Nordson (NDSN) 10-K risk factor changes: FY2019 vs FY2018

In [removed: 2018,] [added: 2019,] approximately [removed: 32] [added: 35] percent of our revenue was generated in the United States, while approximately [removed: 68] [added: 65] percent was generated outside the United States.

A portion of our product sales is attributable to industries and markets, such as the [removed: semiconductor, mobile] electronics, polymer processing and metal finishing industries, which historically have been cyclical and sensitive to relative changes in supply and demand and general economic conditions.

[removed: If] [added: If] we fail to develop new [removed: products,] [added: products or enhance existing products,] or our customers do not accept the [removed: new products] [added: new or enhanced products] we develop, our revenue and profitability could be adversely [removed: impacted.][added: impacted.]

We believe that we must continue to enhance our existing products and to develop and manufacture new products with improved capabilities in order to continue to be a leading provider of precision technology [removed: solutions for the industrial equipment market.][added: solutions.]

Difficulties or delays in research, development or production of new [added: or enhanced] products or failure to gain market acceptance of new [added: or enhanced] products and technologies may reduce future sales and adversely affect our competitive position.

We continue to invest in the development and marketing of new [added: or enhanced] products.

A cyber-attack or other disruption may also result in financial loss, including potential fines for failure to safeguard [removed: data.][added: data or losses in connection with any litigation that may result from a cyber-attack.]

Our results [added: have been and] could [added: continue to] be impacted by [added: uncertainty in U.S. trade policy, including uncertainty surrounding] changes in tariffs, trade agreements or other trade restrictions imposed by the U.S. or other governments.

Our ability to conduct business can be significantly impacted by changes in tariffs, changes or repeals of trade agreements, including withdrawal from or material modifications to [added: the] North American Free Trade Agreement, [added: which] the [removed: implementation of] [added: U.S. government has renegotiated into] the [removed: United] [added: “United] States-Mexico-Canada [removed: Agreement, or certain other international trade agreements,] [added: Agreement” with Mexico and Canada and has yet to ratify,] or [added: the imposition of] other trade restrictions or retaliatory actions imposed by various governments.

[removed: Our] [added: Our] growth strategy includes acquisitions, and we may not be able to execute on our acquisition strategy or integrate acquisitions [removed: successfully.][added: successfully.]

[removed: The majority] [added: A significant portion] of our consolidated revenues in [removed: 2018] [added: 2019] were generated in currencies other than the United States dollar, which is our reporting currency.

For example, [added: uncertainty surrounding] the [removed: announcement] [added: effects and timing] of Brexit [removed: and subsequent steps taken by Britain to begin withdrawal from the European Union] [added: have] caused [added: increased] volatility in global currency exchange [removed: rate fluctuations] [added: rates] that [added: have] resulted in the strengthening of the United States dollar against [added: the] foreign currencies in which we conduct business.

[removed: Any] [added: Any] impairment in the value of our intangible assets, including goodwill, would negatively affect our operating results and total [removed: capitalization.][added: capitalization.]

[removed: Our] [added: Our] inability to comply with our existing credit facilities’ restrictive covenants or to access additional sources of capital could impede growth or the repayment or refinancing of existing [removed: indebtedness.][added: indebtedness.]

Any period of interest rate increases may [removed: also] adversely affect our profitability.

At October 31, [removed: 2018,] [added: 2019,] we had [removed: $1,314,091] [added: $1,244,142] of total debt and notes payable outstanding, of which 51 percent was priced at interest rates that float with the market.

A one percentage point increase in the interest rate on the floating rate debt in [removed: 2018] [added: 2019] would have resulted in approximately [removed: $10,672] [added: $7,236] of additional interest expense.

[removed: The] [added: The] level of returns on pension plan assets and changes in the actuarial assumptions used could adversely affect [removed: us.][added: us.]

In [removed: 2018,] [added: 2019,] approximately [removed: 68] [added: 65] percent of our total sales were generated outside the United States.

| • | changes in tax rates, adoption of new tax laws or other additional tax policies, [removed: including the implementation of the Tax Cuts] and [removed: Jobs Act of 2017 and] other proposals to reform United States and foreign tax laws that impact how United States multinational corporations are taxed on foreign earnings; |

The current U.S. presidential administration has criticized existing trade agreements, and while it [removed: is currently] [added: remains] unclear what actions the administration may take with respect to existing and proposed trade agreements, or restrictions on trade generally, more stringent export and import controls may be ultimately imposed in the future.

[removed: The] [added: The] insurance that we maintain may not fully cover all potential [removed: exposures.][added: exposures.]

A general slowdown in the global economy or in a particular region or industry or an increase in trade tensions with U.S. trading partners could negatively impact our business, financial condition or liquidity.

Our largest markets include consumer non-durable, industrial, medical, electronics, consumer durable and automotive.

We cannot predict the timing, strength or duration of any economic slowdown, instability or recovery, generally or within any particular region or industry in which we operate.

Nordson Corporation 9

We cannot predict what further action may be taken with respect to tariffs or trade relations between the U.S. and other governments, and any further changes in U.S. or international trade policy could have an adverse impact on our business.

Additionally, the interest rates on some of our debt is tied to LIBOR.

In July 2017, the head of the United Kingdom’s Financial Conduct Authority announced its intention to phase out the use of LIBOR by the end of 2021.

The uncertainty regarding the future of LIBOR, as well as the transition from LIBOR to another benchmark rate or rates could have adverse impacts on our outstanding debt and notes payable that currently use LIBOR as a benchmark rate, and ultimately, adversely affect our financial condition and results of operations.

During 2019, we experienced a leadership change with the appointment of a new President and Chief Executive Officer.

Our largest markets include appliance, automotive, construction, container, electronics assembly, food and beverage, furniture, medical, metal finishing, nonwovens, packaging, paper and paperboard converting, plastics processing and semiconductor.

We did not record any goodwill impairment charges in [removed: 2018.][added: 2019.]

For [removed: 2018,] [added: 2019,] the discount rates used ranged from [removed: 9.5] [added: 9] percent to 12 percent depending upon the reporting unit's size, end market volatility, and projection risk.

In [added: 2019,] 2018, [removed: 2017,] and [removed: 2016,] [added: 2017,] the results of our annual impairment tests indicated no impairment.

Based on the results shown in the table below and based on our measurement date of August 1, [removed: 2018,] [added: 2019,] our conclusion is that no goodwill was impaired in [removed: 2018.][added: 2019.]

| Industrial Coating Systems Segment | | [removed: 11.5%] [added: 10.5%] | | | [removed: 488%] [added: 550%] | | | $ | 24,058 | |

| Advanced Technology Systems Segment - Electronics Systems | | [removed: 11.0%] [added: 10.0%] | | | [removed: 564%] [added: 295%] | | | $ | [removed: 27,916] [added: 27,581] | |

| Advanced Technology Systems Segment - Fluid Management | | [removed: 10.5%] [added: 10.0%] | | | [removed: 119%] [added: 127%] | | | $ | [removed: 1,095,969] [added: 1,098,006] | |

| Advanced Technology Systems Segment - Test & Inspection | | 12.0% | | | [removed: 141%] [added: 178%] | | | $ | [removed: 71,050] [added: 77,118] | |

The weighted-average discount rate used to determine the present value of our domestic pension plan obligations was [removed: 4.53] [added: 3.25] percent at October 31, [removed: 2018] [added: 2019] and [removed: 3.80] [added: 4.53] percent at October 31, [removed: 2017.][added: 2018.]

The weighted-average discount rate used to determine the present value of our various international pension plan obligations was [removed: 2.14] [added: 1.26] percent at October 31, [removed: 2018,] [added: 2019,] compared to [removed: 2.07] [added: 2.14] percent at October 31, [removed: 2017.][added: 2018.]

The expected rate of return (long-term investment rate) on domestic pension assets used to determine net benefit costs was 6.00 percent in [removed: 2018] [added: both 2019] and [removed: 6.25 percent in 2017.][added: 2018.]

The average expected rate of return on international pension assets used to determine net benefit costs was [removed: 3.91] [added: 3.96] percent in [removed: 2018] [added: 2019] and [removed: 3.51] [added: 3.91] percent in [removed: 2017.][added: 2018.]

The assumed rate of compensation increases used to determine the present value of our domestic pension plan obligations was [removed: 3.90] [added: 4.00] percent at October 31, [removed: 2018,] [added: 2019,] compared to [removed: 3.61] [added: 3.90] percent at October 31, [removed: 2017.][added: 2018.]

The assumed rate of compensation increases used to determine the present value of our international pension plan obligations was 3.12 percent at [added: both] October 31, [removed: 2018, compared to 3.13 percent at] [added: 2019, and] October 31, [removed: 2017.][added: 2018.]

With respect to the domestic postretirement medical plan, the discount rate used to value the benefit [removed: plan] [added: obligation] was [removed: 4.56] [added: 3.27] percent at October 31, [removed: 2018] [added: 2019] and [removed: 3.86] [added: 4.56] percent at October 31, [removed: 2017.][added: 2018.]

The annual rate of increase in the per capita cost of covered benefits (the health care cost trend rate) is assumed to be [removed: 3.75] [added: 3.62] percent in [removed: 2019,] [added: 2020,] decreasing gradually to [removed: 3.27] [added: 3.24] percent in 2026.

For the international postretirement plan, the discount rate used to value the benefit obligation was [removed: 3.88] [added: 3.03] percent at October 31, [removed: 2018] [added: 2019] and [removed: 3.52] [added: 3.88] percent at October 31, [removed: 2017.][added: 2018.]

The annual rate of increase in the per capita cost of covered benefits (the health care cost trend rate) is assumed to be [removed: 6.35] [added: 4.00] percent in [removed: 2019, decreasing gradually] [added: 2020] to [removed: 3.50] [added: 4.05] percent in [removed: 2037.][added: 2040.]

Pension and postretirement expenses in [removed: 2019] [added: 2020] are expected to be approximately [removed: $990 lower] [added: $9,900 higher] than [removed: 2018.][added: 2019.]

[removed: Judgment] [added: Significant judgment] is involved regarding the application of global income tax laws and regulations and when projecting the jurisdictional mix of income.

[removed: Operating profit] [added: Operating profit] – Cost of sales were [removed: $1,018,703] [added: $1,018,340] in 2018, up 9.8 percent from [removed: $927,981] [added: $927,692] in 2017.

Selling and administrative expenses were [removed: $734,856] [added: $733,749] in 2018, compared to [removed: $678,861] [added: $672,888] in 2017.

The [removed: 8.2] [added: 9.0] percent increase includes [removed: 8.7] [added: 9.4] percent primarily in support of higher sales growth and [removed: 1.7] [added: 1.8] percent due to unfavorable currency translation effects, offset by 2.2 percent due to lower acquisition transaction costs in [removed: the current year.][added: 2018.]

Selling and administrative expenses as a percentage of sales decreased to [removed: 32.6] [added: 32.5] percent in 2018 from [removed: 32.8] [added: 32.6] percent in 2017.

Of the [removed: 0.2] [added: 0.1] percentage point improvement, 0.7 percentage points is due to lower acquisition transaction costs, offset by [removed: 0.5] [added: 0.6] percentage points due to higher base business costs.

Operating profit as a percentage of sales decreased to [removed: 21.9] [added: 22.3] percent in 2018 compared to [removed: 22.1] [added: 22.6] percent in 2017.

Of the [removed: 0.2] [added: 0.3] percentage point decline in operating margin, unfavorable leverage of our selling and administrative expenses contributed [removed: 0.9] [added: 1.1] percentage points, higher severance and restructuring expenses contributed 0.2 percentage [removed: points,] [added: points] and unfavorable product mix contributed [removed: 0.7] [added: 0.5] percentage points.

This decline was offset by 0.3 percentage points due to the [removed: first year] [added: first-year] effect of acquisitions, 0.7 percentage points due to lower acquisition transaction [removed: costs,] [added: costs] and [removed: 0.6] [added: 0.5] percentage points due to favorable foreign currency translation effects.

For the Adhesive Dispensing Systems segment, operating profit as a percentage of sales decreased to [removed: 27.2] [added: 27.5] percent in 2018 compared to [removed: 27.7] [added: 28.0] percent in 2017.

Of the 0.5 percentage point decline in operating margin, dilution in gross margin of 0.8 percentage points was due to the consolidation of certain facilities in the [removed: U.S.,] [added: U.S.] and higher severance and restructuring expenses contributed 0.3 percentage points, offset by favorable foreign currency translation effects of 0.6 percentage points.

For the Advanced Technology Systems segment, operating profit as a percentage of sales decreased to [removed: 23.4] [added: 23.6] percent in 2018 compared to [removed: 25.4] [added: 25.6] percent in 2017.

For the Industrial Coating Systems segment, operating profit as a percentage of sales increased to [removed: 19.5] [added: 20.2] percent in 2018 compared to [removed: 17.4] [added: 18.0] percent in 2017.

Of the [removed: 2.1] [added: 2.2] percentage point improvement in operating margin, 1.9 percentage points related to favorable product mix and 0.4 percentage points related to favorable foreign currency translation effects.

This improvement was partially offset by [removed: 0.2] [added: 0.1] percentage points due to unfavorable leverage of our selling and administrative expenses.

Other [removed: income] [added: expense] in 2018 was [removed: $2,154] [added: $5,868] compared to other expense of [removed: $1,934] [added: $10,634] in 2017.

Included in the [removed: current] [added: prior] year’s other [removed: income are] [added: expense were pension costs related to the adoption of a new accounting standard, as noted above, of $8,022,] foreign currency gains of $1,133 and a non-recurring gain of $2,512.

Income [added: taxes – Income] tax expense in 2018 was $71,144, or 15.9 percent of pre-tax income, as compared to $124,489, or 29.6 percent of pre-tax income in 2017.

We have an October 31 fiscal [removed: year-end,] [added: year end,] therefore the lower corporate income tax rate will be phased in, resulting in a U.S. statutory federal rate of 23.34 percent for our fiscal year ended October 31, 2018, and [removed: 21] [added: 21.00] percent for subsequent fiscal years.

The statutory tax rate of [removed: 23.34 percent] [added: 21.00percent] was applied to earnings in the current year.

Sales volume [removed: increased 14.8] [added: decreased 0.7] percent and unfavorable currency translation effects [removed: reduced] [added: decreased] sales by [removed: 0.5] [added: 2.0] percent.

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 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.

Refer to Note 1 to the Consolidated Financial Statements for further discussion around the Company's revenue recognition policy.

| Adhesive Dispensing Systems Segment | | 9.0% | | | 564% | | | $ | 386,713 | |

| Effect on total net periodic pension cost in 2019 | | $ | (5,413 | ) | | $ | 7,862 | | | $ | (1,184 | ) | | $ | 1,333 | |

| Effect on pension obligation as of October 31, 2019 | | $ | (74,804 | ) | | $ | 94,969 | | | $ | (13,823 | ) | | $ | 16,523 | |

| Effect on total net periodic pension cost in 2019 | | $ | (3,890 | ) | | $ | 3,890 | | | $ | (407 | ) | | $ | 407 | |

| Effect on total net periodic pension cost in 2019 | | $ | 4,625 | | | $ | (4,046 | ) | | $ | 522 | | | $ | (461 | ) |

| Effect on pension obligation as of October 31, 2019 | | $ | 28,775 | | | $ | (25,955 | ) | | $ | 3,186 | | | $ | (2,955 | ) |

| Effect on total net postretirement benefit cost components in 2019 | | $ | (535 | ) | | $ | 681 | | | $ | (3 | ) | | $ | 3 | |

| Effect on postretirement obligation as of October 31, 2019 | | $ | (12,237 | ) | | $ | 15,551 | | | $ | (87 | ) | | $ | 116 | |

| Effect on total net postretirement benefit cost components in 2019 | | $ | 494 | | | $ | (400 | ) | | $ | 9 | | | $ | (7 | ) |

| Effect on postretirement obligation as of October 31, 2019 | | $ | 11,984 | | | $ | (9,800 | ) | | $ | 108 | | | $ | (84 | ) |

2019 compared to 2018

Sales – Worldwide sales for 2019 were $2,194,226, a decrease of 2.7 percent from 2018 sales of $2,254,668.

Sales of the Adhesive Dispensing Systems segment were $950,917 in 2019, a decrease of $4,275, or 0.4 percent, from 2018 sales of $955,192.

Sales of the Advanced Technology Systems segment were $985,850 in 2019, a decrease of $53,516, or 5.1 percent, from 2018 sales of $1,039,366.

Growth in our fluid management product lines serving medical end markets was offset by lower demand in our dispensing product lines serving electronics end markets.

Sales of the Industrial Coating Systems segment were $257,459 in 2019, a decrease of $2,651, or 1.0 percent, from 2018 sales of $260,110.

Growth in cold materials product lines serving automotive end markets was offset by softness in the liquid and container product lines serving industrial end markets.

Sales in Europe were $571,596, a decrease of 8.1 percent from 2018, with volume decreasing 3.3 percent and unfavorable currency effects of 4.8 percent.

Sales in Japan were $126,756, a decrease of 21.6 percent from 2018, with volume decreasing 22.2 percent offset by favorable currency effects of 0.6 percent.

Operating profit – Cost of sales were $1,002,123 in 2019, down 1.6 percent from $1,018,340 in 2018.

Of the 0.5 percentage point decrease in gross margin, unfavorable currency translation effects contributed 0.4 percentage points and unfavorable product mix contributed 0.1 percentage points.

Selling and administrative expenses were $708,990 in 2019, compared to $733,749 in 2018.

The 3.4 percent decrease includes 1.6 percentage points due to lower base business costs and 1.8 percentage points due to unfavorable currency translation effects.

The 0.2 percentage point improvement is due to lower base business costs.

Operating profit as a percentage of sales decreased to 22.0 percent in 2019 compared to 22.3 percent in 2018.

This decline was partially offset by 0.6 percentage points due to favorable leverage of our selling and administrative expenses.

Interest and other income (expense) - Interest expense in 2019 was $47,145, a decrease of $2,432, or 4.9 percent, from 2018.

The decrease was due to lower average debt levels than the prior year.

Other expense in 2019 was $6,708 compared to other expense of $5,868 in 2018.

Included in the current year’s other expense were pension costs related to the adoption of a new accounting standard of $7,136.

Income taxes – Income tax expense in 2019 was $94,013, or 21.8 percent of pre-tax income, as compared to $71,144, or 15.9 percent of pre-tax income in 2018.

On December 22, 2017 the U.S. Tax Cuts and Jobs Act ("the Act") was enacted.

It reduces the U.S. federal corporate income tax rate from 35 percent to 21 percent.

We have an October 31 fiscal year end, therefore the lower corporate income tax rate was phased in, resulting in a U.S. statutory federal rate of 23.34 percent for our fiscal year ended October 31, 2018, and 21.00 percent for subsequent fiscal years.

Our income tax provision for 2018 included a provisional tax benefit of $49,082 to reflect the revaluation of our tax assets and liabilities at the reduced corporate tax rate.

Subsequent to the enactment of the Act, the SEC staff issued SAB 118, which provided a measurement period of up to one year after the enactment date for companies to finalize the recognition of the income tax effects of the Act.

Revenue recognition – Most of our revenues are recognized upon shipment, provided that persuasive evidence of an arrangement exists, the sales price is fixed or determinable, collectibility is reasonably assured, and title and risk of loss have passed to the customer.

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 perfunctory.

Revenue for undelivered items is deferred and included within accrued liabilities in the Consolidated Balance Sheet.

Revenues deferred in 2018, 2017 and 2016 were not material.

| Adhesive Dispensing Systems Segment | | 9.5% | | | 497% | | | $ | 392,740 | |

| Effect on total service and interest cost components in 2018 | | $ | (6,081 | ) | | $ | 7,000 | | | $ | (1,212 | ) | | $ | 1,418 | |

| Effect on pension obligation as of October 31, 2018 | | $ | (53,084 | ) | | $ | 66,632 | | | $ | (14,279 | ) | | $ | 17,644 | |

| Effect on total service and interest cost components in 2018 | | $ | (3,660 | ) | | $ | 3,660 | | | $ | (391 | ) | | $ | 391 | |

| Effect on total service and interest cost components in 2018 | | $ | 4,648 | | | $ | (3,266 | ) | | $ | 553 | | | $ | (534 | ) |

| Effect on pension obligation as of October 31, 2018 | | $ | 21,688 | | | $ | (18,104 | ) | | $ | 3,588 | | | $ | (2,944 | ) |

| Effect on total service and interest cost components in 2018 | | $ | (631 | ) | | $ | 760 | | | $ | (4 | ) | | $ | 4 | |

| Effect on postretirement obligation as of October 31, 2018 | | $ | (9,204 | ) | | $ | 11,482 | | | $ | (96 | ) | | $ | 127 | |

| Effect on total service and interest cost components in 2018 | | $ | 516 | | | $ | (411 | ) | | $ | 11 | | | $ | (8 | ) |

| Effect on postretirement obligation as of October 31, 2018 | | $ | 9,316 | | | $ | (7,659 | ) | | $ | 120 | | | $ | (93 | ) |

In the fourth quarter of 2016, we adopted a change in the method to be used to estimate the service and interest cost components of net periodic benefit cost for defined benefit pension plans.

Historically, for the vast majority of our plans, the service and interest cost components were estimated using a single weighted-average discount rate derived from the yield curve used to measure the benefit obligation at the beginning of the period.

Beginning in 2017, we used a spot rate approach by applying the specific spot rates along the yield curve to the relevant projected cash flows in the estimation of the service and interest components of benefit cost, resulting in a more precise measurement.

This change did not affect the measurement of total benefit obligations.

The change was accounted for as a change in estimate that is inseparable from a change in accounting principle and, accordingly, was accounted for prospectively starting in 2017.

The reductions in service and interest costs for 2017 associated with this change were $1,200 and $3,100, respectively.

As used throughout this Form 10-K, geographic regions include the Americas (Canada, Mexico and Central and South America), Asia Pacific (excluding Japan), Europe, Japan, and the United States.

Severance and restructuring costs of $6,552 were recorded in 2018.

Within the Adhesives Dispensing Systems segment, a restructuring initiative to consolidate certain polymer processing product line facilities in the U.S. resulted in severance and restructuring costs of $5,631.

Within the Advanced Technology Systems segment, severance costs of $401 were recorded in Europe.

Severance costs of $520 were recorded in the U.S. due to a Corporate restructuring initiative.

No costs related to severance and restructuring were recorded in the Industrial Coating Systems segment in 2018.

Additional costs related to these initiatives are not expected to be material in future periods.

All severance and restructuring costs are included in selling and administrative expenses in the Consolidated Statements of Income.

The increase was due to higher average borrowing levels between periods.

Included in the prior year’s other expense were foreign currency losses of $686.

Income taxes –

Our income tax provision for 2017 includes a discrete tax expense of $1,070 related to nondeductible acquisition costs.

2017 compared to 2016

Sales – Worldwide sales for 2017 were $2,066,982, an increase of 14.3 percent from 2016 sales of $1,808,994.

We had four acquisitions during 2017, ACE Production Technologies, Inc. (“ACE”), Plas-Pak Industries, Inc. (“Plas-Pak), InterSelect GmbH (“InterSelect”), and Vention Medical’s Advanced Technologies business (“Vention”), which are all included within the Advanced Technology Systems segment.

Sales of the Adhesive Dispensing Systems segment were $916,019 in 2017, an increase of $36,446, or 4.1 percent, from 2016 sales of $879,573.

Sales of the Advanced Technology Systems segment were $897,623 in 2017, an increase of $221,294 or 32.7 percent, from 2016 sales of $676,329.

Organic volume increased in most product lines, and was driven by demand in electronics and medical end markets.

Sales of the Industrial Coating Systems segment were $253,340 in 2017, an increase of $248, or 0.1 percent, from 2016 sales of $253,092.

Sales volume increased in most product lines, and was driven by demand for liquid and UV curing, powder coating and container product lines serving industrial end markets.

As a result of the use of foreign exchange contracts on a routine basis to reduce the risks related to most of our transactions denominated in foreign currencies, as of October 31, [removed: 2018,] [added: 2019,] we did not have material foreign currency exposure.

[added: Refer to] Note 12 to the [removed: financial statements contains additional information] [added: Consolidated Financial Statements for further discussion] about our foreign currency transactions and the methods and assumptions used to record these transactions.

| [removed: At October 31, 2018] | | | | | | | | | | | | | | | | | | | | | | | | | | Total | | | | Fair | | |

| [removed: | |] [added: At October 31,] 2019 | | [removed: | |] 2020 | | | | 2021 | | | | 2022 | | | | 2023 | | | | [added: 2024 | | | |] Thereafter | | | | Value | | | | Value | | |

| [removed: At October 31, 2017] | | | | | | | | | | | | | | | | | | | | | | | | | | Total | | | | Fair | | |

| [removed: | |] [added: At October 31,] 2018 | | [removed: | |] 2019 | | | | 2020 | | | | 2021 | | | | 2022 | | | | [added: 2023 | | | |] Thereafter | | | | Value | | | | Value | | |

| Average interest rate on total borrowings outstanding during the year | | | [removed: 2.9] [added: 3.5] | % | | | [removed: 3.0] [added: 3.6] | % | | | [removed: 3.0] [added: 3.7] | % | | | [removed: 3.1] [added: 3.7] | % | | | [removed: 3.1] [added: 3.8] | % | | | [removed: 3.1] [added: 3.9] | % | | | [removed: 2.9] [added: 3.5] | % | | | | |

The weighted average interest rate of this debt was [removed: 3.2] [added: 3.0] percent at October 31, [removed: 2018] [added: 2019] and [removed: 2.3] [added: 3.2] percent at October 31, [removed: 2017.][added: 2018.]

A one percent increase in interest rates would have resulted in additional interest expense of approximately [removed: $10,672] [added: $7,236] on the variable rate notes payable and long-term debt in [removed: 2018.][added: 2019.]

| Annual repayments of long-term debt | | $ | 68,738 | | | $ | 38,187 | | | $ | 30,791 | | | $ | 130,796 | | | $ | 110,801 | | | $ | 235,851 | | | $ | 615,164 | | | $ | 647,982 | |

| Annual repayments of long-term debt | | $ | 26,586 | | | $ | 28,734 | | | $ | 68,738 | | | $ | 38,187 | | | $ | 30,791 | | | $ | 127,448 | | | $ | 320,484 | | | $ | 324,965 | |

Nordson engineers, manufactures and markets differentiated products and systems used [removed: to dispense, apply] [added: for precision dispensing, applying] and [removed: control] [added: controlling of] adhesives, coatings, polymers, sealants, biomaterials, and other fluids, to test and inspect for quality, and to treat and cure surfaces.

Consistent with this global strategy, approximately [removed: 68] [added: 65] percent of our revenues were generated outside the United States in [removed: 2018.][added: 2019.]

We have [removed: 7,536] [added: 7,579] employees worldwide.

| | [removed: 1.] [added: 1.] | Adhesive Dispensing Systems |

| | • | [removed: Nonwovens] [added: Nonwovens] – Dispensing, coating and laminating systems for applying adhesives, lotions, liquids and fibers to disposable products and continuous roll goods. Key strategic markets include adult incontinence products, baby diapers and child-training pants, feminine hygiene products and surgical drapes, gowns, shoe covers and face masks. |

| | • | [removed: Packaging] [added: Packaging] – Automated adhesive dispensing systems used in the rigid packaged goods industries. Key strategic markets include food and beverage packaging, pharmaceutical packaging, and other consumer goods packaging. |

| | • | [removed: Polymer Processing] [added: Polymer Processing] – Components and systems used in the thermoplastic melt stream in plastic extrusion, injection molding, compounding, polymerization and recycling processes. Key strategic markets include flexible packaging, electronics, medical, building and construction, transportation and aerospace, and general consumer goods. |

| | • | [removed: Product Assembly] [added: Product Assembly] – Dispensing, coating and laminating systems for the assembly of plastic, metal and wood products, for paper and paperboard converting applications and for the manufacturing of continuous roll goods. Key strategic markets include appliances, automotive components, building and construction materials, electronics, furniture, solar energy, and the manufacturing of bags, sacks, books, envelopes and folding cartons. |

| | [removed: 2.] [added: 2.] | [removed: Advanced] [added: Advanced] Technology [removed: Systems] [added: Systems] |

| | • | [removed: Electronics] [added: Electronics] Systems [removed: -] [added: –] Automated dispensing systems for high-speed, accurate application of a broad range of attachment, protection and coating fluids, and related gas plasma treatment systems for cleaning and conditioning surfaces prior to dispense. Key strategic markets include [removed: mobile phones, tablets, personal computers, wearable technology, liquid crystal displays, micro hard drives, microprocessors,] [added: the breadth of the electronics industry manufacturing supply chain that produces semiconductor,] printed circuit [removed: boards, flexible circuits, micro-electronic mechanical systems (MEMS),] [added: board assemblies] and [removed: semiconductor packaging.] [added: electronic components.] |

| | • | [removed: Fluid Management] [added: Fluid Management] – Precision manual and semi-automated dispensers, minimally invasive interventional delivery devices, and highly engineered single-use plastic molded syringes, cartridges, tips, fluid connection components, tubing, balloons, and catheters. Products are used for applying and controlling the flow of adhesives, sealants, lubricants, and biomaterials in critical industrial production processes and within medical equipment and related surgical procedures. Key strategic markets include consumer goods, electronics, industrial assembly, and medical. |

| | • | [removed: Test] [added: Test] and Inspection [removed: -] [added: –] Bond testing and automated optical, acoustic microscopy and x-ray inspection systems used in the semiconductor and printed circuit board industries. Key strategic markets include mobile phones, tablets, personal computers, wearable technology, liquid crystal displays, micro hard drives, microprocessors, printed circuit boards, flexible circuits, MEMS, and semiconductor packaging. |

| | [removed: 3.] [added: 3.] | Industrial Coating Systems |

| | • | [removed: Cold Materials] [added: Cold Materials] – Automated and manual dispensing products and systems used to apply multiple component adhesive and sealant materials in the general industrial and transportation manufacturing industries. Key strategic markets include aerospace, [removed: alternative energy,] [added: electric battery,] appliances, automotive, building and construction, composites, electronics and medical. |

| | • | [removed: Container Coating] [added: Container Coating] – Automated and manual dispensing and curing systems used to coat and cure containers. Key strategic markets include beverage containers and food cans. |

| | • | [removed: Curing] [added: Curing] and Drying [removed: Systems] [added: Systems] – Ultraviolet equipment used primarily in curing and drying operations for specialty coatings, semiconductor materials and paints. Key strategic markets include electronics, containers, and durable goods products. |

| | • | [removed: Liquid Finishing] [added: Liquid Finishing] – Automated and manual dispensing systems used to apply liquid paints and coatings to consumer and industrial products. Key strategic markets include automotive components, agriculture, construction, metal shelving and drums. |

| | • | [removed: Powder Coating] [added: Powder Coating] – Automated and manual dispensing systems used to apply powder paints and coatings to a variety of metal, plastic and wood products. Key strategic markets include agriculture and construction equipment, appliances, automotive components, home and office furniture, lawn and garden equipment, pipe coating, and wood and metal shelving. |

Senior operating management [removed: supervise] [added: supervises] an extensive quality control program for our equipment, machinery and systems, and manufacturing processes.

As of October 31, [removed: 2018,] [added: 2019,] we held [removed: 545] [added: 598] United States patents and [removed: 1,405] [added: 1,449] foreign patents and had [removed: 193] [added: 160] United States patent applications pending and [removed: 856] [added: 778] foreign patent applications pending, but there is no assurance that any patent application will be issued.

Our patent portfolio as of October 31, [removed: 2018] [added: 2019] had expiration dates ranging from November [removed: 2018] [added: 2019] to [removed: April] [added: August] 2038.

As of October 31, [removed: 2018,] [added: 2019,] we had a total of [removed: 884] [added: 987] trademark registrations in the United States and in various foreign countries.

[removed: Working Capital Practices][added: Working Capital Practices]

In [removed: 2018,] [added: 2019,] no single customer accounted for ten percent or more of sales.

The amounts for both years were calculated based upon exchange rates in effect at October 31, [removed: 2018.][added: 2019.]

All orders in the [removed: 2018] [added: 2019] year-end backlog are expected to be shipped to customers in [removed: 2019.][added: 2020.]

Compliance with federal, state, local and foreign environmental protection laws during [removed: 2018] [added: 2019] had no material effect on our capital expenditures, earnings or competitive position.

As of October 31, [removed: 2018,] [added: 2019,] we had [removed: 7,536] [added: 7,579] full-time and part-time employees, including [removed: 134] [added: 138] at our Amherst, Ohio, facility who are represented by a collective bargaining agreement that expires on [removed: October 31, 2019.][added: November 13, 2022.]

Our [removed: proxy statement,] annual report to the Securities and Exchange Commission (Form 10-K), quarterly reports (Form 10-Q) and current reports (Form 8-K) and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 are available free of charge at [removed: http://www.nordson.com/investors] [added: https://investors.nordson.com] as soon as reasonably practical after such material is electronically filed with, or furnished to, the SEC.

The contents of our [removed: Internet] website are not incorporated by reference herein and are not deemed to be a part of this report.

New Chief Executive Officer

On June 14, 2019, we announced the appointment of Sundaram Nagarajan as our President and Chief Executive Officer, effective August 1, 2019.

Mr. Nagarajan succeeds Michael F.

Hilton, who previously announced his plans to retire.

On Mr. Nagarajan’s start date, Mr. Hilton became Senior Advisor to the Company and will remain as an Executive Officer and Senior Advisor, and as a member of our Board of Directors until he retires on December 31, 2019.

Our backlog of open orders was approximately $385,000 at October 31, 2019, compared to approximately $390,000 at October 31, 2018.

The impact of tariffs over our end markets in Asia could negatively affect our long-term market position in that region.

Our backlog of open orders were relatively consistent at approximately $394,000 at October 31, 2018 and approximately $397,000 at October 31, 2017, inclusive of approximately three percent decline in organic growth, offset by two percent growth due to acquisitions.

Nordson Corporation 9

Including the [added: litigation and] environmental [removed: matter] [added: matters] discussed below, after consultation with legal counsel, we [added: do not] believe that [removed: the probability is remote 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.

[removed: 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 constructing a potable water delivery system serving the impacted area down gradient of the Site.

At October 31, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] our accrual for the ongoing operation, maintenance and monitoring obligation at the Site was [removed: $439] [added: $401] and [removed: $472,] [added: $439,] respectively.

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.

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

| [removed: ☒] [added: ☒] | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |

For the fiscal year ended October 31, [removed: 2018][added: 2019]

| [removed: ☐] [added: ☐] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |

[added: |] Securities registered pursuant to Section 12(b) of the Act: [added: | | |]

| Common Shares, without par value | [added: NDSN |] Nasdaq Stock Market LLC |

| [removed: (Title)] [added: Title of Each class] | [removed: (Name] [added: Trading Symbol(s) | Name] of [removed: exchange] [added: Each Exchange] on which [removed: registered)] [added: Registered] |

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or [removed: 15 (d)] [added: 15(d)] of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days.

The aggregate market value of Common Shares, no par value per share, held by nonaffiliates (based on the closing sale price on the Nasdaq Stock Market) as of April 30, [removed: 2018] [added: 2019] was approximately [removed: $7,441,507.][added: $8,347,622,072.]

There were [removed: 57,927,038] [added: 57,708,386] Common Shares outstanding as of November 30, [removed: 2018.][added: 2019.]

Documents incorporated by reference: Portions of the Proxy Statement for the [removed: 2019] [added: 2020] Annual Meeting - Part III of the Form 10-K

[removed: Table] [added: Table] of [removed: Contents][added: Contents]

| | | [Manufacturing and Raw Materials](#MANUFACTURING_RAW_MATERIALS) | [removed: 7] [added: 6] |

| | | [Seasonal Variation in Business](#SEASONAL_VARIATION_IN_BUSINESS) | [removed: 8] [added: 7] |

| Item 1A. | | [Risk Factors](#ITEM_1A_RISK_FACTORS) | [removed: 10] [added: 9] |

| | | [removed: [Executive Officers of the Company](#EXECUTIVE_FICERS__COMPANY)] [added: [Information about Our Executive Officers](#EXECUTIVE_FICERS__COMPANY)] | 17 |

| [PART II](#PART_II) | | | [removed: 18] [added: 19] |

| Item 5. | | [Market for the Company’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](#ITEM_5_MARKET_FOR_COMPANYS_COMMON_EQUITY) | [removed: 18] [added: 19] |

| | | [Market Information and Dividends](#MARKET_INFORMATION_DIVIDENDS) | [removed: 18] [added: 19] |

| | | [Performance Graph](#PERFORMANCE_GRAPH) | [removed: 18] [added: 19] |

| | | [Consolidated Statements of Shareholders’ [removed: Equity](#CONSOLIDATED_STATEMENTS_SHAREHOLDERS_EQU)] [added: Equity](#CONDENSED_CONSOLIDATED_STATEMENTS_SHAREH)] | 36 |

| | | [Report of Independent Registered Public Accounting [removed: Firm](#Report_of_Independent)] [added: Firm](#REPORT_INDEPENDENT_REGISTERED_PUBLIC_AC)] | 69 |

| Item 9. | | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](#ITEM_9_CHANGES_IN_DISAGREEMENTS_WITH_ACC) | [removed: 70] [added: 71] |

| Item 9A. | | [Controls and Procedures](#ITEM_9A_CONTROLS_PROCEDURES) | [removed: 70] [added: 71] |

| Item 9B. | | [Other Information](#ITEM_9B_OR_INFORMATION) | [removed: 70] [added: 71] |

| [PART III](#PART_III) | | | [removed: 71] [added: 72] |

| Item 10. | | [Directors, Executive Officers and Corporate Governance](#ITEM_10_DIRECTORS_EXECUTIVE_FICERS_CORPO) | [removed: 71] [added: 72] |

| Item 11. | | [Executive Compensation](#ITEM_11_EXECUTIVE_COMPENSATION) | [removed: 71] [added: 72] |

| Item 12. | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](#ITEM_12_SECURITY_OWNERSHIP_CERTAIN_BENEF) | [removed: 71] [added: 72] |

| | | [Equity Compensation Table](#EQUITY_COMPENSATION_TABLE) | [removed: 71] [added: 72] |

| Item 13. | | [Certain Relationships and Related Transactions, and Director Independence](#ITEM_13_CERTAIN_RELATIONSHIPS_RELATED_TR) | [removed: 71] [added: 72] |

| --- | --- | --- |

10-K 1 ndsn-10k_20181031.htm 10-K

| --- | --- |

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

| | | | |

| Chippewa Falls, Wisconsin 1 | | [removed: Three] [added: A] manufacturing, warehouse and office [removed: buildings] [added: building] (leased) | | [removed: 151,000] [added: 145,000] |

| Salem, New Hampshire 2 | | [removed: A] [added: Two] manufacturing, warehouse and office [removed: building] [added: buildings] (leased) | | [removed: 63,000] [added: 83,000] |

| [removed: Boulder, Colorado 2] [added: Münster, Germany 1] | | Two [removed: office] [added: manufacturing, warehouse] and [removed: laboratory] [added: office] buildings (leased) | | [removed: 21,000] [added: 488,000] |

| [removed: Concord, California 2] [added: Erkrath, Germany 1, 2, 3] | | [removed: A manufacturing] [added: An office, laboratory] and [removed: office] [added: warehouse] building (leased) | | [removed: 12,000] [added: 50,000] |

| [removed: Ventura, California 2] [added: Shanghai, China 1,2, 3] | | [removed: Two] [added: Three] manufacturing, warehouse and office buildings (leased) | | [removed: 11,000] [added: 33,000] |

Our principal owned and leased properties (defined as greater than 20,000 square feet or related to a principal operation) as of October 31, 2019 are as follows:

The following table summarizes our principal properties as of October 31, 2018:

| Münster, Germany 1 | | Four manufacturing, warehouse and office buildings (leased) | | 215,000 |

| Shanghai, China 1,2, 3 | | Three manufacturing, warehouse and office buildings (leased) | | 160,000 |

| Erkrath, Germany 1, 2, 3 | | An office, laboratory and warehouse building (leased) | | 48,000 |

| Selangos, Malaysia 1, 3 | | A laboratory and office building (leased) | | 17,000 |

Our executive officers as of October 31, [removed: 2018,] [added: 2019,] were as follows:

| [removed: Michael F. Hilton] [added: Sundaram Nagarajan] | | [removed: 64] [added: 57] | | [removed: 2010] [added: 2019] | | President and Chief Executive Officer, [removed: 2010] [added: 2019] |

| Gregory A. Thaxton | | [removed: 57] [added: 58] | | 2007 | | Executive Vice President, Chief Financial Officer, 2012 |

| Gina A. Beredo | | [removed: 44] [added: 45] | | 2018 | | Executive Vice President, General Counsel and Secretary, 2018 |

| James E. DeVries | | [removed: 59] [added: 60] | | 2012 | | Executive Vice President, 2012 |

| John J. Keane | | [removed: 57] [added: 58] | | 2003 | | Executive Vice President, 2005 |

| Stephen P. Lovass | | [removed: 49] [added: 50] | | 2017 | | Executive Vice President, 2017 |

| Gregory P. Merk | | [removed: 47] [added: 48] | | 2006 | | Executive Vice President, 2013 |

| Shelly M. Peet | | [removed: 53] [added: 54] | | 2007 | | Executive Vice President, 2009 |

| Jeffrey A. Pembroke | | [removed: 51] [added: 52] | | 2015 | | Executive Vice President, 2015 |

| Joseph Stockunas | | [removed: 58] [added: 59] | | 2015 | | Executive Vice President, 2015 |

Information About Our Executive Officers

On June 14, 2019, we announced the appointment of Sundaram Nagarajan as President and Chief Executive Officer and as a member of the Board of Directors of the Company, effective August 1, 2019.

Michael Hilton (age 65) ceased as President and Chief Executive Officer effective August 1, 2019 and has since been employed as Senior Advisor to the Company.

Mr. Hilton will continue to serve as an Executive Officer and Senior Advisor, and as a member of the Company’s Board of Directors until his retirement effective December 31, 2019.

Prior to becoming our President and Chief Executive Officer, Mr. Nagarajan served as Executive Vice President, Automotive OEM Segment, with Illinois Tool Works Inc. (NYSE: ITW), a global manufacturer of a diversified range of industrial products and equipment, since 2015.

Prior to that, Mr. Nagarajan served as Executive Vice President, Welding Segment, with Illinois Tool Works from 2010 to 2015.

Mr. Nagarajan has served as a member of the Board of Directors of Sonoco Products Company (NYSE: SON) since 2015.

Nordson Corporation 18

Executive Officers of the Company

| | | | | | | |

As of November 30, [removed: 2018,] [added: 2019,] there were [removed: 1,406] [added: 1,366] record shareholders.

The following is a graph that compares the 10-year cumulative return, calculated on a dividend-reinvested basis, from investing $100 on November 1, [removed: 2008] [added: 2009] in Nordson common shares, the S&P 500 Index, the S&P MidCap 400 Index, the S&P 500 Industrial Machinery Index, the S&P MidCap 400 Industrial Machinery Index and our Proxy Peer Group, which includes: AIN, AME, [removed: ATU,] B, DCI, ENTG, [added: EPAC,] ESL, FLIR, [added: GDI,] GGG, GTLS, IEX, ITT, KEYS, LECO, [added: NATI,] ROP, TER, WTS, and WWD.

[removed: ][added: ]

| Company/Market/Peer Group | [removed: 2008] | [removed: | |] 2009 | | | 2010 | | | 2011 | | | 2012 | | | 2013 | | | 2014 | | | 2015 | | | [removed: |] 2016 | | | 2017 | | | 2018 | | [added: | 2019 | |]

| | | [removed: Repurchased(1)] [added: Repurchased] | | | | per Share | | | | or [removed: Programs(2)] [added: Programs(1)] | | | | the Plans or [removed: Programs] [added: Programs(1)] | | |

| | [removed: (2)] [added: (1)] | 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 [removed: $600,032] [added: $485,242] of the total $1,000,000 authorized remained available for share repurchases at October 31, [removed: 2018.] [added: 2019.] Uses for repurchased shares include the funding of benefit programs including stock [removed: options, restricted stock] [added: options] and [removed: 401(k) matching.] [added: 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. |

| Nordson Corporation | $ | 100.00 | | $ | 151.62 | | $ | 183.67 | | $ | 238.70 | | $ | 294.28 | | $ | 315.68 | | $ | 297.38 | | $ | 423.52 | | $ | 540.90 | | $ | 528.58 | | $ | 683.29 | |

| S&P 500 Index | $ | 100.00 | | $ | 116.52 | | $ | 125.94 | | $ | 145.09 | | $ | 184.52 | | $ | 216.38 | | $ | 227.64 | | $ | 237.90 | | $ | 294.12 | | $ | 315.73 | | $ | 360.96 | |

| S&P MidCap 400 | $ | 100.00 | | $ | 127.64 | | $ | 138.55 | | $ | 155.32 | | $ | 207.33 | | $ | 231.49 | | $ | 239.42 | | $ | 254.39 | | $ | 314.12 | | $ | 317.33 | | $ | 345.94 | |

| S&P 500 Ind. Machinery | $ | 100.00 | | $ | 127.95 | | $ | 132.38 | | $ | 158.43 | | $ | 226.22 | | $ | 255.10 | | $ | 254.71 | | $ | 290.84 | | $ | 400.96 | | $ | 369.97 | | $ | 451.20 | |

| S&P MidCap 400 Ind. Machinery | $ | 100.00 | | $ | 129.97 | | $ | 147.82 | | $ | 161.44 | | $ | 224.14 | | $ | 237.52 | | $ | 198.82 | | $ | 233.34 | | $ | 334.67 | | $ | 327.62 | | $ | 389.31 | |

| Peer Group | $ | 100.00 | | $ | 123.63 | | $ | 139.16 | | $ | 157.09 | | $ | 217.28 | | $ | 239.51 | | $ | 230.50 | | $ | 235.93 | | $ | 354.82 | | $ | 364.75 | | $ | 464.87 | |

| August 1, 2019 to August 31, 2019 | | | — | | | $ | — | | | | — | | | $ | 487,628 | |

| September 1, 2019 to September 30, 2019 | | | — | | | $ | — | | | | — | | | $ | 487,628 | |

| October 1, 2019 to October 31, 2019 | | | 17 | | | $ | 138.38 | | | | 17 | | | $ | 485,242 | |

| Total | | | 17 | | | | | | | | 17 | | | | | |

| Nordson Corporation | $ | 100.00 | | $ | 149.23 | | $ | 226.27 | | $ | 274.10 | | $ | 356.22 | | $ | 439.17 | | $ | 471.10 | | $ | 443.80 | | $ | 632.04 | | $ | 807.21 | | $ | 788.83 | |

| S&P 500 Index | $ | 100.00 | | $ | 109.80 | | $ | 127.94 | | $ | 138.29 | | $ | 159.32 | | $ | 202.61 | | $ | 237.60 | | $ | 249.95 | | $ | 261.23 | | $ | 322.96 | | $ | 346.68 | |

| S&P MidCap 400 | $ | 100.00 | | $ | 118.18 | | $ | 150.84 | | $ | 163.74 | | $ | 183.57 | | $ | 245.03 | | $ | 273.58 | | $ | 282.95 | | $ | 300.65 | | $ | 371.23 | | $ | 375.02 | |

| S&P 500 Ind. Machinery | $ | 100.00 | | $ | 133.81 | | $ | 171.21 | | $ | 177.14 | | $ | 211.99 | | $ | 302.70 | | $ | 341.34 | | $ | 340.82 | | $ | 389.16 | | $ | 536.52 | | $ | 495.05 | |

| S&P MidCap 400 Ind. Machinery | $ | 100.00 | | $ | 123.61 | | $ | 160.67 | | $ | 182.73 | | $ | 199.57 | | $ | 277.07 | | $ | 293.61 | | $ | 245.77 | | $ | 288.44 | | $ | 413.70 | | $ | 404.98 | |

| Peer Group | $ | 100.00 | | $ | 108.45 | | $ | 133.57 | | $ | 150.02 | | $ | 171.39 | | $ | 238.19 | | $ | 262.44 | | $ | 252.27 | | $ | 259.12 | | $ | 388.10 | | $ | 399.03 | |

Nordson Corporation 18

| August 1, 2018 to August 31, 2018 | | | — | | | $ | — | | | | — | | | $ | 118,971 | |

| September 1, 2018 to September 30, 2018 | | | 25 | | | $ | 144.63 | | | | 24 | | | $ | 615,471 | |

| October 1, 2018 to October 31, 2018 | | | 121 | | | $ | 127.33 | | | | 121 | | | $ | 600,032 | |

| Total | | | 146 | | | | | | | | 145 | | | | | |

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

| --- | --- | --- |

| | | [removed: 2018] [added: 2019] | | | | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | |

| Operating Data (a) [added: (e)] | | | | | | | | | | | | | | | | | | | | |

| Sales | | $ | [removed: 2,254,668] [added: 2,194,226] | | | $ | [removed: 2,066,982] [added: 2,254,668] | | | $ | [removed: 1,808,994] [added: 2,066,982] | | | $ | [removed: 1,688,666] [added: 1,808,994] | | | $ | [removed: 1,704,021] [added: 1,688,666] | |

| % of sales | | | [removed: 45] [added: 46] | | | | 45 | | | | 45 | | | | [removed: 46] [added: 45] | | | | [removed: 45] [added: 46] | |

| % of sales | | | [removed: 33] [added: 32] | | | | 33 | | | | 33 | | | | [removed: 35] [added: 33] | | | | [removed: 34] [added: 35] | |

| % of sales | | | 22 | | | | 22 | | | | [removed: 21] [added: 23] | | | | [removed: 19] [added: 22] | | | | [removed: 22] [added: 20] | |

| Net income | | | [removed: 377,375] [added: 337,091] | | | | [removed: 295,802] [added: 377,375] | | | | [removed: 271,843] [added: 295,802] | | | | [removed: 211,111] [added: 271,843] | | | | [removed: 246,773] [added: 211,111] | |

| % of sales | | | [removed: 17] [added: 15] | | | | [removed: 14] [added: 17] | | | | [removed: 15] [added: 14] | | | | [removed: 13] [added: 15] | | | | [removed: 14] [added: 13] | |

| Financial Data (a) [removed: (e)] [added: (f)] | | | | | | | | | | | | | | | | | | | | |

| Working capital | | $ | [removed: 533,822] [added: 533,569] | | | $ | [removed: 240,626] [added: 533,822] | | | $ | [removed: 414,032] [added: 240,626] | | | $ | [removed: 420,815] [added: 414,032] | | | $ | [removed: 301,815] [added: 420,815] | |

| Net property, plant and equipment and other non-current assets | | | [removed: 2,536,910] [added: 2,505,252] | | | | [removed: 2,526,167] [added: 2,536,910] | | | | [removed: 1,675,008] [added: 2,526,167] | | | | [removed: 1,646,723] [added: 1,675,008] | | | | [removed: 1,606,274] [added: 1,646,723] | |

| Total capital (b) | | | [removed: 2,669,154] [added: 2,674,023] | | | | [removed: 2,648,094] [added: 2,669,154] | | | | [removed: 1,767,369] [added: 2,648,094] | | | | [removed: 1,724,211] [added: 1,767,369] | | | | [removed: 1,661,110] [added: 1,724,211] | |

| Total assets | | | [removed: 3,421,012] [added: 3,516,447] | | | | [removed: 3,414,539] [added: 3,421,012] | | | | [removed: 2,420,583] [added: 3,414,539] | | | | [removed: 2,358,314] [added: 2,420,583] | | | | [removed: 2,278,957] [added: 2,358,314] | |

| Long-term liabilities | | | [removed: 1,619,991] [added: 1,457,776] | | | | [removed: 1,611,300] [added: 1,619,991] | | | | [removed: 1,237,437] [added: 1,611,300] | | | | [removed: 1,407,522] [added: 1,237,437] | | | | [removed: 1,003,292] [added: 1,407,522] | |

| Shareholders’ equity | | | [removed: 1,450,741] [added: 1,581,045] | | | | [removed: 1,155,493] [added: 1,450,741] | | | | [removed: 851,603] [added: 1,155,493] | | | | [removed: 660,016] [added: 851,603] | | | | [removed: 904,797] [added: 660,016] | |

| Return on average total capital — % (c) | | | [removed: 15] [added: 14] | | | | [removed: 14] [added: 15] | | | | [removed: 16] [added: 14] | | | | [removed: 13] [added: 16] | | | | [removed: 17] [added: 13] | |

| Return on average shareholders’ equity — % (d) | | | [removed: 28] [added: 23] | | | | [removed: 30] [added: 28] | | | | [removed: 37] [added: 30] | | | | [removed: 26] [added: 37] | | | | [removed: 27] [added: 26] | |

| Average number of common shares | | | [removed: 57,970] [added: 57,462] | | | | [removed: 57,533] [added: 57,970] | | | | [removed: 57,060] [added: 57,533] | | | | [removed: 60,652] [added: 57,060] | | | | [removed: 63,656] [added: 60,652] | |

| Average number of common shares and common share equivalents | | | [removed: 58,931] [added: 58,202] | | | | [removed: 58,204] [added: 58,931] | | | | [removed: 57,530] [added: 58,204] | | | | [removed: 61,151] [added: 57,530] | | | | [removed: 64,281] [added: 61,151] | |

| Basic earnings per share | | $ | [removed: 6.51] [added: 5.87] | | | $ | [removed: 5.14] [added: 6.51] | | | $ | [removed: 4.76] [added: 5.14] | | | $ | [removed: 3.48] [added: 4.76] | | | $ | [removed: 3.88] [added: 3.48] | |

| Diluted earnings per share | | | [removed: 6.40] [added: 5.79] | | | | [removed: 5.08] [added: 6.40] | | | | [removed: 4.73] [added: 5.08] | | | | [removed: 3.45] [added: 4.73] | | | | [removed: 3.84] [added: 3.45] | |

| Dividends per common share | | | [removed: 1.25] [added: 1.43] | | | | [removed: 1.11] [added: 1.25] | | | | [removed: 0.99] [added: 1.11] | | | | [removed: 0.90] [added: 0.99] | | | | [removed: 0.76] [added: 0.90] | |

| Book value per common share | | | [removed: 25.00] [added: 27.45] | | | | [removed: 20.02] [added: 25.00] | | | | [removed: 14.86] [added: 20.02] | | | | [removed: 11.51] [added: 14.86] | | | | [removed: 14.49] [added: 11.51] | |

| [removed: (e)] [added: (f)] | Certain amounts for the years [removed: 2014 through] [added: 2015 and] 2016 have been adjusted to reflect the retrospective application of our reclassification of debt issuance costs upon the adoption of a new accounting standard in 2017. |

| Cost of sales | | | 1,002,123 | | | | 1,018,340 | | | | 927,692 | | | | 813,792 | | | | 772,225 | |

| Selling and administrative expenses | | | 708,990 | | | | 733,749 | | | | 672,888 | | | | 597,076 | | | | 582,848 | |

| Operating profit | | | 483,113 | | | | 502,579 | | | | 466,402 | | | | 398,126 | | | | 333,593 | |

| (e) | Certain amounts for the years 2015 through 2018 have been adjusted to reflect the retrospective application of our reclassification of certain pension costs upon the adoption of a new accounting standard in 2019. |

| --- | --- |

| Cost of sales | | | 1,018,703 | | | | 927,981 | | | | 815,495 | | | | 774,702 | | | | 758,923 | |

| Selling and administrative expenses | | | 734,856 | | | | 678,861 | | | | 594,293 | | | | 584,823 | | | | 575,442 | |

| Severance and restructuring costs | | | 6,552 | | | | 2,438 | | | | 10,775 | | | | 11,411 | | | | 2,551 | |

| Operating profit | | | 494,557 | | | | 457,702 | | | | 388,431 | | | | 317,730 | | | | 367,105 | |

| Years ended October 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016] [added: 2017] | | [removed: 2018] [added: 2019] | | | | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | |

| Sales | | $ | [removed: 2,254,668] [added: 2,194,226] | | | $ | [removed: 2,066,982] [added: 2,254,668] | | | $ | [removed: 1,808,994] [added: 2,066,982] | |

| Interest expense | | | [removed: (49,576] [added: (47,145] | ) | | | [removed: (36,601] [added: (49,576] | ) | | | [removed: (21,322] [added: (36,601] | ) |

| Interest and investment income | | | [removed: 1,384] [added: 1,844] | | | | [removed: 1,124] [added: 1,384] | | | | [removed: 728] [added: 1,124] | |

| Income before income taxes | | | [removed: 448,519] [added: 431,104] | | | | [removed: 420,291] [added: 448,519] | | | | [removed: 368,494] [added: 420,291] | |

| Current | | | [removed: 105,093] [added: 95,031] | | | | [removed: 124,961] [added: 105,093] | | | | [removed: 100,248] [added: 124,961] | |

| Deferred | | | [removed: (33,949] [added: (1,018] | ) | | | [removed: (472] [added: (33,949] | ) | | | [removed: (3,597] [added: (472] | ) |

| | | | [removed: 71,144] [added: 94,013] | | | | [removed: 124,489] [added: 71,144] | | | | [removed: 96,651] [added: 124,489] | |

| Net income | | $ | [removed: 377,375] [added: 337,091] | | | $ | [removed: 295,802] [added: 377,375] | | | $ | [removed: 271,843] [added: 295,802] | |

| Average common shares | | | [removed: 57,970] [added: 57,462] | | | | [removed: 57,533] [added: 57,970] | | | | [removed: 57,060] [added: 57,533] | |

| Incremental common shares attributable to outstanding stock options, restricted stock and deferred stock-based compensation | | | [removed: 961] [added: 740] | | | | [removed: 671] [added: 961] | | | | [removed: 470] [added: 671] | |

| Average common shares and common share equivalents | | | [removed: 58,931] [added: 58,202] | | | | [removed: 58,204] [added: 58,931] | | | | [removed: 57,530] [added: 58,204] | |

| Basic earnings per share | | $ | [removed: 6.51] [added: 5.87] | | | $ | [removed: 5.14] [added: 6.51] | | | $ | [removed: 4.76] [added: 5.14] | |

| Diluted earnings per share | | $ | [removed: 6.40] [added: 5.79] | | | $ | [removed: 5.08] [added: 6.40] | | | $ | [removed: 4.73] [added: 5.08] | |

| Dividends declared per common share | | $ | [removed: 1.25] [added: 1.43] | | | $ | [removed: 1.11] [added: 1.25] | | | $ | [removed: 0.99] [added: 1.11] | |

[removed: Consolidated Statements of] [added: Consolidated Statements of] Comprehensive [removed: Income][added: Income]

| Foreign currency translation adjustments | | | [removed: (28,619] [added: 3,710] | [removed: )] | | | [removed: 22,697] [added: (28,619] | [added: )] | | | [removed: (8,693] [added: 22,697] | [removed: )] |

| Prior service (cost) credit arising during the year | | | [removed: (45] [added: (148] | ) | | | [removed: —] [added: (45] | [added: )] | | | [removed: 1,831] [added: —] | |

| Net actuarial gain (loss) arising during the year | | | [removed: (7,783] [added: (63,138] | ) | | | [removed: 2,641] [added: (7,783] | [added: )] | | | [removed: (22,482] [added: 2,641] | [removed: )] |

| Amortization of prior service (cost) credit | | | (322 | ) | | | [removed: (210] [added: (322] | ) | | | [removed: 92] [added: (210] | [added: )] |

| Amortization of actuarial loss | | | [removed: 10,536] [added: 6,946] | | | | [removed: 7,972] [added: 10,536] | | | | [removed: 6,724] [added: 7,972] | |

| Settlement loss recognized | | | [removed: 200] [added: 385] | | | | [removed: 712] [added: 200] | | | | [removed: 111] [added: 712] | |

| Total pension and postretirement benefit plans | | | [removed: 2,586] [added: (56,277] | [added: )] | | | [removed: 11,115] [added: 2,586] | | | | [removed: (14,868] [added: 11,115] | [removed: )] |

| Total other comprehensive income (loss) | | | [removed: (26,033] [added: (52,567] | ) | | | [removed: 33,812] [added: (26,033] | [added: )] | | | [removed: (23,561] [added: 33,812] | [removed: )] |

| Reclassification due to adoption of [removed: new accounting standard (Note 2)] [added: ASU 2018-02] | | | [removed: (18,846] [added: —] | [removed: )] | | | [removed: —] [added: (18,846] | [added: )] | | | — | |

| Total comprehensive income | | $ | [removed: 332,496] [added: 284,524] | | | $ | [removed: 329,614] [added: 332,496] | | | $ | [removed: 248,282] [added: 329,614] | |

| October 31, [removed: 2018] [added: 2019] and [removed: 2017] [added: 2018] | | [removed: 2018] [added: 2019] | | | | [removed: 2017] [added: 2018] | | |

| Cash and cash equivalents [added: at beginning of year] | | [removed: $] | 95,678 | | | [removed: $] | 90,383 | | [added: | | 67,239 | |]

| Receivables - net | | | [removed: 491,423] [added: 530,765] | | | | [removed: 505,087] [added: 491,423] | |

| Inventories - net | | | [removed: 264,477] [added: 283,399] | | | | [removed: 264,266] [added: 264,477] | |

| Total current assets | | | [removed: 884,102] [added: 1,011,195] | | | | [removed: 888,372] [added: 884,102] | |

| Property, plant and equipment - net | | | [removed: 386,666] [added: 398,895] | | | | [removed: 346,411] [added: 386,666] | |

| Goodwill | | | [removed: 1,608,018] [added: 1,614,739] | | | | [removed: 1,589,210] [added: 1,608,018] | |

| Intangible assets - net | | | [removed: 499,741] [added: 445,575] | | | | [removed: 547,180] [added: 499,741] | |

| Deferred income taxes | | | [removed: 9,780] [added: 11,261] | | | | [removed: 11,020] [added: 9,780] | |

| Other assets | | | [removed: 32,705] [added: 34,782] | | | | [removed: 32,346] [added: 32,705] | |

| [added: Total consolidated assets] | | $ | [added: 3,516,447 | | | $ |] 3,421,012 | | | $ | 3,414,539 | |

| Accounts payable | | $ | [removed: 83,590] [added: 85,139] | | | $ | [removed: 86,016] [added: 83,590] | |

| Income taxes payable | | | [removed: 19,319] [added: 15,601] | | | | [removed: 22,310] [added: 19,319] | |

| Accrued liabilities | | | [removed: 175,085] [added: 161,655] | | | | [removed: 173,366] [added: 175,085] | |

| Cost of sales | | | 1,002,123 | | | | 1,018,340 | | | | 927,692 | |

| Selling and administrative expenses | | | 708,990 | | | | 733,749 | | | | 672,888 | |

| | | | 1,711,113 | | | | 1,752,089 | | | | 1,600,580 | |

| Operating profit | | | 483,113 | | | | 502,579 | | | | 466,402 | |

| Other - net | | | (6,708 | ) | | | (5,868 | ) | | | (10,634 | ) |

| | | | (52,009 | ) | | | (54,060 | ) | | | (46,111 | ) |

| Years ended October 31, 2019, 2018 and 2017 | | 2019 | | | | 2018 | | | | 2017 | | |

| Prepaid expenses and other current assets | | | 45,867 | | | | 32,524 | |

| | | $ | 3,516,447 | | | $ | 3,421,012 | |

| | | $ | 3,516,447 | | | $ | 3,421,012 | |

| | | Years ended October 31, 2019, 2018 and 2017 | | | | | | | | | | | | | | | | | | | | | | |

| (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 | | |

| October 31, 2016 | | $ | 12,253 | | | $ | 376,625 | | | $ | 1,932,635 | | | $ | (168,247 | ) | | $ | (1,301,663 | ) | | $ | 851,603 | |

| Net income | | | — | | | | — | | | | 295,802 | | | | — | | | | — | | | | 295,802 | |

| Other comprehensive income: | | | | | | | | | | | | | | | | | | | | | | | | |

| Foreign currency translation adjustments | | | — | | | | — | | | | — | | | | 22,697 | | | | — | | | | 22,697 | |

| Defined benefit pension and post-retirement plans adjustment | | | — | | | | — | | | | — | | | | 11,115 | | | | — | | | | 11,115 | |

| October 31, 2017 | | $ | 12,253 | | | $ | 412,785 | | | $ | 2,164,597 | | | $ | (134,435 | ) | | $ | (1,299,707 | ) | | $ | 1,155,493 | |

| Stock-based compensation | | | — | | | | 21,550 | | | | — | | | | — | | | | — | | | | 21,550 | |

| Dividends declared ($1.25 per share) | | | — | | | | — | | | | (72,443 | ) | | | — | | | | — | | | | (72,443 | ) |

| Net income | | | — | | | | — | | | | 377,375 | | | | — | | | | — | | | | 377,375 | |

| Foreign currency translation adjustments | | | — | | | | — | | | | — | | | | (28,619 | ) | | | — | | | | (28,619 | ) |

| Defined benefit pension and post-retirement plans adjustment | | | — | | | | — | | | | — | | | | 2,586 | | | | — | | | | 2,586 | |

| October 31, 2018 | | $ | 12,253 | | | $ | 446,555 | | | $ | 2,488,375 | | | $ | (179,314 | ) | | $ | (1,317,128 | ) | | $ | 1,450,741 | |

| Stock-based compensation | | | — | | | | 18,086 | | | | — | | | | — | | | | — | | | | 18,086 | |

| Purchase of treasury shares (998,004 shares) | | | — | | | | — | | | | — | | | | — | | | | (120,510 | ) | | | (120,510 | ) |

| Dividends declared ($1.43 per share) | | | — | | | | — | | | | (82,145 | ) | | | — | | | | — | | | | (82,145 | ) |

| Net income | | | — | | | | — | | | | 337,091 | | | | — | | | | — | | | | 337,091 | |

| Impact of adoption of ASU 2014-09 | | | — | | | | — | | | | 4,329 | | | | — | | | | — | | | | 4,329 | |

| Other comprehensive income (loss): | | | | | | | | | | | | | | | | | | | | | | | | |

| Foreign currency translation adjustments | | | — | | | | — | | | | — | | | | 3,710 | | | | — | | | | 3,710 | |

| Defined benefit pension and post-retirement plans adjustment | | | — | | | | — | | | | — | | | | (56,277 | ) | | | — | | | | (56,277 | ) |

| October 31, 2019 | | $ | 12,253 | | | $ | 483,116 | | | $ | 2,747,650 | | | $ | (231,881 | ) | | $ | (1,430,093 | ) | | $ | 1,581,045 | |

| Years ended October 31, 2019, 2018 and 2017 | | 2019 | | | | 2018 | | | | 2017 | | |

| Net income | | $ | 337,091 | | | $ | 377,375 | | | $ | 295,802 | |

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.

However, for certain contracts related to the sale of customer-specific products within our Advanced Technology Systems segment, there was a change in revenue recognition upon adoption of the new revenue standard.

Previously, these contracts were recognized at the point in time when the shipping terms were satisfied.

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Cost of sales | | | 1,018,703 | | | | 927,981 | | | | 815,495 | |

| Selling and administrative expenses | | | 741,408 | | | | 681,299 | | | | 605,068 | |

| | | | 1,760,111 | | | | 1,609,280 | | | | 1,420,563 | |

| Operating profit | | | 494,557 | | | | 457,702 | | | | 388,431 | |

| Other - net | | | 2,154 | | | | (1,934 | ) | | | 657 | |

| | | | (46,038 | ) | | | (37,411 | ) | | | (19,937 | ) |

| (In thousands) | | | | | | | | | | | | |

| Curtailment (gain) loss recognized | | | — | | | | — | | | | (1,144 | ) |

| Prepaid expenses | | | 32,524 | | | | 28,636 | |

| Number of common shares in treasury | | | | | | | | | | | | |

| Balance at beginning of year | | | 40,308 | | | | 40,716 | | | | 40,665 | |

| Balance at end of year | | | 39,986 | | | | 40,308 | | | | 40,716 | |

| Common shares | | | | | | | | | | | | |

| Balance at beginning and ending of year | | $ | 12,253 | | | $ | 12,253 | | | $ | 12,253 | |

| Capital in excess of stated value | | | | | | | | | | | | |

| Balance at beginning of year | | $ | 412,785 | | | $ | 376,625 | | | $ | 348,986 | |

| Balance at end of year | | $ | 446,555 | | | $ | 412,785 | | | $ | 376,625 | |

| Retained earnings | | | | | | | | | | | | |

| Balance at beginning of year | | $ | 2,164,597 | | | $ | 1,932,635 | | | $ | 1,717,228 | |

| Balance at end of year | | $ | 2,488,375 | | | $ | 2,164,597 | | | $ | 1,932,635 | |

| Balance at beginning of year | | $ | (134,435 | ) | | $ | (168,247 | ) | | $ | (144,686 | ) |

| Settlement and curtailment loss (gain) recognized, net of tax of $(52) in 2018, $(299) in 2017 and $332 in 2016 | | | 200 | | | | 712 | | | | (1,033 | ) |

| Defined benefit and OPEB activity - prior service cost, net of tax of $189 in 2018, $75 in 2017 and $(558) in 2016 | | | (367 | ) | | | (210 | ) | | | 1,923 | |

| Defined benefit and OPEB activity - actuarial gain (loss), net of tax of $(802) in 2018, $(4,628) in 2017 and $8,642 in 2016 | | | 2,753 | | | | 10,613 | | | | (15,758 | ) |

| Balance at end of year | | $ | (179,314 | ) | | $ | (134,435 | ) | | $ | (168,247 | ) |

| Common shares in treasury, at cost | | | | | | | | | | | | |

| Balance at beginning of year | | $ | (1,299,707 | ) | | $ | (1,301,663 | ) | | $ | (1,273,765 | ) |

| Balance at end of year | | $ | (1,317,128 | ) | | $ | (1,299,707 | ) | | $ | (1,301,663 | ) |

| Total shareholders' equity | | $ | 1,450,741 | | | $ | 1,155,493 | | | $ | 851,603 | |

Revenue recognition — Most of our revenues are recognized upon shipment, provided that persuasive evidence of an arrangement exists, the sales price is fixed or determinable, collectibility is reasonably assured, and title and risk of loss have passed to the customer.

| Balance at October 31, 2017 | | $ | (28,423 | ) | | $ | (106,012 | ) | | $ | (134,435 | ) |

| Reclassification due to adoption of new accounting standard (Note 2) | | | — | | | | (18,846 | ) | | | (18,846 | ) |

| Warranty assumed from acquisitions | | | — | | | | 75 | |

In March 2016, the Financial Accounting Standards Board (“FASB”) issued a new standard which simplifies the accounting for share-based payment transactions.

This guidance requires that excess tax benefits and tax deficiencies be recognized as income tax expense or benefit in the statements of income rather than additional paid-in capital.

Additionally, the excess tax benefits will be classified along with other income tax cash flows as an operating activity, rather than a financing activity, in the statements of cash flows.

Further, the update allows an entity to make a policy election to recognize forfeitures as they occur or estimate the number of awards expected to be forfeited.

We adopted this new standard during the first quarter of 2018.

As a result, net excess tax benefits of $9,498 were recognized as a reduction of income tax expense during 2018.

| | (a) | Evaluation of disclosure controls and procedures. Our management, with the participation of the principal executive officer (president and chief executive officer) and the principal financial officer (executive vice president and chief financial officer), has reviewed and evaluated our disclosure controls and procedures (as defined in the Securities Exchange Act Rule 13a-15e) as of October 31, [removed: 2018.] [added: 2019.] 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 October 31, [removed: 2018] [added: 2019] 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's rules and forms and is accumulated and communicated to our management, including the principal executive officer and the principal financial officer, as appropriate to allow timely decisions regarding required disclosure. |

| | (c) | Changes in internal control over reporting. There were no changes in our internal controls over financial reporting that occurred during the fourth quarter of [removed: 2018] [added: 2019] that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. |

Nordson Corporation [removed: 70][added: 71]

The information required by this Item is incorporated by reference to the captions “Election of Directors Whose Terms Expire in [removed: 2022”] [added: 2023”] and [removed: “Section] [added: “Delinquent Section] 16(a) [removed: Beneficial Ownership Reporting Compliance”] [added: Reports”] of our definitive Proxy Statement for the [removed: 2019] [added: 2020] Annual Meeting of Shareholders.

Information regarding [added: the] Audit Committee [added: and Audit Committee] financial experts is incorporated by reference to the caption [removed: “Election] [added: “Committees] of [removed: Directors Whose Terms Expire in 2022”] [added: the Board] of [added: Directors” of] our definitive Proxy Statement for the [removed: 2019] [added: 2020] Annual Meeting of Shareholders.

Information concerning executive officers is contained in Part I of this report under the caption [removed: “Executive Officers of the Company.”][added: “Information about Our Executive Officers.”]

The information required by this Item is incorporated by reference to the “Executive Compensation Discussion and Analysis” section of the definitive Proxy Statement for the [removed: 2019] [added: 2020] Annual Meeting of Shareholders, along with the sections captioned “Directors Compensation,” “Summary Compensation [removed: Table,”] [added: for Fiscal Year 2019,”] “Grants of Plan-Based Awards,” “Outstanding Equity Awards at October 31, [removed: 2018,”] [added: 2019,”] “Stock Option Exercises and Stock Vested Tables,” “Pension [removed: Benefits Table,”] [added: Benefits,”] “Nonqualified Deferred [removed: Compensation” and] [added: Compensation,”] “Potential Benefits Upon Termination” [added: and “CEO Pay Ratio”] in our definitive Proxy Statement for the [removed: 2019] [added: 2020] Annual Meeting of Shareholders.

The information required by this Item is incorporated by reference to the caption “Security Ownership of Nordson Common Shares by Directors, Director Nominees, Executive Officers and Large Beneficial Owners” in our definitive Proxy Statement for the [removed: 2019] [added: 2020] Annual Meeting of Shareholders.

The following table sets forth information regarding equity compensation plans in effect as of October 31, [removed: 2018:][added: 2019:]

| Equity compensation plans approved by security holders | | | [removed: 1,885] [added: 1,787] | | | $ | [removed: 85.33] [added: 97.74] | | | | [removed: 2,314] [added: 1,888] | |

| Total | | | 1,787 | | | $ | 97.74 | | | | 1,888 | |

| Total | | | 1,885 | | | $ | 85.33 | | | | 2,314 | |

The information required by this Item is incorporated by reference to the [removed: caption] [added: captions “Director Independence” and] “Review of Transactions with Related Persons” in our definitive Proxy Statement for the [removed: 2019] [added: 2020] Annual Meeting of Shareholders.

Nordson Corporation 71

The information required by this Item is incorporated by reference to the caption “Fees Paid to Ernst & Young LLP” and the caption “Pre-Approval of Audit and Non-Audit Services” in our definitive Proxy Statement for the [removed: 2019] [added: 2020] Annual Meeting of Shareholders.

Consolidated Statements of Income for each of the three years in the period ended October 31, [removed: 2018][added: 2019]

Consolidated Statements of Comprehensive Income for each of the three years in the period ended October 31, [removed: 2018][added: 2019]

Consolidated Balance Sheets as of October 31, [removed: 2018] [added: 2019] and October 31, [removed: 2017][added: 2018]

Consolidated Statements of Shareholders’ Equity for each of the three years in the period ended October 31, [removed: 2018][added: 2019]

Consolidated Statements of Cash Flows for each of the three years in the period ended October 31, [removed: 2018][added: 2019]

Schedule II Valuation and Qualifying Accounts and Reserves for each of the three years in the period ended October 31, [removed: 2018.][added: 2019.]

[removed: NORDSON CORPORATION][added: NORDSON CORPORATION]

| 4-e | | [Master Note Purchase Agreement dated July 26, 2012 between Nordson Corporation and the purchasers listed [removed: therein](https://www.sec.gov/Archives/edgar/data/72331/000156459018030928/ndsn-ex4e_313.htm)] [added: therein (incorporated herein by reference to Exhibit 4-e to Registrant’s Annual Report on Form 10-K for the year ended October 31, 2018).](http://www.sec.gov/Archives/edgar/data/72331/000156459018030928/ndsn-ex4e_313.htm)] |

| [removed: 4-g] [added: 10-h] | | [removed: [Credit] [added: [Assurance Trust] Agreement [removed: dated August 6, 2014 by and among] [added: between] Nordson [removed: Corporation, PNC Bank National Association] [added: Corporation] and [removed: PNC Capital Markets LLC] [added: Key Trust Company of Ohio, N.A. amended and restated as of January 22, 2014] (incorporated herein by reference to Exhibit [removed: 10.3] [added: 10.1] to Registrant’s Quarterly Report on Form 10-Q for the quarter ended [removed: July] [added: January] 31, [removed: 2014)](http://www.sec.gov/Archives/edgar/data/72331/000119312514331480/d746837dex103.htm)] [added: 2014)*](http://www.sec.gov/Archives/edgar/data/72331/000119312514088017/d657923dex101.htm)] |

| 4-h | | [removed: [Second] [added: [Third] Amended and Restated Credit Agreement dated [removed: February 20, 2015] [added: April 30, 2019,] among Nordson Corporation, various financial institutions named therein, and KeyBank, National [removed: Association] [added: Association,] as administrative agent (incorporated herein by reference to Exhibit 4.1 to Registrant’s Form 8-K dated [removed: February 26, 2015)](http://www.sec.gov/Archives/edgar/data/72331/000129993315000304/exhibit1.htm)] [added: May 6, 2019)](http://www.sec.gov/Archives/edgar/data/72331/000119312519138470/d739052dex41.htm)] |

| [removed: 4-h-1] [added: 4-k] | | [removed: [Amendment No. 1 dated June 28, 2018, to the Second Amended] [added: [Amended] and Restated [removed: Credit] [added: Term Loan] Agreement, dated [removed: February 20, 2015,] [added: April 30, 2019,] among Nordson Corporation, various financial institutions named therein, and [removed: KeyBank] [added: PNC Bank,] National Association, as administrative agent (incorporated herein by reference to Exhibit 4.2 to Registrant’s Form 8-K dated [removed: June 28, 2018)](http://www.sec.gov/Archives/edgar/data/72331/000119312518207814/d495901dex42.htm)] [added: May 6, 2019)](http://www.sec.gov/Archives/edgar/data/72331/000119312519138470/d739052dex42.htm)] |

| 10-b-3 | | [First Amendment to the Nordson Corporation 2005 Deferred Compensation Plan (incorporated herein by reference to Exhibit 10.1 to Registrant’s Quarterly Report on Form 10-Q for the quarter ended April 30, [removed: 2016)](http://www.sec.gov/Archives/edgar/data/72331/000156459016020351/ndsn-ex101_100.htm)] [added: 2016)*](http://www.sec.gov/Archives/edgar/data/72331/000156459016020351/ndsn-ex101_100.htm)] |

| 10-d-1 | | [First Amendment to [added: Restated] Nordson Corporation Excess Defined Contribution Retirement [removed: Plan*](https://www.sec.gov/Archives/edgar/data/72331/000156459018030928/ndsn-ex10d1_312.htm)] [added: Plan (incorporated herein by reference to Exhibit 10-d-1 to Registrant’s Annual Report on Form 10-K for the year ended October 31, 2018)*](http://www.sec.gov/Archives/edgar/data/72331/000156459018030928/ndsn-ex10d1_312.htm)] |

| [removed: 10-d-2] [added: 10-e] | | [Nordson Corporation [removed: 2005] Excess Defined [removed: Contribution] Benefit [added: Pension] Plan (incorporated herein by reference to Exhibit [removed: 10-d-2] [added: 10-e] to Registrant’s Annual Report on Form 10-K for the year ended October 31, [removed: 2017)*](http://www.sec.gov/Archives/edgar/data/72331/000156459017024983/ndsn-ex10d2_460.htm)] [added: 2009)*](http://www.sec.gov/Archives/edgar/data/72331/000095012309071805/l37763exv10we.htm)] |

| [removed: 10-e-1] [added: 10-e-2] | | [Second Amendment to Nordson Corporation Excess Defined Benefit Pension [removed: Plan*](https://www.sec.gov/Archives/edgar/data/72331/000156459018030928/ndsn-ex10e1_311.htm)] [added: Plan (incorporated herein by reference to Exhibit 10-e-1 to Registrant’s Annual Report on Form 10-K for the year ended October 31, 2018)*](http://www.sec.gov/Archives/edgar/data/72331/000156459018030928/ndsn-ex10e1_311.htm)] |

| [removed: 10-e-2] [added: 10-e-1] | | [removed: [Nordson] [added: [First Amendment to Nordson] Corporation [removed: 2005] Excess Defined Benefit Pension Plan (incorporated herein by reference to Exhibit [removed: 10-e-2] [added: 10-f-1] to Registrant’s Annual Report on Form 10-K for the [removed: year ended] [added: year-ended] October [removed: 31, 2016)*](http://www.sec.gov/Archives/edgar/data/72331/000156459016030237/ndsn-ex10e2_165.htm)] [added: 29, 2000)*](http://www.sec.gov/Archives/edgar/data/72331/000095015201000442/l86000aex10-f_1.txt)] |

| 10-g-2 | | [Nordson Corporation Amended and Restated 2012 Stock Incentive and Award Plan (incorporated [added: herein] by reference to Exhibit 10.1 to Registrant’s Form 8-K dated March 2, [removed: 2018)*](http://www.sec.gov/Archives/edgar/data/72331/000119312513088774/d495750dex101.htm)] [added: 2018)*](http://www.sec.gov/Archives/edgar/data/72331/000119312518068933/d523607dex101.htm)] |

| 10-g-3 | | [Nordson Corporation 2012 Stock Incentive and Award Plan, Form of Notice of Award [removed: –] [added: -] Key Employees (as amended November 24, 2014) (incorporated herein by reference to Exhibit 10-g-3 to Registrant’s Annual Report on Form 10-K for the year ended October 31, 2014)*](http://www.sec.gov/Archives/edgar/data/72331/000119312514442368/d787677dex10g3.htm) |

| 10-g-4 | | [Nordson Corporation 2012 Stock Incentive and Award Plan, Form of Notice of Award [removed: –] [added: -] Executive Officers (as amended November 24, 2014) (incorporated herein by reference to Exhibit 10-g-4 to Registrant’s Annual Report on Form 10-K for the year ended October 31, 2014)*](http://www.sec.gov/Archives/edgar/data/72331/000119312514442368/d787677dex10g4.htm) |

| [removed: 10-h] [added: 10-m] | | [removed: [Assurance Trust] [added: [Employment] Agreement between Nordson Corporation and [removed: Key Trust Company of Ohio, N.A. amended and restated as of January 22, 2014] [added: Michael F. Hilton] (incorporated herein by reference to Exhibit [removed: 10.1] [added: 10-m] to Registrant’s [removed: Quarterly] [added: Annual] Report on Form [removed: 10-Q] [added: 10-K] for the [removed: quarter] [added: year] ended [removed: January] [added: October] 31, [removed: 2014)](http://www.sec.gov/Archives/edgar/data/72331/000119312514088017/d657923dex101.htm)] [added: 2015)*](http://www.sec.gov/Archives/edgar/data/72331/000156459015011507/ndsn-ex10m_428.htm)] |

| [removed: 10-i] [added: 99-a] | | [removed: [Compensation Committee Rules of the Nordson Corporation 2004 Long Term Performance Plan governing directors’ deferred compensation] [added: [Form S-8 Undertakings] (incorporated herein by reference to Exhibit [removed: 10-i] [added: 99-a] to Registrant’s Annual Report on Form 10-K for the year ended October 31, [removed: 2016)*](http://www.sec.gov/Archives/edgar/data/72331/000156459016030237/ndsn-ex10i_163.htm)] [added: 2016)](http://www.sec.gov/Archives/edgar/data/72331/000156459016030237/ndsn-ex99a_7.htm)] |

| [removed: 10-m] [added: 10-n] | | [Employment Agreement [added: (Change in Control Retention Agreement)] between [removed: Registrant] [added: Nordson Corporation] and Michael F. Hilton (incorporated herein by reference to Exhibit [removed: 10-m] [added: 10-n] to Registrant’s Annual Report on Form 10-K for the year ended October 31, [removed: 2015)*](http://www.sec.gov/Archives/edgar/data/72331/000156459015011507/ndsn-ex10m_428.htm)] [added: 2015)*](http://www.sec.gov/Archives/edgar/data/72331/000156459015011507/ndsn-ex10n_429.htm)] |

| [removed: 10-n] [added: 10-o] | | [removed: [Employment] [added: [Supplemental Retirement] Agreement [removed: (Change in Control Retention Agreement)] between [removed: Registrant] [added: Nordson Corporation] and Michael F. Hilton (incorporated herein by reference to Exhibit [removed: 10-n] [added: 10-o] to Registrant’s Annual Report on Form 10-K for the year ended October 31, [removed: 2015)*](http://www.sec.gov/Archives/edgar/data/72331/000156459015011507/ndsn-ex10n_429.htm)] [added: 2016)*](http://www.sec.gov/Archives/edgar/data/72331/000156459016030237/ndsn-ex10o_160.htm)] |

| [removed: 10-o] [added: 10-d] | | [removed: [Supplemental] [added: [Restated Nordson Corporation Excess Defined Contribution] Retirement [removed: Agreement between the Registrant and Michael F. Hilton] [added: Plan] (incorporated herein by reference to Exhibit [removed: 10-o] [added: 10-d] to Registrant’s Annual Report on Form 10-K for the year ended October 31, [removed: 2016)*](http://www.sec.gov/Archives/edgar/data/72331/000156459016030237/ndsn-ex10o_160.htm)] [added: 2009)*](http://www.sec.gov/Archives/edgar/data/72331/000095012309071805/l37763exv10wd.htm)] |

| (21) | | [Subsidiaries of the [removed: Registrant](https://www.sec.gov/Archives/edgar/data/72331/000156459018030928/ndsn-ex21_13.htm)] [added: Registrant](https://www.sec.gov/Archives/edgar/data/72331/000156459019045927/ndsn-ex21_10.htm)] |

| (23) | | [Consent of Independent Registered Public Accounting [removed: Firm](https://www.sec.gov/Archives/edgar/data/72331/000156459018030928/ndsn-ex23_12.htm)] [added: Firm](https://www.sec.gov/Archives/edgar/data/72331/000156459019045927/ndsn-ex23_11.htm)] |

| 31.1 | | [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 [removed: 2002](https://www.sec.gov/Archives/edgar/data/72331/000156459018030928/ndsn-ex311_8.htm)] [added: 2002](https://www.sec.gov/Archives/edgar/data/72331/000156459019045927/ndsn-ex311_6.htm)] |

| 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 [removed: 2002](https://www.sec.gov/Archives/edgar/data/72331/000156459018030928/ndsn-ex312_6.htm)] [added: 2002](https://www.sec.gov/Archives/edgar/data/72331/000156459019045927/ndsn-ex312_12.htm)] |

| 32.1 | | [Certification of CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of [removed: 2002](https://www.sec.gov/Archives/edgar/data/72331/000156459018030928/ndsn-ex321_7.htm)] [added: 2002](https://www.sec.gov/Archives/edgar/data/72331/000156459019045927/ndsn-ex321_9.htm)] |

| 32.2 | | [Certification of CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of [removed: 2002](https://www.sec.gov/Archives/edgar/data/72331/000156459018030928/ndsn-ex322_14.htm)] [added: 2002](https://www.sec.gov/Archives/edgar/data/72331/000156459019045927/ndsn-ex322_7.htm)] |

| 101 | | The following financial information from Nordson Corporation’s Annual Report on Form 10-K for the year ended October 31, [removed: 2018,] [added: 2019,] formatted in [added: inline] Extensible Business Reporting Language [removed: (XBRL):] [added: (iXBRL):] (i) the Consolidated Statements of Income for the years ended October 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016,] [added: 2017,] (ii) the Consolidated Statements of Comprehensive Income for the years ended October 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016] [added: 2017,] (iii) the Consolidated Balance Sheets at October 31, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] (iv) the Consolidated Statements of Changes in Shareholders’ Equity for the years ended October 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016,] [added: 2017,] (v) the Consolidated Statements of Cash Flows for the years ended October 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016,] [added: 2017,] and (vi) [added: the] Notes to Consolidated Financial Statements. |

| | [removed: Certain exhibits] [added: Schedules] and [removed: schedules] [added: attachments to this exhibit] have been omitted [removed: and the Registrant agrees to furnish supplementally] [added: pursuant] to [removed: the Securities and Exchange Commission] [added: Regulation S-K, Item 601(a)(5). The Registrant will provide] a copy of any omitted [removed: exhibits] [added: schedule to the Securities] and [removed: schedules] [added: Exchange Commission or its staff] upon request. |

| 4-a | | [Description of Nordson Corporation’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934](https://www.sec.gov/Archives/edgar/data/72331/000156459019045927/ndsn-ex4a_201.htm) |

NORDSON CORPORATION

| 10-m-1 | | [Amendment to Employment Agreement, dated June 10, 2019, between Nordson Corporation and Michael F. Hilton (incorporated herein by reference to Exhibit 10.1 to Registrant’s Form 8-K dated June 14, 2019)*](http://www.sec.gov/Archives/edgar/data/72331/000119312519173060/d760303dex101.htm) |

NORDSON CORPORATION

| 10-p | | [Employment Agreement, effective as of August 1, 2019, between Nordson Corporation and Sundaram Nagarajan (incorporated herein by reference to Exhibit 10.2 to Registrant’s Form 8-K dated June 14, 2019)*](http://www.sec.gov/Archives/edgar/data/72331/000119312519173060/d760303dex102.htm) |

| 10-q | | [Change-in-Control Retention Agreement between Nordson Corporation and Sundaram Nagarajan (incorporated herein by reference to Exhibit 10.3 to Registrant’s Form 8-K dated June 14, 2019)*](http://www.sec.gov/Archives/edgar/data/72331/000119312519173060/d760303dex103.htm) |

| 104 | | The cover page from Nordson Corporation’s Annual Report on Form 10-K for the year ended October 31, 2019, formatted in inline Extensible Business Reporting Language (iXBRL) (included in Exhibit 101). |

| 4-i | | [$200 million Term Loan Facility Agreement dated April 10, 2015 among Nordson Corporation, various financial institutions named therein, and PNC Bank National Association, as administrative agent (incorporated herein by reference to Exhibit 4.2 to Registrant’s Quarterly Report on Form 10-Q for the quarter ended April 30, 2015)](http://www.sec.gov/Archives/edgar/data/72331/000156459015004835/ndsn-ex42_20150430363.htm) |

| 4-i-1 | | [First Amendment dated June 26, 2018 to the Term Loan Facility Agreement dated April 10, 2015 among Nordson Corporation, various financial institutions named therein and PNC Bank, National Association, as administrative agent (incorporated herein by reference to Exhibit 4.3 to Registrant’s Form 8-K dated June 28, 2018)](http://www.sec.gov/Archives/edgar/data/72331/000119312518207814/d495901dex43.htm) |

| 4-k | | [First Amendment and Joinder to Term Loan Agreement, dated as of March 31, 2017, by and among Nordson Corporation, the lenders party thereto and PNC Bank, National Association, as administrative agent and lender, and Term Loan Agreement, dated as of February 21, 2017, by and among Nordson Corporation, the lenders party thereto, PNC Bank, National Association, as lender and administrative agent, the joint lead arrangers and joint bookrunners party thereto, the co-syndication agents party thereto and the co-documentation agents party thereto (incorporated herein by reference to Exhibit 4.1 to Registrant’s Form 8-K dated April 5, 2017)](http://www.sec.gov/Archives/edgar/data/72331/000119312517111134/d355120dex41.htm) |

| 4-k-1 | | [Second Amendment dated May 17, 2018 to Term Loan Agreement dated as of February 21, 2017, among Nordson Corporation, the lenders party thereto and PNC Bank, National Association, as administrative agent and lender (incorporated herein by reference to Exhibit 10.1 to Registrant’s Form 8-K dated May 23, 2018)](http://www.sec.gov/Archives/edgar/data/72331/000119312518172181/d578826dex101.htm) |

| 4-k-2 | | [Third Amendment dated June 26, 2018 to Term Loan Agreement dated as of February 21, 2017, among Nordson Corporation, various financial institutions named therein and PNC Bank, National Association, as administrative agent (incorporated herein by reference to Exhibit 4.4 to Registrant’s Form 8-K dated June 28, 2018)](http://www.sec.gov/Archives/edgar/data/72331/000119312518207814/d495901dex44.htm) |

| 99-a | | Form S-8 Undertakings |

| | | |

[removed: Signatures][added: Signatures]

| Date: December [removed: 14, 2018] [added: 13, 2019] | By: | /s/ Gregory A. Thaxton |

| /s/ [removed: Michael F. Hilton] [added: Sundaram Nagarajan] | Director, President and Chief Executive Officer (Principal Executive Officer) | December [removed: 14, 2018] [added: 13, 2019] |

| /s/ Gregory A. Thaxton | Executive Vice President, Chief Financial Officer (Principal Financial Officer) (Principal Accounting Officer) | December [removed: 14, 2018] [added: 13, 2019] |

| /s/ Michael J. Merriman, Jr. | Chairman of the Board | December [removed: 14, 2018] [added: 13, 2019] |

| /s/ Lee C. Banks | Director | December [removed: 14, 2018] [added: 13, 2019] |