FORM 10-Q


UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-Q
(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended July 31, 2020

April 30, 2021

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from          to         

Commission file number   0-7977

NORDSON CORPORATION

(Exact name of registrant as specified in its charter)

Ohio

34-0590250

(State of incorporation)

(I.R.S. Employer Identification No.)

28601 Clemens Road

Westlake, Ohio

44145

(Address of principal executive offices)

(Zip Code)

(State or other jurisdiction of incorporation or organization)
28601 Clemens Road
Westlake, Ohio
(Address of principal executive offices)
34-0590250
(I.R.S. Employer Identification No.)
44145
(Zip Code)
(440) 892-1580

(Registrant's Telephone Number)

Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol(s)

Name of Each Exchange
On Which Registered

Common Shares, without par value

NDSN

NDSN

Nasdaq Stock Market LLC

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  o

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).    Yes  x    No  o

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  o

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  x

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:  Common Shares, without par value as of August 25, 2020:  58,034,535

May 24, 2021:  58,128,637


Nordson Corporation


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Page 2


Table of Contents
Nordson Corporation

Part I – FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS (UNAUDITED)


Condensed Consolidated Statements of Income

 

Three Months Ended

 

 

Nine Months Ended

 

Three Months EndedSix Months Ended

 

July 31, 2020

 

 

July 31, 2019

 

 

July 31, 2020

 

 

July 31, 2019

 

April 30, 2021April 30, 2020April 30, 2021April 30, 2020

(In thousands, except for per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands, except for per share data)  

Sales

 

$

538,181

 

 

$

559,746

 

 

$

1,562,575

 

 

$

1,608,775

 

Sales$589,538 $529,478 $1,116,104 $1,024,394 

Operating costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating costs and expenses:

Cost of sales

 

 

257,373

 

 

 

257,123

 

 

 

728,975

 

 

 

735,647

 

Cost of sales251,839 239,880 488,445 471,602 

Selling and administrative expenses

 

 

168,753

 

 

 

172,347

 

 

 

521,423

 

 

 

529,675

 

Selling and administrative expenses171,308 164,569 352,243 352,670 

 

 

426,126

 

 

 

429,470

 

 

 

1,250,398

 

 

 

1,265,322

 

423,147 404,449 840,688 824,272 

Operating profit

 

 

112,055

 

 

 

130,276

 

 

 

312,177

 

 

 

343,453

 

Operating profit166,391 125,029 275,416 200,122 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

Interest expense

 

 

(7,314

)

 

 

(11,500

)

 

 

(25,348

)

 

 

(36,238

)

Interest expense(7,139)(8,293)(14,071)(18,034)

Interest and investment income

 

 

434

 

 

 

511

 

 

 

1,301

 

 

 

1,153

 

Interest and investment income449 278 829 867 

Other - net

 

 

(9,668

)

 

 

210

 

 

 

(12,943

)

 

 

(4,546

)

Other - net(3,843)(429)(8,504)(3,275)

 

 

(16,548

)

 

 

(10,779

)

 

 

(36,990

)

 

 

(39,631

)

(10,533)(8,444)(21,746)(20,442)

Income before income taxes

 

 

95,507

 

 

 

119,497

 

 

 

275,187

 

 

 

303,822

 

Income before income taxes155,858 116,585 253,670 179,680 

Income taxes

 

 

8,526

 

 

 

25,569

 

 

 

44,123

 

 

 

69,404

 

Income taxes31,714 24,506 51,944 35,597 

Net income

 

$

86,981

 

 

$

93,928

 

 

$

231,064

 

 

$

234,418

 

Net income$124,144 $92,079 $201,726 $144,083 

Average common shares

 

 

57,693

 

 

 

57,395

 

 

 

57,679

 

 

 

57,463

 

Average common shares58,068 57,677 58,063 57,672 

Incremental common shares attributable to equity

compensation

 

 

734

 

 

 

722

 

 

 

725

 

 

 

720

 

Incremental common shares attributable to equity compensation584 583 640 720 

Average common shares and common share equivalents

 

 

58,427

 

 

 

58,117

 

 

 

58,404

 

 

 

58,183

 

Average common shares and common share equivalents58,652 58,260 58,703 58,392 

Basic earnings per share

 

$

1.51

 

 

$

1.64

 

 

$

4.01

 

 

$

4.08

 

Basic earnings per share$2.14 $1.60 $3.47 $2.50 

Diluted earnings per share

 

$

1.49

 

 

$

1.62

 

 

$

3.96

 

 

$

4.03

 

Diluted earnings per share$2.12 $1.58 $3.44 $2.47 

See accompanying notes.


Page 3


Table of Contents
Nordson Corporation

Condensed Consolidated Statements of Comprehensive Income

 

Three Months Ended

 

 

Nine Months Ended

 

Three Months EndedSix Months Ended

 

July 31, 2020

 

 

July 31, 2019

 

 

July 31, 2020

 

 

July 31, 2019

 

April 30, 2021April 30, 2020April 30, 2021April 30, 2020

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)    

Net income

 

$

86,981

 

 

$

93,928

 

 

$

231,064

 

 

$

234,418

 

Net income$124,144 $92,079 $201,726 $144,083 

Components of other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Components of other comprehensive income (loss):

Foreign currency translation adjustments

 

 

28,943

 

 

 

(7,172

)

 

 

10,509

 

 

 

227

 

Foreign currency translation adjustments(6,943)(21,227)21,490 (18,434)

Amortization of prior service cost and net actuarial

losses, net of tax

 

 

2,621

 

 

 

2,378

 

 

 

9,748

 

 

 

5,328

 

Amortization of prior service cost and net actuarial losses, net of tax8,385 3,898 11,382 7,127 

Total other comprehensive income (loss)

 

 

31,564

 

 

 

(4,794

)

 

 

20,257

 

 

 

5,555

 

Total other comprehensive income (loss)1,442 (17,329)32,872 (11,307)

Total comprehensive income

 

$

118,545

 

 

$

89,134

 

 

$

251,321

 

 

$

239,973

 

Total comprehensive income$125,586 $74,750 $234,598 $132,776 

See accompanying notes.

Page 4


Table of Contents
Nordson Corporation

Condensed Consolidated Balance Sheets

 

July 31, 2020

 

 

October 31, 2019

 

(In thousands)

 

 

 

 

 

 

 

 

(In thousands)

Assets

 

 

 

 

 

 

 

 

Assets

Current assets:

 

 

 

 

 

 

 

 

Current assets:April 30, 2021October 31, 2020

Cash and cash equivalents

 

$

221,783

 

 

$

151,164

 

Cash and cash equivalents$133,320 $208,293 

Receivables - net

 

 

498,283

 

 

 

530,765

 

Receivables - net470,622 471,873 

Inventories - net

 

 

310,557

 

 

 

283,399

 

Inventories - net295,841 277,033 

Prepaid expenses and other current assets

 

 

50,075

 

 

 

45,867

 

Prepaid expenses and other current assets49,642 43,798 
Assets held for saleAssets held for sale0 19,615 

Total current assets

 

 

1,080,698

 

 

 

1,011,195

 

Total current assets949,425 1,020,612 

Property, plant and equipment - net

 

 

414,982

 

 

 

398,895

 

Property, plant and equipment - net362,622 358,618 

Operating right of use lease assets

 

 

132,062

 

 

 

 

Operating right of use lease assets119,671 122,125 

Goodwill

 

 

1,701,914

 

 

 

1,614,739

 

Goodwill1,720,990 1,713,354 

Intangible assets - net

 

 

435,817

 

 

 

445,575

 

Intangible assets - net383,856 407,586 

Deferred income taxes

 

 

11,674

 

 

 

11,261

 

Deferred income taxes7,012 9,831 

Other assets

 

 

42,811

 

 

 

34,782

 

Other assets51,334 42,530 

Total assets

 

$

3,819,958

 

 

$

3,516,447

 

Total assets$3,594,910 $3,674,656 

Liabilities and shareholders' equity

 

 

 

 

 

 

 

 

Liabilities and shareholders' equity

Current liabilities:

 

 

 

 

 

 

 

 

Current liabilities:

Accounts payable

 

$

71,355

 

 

$

85,139

 

Accounts payable$84,824 $70,949 

Income taxes payable

 

 

635

 

 

 

15,601

 

Income taxes payable13,071 7,841 

Accrued liabilities

 

 

161,044

 

 

 

161,655

 

Accrued liabilities160,912 167,883 

Customer advanced payments

 

 

45,713

 

 

 

41,131

 

Customer advanced payments65,151 42,323 

Current maturities of long-term debt

 

 

43,598

 

 

 

168,738

 

Current maturities of long-term debt38,043 38,043 

Operating lease liability - current

 

 

18,636

 

 

 

 

Operating lease liability - current17,198 16,918 

Finance lease liability - current

 

 

6,237

 

 

 

5,362

 

Finance lease liability - current6,068 5,984 
Liabilities held for saleLiabilities held for sale0 13,148 

Total current liabilities

 

 

347,218

 

 

 

477,626

 

Total current liabilities385,267 363,089 

Long-term debt

 

 

1,221,082

 

 

 

1,075,404

 

Long-term debt829,044 1,067,952 

Operating lease liability - noncurrent

 

 

117,609

 

 

 

 

Operating lease liability - noncurrent106,527 109,317 

Finance lease liability - noncurrent

 

 

10,969

 

 

 

9,513

 

Finance lease liability - noncurrent15,908 10,470 

Deferred income taxes

 

 

85,363

 

 

 

83,564

 

Deferred income taxes67,439 66,995 

Pension obligations

 

 

132,769

 

 

 

158,506

 

Pension obligations109,003 165,529 

Postretirement obligations

 

 

87,448

 

 

 

86,368

 

Postretirement obligations85,608 85,249 

Other long-term liabilities

 

 

47,588

 

 

 

44,421

 

Other long-term liabilities45,757 47,064 

Shareholders' equity:

 

 

 

 

 

 

 

 

Shareholders' equity:

Common shares

 

 

12,253

 

 

 

12,253

 

Common shares12,253 12,253 

Capital in excess of stated value

 

 

526,923

 

 

 

483,116

 

Capital in excess of stated value564,611 534,684 

Retained earnings

 

 

2,912,848

 

 

 

2,747,650

 

Retained earnings3,064,726 2,908,738 

Accumulated other comprehensive loss

 

 

(211,624

)

 

 

(231,881

)

Accumulated other comprehensive loss(193,246)(226,118)

Common shares in treasury, at cost

 

 

(1,470,488

)

 

 

(1,430,093

)

Common shares in treasury, at cost(1,497,987)(1,470,566)

Total shareholders' equity

 

 

1,769,912

 

 

 

1,581,045

 

Total shareholders' equity1,950,357 1,758,991 

Total liabilities and shareholders' equity

 

$

3,819,958

 

 

$

3,516,447

 

Total liabilities and shareholders' equity$3,594,910 $3,674,656 

See accompanying notes.

Page 5


Table of Contents
Nordson Corporation

Condensed Consolidated Statements of Shareholders’ Equity

 

 

Nine Month Period Ended July 31, 2020

 

(In thousands, except for per share data)

 

Common

Shares

 

 

Additional

Paid-in

Capital

 

 

Retained

Earnings

 

 

Accumulated

Other

Comprehensive

Income (Loss)

 

 

Common

Shares in

Treasury,

at cost

 

 

TOTAL

 

November 1, 2019

 

$

12,253

 

 

$

483,116

 

 

$

2,747,650

 

 

$

(231,881

)

 

$

(1,430,093

)

 

$

1,581,045

 

Shares issued under company stock and employee

   benefit plans

 

 

 

 

 

12,330

 

 

 

 

 

 

 

 

 

4,049

 

 

 

16,379

 

Stock-based compensation

 

 

 

 

 

6,105

 

 

 

 

 

 

 

 

 

 

 

 

6,105

 

Purchase of treasury shares (26,223 shares)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(4,311

)

 

 

(4,311

)

Dividends declared ($0.38 per share)

 

 

 

 

 

 

 

 

(21,915

)

 

 

 

 

 

 

 

 

(21,915

)

Net income

 

 

 

 

 

 

 

 

52,004

 

 

 

 

 

 

 

 

 

52,004

 

Impact of adoption of ASU 2016-02 (See Note 2)

 

 

 

 

 

 

 

 

(1,055

)

 

 

 

 

 

 

 

 

(1,055

)

Other Comprehensive Income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

 

 

 

 

 

 

 

 

 

2,793

 

 

 

 

 

 

2,793

 

Defined benefit pension and post-retirement

   plans adjustment

 

 

 

 

 

 

 

 

 

 

 

3,229

 

 

 

 

 

 

3,229

 

January 31, 2020

 

$

12,253

 

 

$

501,551

 

 

$

2,776,684

 

 

$

(225,859

)

 

$

(1,430,355

)

 

$

1,634,274

 

Shares issued under company stock and employee

   benefit plans

 

 

 

 

 

2,362

 

 

 

 

 

 

 

 

 

(194

)

 

 

2,168

 

Stock-based compensation

 

 

 

 

 

(72

)

 

 

 

 

 

 

 

 

 

 

 

(72

)

Purchase of treasury shares (300,894 shares)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(37,619

)

 

 

(37,619

)

Dividends declared ($0.38 per share)

 

 

 

 

 

 

 

 

(21,963

)

 

 

 

 

 

 

 

 

(21,963

)

Net income

 

 

 

 

 

 

 

 

92,079

 

 

 

 

 

 

 

 

 

92,079

 

Impact of adoption of ASU 2016-02 (See Note 2)

 

 

 

 

 

 

 

 

 

 

956

 

 

 

 

 

 

 

 

 

 

 

956

 

Other Comprehensive Income (Loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

 

 

 

 

 

 

 

 

 

(21,227

)

 

 

 

 

 

(21,227

)

Defined benefit pension and post-retirement

   plans adjustment

 

 

 

 

 

 

 

 

 

 

 

3,898

 

 

 

 

 

 

3,898

 

April 30, 2020

 

$

12,253

 

 

$

503,841

 

 

$

2,847,756

 

 

$

(243,188

)

 

$

(1,468,168

)

 

$

1,652,494

 

Shares issued under company stock and employee

   benefit plans

 

 

 

 

 

20,110

 

 

 

 

 

 

 

 

 

7,647

 

 

 

27,757

 

Stock-based compensation

 

 

 

 

 

2,972

 

 

 

 

 

 

 

 

 

 

 

 

2,972

 

Purchase of treasury shares (53,735 shares)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(9,967

)

 

 

(9,967

)

Dividends declared ($0.38 per share)

 

 

 

 

 

 

 

 

(21,859

)

 

 

 

 

 

 

 

 

(21,859

)

Net income

 

 

 

 

 

 

 

 

86,981

 

 

 

 

 

 

 

 

 

86,981

 

Impact of adoption of ASU 2016-02 (See Note 2)

 

 

 

 

 

 

 

 

 

 

(30

)

 

 

 

 

 

 

 

 

 

 

(30

)

Other Comprehensive Income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

 

 

 

 

 

 

 

 

 

28,943

 

 

 

 

 

 

28,943

 

Defined benefit pension and post-retirement

   plans adjustment

 

 

 

 

 

 

 

 

 

 

 

2,621

 

 

 

 

 

 

2,621

 

July 31, 2020

 

$

12,253

 

 

$

526,923

 

 

$

2,912,848

 

 

$

(211,624

)

 

$

(1,470,488

)

 

$

1,769,912

 

 Three and Six Month Period Ended April 30, 2021
(In thousands, except for share and per share data)Common
Shares
Additional
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Common
Shares in
Treasury,
at cost
TOTAL
November 1, 2020$12,253 $534,684 $2,908,738 $(226,118)$(1,470,566)$1,758,991 
Shares issued under company stock and employee benefit plans 6,462   976 7,438 
Stock-based compensation 10,120    10,120 
Purchase of treasury shares (27,347 shares)    (5,310)(5,310)
Dividends declared ($0.39 per share)  (22,672)  (22,672)
Net income  77,582   77,582 
Impact of adoption of ASU 2016-13  (396)  (396)
Other Comprehensive Income:
Foreign currency translation adjustments   28,433  28,433 
Defined benefit pension and post-retirement
   plans adjustment
   2,997  2,997 
January 31, 2021$12,253 $551,266 $2,963,252 $(194,688)$(1,474,900)$1,857,183 
Shares issued under company stock and employee benefit plans 9,468   1,877 11,345 
Stock-based compensation 3,877    3,877 
Purchase of treasury shares (127,297 shares)    (24,964)(24,964)
Dividends declared ($0.39 per share)  (22,670)  (22,670)
Net income  124,144   124,144 
Other Comprehensive Income (Loss):
Foreign currency translation adjustments   (6,943) (6,943)
Defined benefit pension and post-retirement
   plans adjustment
   8,385  8,385 
April 30, 2021$12,253 $564,611 $3,064,726 $(193,246)$(1,497,987)$1,950,357 

Page 6


Nordson Corporation

 

 

Nine Month Period Ended July 31, 2019

 

(In thousands, except for per share data)

 

Common

Shares

 

 

Additional

Paid-in

Capital

 

 

Retained

Earnings

 

 

Accumulated

Other

Comprehensive

Income (Loss)

 

 

Common

Shares in

Treasury,

at cost

 

 

TOTAL

 

November 1, 2018

 

$

12,253

 

 

$

446,555

 

 

$

2,488,375

 

 

$

(179,314

)

 

$

(1,317,128

)

 

$

1,450,741

 

Shares issued under company stock and employee

   benefit plans

 

 

 

 

 

1,016

 

 

 

 

 

 

 

 

 

2,591

 

 

 

3,607

 

Stock-based compensation

 

 

 

 

 

4,359

 

 

 

 

 

 

 

 

 

 

 

 

4,359

 

Purchase of treasury shares (901,545 shares)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(107,667

)

 

 

(107,667

)

Dividends declared ($0.35 per share)

 

 

 

 

 

 

 

 

(20,210

)

 

 

 

 

 

 

 

 

(20,210

)

Net income

 

 

 

 

 

 

 

 

48,567

 

 

 

 

 

 

 

 

 

48,567

 

Impact of adoption of ASU 2014-09

 

 

 

 

 

 

 

 

4,329

 

 

 

 

 

 

 

 

 

4,329

 

Other Comprehensive Income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

 

 

 

 

 

 

 

 

 

16,463

 

 

 

 

 

 

16,463

 

Defined benefit pension and post-retirement

   plans adjustment

 

 

 

 

 

 

 

 

 

 

 

1,352

 

 

 

 

 

 

1,352

 

January 31, 2019

 

$

12,253

 

 

$

451,930

 

 

$

2,521,061

 

 

$

(161,499

)

 

$

(1,422,204

)

 

$

1,401,541

 

Shares issued under company stock and employee

   benefit plans

 

 

 

 

 

8,116

 

 

 

 

 

 

 

 

 

2,731

 

 

 

10,847

 

Stock-based compensation

 

 

 

 

 

4,869

 

 

 

 

 

 

 

 

 

 

 

 

4,869

 

Purchase of treasury shares (78,957 shares)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(10,422

)

 

 

(10,422

)

Dividends declared ($0.35 per share)

 

 

 

 

 

 

 

 

(20,029

)

 

 

 

 

 

 

 

 

(20,029

)

Net income

 

 

 

 

 

 

 

 

91,923

 

 

 

 

 

 

 

 

 

91,923

 

Other Comprehensive Income (Loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

 

 

 

 

 

 

 

 

 

(9,064

)

 

 

 

 

 

(9,064

)

Defined benefit pension and post-retirement

   plans adjustment

 

 

 

 

 

 

 

 

 

 

 

1,598

 

 

 

 

 

 

1,598

 

April 30, 2019

 

$

12,253

 

 

$

464,915

 

 

$

2,592,955

 

 

$

(168,965

)

 

$

(1,429,895

)

 

$

1,471,263

 

Shares issued under company stock and employee

   benefit plans

 

 

 

 

 

2,245

 

 

 

 

 

 

 

 

 

576

 

 

 

2,821

 

Stock-based compensation

 

 

 

 

 

3,791

 

 

 

 

 

 

 

 

 

 

 

 

3,791

 

Purchase of treasury shares (261 shares)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(35

)

 

 

(35

)

Dividends declared ($0.35 per share)

 

 

 

 

 

 

 

 

(20,086

)

 

 

 

 

 

 

 

 

(20,086

)

Net income

 

 

 

 

 

 

 

 

93,928

 

 

 

 

 

 

 

 

 

93,928

 

Other Comprehensive Income (Loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

 

 

 

 

 

 

 

 

 

(7,172

)

 

 

 

 

 

(7,172

)

Defined benefit pension and post-retirement

   plans adjustment

 

 

 

 

 

 

 

 

 

 

 

2,378

 

 

 

 

 

 

2,378

 

July 31, 2019

 

$

12,253

 

 

$

470,951

 

 

$

2,666,797

 

 

$

(173,759

)

 

$

(1,429,354

)

 

$

1,546,888

 

See accompanying notes.

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Nordson Corporation
 Three and Six Month Period Ended April 30, 2020
(In thousands, except for share and per share data)Common
Shares
Additional
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Common
Shares in
Treasury,
at cost
TOTAL
November 1, 2019$12,253 $483,116 $2,747,650 $(231,881)$(1,430,093)$1,581,045 
Shares issued under company stock and employee benefit plans 12,330   4,049 16,379 
Stock-based compensation 6,105    6,105 
Purchase of treasury shares (26,223 shares)    (4,311)(4,311)
Dividends declared ($0.38 per share)  (21,915)  (21,915)
Net income  52,004   52,004 
Impact of adoption of ASU 2016-02  (1,055)  (1,055)
Other Comprehensive Income:
Foreign currency translation adjustments   2,793  2,793 
Defined benefit pension and post-retirement
   plans adjustment
   3,229  3,229 
January 31, 2020$12,253 $501,551 $2,776,684 $(225,859)$(1,430,355)$1,634,274 
Shares issued under company stock and employee benefit plans 2,362   (194)2,168 
Stock-based compensation— (72)— — — (72)
Purchase of treasury shares (300,894 shares)— — — — (37,619)(37,619)
Dividends declared ($0.38 per share)— — (21,963)— — (21,963)
Net income— — 92,079 — — 92,079 
Impact of adoption of ASU 2016-02— — 956 — — 956 
Other Comprehensive Income (Loss):
Foreign currency translation adjustments— — — (21,227)— (21,227)
Defined benefit pension and post-retirement
   plans adjustment
— — — 3,898 — 3,898 
April 30, 2020$12,253 $503,841 $2,847,756 $(243,188)$(1,468,168)$1,652,494 
See accompanying notes.
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Condensed Consolidated Statements of Cash Flows

Nine months ended

 

July 31, 2020

 

 

July 31, 2019

 

(In thousands)

 

 

 

 

 

 

 

 

(In thousands)Six Months Ended

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Cash flows from operating activities:April 30, 2021April 30, 2020

Net income

 

$

231,064

 

 

$

234,418

 

Net income$201,726 $144,083 
Adjustments to reconcile net income to net cash provided by operating activities:Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

 

 

84,164

 

 

 

83,331

 

Depreciation and amortization51,336 55,664 

Non-cash stock compensation

 

 

9,005

 

 

 

13,019

 

Non-cash stock compensation13,997 6,033 

Deferred income taxes

 

 

(6,402

)

 

 

(1,828

)

Deferred income taxes(491)(5,932)

Other non-cash expense

 

 

5,874

 

 

 

2,455

 

Other non-cash expense837 2,166 

Loss on sale of property, plant and equipment

 

 

274

 

 

 

1,053

 

Changes in operating assets and liabilities

 

 

(14,021

)

 

 

(96,017

)

Changes in operating assets and liabilities31,244 4,276 
Other, principally pensions and postretirement plansOther, principally pensions and postretirement plans(50,935)11,889 

Net cash provided by operating activities

 

 

309,958

 

 

 

236,431

 

Net cash provided by operating activities247,714 218,179 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Cash flows from investing activities:

Additions to property, plant and equipment

 

 

(36,096

)

 

 

(46,002

)

Additions to property, plant and equipment(18,743)(25,835)

Proceeds from sale of property, plant and equipment

 

 

164

 

 

 

1,037

 

Proceeds from sale of property, plant and equipment69 104 

Equity investments

 

 

(2,000

)

 

 

(844

)

Acquisition of businesses, net of cash acquired

 

 

(125,260

)

 

 

(12,110

)

OtherOther4,993 (2,000)

Net cash used in investing activities

 

 

(163,192

)

 

 

(57,919

)

Net cash used in investing activities(13,681)(27,731)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Cash flows from financing activities:

Proceeds from long-term debt

 

 

165,734

 

 

 

184,892

 

Proceeds from long-term debt4,899 165,773 

Repayment of long-term debt

 

 

(163,994

)

 

 

(148,883

)

Repayment of long-term debt(255,000)(125,951)

Repayment of finance lease obligations

 

 

(5,814

)

 

 

(4,442

)

Repayment of finance lease obligations(3,399)(3,548)

Issuance of common shares

 

 

46,304

 

 

 

17,275

 

Issuance of common shares18,783 18,547 

Purchase of treasury shares

 

 

(51,897

)

 

 

(118,124

)

Purchase of treasury shares(30,274)(41,930)

Dividends paid

 

 

(65,737

)

 

 

(60,325

)

Dividends paid(45,342)(43,878)

Net cash used in financing activities

 

 

(75,404

)

 

 

(129,607

)

Net cash used in financing activities(310,333)(30,987)

 

 

 

 

 

 

 

 

Effect of exchange rate changes on cash

 

 

(743

)

 

 

3,262

 

Effect of exchange rate changes on cash1,327 (4,370)

Increase in cash and cash equivalents

 

 

70,619

 

 

 

52,167

 

Cash and cash equivalents:

 

 

 

 

 

 

 

 

Beginning of year

 

 

151,164

 

 

 

95,678

 

End of period

 

$

221,783

 

 

$

147,845

 

Increase (decrease) in cash and cash equivalentsIncrease (decrease) in cash and cash equivalents(74,973)155,091 
Cash and cash equivalents at beginning of periodCash and cash equivalents at beginning of period208,293 151,164 
Cash and cash equivalents at end of periodCash and cash equivalents at end of period$133,320 $306,255 

See accompanying notes.


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Notes to Condensed Consolidated Financial Statements

July 31, 2020

April 30, 2021
NOTE REGARDING AMOUNTS AND FISCAL YEAR REFERENCES

In this quarterly report, all amounts related to United States dollars and foreign currency and to the number of Nordson Corporation’s common shares, except for per share earnings and dividend amounts, are expressed in thousands.

Unless the context otherwise indicates, all references to “we” or the “Company” mean Nordson Corporation.

Unless otherwise noted, all references to years relate to our fiscal year ending October 31.

1.

Significant accounting policies

Significant accounting policies
Basis of presentation.  The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotesnotes required by generally accepted accounting principles in the United States (U.S. GAAP) for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and ninesix months ended July 31, 2020April 30, 2021 are not necessarily indicative of the results that may be expected for the full year. For further information, refer to the consolidated financial statements and footnotesnotes included in our Annual Report on Form 10-K for the year ended October 31, 2019. Certain reclassifications have been made to the prior year financial statements to conform to current year classifications, which included the reclassification of amounts as a result of the realignment of our operating segments. Refer to Note 11 for details on our operating segments2020..

Basis of consolidation.  The consolidated financial statements include the accounts of Nordson Corporation and its majority-owned and controlled subsidiaries. Investments in affiliates and joint ventures in which our ownership is 50%25% or less or in which we do not have control but have the ability to exercise significant influence, are accounted for under the equitycost method. All significant intercompany accounts and transactions have been eliminated in consolidation.  

Use of estimates.  The preparation of financial statements in conformity with accounting principles generally accepted in the United StatesU.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements.  Actual amounts could differ from these estimates.

Revenue recognition. A contract exists when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of the consideration is probable. Revenue is recognized when performance obligations under the terms of the contract with a customer are satisfied. Generally, our revenue results from short-term, fixed-price contracts and primarily is recognized as of a point in time when the product is shipped or at a later point when the control of the product transfers to the customer. Revenue for undelivered items is deferred and included within Accrued liabilities in our Condensed Consolidated Balance Sheets. Revenues deferred as of July 31,April 30, 2021 and 2020 and 2019 were not material.

However, for certain contracts related to the sale of customer-specific products within our Advanced Technology Solutions segment, revenue for these contracts is recognized over time as we satisfy performance obligations because of the continuous transfer of control to the customer. The continuous transfer of control to the customer occurs as we enhance assets that are customer controlled and we are contractually entitled to payment for work performed to date plus a reasonable margin.  

As control transfers over time for these products or services, revenue is recognized based on progress toward completion of the performance obligations. The selection method to measure progress towards completion requires judgment and is based on the nature of the products or services to be provided. We have elected to use the input method – costs incurred for these contracts because it best depicts the transfer of products or services to the customer based on incurring costs on the contract. Under this method, revenues are recorded proportionally as costs are incurred. Contract assets recognized are recorded in Prepaid expenses and other current assets and contract liabilities are recorded in Accrued liabilities in our Condensed Consolidated Balance Sheets and were not material at July 31, 2020April 30, 2021 and October 31, 2019.2020.  Revenue recognized over time is not material to our overall Consolidated Financial Statements.

Revenue is measured as the amount of consideration we expect to receive in exchange for transferring products or services.  Sales, value add, and other taxes we collect concurrently with revenue-producing activities are excluded from revenue. As a practical expedient, we may exclude the assessment of whether goods or services are performance obligations, if they are immaterial in the context of the contract, and combine these with other performance obligations. While payment terms and conditions vary by contract type, we have determined that our contracts generally do not include a significant financing component. We have elected to apply the practical expedient to treat all shipping and handling costs as fulfillment costs as a significant portion of these costs are incurred prior to transfer of control to the customer. We have also elected to apply the practical expedient to expense sales
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Nordson Corporation
commissions as they are incurred as the amortization period resulting from capitalizing the costs is one year or less. These costs are recorded within Selling and administrative expenses in our Condensed Consolidated Statements of Income.

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We offer assurance type warranties on our products as well as separately sold warranty contracts.  Revenue related to warranty contracts that are sold separately is recognized over the life of the warranty term.term and is generally not material.

Certain arrangements may include installation, installation supervision, training, and spare parts, which tend to be completed in a short period of time, at an insignificant cost, and utilizing skills not unique to us, and, therefore, are typically regarded as inconsequential or not material.

We disclose disaggregated revenues by operating segment and geography in accordance with the revenue standard and on the same basis used internally by the chief operating decision maker for evaluating performance of operating segments and for allocating resources.  Refer to Note 11 for details on our operating segments.

Operating Segments note.

Earnings per share.  Basic earnings per share are computed based on the weighted-average number of common shares outstanding during each year, while diluted earnings per share are based on the weighted-average number of common shares and common share equivalents outstanding. Common share equivalents consist of shares issuable upon exercise of stock options computed using the treasury stock method, as well as restricted shares and deferred stock-based compensation. Options with an exercise price higher than the average market price are excluded from the calculation of diluted earnings per share because the effect would be anti-dilutive. Options excluded from the calculation of diluted earnings per share for the three months ended July 31,April 30, 2021 and April 30, 2020 were 210. NaN options were excluded from the calculation of diluted earnings per share for the three months ended July 31, 2019.91 and 360, respectively. Options excluded from the calculation of diluted earnings per share for the ninesix months ended July 31,April 30, 2021 and April 30, 2020 were 91 and 2019 were 127 and 235,180, respectively.

2.

Recently issued accounting standards

Recently issued accounting standards
New accounting guidance adopted:

On November 1, 2019, we adopted Accounting Standards Update (ASU) 2016-02, Accounting Standards Codification (ASC) 842, “Leases.” This standard requires a lessee to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases with a lease term of more than 12 months. We elected to use the transition option, which allows entities to initially apply the new standard at the adoption date and recognize a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption without restating prior periods. We elected the practical expedient package related to the identification of leases in contracts, lease classification, and accounting for initial direct costs whereby prior conclusions do not have to be reassessed for leases that commenced before the effective date. As we have not reassessed such conclusions, we did not adopt the practical expedient to use hindsight to determine the likelihood of whether a lease will be extended or terminated, to separate non-lease components within our lease portfolios, or to determine whether a purchase option will be exercised.  There was not a material cumulative-effect adjustment to our beginning retained earnings for the adoption of this standard.  Upon adoption, we recognized operating right-of-use assets and lease liabilities in our Consolidated Balance Sheet of $130,583 and $134,853 as of November 1, 2019, respectively, and operating right-of-use assets and lease liabilities were $132,062 and $136,245 as of July 31, 2020, respectively.  Adoption of the new standard did not have a material impact on our Consolidated Statements of Income and Cash Flows.  Refer to Note 14 for further discussion of leases.      

New accounting guidance issued and not yet adopted:

In June 2016, the Financial Accounting Standards Board (FASB) issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326),” which changeschanged the impairment model for most financial instruments. CurrentPrior guidance requiresrequired the recognition of credit losses based on an incurred loss impairment methodology that reflectsreflected losses once the losses are probable. We will be required to useadopted the new standard on November 1, 2020 and are now applying a current expected credit loss model that will immediately recognizerequires recognizing an estimate of credit losses that are expected to occur over the life of the financial instruments that are in the scope of thisthe update, including trade receivables. The standard does not prescribe a specific method to make an estimate so the application will requirerequires judgment and should considerconsideration of historical information, current information, and reasonable and supportable forecasts, and includes estimatesas well as the impact of prepayment.  This guidance will become effective for us on November 1, 2020.  We are advancing in the implementation process asany prepayments. In addition, we are gathering and evaluating historical data to determine our policy and are reviewingreviewed our business processes and controls to support the recognition and disclosure as required under the new standard. The adoption of this new standard and are currently assessing thedid not have a material impact this standard will have on our Consolidated Financial Statements.

In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820)2018-15, “Intangibles – Goodwill and Other Internal – Use Software (Subtopic 350-40),” which is meant to help entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement (hosting arrangement), by providing guidance in determining when the arrangement includes a software license.We adopted the new standard on November 1, 2020.Hosted arrangements deemed to be in scope will follow the capitalization criteria for implementation costs as though they were internal-use computer software.There may be multiple elements besides the software license (such as: training, future upgrades, data conversion, and other elements) which require the allocation of the contract price to each of the elements; entities are to capitalize only those elements which meet the capitalization criteria.Capitalized implementation costs are amortized over the term of the hosted arrangement including consideration for renewal or termination options. In addition, we reviewed our business processes and controls to support the recognition and disclosure as required under the new standard. The adoption of this new standard did not have a material impact on our Consolidated Financial Statements.
In August 2018, the FASB issued a new standard which removes, modifies,removed, modified, and addsadded certain disclosure requirements on fair value measurements. The guidance removesremoved disclosure requirements pertaining to the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers between levels, and the valuation processes for Level 3 fair value measurements. For investments in certain entities that calculate net asset value, an entity is required to disclose the timing of liquidation of an investee’s assets and the date when restrictions from redemption might lapse only if the investee has communicated the timing to the entity or announced the timing publicly. In addition, the amendment clarifiesclarified that the measurement uncertainty disclosure is to communicate

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Nordson Corporation

information about the uncertainty in measurement as of the reporting date. The guidance addsadded disclosure requirements for changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period as well as the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. It will be effective for us beginningWe adopted the new standard on November 1, 2020.  Early adoption is permitted.  We currently do not expect this standard will have a2020 with no material impact on ourto the Consolidated Financial Statements.

In August 2018, the FASB

New accounting guidance issued ASU 2018-15, “Intangibles – Goodwill and Other Internal-Use Software (Subtopic 350-40),” a new standard which makes a number of changes meant to help entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement (hosting arrangement), by providing guidance in determining when the arrangement includes a software license. It will be effective for us beginning November 1, 2020.  Early adoption is permitted. We are currently evaluating our arrangements to determine policy and transition approach with efforts focused on business processes and controls to support the new standard.

not yet adopted:

In August 2018, the FASB issued ASU 2018-14, “Compensation – Retirement Benefits – Defined Benefit Plans – General (Subtopic 715-20),” a new standard which addresses defined benefit plans. The amendments modify the following disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans: the amounts in accumulated other
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comprehensive income expected to be recognized as components of net periodic benefit cost over the next fiscal year, amount and timing of plan assets expected to be returned to the employer, related party disclosure about the amount of future annual benefits covered by insurance and annuity contracts and significant transactions between the employer or related parties and the plan, and the effects of a 1-percentage point change in assumed health care cost trend rates on the (a) aggregate of the service and interest cost components of net periodic benefit costs and (b) benefit obligations for postretirement health care benefits. A disclosure requirement was added for the explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period. Additionally, the standard clarifies disclosure requirements surrounding the projected benefit obligation (PBO) and fair value of plan assets for plans with PBOs in excess of plan assets and the accumulated benefit obligation (ABO) and fair value of plan assets for plans with ABOs in excess of plan assets. It will be effective for us beginning November 1, 2021. Early adoption is permitted. We are currently assessing the impact this standard will have on our Consolidated Financial Statements.

In December 2019, the FASB issued ASU 2019-12, “Income Taxes (ASC 740) – Simplifying the Accounting for Income Taxes,” which simplifies the accounting for income taxes by removing certain exceptions to the general principles in ASC 740. The amendments also improve consistent application of and simplify U.S. GAAP for other areas of ASC 740 by clarifying and amending existing guidance. It will be effective for us beginning November 1, 2021. Early adoption is permitted, including adoption in any interim period for which financial statements have not yet been issued. Depending on the amendment, adoption may be applied on the retrospective, modified retrospective or prospective basis. We are currently assessing the impact of this standard will have on our Consolidated Financial Statements.

3.

Acquisitions

Acquisitions
Business acquisitions have been accounted for using the acquisition method, with the acquired assets and liabilities recorded at estimated fair value on the dates of acquisition. The cost in excess of the net assets of the business acquired is included in goodwill. Operating results since the respective dates of acquisitions are included in the Condensed Consolidated Statements of Income.

On September 1, 2020, we acquired 100 percent of the outstanding shares of vivaMOS Ltd. ("vivaMOS"), a developer and fabricator of high-end large-area complementary metal–oxide–semiconductor (CMOS) image sensors for a wide range of X-ray applications. We acquired vivaMOS for an aggregate purchase price of $17,154, net of cash and other closing adjustments of approximately $158, utilizing cash on hand. Based on the fair value of the assets acquired and the liabilities assumed, goodwill of $14,394 and identifiable intangible assets of $4,040 were recorded. The identifiable intangible assets consist primarily of $3,900 of technology (amortized over 10 years) and $140 of non-compete agreements (amortized over 3 years). Goodwill associated with this acquisition

is not tax deductible. This acquisition is being reported in our Advanced Technology Solutions segment and the results of vivaMOS are not material to our Consolidated Financial Statements. As of April 30, 2021, the purchase price allocation remains preliminary as we complete our assessments of income taxes.

On June 1, 2020, we acquired 100%100 percent of the outstanding shares of Fluortek, Inc. ("Fluortek"), a precision plastic extrusion manufacturer that provides custom dimensioned tubing to the medical device industry. We acquired Fluortek for an aggregate purchase price of $125,260,$125,260, net of cash and other closing adjustments of approximately $515,$515, utilizing cash on hand. Based on the fair value of the assets acquired and the liabilities assumed, property, plant and equipment and working capital – net of $19,843, goodwill of $76,047 and identifiable intangible assets of $29,370 were recorded. The identifiable intangible assets consist primarily of $19,700 of customer relationships (amortized over 12 years), $7,400 of technology (amortized over 10 years), $1,500 of tradenames (amortized over 10 years), and $770 of non-compete agreements (amortized over 5 years). Goodwill associated with this acquisition is tax deductible. This acquisition is being reported in our Advanced Technology Solutions segment and the results for Fluortek are not material to the company’s consolidated financial statements.our Consolidated Financial Statements. As of July 31, 2020,April 30, 2021, the purchase price allocations remain preliminary as we complete our assessments of intangibleincome taxes.
Divestiture
In the fourth quarter of 2020, we committed to a plan to sell our screws and barrels product line within our Industrial Precision Solutions operating segment and determined the criteria to be classified as held for sale were met. We entered into a letter of intent to sell the screws and barrels product line in October 2020 and in December 2020, entered into a definitive agreement with the buyer. The assets and income taxes.

liabilities were presented as held for sale in the Condensed Consolidated Balance Sheets and measured at the lower of carrying value or fair value less cost to sell from October 31, 2020 until the transaction was completed on February 1, 2021.

Before measuring the fair value less costs to sell of the disposal group as a whole, we first reviewed individual assets and liabilities to determine if any fair value adjustments were required and concluded no individual asset impairments were required. Then, based on the definitive agreement entered into by us and the buyer, we determined the fair value of the disposal group to be
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Nordson Corporation

2019 acquisition

On July 1, 2019,

equal to the selling price, less costs to sell. Based on this review, we purchased certainrecorded a non-cash, assets held for sale impairment charge of Optical Control GmbH & Co. KG (“Optical”), a Nuremberg, Germany designer$87,371 in 2020.
The assets and developerliabilities of high speed, fully automatic counting systems utilizing x-ray technology. This transaction wasthe screws and barrels product line classified as held for sale at October 31, 2020 were as follows:
October 31, 2020
Receivables - net$14,327 
Inventories - net9,854 
Prepaid expenses and other current assets696 
Property, plant and equipment - net58,950 
Other assets23,159 
Impairment on carrying value(87,371)
Assets held for sale$19,615 
Accounts payable$4,625 
Accrued liabilities3,352 
Other liabilities5,171 
Liabilities held for sale$13,148 
Excluding the non-cash, assets held for sale impairment charge recorded in the fourth quarter of 2020, the operating results of the screws and barrels product line were not material to our Consolidated Financial Statements. We recordedStatements for any period presented. There were no significant adjustments to the acquisitionloss recognized in 2020.
Receivables
Our primary allowance for credit losses is the allowance for doubtful accounts, which is principally determined based on aging of Opticalreceivables. Receivables are exposed to credit risk based on the fair valuecustomers' ability to pay which is influenced by, among other factors, their financial liquidity. We perform ongoing customer credit evaluation to maintain sufficient allowances for potential credit losses. Our segments perform credit evaluation and monitoring to estimate and manage credit risk through the review of customer information, credit ratings, approval and monitoring of customer credit limits, and assessment of market conditions. We may also require prepayments or bank guarantees from customers to mitigate credit risk. Our receivables are generally short-term in nature with a majority of receivables outstanding less than 90 days. Accounts receivable balances are written-off against the assets acquiredallowance if deemed uncollectible.
Accounts receivable are net of an allowance for credit losses of $8,176 and the liabilities assumed. Goodwill associated with this acquisition is tax deductible. This acquisition is being reported in our Advanced Technology Solutions segment.

4.

Inventories

At July 31, 2020$9,045 at April 30, 2021 and October 31, 2019,2020, respectively. The change in the allowance for expected credit losses includes an immaterial accounting standard adoption impact from ASU 2016-13 of $396 for the six months ended April 30, 2021. The provision for losses on receivables was $301 and $404 for the three and six months ended April 30, 2021, respectively, compared to $751 and $1,535 for the same periods a year ago, respectively. The remaining change in the allowance for credit losses is principally related to the write-off of uncollectible accounts.

Inventories
Components of inventories consistedwere as follows:
 April 30, 2021October 31, 2020
Finished goods$194,625 $183,860 
Raw materials and component parts101,076 94,630 
Work-in-process49,808 44,403 
 345,509 322,893 
Obsolescence and other reserves(44,864)(41,315)
LIFO reserve(4,804)(4,545)
 $295,841 $277,033 
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Property, Plant and Equipment
Components of property, plant and equipment were as follows:
April 30, 2021October 31, 2020
Land$9,309 $8,816 
Land improvements4,801 4,611 
Buildings257,695 253,621 
Machinery and equipment480,971 464,171 
Enterprise management system51,850 56,103 
Construction-in-progress34,114 29,897 
Leased property under capitalized leases38,462 32,590 
 877,202 849,809 
Accumulated depreciation and amortization(514,580)(491,191)
 $362,622 $358,618 
Depreciation expense was $12,700 and $12,386 for the following:

three months ended April 30, 2021 and 2020, respectively. Depreciation expense was $25,639 and $24,831 for the six months ended April 30, 2021 and 2020, respectively.

 

 

July 31, 2020

 

 

October 31, 2019

 

Finished goods

 

$

196,611

 

 

$

183,973

 

Raw materials and component parts

 

 

107,145

 

 

 

102,044

 

Work-in-process

 

 

54,123

 

 

 

42,904

 

 

 

 

357,879

 

 

 

328,921

 

Obsolescence and other reserves

 

 

(41,570

)

 

 

(39,377

)

LIFO reserve

 

 

(5,752

)

 

 

(6,145

)

 

 

$

310,557

 

 

$

283,399

 

5.

Goodwill and other intangible assets  

Changes in the carrying amount of goodwill for the ninesix months ended July 31, 2020April 30, 2021 by operating segment arewere as follows:

 

 

Industrial

Precision

Solutions

 

 

Advanced

Technology

Solutions

 

 

Total

 

Balance at October 31, 2019

 

$

411,461

 

 

$

1,203,278

 

 

$

1,614,739

 

Acquisitions

 

 

 

 

 

76,047

 

 

 

76,047

 

Currency effect

 

 

6,088

 

 

 

5,040

 

 

 

11,128

 

Balance at July 31, 2020

 

$

417,549

 

 

$

1,284,365

 

 

$

1,701,914

 

 Industrial
Precision
Solutions
Advanced
Technology
Solutions
Total
Balance at October 31, 2020$415,862 $1,297,492 $1,713,354 
Currency effect3,507 4,129 7,636 
Balance at April 30, 2021$419,369 $1,301,621 $1,720,990 

As part of our change in operating segments as described in Note 11, we considered whether the reporting units used for purposes of assessing impairment of goodwill should be changed and concluded that no changes were necessary.


Information regarding our intangible assets subject to amortization iswas as follows:

 

July 31, 2020

 

April 30, 2021

 

Carrying Amount

 

 

Accumulated

Amortization

 

 

Net Book Value

 

Carrying 
Amount
Accumulated
Amortization
Net Book 
Value

Customer relationships

 

$

503,804

 

 

$

203,589

 

 

$

300,215

 

Customer relationships$486,696 $212,301 $274,395 

Patent/technology costs

 

 

163,550

 

 

 

81,590

 

 

 

81,960

 

Patent/technology costs155,346 84,173 71,173 

Trade name

 

 

98,691

 

 

 

46,553

 

 

 

52,138

 

Trade name74,666 37,501 37,165 

Non-compete agreements

 

 

12,472

 

 

 

10,972

 

 

 

1,500

 

Non-compete agreements10,005 8,884 1,121 

Other

 

 

1,401

 

 

 

1,397

 

 

 

4

 

Other1,394 1,392 2 

Total

 

$

779,918

 

 

$

344,101

 

 

$

435,817

 

Total$728,107 $344,251 $383,856 

 

 

 

 

 

 

 

 

 

 

 

 

 

October 31, 2019

 

October 31, 2020

 

Carrying Amount

 

 

Accumulated

Amortization

 

 

Net Book Value

 

Carrying 
Amount
Accumulated
Amortization
Net Book 
Value

Customer relationships

 

$

480,007

 

 

$

173,996

 

 

$

306,011

 

Customer relationships$483,568 $193,617 $289,951 

Patent/technology costs

 

 

154,735

 

 

 

71,663

 

 

 

83,072

 

Patent/technology costs153,555 76,934 76,621 

Trade name

 

 

96,655

 

 

 

41,303

 

 

 

55,352

 

Trade name74,240 34,693 39,547 

Non-compete agreements

 

 

11,540

 

 

 

10,406

 

 

 

1,134

 

Non-compete agreements9,908 8,444 1,464 

Other

 

 

1,400

 

 

 

1,394

 

 

 

6

 

Other1,403 1,400 

Total

 

$

744,337

 

 

$

298,762

 

 

$

445,575

 

Total$722,674 $315,088 $407,586 

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Nordson Corporation

Amortization expense for the three months ended July 31,April 30, 2021 and 2020 was $12,617 and 2019 was $16,577 and $13,903,$14,660, respectively. Amortization expense for the ninesix months ended July 31,April 30, 2021 and 2020 was $25,697 and 2019 was $47,410$30,833, respectively.

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Nordson Corporation
Pension and $41,665, respectively. Refer to Note 3 for an explanation of the change in goodwill and intangible assets due to the Fluortek acquisition.  

other postretirement plans

6.

Pension and other postretirement plans  

The components of net periodic pension cost for the three and ninesix months ended July 31,April 30, 2021 and 2020 and 2019 were:

 

U.S.

 

 

International

 

U.S.International

Three Months Ended

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Three Months Ended2021202020212020

Service cost

 

$

5,146

 

 

$

3,740

 

 

$

519

 

 

$

484

 

Service cost$5,722 $5,235 $662 $459 

Interest cost

 

 

3,970

 

 

 

4,736

 

 

 

256

 

 

 

416

 

Interest cost3,494 4,026 250 251 

Expected return on plan assets

 

 

(6,165

)

 

 

(5,908

)

 

 

(313

)

 

 

(397

)

Expected return on plan assets(7,335)(6,175)(431)(304)

Amortization of prior service credit

 

 

(21

)

 

 

(16

)

 

 

(72

)

 

 

(76

)

Amortization of prior service credit(21)(22)(88)(68)

Amortization of net actuarial loss

 

 

3,510

 

 

 

1,938

 

 

 

739

 

 

 

424

 

Amortization of net actuarial loss4,042 3,622 1,011 729 

Settlement loss

 

 

2,508

 

 

 

 

 

 

 

 

 

 

Settlement loss2,018 0 0 0 

Total benefit cost

 

$

8,948

 

 

$

4,490

 

 

$

1,129

 

 

$

851

 

Total benefit cost$7,920 $6,686 $1,404 $1,067 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

 

International

 

U.S.International

Nine Months Ended

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Six Months EndedSix Months Ended2021202020212020

Service cost

 

$

15,439

 

 

$

10,895

 

 

$

1,550

 

 

$

1,454

 

Service cost$11,488 $10,293 $1,180 $1,030 

Interest cost

 

 

11,913

 

 

 

13,726

 

 

 

769

 

 

 

1,262

 

Interest cost6,834 7,943 470 514 

Expected return on plan assets

 

 

(18,499

)

 

 

(17,506

)

 

 

(948

)

 

 

(1,204

)

Expected return on plan assets(14,088)(12,334)(822)(635)

Amortization of prior service credit

 

 

(63

)

 

 

(46

)

 

 

(214

)

 

 

(228

)

Amortization of prior service credit(41)(42)(165)(142)

Amortization of net actuarial loss

 

 

10,529

 

 

 

5,026

 

 

 

2,201

 

 

 

1,280

 

Amortization of net actuarial loss7,616 7,019 1,801 1,462 

Settlement loss

 

 

2,508

 

 

 

 

 

 

 

 

 

 

Settlement loss2,018 0 

Total benefit cost

 

$

21,827

 

 

$

12,095

 

 

$

3,358

 

 

$

2,564

 

Total benefit cost$13,827 $12,879 $2,464 $2,229 

During

Contributions to the thirddefined benefit pension plans are expected to be approximately $68,000 for fiscal year 2021, which includes an additional cash contribution of $20,000 made in the second quarter of 2020, we recognized a settlement loss of $2,508 as a result of a lump sum distribution from our supplemental executive retirement plan.

The components of other postretirement benefit cost for2021 to move the three and nine months ended July 31, 2020 and 2019 were:

domestic plans closer to full funding.

 

 

U.S.

 

 

International

 

Three Months Ended

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Service cost

 

$

187

 

 

$

70

 

 

$

4

 

 

$

3

 

Interest cost

 

 

657

 

 

 

698

 

 

 

3

 

 

 

3

 

Amortization of prior service credit

 

 

(5

)

 

 

(6

)

 

 

 

 

 

 

Amortization of net actuarial (gain) loss

 

 

380

 

 

 

162

 

 

 

(9

)

 

 

(5

)

Total benefit cost

 

$

1,219

 

 

$

924

 

 

$

(2

)

 

$

1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

 

International

 

Nine Months Ended

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Service cost

 

$

520

 

 

$

401

 

 

$

11

 

 

$

13

 

Interest cost

 

 

1,830

 

 

 

2,195

 

 

 

10

 

 

 

15

 

Amortization of prior service credit

 

 

(13

)

 

 

(20

)

 

 

 

 

 

 

Amortization of net actuarial (gain) loss

 

 

1,057

 

 

 

467

 

 

 

(27

)

 

 

(22

)

Total benefit cost

 

$

3,394

 

 

$

3,043

 

 

$

(6

)

 

$

6

 

The components of net periodic pension cost other than service cost are included in Other – net in our Condensed Consolidated Statements of Income.

The components of other postretirement benefit costs for the three and six months ended April 30, 2021 and 2020 were:
 U.S.International
Three Months Ended2021202020212020
Service cost$216 $143 $3 $
Interest cost456 558 3 
Amortization of prior service credit0 (4)0 
Amortization of net actuarial (gain) loss338 258 (10)(9)
Total benefit cost (income)$1,010 $955 $(4)$(2)
 U.S.International
Six Months Ended2021202020212020
Service cost$392 $333 $7 $
Interest cost910 1,173 6 
Amortization of prior service credit0 (8)0 
Amortization of net actuarial (gain) loss685 677 (20)(18)
Total benefit cost (income)$1,987 $2,175 $(7)$(4)


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7.

Income taxes

We record our interim provision for income taxes based on our estimated annual effective tax rate, as well as certain items discrete to the current period. The effective tax rate for the three and ninesix months ended July 31, 2020April 30, 2021 was 8.9%20.3% and 16.0%20.5%, respectively. The effective tax rate for the three and ninesix months ended July 31, 2019 was 21.4% and 22.8%, respectively. The effective tax rate for the three and nine months ended July 31,April 30, 2020 was lower than the comparable prior year periods primarily due to excess tax benefits associated with share-based payment transactions.

21.0% and 19.8%, respectively.

Due to our share-based payment transactions our income tax provision included a discrete tax benefit of $11,373$1,796 and $14,048$2,595 for the three and ninesix months ended July 31, 2020, respectively. Our income tax provision included a similar discrete tax benefit of $210April 30, 2021, respectively, compared to $138 and $3,227$2,675 for the three and ninesix months ended July 31, 2019,April 30, 2020, respectively.

During the nine months ended July 31, 2019, a discrete tax expense of $4,866 was recorded to update the provisional amounts recognized in 2018 due to changes in interpretations and assumptions and the finalization of estimates related to the U.S. Tax Cuts and Jobs Act.

During the three months ended July 31, 2020 and July 31, 2019, we recorded a favorable adjustment to unrecognized tax benefits of $443 and $858, respectively. In addition, during the three months ended July 31, 2020 there was an increase of $5,664 in unrecognized tax benefits and, if recognized, the gross unrecognized tax benefits would be offset against assets currently recorded in the Consolidated Balance Sheet.    

8.

Accumulated other comprehensive loss

Accumulated other comprehensive loss
The components of accumulated other comprehensive loss, including adjustments for items that are reclassified from accumulated other comprehensive loss to net income, are shown below.

 

 

Cumulative

 

 

Pension and

 

 

Accumulated

 

 

 

translation

 

 

postretirement benefit

 

 

other comprehensive

 

 

 

adjustments

 

 

plan adjustments

 

 

loss

 

Balance at October 31, 2019

 

$

(53,332

)

 

$

(178,549

)

 

$

(231,881

)

Amortization of prior service costs and net

   actuarial losses, net of tax of $(3,026)

 

 

 

 

 

9,748

 

 

 

9,748

 

Foreign currency translation adjustments

 

 

10,509

 

 

 

 

 

 

10,509

 

Balance at July 31, 2020

 

$

(42,823

)

 

$

(168,801

)

 

$

(211,624

)

Cumulative
translation
adjustments
Pension and
postretirement 
benefit
plan adjustments
Accumulated
other 
comprehensive
income (loss)
Balance at October 31, 2020$(40,422)$(185,696)$(226,118)
Amortization of prior service costs and net
   actuarial losses, net of tax of ($3,485)
0 11,382 11,382 
Foreign currency translation adjustments21,490 0 21,490 
Balance at April 30, 2021$(18,932)$(174,314)$(193,246)

9.

Stock-based compensation

Stock-based compensation
During the 20182021 Annual Meeting of Shareholders, our shareholders approved the Nordson Corporation 2021 Stock Incentive and Award Plan (the “2021 Plan”) as the successor to the Amended and Restated 2012 Stock Incentive and Award Plan (the “2012 Plan”"2012 Plan"). The 20122021 Plan provides for the granting of stock options, stock appreciation rights, restricted shares, restricted share units, performance shares, cash awards and other stock or performance-based incentives. A maximum of 4,525900 common shares were originally availableauthorized for grant under the 2021 Plan plus the number of shares that were available to be granted under the 2012 Plan.

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Nordson Corporation

Plan for a combined total of 2,208 common shares available to be granted as of April 30, 2021.

Stock Options

Nonqualified or incentive stock

Stock options may be granted to our employees and directors. Generally, options granted to employees may be exercised beginning one year from the date of grant at a rate not exceeding 25 percent per year and expire 10 years from the date of grant. Vesting accelerates upon a qualified termination in connection with a change in control. In the event of termination of employment due to early retirement or normal retirement at age 65, options granted within 12 months prior to termination are forfeited, and vesting continues post retirement for all other unvested options granted.  In the event of disability or death, all unvested stock options granted within 12 months prior to termination (or at any time prior to December 28, 2017) fully vest. Termination for any other reason results in forfeiture of unvested options and vested options in certain circumstances.  The amortized cost of options is accelerated if the retirement eligibility date occurs before the normal vesting date.  Option exercises are satisfied through the issuance of treasury shares on a first-in, first-out basis. We recognized compensation expense related to stock options of $2,385$1,565 and $2,525 in$3,801 for the three and six months ended July 31, 2020April 30, 2021, respectively, compared to $2,538 and 2019, respectively. Corresponding amounts$5,263 for the ninethree and six months ended July 31,April 30, 2020, and 2019 were $7,648 and $7,583, respectively.

The following table summarizes activity related to stock options for the ninesix months ended July 31, 2020:

April 30, 2021:

 

Number of

Options

 

 

Weighted-

Average

Exercise Price Per

Share

 

 

Aggregate

Intrinsic Value

 

 

Weighted

Average

Remaining

Term

Outstanding at October 31, 2019

 

 

1,787

 

 

$

97.74

 

 

 

 

 

 

 

Number of
Options
Weighted-
Average
Exercise Price 
Per Share
Aggregate
Intrinsic Value
Weighted
Average
Remaining
Term
Outstanding at October 31, 2020Outstanding at October 31, 20201,487$122.45 

Granted

 

 

391

 

 

 

166.38

 

 

 

 

 

 

 

Granted93201.43 

Exercised

 

 

(587

)

 

 

78.87

 

 

 

 

 

 

 

Exercised(176)107.02 

Forfeited or expired

 

 

(39

)

 

 

144.70

 

 

 

 

 

 

 

Forfeited or expired(19)140.03 

Outstanding at July 31, 2020

 

 

1,552

 

 

$

121.00

 

 

$

112,752

 

 

7.2 years

Outstanding at April 30, 2021Outstanding at April 30, 20211,385$129.45 $113,525 6.8 years

Expected to vest

 

 

853

 

 

$

141.34

 

 

$

44,597

 

 

8.4 years

Expected to vest592$156.11 $32,752 8.2 years

Exercisable at July 31, 2020

 

 

689

 

 

$

95.33

 

 

$

67,769

 

 

5.7 years

Exercisable at April 30, 2021Exercisable at April 30, 2021788$109.22 $80,514 5.8 years

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Nordson Corporation
As of July 31, 2020,April 30, 2021, there was $13,963$12,291 of total unrecognized compensation cost related to unvested stock options. That cost is expected to be amortized over a weighted average period of approximately 1.7 years.

The fair value of each option grant was estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions:

Nine months ended

July 31, 2020

July 31, 2019

Expected volatility

24.5%-30.5%

24.1%-24.5%

Expected dividend yield

0.87%-1.16%

1.04%

Risk-free interest rate

0.44%-1.69%

2.84%-2.95%

Expected life of the option (in years)

5.3-6.3

5.3-6.2

Six Months EndedApril 30, 2021April 30, 2020
Expected volatility30.8%-32.6%24.5%-29.2%
Expected dividend yield0.83%-0.85%0.92%-1.16%
Risk-free interest rate0.43%-0.77%0.50%-1.69%
Expected life of the option (in years)5.3-6.25.3-6.2

The weighted-average expected volatility used to value the 20202021 and 20192020 options was 25.4%31.0% and 24.3%25.1%, respectively.

Historical information was the primary basis for the selection of the expected volatility, expected dividend yield and the expected lives of the options. The risk-free interest rate was selected based upon yields of U.S. Treasury issues with a term equal to the expected life of the option being valued.

The weighted average grant date fair value of stock options granted during the ninesix months ended July 31,April 30, 2021 and 2020 was $56.02 and 2019 was $38.57 and $31.74,$37.81, respectively.

The total intrinsic value of options exercised during the three months ended July 31,April 30, 2021 and 2020 was $12,166 and 2019 was $39,811 and $2,449,$1,704, respectively. The total intrinsic value of options exercised during the ninesix months ended July 31,April 30, 2021 and 2020 was $17,601 and 2019 was $58,758 and $21,770,$18,948, respectively.

Cash received from the exercise of stock options for the ninesix months ended July 31,April 30, 2021 and 2020 was $18,783 and 2019 was $46,304 and $17,275,$18,547, respectively.

Restricted Shares and Restricted Share Units

We may grant restricted shares and/or restricted share units to our employees and directors. These shares or units may not be transferred for a designated period of time (generally one to three years) defined at the date of grant.

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Nordson Corporation

We may also grant continuation awards in the form of restricted share units with cliff vesting and a gateway performance measure that must be achieved for the restricted share units to vest.

For employee recipients, in the event of termination of employment due to early retirement with the consent of the Company, restricted shares and units granted within 12 months prior to termination are forfeited, and other restricted shares and units vest on a pro-rata basis.basis, subject to the consent of the Compensation Committee. In the event of termination of employment due to normal retirement at age 65, restricted shares and units granted within 12 months prior to termination are forfeited, and, for other restricted shares and units, the restriction period applicable to restricted shares will lapse and the shares will vest and be transferable. Fortransferable and all unvested units will become vested in full, subject to the consent of the Compensation Committee. In the event of a recipient's disability or death, all restricted shares and units granted within 12 months prior to termination (or at any time prior to December 28, 2017), the restrictions lapse in the event of a recipient’s disability or death.fully vest. Termination for any other reason prior to the lapse of any restrictions or vesting of units results in forfeiture of the shares.

shares or units.

For non-employee directors, all restrictions lapse in the event of disability or death of the non-employee director. Termination of service as a director for any other reason within one year of date of grant results in a pro-rata vesting of shares or units.

As shares or units are issued, deferred stock-based compensation equivalent to the fair value on the date of grant is expensed over the vesting period.  

The following table summarizes activity related to restricted shares during the ninesix months ended July 31, 2020:

April 30, 2021:

 

Number of Shares

 

 

Weighted-Average

Grant Date Fair

Value

 

Restricted shares at October 31, 2019

 

 

66

 

 

$

126.83

 

Number of SharesWeighted-Average
Grant Date
Fair Value
Restricted shares at October 31, 2020Restricted shares at October 31, 202058 $148.75 

Granted

 

 

25

 

 

 

169.62

 

Granted0

Forfeited

 

 

(6

)

 

 

131.06

 

Forfeited(2)149.37

Vested

 

 

(26

)

 

 

120.23

 

Vested(28)138.07

Restricted shares at July 31, 2020

 

 

59

 

 

$

147.17

 

Restricted shares at April 30, 2021Restricted shares at April 30, 202128 $159.56 

As of July 31, 2020,April 30, 2021, there was $5,053$2,655 of unrecognized compensation cost related to restricted shares. The cost is expected to be amortized over a weighted average period of 2.01.7 years. The amount charged to expense related to restricted shares during the
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Nordson Corporation
three months ended July 31,April 30, 2021 and 2020 was $501 and 2019 was $734 and $898, respectively. These amounts$688, respectively, which included common share dividends forof $13 and $18, respectively. For the threesix months ended July 31,April 30, 2021 and 2020, and 2019 of $21 and $22, respectively. For the nine months ended July 31, 2020 and 2019, the amounts charged to expense related to restricted shares were $2,995$1,465 and $2,762, respectively. These amounts$2,261, respectively, which included common share dividends for the nine months ended July 31, 2020of $31 and 2019 of $64 and $58,$43, respectively. 

The following table summarizes activity related to restricted share units during the ninesix months ended July 31, 2020:

April 30, 2021:

 

 

Number of Units

 

 

Weighted-Average

Grant Date Fair

Value

 

Restricted share units at October 31, 2019

 

 

 

 

$

 

Granted

 

 

7

 

 

 

160.68

 

Restricted share units at July 31, 2020

 

 

7

 

 

$

160.68

 

 Number of UnitsWeighted-Average
Grant Date
Fair Value
Restricted share units at October 31, 2020$
Granted86 202.18
Forfeited(7)201.33
Vested(1)201.50
Restricted share units at April 30, 202178 $202.26 

As of July 31, 2020,April 30, 2021, there was $295$11,639 of remaining expense to be recognized related to outstanding restricted share units, which is expected to be recognized over a weighted average period of 0.31.4 years. The amount charged to expense related to restricted share units during each of the three months ended July 31,April 30, 2021 and 2020 was $2,192 and 2019 was $299$298, respectively, compared to $4,284 and $263, respectively. For$584 for the ninesix months ended July 31,April 30, 2021 and 2020, and 2019, the corresponding amounts were $883 and $789, respectively.

Performance Share Incentive Awards

Executive officers and selected other key employees are eligible to receive common share-based incentive awards. Payouts, in the form of unrestricted common shares, vary based on the degree to which corporate financial performance exceeds predetermined threshold, target and maximum performance goals over three-year performance periods. No payout will occur unless threshold performance is achieved.

The amount of compensation expense is based upon current performance projections for each three-year period and the percentage of the requisite service that has been rendered. The calculations are also based upon the grant date fair value determined using the closing market price of our common shares at the grant date, reducedwhich is principally driven by the implied valuestock price on the date of dividends not to be paid.grant or a Monte Carlo valuation for awards granted in 2021. The per share values were $160.02, $133.01$202.05 for 2021 and $184.04$201.50 for 2020, $120.12 and $138.53 for 2019, and $123.45 and $138.53 for 2018.  During the three months ended July 31, 2020, $552 was2020. The amount credited to expense and for the three months ended July 31, 2019, $15April 30, 2021 and 2020 was charged$460 and $3,703, respectively, compared to expense. Fora charge of $4,295 and credit of $2,282 to expense for the ninesix months ended July 31,April 30, 2021 and 2020, $2,834 was credited to expense, and for the nine months ended July 31, 2019, $1,611 was charged to expense.respectively. The cumulative amount recorded in shareholders’ equity at July 31, 2020April 30, 2021 was $1,455.

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Nordson Corporation

$4,132.

Deferred Compensation

Our executive officers and other highly compensated employees may elect to defer up to 100% of their base pay and cash incentive compensation, and for executive officers, up to 90% of their share-based performance incentive payout each year. Additional share units are credited for quarterly dividends paid on our common shares. Expense related to dividends paid under this plan for the three months ended July 31,April 30, 2021 and 2020 was $29 and 2019 was $83, respectively, compared to $58 and $74, respectively. For$164 for the ninesix months ended July 31,April 30, 2021 and 2020, and 2019, the corresponding amounts were $247 and $219, respectively.

Deferred Directors’ Compensation

Non-employee directors may defer all or part of their cash and equity-based compensation until retirement. Cash compensation may be deferred as cash or as share equivalent units. Deferred cash amounts are recorded as liabilities, and share equivalent units are recorded as equity. Additional share equivalent units are earned when common share dividends are declared.

The following table summarizes activity related to director deferred compensation share equivalent units during the ninesix months ended July 31, 2020:

April 30, 2021:

 

 

Number of Shares

 

 

Weighted-Average

Grant Date Fair

Value

 

Outstanding at October 31, 2019

 

 

114

 

 

$

55.52

 

Dividend equivalents

 

 

1

 

 

 

164.44

 

Outstanding at July 31, 2020

 

 

115

 

 

$

56.27

 

 Number of SharesWeighted-Average
Grant Date Fair
Value
Outstanding at October 31, 2020120 $60.81 
Dividend equivalents0
Distributions(11)68.28
Outstanding at April 30, 2021109 $60.86 

The amount charged to expense related to director deferred compensation for the three months ended July 31,April 30, 2021 and 2020 was $63 and 2019 was $44$42, respectively, compared to $125 and $38, respectively. For$86 for the ninesix months ended July 31,April 30, 2021 and 2020, and 2019, the corresponding amounts were $130 and $113, respectively.

10.

Warranties

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Nordson Corporation
Warranties
We offer warranties to our customers depending on the specific product and terms of the customer purchase agreement.  A typical warranty program requires that we repair or replace defective products within a specified time period (generally one year) from the date of delivery or first use.  We record an estimate for future warranty-related costs based on actual historical return rates.  Based on analysis of return rates and other factors, the adequacy of our warranty provisions are adjusted as necessary.  The liability for warranty costs is included in Accrued liabilities in the Condensed Consolidated Balance Sheet.  

Sheets.  

Following is a reconciliation of the product warranty liability for the ninesix months ended July 31, 2020April 30, 2021 and 2019:

2020:

 

July 31, 2020

 

 

July 31, 2019

 

April 30, 2021April 30, 2020

Beginning balance at October 31

 

$

11,006

 

 

$

12,195

 

Beginning balance at October 31$10,550 $11,006 

Accruals for warranties

 

 

8,219

 

 

 

7,628

 

Accruals for warranties7,708 5,429 

Warranty payments

 

 

(8,180

)

 

 

(7,837

)

Warranty payments(8,200)(5,231)

Currency effect

 

 

221

 

 

 

(78

)

Currency effect197 (122)

Ending balance

 

$

11,266

 

 

$

11,908

 

Ending balance$10,255 $11,082 

11.

Operating segments  

Operating segments
We conduct business across 2 primary operating segments:  Industrial Precision Solutions (IPS) and Advanced Technology Solutions (ATS).  The composition of segments and measure of segment profitability is consistent with that used by our chief operating decision maker.  The primary measure used by the chief operating decision maker for purposes of making decisions about allocating resources to the segments and assessing performance is operating profit, which equals sales less cost of sales and certain operating expenses.  Items below the operating profit line of the Condensed Consolidated Statements of Income (interest and investment income, interest expense and other income/expense) are excluded from the measure of segment profitability reviewed by our chief operating decision maker and are not presented by operating segment.  

Effective in the second quarter of 2020, we made changes to realign our management team and our operating segments.segments, consolidating our former 3 operating segments into the 2 described above, which are reflected in our disclosures. Existing product lines were unchanged as part of this new structure. This realignment will enable us to better serve global customers and markets, to more efficiently leverage technology synergies, to operate divisions of significant size in a consistent and focused way and to position ourselves for our next chapter of profitable growth. The revised operating segments better reflect how we manage the Company, allocate resources, and assess performance of the businesses.

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Nordson Corporation

We realigned our former three operating segments into two: Industrial Precision Solutions and Advanced Technology Solutions. Existing product lines were unchanged as part of this new structure.

Industrial Precision Solutions: This segment combines our former Adhesive Dispensing Systems (ADS) and Industrial Coating Systems (ICS) businesses. IPS enhances the technology synergies between ADS and ICS to deliverdelivers proprietary dispensing and processing technology to diverse end markets. Product lines reduce material consumption, increase line efficiency and enhance product brand and appearance. Components are used for dispensing adhesives, coatings, paint, finishes, sealants and other materials. This segment primarily serves the non-durables, industrial and consumer durables and non-durables markets.

Advanced Technology Solutions: This segment integrates our proprietary product technologies found in progressive stages of a customer’s production processes, such as surface treatment, precisely controlled dispensing of material and post-dispense test and inspection to ensure quality. Related single-use plastic molded syringes, cartridges, tips, fluid connection components, tubing, balloons and catheters are used to dispense or control fluids in production processes or within customers’ end products. This segment predominantly serves customers in the electronics, medical and related high-tech industrial markets.

The financial information presented herein reflects the impact


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Table of the preceding changes and prior periods have been revised to reflect these changes.

Contents

Nordson Corporation
The following table presents information about our segments:

 

Industrial

Precision

Solutions

 

 

Advanced

Technology

Solutions

 

 

Corporate

 

 

Total

 

Three months ended

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

July 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months EndedThree Months EndedIndustrial
Precision
Solutions
Advanced
Technology
Solutions
CorporateTotal
April 30, 2021April 30, 2021    

Net external sales

 

$

288,965

 

 

$

249,216

 

 

$

 

 

$

538,181

 

Net external sales$298,775 $290,763 $ $589,538 

Operating profit (loss)

 

 

74,744

 

 

 

49,952

 

 

 

(12,641

)

 

 

112,055

 

Operating profit (loss)104,283 76,585 (14,477)166,391 

July 31, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

April 30, 2020April 30, 2020

Net external sales

 

$

306,648

 

 

$

253,098

 

 

$

 

 

$

559,746

 

Net external sales$282,274 $247,204 $— $529,478 

Operating profit (loss)

 

 

88,811

 

 

 

53,562

 

 

 

(12,097

)

 

 

130,276

 

Operating profit (loss)76,454 58,689 (10,114)125,029 

Nine months ended

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

July 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months EndedSix Months Ended
April 30, 2021April 30, 2021

Net external sales

 

$

835,038

 

 

$

727,537

 

 

$

 

 

$

1,562,575

 

Net external sales$587,191 $528,913 $ $1,116,104 

Operating profit (loss)

 

 

207,603

 

 

 

140,928

 

 

 

(36,354

)

 

 

312,177

 

Operating profit (loss)187,686 123,786 (36,056)275,416 

July 31, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

April 30, 2020April 30, 2020

Net external sales

 

$

871,925

 

 

$

736,850

 

 

$

 

 

$

1,608,775

 

Net external sales$546,073 $478,321 $— $1,024,394 

Operating profit (loss)

 

 

229,702

 

 

 

150,882

 

 

 

(37,131

)

 

 

343,453

 

Operating profit (loss)132,858 90,976 (23,712)200,122 

A reconciliation of total segment operating income to total consolidated income before income taxes is as follows:

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

July 31, 2020

 

 

July 31, 2019

 

 

July 31, 2020

 

 

July 31, 2019

 

Total profit for reportable segments

 

$

112,055

 

 

$

130,276

 

 

$

312,177

 

 

$

343,453

 

Interest expense

 

 

(7,314

)

 

 

(11,500

)

 

 

(25,348

)

 

 

(36,238

)

Interest and investment income

 

 

434

 

 

 

511

 

 

 

1,301

 

 

 

1,153

 

Other-net

 

 

(9,668

)

 

 

210

 

 

 

(12,943

)

 

 

(4,546

)

Income before income taxes

 

$

95,507

 

 

$

119,497

 

 

$

275,187

 

 

$

303,822

 

We have
0We had significant sales in the following geographic regions:

 

Three Months Ended

 

 

Nine Months Ended

 

Three Months EndedSix Months Ended

 

July 31, 2020

 

 

July 31, 2019

 

 

July 31, 2020

 

 

July 31, 2019

 

April 30, 2021April 30, 2020April 30, 2021April 30, 2020

United States

 

$

183,508

 

 

$

190,460

 

 

$

560,941

 

 

$

551,510

 

United States$202,924 $188,933 $388,240 $377,433 

Americas

 

 

38,265

 

 

 

47,040

 

 

 

106,021

 

 

 

123,159

 

Americas44,914 36,673 81,052 67,756 

Europe

 

 

132,107

 

 

 

143,449

 

 

 

394,554

 

 

 

425,650

 

Europe156,451 136,056 291,602 262,447 

Japan

 

 

31,226

 

 

 

30,488

 

 

 

90,353

 

 

 

89,566

 

Japan27,852 31,575 54,967 59,127 

Asia Pacific

 

 

153,075

 

 

 

148,309

 

 

 

410,706

 

 

 

418,890

 

Asia Pacific157,397 136,241 300,243 257,631 

Total net external sales

 

$

538,181

 

 

$

559,746

 

 

$

1,562,575

 

 

$

1,608,775

 

Total net external sales$589,538 $529,478 $1,116,104 $1,024,394 

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Nordson Corporation

12.

Fair value measurements

Fair value measurements
The inputs to the valuation techniques used to measure fair value are classified into the following categories:

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data.

Level 3: Unobservable inputs that are not corroborated by market data.


The following tables present the classification of our assets and liabilities measured at fair value on a recurring basis:

July 31, 2020

 

Total

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency forward contracts (a)

 

$

22,241

 

 

$

 

 

$

22,241

 

 

$

 

Total assets at fair value

 

$

22,241

 

 

$

 

 

$

22,241

 

 

$

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deferred compensation plans (b)

 

$

12,030

 

 

$

 

 

$

12,030

 

 

$

 

Foreign currency forward contracts (a)

 

 

6,484

 

 

 

 

 

 

6,484

 

 

 

 

Total liabilities at fair value

 

$

18,514

 

 

$

 

 

$

18,514

 

 

$

 

October 31, 2019

 

Total

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency forward contracts (a)

 

$

5,042

 

 

$

 

 

$

5,042

 

 

$

 

Total assets at fair value

 

$

5,042

 

 

$

 

 

$

5,042

 

 

$

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deferred compensation plans (b)

 

$

11,850

 

 

$

 

 

$

11,850

 

 

$

 

Foreign currency forward contracts (a)

 

 

2,381

 

 

 

 

 

 

2,381

 

 

 

 

Total liabilities at fair value

 

$

14,231

 

 

$

 

 

$

14,231

 

 

$

 

(a)

We enter into foreign currency forward contracts to reduce the risk of foreign currency exposures resulting from receivables, payables, intercompany receivables, intercompany payables and loans denominated in foreign currencies. Foreign exchange contracts are valued using market exchange rates. These foreign exchange contracts are not designated as hedges.

(b)

Executive officers and other highly compensated employees may defer up to 100 percent of their salary and annual cash incentive compensation and for executive officers, up to 90 percent of their long-term incentive compensation, into various non-qualified deferred compensation plans. Deferrals can be allocated to various market performance measurement funds. Changes in the value of compensation deferred under these plans are recognized each period based on the fair value of the underlying measurement funds.

April 30, 2021TotalLevel 1Level 2Level 3
Assets:    
Foreign currency forward contracts (a)
$1,255 $0 $1,255 $0 
Total assets at fair value$1,255 $0 $1,255 $0 
Liabilities:
Deferred compensation plans (b)
$12,118 $0 $12,118 $0 
Foreign currency forward contracts (a)
3,283 0 3,283 0 
Total liabilities at fair value$15,401 $0 $15,401 $0 

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Nordson Corporation
October 31, 2020TotalLevel 1Level 2Level 3
Assets:    
Foreign currency forward contracts (a)
$2,700 $$2,700 $
Total assets at fair value$2,700 $$2,700 $
Liabilities:
Deferred compensation plans (b)
$12,304 $$12,304 $
Foreign currency forward contracts (a)
5,937 5,937 
Total liabilities at fair value$18,241 $$18,241 $
(a)We enter into foreign currency forward contracts to reduce the risk of foreign currency exposures resulting from receivables, payables, intercompany receivables, intercompany payables and loans denominated in foreign currencies. Foreign exchange contracts are valued using market exchange rates. These foreign exchange contracts are not designated as hedges.
(b)Executive officers and other highly compensated employees may defer up to 100 percent of their salary and annual cash incentive compensation and for executive officers, up to 90 percent of their long-term incentive compensation, into various non-qualified deferred compensation plans. Deferrals can be allocated to various market performance measurement funds. Changes in the value of compensation deferred under these plans are recognized each period based on the fair value of the underlying measurement funds.
The carrying amounts and fair values of financial instruments, other than cash and cash equivalents, receivables, and accounts payable, are shown in the table below. The carrying values of cash and cash equivalents, receivables and accounts payable approximate fair value due to the short-term nature of these instruments.

 

 

July 31, 2020

 

 

 

Carrying

Amount

 

 

Fair Value

 

Long-term debt (including current portion), excluding unamortized debt

   issuance costs

 

 

1,264,680

 

 

 

1,330,739

 

 April 30, 2021
 Carrying
Amount
Fair Value
Long-term debt (including current portion), excluding unamortized debt issuance costs$867,087 $921,834 

We used the following methods and assumptions in estimating the fair value of financial instruments:

Long-term debt is valued by discounting future cash flows at currently available rates for borrowing arrangements with similar terms and conditions, which are considered to be Level 2 inputs under the fair value hierarchy.

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Nordson Corporation

13.

Derivative financial instruments  

Derivative financial instruments  
We operate internationally and enter into intercompany transactions denominated in foreign currencies. Consequently, we are subject to market risk arising from exchange rate movements between the dates foreign currency transactions occur and the dates they are settled. We regularly use foreign currency forward contracts to reduce our risks related to most of these transactions. These contracts usually have maturities of 90 days or less and generally require us to exchange foreign currencies for U.S. dollars at maturity, at rates stated in the contracts. These contracts are not designated as hedging instruments under U.S. GAAP. Accordingly, the changes in the fair value of the foreign currency forward contracts are recognized in each accounting period in “Other – net” on the Condensed Consolidated Statements of Income together with the transaction gain or loss from the related balance sheet position. For the three months ended July 31, 2020,April 30, 2021, we recognized a net gainsloss of $17,255$8,133 on foreign currency forward contracts and a realized net lossesgain of $20,809$7,357 from the change in fair value of balance sheet positions. For the three months ended July 31, 2019,April 30, 2020, we recognized a net gainsloss of $975$3,728 on foreign currency forward contracts and a net gainsgain of $407$6,720 from the change in fair value of balance sheet positions. For the ninesix months ended July 31, 2020,April 30, 2021, we recognized a net gainsgain of $13,096$1,209 on foreign currency forward contracts and lossesa realized net loss of $13,658$4,746 from the change in fair value of balance sheet positions. For the ninesix months ended July 31, 2019,April 30, 2020, we recognized gainsa net loss of $769$4,159 on foreign currency forward contracts and gainsa net gain of $267$7,151 from the change in fair value of balance sheet positions.



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Nordson Corporation
The following table summarizes, by currency, the foreign currency forward contracts outstanding at July 31, 2020April 30, 2021 and 2019:

2020:

 

Notional Amounts

 

July 31, 2020 contract amounts:

 

Sell

 

 

Buy

 

Notional Amounts
April 30, 2021 contract amounts:April 30, 2021 contract amounts:SellBuy

Euro

 

$

108,856

 

 

$

207,198

 

Euro$127,660 $309,020 

British pound

 

 

18,861

 

 

 

60,397

 

British pound21,228 79,446 

Japanese yen

 

 

15,815

 

 

 

32,009

 

Japanese yen12,228 38,648 

Australian dollar

 

 

174

 

 

 

7,682

 

Australian dollar194 10,240 

Hong Kong dollar

 

 

56,279

 

 

 

74,714

 

Hong Kong dollar978 33,024 

Singapore dollar

 

 

1,357

 

 

 

15,982

 

Singapore dollar15 18,071 

Others

 

 

4,412

 

 

 

59,921

 

Others11,886 92,869 

Total

 

$

205,754

 

 

$

457,903

 

Total$174,189 $581,318 

 

 

 

 

 

 

 

 

 

Notional Amounts

 

Notional Amounts

July 31, 2019 contract amounts:

 

Sell

 

 

Buy

 

April 30, 2020 contract amounts:April 30, 2020 contract amounts:SellBuy

Euro

 

$

219,910

 

 

$

90,043

 

Euro$110,114 $182,146 

British pound

 

 

20,542

 

 

 

45,955

 

British pound18,987 58,543 

Japanese yen

 

 

32,560

 

 

 

48,670

 

Japanese yen16,301 31,934 

Australian dollar

 

 

350

 

 

 

7,683

 

Australian dollar327 7,647 

Hong Kong dollar

 

 

1,209

 

 

 

136,818

 

Hong Kong dollar53,935 60,737 

Singapore dollar

 

 

782

 

 

 

15,449

 

Singapore dollar1,082 15,620 

Others

 

 

3,460

 

 

 

63,388

 

Others3,995 61,286 

Total

 

$

278,813

 

 

$

408,006

 

Total$204,741 $417,913 

We are exposed to credit-related losses in the event of nonperformance by counterparties to financial instruments. These financial instruments include cash deposits and foreign currency forward contracts. We periodically monitor the credit ratings of these counterparties in order to minimize our exposure. Our customers represent a wide variety of industries and geographic regions. For the ninethree and six months ended July 31,April 30, 2021 and 2020, and 2019, there were no significant concentrations of credit risk.

14.

Leases

We review new contracts to determine if the contracts include a lease. To the extent a lease agreement includes an extension option that is reasonably certain to be exercised, we have recognized those amounts as part of the right-of-use assets and lease liabilities. We combine lease and non-lease components, such as common area maintenance, in the calculation of the lease assets and related liabilities. As most lease agreements do not provide an implicit rate, we use an incremental borrowing rate (IBR) based on information available at the lease commencement date in determining the present value of lease payments and to help classify the lease as operating or financing. We calculate the IBR based on a bond yield curve which considers secured borrowing rates based on our credit rating and current economic environment, as well as other publicly available data.

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Nordson Corporation

We lease certain manufacturing facilities, warehouse space, machinery and equipment, and vehicles.  We often have options to renew lease terms for buildings and other assets.  We evaluate renewal and termination options at the lease commencement date to determine if we are reasonably certain to exercise the option on the basis of economic factors.  Leases with an initial term of 12 months or less (short-term leases) are not recorded on the Consolidated Balance Sheet.  Lease expense for operating leases is recognized on a straight-line basis over the lease term, with variable lease payments recognized in the period those payments occur.  Variable payments for leases primarily relate to future rates or amounts, miles, or other quantifiable usage factors which are not determinable at the time the lease agreement commences. Finance lease assets are recorded in Property, plant, and equipment – net on the Consolidated Balance Sheet. As of July 31, 2020, we have no material leases that have yet to commence.

Additional lease information is summarized below for the three and nine months ended July 31, 2020:

 

 

Three months ended

 

 

Nine months ended

 

 

 

July 31, 2020

 

 

July 31, 2020

 

 

 

Finance Leases

 

 

Operating Leases

 

 

Finance Leases

 

 

Operating Leases

 

Amortization of right of use assets

 

$

1,779

 

 

$

 

 

$

5,293

 

 

$

 

Interest

 

 

93

 

 

 

 

 

 

266

 

 

 

 

Lease cost(1)

 

 

1,872

 

 

 

5,406

 

 

 

5,559

 

 

 

16,073

 

Short-term and variable lease cost(1)

 

 

200

 

 

 

617

 

 

 

1,023

 

 

 

1,917

 

Total lease cost

 

$

2,072

 

 

$

6,023

 

 

$

6,582

 

 

$

18,000

 

Long-term debt

(1)

Lease costs are recorded in both Cost of sales and Selling and administrative expenses on the Consolidated Statements of Income.

Supplemental cash flow information is summarized below for the nine months ended July 31, 2020:

 

 

Finance Leases

 

 

Operating Leases

 

Cash outflows for leases

 

$

5,814

 

 

$

15,935

 

Weighted average remaining lease term (years)

 

4.72 years

 

 

10.48 years

 

Weighted average discount rate

 

 

2.51

%

 

 

1.69

%

The following table reconciles the undiscounted cash flows for five years and thereafter to the operating and finance lease liabilities recognized on the statement of financial position as of July 31, 2020.  The reconciliation excludes short-term leases that are not recognized on the Consolidated Balance Sheet.

Year:

 

Finance Leases

 

 

Operating Leases

 

2020

 

$

6,479

 

 

$

20,709

 

2021

 

 

4,445

 

 

 

19,056

 

2022

 

 

2,735

 

 

 

16,106

 

2023

 

 

1,130

 

 

 

14,163

 

2024

 

 

669

 

 

 

12,160

 

Later years

 

 

3,210

 

 

 

68,085

 

Total minimum lease payments

 

$

18,668

 

 

$

150,279

 

Amounts representing interest

 

 

1,462

 

 

 

14,034

 

Present value of minimum lease payments

 

$

17,206

 

 

$

136,245

 

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15.

Long-term debt

A summary of long-term debt is as follows:

 April 30, 2021October 31, 2020
Revolving credit agreement, due 2024$4,899 $
Senior notes, due 2021-2025109,900 109,900 
Senior notes, due 2021-202785,714 85,714 
Senior notes, due 2023-2030350,000 350,000 
Term loan, due 20240 255,000 
Euro loan, due 2023318,473 308,642 
 868,986 1,109,256 
Less current maturities38,043 38,043 
Less unamortized debt issuance costs1,899 3,261 
Long-term maturities$829,044 $1,067,952 
Revolving credit agreement, due 2024

— In April 2019, we entered into a $850,000 unsecured multi-currency credit facility with a group of banks, which amended, restated and extended our existing syndicated revolving credit agreement that was scheduled to expire in February 2020. This facility has a five-year term and includes a $75,000 subfacility for swing-line loans. It expires in April 2024. We were in compliance with all covenants at April 30, 2021, and the amount we could borrow under the facility was not limited by any debt covenants. 

 

 

July 31, 2020

 

 

October 31, 2019

 

Senior notes, due 2020-2025

 

$

109,900

 

 

$

140,800

 

Senior notes, due 2020-2027

 

 

85,714

 

 

 

92,857

 

Senior notes, due 2023-2030

 

 

350,000

 

 

 

350,000

 

Term loan, due 2022-2024

 

 

405,000

 

 

 

505,000

 

Euro loan, due 2023

 

 

312,022

 

 

 

128,219

 

Private shelf facility, due 2020

 

 

5,556

 

 

 

30,556

 

Development loans, due 2020-2026

 

 

 

 

 

951

 

 

 

 

1,268,192

 

 

 

1,248,383

 

Less current maturities

 

 

43,598

 

 

 

168,738

 

Less unamortized debt issuance costs

 

 

3,512

 

 

 

4,241

 

Long-term maturities

 

$

1,221,082

 

 

$

1,075,404

 

Senior notes, due 2021-2025 — These unsecured fixed-rate notes entered into in 2012 with a group of insurance companies had a remaining weighted-average life of 1.83 years. The weighted-average interest rate at April 30, 2021 was 3.07 percent.

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Senior notes, due 2021-2027 — These unsecured fixed-rate notes entered into in 2015 with a group of insurance companies had a remaining weighted-average life of 3.41 years. The weighted-average interest rate at April 30, 2021 was 3.06 percent.
Senior notes, due 2023-2030 These unsecured fixed-rate notes entered into in 2018 with a group of insurance companies had a remaining weighted-average life of 4.55 years. The weighted-average interest rate at April 30, 2021 was 3.90 percent.
Term loan, due 2024 —  In April 2019, we amended, restated and extended the term of our existing $605,000 term loan facility with a group of banks. There was no outstanding balance at April 30, 2021, as it was fully repaid and terminated in the second quarter of 2021.
Euro loan, due 2023 In March 2020 we amended, restated and extended the term of our existing term loan facility with Bank of America Merrill Lynch International Limited. The interest rate is variable based on the EURIBOR rate. The Term Loan Agreement provides for the following term loans due in two tranches: € 115,000€115,000 is due in March 2023 and an additional €150,000 that was drawn down in March 2020 and is due in March 2023. The weighted average interest rate at July 31, 2020April 30, 2021 was 0.71%.  At July 31, 2020, the balance outstanding was € 265,000 ($312,022). percent. We were in compliance with all covenants at July 31, 2020.  

In April 2019, we amended, restated and extended the term of our existing $605,000 term loan facility with a group of banks. The interest rate is variable based upon the LIBOR rate. At July 31, 2020, $405,000 was outstanding under this facility. The Term Loan Agreement provides for the following term loans in two tranches:  $200,000 due in September 2022, and $205,000 due in March 2024.   The weighted average interest rate for borrowings under this agreement was 0.82% at July 31, 2020.  We were in compliance with all covenants at July 31, 2020.

In April 2019, we entered into a $850,000 unsecured, multicurrency credit facility with a group of banks, which amended, restated and extended our existing syndicated revolving credit agreement that was scheduled to expire in February 2020. This facility has a 30, 2021.

Contingencies
five-year term and includes a $75,000 subfacility for swing-line loans.  It expires in April 2024. We had 0 balances outstanding under this facility at July 31, 2020 and October 31, 2019. We were in compliance with all covenants at July 31, 2020, and the amount we could borrow under the facility would not have been limited by any debt covenants.

In June 2018, we entered into a Note Purchase Agreement with a group of insurance companies under which we sold $350,000 of Senior Notes to the insurance companies and their affiliates. The notes start to mature between June 2023 and June 2030 and bear interest at fixed rates between 3.71% and 4.17%.  We were in compliance with all covenants at July 31, 2020.

In July 2015, we entered into a Note Purchase Agreement with a group of insurance companies under which we sold $100,000 of unsecured Senior Notes.  At July 31, 2020 and October 31, 2019, $85,714 and $92,857, respectively, was outstanding under this agreement. Existing notes mature between July 2021 and July 2027 and bear interest at fixed rates between 2.89% and 3.19%.  We were in compliance with all covenants at July 31, 2020.

In 2012, we entered into a Note Purchase Agreement with a group of insurance companies under which we sold $200,000 of unsecured Senior Notes.  At July 31, 2020 and October 31, 2019, $109,900 and $140,800, respectively, was outstanding under this agreement. Existing notes mature between July 2021 and July 2025 and bear interest at fixed rates between 2.62% and 3.13%.  We were in compliance with all covenants at July 31, 2020.

We entered into a $150,000 three-year Note Purchase and Private Shelf agreement with New York Life Investment Management LLC in 2011.  In 2015, the amount of the facility was increased to $180,000, and in 2016 it was increased to $200,000.   At July 31, 2020 and October 31, 2019, $5,556 and $30,556, respectively, was outstanding under this facility. Existing notes mature in September 2020 and bear interest at a fixed rate of 2.21%.  We were in compliance with all covenants at July 31, 2020. 

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16.

Contingencies

We are involved in pending or potential litigation regarding environmental, product liability, patent, contract, employee and other matters arising from the normal course of business.  Including the litigation and environmental matters discussed below, after consultation with legal counsel, we do not believe that losses in excess of the amounts we have accrued would have a material adverse effect on our financial condition, quarterly or annual operating results or cash flows.

Class Action Litigation

On February 22, 2019, a former employee, Mr. Ortiz, filed a purported class action lawsuit in the San Diego County Superior Court, California, against Nordson Asymtek, Inc. and Nordson Corporation, alleging various violations of the California Labor Code.  Plaintiff seeks, among other things, an unspecified amount for unpaid wages, actual, consequential and incidental losses, penalties, and attorneys’ fees and costs.  Following mediation in June 2020, the parties agreed to settle the lawsuit, subject to the execution of a written settlement agreement and court approval. If the settlement agreement is approved, the class action lawsuit will be resolved. Management believes, based on currently available information, that the ultimate outcome of the proceeding described above will not have a material adverse effecton the Company’s financial condition or results of operations.

Environmental

We have voluntarily agreed with the City of New Richmond, Wisconsin and other Potentially Responsible Parties to share costs associated with the remediation of the City of New Richmond municipal landfill (the “Site”) and the construction of a potable water delivery system serving the impacted area down gradient of the Site. At July 31, 2020April 30, 2021 and October 31, 2019,2020, our accrual for the ongoing operation, maintenance and monitoring obligation at the Site was $360$319 and $401,$360, respectively. The liability for environmental remediation represents management’s best estimate of the probable and reasonably estimable undiscounted costs related to known remediation obligations. The accuracy of our estimate of environmental liability is affected by several uncertainties such as additional requirements that may be identified in connection with remedial activities, the complexity and evolution of environmental laws and regulations, and the identification of presently unknown remediation requirements. Consequently, our liability could be greater than our current estimate.  However, we do not expect that the costs associated with remediation will have a material adverse effect on our financial condition or results of operations.

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ITEM 2.

ITEM 2.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is Management's discussion and analysis of certain significant factors affecting our financial condition and results of operations for the periods included in the accompanying condensed consolidated financial statements.

Overview

Founded in 1954, Nordson Corporation delivers precision technology solutions to help customers succeed worldwide. We engineer, manufacture and market differentiated products and systems used for precision dispensing, applying and controlling of adhesives, coatings, sealants, biomaterials, polymers, plastics and other materials; fluid management; test and inspection; and UV curing and plasma surface treatment. 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. We have approximately 7,600 employees and direct operations in more than 35 countries.

Segment Update

As described in Note 11, effective

Effective in the second quarter of 2020, we made changes to realign our management team and our operating segments. This realignment will enable us to better serve global customers and markets, to more efficiently leverage technology synergies, to operate divisions of significant size in a consistent and focused way and to position ourselves for our next chapter of profitable growth. The revised segments better reflect how we manage the Company, allocate resources, and assess performance of the businesses.

We realigned our former three operating segments into two: Industrial Precision Solutions (IPS) and Advanced Technology Solutions. Existing product lines were unchanged as part of this new structure.

Industrial Precision Solutions:This segment combinesRefer to our former Adhesive Dispensing Systems (ADS) and Industrial Coating Systems (ICS) businesses. IPS enhances the technology synergies between ADS and ICS to deliver proprietary dispensing and processing technology, to diverse end markets. Product lines reduce material consumption, increase line efficiency and enhance product brand and appearance. Components are usedOperating segments footnote for dispensing adhesives, coatings, paint, finishes, sealants and other materials. This segment primarily serves the industrial, consumer durables and non-durables markets.

Advanced Technology Solutions:This segment integrates our proprietary product technologies found in progressive stages of a customer’s production processes, such as surface treatment, precisely controlled dispensing of material and post-dispense test and inspection to ensure quality. Related single-use plastic molded syringes, cartridges, tips, fluid connection components, tubing, balloons and catheters are used to dispense or control fluids in production processes or within customers’ end products. This segment predominantly serves customers in the electronics, medical and related high-tech industrial markets.

further discussion.

The financial information presented herein reflects the impact of the preceding changes and prior periods have been revised to reflect these changes.

COVID-19 Update

We continue to support multiple “critical infrastructure” sectors by manufacturing materials and products needed for medical supply chains, packaging, transportation, energy, communications, and other critical infrastructure industries.  We have benefited from our geographical and product diversification as the end markets we serve have remained resilient in response to the COVID-19 pandemic.  Despite overall demand remaining modestly below prior year levels heading into the fourth quarter, during the third quarter, we experienced a reduction in demand in certain medical product lines due to elective surgeries being reduced as a result of the COVID-19 pandemic along with a reduction in demand in our industrial end markets due to the uncertainty ahead. We continue to actively monitor the impact of the COVID-19 pandemic, which may negatively impact our business and results of operations for the fourth quarter2021 and potentially beyond. However, the full extent of the COVID-19 pandemic on our operations and the markets we serve is highly uncertain and will depend largely on future developments, related toincluding the pandemic, includingavailability and effectiveness of vaccines and their widespread adoption, new information which may emerge concerning the severity of the pandemic, including the evolving strains of COVID-19, some of which may be more transmissible or virulent than the initial variant, and actions by government authorities to contain the outbreakpandemic or treatmitigate its impact, amongeconomic, public health and other things.impacts. These developments are constantly evolving and cannot be accurately predicted. We continue to invest in the business, people, and strategies necessary to achieve our long-term priorities as we focus on driving profitable growth. We have continued to operate during the course of the COVID-19 pandemic in all our production facilities, having taken the recommended public health measures to ensure worker and workplace safety. As a result, there have been unfavorable impacts on our manufacturing efficiencies. Additionally, we are takingcontinue to take steps to offset cost increases from pandemic-related supply chain disruptions.  

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For more information about the risks to the Company as a result of the COVID-19 pandemic and its potential impact on our ability to operate, results of operations, financial condition, liquidity and capital investments, see “Part II, Item 1A. Risk Factors” in this report.

Critical Accounting Policies and Estimates

The preparation and fair presentation of the consolidated unaudited interim financial statements and accompanying notes included in this report are the responsibility of management. The financial statements and footnotes have been prepared in accordance with U.S. generally accepted accounting principles for interim financial statements and contain certain amounts that were based upon management’s best estimates, judgments and assumptions that were believed to be reasonable under the circumstances. On an ongoing basis, we evaluate the accounting policies and estimates used to prepare our financial statements.  Estimates are based on historical experience, judgments and assumptions believed to be reasonable under current facts and circumstances.  Actual amounts and results could differ from these estimates used by management.

A comprehensive discussion of the Company’s critical accounting policies and management estimates and significant accounting policies followed in the preparation of the financial statements is included in Item 7 of our Annual Report on Form 10-K for the year ended October 31, 2019. Other than the adoption of the new lease standard as described in Note 2 of this report, there2020 (the 2020 Form 10-K). There have been no significant changes in critical accounting policies, management estimates or accounting policies followed since the year ended October 31, 2019.

2020.

Results of Operations

Three months ended July 31, 2020

April 30, 2021

Worldwide sales for the three months ended July 31, 2020April 30, 2021 were $538,181 a decrease$589,538 an increase of 3.9%11.3% from sales of $559,746$529,478 for the comparable period of 2019. Sales volume decreased 3.2% and unfavorable currency effects decreased sales by 0.7%.2020. The decreaseincrease consisted of a 10.4% increase in organic sales volume, consistedfavorable effect from currency translation of 4.0% from an organic volume decrease,3.7%, partially offset by 0.8% sales growtha net 2.8% decrease due to acquisitions and divestitures. Growth in electronics and consumer non-durable end markets, as well as strengthening medical and industrial end markets, were the Fluortek acquisition.  While sales were likely negatively impacted by the general decline in the global business environment due to the pandemic, the portionprimary drivers of the sales decline attributable to the pandemic is not determinable.

this performance.

Sales outside the United States accounted for 65.9%65.6% of our sales in the three months ended July 31, 2020April 30, 2021 compared to 66.0%64.3% in the comparable period of 2019.2020. On a geographic basis, sales in the United States were $183,508,$202,924, an increase of 7.4% compared to 2020 consisting of a 12.1% increase in organic sales volume and a net 4.7% decrease from acquisitions and divestitures. In the Americas region, sales were $44,914, an increase of 22.5% from 2020, consisting of an organic sales volume increase of 15.1%, a
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net increase of net 5.4% due to acquisitions and divestitures, and favorable currency effects of 2.0%. In Europe, sales were $156,451, an increase of 15.0% from 2020, consisting of favorable currency effects of 9.0%, and organic sales volume increase of 8.3%, partially offset by a net 2.3% decrease due to acquisitions and divestitures. In Japan, sales were $27,852, a decrease of 3.6%11.8% from the comparable period2020, consisting of 2019. The decrease in sales was due to an organic sales volume decrease of 4.4%,8.5% and a 4.0% decrease due to acquisitions and divestitures, partially offset by a 0.8% increase from acquisitions. Sales in the Americas region were $38,265, a decrease of 18.7% from the comparable period of 2019, with volume decreasing 13.3% and unfavorablefavorable currency effects of 5.4%0.7%. The decrease inIn the Asia Pacific region, sales volume consisted of lower organic volume of 17.5%, offset by a 4.2% increase from acquisitions. Sales in Europe were $132,107, a decrease of 7.9% from the comparable period of 2019, with volume decreasing 7.3% and unfavorable currency effects of 0.6%. The decrease in sales volume consisted of lower organic volume of 7.6%, offset by a 0.3% increase from acquisitions. Sales in Japan were $31,226,$157,397, an increase of 2.4%15.5% from the comparable period2020, consisting of 2019, withan organic sales volume increasing 1.0%,increase of 13.6% and favorable currency effects of 1.4%. The increase in sales volume consisted of organic volume growth of 0.6%4.4%, and a 0.4% increase from acquisitions.  Sales in the Asia Pacific region were $153,075, an increase of 3.2% from the comparable period of 2019, with volume increasing 4.0%,partially offset by unfavorable currency effects of 0.8%. The increase in sales volume consisted of organic volume growth of 3.7%,a net 2.5% decrease due to acquisitions and a 0.3% increase from acquisitions.

divestitures.

Cost of sales for the three months ended July 31, 2020April 30, 2021 were $257,373, slightly$251,839, up from $257,123$239,880 in the comparable period of 2019.2020. Gross profit, expressed as a percentage of sales, decreasedincreased to 52.2% for this same57.3% from 54.7% in the comparable period from 54.1% in 2019. Of the 1.9of 2020. The 2.6 percentage point declineincrease in gross margin unfavorablewas primarily driven by the divestiture of the screws and barrel product mixline, which contributed 1.21.8 percentage points, unfavorable currency translation effects contributed 0.3 of a percentage point, and an inventory step-up related to the Fluortek acquisition as well as higher severance costs each contributed a negative impact of 0.2 of a percentage point, respectively. Severance costs were incurred in both of our segments as part of cost structure simplification actions made to improve operational efficiencies.

plus favorable sales volume leverage.

Selling and administrative expenses for the three months ended July 31, 2020April 30, 2021 were $168,753, down$171,308, up from $172,347$164,569 in the comparable period of 2019.2020. The 2.1% decrease includes a 5.0% decrease related to the base business and 0.5% due to favorable4.1% increase was primarily driven by unfavorable currency translation effects.  This improvement was partiallyeffects of 3.1 percentage points plus increased variable incentive compensation offset by 2.5% due reductions resulting from the divestiture and structural cost reduction actions taken in 2020.
Operating profit increased from $125,029 in the three months ended April 30, 2020 to higher severance costs and 0.9% due to$166,391 in the first-year effectcomparable period of acquisitions. Selling and administrative expenses 2021. Operating profit as a percentage of sales increased to 31.4% for28.2% for the three months ended July 31, 2020April 30, 2021 compared to 30.8% 23.6% in 2019.the comparable period of 2020. The 0.6% percentage point increase includes a 1.0% percentage point increase due to higher severance costsimproved profitability was largely driven by the product line divestiture, which improved the sales mix, and a 0.3% percentage point increase due toleveraging the first-year effect of acquisitions, which was partially offset by a 0.7% percentage point decrease in base business costs.

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Nordson Corporation

Operating profit as a percentage of sales decreased to 20.8% for the three months ended July 31, 2020 compared to 23.3% in 2019.  Of the 2.5 percentage point decrease, unfavorable absorption due to lower10.4% organic sales volume and unfavorable product mix contributed 1.5 percentage points, higher severance costs contributed 1.0 percentage point, unfavorable currency translation effects contributed 0.3 of a percentage point, and the first-year effect of acquisitions and an inventory step-up related to the Fluortek acquisition each unfavorably contributed a negative impact of 0.2 of a percentage point, respectively.  These were partially offset by a positive 0.7 percentage point impact of lower base business costs.growth.

Interest expense for the three months ended July 31, 2020April 30, 2021 was $7,314, down from $11,500 for$7,139, compared to $8,293 in the comparable period of 2019.  This2020. The decrease was primarily due to lower average debt levels and lower variable interest rates compared to the prior year.

year period. Other expense was $9,668 for the three months ended July 31, 2020,$3,843 compared to other income of $210 for the comparable period of 2019.$429 in 2020 primarily due to higher foreign currency losses. Included in the current quarter’syear other expense were pension costs of $5,326$3,499 and $3,554 of$777 in foreign currency losses. Included in the prior year’s other incomeyear were $1,382pension costs of $2,851, partially offset by foreign currency gains and $2,024 of pension costs.  

$2,992.

Net income for the three months ended July 31, 2020,April 30, 2021 was $86,981,$124,144, or $1.49$2.12 per diluted share, compared to $93,928,$92,079, or $1.62$1.58 per diluted share, in the same period of 2019.2020. This represents a 7.4% decrease34.8% increase in net income, and a 8.0% decrease34.2% increase in diluted earnings per share. 

Industrial Precision Solutions

Sales of the Industrial Precision Solutions segment forwere $298,775 in the three months ended July 31, 2020 were $288,965 compared to $306,648April 30, 2021, an increase of 5.8% from sales in the comparable period of 2019, a decrease2020 of $17,683, or 5.8%.$282,274. The decreaseincrease was due to anthe result of organic sales volume decreaseincrease of 4.5%8.3% and unfavorablefavorable currency effects that decreasedincreased sales by 1.3%.  Growth in Asia geographic regions plus stable demand from product lines serving consumers in the non-durable end markets were4.8%, partially offset by weaknessa 7.3% decrease due to divestitures. The organic sales volume increase was driven by strong global demand in sales of product lines servingconsumer non-durable and industrial markets primarily in the United States and Europe.  

For the Industrial Precision Solutions segment, operatingend markets.

Operating profit as a percentage of sales decreasedincreased to 25.9%34.9% for the three months ended July 31, 2020April 30, 2021 compared to 29.0%27.1% in 2019.  Of the 3.1comparable period of 2020. The 7.8 percentage point decreaseimprovement in operating margin 2.5was principally due to favorable absorption and leverage related to higher sales volume which contributed 3.9 percentage points wereand a favorable sales mix primarily due to unfavorable absorption due to lower sales volume and unfavorable product mix, 0.8the divestiture of a3.9 percentage point was due to higher severance costs and 0.5 of a percentage point was due to unfavorable currency translation effects.  These were partially offset by a positive 0.7 of a percentage point impact due to lower base business costs.

points.

Advanced Technology Solutions

Sales of the Advanced Technology Solutions segment forwere $290,763 in the three months ended July 31, 2020 were $249,216 compared to $253,098April 30, 2021, an increase of 17.6% from sales in the comparable period of 2019, a decrease2020 of $3,882, or 1.5%.$247,204. The increase was the result of organic sales volume decrease consistedincrease of 3.3%12.7%, favorable currency effects of 2.5% and a 2.4% increase from an organic volume decrease, partially offset by a 1.8% increase due to acquisitions. Sales volume increasesgrowth occurred in all product lines in particular test and inspection and fluid dispense product lines. This sales growth was driven by test and inspection product lines serving electronics end markets and stable demand in certain medical product lines were offset by weakness in fluid dispensemanagement product lines serving medical and industrial end markets. The stable demandGrowth was seen in medical is reflective of strength in some product lines, offset by meaningful softness in other medical products more closely tied to elective surgeries, which have been reduced as a result of the COVID-19 pandemic.  

For the Advanced Technology Solutions segment, operatingall geographic regions.

Operating profit as a percentage of sales decreasedincreased to 20.0%26.3% for the three months ended July 31, 2020April 30, 2021 compared to 21.2%23.7% in 2019.  Of the 1.2comparable period of 2020. The 2.6 percentage point declineimprovement in operating margin 0.6 of a percentage point was primarily due to higher severance costs, 0.6 of a percentage point was due to the first-year effect of acquisitions, 0.4 of  a percentage point was due to an inventory step-upfavorable selling and administrative expense leverage related to the Fluortek acquisition and 0.2 of a percentage point was due to unfavorable absorption due to lower12.7% organic sales volume and unfavorable product mix.  These were partially offset by a positive 0.6 of a percentage point impact due to lower base business costs.

Nineincrease.

Six months ended July 31, 2020

April 30, 2021

Worldwide sales for the ninesix months ended July 31, 2020April 30, 2021 were $1,562,575, a 2.9% decrease$1,116,104, an increase of 9.0% from sales of $1,608,775$1,024,394 for the comparable period of 2019.2020. The decrease was due to lowerincrease consisted of a 7.0% increase in organic sales volume, a favorable effect from currency translation of 2.0%3.3%, and unfavorable currency effects that decreased sales by 0.9%.  The decrease in sales volume consisted of an organic volume decrease of 2.5%,partially offset by a 0.5% increase from acquisitions.  

net 1.3% decrease due to acquisitions and divestitures. Strength in consumer non-durable and industrial end markets were the primary drivers of the growth.

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Sales outside the United States accounted for 64.1%65.2% of our sales in the ninesix months ended July 31, 2020April 30, 2021 compared to 65.7%63.2% in the comparable period of 2019.2020. On a geographic basis, sales in the United States were $560,941,$388,240, an increase of 1.7% from 2019. The2.9% compared to 2020 consisting of a 5.0% increase in organic sales was due tovolume, partially offset by a net 2.1% decrease from acquisitions and divestitures. In the Americas region, sales were $81,052, an increase of 19.6% from 2020, consisting of an organic sales volume increase of 1.2%13.8% and a 0.5%net increase from acquisitions. Sales in the Americas region were $106,021, a decrease of 13.9% from 2019, with sales volume decreasing 10.2%,6.3% due to acquisitions and divestitures, partially offset by unfavorable currency effects of 3.7%0.5%. The decrease inIn Europe, sales were $291,602, an increase of 11.1% from 2020, consisting of favorable currency effects of 7.9% and organic sales volume consistedincrease of an organic volume decrease of 12.0%4.8%, partially offset by a 1.8% increasenet 1.6% decrease from acquisitions. Sales in Europeacquisitions and divestitures. In Japan, sales were $394,554,$54,967, a decrease of 7.3%7.0% from 2019, with sales volume decreasing 5.5% and unfavorable currency effectsthe comparable period of 1.8%.  The decrease in sales volume consisted2020, consisting of an organic sales volume decrease of 6.0%6.7% and a net 2.9% decrease due to acquisitions and divestitures, partially offset by a 0.5% increase from acquisitions. Sales in Japan were $90,353, an increase of 0.9% from 2019, with sales volume decreasing 0.8%, offset by favorable currency effects of 1.7%2.6%. The decrease in sales volume consisted of an organic volume decrease of 1.1% partially offset by a 0.3% increase from acquisitions. Sales inIn the Asia Pacific region, sales were $410,706, a decrease$300,243, an increase of 2.0%16.5% from 2019, with2020, consisting of an organic sales volume decreasing 1.0%increase of 13.5% and unfavorablefavorable currency effects of 1.0%. The decrease in sales volume consisted of an organic volume decrease of 1.3%4.4%, partially offset by a 0.3% increasenet 1.3% decrease from acquisitions.  

acquisitions and divestitures.

Cost of sales for the ninesix months ended July 31, 2020April 30, 2021 were $728,975, down$488,445, up from $735,647$471,602 in the comparable period of 2019.2020. Gross profit, expressed as a percentage of sales, decreasedincreased to 53.3% for this same56.2% from 54.0% in the comparable period from 54.3% in 2019.  Of the 1.0of 2020. The 2.2 percentage point declineincrease in gross margin unfavorablewas driven by a favorable product mix contributed 0.5impact, principally driven by a divestiture, of a1.5 percentage point, unfavorable currency translation effects contributed 0.3 of a percentage point,points and an inventory step-up related to the Fluortek acquisition as well as higher severance costs each contributed a negative impact of 0.1 of a percentage point, respectively.

favorable sales volume leverage.

Selling and administrative expenses for the ninesix months ended July 31, 2020April 30, 2021 were $521,423,$352,243, down from $529,675$352,670 in the comparable period of 2019.  The 1.6%2020. Of the 0.1% decrease, includes a 2.6% decreasenet favorable impact principally due to divestitures contributed 1.0 percentage point, lower services and employee related costs contributed 0.9 of a percentage point, and lower costs related to the base business and 0.8% due to favorable currency translation effects.  This improvement wascost structure simplification actions contributed 0.8 of a percentage point. These improvements were partially offset by 1.1%2.6 percentage points due to higher severance costs and 0.7% due unfavorable currency translation effects.
Operating profit increased from $200,122 in the six months ended April 30, 2020 to $275,416 in the first-year effectcomparable period of acquisitions. Selling and administrative expenses2021. Operating profit as a percentage of sales increased to 33.4% for24.7% for the ninesix months ended July 31, 2020April 30, 2021 compared to 32.9% 19.5% in 2019.the comparable period of 2020. The 0.5% percentage point5.2% increase includes a 0.5% percentage point increase due to higher severance costs and a 0.1% percentage point increase due toin operating margin was driven by the first-year effect of acquisitions, which was partially offset by a 0.1% percentage point decrease in base business costs.

Operating profit as a percentage of sales decreased to 20.0% for the nine months ended July 31, 2020 compared to 21.3% in 2019.  Of the 1.3 percentage point decrease, unfavorable absorption due to lower7.0% organic sales volume and unfavorable product mix contributed 0.5 of a percentage point, higher severance costs contributed 0.5 of a percentage point, unfavorable currency translation effects contributed 0.3 of a percentage point, and an inventory step-up related to the Fluortek acquisitionincrease and the first-year effect of acquisitions each contributed a negative impact of 0.1 of a percentage point, respectively.  These were partially offset by a positive 0.2 of a percentage point due to lower base business costs.

favorable sales mix from the divestiture, plus leverage on the relatively flat selling and administrative cost structure.

Interest expense for the ninesix months ended July 31, 2020April 30, 2021 was $25,348, down from $36,238 for$14,071, compared to $18,034 in the comparable period of 2019. This2020. The decrease was primarily due to lower average debt levels and lower variable interest rates compared to the prior year.

year period. Other expense was $12,943 for the nine months ended July 31, 2020,$8,504 compared to $4,546 for$3,275 in the comparable period of 2019.2020 due to higher foreign currency losses. Included in the current year’syear other expense were pension costs of $10,941,$4,975 and $562 of$3,537 in foreign currency losses. Included in the prior year’s other expenseyear were $5,004 of pension costs and $1,036 of $5,615, partially offset by foreign currency gains.

gains of $2,992.

Net income for the ninesix months ended July 31, 2020, net incomeApril 30, 2021 was $231,064,$201,726, or $3.96$3.44 per diluted share, compared to $234,418,$144,083, or $4.03$2.47 per diluted share, in the same period of 2019.2020. This represents a 1.4% decrease40.0% increase in net income, and a 1.7% decrease39.3% increase in diluted earnings per share.

Industrial Precision Solutions

Sales of the Industrial Precision Solutions segment forwere $587,191 in the ninesix months ended July 31, 2020 were $835,038 compared to $871,925April 30, 2021, an increase of 7.5% from sales in the comparable period of 2019,2020 of $546,073. The increase was the result of an increase of 8.0% in organic sales volume and favorable currency effects that increased sales by 4.2%, partially offset by a decrease of $36,887, or 4.2%.  The decrease was4.7% due to an organic sales volume decrease of 2.8%, and unfavorable currency effects that decreased sales by 1.4%.divestitures. Growth in Asia geographic regions plus stable demand from product lines serving consumers in the non-durable and industrial end markets, wereparticularly in the Asia Pacific and Europe regions, was partially offset by weakness in sales of product lines serving industrial markets primarily in theJapan and United States and Europe.  

For the Industrial Precision Solutions segment, operatingregions.

Operating profit as a percentage of sales decreasedincreased to 24.9%32.0% for the ninesix months ended July 31, 2020April 30, 2021 compared to 26.3%24.3% in 2019.  the comparable period of 2020. Of the 1.47.7 percentage point declineimprovement in operating margin, 0.8 of a percentage point was due to unfavorable favorable absorption due to lowerhigher sales volume and unfavorable productthe favorable sales mix 0.4 ofprimarily due to the divestiture combined for a 3.5 percentage point was due to unfavorable currency translation effectsexpansion in gross profit, plus selling and 0.2 of aadministrative expense leverage contributed and additional 4.2 percentage point was due to higher severance costs.

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Nordson Corporation

points.

Advanced Technology Solutions

Sales of the Advanced Technology Solutions segment forwere $528,913 in the ninesix months ended July 31, 2020 were $727,537 compared to $736,850April 30, 2021, an increase of 10.6% from sales in the comparable period of 2019, a decrease2020 of $9,313, or 1.3%.$478,321. The decreaseincrease was due to athe result of an organic sales volume decreaseincrease of 1.0 %,6.0%, a 2.3% increase from acquisitions and unfavorablefavorable currency effects that decreasedincreased sales by 0.3%2.3%. The sales volume decrease consisted of an organic volume decrease of 2.1%, partially offset by 1.1%Sales growth from acquisitions.  Sales volume increasesoccurred in all product lines, in particular test and inspection product lines serving electronics end markets and stable demand in certain medical product lines were offset by weakness in fluid dispense product lines serving industrial end markets.  The stable demand in medical is reflective of strength in some product lines, offset by meaningful softness in other medical products more closely tied to elective surgeries, which have been reduced as a result of the COVID-19 pandemic.  

For the Advanced Technology Solutions segment, operatinglines.

Operating profit as a percentage of sales decreasedincreased to 19.4%23.4% for the ninesix months ended July 31, 2020April 30, 2021 compared to 20.5%19.0% in 2019.  Of the 1.1comparable period of 2020. The 4.4 percentage point decreaseimprovement in operating margin higher severance costswas principally driven by greater selling and administrative expense leverage which contributed 0.6 of a3.4 percentage point, unfavorable absorption due to lowerpoints associated with the sales volume growth and unfavorable product mix contributed 0.3cost structure simplification actions taken in the prior year.

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Table of a percentage point, inventory step-up related to the Fluortek acquisition contributed 0.1 of a percentage point, and the first-year effect of acquisitions and unfavorable currency translation effects each had a negative impact of 0.1 of a percentage point, respectively.  These were partially offset by a positive 0.1 of a percentage point impact due to lower base business costs.

Operating capacity for each of our segments can support fluctuations in order activity without significant changes in operating costs.  Changes in exchange rates can materially impact reported operating margins.  Operating margins for each segment were unfavorably impacted by a stronger dollar primarily against the Euro and Chinese Yuan during the first nine months of 2020 as compared to the same period in 2019.

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Nordson Corporation
Income taxes

We record our interim provision for income taxes based on our estimated annual effective tax rate, as well as certain items discrete to the current period. Significant judgment is involved regarding the application of global income tax laws and regulations and when projecting the jurisdictional mix of income. We have considered several factors in determining the probability of realizing deferred income tax assets which include forecasted operating earnings, available tax planning strategies and the time period over which the temporary differences will reverse. We review our tax positions on a regular basis and adjust the balances as new information becomes available. The effective tax rate for the three and ninesix months ended July 31, 2020April 30, 2021 was 8.9%20.3% and 16.0%20.5%, respectively. The effective tax raterespectively, compared to 21.0% and 19.8%, respectively, for the three and nine months ended July 31, 2019 was 21.4% and 22.8%, respectively. The effective tax rate for the three and nine months ended July 31, 2020 was lower than the comparable priorperiods a year period primarily due to increased tax benefits from share-based payment transactions. 

ago.

Due to our share-based payment transactions, our income tax provision included a discrete tax benefit of $11,373$1,796 and $14,048$2,595 for the three and ninesix months ended July 31,April 30, 2021, respectively, compared to $138 and $2,675 in the comparable periods of 2020, respectively. Our income tax provision included a similar discrete tax benefit of $210 and $3,227 for the three and nine months ended July 31, 2019, respectively.

During the nine months ended July 31, 2019, a discrete tax expense of $4,866 was recorded to update the provisional amounts recognized in 2018 due to changes in interpretations and assumptions and the finalization of estimates related to the U.S. Tax Cuts and Jobs Act.

During the three months ended July 31, 2020 and July 31, 2019, we recorded a favorable adjustment to unrecognized tax benefits of $443 and $858, respectively.  In addition, during the three months ended July 31, 2020, there was an increase of $5,664 in unrecognized tax benefits and, if recognized, the gross unrecognized tax benefits would be offset against assets currently recorded in the Consolidated Balance Sheet.

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Foreign Currency Effects

In the aggregate, average exchange rates for 20202021 used to translate international sales and operating results into U.S. dollars were generally unfavorablefavorable comparedwith average exchange rates existing during 2019.2020, particularly due to a strengthening EURO and Chinese Yuan. It is not possible to precisely measure the impact on operating results arising from foreign currency exchange rate changes, because of changes in selling prices, sales volume, product mix and cost structure in each country in which we operate. However, if transactions for the three months ended July 31, 2020April 30, 2021 were translated at exchange rates in effect during the same period of 2019,2020, sales would have been approximately $4,000 higher$18,700 lower while third-party costs of sales and selling and administrative expenses would have been approximately $1,500 higher.$8,300 lower. If transactions for the ninesix months ended July 31, 2020April 30, 2021 were translated at exchange rates in effect during the same period of 2019,2020, sales would have been approximately $14,600 higher$32,500 lower while third-party costs of sales and selling and administrative expenses would have been approximately $6,600 higher.

$16,100 lower.

Financial Condition

Liquidity and Capital Resources

During the ninesix months ended July 31, 2020,April 30, 2021, cash and cash equivalents increased $70,619.decreased $74,973. Cash provided by operations during this period was $309,958,$247,714, compared to $236,431$218,179 for the ninesix months ended July 31, 2019.April 30, 2020. This increase was primarily due to higher net income. Changes in operating assets and liabilities decreasedincreased cash by $14,021$31,244 in the ninesix months ended July 31, 2020,April 30, 2021, compared to decreasingincreasing cash by $96,017$4,513 in the comparable period of 2019. The primary reasons for this increase was due to high liquidation of working capital and changes in deferred taxes between periods.

2020.

Cash used in investing activities was $163,192$13,681 for the ninesix months ended July 31, 2020,April 30, 2021, compared to $57,919$27,731 used in the comparable period of 2019. During the nine months ended July 31, 2020, cashwhich included capital expenditures of $125,260 was used$18,743 and $25,835 for the Fluortek acquisition while cash of $12,110 was used for the Optical acquisition in the comparable period of 2019. Capital expenditures in the nine months ended July 31, 2020 were $36,096, compared to $46,002 in 2019.

same periods, respectively.

Cash used in financing activities was $75,404$310,333 for the ninesix months ended July 31, 2020,April 30, 2021, compared to $129,607$30,987 used in the comparable period of 2019.2020. Net Proceedsrepayments of long-term debt were $1,740 during$250,101 in the ninesix months ended July 31, 2020,April 30, 2021, compared to net proceeds of long-term debt$39,822 for the same period of $36,009 in 2019.2020. Cash of $65,737$45,342 was used for dividend payments and cash of $51,897$30,274 was used for the purchase of treasury shares, associated with employee benefit plans in the current year period, compared to $60,325$43,878 and $118,124,$41,930, respectively, in the comparable period of 2019.2020. Issuance of common shares related to employee benefit plans generated $46,304$18,783 during the ninesix months ended July 31, 2020April 30, 2021 compared to $17,275$18,547 in 2019, resulting from recent executive retirement activity and increased stock option exercises.

the comparable period of 2020.

The following is a summary of significant changes in balance sheet captions from October 31, 20192020 to July 31, 2020.  Goodwill increased by $87,175 drivenApril 30, 2021. The decrease of $56,526 in pension obligations was primarily bydue to pension contributions during the Fluortek acquisition.  Refer to Note 3 for an explanationsecond quarter of the change in goodwill2021. Long-term debt decreased $238,908 primarily due to the Fluortek acquisition. Current maturities of long-term debt decreased $125,140 primarily driven by a payment of $100,000full repayment on our Term Loan Agreement and a $25,000 payment on notes issued under our agreement with New York Life which matured in July 2020. Long-term debt increased $145,678 primarily due to Euro loan borrowings during the period.

Contractual Obligations

In March 2020, we amended, restated and extended the term of our existing term loan facility with Bankdue 2024.

We believe that the combination of America Merrill Lynch International Limited.  The interest rate is variable based onpresent capital resources, cash from operations and unused financing sources are more than adequate to meet cash requirements for 2021. There are no significant restrictions limiting the EURIBOR rate.  The Term Loan Agreement provides fortransfer of funds from international subsidiaries to the following term loans in two tranches: € 115,000 due in March 2023 and an additional € 150,000 that was drawn down in March 2020 and is due in March 2023.  The weighted average interest rate at July 31, 2020 was 0.71%.  At July 31, 2020, the balance outstanding was €265,000 ($312,022).parent company. We were in compliance with all covenants at July 31, 2020.  

In April 2019, we amended, restated and extended the term30, 2021. Refer to our Long-term debt footnote for additional details regarding our debt outstanding.

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Table of our existing $605,000 term loan facility with a group of banks. The interest rate is variable based upon the LIBOR rate. At July 31, 2020, $405,000 was outstanding under this facility. The Term Loan Agreement provides for the following term loans in two tranches:  $200,000 due in September 2022, and $205,000 due in March 2024.   The weighted average interest rate for borrowings under this agreement was 0.82% at July 31, 2020.  We were in compliance with all covenants at July 31, 2020.

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In April 2019, we entered into a $850,000 unsecured, multicurrency credit facility with a group of banks, which amended, restated and extended our existing syndicated revolving credit agreement that was scheduled to expire in February 2020. This facility has a five-year term and includes a $75,000 subfacility for swing-line loans.  It expires in April 2024. We had no balances outstanding under this facility at July 31, 2020 and October 31, 2019. We were in compliance with all covenants at July 31, 2020, and the amount we could borrow under the facility would not have been limited by any debt covenants.

In June 2018, we entered into a Note Purchase Agreement with a group of insurance companies under which we sold $350,000 of Senior Notes to the insurance companies and their affiliates. The notes start to mature between June 2023 and June 2030 and bear interest at fixed rates between 3.71% and 4.17%.  We were in compliance with all covenants at July 31, 2020.

In July 2015, we entered into a Note Purchase Agreement with a group of insurance companies under which we sold $100,000 of unsecured Senior Notes.  At July 31, 2020 and October 31, 2019, $85,714 and $92,857, respectively, was outstanding under this agreement. Existing notes mature between July 2021 and July 2027 and bear interest at fixed rates between 2.89% and 3.19%.  We were in compliance with all covenants at July 31, 2020.

In 2012, we entered into a Note Purchase Agreement with a group of insurance companies under which we sold $200,000 of unsecured Senior Notes.  At July 31, 2020 and October 31, 2019, $109,900 and $140,800, respectively, was outstanding under this agreement. Existing notes mature between July 2021 and July 2025 and bear interest at fixed rates between 2.62% and 3.13%.  We were in compliance with all covenants at July 31, 2020.

We entered into a $150,000 three-year Note Purchase and Private Shelf agreement with New York Life Investment Management LLC in 2011.  In 2015, the amount of the facility was increased to $180,000, and in 2016 it was increased to $200,000.   At July 31, 2020 and October 31, 2019, $5,556 and $30,556, respectively, was outstanding under this facility. Existing notes mature in September 2020 and bear interest at a fixed rate of 2.21%.  We were in compliance with all covenants at July 31, 2020. 

Outlook

We are optimistic about our longer-term growth opportunities in the diverse consumer non-durable, industrial, medical, electronics, consumer durable and automotive end markets we serve. We also support our customers with parts and consumables, where a significant percentage of our revenue is recurring. ForBased on the fourth quarter of 2020,current backlog, order entry trends, and the correlation to shipment timing, we expect 2021 full year sales growth to be comparableapproximately 8% to slightly better than the third quarter of 2020 and operating profit is forecasted to improve modestly.

We move forward with caution given the potential for a lower-growth macroeconomic environment, continued trade negotiations between the U.S. and other countries and the marketplace effects of political instability in certain areas of the world.  We10% over 2020. Additionally, we are also monitoring the COVID-19 pandemic, which may negatively impact our business and results of operations for the fourth quarter and potentially beyond. We are unable to predict the ultimate impact that it may have on our business, future results of operations, financial position or cash flows.

Though the status of the global economy remains unclear, our growth potential has been demonstrated over time through our ability to build and enhance our core businesses by entering emerging markets, pursuing market adjacencies and driving growth initiatives.  We drive value for our customers through our application expertise, differentiated technology, and direct sales and service support. Our priorities also are focused on operational efficiencies by employing continuous improvement methodologies in our business processes.  We expect our efforts will continue to provide more than sufficient cash from operations to meet our liquidity needs, pay dividends to common shareholders and enable us to investforecasting full year 2021 diluted earnings per share in the developmentrange of new applications and markets for our technologies.

$7.20 to $7.50.

Safe Harbor Statements Under The Private Securities Litigation Reform Act Ofof 1995

This Form 10-Q, particularly the “Management’s Discussion and Analysis”, contains forward-looking statements within the meaning of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995.  Such statements relate to, among other things, income, earnings, cash flows, changes in operations, operating improvements, businesses in which we operate and the U.S. and global economies.  Statements in this Form 10-Q that are not historical are hereby identified as “forward-looking statements” and may be indicated by words or phrases such as “anticipates”, “supports”, “plans”, “projects”, “expects”, “believes”, “should”, “would”, “could”, “hope”, “forecast”, “management is of the opinion”, use of the future tense and similar words or phrases.

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In light of these risks and uncertainties, actual events and results may vary significantly from those included in or contemplated or implied by such statements. Readers are cautioned not to place undue reliance on such forward-looking statements. These forward-looking statements speak only as of the date made. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Factors that could cause actual results to differ materially from the expected results are discussed in Part I, Item 1A, Risk Factors in our 2020 Form 10-K for the year ended October 31, 2019 and in Part II, Item 1A, Risk Factors in this report.

10-K.

ITEM 3.

ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Information regarding our financial instruments that are sensitive to changes in interest rates and foreign currency exchange rates was disclosed under Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” in our 2020 Form 10-K for the year ended October 31, 2019.10-K. The information disclosed has not changed materially in the interim period since then.

ITEM 4.

ITEM 4. CONTROLS AND PROCEDURES

Our management with the participation of the principal executive officer (President and Chief Executive Officer) and principal financial officer (Executive Vice President, Chief Financial Officer) has reviewed and evaluated our disclosure controls and procedures (as defined in the Securities Exchange Act Rule 13a-15(e)) as of July 31, 2020.April 30, 2021. Based on that evaluation, our management, including the principal executive and financial officers, has concluded that our disclosure controls and procedures were effective as of July 31, 2020April 30, 2021 in ensuring that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC'sSecurities and Exchange Commission's rules and forms and is accumulated and communicated to management, including the principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

There were no changes in our internal control over financial reporting that occurred during the three months ended July 31, 2020April 30, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.



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Part II – OTHER INFORMATION


ITEM 1.

ITEM 1.    LEGAL PROCEEDINGS

We are involved in pending or potential litigation regarding environmental, product liability, patent, contract, employee and other matters arising from the normal course of business. Including the litigation and environmental matters discussed below, after consultation with legal counsel, we do not believe that losses in excess of the amounts we have accrued would have a material adverse effect on

See our financial condition, quarterly or annual operating results or cash flows.

Class Action Litigation

On February 22, 2019, a former employee, Mr. Ortiz, filed a purported class action lawsuit in the San Diego County Superior Court, California, against Nordson Asymtek, Inc. and Nordson Corporation, alleging various violations of the California Labor Code.  Plaintiff seeks, among other things, an unspecified amount for unpaid wages, actual, consequential and incidental losses, penalties, and attorneys’ fees and costs.  Following mediation in June 2020, the parties agreed to settle the lawsuit, subjectContingencies note to the execution ofcondensed consolidated financial statements for a written settlement agreement and court approval. If the settlement agreement is approved, the class action lawsuit will be resolved. Management believes, based on currently available information, that the ultimate outcome of the proceeding described above will not have a material adverse effect on the Company’s financial condition or results of operations.

Environmental

We have voluntarily agreed with the City of New Richmond, Wisconsin and other Potentially Responsible Parties to share costs associated with the remediation of the City of New Richmond municipal landfill (the “Site”) and the construction of a potable water delivery system serving the impacted area down gradient of the Site.  At July 31, 2020 and October 31, 2019, our accrual for the ongoing operation, maintenance and monitoring obligation at the Site was $360 and $401, respectively. The liability for environmental remediation represents management’s best estimate of the probable and reasonably estimable undiscounted costs related to known remediation obligations.  The accuracydiscussion of our estimate of environmental liability is affected by several uncertainties such as additional requirements that may be identified in connection with remedial activities, the complexitycontingencies and evolution of environmental laws and regulations, and the identification of presently unknown remediation requirements. Consequently, our liability could be different than our current estimate.  However, we do not expect that the costs associated with remediation will have a material adverse effect on our financial condition or results of operations.

legal matters.

ITEM 1A.

ITEM 1A.    RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the risk factors disclosed in “Item 1A. Risk Factors” of our Annual Report on2020 Form 10-K for the fiscal year ended October 31, 2019 (the “2019 Form 10-K”).10-K. Many of the risks identified in the 20192020 Form 10-K are,have been, and willmay be further, exacerbated by the impact of the COVID-19 pandemic and the actions taken by governmental entities, businesses, individuals and others in response to the pandemic. Other than as set forth below, there have been no material changes to the risk factors previously disclosed in the 2019 Form 10-K.

The COVID-19 pandemic may have a negative impact, which could be material, on our ability to operate, results of operations, financial condition, liquidity and capital investments.

In March 2020, the World Health Organization categorized the current coronavirus disease (“COVID-19”) as a pandemic, and the President of the United States declared the COVID-19 outbreak a national emergency. COVID-19 continues to spread throughout the United States and other countries across the world, and the duration and severity of its effects are currently unknown. The pandemic has resulted in governments around the world implementing increasingly stringent measures to help control the spread of the virus, including quarantines, social distancing protocols, “shelter in place” and “stay at home” orders, travel restrictions, business curtailments, school closures and other measures. In addition, governments and central banks in several parts of the world have enacted fiscal and monetary stimulus measures to counteract the impacts of COVID-19.

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We manufacture and provide essential products and services to a variety of critical infrastructure customers around the globe, and we intend to continue providing our products and services to these customers. However, any negative impact of the COVID-19 pandemic and similar issues in the future could have a material adverse effect on our ability to operate, results of operations, financial condition, liquidity, and capital investments. In addition, preventive measures we have voluntarily put in place as well as other measures enacted by governments may have a material adverse effect on our business for an indefinite period of time, such as the potential shut down of certain locations, decreased employee availability, potential border closures, disruptions to the businesses of our channel partners and other potential adverse effects. Our suppliers and customers may also face these and other challenges, which could lead to a disruption in our supply chain, as well as decreased customer demand for our products and services. These issues may also materially affect our future access to our sources of liquidity, particularly our cash flows from operations, financial condition, capitalization and capital investments. The long-term economic impact and near-term financial impacts of the COVID-19 pandemic cannot be reasonably estimated at this time due to the uncertainty of future developments.

ITEM 2.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table summarizes common stock repurchased by the Company during the three months ended July 31, 2020:

April 30, 2021:

 

 

 

 

 

 

 

 

 

 

Total Number of

 

 

Approximate

Dollar Value

 

 

 

 

 

 

 

 

 

 

 

Shares Purchased

 

 

of Shares that

 

 

 

Total Number

 

 

Average

 

 

as Part of Publicly

 

 

May Yet Be Purchased

 

 

 

of Shares

 

 

Price Paid

 

 

Announced Plans

 

 

Under the Plans

 

 

 

Purchased(1)

 

 

per Share

 

 

or Programs(2)

 

 

or Programs(2)

 

May 1, 2020 to May 31, 2020

 

 

 

 

 

 

 

 

 

 

$

447,703

 

June 1, 2020 to June 30, 2020

 

 

 

 

 

 

 

 

 

 

$

447,703

 

July 1, 2020 to July 31, 2020

 

 

 

 

 

 

 

 

 

 

$

447,703

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in whole shares)
Total Number
of Shares
Purchased (1)
Average
Price Paid
per Share
Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs (2)
Maximum Value
of Shares that
May Yet Be Purchased
Under the Plans
or Programs (2)
February 1, 2021 to February 28, 202150,527 $186.48 49,568 $434,353 
March 1, 2021 to March 31, 202136,834 $198.57 32,540 $427,865 
April 1, 2021 to April 30, 202127,237 $205.45 27,048 $422,307 
Total114,598  109,156  

(1)Includes shares tendered for taxes related to vesting of restricted stock.

In December 2014, the board of directors authorized a $300,000 common share repurchase program. In August 2015, the board of directors authorized the repurchase of up to an additional $200,000 of the Company’s common shares. In August 2018, the board of directors authorized the repurchase of an additional $500,000 of the Company’s common shares. Approximately $447,703 of the total $1,000,000 authorized remained available for share repurchases at July 31, 2020. Uses for repurchased shares include the funding of benefit programs including stock options and restricted stock. Shares purchased are treated as treasury shares until used for such purposes. The repurchase program is being funded using cash from operations and proceeds from borrowings under our credit facilities.

(2)In December 2014, the board of directors authorized a $300,000 common share repurchase program. In August 2015, the board of directors authorized the repurchase of up to an additional $200,000 of the Company’s common shares. In August 2018, the board of directors authorized the repurchase of an additional $500,000 of the Company’s common shares. Approximately $422,307 of the total $1,000,000 authorized remained available for share repurchases at April 30, 2021. Uses for repurchased shares include the funding of benefit programs including stock options and restricted stock. Shares purchased are treated as treasury shares until used for such purposes. The repurchase program is being funded using cash from operations and proceeds from borrowings under our credit facilities.
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ITEM 6.

EXHIBITS

31.1

Separation Agreement and Release between John J. Keane and Nordson Corporation, effective February 1, 2021 (incorporated herein by reference to Exhibit 10.1 to Registrant’s Form 10-Q for the quarter ended January 31, 2021).

Resolution by the Board of Directors, dated March 2, 2021, to close to new hires the Nordson Corporation Salaried Employee Pension Plan and the Nordson Corporation 2005 Excess Defined Benefit Pension Plan.

Non-officer award agreement (incorporated herein by reference to Exhibit 10.1 to Registrant’s Form 8-K dated April 19, 2021)
Officer award agreement (incorporated herein by reference to Exhibit 10.2 to Registrant’s Form 8-K dated April 19, 2021)
Nordson Corporation 2021 Stock Incentive and Award Plan (incorporated herein by reference to Exhibit 10.1 to Registrant’s Form 8-K dated March 2, 2021)
Certification pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934 by the Chief Executive Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2

Certification pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934 by the Chief Financial Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1

Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

32.2

Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

101

101

The following financial information from Nordson Corporation’s Quarterly Report on Form 10-Q for the three and six months ended July 31, 2020,April 30, 2021 formatted in inline Extensible Business Reporting Language (iXBRL): (i) the Condensed Consolidated Statements of Income for the three and ninesix months ended July 31,April 30, 2021 and 2020, and 2019, (ii) the Condensed Consolidated Statements of Comprehensive Income for the three and ninesix months ended July 31,April 30, 2021 and 2020, and 2019, (iii) the Condensed Consolidated Balance Sheets at July 31, 2020April 30, 2021 and October 31, 2019,2020, (iv) the Condensed Consolidated Statements of Shareholders’ Equity for the three and ninesix months ended July 31,April 30, 2021 and 2020, and 2019, (v) the Condensed Consolidated Statements of Cash Flows for the ninesix months ended July 31,April 30, 2021 and 2020, and 2019, and (vi) the Notes to Condensed Consolidated Financial Statements.

104

104

The cover page from Nordson Corporation’s Quarterly Report on Form 10-Q for the quarter ended July 31, 2020,April 30, 2021, formatted in inline Extensible Business Reporting Language (iXBRL) (included in Exhibit 101).

*

Furnished herewith.

Indicates management contract or compensatory plan, contract or arrangement in which one or more directors and/or executive officers of Nordson Corporation may be participants.



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Table of Contents
Nordson Corporation

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date:  September 4, 2020

Nordson Corporation

Date:  May 28, 2021

Nordson Corporation

By: /s/ Joseph P. Kelley

Joseph P. Kelley

Executive Vice President, Chief Financial Officer

(Principal Financial Officer)


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