Nordson Corporation (NASDAQ:NDSN) is an innovative precision technology company that leverages a scalable growth framework to deliver top-tier growth with leading margins and returns. The company engineers, manufactures, and markets differentiated products and systems used for precision dispensing, applying and controlling of adhesives, coatings, polymers, sealants, biomaterials, and other fluids, as well as for testing and inspecting for quality, and treating and curing surfaces and various medical products.
Business Overview
Nordson serves a wide variety of consumer non-durable, consumer durable, and technology end markets including packaging, electronics, medical, appliances, energy, transportation, precision agriculture, building and construction, and general product assembly and finishing. The company's strategy for long-term growth is based on solving customers' needs globally.
Financials
In fiscal 2023, Nordson reported annual revenue of $2,628,632,000 and net income of $487,493,000. The company generated annual operating cash flow of $641,282,000 and free cash flow of $606,699,000. These strong financial results demonstrate Nordson's ability to execute its strategy and deliver value to shareholders.
For the second quarter of fiscal 2024, Nordson reported revenue of $650,642,000, a slight increase from $650,165,000 in the prior-year period. Net income for the quarter was $118,217,000, or $2.05 per diluted share, compared to $127,563,000, or $2.21 per diluted share, in the same period of 2023. The company's operating cash flow for the quarter was $294,964,000, and free cash flow was $108,000,000.
Segment Performance
Nordson's performance in the second quarter was driven by strength in its Industrial Precision Solutions (IPS) and Medical and Fluid Solutions (MFS) segments, which offset continued weakness in the Advanced Technology Solutions (ATS) segment. The IPS segment reported sales of $366,991,000, an increase of 9.3% from the prior-year period, driven by the ARAG acquisition and organic growth in industrial coatings systems and packaging product lines. The MFS segment reported sales of $168,966,000, an increase of 1.5% from the prior-year period, driven by growth in fluid and interventional solutions product lines. The ATS segment reported sales of $114,685,000, a decrease of 22.4% from the prior-year period, due to ongoing weakness across the segment.
Geographic Performance
Geographically, Nordson saw strong performance in the Americas region, with sales increasing 5.6% to $294,428,000. The Asia Pacific region experienced a 14.4% decline in sales to $174,144,000, while Europe saw an 8.4% increase in sales to $182,070,000.
Outlook
Looking ahead, Nordson has updated its full-year fiscal 2024 guidance. The company now expects revenue to be flat to up 2% over the record fiscal 2023 levels, with earnings per diluted share expected to be in the range of down 5% to down 1%. This guidance assumes a neutral impact from foreign exchange rates and the ARAG acquisition contributing approximately 3.5% growth at the midpoint.
For the third quarter of fiscal 2024, Nordson expects sales to be in the range of $645 million to $670 million, with adjusted earnings per diluted share in the range of $2.25 to $2.40. This guidance considers weaker electronics and agriculture end markets.
Conclusion
Despite the near-term cyclical headwinds, Nordson remains well-positioned for long-term growth. The company's diversified portfolio, close-to-the-customer business model, high level of recurring revenue, and commitment to innovation through its NBS Next Growth Framework continue to be key strengths. Nordson's Ascend Strategy also positions the company well for profitable growth in the years ahead.
Nordson's strong financial performance, with annual revenue of $2,628,632,000, net income of $487,493,000, operating cash flow of $641,282,000, and free cash flow of $606,699,000, demonstrates the company's ability to execute its strategy and deliver value to shareholders. The company's focus on precision technology, diversified end markets, and operational excellence through the NBS Next Growth Framework provide a solid foundation for long-term success.
As Nordson navigates the current cyclical challenges, the company's commitment to innovation, customer-centric approach, and disciplined capital allocation position it well to capitalize on emerging opportunities and drive sustainable growth. Investors should closely monitor Nordson's progress as it continues to execute its Ascend Strategy and leverage its strengths to deliver value over the long term.