Nordson(NDSN) - 2025 Q3 - Quarterly Results

Fiscal 2025 Third Quarter Performance Overview Nordson reported strong Q3 FY2025 results with significant sales and adjusted EPS growth, driven by strategic acquisitions and effective market response Key Financial Highlights Nordson reported strong Q3 FY2025 financial results, with double-digit sales and adjusted EPS growth and robust cash generation Q3 FY2025 Key Financial Metrics | Metric | Q3 FY2025 | Q3 FY2024 | % Change | | :--- | :--- | :--- | :--- | | Sales | $742 million | $662 million | +12.1% | | Net Income | $126 million | $117 million | +7.7% | | Adjusted Net Income | $155 million | $138 million | +12.3% | | Diluted EPS | $2.22 | $2.04 | +8.8% | | Adjusted Diluted EPS | $2.73 | $2.41 | +13.3% | | EBITDA | $239 million | $208 million | +14.9% | - The company achieved a strong free cash flow conversion rate of 180% of net income during the quarter[7] - The Board of Directors has approved a new share repurchase authorization of $500 million[7] Management Commentary Management attributed strong performance to effective market response, significant organic growth in ATS, and successful Atrion acquisition - The Advanced Technology Solutions segment was a key growth driver, delivering 15% organic sales growth[4] - The Atrion acquisition, in its final full quarter of its first year, again exceeded expectations and contributed positively to both sales and earnings[4] - Strong cash flow conversion of 180% enabled the company to reduce debt, repurchase shares, and return dividends to shareholders[4] Segment Performance Analysis Analysis of sales and profitability across Industrial Precision, Medical and Fluid, and Advanced Technology Solutions segments Industrial Precision Solutions (IPS) IPS sales increased slightly by 1% due to favorable currency, offsetting organic decline, with stable EBITDA margin at 37% IPS Q3 FY2025 Performance | Metric | Q3 FY2025 | Q3 FY2024 | % Change | | :--- | :--- | :--- | :--- | | Sales | $351 million | $349 million | +1% | | Organic Sales Change | -2% | N/A | N/A | | Operating Profit | $117 million | $115 million | +1.7% | | EBITDA | $130 million | $131 million | -0.8% | | EBITDA Margin | 37% | 37% | 0 bps | Medical and Fluid Solutions (MFS) MFS sales surged 32% driven by the Atrion acquisition, with organic growth of 4% and an expanded EBITDA margin of 38% MFS Q3 FY2025 Performance | Metric | Q3 FY2025 | Q3 FY2024 | % Change | | :--- | :--- | :--- | :--- | | Sales | $219 million | $167 million | +32% | | Acquisition Impact | +31% | N/A | N/A | | Organic Sales (ex-divestiture) | +4% | N/A | N/A | | EBITDA | $83 million | $62 million | +34% | | EBITDA Margin | 38% | 37% | +100 bps | - Adjusted operating profit, excluding acquisition costs and divestiture charges, increased by $17 million from the prior year, reflecting increased leverage and contributions from the Atrion acquisition[6] Advanced Technology Solutions (ATS) ATS achieved outstanding results with 17% sales growth, 15% organic growth, and a significant EBITDA margin expansion to 24% ATS Q3 FY2025 Performance | Metric | Q3 FY2025 | Q3 FY2024 | % Change | | :--- | :--- | :--- | :--- | | Sales | $171 million | $146 million | +17% | | Organic Sales Growth | +15% | N/A | N/A | | Operating Profit | $37 million | $26 million | +42.3% | | EBITDA | $42 million | $31 million | +35% | | EBITDA Margin | 24% | 21% | +300 bps | Financial Outlook Nordson provides its full-year fiscal guidance, affirming original expectations with slight adjustments for sales and adjusted EPS Full Year Guidance Nordson affirmed full-year guidance, expecting sales slightly below and adjusted EPS slightly above the midpoint, pending divestiture - The company's backlog is down approximately 5% sequentially after a strong third quarter[10] - Full-year sales are now tracking slightly below the midpoint of the original guidance[10] - Full-year adjusted earnings per share are now tracking slightly above the midpoint of the original guidance[10] - The CEO expressed confidence in the company's ability to deliver solid growth and profitability, citing the NBS Next strategy, a diverse product portfolio, and a close-to-customer business model[11] Consolidated Financial Statements This section presents Nordson's consolidated statements of income, balance sheets, and cash flows for the reported periods Consolidated Statements of Income Q3 FY2025 sales grew to $741.5 million, with increased gross and operating profit, and net income of $125.8 million Q3 Statement of Income Highlights (in thousands) | Account | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | | :--- | :--- | :--- | | Sales | $741,509 | $661,604 | | Gross Profit | $406,517 | $369,001 | | Operating Profit | $187,767 | $167,058 | | Net Income | $125,784 | $117,327 | | Diluted EPS | $2.22 | $2.04 | Consolidated Balance Sheets As of July 31, 2025, total assets were $6.01 billion, with increased cash, reduced long-term debt, and assets held for sale Balance Sheet Highlights (in thousands) | Account | July 31, 2025 | October 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $147,788 | $115,952 | | Total current assets | $1,326,848 | $1,275,032 | | Total assets | $6,009,713 | $6,000,966 | | Long-term debt | $1,785,745 | $2,101,197 | | Total shareholders' equity | $2,981,785 | $2,932,192 | Consolidated Statement of Cash Flows Nine-month operating cash flow increased to $516.3 million, with significant cash used for share repurchases and debt repayments Nine-Month Cash Flow Highlights (in thousands) | Account | Nine Months Ended July 31, 2025 | Nine Months Ended July 31, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $516,264 | $459,812 | | Net cash used in investing activities | ($44,730) | ($34,890) | | Net cash used in financing activities | ($444,530) | ($370,612) | | Net change in cash | $31,836 | $49,645 | - Share repurchases increased significantly year-over-year, with $218.2 million spent on treasury shares in the first nine months of FY2025 compared to $34.1 million in the prior year period[21] Supplemental Financial Data This section provides additional financial details, including sales by segment and region, and reconciliations of non-GAAP measures Sales by Segment and Geographic Region Q3 sales grew 12.1% across all regions, led by Asia Pacific, with MFS and ATS showing strong segment growth Q3 FY2025 Sales Variance vs. Q3 FY2024 | Category | Total Variance | Organic | Acquisitions | Currency | | :--- | :--- | :--- | :--- | :--- | | By Segment | | | | | | Industrial Precision Solutions | +0.5% | -2.0% | 0.0% | +2.5% | | Medical and Fluid Solutions | +31.6% | -0.4% | +31.0% | +1.0% | | Advanced Technology Solutions | +17.4% | +14.6% | 0.0% | +2.8% | | By Region | | | | | | Americas | +9.6% | -3.2% | +13.0% | -0.2% | | Europe | +4.0% | -6.1% | +4.8% | +5.3% | | Asia Pacific | +23.1% | +17.4% | +2.9% | +2.8% | Reconciliation of Non-GAAP Measures Detailed reconciliations of non-GAAP measures like EBITDA, Adjusted Net Income, EPS, and Free Cash Flow are provided for clarity Net Income to EBITDA Reconciliation Reconciliation of GAAP net income to non-GAAP EBITDA, detailing adjustments for taxes, interest, depreciation, and other items Q3 EBITDA Reconciliation (in thousands) | Account | Q3 FY2025 | Q3 FY2024 | | :--- | :--- | :--- | | Net Income | $125,784 | $117,327 | | Add: Income Taxes | $33,340 | $32,107 | | Add: Interest Expense - net | $25,698 | $17,776 | | Add: Depreciation & Amortization | $37,847 | $33,382 | | Add: Divestiture Charges | $12,211 | $0 | | Other Adjustments | $3,631 | $7,544 | | EBITDA (non-GAAP) | $238,511 | $208,136 | Segment EBITDA Reconciliation This table presents the EBITDA and corresponding margins for each operating segment for the third quarter Q3 EBITDA by Segment (in thousands) | Segment | EBITDA Q3 FY2025 | Margin | EBITDA Q3 FY2024 | Margin | | :--- | :--- | :--- | :--- | :--- | | Industrial Precision Solutions | $130,130 | 37% | $130,606 | 37% | | Medical and Fluid Solutions | $83,153 | 38% | $61,927 | 37% | | Advanced Technology Solutions | $41,546 | 24% | $30,873 | 21% | | Total EBITDA | $238,511 | 32% | $208,136 | 31% | Adjusted Net Income and EPS Reconciliation This reconciliation details adjustments from GAAP net income and diluted EPS to their non-GAAP adjusted counterparts Q3 Adjusted Net Income & EPS Reconciliation | Metric | GAAP As Reported | Adjustments (net of tax) | Non-GAAP Adjusted | | :--- | :--- | :--- | :--- | | Net Income | $125.8 M | $29.1 M | $154.9 M | | Diluted EPS | $2.22 | $0.51 | $2.73 | - Total pre-tax adjustments for the quarter were $33.0 million, primarily consisting of $20.1 million in acquisition amortization and $12.2 million in divestiture-related charges[31] Free Cash Flow Reconciliation This section reconciles net cash provided by operating activities to free cash flow and calculates the conversion rate Q3 Free Cash Flow (in thousands) | Metric | Q3 FY2025 | | :--- | :--- | | Net cash provided by operating activities (YTD) | $516,264 | | Less: Additions to property, plant and equipment (YTD) | ($49,002) | | Free Cash Flow (YTD) | $467,262 | | Free Cash Flow (QTD) | $226,409 | | Net Income (QTD) | $125,784 | | Free Cash Flow Conversion (QTD) | 180% |