Acquisitions and volume key to positive results - Nordson
Sales for the quarter ending 31 October were $439m, an increase of 33% over the fourth quarter of the prior year.
This included a 19% increase in organic volume, a 16% increase related to the first year effect of acquisitions, and a negative 2% impact related to the unfavorable effects of currency translation.
Fourth quarter operating profit increased 31% over the same period a year ago to $104m, and fourth quarter net income increased 24% over the same period a year ago to $68m.
Nordson has acquired EDI (Extrusion Die Industries) Holdings and Xaloy Superior Holdings for $200m to boost its growth this year.
Segments in depth
Sales volume in Adhesive Dispensing Systems increased 36% over the prior year’s fourth quarter, as solid growth in both consumer non-durable and durable end markets drove a 6% increase in organic volume with the remainder of the increase coming from the first year effect of acquisitions.
Operating margin in the segment was 28%, including the recent EDI and Xaloy acquisitions and the non-recurring short term purchase accounting charges associated with acquired inventory.
In Advanced Technology Systems, organic sales volume increased by 26% and the first year effect of acquisitions added 2%, for total volume growth of 28% over the prior year’s fourth quarter.
The order trend seen in recent quarters continued, with strong broad based demand for dispensing and test and inspection in electronics end markets, especially for mobile device applications, and continued penetration of niche applications, said the firm.
Industrial Coating Systems’ sales volume in the quarter increased by 47% over the same period a year ago, inclusive of 8% volume growth from the first year effect of acquisitions.
Nordson president and chief executive officer, Michael F. Hilton, said: “We delivered fourth quarter operating margin of 24%, the same strong level as a year ago and inclusive of the impact of this year’s acquisitions.
“Integration of these acquisitions remains on track and we are pleased by the many opportunities for growth and synergy that we see. Free cash flow in the quarter was approximately 122% of net income, representing very strong cash conversion that enables us to continue funding a variety of growth and continuous improvement initiatives.”
2013 outlook
For Q1 2013, sales are expected to be in the range of $343m to $354m, a growth rate in the range of up 24% to 28% compared to the first quarter a year ago.
The growth includes organic volume of up 7% to 11%, 18% growth from the first year effect of acquisitions, and a negative 1% impact related to the unfavorable effects of currency translation based on the current exchange rate environment.
Hilton said the firm begin 2013 with a solid outlook based on current order rates.
“At the same time, the global macroeconomic environment contains many uncertainties.
“In most emerging markets, growth remains strong, though the pace has cooled as exports have softened.
“We plan to achieve our goals by relying on our core strengths, our team’s ability to execute, our commitment to continuous improvement, and the many growth markets where we see opportunity.”
