<PAGE>
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 July 31, 1994
------------------------
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 0-7977
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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 July 31, 1994: 18,510,218
- - ---------------------------------------------------------------
Page 1 of 14
<PAGE>
NORDSON CORPORATION
INDEX
Part I - Financial Information Page Number
Condensed Consolidated Statement of Income -
Thirteen Weeks and Thirty-Nine Weeks ended
July 31, 1994 and August 1, 1993 3
Condensed Consolidated Balance Sheet -
July 31, 1994 and October 31, 1993 4
Condensed Consolidated Statement of Cash
Flows - Thirty-Nine Weeks ended
July 31, 1994 and August 1, 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 9-10
Part II - Other Information
Item 6, Exhibits and Reports on Form 8-K 11
Signature 12
Exhibit Index 13
Page 2
<PAGE>
<TABLE>
Part I - Financial Information
NORDSON CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(Dollars and shares in thousands except for per share amounts)
<CAPTION>
Thirteen Weeks Ended Thirty-Nine Weeks Ended
July 31, August 1, July 31, August 1,
1994 1993 1994 1993
-------- --------- -------- ---------
<S> <C> <C> <C> <C>
Sales $133,438 $123,341 $359,620 $332,891
Cost of sales 56,658 52,748 148,855 137,630
Selling &
administrative
expenses 55,375 51,363 159,666 149,502
-------- -------- -------- --------
Operating profit 21,405 19,230 51,099 45,759
Other income (expense):
Interest expense (1,203) (1,630) (3,430) (5,139)
Interest and
investment income 161 266 661 821
Other - net (491) 570 303 536
-------- -------- -------- --------
Income before income
taxes and cumulative
effect of accounting
changes 19,872 18,436 48,633 41,977
Income taxes 6,754 6,361 16,965 14,432
-------- -------- -------- --------
Income before
cumulative effect
of accounting
changes 13,118 12,075 31,668 27,545
Cumulative effect of
accounting changes - - - (4,784)
-------- -------- -------- --------
Net income $ 13,118 $ 12,075 $ 31,668 $ 22,761
======== ======== ======== ========
Weighted average common
shares and common
share equivalents 18,988 19,152 19,125 19,190
======== ======== ======== ========
Primary earnings per share:
Income before cumulative
effect of accounting
changes $ .69 $ .63 $ 1.66 $ 1.44
======== ======== ======== ========
Net income $ .69 $ .63 $ 1.66 $ 1.19
======== ======== ======== ========
Dividends per
common share $ .14 $ .12 $ .42 $ .36
======== ======== ======== ========
<FN>
See accompanying notes.
</TABLE>
Page 3
<PAGE>
<TABLE>
NORDSON CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(Dollars in thousands)
<CAPTION>
July 31, 1994 October 31, 1993
------------- ----------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 3,964 $ 18,128
Marketable securities 6,011 5,235
Receivables 111,189 107,395
Inventories 100,320 84,661
Deferred income taxes 19,003 21,708
Prepaid expenses 4,016 4,545
-------- --------
Total current assets 244,503 241,672
Property, plant and equipment 161,929 146,939
Less accumulated depreciation and
amortization of property, plant
and equipment (76,231) (68,250)
Intangible assets - net 27,564 27,251
Other assets 10,576 10,358
-------- --------
$368,341 $357,970
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable $ 21,328 $ 19,050
Accounts payable 27,390 22,186
Current portion of long-term debt 5,109 6,355
Other current liabilities 64,219 68,690
-------- --------
Total current liabilities 118,046 116,281
Long-term debt 20,598 22,089
Deferred income taxes - 495
Other liabilities 25,594 22,700
Shareholders' equity:
Common shares 12,253 12,253
Other shareholders' equity 191,850 184,152
-------- --------
Total shareholders' equity 204,103 196,405
-------- --------
$368,341 $357,970
======== ========
<FN>
See accompanying notes.
</TABLE>
Page 4
<PAGE>
<TABLE>
NORDSON CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in thousands)
<CAPTION>
Thirty-Nine Weeks Ended
July 31, 1994 August 1, 1993
-------------- --------------
<S> <C> <C>
Cash flows from operating activities:
Net income $31,668 $22,761
Changes in working capital (13,425) 765
Other - net 13,432 23,177
------- -------
31,675 46,703
Cash flows from investing activities:
Additions to property, plant
and equipment (13,359) (11,869)
Proceeds from sale of property,
plant and equipment 35 274
Acquisition of new businesses (1,518) (455)
Purchase of marketable securities (3,605) (5,425)
Proceeds from sale of marketable
securities 2,755 6,890
------- -------
(15,692) (10,585)
Cash flows from financing activities:
Proceeds from notes payable 17,974 5,336
Payment of notes payable (15,716) (12,178)
Proceeds from long-term debt 94 684
Payment of long-term debt (5,043) (6,779)
Issuance of common shares 6,990 3,669
Purchase of treasury shares (26,587) (8,631)
Dividends paid (7,838) (6,734)
------- -------
(30,126) (24,633)
Effect of exchange rate changes (21) (778)
------- -------
Increase (decrease) in cash (14,164) 10,707
Cash and cash equivalents
Beginning of fiscal year 18,128 7,409
------- -------
End of period $ 3,964 $18,116
======= =======
<FN>
See accompanying notes.
</TABLE>
Page 5
<PAGE>
NORDSON CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
July 31, 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 thirty-nine week period ended July 31, 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):
July 31, 1994 October 31, 1993
-------------- ----------------
Finished goods $36,261 $30,747
Work-in-process 14,110 8,466
Raw materials and
finished parts 49,949 45,448
-------- -------
$100,320 $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 thirty-nine weeks ended August 1, 1993 have been restated to reflect
this charge.
Page 6
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following is Management's discussion and analysis of certain significant
factors affecting the Company's financial condition and results of operations
for the periods included in the accompanying condensed consolidated financial
statements.
RESULTS OF OPERATIONS
SALES
- - -----
Sales for the third quarter and year-to-date 1994 increased 8.2% and 8.0%,
respectively, over the comparable 1993 periods, with price/volume increases
partially offset by currency effects.
In the third quarter, price/volume changes accounted for an 8.8% increase in
sales, while for the year-to-date, they accounted for a 9.2% increase. In
the third quarter, the Company experienced volume gains in all geographic
regions, except for Europe where shipments were flat compared to the third
quarter of the prior year. For the year-to-date period, sales volume in
North America was up 13%, shipments in Europe were up 3%, Japanese sales
volume increased 8%, and activity in the Pacific Rim countries and Latin
America grew 20%. 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 59% 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 0.6% for both the third quarter and 1.2%
for the year-to-date.
OPERATING PROFIT
- - ----------------
For the third quarter of 1994, operating profit, as a percentage of sales,
increased to 16.0% from 15.6% for the same period of 1993. Year-to-date
operating profit rose to 14.2% of sales for 1994 from 13.7% in 1993.
As a percentage of sales, gross margins increased in the third quarter of
1994 over the comparable 1993 period, while on a year-to-date basis, they
remained unchanged. Declines in gross margins traced to changes in the mix
of products sold were offset by favorable manufacturing efficiencies and
reduced indirect costs. Further, selling and administrative expenses,
expressed as a percentage of sales, decreased for both the third quarter and
year-to-date 1994 as spending grew at a slower rate than sales.
NET INCOME
- - ----------
For the third quarter of 1994, net income, as a percentage of sales, was
9.8%, unchanged from the same period of 1993. Year-to-date income before
cumulative effect of accounting changes increased to 8.8% of sales for 1994
from 8.3% in 1993.
Page 7
<PAGE>
In addition to the factors impacting operating profit discussed above,
interest expense decreased in both 1994 periods as compared to 1993 due to
reductions in debt throughout fiscal 1993. Also, currency exchange losses in
the third quarter of 1994 compared to gains in the third quarter of 1993 have
brought year-to-date exchange gains in line with the prior year. The remain-
ing change in the year-to-date balance of other income-net is attributable to
several small nonrecurring charges recorded in the third quarter of 1994.
FOREIGN CURRENCY EFFECTS
- - ------------------------
In the aggregate, average exchange rates for third 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
structure in each country in which the Company operates. However, the
Company estimates that for third quarter 1994, sales would have been
approximately $687,000 higher while third-party costs and expenses would have
been $581,000 higher if exchange rates for 1993 had been in effect during
1994. For year-to-date 1994, sales would have been approximately $4,105,000
higher and third-party costs and expenses $2,746,000 higher if exchange rates
for 1993 had been in effect during 1994.
FINANCIAL CONDITION
During the first three quarters of 1994, net assets increased $7,698,000.
Earnings of $31,668,000 were substantially offset by net repurchases of
Nordson stock totalling $19,597,000 and the payment of $7,838,000 in
dividends.
Working capital, as of the end of the quarter, increased $1,066,000 over the
prior year-end. This change consisted primarily of increases in receivables
and inventories and decreases in accrued liabilities, offset by decreases in
cash and increases in accounts payable. Receivables increased as a result of
strong sales in the third quarter of 1994. 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 liabili-
ties decreased due to the payment in 1994 of certain accruals accumulated
during 1993. The increase in accounts payable is attributable to recent
increases in inventory levels and to the timing of certain transactions.
Cash and cash equivalents decreased $14,164,000 during the first nine months
of 1994. Uses for cash included net 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 equiva-
lents were utilized to finance the above cash uses. Available lines of
credit continue to be more than adequate to meet additional cash require-
ments over the next year.
Page 8
<PAGE>
Part I - Exhibit 11
Page 1 of 2
<TABLE>
NORDSON CORPORATION
CALCULATION OF EARNINGS PER SHARE
(Dollars and shares in thousands except for per share amounts)
<CAPTION>
Thirteen Weeks Ended Thirty-Nine Weeks Ended
July 31, 1994 August 1, 1993 July 31, 1994 August 1, 1993
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
PRIMARY:
Weighted average number
of common shares
outstanding during
the period 18,602 18,745 18,669 18,754
Effect of Registrant
stock plans based on
the treasury stock
method using average
market price 386 407 456 436
------- ------- ------- -------
Total weighted average
common shares and
common share
equivalents 18,988 19,152 19,125 19,190
======= ======= ======= =======
Income before cumulative
effect of accounting
changes $13,118 $12,075 $31,668 $27,545
======= ======= ======= =======
Net income $13,118 $12,075 $31,668 $22,761
======= ======= ======= =======
Earnings per share:
Income before
cumulative effect
of accounting
changes $ .69 $ .63 $ 1.66 $ 1.44
======= ======= ======= =======
Net income $ .69 $ .63 $ 1.66 $ 1.19
======= ======= ======= =======
</TABLE>
Page 9
<PAGE>
Part I - Exhibit 11
Page 2 of 2
<TABLE>
NORDSON CORPORATION
CALCULATION OF EARNINGS PER SHARE
(Dollars and shares in thousands except for per share amounts)
<CAPTION>
Thirteen Weeks Ended Thirty-Nine Weeks Ended
July 31, 1994 August 1, 1993 July 31, 1994 August 1, 1993
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
FULLY DILUTED:
Weighted average number
of common shares
outstanding during
the period 18,602 18,745 18,669 18,754
Effect of Registrant
stock plans based on
the treasury stock
method using the higher
of average or ending
market price 386 407 496 436
------- ------- ------- -------
Total weighted average
common shares and
common share
equivalents 18,988 19,152 19,165 19,190
======= ======= ======= =======
Income before cumulative
effect of accounting
changes $13,118 $12,075 $31,668 $27,545
======= ======= ======= =======
Net income $13,118 $12,075 $31,668 $22,761
======= ======= ======= =======
Earnings per share:
Income before
cumulative effect
of accounting
changes $ .69 $ .63 $ 1.65 $ 1.44
======= ======= ======= =======
Net income $ .69 $ .63 $ 1.65 $ 1.19
======= ======= ======= =======
</TABLE>
Page 10
<PAGE>
Part II - Other Information
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit 11 Calculation of Earnings Per Share
Exhibit 27 Financial Data Schedule
(b) There were no reports on Form 8-K filed for the quarter ended
July 31, 1994.
Page 11
<PAGE>
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: September 13, 1994 Nordson Corporation
/s/ Nicholas D. Pellecchia
Vice President-Finance
and Treasurer
(Principal Financial Officer
and Chief Accounting Officer)
Page 12
<PAGE>
NORDSON CORPORATION
EXHIBIT INDEX
Page Number
Exhibit 11 Calculation of Earnings Per Share 9
Exhibit 27 Financial Data Schedule 14
Page 13
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> OCT-30-1994
<PERIOD-END> JUL-31-1994
<CASH> 3,964
<SECURITIES> 6,011
<RECEIVABLES> 109,898
<ALLOWANCES> 2,728
<INVENTORY> 100,320
<CURRENT-ASSETS> 244,503
<PP&E> 161,929
<DEPRECIATION> 76,231
<TOTAL-ASSETS> 368,341
<CURRENT-LIABILITIES> 118,046
<BONDS> 20,598
<COMMON> 12,253
0
0
<OTHER-SE> 191,850
<TOTAL-LIABILITY-AND-EQUITY> 368,341
<SALES> 359,620
<TOTAL-REVENUES> 359,620
<CGS> 148,855
<TOTAL-COSTS> 148,855
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 466
<INTEREST-EXPENSE> 3,430
<INCOME-PRETAX> 48,633
<INCOME-TAX> 16,965
<INCOME-CONTINUING> 31,668
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 31,668
<EPS-PRIMARY> 1.66
<EPS-DILUTED> 1.65
</TABLE>
