Nordson (NDSN) 8-K Nordson Corporation Reports Fiscal Year 2012 Second Quarter Results

Exhibit 99.1

Nordson Corporation Reports Fiscal Year 2012 Second Quarter Results

• Sales increase sequentially by 14 percent to $315 million
• Operating profit grows sequentially by 36 percent to $77 million, with operating margin of 24 percent
• Diluted EPS increases sequentially by 38 percent to $0.80, including $0.04 in one-time charges
• Third quarter 2012 guidance: sales expected to increase 8 to 12 percent over prior year; EPS in the range of $0.96 to $1.04

WESTLAKE, Ohio--(BUSINESS WIRE)--May 21, 2012--Nordson Corporation (Nasdaq: NDSN) today reported results for the second quarter of fiscal year 2012. For the quarter ending April 30, 2012, sales were $315 million, a 1 percent decrease over the prior year’s second quarter sales. This change in sales included a 3 percent increase related to the first year effect of acquisitions, offset by a 3 percent decrease in organic volume and a negative 1 percent impact related to unfavorable effects of currency translation. As reported, operating profit was $77 million, net income was $52 million, and diluted earnings per share were $0.80. Excluding one-time charges of $4 million in the quarter, operating profit was $81 million, net income was $55 million, and earnings per share were $0.84. Prior year second quarter sales, operating profit, net income and diluted earnings per share were $319 million, $92 million, $65 million and $0.95, respectively.

“Nordson’s team delivered another excellent quarter by continuing to provide our customers with precision technology solutions, application expertise and strong global support,” said Nordson President and Chief Executive Officer Michael F. Hilton. “On a sequential basis, we leveraged strong top line growth of 14 percent to generate incremental operating margin of 52 percent excluding one-time charges. Operating margin in the quarter was a strong 26 percent excluding one-time charges, and we remain committed to future performance enhancements through continuous improvement efforts. We also continued to generate excellent free cash flow and maintain our strong balance sheet which gives us the capacity to invest in strategic growth opportunities going forward.”

Second Quarter Segment and Regional Results

“All three of our segments performed in line with our expectation for the quarter,” said Hilton. “Sales improved strongly on a sequential basis, though year-over-year comparisons were impacted by continuing macro economic uncertainty in some end markets and geographies and very challenging comparisons against our prior year’s second quarter. We leveraged the sequential sales increase and our continuous improvement activities to drive operating margin well above our first quarter level and to the range of outstanding performance we have sustained over the past two years.”

“Sales volume in Adhesive Dispensing Systems was down 1 percent compared to the second quarter a year ago, with the positive first year effect of acquisitions and solid organic growth in certain consumer non-durable end markets being offset by softness in some durable goods end markets and the timing of some larger dollar system orders. The Adhesive segment’s operating margin in the second quarter was an excellent 33 percent, or 35 percent excluding one-time charges. In Advanced Technology Systems, second quarter sales volume grew by 3 percent over the prior year. The first year effect of acquisitions drove the improvement, as organic sales volume decreased over the previous year due to softness in certain non-dispense product lines. Sequential volume growth and operating efficiencies drove this segment’s operating margin to 25 percent, an increase of 9 percentage points over the first quarter of 2012. Industrial Coating Systems sales volume in the quarter decreased 2 percent on a year-over-year basis due to softness in durable goods end markets and the timing of some large engineered system orders. Industrial Coating operating margin in the quarter was 12 percent, or 13 percent excluding one-time charges related to severance costs. On a sequential basis, reported operating margin in this segment improved by 9 percentage points over the first quarter, as our team efficiently leveraged existing resources to meet a strong increase in sequential volume.”

Detailed results by operating segment and geography are included in the attached tables, as is an earnings per share reconciliation table.

Fiscal Year-to-Date Results

For the first half of fiscal year 2012, sales were $591 million, operating profit was $133 million and net income was $90 million. First half diluted earnings per share were $1.38, inclusive of $0.08 in one time charges as described on the attached earnings per share reconciliation table. Prior year first half revenue, operating profit, net income and diluted earnings per share were $590 million, $158 million, $111 million and $1.61.

“Our team delivered strong first half results, especially against an uncertain macroeconomic backdrop,” said Hilton. “Operating margin is still well above our pre-recession level and is inclusive of continuous improvement and other strategic investments that will drive growth and performance for Nordson over the long-term.”

Order Rates and Backlog

Order rates for the 12-week period ending May 13, 2012, measured in constant currency, increased by 9 percent over the same period a year ago. Order rates by segment and geography are provided in the accompanying financial tables, with pro-forma growth in order rates calculated as though fiscal year 2011 acquisitions were owned in both years.

Backlog at the end of the second quarter was approximately $197 million, an increase of 29 percent compared to the end of the second quarter a year ago, and an increase of 30 percent compared to the end of the first quarter of fiscal 2012. Backlog amounts are calculated at April 30, 2012 exchange rates.

Outlook

For the third quarter of fiscal 2012, sales are expected to be in the range of $337 million to $349 million, an increase of 8 to 12 percent as compared to the third quarter a year ago. This growth is inclusive of organic volume up 9 to 13 percent, 3 percent growth from the first year effect of acquisitions, and a negative 4 percent currency translation effect based on the current exchange rate environment. Diluted earnings per share are expected to be in the range of $0.96 to $1.04. This outlook does not include any impact associated with the agreement to acquire EDI Holdings announced earlier today.

“Our current order rates are encouraging and exceed the levels we saw during the first half of our year, which are driving strong expectations for our third quarter,” said Hilton. At the same time, uncertainties in the macroeconomic environment add a conservative view to the positive expectations we have for growth in future quarters. Over the long term, we will continue to win in the diverse end markets we serve through the continuous introduction of differentiated, best-in-class technology that increases customers’ productivity and reduces their costs. And in all aspects of the organization, our lean and decentralized global team has proven it can execute better than our competitors. Overall, we will continue to invest in our future, we look forward to providing our customers with the highest level of value, and we expect to continue delivering top quartile returns for our shareholders.”

Nordson will broadcast its second-quarter conference call on its web site at http://www.nordson.com/investors on Tuesday, May 22, 2012 at 8:30 a.m. EDT. For persons unable to listen to the live broadcast, a replay will be available for 14 days after the event. Information about Nordson’s investor relations and shareholder services is available from James R. Jaye, Director of Communications & Investor Relations at (440) 414-5639 or Jim.Jaye@nordson.com.

Except for historical information and comparisons contained herein, statements included in this release may constitute “forward-looking statements,” as defined by the Private Securities Litigation Reform Act of 1995. These statements involve a number of risks, uncertainties and other factors, as discussed in the company’s filing with the Securities and Exchange Commission that could cause actual results to differ.

Nordson Corporation delivers precision technology solutions that help customers increase throughput, productivity and up-time, enable new products and features, and decrease material usage. The company engineers, manufactures and markets differentiated products and systems used for dispensing adhesives, coatings, sealants, biomaterials and other materials, fluid management, test and inspection, UV curing and plasma surface treatment, all supported by application expertise and direct global sales and service. Nordson serves a wide variety of consumer non-durable, durable and technology end markets including packaging, nonwovens, electronics, medical, appliances, energy, transportation, construction, and general product assembly and finishing. Founded in 1954 and headquartered in Westlake, Ohio, the company has operations and support offices in more than 30 countries. Visit Nordson on the web at www.nordson.com, www.twitter.com/Nordson_Corp or www.facebook.com/nordson.

SECOND QUARTER PERIOD	NORDSON CORPORATION
Period Ending April 30, 2012	FINANCIAL HIGHLIGHTS
(Unaudited)	(Dollars in thousands except for per-share amounts)
CONSOLIDATED STATEMENT OF INCOME
		Second Quarter						Year-to-Date
		2012			2011			2012			2011
Net sales		$	315,193		$	318,924		$	591,029		$	589,886
Cost of sales			125,537			121,172			232,027			225,963
Selling & administrative expenses			112,799			105,324			225,658			205,971
Operating profit			76,857			92,428			133,344			157,952
Interest expense - net			(2,014	)		(1,223	)		(3,863	)		(2,493	)
Other income (expense) - net			137			1,791			1,129			2,727
Income before income taxes			74,980			92,996			130,610			158,186
Income taxes			22,869			27,754			40,161			47,047
Net Income		$	52,111		$	65,242		$	90,449		$	111,139
Return on sales			17	%		20	%		15	%		19	%
Return on average shareholders' equity			37	%		45	%		32	%		40	%
Average common shares outstanding (000's)			64,426			68,110			64,749			68,043
Average common shares and
common share equivalents (000's)			65,179			69,002			65,407			68,921
Per share:
Basic earnings		$	.81		$	.96		$	1.40		$	1.63
Diluted earnings		$	.80		$	.95		$	1.38		$	1.61
Dividends paid		$	.125		$	.105		$	.25		$	.21

SECOND QUARTER PERIOD
Period Ending April 30, 2012
(Unaudited)
CONSOLIDATED BALANCE SHEET
	April 30		October 31
	2012		2011
Cash and marketable securities	$	57,537	$	37,408
Receivables		249,184		254,310
Inventories		154,934		141,912
Other current assets		44,877		43,327
Total current assets		506,532		476,957
Property, plant & equipment - net		141,610		130,883
Other assets		689,075		696,610
	$	1,337,217	$	1,304,450
Notes payable and debt due within one year	$	55,668	$	5,697
Accounts payable and accrued liabilities		168,558		176,464
Total current liabilities		224,226		182,161
Long-term debt		286,480		313,459
Other liabilities		248,668		237,507
Total shareholders' equity		577,843		571,323
	$	1,337,217	$	1,304,450
Other information:
Employees		4,156		4,094
Common shares outstanding (000's)		64,313		65,601

SECOND QUARTER PERIOD	NORDSON CORPORATION
Period Ending April 30, 2012	FINANCIAL HIGHLIGHTS
(Unaudited)	(Dollars in thousands)
	Second Quarter						% Growth over 2011						Year-to-Date						% Growth over 2011
SALES BY BUSINESS SEGMENT	2012			2011			Volume		Currency		Total		2012			2011			Volume		Currency		Total
Adhesive dispensing systems	$	154,698		$	159,432		-0.9	%	-2.1	%	-3.0	%	$	293,870		$	296,408		0.2	%	-1.1	%	-0.9	%
Advanced technology systems		114,998			112,603		2.8	%	-0.7	%	2.1	%		215,105			209,235		3.2	%	-0.4	%	2.8	%
Industrial coating systems		45,497			46,889		-1.8	%	-1.2	%	-3.0	%		82,054			84,243		-1.9	%	-0.7	%	-2.6	%
Total sales by business segment	$	315,193		$	318,924		0.3	%	-1.5	%	-1.2	%	$	591,029		$	589,886		1.0	%	-0.8	%	0.2	%
	Second Quarter												Year-to-Date
OPERATING PROFIT BY BUSINESS SEGMENT	2012			2011									2012			2011
Adhesive dispensing systems	$	51,518		$	59,649								$	98,745		$	105,845
Advanced technology systems		28,683			33,563									44,683			56,839
Industrial coating systems		5,362			7,662									6,500			10,711
Corporate		(8,706	)		(8,446	)								(16,584	)		(15,443	)
Total operating profit by business segment	$	76,857		$	92,428								$	133,344		$	157,952
	Second Quarter						% Growth over 2011						Year-to-Date						% Growth over 2011
SALES BY GEOGRAPHIC REGION	2012			2011			Volume		Currency		Total		2012			2011			Volume		Currency		Total
United States	$	85,647		$	79,300		8.0	%	-		8.0	%	$	160,849		$	149,573		7.5	%	-		7.5	%
Americas		25,927			26,158		2.4	%	-3.3	%	-0.9	%		46,126			46,018		3.6	%	-3.4	%	0.2	%
Europe		91,430			98,049		-1.9	%	-4.9	%	-6.8	%		178,013			188,307		-2.1	%	-3.4	%	-5.5	%
Japan		30,004			30,159		-1.8	%	1.3	%	-0.5	%		60,039			55,232		4.8	%	3.9	%	8.7	%
Asia Pacific		82,185			85,258		-4.1	%	0.5	%	-3.6	%		146,002			150,756		-3.8	%	0.6	%	-3.2	%
Total Sales by Geographic Region	$	315,193		$	318,924		0.3	%	-1.5	%	-1.2	%	$	591,029		$	589,886		1.0	%	-0.8	%	0.2	%
	Second Quarter												Year-to-Date
SELECTED SUPPLEMENTAL INFORMATION	2012			2011									2012			2011
Depreciation and amortization	$	7,990		$	6,931								$	15,959		$	14,246
Capital expenditures	$	5,726		$	5,184								$	14,370		$	10,714
Dividends paid	$	8,058		$	7,147								$	16,191		$	14,291

NORDSON CORPORATION
ORDER RATES FOR 12-WEEK PERIOD ENDING MAY 13, 2012
CHANGE FROM PRIOR YEAR
BUSINESS SEGMENT	% CHANGE		GEOGRAPHY	% CHANGE
Adhesive dispensing systems	-5	%	United States	11	%
Advanced technology systems	22	%	Americas	-12	%
Industrial coating systems	29	%	Europe	-9	%
			Japan	12	%
Total	9	%	Asia Pacific	36	%
			Total	9	%
Notes:
1. Numbers in this table are unaudited and exclude the effects of currency movements.
2. Pro-forma changes in order rates were calculated as though 2011 acquisitions were owned in both years.

SECOND QUARTER PERIOD	NORDSON CORPORATION
Period Ending April 30, 2012	RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(Unaudited)
	Second Quarter						Year-to-Date
	2012			2011			2012			2011
Diluted EPS as reported (U.S. GAAP)	$	0.80		$	0.95		$	1.38		$	1.61
Short-term inventory purchase accounting adjustments		-			-			0.02			0.01
Fixed asset write-down		-			0.01			-			0.01
Severance and restructuring		0.04			-			0.05			-
Pension termination expense		-			-			0.01			-
Discrete tax items		-			(0.01	)		-			(0.03	)
Diluted EPS as adjusted (Non-GAAP)	$	0.84		$	0.95		$	1.46		$	1.60
	Second Quarter						Year-to-Date
	2012			2011			2012			2011
Net income as reported (U.S. GAAP)	$	52,111		$	65,242		$	90,449		$	111,139
Short-term inventory purchase accounting adjustments		-			-			1,538			415
Fixed asset write-down		-			912			-			912
Severance and restructuring		2,624			-			3,188			-
Pension termination expense		-			-			466			-
Discrete tax items		-			(769	)		-			(1,991	)
Net income as adjusted (Non-GAAP)	$	54,735		$	65,385		$	95,641		$	110,475
	Second Quarter						Year-to-Date
	2012			2011			2012			2011
Operating profit as reported (U.S. GAAP)	$	76,857		$	92,428		$	133,344		$	157,952
Short-term inventory purchase accounting adjustments		-			-			2,213			602
Fixed asset write-down		-			1,322			-			1,322
Severance and restructuring		3,776			-			4,587			-
Pension termination expense		-			-			670			-
Operating profit as adjusted (Non-GAAP)	$	80,633		$	93,750		$	140,814		$	159,876
Operating profit (loss) by business segment
Second Quarter 2012							Operating			Operating
	Operating						Profit (Loss)			Margin
	Profit (Loss)			Severance and			As Adjusted			As Adjusted
	(U.S. GAAP)			Restructuring			(Non-GAAP)			(Non-GAAP)
Adhesive dispensing systems	$	51,518		$	3,215		$	54,733			35	%
Advanced technology systems		28,683			-			28,683			25	%
Industrial coating systems		5,362			561			5,923			13	%
Corporate		(8,706	)		-			(8,706	)	NA
Total operating profit by business segment	$	76,857		$	3,776		$	80,633			26	%

Adjusted EPS, net income and operating profit are not measurements of financial performance under GAAP, and such measures should not be considered as alternatives to EPS, net income and operating profit determined in accordance with GAAP. Management believes that EPS, net income and operating profit as adjusted to exclude the items in the tables below assist in understanding the results of Nordson Corporation. Our calculation of these non-GAAP measures may not be comparable to the calculation of similarly titled measures reported by other companies.

CONTACT:
Nordson Corporation
James R. Jaye, Director, Communications & Investor Relations, 440-414-5639
Jim.Jaye@nordson.com