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Nordson Corporation Reports Record Fourth Quarter Sales and Operating Profit; Double Digit Growth Also Pushes Annual Sales to Record Level

Published on 2007-12-28. Author : SpecialChem

WESTLAKE, Ohio -- Nordson Corporation has reported record sales and earnings for the fourth quarter which ended October 31, 2007. Sales for the fourth quarter reached $290.8 million, a 20.4 percent increase over sales for the same period of 2006. Acquisitions accounted for 11.6 percent of the increase and core volume added 4.4 percent, with the remainder coming from the effects of currency translation.

On a diluted basis, fourth-quarter earnings per share were $.87, as compared to the prior year's $.87 from continuing operations and $.82 including discontinued operations. The current quarter's results include a charge of $.01 for short-term purchase accounting for acquired inventory.

"We had a very strong finish to the year, with record fourth quarter sales and operating profit," said Chairman and Chief Executive Officer Edward P. Campbell. "We generated significant volume growth during the quarter in all segments and each geographic region, grew operating profit by 17 percent and, after normalizing the effect on last year's earnings of non-recurring tax benefits, grew earnings per share from continuing operations by 14 percent."

Annual sales for the year, which ended October 31, 2007, reached a record $993.6 million, an 11.4 percent increase over sales of $892.2 million a year ago. Acquisitions accounted for 7.9 percent of the growth, currency accounted for 3.4 percent, and core growth accounted for 0.1 percent. Full year diluted earnings per share were $2.65 as compared to the prior year's $2.86 from continuing operations and $2.65 including discontinued operations. The current year's results include a charge of $.16 for short-term purchase accounting for acquired inventory. The effective tax rate in the current quarter is 33.2% as compared to the prior year's rate of 28.4% on continuing operations. The prior year rate benefited from certain non-recurring tax benefits. Excluding the $.16 short-term purchase accounting charge in the current year and applying the current year effective tax rate to prior year results, earnings per share from continuing operations increased 5.2 percent over 2006.

Cash flow from operations for the year, less capital expenditures and dividends, was $77.9 million or 7.8 percent of sales.

Campbell noted, "For the year, we achieved record sales and completed four acquisitions that bring us high performing businesses with market leading positions and significant technology. These new additions strengthen our base in important growth markets we have targeted for investment."

Segment & Regional Results

All segments contributed solid volume growth in the quarter. The Advanced Technology Systems segment reported a sales volume gain of 38.7 percent. The Adhesive Dispensing Systems segment volume increased 9.5 percent, and Industrial Coating and Automotive Systems volume increased 5.2 percent.

"I am very pleased with the excellent profitability the Adhesive Dispensing Systems segment delivered in the quarter and the continuing improvement in the profitability of the Industrial Coating and Automotive Systems segment, where full year operating profit margins improved from 5.9 percent to 9.6 percent," said Campbell.

On a geographic basis, fourth quarter sales volume increased 26.5 percent in the Americas, 22.0 percent in Japan, 16.4 percent in Asia Pacific, 15.9 percent in Europe and 11.9 percent in the United States.

Backlog and Outlook

Backlog at year-end was approximately $98 million, compared with $72 million for the same period of the prior year. These backlog amounts are calculated at 2007 year-end exchange rates.

"We finished 2007 with excellent momentum which should propel first quarter revenue and earnings per share to record levels. With the short term dampening effect of purchase accounting behind us and with many geographic markets continuing to show strength, we believe 2008 will be another record year for Nordson," said Campbell.

For the first quarter of fiscal year 2008, sales are expected to grow between 21 and 25 percent over the same period a year ago. Diluted earnings per share are expected to be in the range of $.55 to $.64, compared to $.46 in the prior year's first quarter.

About Nordson Corporation

Nordson Corporation is one of the world's leading producers of precision dispensing equipment that applies adhesives, sealants and coatings to a broad range of consumer and industrial products during manufacturing operations. The company also manufactures equipment used in the testing and inspection of electronic components as well as technology-based systems for curing and surface treatment processes. Headquartered in Westlake, Ohio, Nordson has more than 4,000 employees worldwide, and direct operations and sales support offices in 30 countries.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding Nordson's business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's Annual Report or Form 10-K for the most recently ended fiscal year.

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.

Source: Nordson Corporation

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