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- Sales increase 14% from the previous year to $331 million in the fourth quarter; full year sales increase 18% over the prior year to $1.2 billion
- Operating profit increases to $79 million in the fourth quarter and $316 million for the year; full year operating margin reaches 26% of sales
- Diluted EPS expands to $0.81 in the fourth quarter and $3.25 for the year
- First quarter 2012 guidance: Sales expected in the range of $270 million to $281 million
Nordson Corporation today reported record fourth quarter and full year results for the fiscal year ended October 31, 2011. Sales for the quarter were $331 million, an increase of 14% over the fourth quarter of the prior year. This sales improvement included an 8% increase in organic volume and a 3% increase from acquisitions, with the remainder coming from positive currency translation effects. Fourth quarter operating profit and net income increased over the same period a year ago to $79 million and $55 million, respectively. Diluted earnings per share for the quarter increased to $0.81 and include a $0.03 per share charge for short-term purchase accounting related to the acquisition of Value Plastics and a $0.02 per share charge related to restructuring activities.
“Our continued focus on meeting customer needs with innovative precision technology, application expertise and direct global service enabled us to deliver another quarter of excellent performance,” said Nordson President and Chief Executive Officer Michael F. Hilton. “Strong top line growth coupled with the efficiency of our global team resulted in very strong operating margin of 24% for the quarter. Diluted earnings per share grew by 15% compared to a year ago, excluding one-time items in both periods. Strong free cash flow in the quarter enabled us to continue funding initiatives in new product development, supply chain optimization and continuous improvement activities. In addition to these investments in the business, we maintained our commitment to returning value to shareholders as we increased our dividend for the 48th consecutive year and we continued our share repurchase program during the quarter. In addition, we completed the acquisition of Value Plastics, a high performing growth company.”
Fourth Quarter Segment & Regional Results
“Quarterly sales grew at a double digit rate in all segments and all geographies compared to the same period a year ago, as customers continued to respond to the value we provide,” said Hilton. “Results were very strong in the Adhesive Dispensing Systems segment, where sales expanded by 14%and operating margin was 34%, excluding restructuring charges incurred in the quarter. The Advanced Technology Systems segment also delivered an excellent quarter, as sales grew by 15% and operating margin was 25%, excluding short-term purchase accounting charges. We are also pleased with our results in the Industrial Coating Systems segment, where sales increased by 11% and operating margin reached 15%.”
Detailed results by operating segment and geography are included in the attached tables, as is an earnings per share reconciliation table.
Fiscal 2011 Full Year Results
Sales for the full fiscal year of 2011 grew to $1.2 billion, an increase of 18% over the previous year. Growth consisted of a 15% increase in organic volume, and a 3% increase from favorable currency translation. Growth related to the first year effect of acquisitions, less sales associated with divested product lines in 2010, was less than 1 percent. Operating profit for the year was $316 million, net income was $222 million and diluted earnings per share were $3.25, all full year records for Nordson. Excluding one- time items in both years, full year diluted earnings per share improved by 41% over the prior year.
“Our increasingly efficient global team continued to meet customer needs better than the competition, resulting in the strongest financial performance in Nordson’s history,” said Hilton. “For the second straight year, sales increased by double digits in every segment and geography. We leveraged our increased sales to generate outstanding full year operating margin of 26%. We delivered this performance while making prudent reinvestments in the business, returning value to our shareholders, and executing on our acquisition strategy. I thank all of our employees for their outstanding efforts this year and our customers for their continued trust in our technology, solutions and service.”
Order Rates and Backlog
Order rates for the 12-week period ending December 4, 2011, measured in constant currency, decreased 3% 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 fiscal year 2011 acquisitions were owned in both years.
Backlog at the end of the fourth quarter of fiscal 2011 was $131 million, an increase of 2% compared with $128 million at the end of the fourth quarter a year ago. Backlog amounts are calculated at October 31, 2011 exchange rates.
For the first quarter of fiscal 2012, sales are expected to be in the range of $270 million to $281 million. This sales outlook indicates growth will be in the range of flat to up 4% compared to the first quarter a year ago. This growth is inclusive of organic volume of down 4% to flat, 3% growth from the first year effect of acquisitions, with an additional 1% currency translation benefit based on the current exchange rate environment. Diluted earnings per share are expected to be in the range of $0.54 to $0.61.
“Nordson will remain focused on growth and performance in 2012, while maintaining our proven ability to adjust to changing market conditions if necessary,” said Hilton. “Though the near-term global macroeconomic outlook remains somewhat unclear, most economists at this time expect global GDP in 2012 to grow at or slightly ahead of 2011 rates. This longer term view, combined with Nordson’s participation in emerging regions, niche applications and some still-recovering end markets, provides encouragement that as the year progresses, we will see more favorable comparisons to the prior year than the current outlook for the first quarter. Our future is bright, as we will continue to build and enhance our core, further penetrate faster growing geographies, pursue market adjacencies, and optimize our business. We will continue to drive value for our customers through our application expertise, differentiated technology and direct sales and service support. The Nordson team possesses a strong ability to execute, as demonstrated by our success over an extended period, and I am confident they will continue to perform at a high level.”
About Nordson Corporation
Nordson Corporation delivers precision technology solutions to help customers succeed worldwide. The company engineers, manufactures and markets differentiated products and systems used for dispensingadhesives, coatings, sealants, biomaterials and other materials, fluid management, test and inspection, UV curing and plasma surface treatment, all supported by application expertise and direct global sales and service. Nordson serves a wide variety of consumer non-durable, durable and technology end markets including packaging, nonwovens, electronics, medical, appliances, energy, transportation, 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.