Nordson Corporation (NDSN Quick QuoteNDSN - Free Report) reported weaker-than-expected results for the fourth quarter of fiscal 2021 (ended Oct 31, 2021). Its earnings lagged the Zacks Consensus Estimate by 10.48%. Also, sales in the quarter lagged estimates by 3.26%.

The company’s adjusted earnings were $1.88 per share in the reported quarter, lagging the Zacks Consensus Estimate of $2.10. On a year-over-year basis, the bottom line increased 18.2% from the year-ago quarter’s $1.59.

For fiscal 2021, the company’s adjusted earnings were $7.74 per share, increasing 41.2% from the previous year’s figure of $5.48. However, the bottom line lagged the Zacks Consensus Estimate of $7.96.

Revenue Details

In the reported quarter, Nordson’s revenues were $599.3 million, reflecting an increase of 7.3% from the year-ago number. Foreign currency translation had a positive impact of 0.6%. Organic sales in the reported quarter expanded 10.4%, driven by healthy end-market businesses, including industrial and electronics. Acquisitions/divestitures had a negative impact of 3.7%.

Also, the company’s revenues lagged the Zacks Consensus Estimate of $619.4 million.

On a regional basis, revenues from the United States increased 2.5% year over year to $199.5 million. Revenues from operations in Japan fell 23.7% to $27.7 million, while that from the Asia Pacific region increased 4.9% to $157.4 million. Revenues generated from Europe rose 15.1% to $163.6 million and that in the Americas increased 44% to $51 million.

Nordson reports revenues under two segments — Industrial Precision Solutions and Advanced Technology Solutions. A brief snapshot of the segmental sales is provided below:

Revenues generated from Industrial Precision Solutions amounted to $314.3 million, increasing 1.9% year over year. It represented 52.5% of the company’s revenues in the quarter.

Organic sales in the quarter expanded 8% year over year. Foreign currency translation had a positive impact of 0.5% and acquisitions/divestitures had a negative impact of 6.6%.

Advanced Technology Solutions’ sales were $284.9 million in the fourth quarter, up 13.9% from the year-ago reported quarter. It represented 47.5% of the company’s revenues in the quarter.

Organic sales increased 13.3% from the year-ago quarter and foreign currency translation had a positive impact of 0.6%.

For fiscal 2021, the company’s revenues were $2.36 billion, lagging the Zacks Consensus Estimate of $2.38 billion.

Margin Profile

In the reported quarter, Nordson’s cost of sales increased 2.5% year over year to $268.1 million. Notably, the cost of sales represented 44.7% of net sales. Gross profit was $331.2 million, up 11.5% year over year. The gross margin increased 210 basis points (bps) year over year to 55.3%. The company suffered from the adverse impacts of supply-chain woes and high logistic costs.

Selling and administrative expenses increased 4.4% year over year to $179.7 million and represented 30% of net sales. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were $177.1 million, the margin being 30%. Adjusted operating income in the reported quarter increased 16.3% year over year to $151.4 million, with the adjusted operating margin growing 200 bps to 25.3%.

Net interest expenses totaled $4.5 million in the reported quarter, reflecting a decrease of 30.8% from the year-ago quarter.

Balance Sheet & Cash Flow

Exiting the quarter, Nordson’s cash and cash equivalents were $300 million, increasing 72.2% from $174.2 million recorded in the last reported quarter. Long-term debt was $781.7 million, reflecting a 1% decline from $789.7 million in the last reported quarter.

In fiscal 2021, the company repaid $289.4 million of long-term debts and $6.6 million of financial lease obligations.

In fiscal 2021, it generated net cash of $545.9 million from operating activities, up 8.7% from the previous year. Capital invested for purchasing property, plant and equipment totaled $38.3 million, decreasing 24.2% year over year.

Dividends/Share Buyback

In fiscal 2021, the company paid out dividends amounting to $97.7 million, up 10.6% from $88.4 million in the previous year.

On Dec 8, 2021, Nordson announced that its board of directors approved a quarterly dividend of 51 cents per share. The dividend payment for the first quarter of fiscal 2022 (ending January 2022) will be made on Jan 4, 2022, to shareholders of record as of Dec 21, 2021.

The purchase of treasury shares by Nordson amounted to $61 million in fiscal 2021, increasing 15.9% from the previous year.

Outlook

Nordson anticipates solid orders and backlog (of $800 million) to be beneficial in the first quarter of fiscal 2022 (ending January 2022). Pricing actions will also help mitigate the impacts of supply-chain and cost woes.

For the fiscal first quarter, the company predicts year-over-year sales growth of 14-16% and adjusted earnings of $1.80-$1.95 per share.

For fiscal 2022, Nordson anticipates year-over-year adjusted earnings growth of 8-18%. Sales are expected to increase 6-10% from the previous fiscal year’s reported number.