In This Article:
Nordson Corporation (NASDAQ: NDSN) announced solid fiscal second-quarter 2018 results on Monday after the market closed, including an expected decline in organic volume that was more than offset by acquisitive growth.
Thanks to its disappointing forward outlook, shares of the adhesive-dispensing systems specialist are down around 6% in after-hours trading as of this writing -- albeit after a more than 3% gain in Monday's regular session. Let's take a closer look at what Nordson accomplished over the past few months, and what investors should watch for the remainder of the year.
IMAGE SOURCE: NORDSON.
Nordson results: The raw numbers
| Metric | Fiscal Q2 2018* | Fiscal Q2 2017 | Year-Over-Year Growth |
|---|---|---|---|
| Revenue | $553.7 million | $496.1 million | 11.6% |
| GAAP net income | $91.2 million | $64.5 million | 41.4% |
| GAAP earnings per share (diluted) | $1.55 | $1.11 | 39.6% |
*FOR THE QUARTER ENDED APRIL 30, 2018. DATA SOURCE: NORDSON CORPORATION.
What happened with Nordson this quarter?
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On a non-GAAP basis -- which notably excludes one-time items such as discrete tax adjustments, and $0.16 per share in acquisition costs in last year's fiscal Q2 -- Nordson's earnings increased 15.6% year over year to $1.56 per share -- above most investors' expectations for earnings of $1.43 per share.
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Nordson's top line included a 1% decline in organic volume, 7% growth related to acquisitions, and a 5% favorable effect from foreign currency translation.
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These results were roughly in line with Nordson's latest guidance (provided in February), which called for a change in organic volume of down 3% to up 1%, a 7% contribution from acquisitions, and a 5% favorable impact from currencies.
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Adjusted EBITDA grew 15.4% year over year to $157.5 million.
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Revenue by segment included:
What management had to say
Nordson CEO Michael Hilton stated:
These results highlight the strategic fit of our recent acquisitions, along with the resilient performance of our base business, particularly against very challenging prior year comparisons where total company organic sales growth was 9 percent in the second quarter. Our global team helped to deliver record second quarter sales, operating profit, diluted earnings per share, and EBITDA. Adjusted EBITDA margin improved about 100 basis points, as compared to the prior year's second quarter adjusted EBITDA margin, to 29 percent of sales.
Looking forward
For the current third quarter of fiscal 2018, Nordson anticipates revenue will arrive in the range of down 3% to up 1% from the same year-ago period. This assumes a change in organic volume of down 6% to down 2%, 1% growth from first-year acquisitions, and a positive 2% contribution from currency exchange. When all is said and done, that should translate to GAAP earnings per diluted share of $1.47 to $1.63.