Nordson 10-Q 2025-04-30

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

For the quarterly period ended April 30, 2025

OR

For the transition period from to

Commission file number 0-7977

____________________________________________________

NORDSON CORPORATION

(Exact name of registrant as specified in its charter)

___________________________________________________

Ohio

(State or other jurisdiction of incorporation or organization)

28601 Clemens Road

Westlake, Ohio

(Address of principal executive offices)

34-0590250

(I.R.S. Employer Identification No.)

44145

(Zip Code)

(440) 892-1580

(Registrant's Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes x No o

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: Common Shares, without par value as of May 27, 2025: 56,508,946

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Nordson Corporation

Part I – FINANCIAL INFORMATION

Condensed Consolidated Statements of Income

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The following is management's discussion and analysis of certain significant factors affecting our financial condition and results of operations for the periods included in the accompanying condensed consolidated financial statements. Throughout this Quarterly Report on Form 10-Q, components may not sum to totals due to rounding.

Overview

Nordson is an innovative precision technology company that leverages a scalable growth framework expected to deliver top tier growth with leading margins and returns. We engineer, manufacture and market differentiated products and systems used for precision dispensing, applying and controlling of adhesives, coatings, polymers, sealants, biomaterials, and other fluids, to test and inspect for quality, and to treat and cure surfaces and various medical products such as: catheters, cannulas, medical balloons and medical tubing. These products are supported with extensive application expertise and direct global sales and service. We serve a wide variety of consumer non-durable, consumer durable and technology end markets including packaging, electronics, medical, appliances, energy, transportation, precision agriculture, building and construction, and general product assembly and finishing.

Our strategy for long-term growth is based on solving customers’ needs globally. We were incorporated in the State of Ohio in 1954 and are headquartered in Westlake, Ohio. Our products are marketed through a network of direct operations in more than 35 countries.

As of April 30, 2025, we had approximately 7,800 employees worldwide. We have principal manufacturing operations and sources of supply in the United States in Ohio, Georgia, California, Colorado, Connecticut, Illinois, Michigan, Minnesota, Pennsylvania, Rhode Island, Tennessee, Florida, Texas, Alabama, South Carolina and Wisconsin; as well as in the People’s Republic of China, Germany, Ireland, India, Israel, Italy, Mexico, the Netherlands and the United Kingdom.

Critical Accounting Policies and Estimates

A comprehensive discussion of the Company’s critical accounting policies and management estimates and significant accounting policies followed in the preparation of the financial statements is included in Item 7 of our Annual Report on Form 10-K for the year ended October 31, 2024 (the "2024 Form 10-K"). There have been no significant changes in critical accounting policies, management estimates or accounting policies followed since the year ended October 31, 2024.

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Results of Operations

Below is a detailed comparison of our results of operations for the three and six months ended April 30, 2025 and April 30, 2024.

As used throughout this Quarterly Report on Form 10-Q, geographic regions include the Americas (United States, Canada, Mexico and Central and South America), Asia Pacific and Europe.

Consolidated Financial Results

Consolidated financial results for the three months ended April 30, 2025 and April 30, 2024 were as follows:

Consolidated financial results for the six months ended April 30, 2025 and April 30, 2024 were as follows:

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Net Sales

Net sales for the IPS, MFS and ATS segments were as follows:

Three Months Ended April 30, 2025

The IPS organic sales decrease of 6.9 percent was driven by weaker systems demand in polymer processing and industrial coatings product lines, partially offset by growth in nonwovens, precision agriculture and packaging product lines. The MFS organic sales decrease of 10.0 percent reflects targeted program rationalization in medical contract manufacturing and ongoing destocking in selected interventional product lines. The inorganic growth of MFS is due to the acquisition of Atrion. The ATS organic sales increase of 18.1 percent was driven by broad-based demand in semi-conductor and electronics end markets.

Six Months Ended April 30, 2025

The IPS organic sales decrease of 7.6 percent was driven primarily by weaker systems demand in polymer processing and industrial coatings product lines, which was partially offset by growth in nonwovens product lines. The MFS organic sales decrease of 10.6 percent was driven by lower demand and tough year-over-year comparisons in medical interventional solutions product lines, where customer destocking trends continued to impact demand. The inorganic growth of MFS is due to the acquisition of Atrion. The ATS organic sales increase of 4.3 percent was driven by growth in optical sensors, partially offset by weakness in measurement and control and electronics processing product lines.

Net Sales by region were as follows:

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Operating Profit

Operating profit for the IPS, MFS and ATS segments were as follows:

Three Months Ended April 30, 2025

Consolidated operating margin decreased by 120 basis points primarily driven by reduced sales leverage. IPS operating margin declined 360 basis points, reflecting the impact of lower sales volume. MFS operating profit increased $7,812 reflecting the contribution from the Atrion acquisition and solid operational execution from the organic business. ATS operating margin improved by 450 basis points driven by strong organic sales growth and the benefits of strategic cost and manufacturing optimization actions.

Six Months Ended April 30, 2025

Consolidated operating margin decreased by 170 basis points primarily driven by reduced sales leverage. IPS operating margin declined 210 basis points due to lower sales volumes. MFS operating margin declined 420 basis points, reflecting lower organic sales demand partially offset by the impact of the Atrion acquisition. ATS operating margin improved by 330 basis points driven by strong organic sales growth as well as cost reduction actions and manufacturing footprint optimization actions.

Interest and Other expenses

Interest expense for the three months ended April 30, 2025 was $26,572, compared to $20,109 in the comparable period of 2024. The increase, compared to the prior year period, was primarily due to higher average debt levels, driven by acquisitions. Other expense for the three months ended April 30, 2025 was $3,961 compared to $785 in the comparable period of 2024. Included in other expense for the three months ended April 30, 2025 were pension and postretirement income of $1,019 and $3,199 of foreign currency losses. Included in other expense for the three months ended April 30, 2024 were pension and postretirement income of $1,029 and $1,125 in foreign currency losses.

Interest expense for the six months ended April 30, 2025 was $53,131, compared to $41,551 in the comparable period of 2024. The increase, compared to the prior year period, was primarily due to higher average debt levels, driven by acquisitions. Other expense was $2,435 compared to $1,123 in the comparable period of 2024. Included in other expense for the six months ended April 30, 2025 were pension and postretirement income of $2,035 and $2,868 of foreign currency losses. Included in other expense for the six months ended April 30, 2024 were pension and postretirement income of $2,056 and $1,947 in foreign currency losses.

Income Tax Expense

We record our interim provision for income taxes based on our estimated annual effective tax rate, as well as certain items discrete to the current period. Significant judgment is involved regarding the application of global income tax laws and regulations and when projecting the jurisdictional mix of income. We have considered several factors in determining the probability of realizing deferred income tax assets including forecasted operating earnings, available tax planning strategies and the time period over which the temporary differences will reverse. We review our tax positions on a regular basis and adjust the balances as new information becomes available. The effective tax rate for both the three and six months ended April 30, 2025 was

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19.0% compared to 20.8% and 20.9%, respectively, for the same periods in 2024. The effective tax rate for the three and six months ended April 30, 2025 is lower than the U.S. tax rate of 21% primarily due to the foreign-derived intangible income deduction.

Net Income

Net income was $112,404, or $1.97 per diluted share, for the three months ended April 30, 2025, compared to net income of $118,217, or $2.05 per diluted share, in the same period of 2024. This represented a 4.9 percent decrease in net income and a 3.9 percent decrease in diluted earnings per share. The decrease in net income and decrease of $0.08 per diluted share was primarily driven by higher interest expense due to prior year's acquisitions and an increase in foreign currency losses.

Net income was $207,056, or $3.62 per diluted share, for the six months ended April 30, 2025, compared to net income of $227,789, or $3.95 per diluted share, in the same period of 2024. This represented a 9.1 percent decrease in net income and a 8.4 percent decrease in diluted earnings per share. The decrease in net income and decrease of $0.33 per diluted share was primarily driven by higher selling & administrative expenses due to the first-year effect of acquisitions and higher interest expense due to prior year's acquisitions.

Foreign Currency Effects

In the aggregate, average exchange rates for 2025 used to translate international sales and operating results into U.S. dollars were generally unfavorable compared with average exchange rates existing during 2024. It is not possible to precisely measure the impact on operating results arising from foreign currency exchange rate changes, because of changes in selling prices, sales volume, product mix and cost structure in each country in which we operate. However, if transactions for the three months ended April 30, 2025 were translated at exchange rates in effect during the same period of 2024, we estimated that sales would have been approximately $4,000 higher while costs of sales and selling and administrative expenses would have been approximately $2,000 higher. If transactions for the six months ended April 30, 2025 were translated at exchange rates in effect during the same period of 2024, we estimated that sales would have been approximately $16,000 higher while costs of sales and selling and administrative expenses would have been approximately $9,000 higher.

Other Trends

Changes in trade policies, tariffs, and other import/export regulations of the U.S. and other nations did not have a material impact on our financial results for the six months ended April 30, 2025. However, the Company does have sales and purchases that could be negatively impacted by recent tariff actions. The Company is actively working to minimize the impact of these changes and mitigate risk.

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Financial Condition

Liquidity and Capital Resources

Cash and cash equivalents increased $14,205 during the six months ended April 30, 2025. Approximately 78 percent of our consolidated cash and cash equivalents were held at various foreign subsidiaries as of April 30, 2025.

A comparison of cash flow changes for the six months ended April 30, 2025 to the six months ended April 30, 2024 is as follows:

Additions to property, plant and equipment were largely driven by productivity and growth projects, including a new manufacturing facility.

We have a $1,150,000 unsecured multi-currency credit facility with a group of banks that provides for a term loan facility in the aggregate principal amount of $300,000, maturing in June 2026, and a multicurrency revolving credit facility in the aggregate principal amount of $850,000, maturing in June 2028. At April 30, 2025, we had $280,000 outstanding on the term loan facility and $243,000 outstanding on the revolving credit facility.

Our operating performance, balance sheet position and financial ratios for six months ended April 30, 2025 remained strong. The Company is well-positioned to manage liquidity needs that arise from working capital requirements, capital expenditures and contributions related to pension and postretirement obligations, as well as principal and interest payments on our outstanding debt. Our primary sources of capital to meet these needs, as well as other opportunistic investments, are a combination of cash on hand, which was $130,157 as of April 30, 2025, cash provided by operations, which was $278,292 for the six months ended April 30, 2025, and available borrowings under our loan agreements and unused bank lines of credit, which totaled $806,477 as of April 30, 2025. Cash from operations, which, when combined with our available borrowing capacity and ready access to capital markets, is expected to be more than adequate to fund our liquidity needs over the twelve months and the foreseeable future thereafter. The Company believes it has the ability to generate and obtain adequate amounts of cash to meet its long-term needs for cash. However, the impact of changes in trade policies, tariffs, and other import/export regulations of the U.S. and other nations could negatively impact our cash flow from operations and liquidity in future periods.

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Safe Harbor Statements Under the Private Securities Litigation Reform Act of 1995

This Quarterly Report on Form 10-Q, particularly “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains forward-looking statements within the meaning of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Such statements relate to, among other things, income, earnings, cash flows, changes in operations, operating improvements, businesses in which we operate and the United States and global economies. Statements in this Quarterly Report on Form 10-Q that are not historical are hereby identified as “forward-looking statements” and may be indicated by words or phrases such as “anticipates,” “supports,” “plans,” “projects,” “expects,” “believes,” “should,” “would,” “could,” “hope,” “forecast,” “management is of the opinion,” use of the future tense and similar words or phrases. These forward-looking statements reflect management’s current expectations and involve a number of risks and uncertainties. These risks and uncertainties include, but are not limited to, U.S. and international economic and political conditions; financial and market conditions; currency exchange rates and devaluations; possible acquisitions and the Company’s ability to complete and successfully integrate acquisitions, including the integration of Atrion; the Company’s ability to successfully divest or dispose of businesses that are deemed not to fit with its strategic plan; the effects of changes in U.S. trade policy and trade agreements, including changes in tariffs by the U.S. or other nations; the effects of changes in tax law; and the possible effects of events beyond our control, such as political unrest, including the conflicts in Europe and the Middle East, acts of terror, natural disasters and pandemics.

In light of these risks and uncertainties, actual events and results may vary significantly from those included in or contemplated or implied by such forward-looking statements. Readers are cautioned not to place undue reliance on such forward-looking statements. These forward-looking statements speak only as of the date made. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Factors that could cause our actual results to differ materially from the expected results are discussed in Part I, Item 1A, Risk Factors in our 2024 Form 10-K and Part II, Item 1A, Risk Factors in the Quarterly Report on Form 10-Q.

Information regarding our financial instruments that are sensitive to changes in interest rates and foreign currency exchange rates was disclosed under Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” in our 2024 Form 10-K. The information disclosed has not changed materially in the interim period since then.

Our management with the participation of the principal executive officer (president and chief executive officer) and 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-15(e)) as of April 30, 2025. 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 April 30, 2025 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 Securities and Exchange Commission's rules and forms and is accumulated and communicated to management, including the principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

There were no changes in our internal control over financial reporting that occurred during the three months ended April 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Part II – OTHER INFORMATION

See our Contingencies Note to the condensed consolidated financial statements for a discussion of our contingencies and legal matters.

In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors disclosed in “Item 1A. Risk Factors” of our 2024 Form 10-K. Other than as set forth below, there have been no material changes to the risk factors described in the 2024 Form 10-K.

Changes to trade policies, tariffs, and other import/export regulations of the U.S. and other nations may create uncertainty in the global market and have a material adverse effect on our business, financial condition, and results of operations.

Changes in trade policies, tariffs, and other import/export regulations of the U.S. and other nations could change how we transact business, who we trade with, affect our relationships with customers and suppliers, and negatively impact our sales, margins and profitability. As a result, these government trade actions may create significant uncertainty in the global market and may have a material adverse impact on our business, financial condition and results of operations.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table summarizes common shares repurchased by the Company during the three months ended April 30, 2025:

(1) Includes shares tendered for taxes related to stock option exercises and vesting of restricted stock.

(2) 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. In September 2022, the board of directors authorized the repurchase of up to an additional $500,000 of the Company's common shares. Approximately $382,550 of the total $1,500,000 authorized remained available for share repurchases at April 30, 2025. Uses for repurchased shares include the funding of benefit programs including stock options and restricted stock. Shares purchased are treated as treasury shares until used for such purposes. The repurchase program will be funded using cash from operations and proceeds from borrowings under our credit facilities. The repurchase program does not have an expiration date.

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During the quarter ended April 30, 2025, no director or officer (as defined in Rule 16a-1(f) promulgated under the Exchange Act) of the Company adopted or terminated any “Rule 10b5-1 trading arrangement” or any “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K, except as described in the table below:

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

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