WESTLAKE, Ohio--(BUSINESS WIRE)--

Nordson Corporation (Nasdaq: NDSN) today reported results for the first quarter of fiscal year 2017. For the quarter ending January 31, 2017, sales were $407 million, an increase of 10 percent from the prior year’s first quarter. This change in sales included a 10 percent increase in organic volume and a 1 percent increase related to the first year effect of acquisitions, offset by a 1 percent decrease related to the unfavorable effects of currency translation compared to the prior year’s first quarter. Operating profit for the quarter was $76 million, net income was $50 million, and diluted earnings per share were $0.86. Prior year first quarter sales, operating profit, net income and diluted earnings per share were $372 million, $52 million, $41 million and $0.72, respectively. A reconciliation of GAAP diluted EPS to normalized amounts and a calculation of free cash flow are included in the attached tables.

“Nordson delivered record first quarter sales, including 10 percent organic volume growth over the same period a year ago, as all three segments continued to perform at a high level,” said Michael F. Hilton, Nordson President and Chief Executive Officer. “We leveraged the increased revenue to drive reported operating margin to 19 percent in the quarter, an improvement of 5 percentage points over the first quarter a year ago and an excellent performance given the seasonally lower volume we typically see in our first quarter. Incremental operating margin on the increased volume was 68 percent. Reported diluted earnings per share of $0.86 were a first quarter record and an increase of 41 percent compared to the prior year on a normalized basis. Free cash flow before dividends was $71 million or 143 percent of net income.”

“Capital deployment in the quarter included the distribution of approximately $15 million in dividends, along with the acquisition of the assets of ACE Production Technologies which establishes a new growth niche within our targeted electronics markets. Two other acquisitions that fit with our strategic priorities, Plas-Pak Industries and Interselect GmbH, closed shortly after the quarter end. And in a separate disclosure also released today, we are very pleased to announce the signing of a definitive agreement to acquire the Advanced Technologies business of Vention Medical, a transaction we expect will close during our second quarter.” Nordson management will provide further discussion of these transactions as part of its first quarter conference call, scheduled for 8:30 am eastern on February 21 and available via Nordson’s website at www.nordson.com/investors.

First Quarter Segment Results

“Volume leverage, favorable mix and continuous improvement benefits enabled all three segments to deliver significant margin improvement compared to the first quarter a year ago,” said Hilton.

Organic sales volume in the Adhesive Dispensing Systems segment increased 3 percent compared to the first quarter a year ago, offset by a negative 1 percent impact related to unfavorable currency translation. “This segment delivered solid growth against a challenging comparison to the prior year first quarter where organic growth was 11 percent,” said Hilton. “Our general product assembly and rigid packaging product lines drove the growth. On a geographic basis, Asia Pacific, the Americas and Japan were strongest.” Reported operating margin in this segment was 26 percent in the first quarter, an improvement of 1 percentage point compared to the same period a year ago.

Sales volume in the Advanced Technology Systems segment increased 25 percent compared to the first quarter a year ago, inclusive of a 23 percent increase in organic volume and a 2 percent increase related to the first year effect of the LinkTech and ACE acquisitions. This growth was offset by 2 percent negative impact related to unfavorable currency translation. “All product lines and geographies in the segment delivered excellent organic growth, most by double digits, with performance aided in part by comparison to a softer first quarter in some end markets a year ago. The LinkTech and ACE acquisitions are performing as expected and add to our offerings for medical and electronic customers, respectively,” said Hilton. Reported segment operating margin was 18 percent in the quarter, an increase of 11 percentage points over the same period a year ago.

Organic sales volume in the Industrial Coating Systems segment increased 8 percent compared to the first quarter a year ago, offset by a less than 2 percent negative impact related to unfavorable currency translation. “Growth was strong in nearly all regions and was led by demand for our cold material dispensing, powder coating and UV curing product lines,” said Hilton. Reported segment operating margin was 13 percent in the quarter, an increase of 5 percentage points over the same period a year ago.

Detailed results by operating segment and geography are included in the accompanying tables.

Order Rates and Backlog

Order rates for the 12-week period ending February 12, 2017, measured in constant currency, increased 7 percent over the same period a year ago. Order rates by segment and geography are provided in the accompanying financial tables, with pro-forma growth in order rates calculated as though acquisitions that closed prior to the end of the first quarter of 2017 were owned in both years.

Backlog for the quarter ended January 31, 2017 was approximately $308 million, an increase of 24 percent compared to the same quarter a year ago, and inclusive of 23 percent organic growth and 1 percent growth due to acquisitions. Backlog amounts are calculated at January 31, 2017 exchange rates and include acquisitions that closed prior to the end of the first quarter of 2017.

Outlook

For the second quarter of fiscal year 2017, sales are expected to increase in the range of 3 percent to 7 percent compared to the prior year’s second quarter. This is inclusive of organic growth of 3 percent to 7 percent, 2 percent growth from the first year effect of acquisitions, and a negative currency effect of 2 percent based on the current exchange rate environment. At the midpoint of this sales outlook, operating margin is expected to be approximately 24 percent. GAAP diluted earnings per share are expected to be in the range of $1.21 to $1.33. This outlook does not include the Vention Medical acquisition, which has not yet closed.

“Our backlog, 12 week order rates and project activity all remain solid, leading us to forecast organic volume growth of 5 percent compared to the prior year at the midpoint of our second quarter guidance,” said Hilton. “This is an excellent level well ahead of most current global GDP forecasts and is against a challenging prior year comparison where we delivered robust organic sales growth of 9 percent. We continue to focus on innovative products, new applications and superior customer service to capture growth in our diverse end markets. We also remained focused on continuous improvement initiatives within the Nordson Business System to drive ongoing performance enhancements across the enterprise.”

Nordson will broadcast its first quarter conference call on the investor relations page of its Web site, www.nordson.com/investors on Tuesday, February 21, 2017 at 8:30 a.m. eastern time. 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, Senior Director of Communications & Investor Relations at (440) 414-5639 or [email protected].

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 engineers, manufactures and markets differentiated products and systems used to dispense, apply and control adhesives, coatings, polymers, sealants, biomaterials, and other fluids; to test and inspect for quality; and to treat and cure surfaces. These products are supported with extensive application expertise and direct global sales and service. We serve a wide variety of consumer non-durable, consumer durable and technology end markets including packaging, nonwovens, electronics, medical, appliances, energy, transportation, building and construction, and general product assembly and finishing. Founded in 1954 and headquartered in Westlake, Ohio, the company has operations and support offices in more than 30 countries. Visit Nordson on the web at www.nordson.com, @Nordson_Corp or www.facebook.com/nordson.

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