<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 January 29, 1995
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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
NORDSON CORPORATION
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(Exact name of registrant as specified in its charter)
Ohio 34-0590250
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(State or other jurisdiction of (I.R.S Employer Identification No.)
incorporation or organization)
28601 Clemens Road, Westlake, Ohio 44145
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(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 29, 1995: 18,341,581
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Page 1
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NORDSON CORPORATION
INDEX
Part I - Financial Information Page Number
Condensed Consolidated Statement of Income -
Thirteen Weeks Ended January 29, 1995 and
January 30, 1994 3
Condensed Consolidated Balance Sheet -
January 29, 1995 and October 30, 1994 4
Condensed Consolidated Statement of Cash
Flows - Thirteen Weeks Ended January 29, 1995
and January 30, 1994 5
Notes to Condensed Consolidated Financial
Statements 6
Management's Discussion and Analysis of
Results of Operations and Financial Condition 7-8
Part II - Other Information
Item 6, Exhibits and Reports on Form 8-K 9
Signature 10
Exhibit Index 11
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
January 29, 1995 January 30, 1994
---------------- ----------------
<S> <C> <C>
Sales $123,477 $104,680
Cost of sales 52,106 41,405
Selling & administrative expenses 57,357 50,960
------- -------
Operating profit 14,014 12,315
Other income (expense):
Interest expense (971) (1,080)
Interest and investment income 188 292
Other - net 525 560
------- -------
Income before income taxes 13,756 12,087
Income taxes 4,815 4,291
------- -------
Net income $ 8,941 $ 7,796
======= =======
Weighted average common shares and
common share equivalents 18,781 19,168
======= =======
Primary earnings per share $ .48 $ .41
======= =======
Dividends per common share $ .16 $ .14
======= =======
<FN>
See accompanying notes.
</TABLE>
3
<PAGE>
<TABLE>
NORDSON CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(Dollars in thousands)
<CAPTION>
January 29, 1995 October 30, 1994
---------------- ----------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 6,265 $ 4,578
Marketable securities 4,226 6,486
Receivables 113,742 120,073
Inventories 100,311 93,615
Deferred income taxes 20,869 20,575
Prepaid expenses 5,508 4,980
-------- --------
Total current assets 250,921 250,307
Property, plant and equipment 167,650 167,611
Less accumulated depreciation and
amortization of property, plant
and equipment (79,639) (78,956)
Intangible assets - net 29,409 29,900
Other assets 13,467 12,082
-------- --------
$381,808 $380,944
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable $ 30,692 $ 26,917
Accounts payable 24,743 26,900
Current portion of long-term debt 5,588 5,723
Other current liabilities 63,305 63,771
-------- --------
Total current liabilities 124,328 123,311
Long-term debt 18,598 19,254
Other liabilities 27,184 25,955
Shareholders' equity:
Common shares 12,253 12,253
Other shareholders' equity 199,445 200,171
-------- --------
Total shareholders' equity 211,698 212,424
-------- --------
$381,808 $380,944
======== ========
<FN>
See accompanying notes.
</TABLE>
4
<PAGE>
<TABLE>
NORDSON CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in thousands)
<CAPTION>
Thirteen Weeks Ended
January 29, 1995 January 30, 1994
---------------- ----------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 8,941 $ 7,796
Changes in working capital (6,081) (5,503)
Other - net 5,038 4,423
------- -------
7,898 6,716
Cash flows from investing activities:
Additions to property, plant
and equipment (5,232) (3,556)
Proceeds from sale of property,
plant and equipment 1,638 4
Acquisition of businesses - (1,518)
Purchase of marketable securities - (2,582)
Proceeds from sale of marketable
securities 2,255 1,315
------- -------
(1,339) (6,337)
Cash flows from financing activities:
Proceeds from notes payable 11,095 7,040
Payment of notes payable (7,113) (5,046)
Payment of long-term debt (1,089) (1,336)
Issuance of common shares 328 445
Purchase of treasury shares (4,959) (4,262)
Dividends paid (2,941) (2,613)
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(4,679) (5,772)
Effect of exchange rate changes (193) 270
------- -------
Increase (decrease) in cash 1,687 (5,123)
Cash and cash equivalents
Beginning of fiscal year 4,578 18,128
------- -------
End of period $ 6,265 $13,005
======= =======
<FN>
See accompanying notes.
</TABLE>
5
<PAGE>
NORDSON CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
January 29, 1995
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 29, 1995 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 30, 1994.
2. INVENTORIES. Inventories consisted of the following (in thousands of
dollars):
January 29, 1995 October 30, 1994
---------------- ----------------
Finished goods $ 37,718 $33,919
Work-in-process 15,388 10,579
Raw materials and
finished parts 47,205 49,117
-------- -------
$100,311 $93,615
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3. ACCOUNTING CHANGES. Effective as of the beginning of fiscal 1995, the
Company adopted Financial Accounting Standards Board Statement
"Accounting for Certain Instruments in Debt and Equity Securities" (FAS
115). Under FAS 115, the Company's marketable securities are classified
as "available for sale" and recorded at current market value. Adoption
of this statement did not have a material effect on the Company's
consolidated financial position.
6
<PAGE>
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 1995 increased 18.0% over the comparable 1994
period, as a result of price/volume gains combined with favorable currency
effects.
Sales gains due to price/volume changes accounted for a 13.3% increase,
compared with the same period of the prior year. Volume gains were
experienced in three of our four geographic regions. Sales volume in North
America was up 23%, shipments in Europe were up 8%, activity in the Pacific
Rim countries and Latin America grew 19%, while Japanese sales volume
decreased 3%. Price increases averaging 1.4% 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 1995 comprised approxi-
mately 59% of total sales. Translating international sales at generally
higher average exchange rates as compared to the same period in the prior
year increased sales by 4.7% for the first quarter.
OPERATING PROFIT
----------------
Operating profit, as a percentage of sales, decreased to 11.3% for the first
quarter 1995 from 11.8% for first quarter 1994. Compared to the first
quarter of the prior year, gross margins, expressed as a percentage of sales,
decreased to 57.8% from 60.4%. The decline in margins can be traced to
changes in the mix of products sold, offset by favorable currency effects.
Product sales mix was influenced by strong sales of large engineered powder
coating systems sold into automotive and other industrial markets. The
increase in selling and administrative expenses over the first quarter 1994
of 12.6% can be attributed to increased sales volume and currency effects.
NET INCOME
----------
Net income, as a percentage of sales, decreased from 7.4% to 7.2% for first
quarter 1995 as compared to first quarter 1994. This decrease is due to the
factors impacting operating profit discussed above. In addition, interest
expense decreased $109,000 due to lower weighted-average interest rates,
partially offset by the effect of higher short-term borrowings. Interest and
investment income decreased $104,000 as a result of reductions in marketable
securities.
7
<PAGE>
FOREIGN CURRENCY EFFECTS
------------------------
In the aggregate, average exchange rates for first quarter 1995 used to
translate international sales and operating results into U.S. dollars
compared favorably with average exchange rates which existed during the
comparable 1994 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
$4,884,000 lower and third-party costs would have been $3,123,000 lower if
exchange rates for 1994 had been in effect during 1995.
FINANCIAL CONDITION
During the first quarter of 1995, net assets decreased $726,000. This
decrease is primarily attributable to net purchases of treasury shares
amounting to $4,631,000, the payment of $2,941,000 in dividends, and a
reduction of $2,385,000 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, offset by earnings of $8,941,000.
Working capital decreased $403,000 during the quarter. This change consisted
primarily of decreases in marketable securities and receivables and increases
in notes payable, offset by increases in cash and cash equivalents and
inventories, and decreases in accounts payable. All balances, other than
marketable securities, reflect decreases from the effects of translating
amounts denominated in generally weaker foreign currencies into U.S. dollars.
In addition, marketable securities decreased due to sales of these
securities, receivables decreased from the collection of year-end receivables
arising from strong sales in the fourth quarter of 1994, notes payable
increased from net borrowings, inventories increased as the Company
replenished stocks depleted as a result of those strong fourth quarter sales,
and accounts payable decreased from the repayment of additional purchases at
year-end.
Cash and cash equivalents increased $1,687,000 during the quarter. Uses for
cash included outlays for capital expenditures, purchases of treasury shares,
dividends, and scheduled repayments on long-term debt. Cash from operations,
net proceeds from notes payable, proceeds from the sale of marketable
securities, and proceeds from the sale of property, plant and equipment were
utilized to finance the above cash uses. Proceeds from the sale of property,
plant and equipment represent the sale, for approximately net book value, of
a facility in Norcross, Georgia . Available lines of credit continue to be
more than adequate to meet additional cash requirements over the next year.
8
<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
January 29, 1995.
9
<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: March 14, 1995 Nordson Corporation
/s/ Nicholas D. Pellecchia
Nicholas D. Pellecchia
Vice President-Finance
and Controller
(Principal Financial Officer
and Chief Accounting
Officer)
10
<PAGE>
NORDSON CORPORATION
EXHIBIT INDEX
Page Number
Exhibit 11 Calculation of Earnings Per Share 12
Exhibit 27 Financial Data Schedule 13
11
<TABLE>
Exhibit 11
NORDSON CORPORATION
CALCULATION OF EARNINGS PER SHARE
(Dollars and shares in thousands except for per share amounts)
<CAPTION>
Thirteen Weeks Ended
January 29, 1995 January 30, 1994
---------------- ----------------
<S> <C> <C>
PRIMARY:
Weighted average number of common
shares outstanding during the
period 18,388 18,720
Effect of Company stock plans
based on the treasury stock
method using average market
price 393 448
------ ------
Total weighted average common shares
and common share equivalents 18,781 19,168
====== ======
Net income $8,941 $7,796
====== ======
Earnings per share $ .48 $ .41
====== ======
FULLY DILUTED:
Weighted average number of common
shares outstanding during the
period 18,388 18,720
Effect of Company stock plans
based on the treasury stock
method using the higher of
ending or average market
price 393 539
------ ------
Total weighted average common shares
and common share equivalents 18,781 19,259
====== ======
Net income $8,941 $7,796
====== ======
Earnings per share $ .48 $ .40
====== ======
</TABLE>
12
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> QTR-1
<FISCAL-YEAR-END> OCT-29-1995
<PERIOD-END> JAN-29-1995
<CASH> 6,265
<SECURITIES> 4,226
<RECEIVABLES> 113,742
<ALLOWANCES> 0
<INVENTORY> 100,311
<CURRENT-ASSETS> 250,921
<PP&E> 167,650
<DEPRECIATION> 79,639
<TOTAL-ASSETS> 381,808
<CURRENT-LIABILITIES> 124,328
<BONDS> 18,598
<COMMON> 12,253
0
0
<OTHER-SE> 199,445
<TOTAL-LIABILITY-AND-EQUITY> 381,808
<SALES> 123,477
<TOTAL-REVENUES> 123,477
<CGS> 52,106
<TOTAL-COSTS> 52,106
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 971
<INCOME-PRETAX> 13,756
<INCOME-TAX> 4,815
<INCOME-CONTINUING> 8,941
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,941
<EPS-PRIMARY> .48
<EPS-DILUTED> .48
</TABLE>
