On December 11, 2024, Nordson Corp (NDSN, Financial) released its 8-K filing detailing its financial results for the fourth quarter and fiscal year 2024. Nordson, a manufacturer of precision dispensing equipment, serves diverse markets such as packaging, medical, electronics, and industrial sectors. The company operates through three segments: industrial precision solutions, medical and fluid solutions, and advanced technology solutions, generating approximately $2.7 billion in revenue for fiscal 2023.
Q4 Financial Performance and Challenges
Nordson Corp reported fourth-quarter sales of $744 million, a 4% increase from the previous year's $719 million. This growth was driven by a 6% favorable impact from acquisitions and a 1% positive currency translation, offset by a 3% decline in organic sales. Despite the sales increase, earnings per diluted share (EPS) were $2.12, falling short of the analyst estimate of $2.42. However, adjusted EPS was $2.78, surpassing the prior year's adjusted EPS of $2.71.
Key Financial Achievements
For the full fiscal year, Nordson achieved record sales of $2.7 billion, marking a 2% growth over the previous year. The company's EBITDA reached a record $849 million, representing 32% of sales, up from $819 million or 31% of sales in the prior year. These achievements underscore Nordson's ability to leverage acquisitions and maintain strong profit margins, crucial for sustaining growth in the industrial products sector.
Income Statement Highlights
Nordson's net income for the fourth quarter was $122 million, compared to $128 million in the previous year. The company's gross profit margin improved to 54.1% from 53.4% year-over-year. Operating profit for the quarter was $178.9 million, slightly down from $185 million in the prior year, primarily due to increased selling and administrative expenses.
Balance Sheet and Cash Flow Insights
As of October 31, 2024, Nordson's total assets stood at $6 billion, up from $5.25 billion the previous year. The increase was largely driven by goodwill and property, plant, and equipment. The company's free cash flow for the year was $492 million, reflecting a conversion rate of 105% of net income, highlighting strong cash generation capabilities.
Segment Performance Analysis
The Industrial Precision Solutions segment saw a 3% decline in sales to $392 million, impacted by a 5% decrease in organic sales. The Medical and Fluid Solutions segment experienced a 19% sales increase to $200 million, primarily due to the Atrion acquisition. The Advanced Technology Solutions segment reported a 5% sales increase to $152 million, driven by organic growth and favorable currency impacts.
CEO Commentary
"I appreciate our team’s focus and commitment to our customers, which delivered results above our fourth quarter guidance expectations. Our Advanced Technology Solutions segment delivered year-over-year fourth quarter sales growth, as electronics demand continued to steadily improve at fiscal year-end," said Nordson President and CEO Sundaram Nagarajan.
Fiscal 2025 Outlook
Looking ahead, Nordson forecasts fiscal 2025 sales between $2.75 billion and $2.87 billion, with adjusted earnings per share ranging from $9.70 to $10.50. The company enters the new fiscal year with a backlog of approximately $580 million, positioning it for continued growth despite a cautious outlook due to global macroeconomic conditions.
Nordson's strategic focus on acquisitions and its diversified portfolio are expected to drive future growth, while its strong cash flow generation supports ongoing investments and shareholder returns. Investors and stakeholders can access further details and commentary during Nordson's webcast scheduled for December 12, 2024.
Explore the complete 8-K earnings release (here) from Nordson Corp for further details.
