Nordson has reported sales of $581m for the third quarter of this year, which is a 1% decrease compared to the prior year’s third quarter.
This change in sales included a decrease of approximately 3% in organic volume, growth related to the first year effect of acquisitions of approximately 1 percent, and an increase related to the favorable effects of currency translation as compared to the prior year’s third quarter of 1 percent.
The prior year’s third quarter sales benefitted from strong organic sales growth in all segments.
In the third quarter of fiscal year 2018, reported operating profit was $136 million, net income was $95 million, and GAAP diluted earnings were $1.61 per share. Free cash flow before dividends was $118 million in the quarter, reflecting strong cash conversion of 124 percent of net income.
Prior year third quarter sales, operating profit, net income and GAAP diluted earnings per share were $589 million, $153 million, $101 million and $1.74, respectively.
A reconciliation of GAAP diluted earnings per share to adjusted diluted earnings per 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.
Nordson president and chief executive officer Michael Hilton said: “Nordson delivered solid results despite challenging comparisons to our prior year’s third quarter, where total company organic sales growth was 11 percent.
“Our commitment to delivering the best technology solutions while employing continuous improvement initiatives drove bottom line performance, generating operating margin of 23 percent and $118 million of free cash flow before dividends. Our base business is strong, and we remain focused on bringing value to our customers and the diverse end markets we serve.”
The current quarter’s results include a non-recurring restructuring charge of approximately $1 million, or $0.02 per diluted share. Additionally, discrete tax benefits of approximately $2 million, or $0.03 per diluted share, were recognized in the quarter.
Adhesive Dispensing Systems sales increased 5 percent compared to the prior year’s third quarter, inclusive of 3 percent organic volume growth and a 2 percent increase related to the favorable effects of currency translation as compared to the prior year.
Reported operating margin in the segment was 28 percent, or 29 percent on an adjusted basis to exclude non-recurring restructuring charges of $1 million related to a previously announced U.S. facility consolidation.
Advanced Technology Systems sales decreased 8 percent compared to the prior year’s third quarter, including an 11 percent decrease in organic volume, a 2 percent increase related to the first year effect of acquisitions, and a 1 percent increase related to the favorable effects of currency translation as compared to the prior year.
The third quarter’s acquisitive growth includes the fiscal 2018 acquisition of Sonoscan. The third quarter of fiscal year 2017 benefitted from strong electronics end market demand driving 18 percent organic sales growth for this segment. Reported operating margin in the segment was 25 percent in the current quarter.
Industrial Coating Systems sales increased 6 percent compared to the prior year’s third quarter, including approximately 6 percent organic growth and a less than 1 percent increase from the favorable effects of currency translation as compared to the prior year.
Compared to the prior year’s third quarter, reported operating margin in the segment improved 160 basis points to 22 percent.
For the fourth quarter of fiscal 2018, sales are expected to be in the range of flat to down 4 percent compared to the fourth quarter a year ago. This outlook includes a range for organic volume to be up 1 percent to down 3 percent, 1 percent growth from the first year effect of acquisitions, and an unfavorable currency translation effect of 2 percent based on the current exchange rate environment as compared to the prior year.
At the midpoint of this outlook, operating margin is expected to be approximately 22 percent. GAAP diluted earnings per share are expected to be in the range of $1.38 to $1.54, with an estimated effective tax rate of approximately 25 percent. At the midpoint of the guidance, EBITDA and EBITDA margin are expected to be $149 million and 26 percent, respectively.
Nordson Corporation engineers, manufactures and markets differentiated products and systems used for the precision dispensing of adhesives, coatings, sealants, biomaterials, polymers, plastics 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.
Source: Company Press Release