1
NORDSON EMPLOYEES' SAVINGS TRUST PLAN
FINANCIAL STATEMENTS
DECEMBER 31, 1993 AND 1992
AND YEAR ENDED DECEMBER 31, 1993
with
REPORT OF INDEPENDENT AUDITORS
2
REPORT OF INDEPENDENT AUDITORS
The Retirement Committee and Participants
Nordson Employees' Savings Trust Plan
We have audited the accompanying statement of net assets available for plan
benefits of the Nordson Employees' Savings Trust Plan as of December 31, 1993
and 1992, and the related statement of changes in net assets available for
plan benefits for the year ended December 31, 1993. These financial
statements are the responsibility of the Plan's management. Our responsi-
bility is to express an opinion on these financial statements based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and signifi-
cant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the
Nordson Employees' Savings Trust Plan at December 31, 1993 and 1992, and the
changes in its net assets available for plan benefits for the year ended
December 31, 1993 in conformity with generally accepted accounting
principles.
/s/ Ernst & Young
Ernst & Young
May 24, 1994
Cleveland, Ohio
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NORDSON SAVINGS TRUST PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1993
Money Nordson
Market Guaranteed Loan Stock Equity Bond
Fund Fund Fund Fund Fund Fund Total
-------- ----------- ---------- ------------ ---------- ---------- -----------
ASSETS
Investments:
Master trust $486,702 $39,324,664 $2,289,621 $13,562,929 $7,860,129 $2,146,662 $65,670,707
Employer contribution 17,127 653,363 - 637,660 166,851 43,538 1,518,539
Accounts receivable - - - 71 - 2 73
Interfund receivables/
(payables) (573) 166,113 - (96,120) (13,989) (55,431) -
-------- ----------- ---------- ----------- ---------- ---------- -----------
503,256 40,144,140 2,289,621 14,104,540 8,012,991 2,134,771 67,189,319
LIABILITIES
Accounts payable (2) (85,158) - (33) (17) (48) (85,258)
Employee contribution-
overpayment - - - - (294) - (294)
-------- ----------- ---------- ----------- ---------- ---------- -----------
Net assets available
for plan benefits $503,254 $40,058,982 $2,289,621 $14,104,507 $8,012,680 $2,134,723 $67,103,767
======== =========== ========== =========== ========== ========== ===========
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NORDSON SAVINGS TRUST PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1992
Money Nordson
Market Guaranteed Loan Stock Equity Bond
Fund Fund Fund Fund Fund Fund Total
-------- ----------- ---------- ------------ ---------- ---------- -----------
ASSETS
Investments:
Master trust $465,343 $35,356,914 $1,940,789 $10,242,017 $6,192,176 $1,165,843 $55,363,082
Contributions receivable:
Employer 15,003 624,085 - 589,718 136,075 22,233 1,387,114
Employee - 235 - - - - 235
Interfund receivables/
(payables) (22,501) (778,617) - 153,122 483,910 164,086 -
-------- ----------- ---------- ----------- ---------- ---------- -----------
457,845 35,202,617 1,940,789 10,984,857 6,812,161 1,352,162 56,750,431
LIABILITIES
Accounts payable - (60) - (625) (294) (36) (1,015)
-------- ----------- ---------- ----------- ---------- ---------- -----------
Net assets available
for plan benefits $457,845 $35,202,557 $1,940,789 $10,984,232 $6,811,867 $1,352,126 $56,749,416
======== =========== ========== =========== ========== ========== ===========
<FN>
See accompanying notes.
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NORDSON EMPLOYEES' SAVINGS TRUST PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
YEAR ENDED DECEMBER 31, 1993
Money Nordson
Market Guaranteed Loan Stock Equity Bond
Fund Fund Fund Fund Fund Fund Total
-------- ----------- ---------- ------------ ---------- ---------- -----------
Net master trust income $ 14,163 $ 2,903,419 $ 162,252 $ 1,708,172 $ 688,135 $ 195,277 $ 5,671,418
Contributions:
Employer 17,127 657,797 - 637,661 166,851 43,539 1,522,975
Employee 74,140 2,528,498 - 1,135,104 775,535 214,418 4,727,695
-------- ----------- ---------- ----------- ---------- ---------- ------------
91,267 3,186,295 - 1,772,765 942,386 257,957 6,250,670
-------- ----------- ---------- ----------- ---------- ---------- -----------
Benefits and
withdrawal payments (11,490) (1,066,387) (92,402) (171,765) (87,993) (13,254) (1,443,291)
Fees and commissions - (115,463) - (11) (8,967) (5) (124,446)
Interfund transfers (48,531) (51,439) 278,982 (188,886) (332,748) 342,622 -
-------- ----------- ---------- ----------- ---------- ---------- -----------
(60,021) (1,233,289) 186,580 (360,662) (429,708) 329,363 (1,567,737)
-------- ----------- ---------- ----------- ---------- ---------- -----------
Increase in net
assets available
for plan benefits 45,409 4,856,425 348,832 3,120,275 1,200,813 782,597 10,354,351
Net assets available
for plan benefits
at beginning of year 457,845 35,202,557 1,940,789 10,984,232 6,811,867 1,352,126 56,749,416
-------- ----------- ---------- ----------- ---------- ---------- -----------
Net assets available
for plan benefits
at end of year $503,254 $40,058,982 $2,289,621 $14,104,507 $8,012,680 $2,134,723 $67,103,767
======== =========== ========== =========== ========== ========== ===========
<FN>
See accompanying notes.
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NORDSON EMPLOYEES' SAVINGS TRUST PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1993 AND 1992
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
METHOD OF ACCOUNTING - Plan transactions are accounted for using
the accrual method.
INVESTMENT VALUATION - Investments in equity and debt securities,
traded on a national exchange and mutual funds are valued at the market price
on the last business day of the Plan year. Securities traded in the over-
the-counter market are valued at the mean between the last reported bid and
asked prices. Deposits under group annuity contracts are valued at the fair
value as reported by the insurance companies.
INCOME TAX STATUS - The Internal Revenue Service issued a
determination letter on April 19, 1988 advising that the Plan is qualified
under Section 401(a) of the Internal Revenue Code and the trust is,
therefore, exempt from federal income taxation under the provisions of
Section 501(a). Such determination letter does not cover the Tax Reform Act
of 1986. However, the Plan administrator believes the plan to be in
operational compliance with all applicable requirements of the Tax Reform Act
of 1986 and all subsequent legislation.
EMPLOYEE TAXATION - Employee before tax contributions, Nordson
Corporation (Company) matching contribution, forfeitures allocated, and
earnings on the participant's account are not subject to tax until distri-
buted from the Plan. Distributions may also be subject to a 10% excise tax.
OTHER - Purchases and sales of securities are reflected on their
trade dates. Gains or losses on sales of securities are based on the average
cost of securities.
Interest is calculated and paid using money market interest rates
on late transfers of money between the various funds. This is done to record
the proper investment earnings within each fund.
2. INVESTMENTS AND NET INVESTMENT INCOME
The assets of the Plan are commingled with the assets of the
Nordson Hourly-Rated Employees' Savings Trust Plan in the Nordson Corporation
Master Trust. Investments of the Nordson Corporation Master Trust at
December 31, 1993 and 1992 and results of operations for the year ended
December 31, 1993 are as follows:
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NORDSON EMPLOYEES' SAVINGS TRUST PLAN
NOTES TO FINANCIAL STATEMENTS--CONTINUED
2. INVESTMENTS AND NET INVESTMENT INCOME (Continued)
1993 1992
------------------------- -------------------------
Current Current
Cost Value Cost Value
------------ ----------- ------------ -----------
Common stock-
Nordson Corp. $ 9,243,914 $14,418,814 $ 6,945,543 $10,468,240
Commingled funds-
Bonds 2,282,761 2,276,619 1,178,152 1,198,568
Equity 7,013,179 8,253,915 5,631,187 6,312,065
Money market funds 637,546 637,546 545,827 545,827
Deposits under
group annuity
contracts 41,769,217 41,769,217 35,926,085 35,926,085
Loans to
participants 2,431,106 2,431,106 1,994,552 1,994,552
----------- ----------- ----------- -----------
63,377,723 69,787,217 52,221,346 56,445,337
Cash 18,464 18,464 - -
Dividends receivable-
Nordson Corp. 37,769 37,769 26,412 26,412
Other 50 50 - -
Interest receivable 279,685 279,685 250,502 250,502
----------- ----------- ----------- -----------
Investments $63,713,691 $70,123,185 $52,498,260 $56,722,251
=========== =========== =========== ===========
Interest income $ 3,274,216
Dividend income:
Nordson Corporation 128,798
Other 230,290
Fees and commissions (128,985)
Net realized and unrealized
gains 2,438,395
-----------
Net investment income $ 5,942,714
===========
The investments above are held by First Wachovia Bank and Trust
Company, N.A. under a trust agreement with the Plan except for the Nordson
Stock Fund which is held at Society National Bank and the Bond Fund held at
Pacific Investment Management Company. The Company uses the services of
investment counselors, not in the employ of First Wachovia Bank and Trust
Company, N.A., who have the authority to direct the purchase and sale of
securities.
The Nordson Employees' Savings Trust Plan proportional share of the
above assets of $65,670,707 and $55,363,082 represent 93.7% and 97.6% of the
total master trust at December 31, 1993 and 1992, respectively, and its
proportional share of net investment income of $5,546,972 represents 93.3% of
the income from the master trust for the year ended December 31, 1993.
3. CONTRIBUTIONS AND BENEFITS
The Nordson Employees' Savings Trust Plan is a defined contribution
plan covering salaried, full-time participating domestic employees of the
Company.
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NORDSON EMPLOYEES' SAVINGS TRUST PLAN
NOTES TO FINANCIAL STATEMENTS--CONTINUED
3. CONTRIBUTIONS AND BENEFITS (continued)
A participant may elect to have contributions made to the Plan on
his behalf of not less than 1% and not more than 16% of his annual
compensation. A participant may elect to make contributions either as
before-tax deferred compensation contributions through a salary reduction
arrangement under Section 401(k) of the Internal Revenue Code, or as after-
tax voluntary contributions, or as a combination of the two. After-tax
voluntary contributions may be made by payroll deductions or by lump sum
payments. A participant may change the percentage of his future contri-
butions as of any subsequent enrollment date by filing a written notice with
the Company and the Retirement Committee prior to the enrollment date. A
participant may suspend contributions under the Plan at any time after
completing at least 12 months of participation in the Plan by filing a
written notice with the Company and the Retirement Committee. After such a
suspension, a participant may resume his contributions as of any subsequent
enrollment date by filing a written notice with the Company and the
Retirement Committee.
The Plan provides participants with the opportunity to change the
amount of their contributions and investment elections on a quarterly basis.
Also, employees are permitted to participate in the Plan immediately upon
their respective dates of hire.
The Company makes contributions equal to 50% of the first 6% of
each participant's contributions, subject to Plan restrictions. The Company
also may make discretionary contributions if authorized by its Board of
Directors.
A separate account in each fund is maintained for each participant.
The account balances for participants are adjusted periodically, as follows:
a) As of the date with respect to which the contribution was
earned.
b) Monthly for a pro rata share of each respective Fund's net
investment income, determined by the percentage which the
participant's account balance at the beginning of the quarter
plus one half of employee deposits, as adjusted for for-
feitures and payments, bears to the total of all participant
adjusted account balances at that date.
c) Annually for a pro rata share of forfeitures, determined by
the ratio that each active participant's percentage of regular
contribution (1 to 6%) for the plan year bears to the aggre-
gate percentage of employee's regular contributions for such
plan year of all active participants. However, no forfeitures
of a participant's account shall be allocated prior to the
earlier of a five year period commencing from the date on
which the participant's employment was terminated or upon the
participant requesting distribution.
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NORDSON EMPLOYEES' SAVINGS TRUST PLAN
NOTES TO FINANCIAL STATEMENTS--CONTINUED
3. CONTRIBUTIONS AND BENEFITS (continued)
Upon retirement after age 62, or death or disability if earlier,
the balance in the separate account is paid to the participant or his
beneficiaries either in lump sum or in installments. Until distribution,
each account shall participate in the allocation of earnings and appreciation
of assets.
If the employment of a participant is terminated for any cause
other than death or total disability prior to the attainment of the age of 62
years, there shall be a distribution based on the number of years the
participant participated in the Plan. The portion of the account to be
distributed will be equal to all the employee's contributions and related
earnings, plus 20% of the remainder of the balance (the employer's matching
contribution, forfeitures and related earnings) in the separate account for
each full year of participation in the Plan up to 100%. Any portion not
distributed shall be forfeited.
While the Company has not expressed any intent to terminate the
Plan, it is free to do so at any time. In the event of termination, each
participant automatically becomes vested to the extent of the balance in his
separate accounts.
4. INVESTMENT PROGRAMS
Each participant may direct that all of his contributions and, when
the participant is fully vested or attains age 55, all matching employer
contributions, be invested jointly in 10% increments in any of the following
five investment funds:
(1) Equity Fund: A fund invested in a mixture of common stocks and
other securities of issuers other than Nordson Corporation.
(2) Money Market Fund: A fund invested in corporate commercial paper,
bank certificates of deposit, U.S. Government and Agency
securities, and other short-term investments.
(3) Guaranteed Fund: A fund invested primarily in insurance contracts
which provide for a guaranteed rate of return.
(4) Nordson Stock Fund: A fund invested primarily in the common stock
of Nordson Corporation.
(5) Bond Fund: A fund invested in fixed income securities, including
corporate bonds, U.S. Government securities, mortgage related
securities, and money market instruments.
For participants not fully vested and less than 55 years old, all
Company matching contributions are deposited in the Nordson Stock Fund.
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NORDSON EMPLOYEES' SAVINGS TRUST PLAN
NOTES TO FINANCIAL STATEMENTS--CONTINUED
4. INVESTMENT PROGRAMS (Continued)
The Plan allows participants that have completed one year in the
Plan to borrow money from the Trust. The loans plus interest, at the prime
commercial interest rate charged by the Trustee as of the first day of the
loan application period, must be repaid in equal installments over the term
of the loan. The term cannot be less than one year or greater than five
years. Participants may prepay the entire balance of the loan in a single
lump sum without penalty. The maximum amount a participant may have
outstanding is the lesser of $50,000 or 50% of the value of the participant's
nonforfeitable balance in the Plan.
5. NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Realized and unrealized gain on investments held by the Trust for
the year ended December 31, 1993 consisted of the following components:
Nordson Other
Corporation Investments
Common Stock In Securities Total
------------ ------------- -----------
1993
- - ----
Realized gain $ 95,265 $ 157,627 $ 252,892
Unrealized gain 1,652,203 533,300 2,185,503
---------- ---------- ----------
Net realized and
unrealized gain
for the year $1,747,468 $ 690,927 $2,438,395
========== ========== ==========
6. 5500 INFORMATION
The Department of Labor requires that realized and unrealized gains
(losses) be recognized in the Form 5500 on a revalued cost basis, whereby
such cost represents the fair value at the beginning of the year or the
purchase price if purchased during the year. On a revalued cost basis, the
realized gain and the unrealized gain on the investments held by the master
trust were $1,361 and $2,437,034, respectively, for the year ended December
31, 1993.
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CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8 No. 33-18309) of Nordson Corporation pertaining to the Nordson
Employees' Savings Trust Plan and in the related Prospectus of our report
dated May 24, 1994 with respect to the financial statements of the Nordson
Employees' Savings Trust Plan included in the Annual Report (Form 11-K) for
the year ended December 31, 1993 which is included in this Form 10-K/A
amendment to Nordson Corporation's Annual Report (Form 10-K) for the year
ended October 31, 1993.
/s/ Ernst & Young
Ernst & Young
June 27, 1994
Cleveland, Ohio