Fri. Jan 24th, 2020

Nordson Corporation Reports Financial Year 2k19 4th-Quarter and Full Year Results

35 min read

Nordson Corporation (Nasdaq: NDSN) declared its results for the 4th-quarter of financial year 2k19. For the quarter finished October 31, 2k19, sales were $585.00M, a 3.0 percent incline compared to the previous year’s 4th-quarter sales of $569.00M. This change in 4th-quarter 2k19 sales included an incline of approximately 4.0 percent organic volume, growth related to the 1st-year effect of acquisitions of less than 1.0 percent, and a decline related to the unfavorable effect of currency translation as compared to the previous year’s 4th-quarter of approximately 1.0 percent.

In the 4th-quarter of the financial year, 2k19 reported operating profit was $140.00M, net income was $103.00M, and GAAP diluted earnings for each share were $1.760, inclusive of a $0.030 for each share charge related to restructuring, the step-up in value of acquired inventory, and discrete tax cost. Free cash flow before dividends inclined 9.0 percent over the prior year to $128.00M in the quarter, reflecting strong cash conversion of 125.00 percent of net income. Previous year 4th-quarter sales, operating profit, net income and GAAP diluted earnings for each share were $569.00M, $117.00M, $87.00M and $1.470, respectively. A reconciliation of GAAP diluted earnings for each share to adjusted diluted earnings for each share and calculations for EBITDA, adjusted EBITDA, free cash flow before dividends, and adjusted free cash flow before dividends are included in the attached financial exhibits.

4th-Quarter Segment Results

Adhesive Dispensing Systems sales inclined 1.0 percent compared to the previous year’s 4th-quarter, inclusive of 3.0 percent organic growth and a 2.0 percent decline related to the unfavorable effect of currency translation as compared to the previous year. The reported operating margin in the segment was 31.00 percent in the quarter, which is an incline of approximately 350.0 basis points as compared to the previous year’s 4th-quarter.

Advanced Technology Systems sales declined less than 1.0 percent compared to the previous year’s 4th-quarter, inclusive of a decline in organic volume of less than 1.0 percent, an incline of 1.0 percent related to the 1st-year effect of acquisitions, and a decline of 1.0 percent related to the unfavourable effect of currency translation as compared to the previous year. The 4th-quarter’s acquisitive growth includes the fiscal 2k19 acquisition of Optical Controls GmbH. The reported operating margin in the segment was 22.00 percent in the quarter, which is an incline of approximately 150.0 basis points as compared to the previous year’s 4th-quarter.

Industrial Coating Systems sales inclined 21.00 percent compared to the previous year’s 4th-quarter, inclusive of an incline in an organic volume of 22.00 percent and a 1.0 percent decline related to the unfavorable effect of currency translation as compared to the prior year. Compared to the prior year’s 4th-quarter, the reported operating margin in the segment improved 425.0 basis points to 25.00 percent, which is a record for the segment.

Fiscal 2k19 Full Year Results

Sales for the financial year finished October 31, 2k19 were $2.20B, a decline of 3.0 percent compared to the similar duration a year ago. This change in sales included a decline in the organic volume of 1.0 percent, growth related to the 1st-year effect of acquisitions of less than 1.0 percent, and a 2.0 percent decline due to the unfavourable effect of currency translation as compared to the prior year. Full-year operating profit was $483.00M, net income was $337.00M, and GAAP diluted earnings for each share were $5.790, or $5.870 on an adjusted basis to exclude restructuring charges, the step-up in value of acquired inventory, and discrete tax cost. Previous year sales, operating profit, net income, and GAAP diluted earnings for each share were $2.30B, $503.00M, $377.00M, and $6.40, respectively.

“The macroeconomic environment remains challenging, with uncertainty impacting customers’ investment decisions. Our ability to drive full-year organic growth in most product lines demonstrates the resiliency of our end markets and the value we deliver to our customers. Despite the sales decline in financial year 2k19, our global Nordson team delivered solid results and held operating margin equal to previous year performance,” said Nagarajan. “We also returned value to our shareholders by distributing $82M in dividends and investing $115.00M for the repurchase of shares throughout the year.”

Backlog

Backlog for the quarter finished October 31, 2k19 was approximately $385.00M, a decline of 1.0 percent compared to a similar duration a year ago. The impact from the fiscal 2k19 acquisition of Optical Control GmbH was not significant. Backlog amounts are calculated at October 31, 2k19 exchange rates.

For the full financial year 2k20, organic sales volume is forecasted to incline in the range of 1.0 to 3.0 percent compared to financial year 2k19, with growth from the 1st-year effect of acquisitions adding 20.0 basis points, offset by an unfavourable currency translation effect of 30.0 basis points based on the current exchange rate environment as compared to the previous year. In addition to this sales outlook, the company expects to hold the reported operating margin and EBITDA margin equal to fiscal 2k19 results. For the financial year 2k20, the company expects interest costs to be approximately $36.00M and maintenance capital expenditures to be approximately $50.00M. The company’s estimated effective tax rate for financial year 2k20 is approximately 22.00 percent. GAAP diluted earnings for each share growth is forecasted to be in the range of 2.0 to 6.0 percent as compared to financial year 2k19 GAAP diluted earnings for each share.

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