Company Overview - Nordson is a global provider of precision dispensing and processing equipment, focusing on specialized, high-margin applications in industrial and technology-driven sectors [4] - The company serves diverse end markets, including medical, electronics, consumer non-durable, and industrials, with nearly 60% of its sales coming from outside the United States [8] - Nordson generates revenue through the sale of proprietary equipment, systems, and related components, as well as aftermarket parts and services, emphasizing automation and precision solutions [7] Financial Performance - As of July 8, 2025, Nordson's market capitalization is $12.51 billion, with a revenue of $2.70 billion and a net income of $447 million [2] - The company has a dividend yield of 1.41% and has increased its dividend payout annually for 61 consecutive years, with a 15% increase last year [5] - Nordson expects to grow its annual revenue by 6% to 8% and adjusted earnings per share by 10% to 12% between 2025 and 2029, anticipating nearly $4 billion in operating cash flows during this period [9] Investment Insights - Confluence Investment Management LLC increased its stake in Nordson by acquiring 182,305 additional shares, raising its total holding to 336,090 shares, with a reported position value increase of $41 million [1] - Nordson stock closed at $221.50 on July 8, 2025, with a one-year share price change of -2.29%, underperforming the S&P 500 by 14.1 percentage points [6] - The stock trades 16.3% below its 52-week high, with a forward P/E of 22.1 and an EV/EBITDA ratio of 18.1 [6]

Core Insights - The article discusses the journey to financial independence through disciplined living and strategic investing [2] - It emphasizes the importance of dividend growth investing and identifying undervalued high-quality stocks [2] Group 1: Financial Independence Journey - The individual transitioned from being financially unstable at age 27 to achieving financial freedom by age 33 [2] - The approach involved living below means and making intelligent investment decisions [2] Group 2: Investment Strategies - Focus on dividend growth investing as a primary strategy for generating income [2] - Highlighting the significance of high-yield situations and long-term investment opportunities [2]

Company Performance - Life360 (LIF) has gained approximately 48.1% year-to-date, significantly outperforming the average return of -3.7% for the Industrial Products sector [4] - Life360 holds a Zacks Rank of 1 (Strong Buy), indicating strong analyst sentiment and a positive earnings outlook, with a 11.6% increase in the consensus estimate for full-year earnings over the past 90 days [3] - Another outperforming stock in the Industrial Products sector is Nordson (NDSN), which has returned 1.4% year-to-date and holds a Zacks Rank of 2 (Buy) [4][5] Industry Context - The Industrial Products sector consists of 190 individual stocks and currently ranks 13 among 16 sector groups according to Zacks [2] - Life360 is part of the Security and Safety Services industry, which includes 17 stocks and ranks 84 in the Zacks Industry Rank, with an average gain of 3.5% year-to-date [5] - In contrast, Nordson belongs to the Manufacturing - General Industrial industry, which has 38 stocks and ranks 145, with a year-to-date decline of -2.7% [6]

Core Insights - Nordson's stock has seen a nearly 10% increase following strong quarterly results that pleased investors [1] Financial Performance - In Q2 of fiscal 2025, Nordson reported total sales of $683 million, up from $651 million in Q2 of fiscal 2024, exceeding analyst expectations of slightly under $673 million [2] - The company achieved a non-GAAP adjusted income of $138 million, or $2.42 per share, a slight increase from $135 million in the same period last year, also surpassing the average analyst projection of $2.36 [4] Factors Contributing to Performance - Management attributed the improved results to robust sales in key divisions such as electronic systems and precision agriculture, along with a 5% rise in order backlog [5] Future Guidance - For the current third quarter, Nordson estimates earnings between $710 million to $750 million, with adjusted earnings projected at $2.55 to $2.75 per share, while analysts expect a top line of just over $724 million and adjusted profitability of $2.63 per share [6] Overall Assessment - The company is demonstrating steady performance across key divisions, with growing fundamentals and consistent cash flow to support its increasing dividend, indicating a reliable investment opportunity [7]

Core Insights - Nordson Corporation is identified as a high-quality company with the potential to outperform the market over the long term due to its competitive advantage and defensibility [1]. Company Analysis - The analysis emphasizes a focus on companies in Europe and North America, without restrictions on market capitalization, ranging from large cap to small cap [1]. - The author has a strong academic background in sociology, which informs the analysis of organizational and economic factors affecting companies [1].

Part I – Financial Information [Financial Statements (Unaudited)](index=4&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS%20(UNAUDITED)) Nordson's Q2 FY2025 saw 5.0% sales growth, but net income decreased 4.9% to $112.4 million, with total assets at $6.06 billion [Condensed Consolidated Statements of Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Consolidated Income Statement Highlights (in thousands, except per share data) | Metric | Three Months Ended April 30, 2025 | Three Months Ended April 30, 2024 | Six Months Ended April 30, 2025 | Six Months Ended April 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Sales** | $682,938 | $650,642 | $1,298,358 | $1,283,835 | | **Operating Profit** | $168,750 | $168,616 | $309,697 | $328,051 | | **Net Income** | $112,404 | $118,217 | $207,056 | $227,789 | | **Diluted EPS** | $1.97 | $2.05 | $3.62 | $3.95 | [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) Balance Sheet Summary (in thousands) | Metric | April 30, 2025 | October 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $1,323,522 | $1,275,032 | | **Total Assets** | $6,062,038 | $6,000,966 | | **Total Current Liabilities** | $516,640 | $528,477 | | **Total Liabilities** | $3,101,734 | $3,068,774 | | **Total Shareholders' Equity** | $2,960,304 | $2,932,192 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Summary for Six Months Ended (in thousands) | Cash Flow Activity | April 30, 2025 | April 30, 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $278,292 | $294,964 | | **Net cash used in investing activities** | ($27,100) | ($15,177) | | **Net cash used in financing activities** | ($240,813) | ($265,757) | | **Increase in cash and cash equivalents** | $14,205 | $9,767 | | **Cash and cash equivalents at end of period** | $130,157 | $125,446 | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the Atrion acquisition, MCS realignment, derivative usage for risk, and the company's $2.2 billion debt - On August 21, 2024, the Company acquired Atrion Corporation for an all-cash price of **$789,996** (net of cash acquired), which now operates within the MFS segment[34](index=34&type=chunk)[35](index=35&type=chunk) - Effective November 1, 2024, the Measurement and Control Solutions (MCS) division was transferred from the Industrial Precision Solutions (IPS) segment to the Advanced Technology Solutions (ATS) segment[41](index=41&type=chunk)[69](index=69&type=chunk) - The company uses various derivative instruments, including foreign currency forward contracts, interest rate swaps (fair value hedges), and cross-currency swaps (net investment hedges) to manage market risks[81](index=81&type=chunk)[87](index=87&type=chunk)[90](index=90&type=chunk) - On May 28, 2025, the Company signed an agreement to divest select product lines within its medical contract manufacturing business, with the deal expected to close in Q4 2025[99](index=99&type=chunk) [Management's Discussion and Analysis (MD&A)](index=23&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management reported a 5.0% sales increase in Q2 2025, driven by acquisitions and ATS growth, despite operating margin contraction [Results of Operations](index=24&type=section&id=Results%20of%20Operations) Q2 2025 sales increased 5.0% to **$682.9 million**, but net income decreased 4.9% to **$112.4 million**, with operating margin declining to **24.7%** Q2 2025 vs Q2 2024 Sales Variance Analysis | Segment/Region | Total Variance | Organic | Acquisitions | Currency | | :--- | :--- | :--- | :--- | :--- | | **Total Company** | **5.0%** | **(2.4)%** | **7.8%** | **(0.4)%** | | IPS Segment | (7.6)% | (6.9)% | —% | (0.7)% | | MFS Segment | 20.0% | (10.0)% | 30.0% | —% | | ATS Segment | 18.0% | 18.1% | —% | (0.1)% | | Asia Pacific Region | 25.2% | 22.6% | 3.2% | (0.6)% | Q2 2025 vs Q2 2024 Operating Profit (in thousands) | Segment | Q2 2025 Profit | Q2 2025 Margin | Q2 2024 Profit | Q2 2024 Margin | | :--- | :--- | :--- | :--- | :--- | | **Total Company** | **$168,750** | **24.7%** | **$168,616** | **25.9%** | | IPS | $95,722 | 30.0% | $115,922 | 33.6% | | MFS | $56,805 | 28.0% | $48,993 | 29.0% | | ATS | $31,558 | 19.6% | $20,693 | 15.1% | - Interest expense increased by **32.1%** in Q2 2025 to **$26.6 million**, primarily due to higher average debt levels driven by acquisitions[106](index=106&type=chunk)[114](index=114&type=chunk) - The effective tax rate for Q2 2025 was **19.0%**, down from **20.8%** in the prior-year period, primarily due to the foreign-derived intangible income deduction[46](index=46&type=chunk)[117](index=117&type=chunk) [Financial Condition, Liquidity and Capital Resources](index=28&type=section&id=Financial%20Condition) The company maintains a strong financial condition with **$130.2 million** cash, **$278.3 million** operating cash flow, and **$806.5 million** available borrowings - Net cash provided by operating activities was **$278.3 million** for the six months ended April 30, 2025, compared to **$295.0 million** in the prior year period[123](index=123&type=chunk) - As of April 30, 2025, the company had **$130.2 million** in cash and cash equivalents and **$806.5 million** in available borrowings under its loan agreements and unused bank lines of credit[125](index=125&type=chunk) - Additions to property, plant and equipment increased to **$37.4 million** in the first six months of 2025, up from **$21.9 million** in the prior year, driven by productivity projects and a new manufacturing facility[123](index=123&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=29&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) No material changes in market risk exposures, including interest rates and foreign currency, have occurred since the 2024 Form 10-K filing - Information regarding financial instruments sensitive to changes in interest and foreign currency exchange rates has not changed materially since the 2024 Form 10-K[129](index=129&type=chunk) [Controls and Procedures](index=29&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded disclosure controls and procedures were effective as of April 30, 2025, with no material changes to internal controls - The principal executive and financial officers concluded that disclosure controls and procedures were effective as of April 30, 2025[130](index=130&type=chunk) - No changes occurred during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[131](index=131&type=chunk) Part II – Other Information [Risk Factors](index=30&type=section&id=ITEM%201A.%20RISK%20FACTORS) Changes in government trade policies, tariffs, and import/export regulations pose a material risk to the company's business - The company highlights that changes in government trade policies, tariffs, and import/export regulations pose a material risk to its business, potentially impacting sales, margins, and profitability[135](index=135&type=chunk) [Share Repurchases](index=30&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) Nordson repurchased **423,521** shares for **$85.3 million** in Q2 2025, with **$382.6 million** remaining for future repurchases Share Repurchases for the Three Months Ended April 30, 2025 | Period | Total Shares Repurchased | Average Price Paid per Share | | :--- | :--- | :--- | | Feb 2025 | 123,121 | $216.07 | | Mar 2025 | 141,409 | $207.78 | | Apr 2025 | 158,991 | $184.59 | | **Total** | **423,521** | **$201.49** | - As of April 30, 2025, approximately **$382.6 million** remained available for share repurchases under the company's authorized programs[136](index=136&type=chunk)

Nordson Corporation’s (NDSN) second-quarter fiscal 2025 (ended April 30, 2025) adjusted earnings of $2.42 per share surpassed the Zacks Consensus Estimate of $2.36. The bottom line increased 3% year over year. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)Quarterly Results of NDSNNordson’s revenues were $682.9 million, up 5% from the year-ago fiscal quarter’s number, driven by strength in the Advanced Technology Solutions segment and contributions from acquired assets. Revenues be ...

Financial Performance - Sales reached $683 million, a 5% increase year-over-year, exceeding the midpoint of guidance[7, 15] - Adjusted EPS increased by 3%, driven by operational excellence despite geopolitical uncertainty[7, 15] - EBITDA increased by 7% to $217 million due to higher sales volume and improved SG&A leverage[15, 17] - The company reported a strong EBITDA margin of 32%, slightly above the prior year[17] Segment Performance - Industrial Precision Solutions (IPS) sales decreased by 8% to $319 million, with a 7% organic decrease[23] - Medical and Fluid Solutions (MFS) sales increased by 20% to $203 million, including 30% growth from the Atrion acquisition, but organic sales decreased by 10%[29] - Advanced Technology Solutions (ATS) sales increased by 18% to $161 million, with an 18% organic increase[35] Portfolio and Strategy - The company signed an agreement to divest certain contract manufacturing product lines within the medical interventional solutions business, expected to close in early 4Q fiscal 2025[11] - The company is prioritizing above-market growth in proprietary medical components, focusing on the remaining ~$800 million medical and fluid solutions product lines[9, 11] Balance Sheet and Cash Flow - Cash totaled $130 million, with a net debt leverage ratio of 24x based on trailing 12-month EBITDA[42] - Free cash flow was $103 million, representing a 92% conversion rate of net income[42] Capital Deployment and Outlook - The company executed share repurchases of $85 million and dividend payments of $44 million[42] - The company anticipates 3Q 2025 sales between $710 million and $750 million, with adjusted EPS between $255 and $275[50] - Backlog increased by approximately 5% from the prior quarter, indicating solid order entry moving into 3Q[48, 53]

Financial Data and Key Metrics Changes - Nordson's Q2 fiscal 2025 sales were $683 million, a 5% increase from $651 million in Q2 fiscal 2024, driven by an 8% increase from the Atrion acquisition, offset by a 2% organic sales decrease and less than 1% unfavorable currency translation [12][13] - Gross profit was $374 million, maintaining a consistent 55% of sales, with EBITDA adjusted for restructuring and integration costs at $217 million, or 32% of sales, reflecting a 7% increase year-over-year [12][13] - Net income totaled $112 million, or $1.97 per share on a GAAP basis, with adjusted earnings per share at $2.42, a 3% increase from the prior year [14] Business Line Data and Key Metrics Changes - Industrial Precision Solutions (IPS) sales decreased 8% to $319 million, with an EBITDA of $114 million, or 36% of sales, down 12% year-over-year due to lower sales volume [14][16] - Medical and Fluid Solutions sales increased 20% to $203 million, driven by the Atrion acquisition, with EBITDA of $77 million, or 38% of sales, a 22% increase from the prior year [17][18] - Advanced Technology Solutions (ATS) sales rose 18% to $161 million, with EBITDA of $40 million, or 25% of sales, a 43% increase year-over-year [19] Market Data and Key Metrics Changes - The company experienced solid order entry and backlog growth of 5% since the last quarter, particularly in electronics, precision agriculture, and select medical product lines [24] - The industrial systems segment showed sequential improvement compared to the first quarter, although automotive demand remains a headwind [38] Company Strategy and Development Direction - Nordson is focusing on divesting select product lines within its medical contract manufacturing business to concentrate on higher-value growth opportunities within the medical and fluid solutions segment [10] - The company is executing a balanced capital deployment strategy, including share repurchases totaling $85 million and $44 million in dividends, while maintaining a debt leverage ratio of 2.4 times [9][20] - The NBS Next framework is being utilized to assess the strategic fit of product lines and enhance operational efficiencies [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in managing current tariff levels without significant impact on results, while monitoring potential effects on end market demand [22][93] - The outlook for Q3 fiscal 2025 sales is projected to be between $710 million and $750 million, with adjusted earnings forecasted between $2.55 and $2.75 per diluted share [27] - Management highlighted the resilience of Nordson's business model and its ability to adapt to market uncertainties, emphasizing ongoing investments in innovation and customer relationships [28][113] Other Important Information - The company reported a free cash flow generation of $103 million during the quarter, resulting in a 92% conversion rate on net income [20] - Nordson's integration of Atrion is performing above expectations, contributing positively to sales and margins [8][36] Q&A Session Summary Question: Trends for the rest of the year and major verticals - Management noted solid order entry in ATS, driven by investments in computing power, and expressed optimism about growth sustainability in the segment [34][35] Question: Size of contract manufacturing divestiture and future actions - The divestiture represents roughly 4% of year-to-date sales in the medical segment, with no other ongoing actions currently planned [43][44] Question: Consistency of growth in ATS segment - Management acknowledged the inherent volatility in ATS but indicated strong order entry patterns and confidence in organic growth [51][55] Question: Status of destocking in interventional medicine - Destocking is reducing in severity, with expectations for gradual recovery to normal demand growth rates [60][62] Question: Margin performance in ATS amid customer behavior volatility - Management indicated that while margins may fluctuate, structural changes have raised the baseline margin performance in the segment [68][69] Question: Impact of tariffs on financial performance - Current tariff levels are manageable, with minimal impact on Q2 results, and the company is monitoring potential effects on end market demand [90][93] Question: Growth drivers in ATS and semiconductor markets - Approximately 50% of ATS business is driven by semiconductor and high-performance computing, up from 20-30% a few years ago [96]

Nordson (NDSN) Q2 2025 Earnings Call May 29, 2025 08:30 AM ET Speaker0 Thank you for standing by, and welcome to the Nordson Corporation Second Quarter Fiscal Year twenty twenty five Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer Thank you. I'd now like to turn the call over to Laura Mahoney. You may begin. Speaker1 Good morning. This is Laura Mahoney, Vice President of Investor Relations and Corporate Com ...