• Record Sales: $2.7 billion for fiscal year 2024.
• Fourth Quarter Sales: $744 million, up 4% from the prior year's fourth quarter.
• EBITDA: $849 million for the fiscal year, 32% of sales.
• Fourth Quarter EBITDA: $241 million, 32% of sales.
• Adjusted Operating Profit: $205 million for the fourth quarter.
• Net Income: $122 million for the fourth quarter.
• Adjusted Earnings Per Share: $2.78 for the fourth quarter, a 3% increase over the prior year.
• Free Cash Flow: $492 million for the fiscal year, 105% conversion rate on net income.
• Debt: Net debt at $2.1 billion, leverage ratio of 2.5 times based on trailing 12 months EBITDA.
• Dividend Increase: 15% annual increase, marking 61 consecutive years of increases.
• Fiscal 2025 Sales Guidance: 2% to 7% above fiscal 2024 sales.
• Fiscal 2025 Adjusted Earnings Guidance: Neutral to 8% growth per diluted share.
• First Quarter Fiscal 2025 Sales Forecast: $615 million to $655 million.
• First Quarter Fiscal 2025 Adjusted Earnings Forecast: $1.95 to $2.15 per diluted share.

• Warning! GuruFocus has detected 3 Warning Sign with NDSN.

Release Date: December 12, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Nordson Corp (NASDAQ:NDSN) achieved record sales of $2.7 billion and record EBITDA of $849 million, representing 32% of sales.
• The company successfully integrated the Atrion acquisition, contributing to a 6% increase in fourth-quarter sales.
• Nordson Corp (NASDAQ:NDSN) reported a strong cash flow year with $492 million in free cash flow and a conversion rate of 105% on net income.
• The Advanced Technology Solutions segment returned to growth with a 5% increase in sales and achieved a 27% EBITDA margin.
• The company increased its annual dividend by 15%, marking the 61st consecutive year of annual increases.

Negative Points

• Organic sales were down 3% in the fourth quarter, driven by declines in the Industrial Precision Solutions and Medical and Fluid Solutions segments.
• The company faces challenging year-over-year comparisons in its Industrial Precision Solutions segment, impacting organic growth.
• Nordson Corp (NASDAQ:NDSN) anticipates muted large capital investments in the near term, particularly in polymer processing product lines.
• The Medical and Fluid Solutions segment experienced a 3% decline in organic sales due to softness in medical interventional solutions.
• The company expects a negative 1.5% impact from foreign exchange rates on fiscal 2025 sales.

Q & A Highlights

Q: Can you provide insights on how you're thinking about growth throughout the year, considering the conservative outlook for the first quarter? A: Sundaram Nagarajan, President and CEO, explained that in the Industrial Precision Solutions (IPS) segment, consumer non-durable end markets have a steady outlook, but large capital investments are expected to be muted. In Medical and Fluid Solutions (MFS), modest growth is expected in fluid components, offsetting pressure in medical interventional products. Advanced Technology Solutions (ATS) is seeing steady improvement, but no significant ramp in capital spending is expected. Dan Hopgood, CFO, added that the sales profile aligns with typical seasonality, with Q1 being the lowest quarter.

Q: Was there anything unusual in the electronics segment in the fourth quarter, or was it a normal run rate? A: Sundaram Nagarajan, President and CEO, stated that the fourth quarter was normal, with strong customer conversations translating into order entry. The company is cautious about significant capital spending but sees positive order trends supporting modest growth in ATS for 2025.

Q: Can you clarify the backlog excluding the Atrion acquisition? A: Dan Hopgood, CFO, noted that Atrion added about $35 million to the backlog, making it approximately $550 million excluding Atrion. Sundaram Nagarajan, President and CEO, added that the company's recurring revenue, which is over 55%, is a significant factor in considering backlog reduction.

Q: What would drive Nordson to the higher end of its full-year guidance? A: Dan Hopgood, CFO, mentioned that stronger recovery in semiconductor and electronics markets, as well as general industrial markets, would push Nordson to the higher end of its guidance. The company is not trying to predict recoveries but would benefit from stronger market conditions.

Q: How are factory efficiency gains impacting Nordson's performance? A: Sundaram Nagarajan, President and CEO, highlighted that the NBS Next growth framework and improved product mix have led to significant efficiency gains. On-time delivery improvements and better manufacturing processes have contributed to these gains, enhancing operational performance.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.