<PAGE> 1
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 May 1, 1994
---------------------
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 number 0-7977
--------------
NORDSON CORPORATION
----------------------------------------------------
(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
--------------
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
----- -----
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 May 1, 1994: 18,605,000
- - -------------------------------------------------------------
Page 1 of 12
<PAGE> 2
NORDSON CORPORATION
INDEX
Part I - Financial Information Page Number
Condensed Consolidated Statement of Income -
Thirteen and Twenty-Six Weeks ended May 1, 1994
and May 2, 1993 3
Condensed Consolidated Balance Sheet -
May 1, 1994 and October 31, 1993 4
Condensed Consolidated Statement of Cash
Flows - Twenty-Six Weeks ended May 1, 1994
and May 2, 1993 5
Notes to Condensed Consolidated Financial
Statements 6
Management's Discussion and Analysis of
Financial Condition and Results of Operation 7-8
Calculation of Earnings Per Share 9
Part II - Other Information
Item 4, Submission of Matters to a Vote
of Security Holders 10
Item 6, Exhibits and Reports on Form 8-K 10
Signature 11
Exhibit Index 12
2
<PAGE> 3
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 Twenty-Six Weeks Ended
May 1, 1994 May 2, 1993 May 1, 1994 May 2, 1993
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Sales $121,502 $109,250 $226,182 $209,550
Cost of sales 50,792 44,564 92,197 84,882
Selling &
administrative
expenses 53,331 49,796 104,291 98,139
-------- -------- -------- --------
Operating profit 17,379 14,890 29,694 26,529
Other income (expense):
Interest expense (1,147) (1,863) (2,227) (3,509)
Interest and
investment income 208 271 500 555
Other - net 234 117 794 (34)
-------- -------- -------- --------
Income before income
taxes and cumulative
effect of accounting
changes 16,674 13,415 28,761 23,541
Income taxes 5,920 4,628 10,211 8,071
-------- -------- -------- --------
Income before
cumulative effect
of accounting
changes 10,754 8,787 18,550 15,470
Cumulative effect of
accounting changes - - - (4,784)
-------- -------- -------- --------
Net income $ 10,754 $ 8,787 $ 18,550 $ 10,686
======== ======== ======== ========
Weighted average common
shares and common
share equivalents 19,217 19,171 19,194 19,201
======== ======== ======== ========
Primary earnings per share:
Income before cumulative
effect of accounting
changes $ .56 $ .46 $ .97 $ .81
======== ======== ======== ========
Net income $ .56 $ .46 $ .97 $ .56
======== ======== ======== ========
Dividends per
common share $ .14 $ .12 $ .28 $ .24
======== ======== ======== ========
<FN>
See accompanying notes.
</TABLE>
3
<PAGE> 4
<TABLE>
NORDSON CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(Dollars in thousands)
<CAPTION>
May 1, 1994 October 31, 1993
----------- ----------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 7,298 $ 18,128
Marketable securities 6,477 5,235
Receivables 104,433 107,395
Inventories 94,012 84,661
Deferred income taxes 19,030 21,708
Prepaid expenses 4,162 4,545
-------- --------
Total current assets 235,412 241,672
Property, plant and equipment 156,483 146,939
Less accumulated depreciation and
amortization of property, plant
and equipment (73,042) (68,250)
Intangible assets - net 27,607 27,251
Other assets 9,195 10,358
-------- --------
$355,655 $357,970
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable $ 20,107 $ 19,050
Accounts payable 23,923 22,186
Current portion of long-term debt 5,346 6,355
Other current liabilities 63,895 68,690
-------- --------
Total current liabilities 113,271 116,281
Long-term debt 20,432 22,089
Deferred income taxes - 495
Other liabilities 24,917 22,700
Shareholders' equity:
Common shares 12,253 12,253
Other shareholders' equity 184,782 184,152
-------- --------
Total shareholders' equity 197,035 196,405
-------- --------
$355,655 $357,970
======== ========
<FN>
See accompanying notes.
</TABLE>
4
<PAGE> 5
<TABLE>
NORDSON CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in thousands)
<CAPTION>
Twenty-Six Weeks Ended
May 1, 1994 May 2, 1993
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net income $18,550 $10,686
Changes in working capital (7,346) 3,780
Other - net 9,186 17,419
------- -------
20,390 31,885
Cash flows from investing activities:
Additions to property, plant
and equipment (8,252) (7,673)
Proceeds from sale of property,
plant and equipment 5 81
Acquisition of new businesses (1,518) (455)
Purchase of marketable securities (3,557) (3,925)
Proceeds from sale of marketable
securities 2,315 3,465
------- -------
(11,007) (8,507)
Cash flows from financing activities:
Proceeds from notes payable 16,431 5,184
Payment of notes payable (14,841) (13,223)
Proceeds from long-term debt - 656
Payment of long-term debt (3,683) (5,416)
Issuance of common shares 1,196 1,550
Purchase of treasury shares (13,266) (6,745)
Dividends paid (5,229) (4,487)
------- -------
(19,392) (22,481)
Effect of exchange rate changes (821) (186)
------- -------
Increase(decrease) in cash (10,830) 711
Cash and cash equivalents
Beginning of fiscal year 18,128 7,409
------- -------
End of period $ 7,298 $ 8,120
======= =======
<FN>
See accompanying notes.
</TABLE>
5
<PAGE> 6
NORDSON CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
May 1, 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 twenty-six week period ended May 1, 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):
May 1, 1994 October 31, 1993
----------- ----------------
Finished goods $33,579 $30,747
Work-in-process 12,789 8,466
Raw materials and
finished parts 47,644 45,448
------- -------
$94,012 $84,661
======= =======
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 statement of income and statement of cash flows for
the twenty-six weeks ended May 2, 1993 have been restated to reflect
this charge.
6
<PAGE> 7
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 second quarter and year-to-date 1994 increased 11.2% and 7.9%,
respectively, over the comparable 1993 periods, with price/volume increases
partially offset by currency effects.
In the second quarter, price/volume changes accounted for an 11.7% increase
in sales, while for the year-to-date, they accounted for a 9.5% increase. In
both the second quarter and year-to-date periods, the Company experienced
volume gains in all geographic regions. For the year-to-date period, sales
volume in North America was up 12%, shipments in Europe were up 5%, Japanese
sales volume increased 6%, and activity in the Pacific Rim countries and
Latin America grew 28%. 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 60% of total sales. Translating international sales at exchange rates
reflecting a generally stronger U.S. dollar as compared to the prior year had
the effect of decreasing sales by 0.5% for the second quarter and 1.6% for
the year-to-date.
OPERATING PROFIT
- - ----------------
For the second quarter of 1994, operating profit, as a percentage of sales,
increased to 14.3% from 13.6% for the same period of 1993. Year-to-date
operating profit rose to 13.1% of sales for 1994 from 12.7% in 1993.
As a percentage of sales, gross margins decreased in the second quarter and
year-to-date periods of 1994 over the comparable 1993 periods, which can be
traced to changes in the mix of products sold. These declines in gross
margins were more than offset by reductions in selling and administrative
expenses, expressed as a percentage of sales, as spending grew at a slower
rate than sales.
7
<PAGE> 8
NET INCOME
- - ----------
For the second quarter of 1994, net income, as a percentage of sales,
advanced to 8.9% compared with 8.0% for the same period of 1993. Year-to-
date income before cumulative effect of accounting changes increased to 8.2%
of sales for 1994 from 7.4% in 1993.
These increases were due to the factors impacting operating profit discussed
above. In addition, interest expense decreased in both 1994 periods as
compared to 1993 due to reductions in debt throughout fiscal 1993. Also, the
Company experienced greater currency exchange gains in 1994, particularly in
the first quarter, compared with the comparable 1993 periods.
FOREIGN CURRENCY EFFECTS
- - ------------------------
In the aggregate, average exchange rates for second quarter and year-to-date
1994 used to translate international sales and operating results into U.S.
dollars compared unfavorably with average exchange rates existing during the
comparable 1993 periods. 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 for second quarter 1994, sales would have been
approximately $513,000 higher while third-party costs and expenses would have
been $398,000 higher if exchange rates for 1993 had been in effect during
1994. For year-to-date 1994, sales would have been approximately $3,418,000
higher and third-party costs and expenses $2,165,000 higher if exchange rates
for 1993 had been in effect during 1994.
FINANCIAL CONDITION
During the first half of 1994, net assets increased $630,000. Earnings of
$18,550,000 were substantially offset by net repurchases of Nordson stock
totalling $12,070,000 and the payment of $5,229,000 in dividends.
Working capital, as of the end of the quarter, decreased $3,250,000 over the
prior year-end. This change consisted primarily of decreases in cash and
cash equivalents and accounts receivable, offset by increases in inventories
and decreases in accrued liabilities. Receivables decreased as a result of
the collection of year-end receivables arising from strong sales in the
fourth quarter of 1993, and a larger proportion in 1994 of domestic sales
which customarily have shorter credit terms. Changes in inventories can be
traced to increases in component inventory related to greater demand and in
work-in-process associated with large engineered systems. Accrued
liabilities decreased due to the payment in 1994 of certain accruals
accumulated during 1993.
Cash and cash equivalents decreased $10,830,000 during the first half of
1994. Uses for cash included repurchases of Nordson stock, outlays for
capital expenditures, dividends, and net payments on long-term borrowings.
Cash from operations 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.
8
<PAGE> 9
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 Twenty-Six Weeks Ended
May 1, 1994 May 2, 1993 May 1, 1994 May 2, 1993
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Weighted average number
of common shares
outstanding during
the period 18,681 18,729 18,702 18,750
Effect of Company
stock plans based on
the treasury stock
method using average
market price 536 442 492 451
------- ------- ------- -------
Total weighted average
common shares and
common share
equivalents 19,217 19,171 19,194 19,201
======= ======= ======= =======
Income before
cumulative effect
of accounting
changes $10,754 $ 8,787 $18,550 $15,470
======= ======= ======= =======
Net income $10,754 $ 8,787 $18,550 $10,686
======= ======= ======= =======
Primary earnings per
share:
Income before
cumulative
effect of
accounting
changes $ .56 $ .46 $ .97 $ .81
======= ======= ======= =======
Net income $ .56 $ .46 $ .97 $ .56
======= ======= ======= =======
</TABLE>
9
<PAGE> 10
Part II - Other Information
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of Shareholders of Nordson Corporation was held on
March 10, 1994, for the purpose of electing three directors.
All of management's nominees for directors, as listing in the proxy state-
ment, were elected by the following votes:
William P. Madar: For 17,463,962
Withheld 53,480
William W. Colville: For 17,468,387
Withheld 49,055
Evan W. Nord: For 17,466,564
Withheld 50,878
In addition to the above directors, the following directors' terms of office
continued after the meeting: Dr. Glenn R. Brown, William D. Ginn, Stephen R.
Hardis, Dr. Jacob O. Kamm, Dr. Anne O. Krueger and Eric T. Nord.
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
May 1, 1994.
10
<PAGE> 11
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: June 14, 1994 Nordson Corporation
/s/ Nicholas D. Pellecchia
Nicholas D. Pellecchia
Vice President-Finance
and Treasurer
(Principal Financial Officer
and Chief Accounting Officer)
11
<PAGE> 12
NORDSON CORPORATION
EXHIBIT INDEX
Page Number
Exhibit 11 Calculation of Earnings Per Share 9
12
