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FORM 10-Q
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended January 30, 1994
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OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission file no. 0-7977
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NORDSON CORPORATION
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(Exact name of registrant as specified in its charter)
Ohio 34-0590250
- ------------------------------- -----------------------------------
(State or other jurisdiction of (I.R.S Employer Identification No.)
incorporation or organization)
28601 Clemens Road, Westlake, Ohio 44145
- ---------------------------------------- -------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (216) 892-1580
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Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
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Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
Common Shares without par value as of January 30, 1994: 18,703,020
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Page 1 of 12
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NORDSON CORPORATION
INDEX
Part I - Financial Information Page Number
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Condensed Consolidated Statement of Income -
Thirteen Weeks Ended January 30, 1994 and
January 31, 1993 3
Condensed Consolidated Balance Sheet -
January 30, 1994 and October 31, 1993 4
Condensed Consolidated Statement of Cash
Flows - Thirteen Weeks Ended January 30, 1994
and January 31, 1993 5
Notes to Condensed Consolidated Financial
Statements 6
Management's Discussion and Analysis of
Results of Operations and Financial Condition 7-8
Calculation of Earnings Per Share 9
Part II - Other Information
Item 6, Exhibits and Reports on Form 8-K 10
Signature 11
Exhibit Index 12
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Part I - Financial Information
<TABLE>
NORDSON CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(Dollars and shares in thousands except for per share amounts)
<CAPTION>
Thirteen Weeks Ended
January 30, 1994 January 31, 1993
---------------- ----------------
<S> <C> <C>
Sales $104,680 $100,300
Cost of sales 41,405 40,318
Selling & administrative expenses 50,960 48,343
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Operating profit 12,315 11,639
Other income (expense):
Interest expense (1,080) (1,646)
Interest and investment income 292 284
Other - net 560 (151)
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Income before income taxes and
cumulative effect of accounting
changes 12,087 10,126
Income taxes 4,291 3,443
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Income before cumulative effect
of accounting changes 7,796 6,683
Cumulative effect of accounting changes - (4,784)
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Net income $ 7,796 $ 1,899
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Weighted average common shares and
common share equivalents 19,168 19,229
======= =======
Primary earnings per share:
Income before cumulative effect
of accounting changes $ .41 $ .35
======= =======
Net income $ .41 $ .10
======= =======
Dividends per common share $ .14 $ .12
======= =======
<FN>
See accompanying notes.
</TABLE>
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<TABLE>
NORDSON CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(Dollars in thousands)
<CAPTION>
January 30, 1994 October 31, 1993
---------------- ----------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 13,005 $ 18,128
Marketable securities 6,502 5,235
Receivables 95,571 107,395
Inventories 87,768 84,661
Deferred income taxes 18,440 21,708
Prepaid expenses 3,709 4,545
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Total current assets 224,995 241,672
Property, plant and equipment 151,072 146,939
Less accumulated depreciation and
amortization of property, plant
and equipment (70,691) (68,250)
Intangible assets - net 27,859 27,251
Other assets 9,012 10,358
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$342,247 $357,970
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable $ 20,593 $ 19,050
Accounts payable 20,657 22,186
Current portion of long-term debt 6,166 6,355
Other current liabilities 55,191 68,690
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Total current liabilities 102,607 116,281
Long-term debt 21,430 22,089
Deferred income taxes - 495
Other liabilities 23,771 22,700
Shareholders' equity:
Common shares 12,253 12,253
Other shareholders' equity 182,186 184,152
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Total shareholders' equity 194,439 196,405
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$342,247 $357,970
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<FN>
See accompanying notes.
</TABLE>
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<TABLE>
NORDSON CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in thousands)
<CAPTION>
Thirteen Weeks Ended
January 30, 1994 January 31, 1993
---------------- ----------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 7,796 $ 1,899
Changes in working capital (5,503) 5,408
Other - net 5,675 12,298
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7,968 19,605
Cash flows from investing activities:
Additions to property, plant
and equipment (3,556) (4,313)
Proceeds from sale of property,
plant and equipment 4 2
Acquisition of businesses (1,518) (455)
Purchase of marketable securities (2,582) (1,000)
Proceeds from sale of marketable
securities 1,315 3,465
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(6,337) (2,301)
Cash flows from financing activities:
Proceeds from notes payable 7,040 4,296
Payment of notes payable (5,046) (5,572)
Proceeds from long-term debt - 650
Payment of long-term debt (1,336) (2,815)
Issuance of common shares 445 276
Purchase of treasury shares (4,262) (1,645)
Dividends paid (2,613) (2,243)
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(5,772) (7,053)
Effect of exchange rate changes (982) 48
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Increase (decrease) in cash (5,123) 10,299
Cash and cash equivalents
Beginning of fiscal year 18,128 7,409
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End of period $13,005 $17,708
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<FN>
See accompanying notes.
</TABLE>
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NORDSON CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
January 30, 1994
1. BASIS OF PRESENTATION. The accompanying unaudited condensed
consolidated financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results
for the thirteen week period ended January 30, 1994 are not necessarily
indicative of the results that may be expected for the full fiscal year.
For further information, refer to the consolidated financial statements
and footnotes thereto included in the Company's annual report on Form
10-K for the year ended October 31, 1993.
2. INVENTORIES. Inventories consisted of the following (in thousands of
dollars):
January 30, 1994 October 31, 1993
---------------- ----------------
Finished goods $31,825 $30,747
Work-in-process 10,521 8,466
Raw materials and
finished parts 45,422 45,448
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$87,768 $84,661
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3. ACCOUNTING CHANGES. In the fourth quarter of fiscal 1993, the Company
adopted Financial Accounting Standards Board Statements "Employers'
Accounting for Postretirement Benefits Other Than Pensions" (FAS 106),
"Accounting for Income Taxes" (FAS 109), and "Employers' Accounting for
Postemployment Benefits" (FAS 112). These standards were adopted
effective as of the beginning of fiscal 1993. The combined cumulative
effect of these changes in accounting principles was an after-tax charge
to first quarter earnings of $4,784,000 or $.25 per share. The
previously reported first quarter 1993 statement of income and statement
of cash flows have been restated to reflect this charge.
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MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
The following is Management's discussion and analysis of certain significant
factors affecting the Company's results of operations and financial condition
for the periods included in the accompanying condensed consolidated financial
statements.
RESULTS OF OPERATIONS
SALES
- -----
Sales for the first quarter of 1994 increased 4.4% over the comparable 1993
period, with price/volume changes partially offset by currency effects.
Sales gains due to price/volume changes accounted for a 7.3% increase,
compared with the same period of the prior year. Volume gains were
experienced in all geographic regions. Sales volume in North America was up
7%, shipments in Europe were up 3%, Japanese sales volume increased 10%, and
activity in the Pacific Rim countries and Latin America grew 40%. Price
increases averaging 2% were implemented on orders taken after the beginning
of the year on standardized small systems and parts.
Sales to international customers for year-to-date 1994 comprised approxi-
mately 61.3% of total sales. Translating international sales at generally
higher average exchange rates as compared to the same period in the prior
year decreased sales by 2.9% for the first quarter.
OPERATING PROFIT
- ----------------
Operating profit, as a percentage of sales, increased to 11.8% for the first
quarter 1994 from 11.6% for first quarter 1993. Compared to the first
quarter of the prior year, gross margins, expressed as a percentage of sales,
increased to 60.4% from 59.8%. Changes in the mix of products sold and
manufacturing efficiencies had a favorable influence on gross margins. The
increase in selling and administrative expenses over the first quarter 1993
of 5.4% can be attributed to increased sales volume.
NET INCOME
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Income before cumulative effect of accounting changes, as a percentage of
sales, increased from 6.7% to 7.4% for first quarter 1994 as compared to
first quarter 1993. This increase is due to the factors impacting operating
profit discussed above. In addition, interest expense decreased $566,000 due
to the reduction in debt levels throughout fiscal 1993. Also, the Company
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experienced currency exchange gains in first quarter 1994 as compared to
slight currency exchange losses in 1993.
FOREIGN CURRENCY EFFECTS
- ------------------------
In the aggregate, average exchange rates for first quarter 1994 used to
translate international sales and operating results into U.S. dollars
compared unfavorably with average exchange rates which existed during the
comparable 1993 period. It is not possible to precisely measure the impact
on operating results arising from foreign currency exchange rate changes,
because of changes in selling prices, sales volume, product mix and cost
structures in each country in which the Company operates. However, the
Company estimates that first quarter sales would have been approximately
$2,905,000 higher and third-party costs would have been $1,767,000 higher if
exchange rates for 1993 had been in effect during 1994.
FINANCIAL CONDITION
During the first quarter of 1994, net assets decreased $1,966,000. This
decrease is primarily attributable to net purchases of treasury shares
amounting to $3,817,000, a reduction of $3,730,000 from translating foreign
net assets at the end of the first quarter when the U.S. dollar was generally
stronger against other currencies than at the prior year end, and the payment
of $2,613,000 in dividends, offset by earnings of $7,796,000.
Working capital decreased $3,003,000 during the quarter. This change
consisted primarily of decreases in cash and cash equivalents and
receivables, offset by increases in inventories and decreases in accounts
payable and accrued liabilities. All balances reflect decreases from the
effects of translating amounts denominated in generally weaker foreign
currencies into U.S. dollars. In addition, receivables decreased from the
collection of year-end receivables arising from strong sales in the fourth
quarter sales of 1993, inventories increased as the Company replenished
stocks depleted as a result of those strong fourth quarter sales, and accrued
liabilities decreased due to the payment in 1994 of certain accruals
accumulated during 1993.
Cash and cash equivalents decreased $5,123,000 during the quarter. Uses for
cash included outlays for capital expenditures, acquisition of a business,
net purchases of marketable securities, scheduled repayments on long-term
debt, purchases of treasury shares, and dividends. Cash from operations, net
proceeds from notes payable, and the decrease in cash and cash equivalents
were utilized to finance the above cash uses. Available lines of credit
continue to be more than adequate to meet additional cash requirements over
the next year.
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Part I - Exhibit 11
<TABLE>
NORDSON CORPORATION
CALCULATION OF EARNINGS PER SHARE
(Dollars and shares in thousands except for per share amounts)
<CAPTION>
Thirteen Weeks Ended
January 30, 1994 January 31, 1993
---------------- ----------------
<S> <C> <C>
Weighted average number of common
shares outstanding during the
period 18,720 18,772
Effect of Company stock plans
based on the treasury stock
method using average market
price 448 457
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Total weighted average common shares
and common share equivalents 19,168 19,229
====== ======
Income before cumulative effect of
accounting changes $7,796 $6,683
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Net income $7,796 $1,899
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Primary earnings per share:
Income before cumulative effect
of accounting changes $ .41 $ .35
====== ======
Net income $ .41 $ .10
====== ======
</TABLE>
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Part II - Other Information
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits - Exhibit 11 Calculation of Earnings Per Share.
(b) There were no reports on Form 8-K filed for the quarter ended
January 30, 1994.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: March 15, 1994 Nordson Corporation
/s/ Nicholas D. Pellecchia
Nicholas D. Pellecchia
Vice President-Finance
and Treasurer
(Principal Financial Officer
and Chief Accounting
Officer)
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NORDSON CORPORATION
EXHIBIT INDEX
Page Number
Exhibit 11 Calculation of Earnings Per Share 9
12
