Third Quarter:

Sales were $649 million, a 2% decrease from the prior year
Operating profit was $171 million
EBITDA was $208 million, 32% of sales
Earnings per share were $2.22
Adjusted earnings per share were $2.35

Guidance:

Narrowing previously issued full-year fiscal 2023 revenue guidance to 0% to 2% growth over record fiscal 2022 and adjusted earnings per diluted share to the range of $8.90 to $9.05 per share

Nordson Corporation (NASDAQ:NDSN) today reported results for the fiscal third quarter ended July 31, 2023. Sales were $649 million, a 2% decrease compared to the prior year's third quarter sales of $662 million. The decrease in third quarter 2023 sales includes an organic decrease of 5%, partially offset by a favorable acquisition impact. The organic sales decrease was driven by ongoing pressure in electronics, primarily semiconductor dispense applications, and biopharma end markets, offset by strong growth in medical interventional solutions and polymer processing product lines.

Operating profit in the third quarter was $171 million. Adjusted operating profit, excluding $8 million in non-recurring acquisition costs plus severance costs, totaled $181 million, or 28% of sales, compared to prior year adjusted operating profit of $188 million. The 4% decrease in adjusted operating profit was driven by lower sales volume. EBITDA for the third quarter of fiscal 2023 totaled $208 million, or 32% of sales.

Net income was $128 million, or $2.22 of earnings per diluted share. Adjusted net income was $136 million, a $9 million decrease from the prior year earnings of $144 million. Third quarter 2023 adjusted earnings per diluted share were $2.35, a 6% decrease from the prior year adjusted earnings per diluted share of $2.49. The decrease was driven by increased interest expense and lower operating profit.

"During the fiscal third quarter, our team delivered strong profitability with 32% EBITDA and solid cash flow against persisting demand weakness in electronics and biopharma end markets. The team remains focused on the execution of our Ascend strategy to achieve top tier growth with leading margins and returns, as evidenced by the recently announced acquisition of ARAG and the steadfast deployment of the NBS Next growth framework. We are looking forward to the recovery of our cyclical end markets and the related incremental earnings power associated with the growth," said Sundaram Nagarajan, president and chief executive officer.

Third Quarter Segment Results

Industrial Precision Solutions sales of $338 million decreased 1% from the prior year. The decrease was driven primarily by product assembly and nonwovens product lines in Asia Pacific, partially offset by continued strength in the polymer processing product lines. Operating profit in the quarter was $115 million, or 34% of sales, a 4% decrease from the prior year third quarter. The decrease in operating profit was driven by lower sales volume and changes in sales mix.

Medical and Fluid Solutions sales of $171 million decreased 4% compared to the prior year third quarter. The decrease was driven by continued softness in the medical fluid components and fluid solutions product lines, partially offset by strong double-digit demand for medical interventional solutions product lines. Operating profit was $54 million, or 32% of sales, a decrease of 11% compared to the prior year third quarter adjusted operating profit. The decreased segment profitability continued to be impacted by lower sales volume and sales mix changes within medical product lines.

Advanced Technology Solutions sales of $140 million decreased 3% compared to the prior year third quarter, as the favorable acquisition impact of 11% was more than offset by a decrease in organic sales of 13%. The organic sales decrease was driven by electronics dispense products serving semiconductor end markets, predominantly in Asia Pacific, slightly offset by continued growth in test and inspection product lines. Operating profit was $27 million. Adjusted operating profit, which excludes severance costs, totaled $29 million, or 21% of sales, an increase of 3% compared to the prior year third quarter operating profit. The improvement in operating profit was driven by favorable sales mix and realization of cost savings actions.

Outlook

Backlog entering the fourth quarter of fiscal 2023 remains strong at $890 million and continues to be heavily weighted toward systems and medical interventional solutions. Order entry has been steady throughout the quarter. Based on current visibility, we expect fourth quarter sales to be the strongest of the year, increasing low-mid single digits over the prior year fourth quarter. This increase includes approximately $20-$30 million of sales from the acquisition of the ARAG Group, which is forecasted to close in late August. On balance, the Company is narrowing its previously issued full-year revenue growth guidance to 0% to 2% over record fiscal 2022 and adjusted earnings guidance to the range of $8.90 to $9.05.

Nordson management will provide additional commentary on these results and outlook during its previously announced webcast on Tuesday, August 22, 2023, at 8:30 a.m. eastern time, which can be accessed at https://investors.nordson.com. For persons unable to listen to the live broadcast, a replay will be available for 14 days after the event. Information about Nordson's investor relations and shareholder services is available from Lara Mahoney, vice president, investor relations and corporate communications at (440) 204-9985 or lara.mahoney@nordson.com.

Certain statements contained in this release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by terminology such as "may," "will," "should," "could," "expects," "anticipates," "believes," "projects," "forecasts," "outlook," "guidance," "continue," "target," or the negative of these terms or comparable terminology. These 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 conditions; financial and market conditions; currency exchange rates and devaluations; possible acquisitions, including the Company's ability to successfully integrate acquisitions; 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; the effects of changes in tax law; and the possible effects of events beyond our control, such as political unrest, including the conflict between Russia and Ukraine, acts of terror, natural disasters and pandemics, including the recent coronavirus (COVID-19) pandemic and the other factors discussed in Item 1A (Risk Factors) in the Company's most recently filed Annual Report on Form 10-K and in its Forms 10-Q filed with the Securities and Exchange Commission, which should be reviewed carefully. The Company undertakes no obligation to update or revise any forward-looking statement in this press release.

Nordson Corporation is an innovative precision technology company that leverages a scalable growth framework through an entrepreneurial, division-led organization to deliver top tier growth with leading margins and returns. The Company's direct sales model and applications expertise serves global customers through a wide variety of critical applications. Its diverse end market exposure includes consumer non-durable, medical, electronics and industrial end markets. Founded in 1954 and headquartered in Westlake, Ohio, the Company has operations and support offices in over 35 countries. Visit Nordson on the web at www.nordson.com, www.twitter.com/Nordson_Corp or www.facebook.com/nordson.

NORDSON CORPORATION

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Dollars in thousands except for per-share amounts)

	Three Months Ended						Nine Months Ended
	July 31, 2023			July 31, 2022			July 31, 2023			July 31, 2022
Sales	$	648,677		$	662,128		$	1,909,319		$	1,906,697
Cost of sales		288,357			296,544			868,007			843,344
Gross profit		360,320			365,584			1,041,312			1,063,353
Gross margin %		55.5	%		55.2	%		54.5	%		55.8	%

Selling & administrative expenses		189,324			180,666			553,590			538,602
Operating profit		170,996			184,918			487,722			524,751

Interest expense - net		(11,486	)		(5,165	)		(30,904	)		(15,292	)
Other income (expense) - net ⁽¹⁾		2,542			752			(2,059	)		(37,720	)
Income before income taxes		162,052			180,505			454,759			471,739

Income taxes		34,161			38,694			95,044			99,885

Net income	$	127,891		$	141,811		$	359,715		$	371,854

Weighted-average common shares outstanding:
Basic		56,989			57,409			57,114			57,782
Diluted		57,530			57,969			57,657			58,392

Earnings per share:
Basic earnings	$	2.24		$	2.47		$	6.30		$	6.44
Diluted earnings	$	2.22		$	2.45		$	6.24		$	6.37

⁽¹⁾ Nine months ended July 31, 2022, includes pension settlement charge of $41,221.

NORDSON CORPORATION

CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollars in thousands)

	July 31, 2023		October 31, 2022
Cash and cash equivalents	$	143,138	$	163,457
Receivables - net		533,793		537,313
Inventories - net		439,741		383,398
Other current assets		60,249		48,803
Total current assets		1,176,921		1,132,971

Property, plant and equipment - net		350,735		353,442
Goodwill		2,110,780		1,804,693
Other assets		558,596		529,269
	$	4,197,032	$	3,820,375

Current maturities of long-term debt and notes payable	$	110,643	$	392,537
Accounts payable and accrued liabilities		417,966		441,666
Total current liabilities		528,609		834,203

Long-term debt		727,455		345,320
Other liabilities		361,162		346,477
Total shareholders' equity		2,579,806		2,294,375
	$	4,197,032	$	3,820,375

NORDSON CORPORATION

CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
(Dollars in thousands)

	Nine Months Ended
	July 31, 2023			July 31, 2022
Cash flows from operating activities:
Net income	$	359,715		$	371,854
Depreciation and amortization		80,637			75,242
Other non-cash items ⁽¹⁾		18,523			54,928
Changes in working capital		19,197			(162,333	)
Net cash provided by operating activities		478,072			339,691

Cash flows from investing activities:
Additions to property, plant and equipment		(24,244	)		(39,373	)
Acquisition of businesses, net of cash acquired		(377,843	)		(171,613	)
Other - net		91			415
Net cash used in investing activities		(401,996	)		(210,571	)

Cash flows from financing activities:
Net issuance of long-term debt		73,956			22,905
Repayment of finance lease obligations		(4,769	)		(3,726	)
Dividends paid		(111,547	)		(88,675	)
Issuance of common shares		18,449			8,845
Purchase of treasury shares		(78,163	)		(233,767	)
Net cash used in financing activities		(102,074	)		(294,418	)

Effect of exchange rate change on cash:		5,679			(5,937	)
Net change in cash and cash equivalents		(20,319	)		(171,235	)

Cash and cash equivalents:
Beginning of period		163,457			299,972
End of period	$	143,138		$	128,737

⁽¹⁾ Nine months ended July 31, 2022, includes pension settlement charge of $41,221.

NORDSON CORPORATION

SALES BY GEOGRAPHIC SEGMENT (Unaudited)
(Dollars in thousands)

	Three Months Ended				Sales Variance
	July 31, 2023		July 31, 2022		Organic		Acquisitions		Currency		Total
SALES BY SEGMENT
Industrial Precision Solutions	$	338,257	$	341,215	(1.5	)%	—	%	0.6	%	(0.9	)%
Medical and Fluid Solutions		170,871		177,840	(3.9	)%	—	%	—	%	(3.9	)%
Advanced Technology Solutions		139,549		143,073	(12.8	)%	10.7	%	(0.4	)%	(2.5	)%
Total sales	$	648,677	$	662,128	(4.5	)%	2.4	%	0.1	%	(2.0	)%

SALES BY GEOGRAPHIC REGION
Americas	$	290,515	$	279,205	2.2	%	1.2	%	0.7	%	4.1	%
Europe		167,536		151,659	5.7	%	1.4	%	3.4	%	10.5	%
Asia Pacific		190,626		231,264	(20.0	)%	4.3	%	(1.9	)%	(17.6	)%
Total sales	$	648,677	$	662,128	(4.5	)%	2.4	%	0.1	%	(2.0	)%

	Nine Months Ended				Sales Variance
	July 31, 2023		July 31, 2022		Organic		Acquisitions		Currency		Total
SALES BY SEGMENT
Industrial Precision Solutions	$	985,610	$	981,582	2.6	%	—	%	(2.2	)%	0.4	%
Medical and Fluid Solutions		491,683		508,836	(2.4	)%	—	%	(1.0	)%	(3.4	)%
Advanced Technology Solutions		432,026		416,279	(6.6	)%	12.2	%	(1.8	)%	3.8	%
Total sales	$	1,909,319	$	1,906,697	(0.7	)%	2.6	%	(1.8	)%	0.1	%

SALES BY GEOGRAPHIC REGION
Americas	$	834,125	$	792,859	3.2	%	1.9	%	0.1	%	5.2	%
Europe		498,379		479,900	4.3	%	1.6	%	(2.0	)%	3.9	%
Asia Pacific		576,815		633,938	(9.7	)%	4.4	%	(3.7	)%	(9.0	)%
Total sales	$	1,909,319	$	1,906,697	(0.7	)%	2.6	%	(1.8	)%	0.1	%

NORDSON CORPORATION

RECONCILIATION OF NON-GAAP MEASURES - ADJUSTED OPERATING PROFIT AND EBITDA (Unaudited)
(Dollars in thousands)

	Three Months Ended										Nine Months Ended
	July 31, 2023					July 31, 2022					July 31, 2023					July 31, 2022
SALES BY SEGMENT
Industrial Precision Solutions	$	338,257				$	341,215				$	985,610				$	981,582
Medical and Fluid Solutions		170,871					177,840					491,683					508,836
Advanced Technology Solutions		139,549					143,073					432,026					416,279
Total sales	$	648,677				$	662,128				$	1,909,319				$	1,906,697

OPERATING PROFIT
Industrial Precision Solutions	$	115,346				$	119,706				$	329,439				$	324,089
Medical and Fluid Solutions		54,019					58,103					141,326					165,510
Advanced Technology Solutions		27,083					28,155					70,136					95,533
Corporate		(25,452	)				(21,046	)				(53,179	)				(60,381	)
Total operating profit	$	170,996				$	184,918				$	487,722				$	524,751

OPERATING PROFIT ADJUSTMENTS⁽¹⁾
Industrial Precision Solutions	$	—				$	—				$	—				$	1,563
Medical and Fluid Solutions		—					2,498					1,479					2,498
Advanced Technology Solutions		2,049					—					14,304					—
Corporate		7,732					897					7,731					897
Total adjustments	$	9,781				$	3,395				$	23,514				$	4,958

ADJUSTED OPERATING PROFIT (NON-GAAP)⁽²⁾				% of Sales					% of Sales					% of Sales					% of Sales
Industrial Precision Solutions	$	115,346		34	%	$	119,706		35	%	$	329,439		33	%	$	325,652		33	%
Medical and Fluid Solutions		54,019		32	%		60,601		34	%		142,805		29	%		168,008		33	%
Advanced Technology Solutions		29,132		21	%		28,155		20	%		84,440		20	%		95,533		23	%
Corporate		(17,720	)				(20,149	)				(45,448	)				(59,484	)
Total operating profit - adjusted	$	180,777		28	%	$	188,313		28	%	$	511,236		27	%	$	529,709		28	%

DEPRECIATION & AMORTIZATION
Industrial Precision Solutions	$	7,036				$	6,347				$	21,166				$	20,705
Medical and Fluid Solutions		14,133					15,021					41,441					42,146
Advanced Technology Solutions		3,834					2,195					11,656					6,705
Corporate		2,099					1,324					6,374					5,686
Total depreciation & amortization	$	27,102				$	24,887				$	80,637				$	75,242

EBITDA (NON-GAAP)⁽²⁾
Industrial Precision Solutions	$	122,382		36	%	$	126,053		37	%	$	350,605		36	%	$	346,357		35	%
Medical and Fluid Solutions		68,152		40	%		75,622		43	%		184,246		37	%		210,154		41	%
Advanced Technology Solutions		32,966		24	%		30,350		21	%		96,096		22	%		102,238		25	%
Corporate		(15,621	)				(18,825	)				(39,074	)				(53,798	)
Total EBITDA	$	207,879		32	%	$	213,200		32	%	$	591,873		31	%	$	604,951		32	%

⁽¹⁾ Represents severance, as well as fees and non-cash inventory charges associated with acquisitions.
⁽²⁾ Adjusted operating profit and EBITDA are non-GAAP measures used by management to evaluate the Company's ongoing operations. Adjusted operating profit is defined as operating profit plus certain adjustments, such as severance, fees and non-cash inventory charges associated with acquisitions. EBITDA is defined as adjusted operating profit plus depreciation and amortization.

NORDSON CORPORATION

RECONCILIATION OF NON-GAAP MEASURES - PROFITABILITY (Unaudited)
(Dollars in thousands)

	Three Months Ended						Nine Months Ended
	July 31, 2023			July 31, 2022			July 31, 2023			July 31, 2022
GAAP AS REPORTED
Operating profit	$	170,996		$	184,918		$	487,722		$	524,751
Other / interest expense - net		(8,944	)		(4,413	)		(32,963	)		(53,012	)
Net income		127,891			141,811			359,715			371,854
Diluted earnings per share	$	2.22		$	2.45		$	6.24		$	6.37

Shares outstanding - diluted		57,530			57,969			57,657			58,392

OPERATING PROFIT ADJUSTMENTS
Inventory step-up amortization	$	—		$	—		$	4,306		$	1,563
Acquisition Costs		7,732			—			13,721			—
Severance and other		2,049			3,395			5,487			3,395

NON-OPERATING EXPENSE ADJUSTMENTS
Pension settlement loss	$	—		$	—		$	—		$	41,221

Total adjustments	$	9,781		$	3,395		$	23,514		$	46,179

Adjustments net of tax	$	7,719		$	2,667		$	18,600		$	36,401
EPS effect of adjustments and other discrete tax items	$	0.13		$	0.04		$	0.32		$	0.62

NON-GAAP MEASURES-ADJUSTED PROFITABILITY
Operating profit⁽¹⁾	$	180,777		$	188,313		$	511,236		$	529,709
Operating profit % of sales		27.9	%		28.4	%		26.8	%		27.8	%
Net income ⁽²⁾	$	135,610		$	144,478		$	378,315		$	408,255
Diluted earnings per share⁽³⁾	$	2.35		$	2.49		$	6.56		$	6.99

⁽¹⁾ Adjusted operating profit is defined as operating profit plus certain adjustments, such as severance, fees and non-cash inventory charges related to acquisitions. Adjusted operating profit as a percentage of sales is defined as adjusted operating profit divided by sales.
⁽²⁾ Adjusted net income is defined as net income plus tax effected adjustments and other discrete tax items.
⁽³⁾ Adjusted earnings per share is defined as GAAP EPS adjusted for tax effected adjustments and other discrete tax items.

Management uses these non-GAAP measures internally to make strategic decisions, forecast future results, and evaluate the Company's current performance. Given management's use of these non-GAAP measures, the Company believes these measures are important to investors in understanding the Company's current and future operating results as seen through the eyes of management. In addition, management believes these non-GAAP measures are useful to investors in enabling them to better assess changes in the Company's core business across different time periods. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures to other companies' non-GAAP financial measures, even if they have similar names. Amounts may not add due to rounding.

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Nordson Corporation Reports Third Quarter Fiscal 2023 Results and Narrows Annual Guidance