FY2019 | -4.6% | 0.9% | -1.4% | -5.1% | |||
43 5 yr avg | 5.2% | 8.3% | -0.9% | 12.6% |
Adhesive Dispensing Systems
Organic | Acquisitive | Currency | Total | ||||
FY2015 | 2.0% | 0.3% | -9.4% | -7.1% | |||
FY2016 | 6.2% | 0.7% | -1.7% | 5.2% | |||
FY2017 | 4.3% | 0.0% | -0.2% | 4.1% | |||
FY2018 | 1.5% | 0.0% | 2.8% | 4.3% | |||
FY2019 | 2.4% | 0.0% | -2.8% | -0.4% | |||
5 yr avg | 3.3% | 0.2% | -2.3% | 1.2% | |||
Industrial Coating Systems
Organic | Acquisitive | Currency | Total | ||||
FY2015 | 12.5% | 0.0% | -5.8% | 6.7% | |||
FY2016 | -0.6% | 0.0% | -1.6% | -2.2% | |||
FY2017 | 0.8% | 0.0% | -0.7% | 0.1% | |||
FY2018 | 1.1% | 0.0% | 1.6% | 2.7% | |||
FY2019 | 0.5% | 0.0% | -1.5% | -1.0% | |||
5 yr avg | 2.9% | 0.0% | -1.6% | 1.3% | |||
FOURTH QUARTER PERIOD | NORDSON CORPORATION | ||||||||||||||||
Period Ended October 31, 2019 | FINANCIAL HIGHLIGHTS | ||||||||||||||||
(Unaudited) | (Dollars in thousands except for per-share amounts) | ||||||||||||||||
CONSOLIDATED STATEMENT OF INCOME(1) | CONSOLIDATED BALANCE SHEET | ||||||||||||||||
Fourth Quarter | Year-to-Date | October 31 | October 31 | ||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Sales | $ | 585,451 | $ | 569,295 | $ | 2,194,226 | $ | 2,254,668 | Cash and marketable securities | $ | 151,164 | $ | 95,678 | ||||
Cost of sales | 266,476 | 261,431 | 1,002,123 | 1,018,340 | Receivables | 530,765 | 491,423 | ||||||||||
Selling & administrative expenses | 179,315 | 191,067 | 708,990 | 733,749 | Inventories | 283,399 | 264,477 | ||||||||||
Other current assets | 45,867 | 32,524 | |||||||||||||||
Operating profit | 139,660 | 116,797 | 483,113 | 502,579 | Total current assets | 1,011,195 | 884,102 | ||||||||||
Interest expense - net | (10,216) | (11,847) | (45,301) | (48,192) | Property, plant & equipment - net | 398,895 | 386,666 | ||||||||||
Other income (expense) - net | (2,162) | (762) | (6,708) | (5,868) | Other assets | 2,106,357 | 2,150,244 | ||||||||||
$ | 3,516,447 | $ | 3,421,012 | ||||||||||||||
Income before income taxes | 127,282 | 104,188 | 431,104 | 448,519 | |||||||||||||
Income taxes | 24,609 | 17,486 | 94,013 | 71,144 | Notes payable and debt due within one year | $ | 168,738 | $ | 28,734 | ||||||||
Accounts payable and accrued liabilities | 308,888 | 321,546 | |||||||||||||||
Net Income | $ | 102,673 | $ | 86,702 | $ | 337,091 | $ | 377,375 | Total current liabilities | 477,626 | 350,280 | ||||||
Long-term debt | 1,075,404 | 1,285,357 | |||||||||||||||
Other liabilities | 382,372 | 334,634 | |||||||||||||||
Return on sales | 18% | 15% | 15% | 17% | Total shareholders' equity | 1,581,045 | 1,450,741 | ||||||||||
Return on average shareholders' equity | 26% | 24% | 23% | 28% | $ | 3,516,447 | $ | 3,421,012 | |||||||||
Average common shares outstanding (000's) | 57,456 | 58,085 | 57,462 | 57,970 | ||||||||
Average common shares and | ||||||||||||
common share equivalents (000's) | 58,255 | 58,994 | 58,202 | 58,931 | ||||||||
Per share: | Other information: | |||||||||||
Basic earnings | $ | 1.79 | $ | 1.49 | $ | 5.87 | $ | 6.51 | ||||
Diluted earnings | $ | 1.76 | $ | 1.47 | $ | 5.79 | $ | 6.40 | Employees | 7,579 | 7,536 | |
Dividends paid | $ | .38 | $ | .35 | $ | 1.43 | $ | 1.25 | Common shares outstanding (000's) | 57,600 | 58,037 | |
Total dividends | $ | 21,820 | $ | 20,334 | $ | 82,145 | $ | 72,443 | ||||
(1) Results for the three and twelve months ended October 31, 2018 have been revised to reflect the retrospective adoption of Accounting Standards Update No. 2017-07, Compensation | ||||||||||||
44 | - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Cost ("ASU 2017-07"). The adoption of ASU 2017-07 | |||||||||||
resulted in a net increase to previously reported operating income of $2.2 million & $8.0 million for the three and twelve months ended October 31, 2018, respectively, and a |
corresponding increase of $2.2 million & $8.0 million to other expense for the three and twelve months ended October 31, 2018, respectively, with no net impact to net income or earnings per share.
FOURTH QUARTER PERIOD | NORDSON CORPORATION | ||||||||||||||||||||||||||
Period Ended October 31, 2019 | FINANCIAL HIGHLIGHTS | ||||||||||||||||||||||||||
(Unaudited) | (Dollars in thousands) | ||||||||||||||||||||||||||
Fourth Quarter | % Growth over 2018 | Year-to-Date | % Growth over 2018 | ||||||||||||||||||||||||
SALES BY BUSINESS SEGMENT | 2019 | 2018 | Volume | Currency | Total | 2019 | 2018 | Volume | Currency | Total | |||||||||||||||||
Adhesive dispensing systems | $ | 253,694 | $ | 250,825 | 2.7% | -1.6% | 1.1% | $ | 950,917 | $ | 955,192 | 2.4% | -2.8% | -0.4% | |||||||||||||
Advanced technology systems | 249,000 | 250,231 | 0.5% | -1.0% | -0.5% | 985,850 | 1,039,366 | -3.7% | -1.4% | -5.1% | |||||||||||||||||
Industrial coating systems | 82,757 | 68,239 | 22.1% | -0.8% | 21.3% | 257,459 | 260,110 | 0.5% | -1.5% | -1.0% | |||||||||||||||||
Total sales by business segment | $ | 585,451 | $ | 569,295 | 4.0% | -1.2% | 2.8% | $ | 2,194,226 | $ | 2,254,668 | -0.7% | -2.0% | -2.7% | |||||||||||||
Fourth Quarter | Year-to-Date | ||||||||||||||||||||||||||
OPERATING PROFIT BY BUSINESS SEGMENT(1) | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||||||||
Adhesive dispensing systems | $ | 78,623 | $ | 69,031 | $ | 275,216 | $ | 262,627 | |||||||||||||||||||
Advanced technology systems | 54,727 | 51,232 | 205,609 | 244,880 | |||||||||||||||||||||||
Industrial coating systems | 20,730 | 14,193 | 53,838 | 52,421 | |||||||||||||||||||||||
Corporate | (14,420) | (17,659) | (51,550) | (57,349) | |||||||||||||||||||||||
Total operating profit by business segment | $ | 139,660 | $ | 116,797 | $ | 483,113 | $ | 502,579 | |||||||||||||||||||
Fourth Quarter | % Growth over 2018 | Year-to-Date | % Growth over 2018 | ||||||||||||||||||||||||
SALES BY GEOGRAPHIC REGION | 2019 | 2018 | Volume | Currency | Total | 2019 | 2018 | Volume | Currency | Total | |||||||||||||||||
United States | $ | 206,874 | $ | 184,666 | 12.0% | - | 12.0% | $ | 758,383 | $ | 720,832 | 5.2% | - | 5.2% | |||||||||||||
Americas | 44,503 | 46,689 | -3.3% | -1.4% | -4.7% | 167,661 | 158,837 | 7.4% | -1.8% | 5.6% | |||||||||||||||||
Europe | 145,946 | 174,724 | -13.3% | -3.2% | -16.5% | 571,596 | 622,108 | -3.3% | -4.8% | -8.1% | |||||||||||||||||
Japan | 37,190 | 34,506 | 3.5% | 4.3% | 7.8% | 126,756 | 161,771 | -22.2% | 0.6% | -21.6% | |||||||||||||||||
Asia Pacific | 150,938 | 128,710 | 19.0% | -1.7% | 17.3% | 569,830 | 591,120 | -1.3% | -2.3% | -3.6% | |||||||||||||||||
Total Sales by Geographic Region | $ | 585,451 | $ | 569,295 | 4.0% | -1.2% | 2.8% | $ | 2,194,226 | $ | 2,254,668 | -0.7% | -2.0% | -2.7% | |||||||||||||
45 | |||||||||||||||||||||||||||
(1) Results for the three and twelve months ended October 31, 2018 have been revised to reflect the retrospective adoption of ASU 2017-07. |
FOURTH QUARTER ENDED | NORDSON CORPORATION | ||||||||||
Period Ended October 31, 2019 | RECONCILIATION OF NON-GAAP FINANCIAL MEASURES | ||||||||||
(Unaudited) | (Dollars in thousands except for per-share amounts) | ||||||||||
EBITDA | Fourth Quarter | Year-to-Date | |||||||||
2019 | 2018 | 2019 | 2018 | ||||||||
Net income | $ | 102,673 | $ | 86,702 | $ | 337,091 | $ | 377,375 | |||
Adjustments: | |||||||||||
Depreciation and amortization expense | 26,913 | 27,370 | 110,244 | 108,407 | |||||||
Interest expense, net | 10,216 | 11,847 | 45,301 | 48,192 | |||||||
Income taxes | 24,609 | 17,486 | 94,013 | 71,144 | |||||||
EBITDA | $ | 164,411 | $ | 143,405 | $ | 586,649 | $ | 605,118 | |||
Adjustments: | |||||||||||
Acquisition costs and adjustments (1) | 342 | - | 530 | 3,484 | |||||||
EBITDA As Adjusted | $ | 164,753 | $ | 143,405 | $ | 587,179 | $ | 608,602 | |||
EBITDA per diluted share | $ | 2.82 | $ | 2.43 | $ | 10.08 | $ | 10.27 | |||
EBITDA As Adjusted per diluted share | $ | 2.83 | $ | 2.43 | $ | 10.09 | $ | 10.33 |
- Represents costs and adjustments associated with our 2019 and 2018 acquisitions, including accounting adjustments to inventory
that were charged to cost of sales when the inventory was sold; transaction-related costs comprising of acquisition fees, legal, financial and tax due diligence expenses; and valuation costs that are required to be expensed as incurred.
EBITDA, EBITDA As Adjusted, EBITDA per diluted share and EBITDA As Adjusted per diluted share are non-GAAP financial measures
used by management to evaluate the Company's ongoing operations. Therefore, the Company believes these financial measures provide useful information to investors. EBITDA is defined as earnings before interest, taxes, depreciation and amortization and EBITDA As Adjusted is defined as EBITDA plus certain acquisition costs and adjustments. EBITDA per diluted share is defined as EBITDA divided by the Company's diluted weighted average shares outstanding. EBITDA As Adjusted per diluted share is defined as EBITDA As Adjusted divided by the Company's diluted weighted average shares outstanding.
Fourth Quarter | Year-to-Date | |||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||
Diluted EPS as reported (U.S. GAAP) | $ | 1.76 | $ | 1.47 | $ | 5.79 | $ | 6.40 | ||||
Short-term inventory purchase accounting adjustments | - | - | 0.01 | 0.05 | ||||||||
Severance and restructuring | 0.02 | 0.04 | 0.05 | 0.08 | ||||||||
U.S. Tax Reform discrete item | - | (0.07) | 0.08 | (0.45) | ||||||||
Other discrete tax items | - | - | (0.07) | (0.15) | ||||||||
Diluted EPS as adjusted (Non-GAAP) | $ | 1.79 | $ | 1.44 | $ | 5.87 | $ | 5.94 | ||||
46 | Adjusted EPS is not a measurement of financial performance under GAAP, and should not be considered as 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. Amounts may not add due to rounding.
FOURTH QUARTER ENDED | NORDSON CORPORATION | ||||||||||
Period Ended October 31, 2019 | RECONCILIATION OF NON-GAAP FINANCIAL MEASURES | ||||||||||
(Unaudited) | (Dollars in thousands except for per-share amounts) | ||||||||||
Free Cash Flow Before Dividends | Fourth Quarter | Year-to-Date | |||||||||
2019 | 2018 | 2019 | 2018 | ||||||||
Net income | $ | 102,673 | $ | 86,702 | $ | 337,091 | $ | 377,375 | |||
Depreciation and amortization | 26,913 | 27,370 | 110,244 | 108,407 | |||||||
Other non-cash charges | 4,907 | 20,243 | 19,606 | (9,025) | |||||||
Changes in operating assets and liabilities | 11,969 | 27,396 | (84,048) | 27,881 | |||||||
Net cash provided by operating activities | 146,462 | 161,711 | 382,893 | 504,638 | |||||||
Additions to property, plant and equipment | (18,242) | (43,818) | (64,244) | (89,790) | |||||||
Proceeds from the sale of property, plant and equipment | 248 | 159 | 1,285 | 458 | |||||||
Free cash flow before dividends | $ | 128,468 | $ | 118,052 | $ | 319,934 | $ | 415,306 | |||
Adjustments: | |||||||||||
Acquisition costs and adjustments, net of tax (1) | 276 | - | 416 | 2,658 | |||||||
Free cash flow before dividends, adjusted | $ | 128,744 | $ | 118,052 | $ | 320,350 | $ | 417,964 | |||
- Represents costs and adjustments associated with our 2019 and 2018 acquisitions, including accounting adjustments to inventory that were charged to cost of sales when the inventory was sold; transaction-related costs comprising of acquisition fees, legal, financial and tax due diligence expenses; and valuation costs that are required to be expensed as incurred.
Free cash flow before dividends, a non-GAAP financial measure, is defined as net cash provided by operating activities less purchased property, plant and equipment and proceeds from the sale of property, plant and equipment. It is a financial measure used by management to assess its ability to generate cash in excess of its operating needs. Therefore, the Company believes this financial measure provides useful information to investors. Free cash flow before dividends is not a measure of financial performance under GAAP and should be considered in addition to, and not as a substitute for, operating cash flows or other financial measures prepared in accordance with GAAP. Our calculations of non-GAAP measures may not be comparable to the calculations of similarly titled measures reported by other companies.
47
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Nordson Corporation published this content on 17 January 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 January 2020 14:13:00 UTC