Nordson Corporation Reports Fiscal Year 2019 Third Quarter Results.
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Release date- 20082019 - Westlake - Nordson Corporation (Nasdaq: NDSN) today reported results for the third quarter of fiscal year 2019.
For the quarter ended July 31, 2019, sales were $560 million, which was a decrease of 4 percent compared to the prior year's third quarter sales of $581 million. This change in third quarter 2019 sales included a decrease of 2 percent organic volume and a decrease of 2 percent related to the unfavorable effects of currency translation as compared to the prior year's third quarter. Growth in the quarter related to the first year effect of the fiscal 2018 acquisition of Clada Medical Devices and the 2019 acquisition of Optical Control GmbH was not significant.
In the third quarter of fiscal year 2019, reported operating profit was $130 million, net income was $94 million, and GAAP diluted earnings per share were $1.62. These results include approximately $1.4 million of one-time charges associated with restructuring and the step-up in value of acquired inventory. Prior year third quarter operating profit, net income and GAAP diluted earnings per share were $138 million, $95 million and $1.61, respectively. Prior year results include approximately $1.5 million of restructuring charges. A reconciliation of GAAP diluted earnings per share to adjusted diluted earnings per share and calculations for EBITDA, adjusted EBITDA, free cash flow before dividends, and adjusted free cash flow before dividends are included in the attached financial exhibits.
Commenting on the third quarter of fiscal year 2019 performance, Michael F. Hilton, President and Chief Executive Officer through July 31, 2019, and now Senior Advisor to the Company, said, 'The third quarter was weaker than expected, primarily impacted by the ongoing uncertainty related to the international trade dispute and its effect on customer investments. The softness in product lines serving electronics end markets and those within the Industrial Coatings Segment offset solid organic growth in our Adhesives Dispensing segment and the non-electronics product lines within the Advanced Technology segment. The Industrial Coatings segment sales volume was impacted by some customers moving deliveries into the fourth quarter, so we are expecting a strong fourth quarter from this segment. Even with this decline in total company sales in the quarter and the pressure from tariffs, the Nordson team held adjusted operating margin, which excludes one-time charges in both years, equal to the prior year.'
Third Quarter Segment Results
Adhesive Dispensing Systems sales increased 2 percent compared to the prior year's third quarter, inclusive of an increase in organic volume of 4 percent and a decrease of 2 percent related to the unfavorable effects of currency translation as compared to the prior year. Reported operating margin in the segment was 31 percent in the quarter.
Advanced Technology Systems sales decreased 5 percent compared to the prior year's third quarter, inclusive of a decrease in organic volume of 4 percent and a decrease of 1 percent related to the unfavorable effects of currency translation as compared to the prior year. In the third quarter of 2019, reported operating margin in the segment was 21 percent.
Industrial Coating Systems sales decreased 18 percent compared to the prior year's third quarter, inclusive of a decrease in organic volume of 17 percent and a decrease of 1 percent related to the unfavorable effects of currency translation as compared to the prior year. Reported operating margin in the segment was 19 percent in the quarter.
Detailed results by operating segment and geography are included in the attached financial exhibits.
Backlog for the quarter ended July 31, 2019 was $431 million, an increase of 3 percent compared to the same period a year ago. Impact from the Clada Medical Devices acquisition in fiscal 2018 and the fiscal 2019 acquisition of Optical Control GmbH was not significant. Backlog amounts are calculated at July 31, 2019 exchange rates.
For the full year fiscal 2019, the company now expects flat to modest organic sales growth and unfavorable foreign currency effects of approximately 2 percent on sales as compared to the prior year. The company will remain focused on continuous improvement initiatives to offset costs and weaker than expected sales growth in order to hold or modestly improve operating margin and EBITDA margin against prior year's performance.
Commenting on the company's fiscal 2019 outlook, Hilton said, 'As we approach the end of our fiscal year, the effect of recent macroeconomic trends has had a more significant impact than most anticipated, particularly on electronics end markets. That said, the strength of our position as a valued solutions provider to our customers combined with the diversity of our end markets gives us confidence that we will continue to drive organic growth going forward.'
Hilton continued, 'On August 1, we welcomed Sundaram Nagarajan as Nordson's new President and Chief Executive Officer. Naga hit the ground running, already traveling and getting to know our business. I believe he is the right fit to lead Nordson to continued success. It has been an honor to lead this great company, and I would like to thank our employees, shareholders and customers for their support over the past ten years.'
Except for historical information and comparisons contained herein, statements included in this release may constitute 'forward-looking statements,' as defined by the Private Securities Litigation Reform Act of 1995. These statements involve a number of risks, uncertainties and other factors, as discussed in the company's filing with the Securities and Exchange Commission that could cause actual results to differ.
Nordson Corporation engineers, manufactures and markets differentiated products and systems used for the precision dispensing of adhesives, coatings, sealants, biomaterials, polymers, plastics and other materials, fluid management, test and inspection, UV curing and plasma surface treatment, all supported by application expertise and direct global sales and service. Nordson serves a wide variety of consumer non-durable, durable and technology end markets including packaging, nonwovens, electronics, medical, appliances, energy, transportation, construction, and general product assembly and finishing. Founded in 1954 and headquartered in Westlake, Ohio, the company has operations and support offices in more than 35 countries.
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|Date:||Aug 21, 2019|
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