NORDSON CORP 10-Q

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED) Condensed Consolidated Statements of Income Three Months Ended Nine Months Ended (In thousands, except for per share data) July 31, 2022 July 31, 2021 July 31, 2022 July 31, 2021 Sales $ 662,128 $ 646,858 $ 1,906,697 $ 1,762,962 Operating costs and expenses: Cost of sales 296,544 281,587 843,344 770,032 Selling and administrative expenses 180,666 176,995 538,602 529,238 477,210 458,582 1,381,946 1,299,270 Operating profit 184,918 188,276 524,751 463,692 Other income (expense): Interest expense ( 5,737 ) ( 6,139 ) ( 16,748 ) ( 20,210 ) Interest and investment income 572 492 1,456 1,321 Other - net 752 ( 2,232 ) ( 37,720 ) ( 10,736 ) ( 4,413 ) ( 7,879 ) ( 53,012 ) ( 29,625 ) Income before income taxes 180,505 180,397 471,739 434,067 Income taxes 38,694 38,215 99,885 90,159 Net income $ 141,811 $ 142,182 $ 371,854 $ 343,908 Average common shares 57,409 58,112 57,782 58,080 Incremental common shares attributable to equity compensation 560 623 610 634 Average common shares and common share equivalents 57,969 58,735 58,392 58,714 Basic earnings per share $ 2.47 $ 2.45 $ 6.44 $ 5.92 Diluted earnings per share $ 2.45 $ 2.42 $ 6.37 $ 5.86 See accompanying notes. Page 3 Table of Contents Nordson Corporation Consolidated Statements of Comprehensive Income Three Months Ended Nine Months Ended (In thousands) July 31, 2022 July 31, 2021 July 31, 2022 July 31, 2021 Net income $ 141,811 $ 142,182 $ 371,854 $ 343,908 Components of other comprehensive income (loss): Foreign currency translation adjustments ( 21,220 ) ( 3,348 ) ( 81,479 ) 18,142 Pension settlement adjustment, net of tax — ( 606 ) 32,047 3,975 Amortization of prior service cost and net actuarial losses, net of tax 1,848 4,405 7,686 11,206 Total other comprehensive income (loss) ( 19,372 ) 451 ( 41,746 ) 33,323 Total comprehensive income $ 122,439 $ 142,633 $ 330,108 $ 377,231 See accompanying notes. Page 4 Table of Contents Nordson Corporation Consolidated Balance Sheets (In thousands) Assets Current assets: July 31, 2022 October 31, 2021 Cash and cash equivalents $ 128,737 $ 299,972 Receivables - net 530,761 489,389 Inventories - net 399,579 327,195 Prepaid expenses and other current assets 56,529 48,282 Total current assets 1,115,606 1,164,838 Property, plant and equipment - net 359,231 355,565 Operating right of use lease assets 100,509 110,851 Goodwill 1,813,234 1,713,148 Intangible assets - net 343,779 357,367 Deferred income taxes 15,080 11,381 Other assets 76,385 77,811 Total assets $ 3,823,824 $ 3,790,961 Liabilities and shareholders' equity Current liabilities: Accounts payable $ 100,397 $ 91,689 Income taxes payable 21,473 16,636 Accrued liabilities 186,714 201,992 Customer advanced payments 95,683 77,868 Current maturities of long-term debt and notes payable 401,728 34,188 Operating lease liability - current 15,984 17,222 Finance lease liability - current 5,303 5,799 Total current liabilities 827,282 445,394 Long-term debt 401,698 781,709 Operating lease liability - noncurrent 88,718 97,685 Finance lease liability - noncurrent 13,466 14,944 Deferred income taxes 96,584 88,467 Pension obligations 75,892 80,584 Postretirement obligations 82,853 82,652 Other long-term liabilities 38,286 40,396 Shareholders' equity: Common shares 12,253 12,253 Capital in excess of stated value 616,567 585,334 Retained earnings 3,548,206 3,265,027 Accumulated other comprehensive loss ( 217,581 ) ( 175,835 ) Common shares in treasury, at cost ( 1,760,400 ) ( 1,527,649 ) Total shareholders' equity 2,199,045 2,159,130 Total liabilities and shareholders' equity $ 3,823,824 $ 3,790,961 See accompanying notes. Page 5 Table of Contents Nordson Corporation Consolidated Statements of Shareholders’ Equity 2022 (In thousands, except for share and per share data) Common Shares Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Common Shares in Treasury, at cost TOTAL November 1, 2021 $ 12,253 $ 585,334 $ 3,265,027 $ ( 175,835 ) $ ( 1,527,649 ) $ 2,159,130 Shares issued under company stock and employee benefit plans — 5,046 — — 675 5,721 Stock-based compensation — 8,392 — — — 8,392 Purchase of treasury shares ( 147,784 shares) — — — — ( 35,002 ) ( 35,002 ) Dividends declared ($ 0.51 per share) — — ( 29,724 ) — — ( 29,724 ) Net income — — 120,409 — — 120,409 Other Comprehensive Income (Loss): Foreign currency translation adjustments — — — ( 13,358 ) — ( 13,358 ) Defined benefit pension and post-retirement plans adjustment — — — 3,060 — 3,060 January 31, 2022 $ 12,253 $ 598,772 $ 3,355,712 $ ( 186,133 ) $ ( 1,561,976 ) $ 2,218,628 Shares issued under company stock and employee benefit plans — 1,843 — — 234 2,077 Stock-based compensation — 7,394 — — — 7,394 Purchase of treasury shares ( 469,604 shares) — — — — ( 105,464 ) ( 105,464 ) Dividends declared ($ 0.51 per share) — — ( 29,577 ) — — ( 29,577 ) Net income — — 109,634 — — 109,634 Other Comprehensive Income (Loss): Foreign currency translation adjustments — — ( 46,901 ) — ( 46,901 ) Pension plan settlement adjustment — — — 32,047 — 32,047 Defined benefit pension and post-retirement plans adjustment — — — 2,778 — 2,778 April 30, 2022 $ 12,253 $ 608,009 $ 3,435,769 $ ( 198,209 ) $ ( 1,667,206 ) $ 2,190,616 Shares issued under company stock and employee benefit plans — 940 — — 107 1,047 Stock-based compensation — 7,618 — — — 7,618 Purchase of treasury shares ( 448,889 shares) — — — — ( 93,301 ) ( 93,301 ) Dividends declared ($ 0.51 per share) — — ( 29,374 ) — — ( 29,374 ) Net income — — 141,811 — — 141,811 Other Comprehensive Income (Loss): Foreign currency translation adjustments — — — ( 21,220 ) — ( 21,220 ) Defined benefit pension and post-retirement plans adjustment — — — 1,848 — 1,848 July 31, 2022 $ 12,253 $ 616,567 $ 3,548,206 $ ( 217,581 ) $ ( 1,760,400 ) $ 2,199,045 Page 6 Table of Contents Nordson Corporation Consolidated Statements of Shareholders’ Equity 2021 (In thousands, except for share and per share data) Common Shares Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Common Shares in Treasury, at cost TOTAL November 1, 2020 $ 12,253 $ 534,684 $ 2,908,738 $ ( 226,118 ) $ ( 1,470,566 ) $ 1,758,991 Shares issued under company stock and employee benefit plans — 6,462 — — 976 7,438 Stock-based compensation — 10,120 — — — 10,120 Purchase of treasury shares ( 27,347 shares) — — — — ( 5,310 ) ( 5,310 ) Dividends declared ($ 0.39 per share) — — ( 22,672 ) — — ( 22,672 ) Net income — — 77,582 — — 77,582 Impact of adoption of ASU 2016-13 — — ( 396 ) — — ( 396 ) Other Comprehensive Income: Foreign currency translation adjustments — — — 28,433 — 28,433 Defined benefit pension and post-retirement plans adjustment — — — 2,997 — 2,997 January 31, 2021 $ 12,253 $ 551,266 $ 2,963,252 $ ( 194,688 ) $ ( 1,474,900 ) $ 1,857,183 Shares issued under company stock and employee benefit plans — 9,468 — — 1,877 11,345 Stock-based compensation — 3,877 — — — 3,877 Purchase of treasury shares ( 127,297 shares) — — — — ( 24,964 ) ( 24,964 ) Dividends declared ($ 0.39 per share) — — ( 22,670 ) — — ( 22,670 ) Net income — — 124,144 — — 124,144 Other Comprehensive Income (Loss): Foreign currency translation adjustments — — — ( 6,943 ) — ( 6,943 ) Defined benefit pension and post-retirement plans adjustment — — — 8,385 — 8,385 April 30, 2021 $ 12,253 $ 564,611 $ 3,064,726 $ ( 193,246 ) $ ( 1,497,987 ) $ 1,950,357 Shares issued under company stock and employee benefit plans — 4,978 — — 375 5,353 Stock-based compensation — 4,080 — — — 4,080 Purchase of treasury shares ( 76,724 shares) — — — — ( 16,566 ) ( 16,566 ) Dividends declared ($ 0.39 per share) — — ( 22,679 ) — — ( 22,679 ) Net income — — 142,182 — — 142,182 Other Comprehensive Income (Loss): Foreign currency translation adjustments — — — ( 3,348 ) — ( 3,348 ) Defined benefit pension and post-retirement plans adjustment — — — 3,799 — 3,799 July 31, 2021 $ 12,253 $ 573,669 $ 3,184,229 $ ( 192,795 ) $ ( 1,514,178 ) $ 2,063,178 See accompanying notes. Page 7 Table of Contents Nordson Corporation Condensed Consolidated Statements of Cash Flows (In thousands) Nine Months Ended Cash flows from operating activities: July 31, 2022 July 31, 2021 Net income $ 371,854 $ 343,908 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 75,242 78,233 Non-cash stock compensation 23,404 18,077 Deferred income taxes ( 11,094 ) ( 1,108 ) Other non-cash expense 43,325 1,450 Loss on sale of property, plant and equipment ( 707 ) 528 Changes in operating assets and liabilities ( 125,573 ) 12,565 Other ( 36,760 ) ( 78,197 ) Net cash provided by operating activities 339,691 375,456 Cash flows from investing activities: Additions to property, plant and equipment ( 39,373 ) ( 28,073 ) Proceeds from sale of property, plant and equipment 415 82 Other — 4,994 Acquisition of business, net of cash acquired ( 171,613 ) — Net cash used in investing activities ( 210,571 ) ( 22,997 ) Cash flows from financing activities: Proceeds from long-term debt 63,067 5,751 Repayment of long-term debt ( 40,162 ) ( 298,041 ) Repayment of finance lease obligations ( 3,726 ) ( 5,111 ) Issuance of common shares 8,845 24,136 Purchase of treasury shares ( 233,767 ) ( 46,840 ) Dividends paid ( 88,675 ) ( 68,021 ) Net cash used in financing activities ( 294,418 ) ( 388,126 ) Effect of exchange rate changes on cash ( 5,937 ) 1,609 Decrease in cash and cash equivalents ( 171,235 ) ( 34,058 ) Cash and cash equivalents at beginning of period 299,972 208,293 Cash and cash equivalents at end of period $ 128,737 $ 174,235 See accompanying notes. Page 8 Table of Contents Nordson Corporation Notes to Condensed Consolidated Financial Statements July 31, 2022 NOTE REGARDING AMOUNTS AND FISCAL YEAR REFERENCES In this quarterly report, all amounts related to United States dollars and foreign currency and to the number of Nordson Corporation’s common shares, except for per share earnings and dividend amounts, are expressed in thousands. Unless the context otherwise indicates, all references to “we” or the “Company” mean Nordson Corporation. Unless otherwise noted, all references to years relate to our fiscal year ending October 31. Significant accounting policies 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 notes required by generally accepted accounting principles in the United States (U.S. GAAP) 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 nine months ended July 31, 2022 are not necessarily indicative of the results that may be expected for the full year. For further information, refer to the Consolidated Financial Statements and notes included in our Annual Report on Form 10-K for the year ended October 31, 2021. Consolidation . The Condensed Consolidated Financial Statements include the accounts of Nordson Corporation and its 100%-owned and controlled subsidiaries. Investments in affiliates and joint ventures in which our ownership is 50 % or less or in which we do not have control but have the ability to exercise significant influence, are accounted for under the equity method. All significant intercompany accounts and transactions have been eliminated in consolidation. Use of estimates . The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the amounts reported in the Condensed Consolidated Financial Statements. Actual amounts could differ from these estimates. Revenue recognition . A contract exists when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of the consideration is probable. Revenue is recognized when performance obligations under the terms of the contract with a customer are satisfied. Generally, our revenue results from short-term, fixed-price contracts and primarily is recognized as of a point in time when the product is shipped or at a later point when the control of the product transfers to the customer. Revenue for undelivered items is deferred and included within Accrued liabilities in our Consolidated Balance Sheets. Revenues deferred as of July 31, 2022 and 2021 were not material. However, for certain contracts related to the sale of customer-specific products within our Advanced Technology Solutions segment, revenue is recognized over time as we satisfy performance obligations because of the continuous transfer of control to the customer. The continuous transfer of control to the customer occurs as we enhance assets that are customer controlled, and we are contractually entitled to payment for work performed to date plus a reasonable margin. As control transfers over time, revenue is recognized based on progress toward completion of the performance obligations. The selection method to measure progress towards completion requires judgment and is based on the nature of the products or services to be provided. We have elected to use the input method – costs incurred for these contracts because it best depicts the transfer of products or services to the customer based on incurring costs on the contract. Under this method, revenues are recorded proportionally as costs are incurred. Contract assets recognized are recorded in Prepaid expenses and other current assets and contract liabilities are recorded in Accrued liabilities in our Consolidated Balance Sheets and were not material on July 31, 2022 and October 31, 2021. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring products or services. Taxes, including sales and value add, that we collect concurrently with revenue-producing activities are excluded from revenue. As a practical expedient, we may exclude the assessment of whether goods or services are performance obligations, if they are immaterial in the context of the contract, and combine these with other performance obligations. While payment terms and conditions vary by contract type, we have determined that our contracts generally do not include a significant financing component. We have elected to apply the practical expedient to treat all shipping and handling costs as fulfillment costs as a significant portion of these costs are incurred prior to transfer of control to the customer. We have also elected to apply the practical expedient to expense sales commissions as they are incurred as the amortization period resulting from capitalizing the Page 9 Table of Contents Nordson Corporation costs is one year or less. These costs are recorded within Selling and administrative expenses in our Condensed Consolidated Statements of Income. We offer assurance-type warranties on our products as well as separately sold warranty contracts. Revenue related to warranty contracts that are sold separately is recognized over the life of the warranty term and are not material. Certain arrangements may include installation, installation supervision, training, and spare parts, which tend to be completed in a short period of time, at an insignificant cost, and utilizing skills not unique to us, and, therefore, are typically regarded as inconsequential or not material. We disclose disaggregated revenues by operating segment and geography in accordance with the revenue standard and on the same basis used internally by the chief operating decision maker for evaluating performance of operating segments and for allocating resources. Refer to our Operating segments Note for details. Earnings per share . Basic earnings per share are computed based on the weighted-average number of common shares outstanding during each year, while diluted earnings per share are based on the weighted-average number of common shares and common share equivalents outstanding. Common share equivalents consist of shares issuable upon exercise of stock options computed using the treasury stock method, as well as restricted shares and deferred stock-based compensation. Options whose exercise price is higher than the average market price are excluded from the calculation of diluted earnings per share because the effect would be anti-dilutive. Options excluded from the calculation of diluted earnings per share for the three months ended July 31, 2022 and 2021 were 76 and 0 , respectively. Options excluded from the calculation of diluted earnings per share for the nine months ended July 31, 2022 and 2021 were 79 and 61 , respectively. Recently issued accounting standards There have been no new accounting standards issued which would require either disclosure or adoption during the current period. Acquisitions Business acquisitions have been accounted for using the acquisition method, with the acquired assets and liabilities recorded at estimated fair value on the dates of acquisition. The cost in excess of the net assets of the business acquired is included in goodwill. Operating results since the respective dates of acquisitions are included in the Consolidated Statements of Income. 2022 Acquisition On November 1, 2021, we acquired 100 % of NDC Technologies (NDC), a leading global provider of precision measurement solutions for in-line manufacturing process control. NDC's technology portfolio includes in-line measurement sensors, gauges and analyzers using near-infrared, laser, X-ray, optical and nucleonic technologies, as well as proprietary algorithms and software. We acquired NDC for an aggregate purchase price of $ 171,613 , net of cash of approximately $ 7,533 and other working capital adjustments of $ 2,763 , utilizing cash on hand. Based on the fair value of the assets acquired and the liabilities assumed, goodwill of $ 129,856 and identifiable intangible assets of $ 31,130 were recorded. The identifiable intangible assets consist primarily of $ 10,800 of tradenames (amortized over 13.0 years), $ 10,000 of technology (amortized over seven years ), $ 9,500 of customer relationships (amortized over four years ) and $ 830 of non-compete agreements (amortized over three years ). Goodwill associated with this acquisition of $ 73,300 is tax deductible. This acquisition is being reported in our Industrial Precision Solutions segment and the results of NDC are not material to our Consolidated Financial Statements. As of July 31, 2022, the purchase price allocation remains preliminary as we complete our assessment of intangibles and income taxes. Receivables Our allowance for credit losses is principally determined based on aging of receivables. Receivables are exposed to credit risk based on the customers' ability to pay which is influenced by, among other factors, their financial liquidity. We perform ongoing customer credit evaluation to maintain sufficient allowances for potential credit losses. Our segments perform credit evaluation and monitoring to estimate and manage credit risk through the review of customer information, credit ratings, approval and monitoring of customer credit limits, and assessment of market conditions. We may also require prepayments or bank guarantees from customers to mitigate credit risk. Our receivables are generally short-term in nature with a majority of receivables outstanding less than 90 days. Accounts receivable balances are written-off against the allowance if deemed uncollectible. Accounts receivable are net of an allowance for credit losses of $ 8,870 and $ 7,552 on July 31, 2022 and October 31, 2021, respectively. The provision for losses on receivables was $ 788 and $ 1,439 for the three and nine months ended July 31, 2022, respectively, compared to $ 454 and $ 50 for the same periods a year ago, respectively. The remaining change in the allowance for credit losses is principally related to net write-off/recoveries of uncollectible accounts as well as currency translation. Page 10 Table of Contents Nordson Corporation Inventories Components of inventories were as follows: July 31, 2022 October 31, 2021 Finished goods $ 227,770 $ 211,628 Raw materials and component parts 159,288 111,089 Work-in-process 64,316 54,557 451,374 377,274 Obsolescence and other reserves ( 51,795 ) ( 50,079 ) $ 399,579 $ 327,195 Effective in the third quarter of 2022, we changed our accounting method for certain U.S. inventories from a last-in, first-out basis (LIFO) to a first-in, first-out basis (FIFO). Previously, the LIFO method was used to determine the cost of a portion of our inventories in the U.S. We believe this change in accounting method is preferable as it is consistent with how we manage our business, results in a uniform method to value our inventory across all regions of our business, improves comparability with our peers, and is expected to better reflect the current value of inventory on the consolidated balance sheets. We applied this accounting change as a cumulative effect adjustment to cost of sales in the third quarter of 2022 and did not restate prior period financial statements because the impact was not material. Property, Plant and Equipment Components of property, plant and equipment were as follows: July 31, 2022 October 31, 2021 Land $ 9,313 $ 9,238 Land improvements 4,962 4,786 Buildings 273,603 263,399 Machinery and equipment 503,533 491,180 Enterprise management system 50,665 50,532 Construction-in-progress 33,575 32,719 Leased property under finance leases 35,784 37,506 911,435 889,360 Accumulated depreciation and amortization ( 552,204 ) ( 533,795 ) $ 359,231 $ 355,565 Depreciation expense was $ 12,178 and $ 14,216 for the three months ended July 31, 2022 and 2021, respectively. Depreciation expense was $ 36,876 and $ 39,855 for the nine months ended July 31, 2022 and 2021, respectively. Goodwill and other intangible assets Changes in the carrying amount of goodwill for th e nine months ended July 31, 2022 by operating segment were as follows: Industrial Precision Solutions Advanced Technology Solutions Total Balance at October 31, 2021 $ 415,020 $ 1,298,128 $ 1,713,148 Acquisitions 129,856 — 129,856 Currency effect ( 19,711 ) ( 10,059 ) ( 29,770 ) Balance at July 31, 2022 $ 525,165 $ 1,288,069 $ 1,813,234 The increase in goodwill for the nine months ended July 31, 2022 was due to the acquisition of NDC. See Acquisitions Note for additional details. Page 11 Table of Contents Nordson Corporation Information regarding our intangible assets subject to amortization was as follows: July 31, 2022 Carrying Amount Accumulated Amortization Net Book Value Customer relationships $ 483,127 $ 244,893 $ 238,234 Patent/technology costs 159,284 94,711 64,573 Trade name 83,368 43,514 39,854 Non-compete agreements 10,358 9,245 1,113 Other 422 417 5 Total $ 736,559 $ 392,780 $ 343,779 October 31, 2021 Carrying Amount Accumulated Amortization Net Book Value Customer relationships $ 483,815 $ 226,658 $ 257,157 Patent/technology costs 154,267 89,299 64,968 Trade name 74,301 39,858 34,443 Non-compete agreements 9,896 9,099 797 Other 1,385 1,383 2 Total $ 723,664 $ 366,297 $ 357,367 Amortization expense for the three months ended July 31, 2022 and 2021 was $ 12,709 and $ 12,681 , respectively. Amortization expense for the nine months ended July 31, 2022 and 2021 was $ 38,366 and $ 38,378 , respectively. See Acquisitions Note for details regarding intangibles recorded due to the acquisition of NDC. Pension and other postretirement plans During the second quarter of 2022, we completed a partial plan settlement transaction in regards to two of our U.S. pension plans in which plan assets amounting to $ 171,181 were used to purchase a group annuity contract from The Prudential Insurance Company of America (Prudential). The settlement resulted in a loss of $ 41,221 , which is included in Other-net on the Condensed Consolidated Statements of Income. This transaction relieved the Company of its responsibility for the pension obligation related to certain retired employees and transferred the obligation and payment responsibility to Prudential for retirement benefits owed to approximately 1,500 retirees and other beneficiaries. The annuity contract covered retirees who commenced receiving benefits on or before November 1, 2021. The monthly retirement benefit payment amounts currently received by retirees and their beneficiaries did not change as a result of this transaction. Plan participants not included in the transaction remain in the plans and responsibility for payment of the retirement benefits remains with the Company. Page 12 Table of Contents Nordson Corporation The components of net periodic pension cost for the three and nine months ended July 31, 2022 and 2021 were: U.S. International Three Months Ended 2022 2021 2022 2021 Service cost $ 3,423 $ 5,511 $ 423 $ 462 Interest cost 3,322 3,414 272 201 Expected return on plan assets ( 5,692 ) ( 7,124 ) ( 347 ) ( 395 ) Amortization of prior service cost (credit) 12 ( 7 ) ( 13 ) ( 81 ) Amortization of net actuarial loss 1,197 3,643 558 572 Settlement loss — 303 — — Total benefit cost $ 2,262 $ 5,740 $ 893 $ 759 U.S. International Nine Months Ended 2022 2021 2022 2021 Service cost $ 13,338 $ 16,999 $ 1,343 $ 1,642 Interest cost 11,146 10,248 861 671 Expected return on plan assets ( 22,082 ) ( 21,212 ) ( 1,109 ) ( 1,217 ) Amortization of prior service cost (credit) 36 ( 48 ) ( 43 ) ( 246 ) Amortization of net actuarial loss 6,282 11,259 1,758 2,373 Settlement loss 41,221 2,321 — — Total benefit cost $ 49,941 $ 19,567 $ 2,810 $ 3,223 The components of other postretirement benefit costs for the three and nine months ended July 31, 2022 and 2021 were: U.S. International Three Months Ended 2022 2021 2022 2021 Service cost $ 172 $ 191 $ 3 $ 4 Interest cost 481 444 3 3 Amortization of net actuarial (gain) loss 244 334 ( 12 ) ( 11 ) Total benefit cost (income) $ 897 $ 969 $ ( 6 ) $ ( 4 ) U.S. International Nine Months Ended 2022 2021 2022 2021 Service cost $ 515 $ 584 $ 9 $ 11 Interest cost 1,443 1,354 10 9 Amortization of net actuarial (gain) loss 733 1,019 ( 37 ) ( 30 ) Total benefit cost (income) $ 2,691 $ 2,957 $ ( 18 ) $ ( 10 ) The components of net periodic pension cost other than service cost are included in Other – net in our Condensed Consolidated Statements of Income. Page 13 Table of Contents Nordson Corporation Income taxes We record our interim provision for income taxes based on our estimated annual effective tax rate, as well as certain items discrete to the current period. The effective tax rate for the three months ended July 31, 2022 and 2021 was 21.4 % and 21.2 %, respectively. The effective tax rate for the nine months ended July 31, 2022 and 2021 was 21.2 % and 20.8 %, respectively. Due to our share-based payment transactions, our income tax provision included a discrete tax benefit of $ 115 and $ 1,539 for the three and nine months ended July 31, 2022, respectively, compared to $ 570 and $ 3,165 for the three and nine months ended July 31, 2021, respectively. Accumulated other comprehensive loss The components of accumulated other comprehensive income (loss), including adjustments for items that are reclassified from accumulated other comprehensive loss to net income, are shown below. Cumulative translation adjustments Pension and postretirement benefit plan adjustments Accumulated other comprehensive income (loss) Balance at October 31, 2021 $ ( 33,389 ) $ ( 142,446 ) $ ( 175,835 ) Amortization of prior service costs and net actuarial losses, net of tax of ($ 2,448 ) — 7,686 7,686 Foreign currency translation adjustments ( 81,479 ) — ( 81,479 ) Pension settlement, net of tax of ($ 9,573 ) — 32,047 32,047 Balance at July 31, 2022 $ ( 114,868 ) $ ( 102,713 ) $ ( 217,581 ) Stock-based compensation During the 2021 Annual Meeting of Shareholders, our shareholders approved the Nordson Corporation 2021 Stock Incentive and Award Plan (the 2021 Plan) as the successor to the Amended and Restated 2012 Stock Incentive and Award Plan (the 2012 Plan). The 2021 Plan provides for the granting of stock options, stock appreciation rights, restricted shares, restricted share units, performance shares, cash awards and other stock or performance-based incentives. A maximum of 900 common shares were authorized for grant under the 2021 Plan plus the number of shares that remained available to be granted under the 2012 Plan. As of July 31, 2022, a total of 2,125 common shares were available to be granted under the 2021 Plan. Stock Options Nonqualified or incentive stock options may be granted to our employees and directors. Generally, options granted to employees may be exercised beginning one year from the date of grant at a rate not exceeding 25 % per year and expire 10 years from the date of grant. Vesting accelerates upon a qualified termination in connection with a change in control. In the event of termination of employment due to early retirement or normal retirement at age 65 , options granted within 12 months prior to termination are forfeited, and vesting continues post retirement for all other unvested options granted. In the event of disability or death, all unvested stock options granted within 12 months prior to termination fully vest. Termination for any other reason results in forfeiture of unvested options and vested options in certain circumstances. The amortized cost of options is accelerated if the retirement eligibility date occurs before the normal vesting date. Option exercises are satisfied through the issuance of treasury shares on a first-in, first-out basis. We recognized compensation expense related to stock options of $ 1,580 and $ 5,743 for the three and nine months ended July 31, 2022, respectively, compared to $ 1,714 and $ 5,515 for the three and nine months ended July 31, 2021, respectively. Page 14 Table of Contents Nordson Corporation The following table summarizes activity related to stock options for the nine months ended July 31, 2022: Number of Options Weighted- Average Exercise Price Per Share Aggregate Intrinsic Value Weighted Average Remaining Term Outstanding at October 31, 2021 1,235 $ 130.93 Granted 83 267.51 Exercised ( 78 ) 115.65 Forfeited or expired ( 17 ) 200.31 Outstanding at July 31, 2022 1,223 $ 140.23 $ 113,724 5.5 years Expected to vest 372 $ 185.00 $ 19,836 7.3 years Exercisable at July 31, 2022 849 $ 120.50 $ 93,792 4.7 years As of July 31, 2022, there was $ 8,148 of total unrecognized compensation cost related to unvested stock options. That cost is expected to be amortized over a weighted average period of approximately 1.0 year. The fair value of each option grant was estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions: Nine Months Ended July 31, 2022 July 31, 2021 Expected volatility 30.6 % - 30.8 % 30.8 % - 32.6 % Expected dividend yield 0.76 % - 0.76 % 0.83 % - 0.85 % Risk-free interest rate 1.36 % - 1.47 % 0.43 % - 0.77 % Expected life of the option (in years) 5.3 - 6.2 5.3 - 6.2 The weighted-average expected volatility used to value the 2022 and 2021 options was 30.6 % and 31.0 %, respectively. Historical information was the primary basis for the selection of the expected volatility, expected dividend yield and the expected lives of the options. The risk-free interest rate was selected based upon yields of U.S. Treasury issues with a term equal to the expected life of the option being valued. The weighted average grant date fair value of stock options granted during the nine months ended July 31, 2022 and 2021 was $ 79.03 and $ 56.02 , respectively. The total intrinsic value of options exercised during the three months ended July 31, 2022 and 2021 was $ 1,052 and $ 4,441 , respectively. The total intrinsic value of options exercised during the nine months ended July 31, 2022 and 2021 was $ 10,418 and $ 21,570 , respectively. Cash received from the exercise of stock options for the nine months ended July 31, 2022 and 2021 was $ 8,845 and $ 24,136 , respectively. Restricted Shares and Restricted Share Units We may grant restricted shares and/or restricted share units to our employees and directors. These shares or units may not be transferred for a designated period of time (generally one to three years ) defined at the date of grant. We may also grant continuation awards in the form of restricted share units with cliff vesting and a performance measure that must be achieved for the restricted share units to vest. For employee recipients, in the event of termination of employment due to early retirement with the consent of the Company, restricted shares and units granted within 12 months prior to termination are forfeited, and other restricted shares and units vest on a pro-rata basis, subject to the consent of the Compensation Committee. In the event of termination of employment due to normal retirement at age 65 , restricted shares and units granted within 12 months prior to termination are forfeited, and, for other restricted shares and units, the restriction period applicable to restricted shares will lapse and the shares will vest and be transferable and all unvested units will become vested in full, subject to the consent of the Compensation Committee. In the event of a recipient's disability or death, all restricted shares and units granted within 12 months prior to termination fully vest. Termination for any other reason prior to the lapse of any restrictions or vesting of units results in forfeiture of the shares or units. For non-employee directors, all restrictions lapse in the event of disability or death of the non-employee director. Termination of service as a director for any other reason within one year of date of grant results in a pro-rata vesting of shares or units. Page 15 Table of Contents Nordson Corporation As shares or units are issued, deferred stock-based compensation equivalent to the fair value on the date of grant is expensed over the vesting period. The following table summarizes activity related to restricted shares during the nine months ended July 31, 2022: Number of Shares Weighted-Average Grant Date Fair Value Restricted shares at October 31, 2021 19 $ 157.36 Vested ( 12 ) 153.64 Restricted shares at July 31, 2022 7 $ 166.68 As of July 31, 2022, there was $ 566 of unrecognized compensation cost related to restricted shares. The cost is expected to be amortized over a weighted average period of 0.4 years. The amount charged to expense related to restricted shares during the three months ended July 31, 2022 and 2021 was $ 243 and $ 346 , respectively, which included common share dividends of $ 4 and $ 5 , respectively. For the nine months ended July 31, 2022 and 2021, the amounts charged to expense related to restricted shares were $ 856 and $ 1,811 , respectively, which included common share dividends of $ 14 and $ 36 , respectively. The following table summarizes activity related to restricted share units during the nine months ended July 31, 2022: Number of Units Weighted-Average Grant Date Fair Value Restricted share units at October 31, 2021 67 $ 202.81 Granted 41 263.53 Forfeited ( 9 ) 223.93 Vested ( 15 ) 201.79 Restricted share units at July 31, 2022 84 $ 230.18 As of July 31, 2022, there was $ 11,061 of remaining expense to be recognized related to outstanding restricted share units, which is expected to be recognized over a weighted average period of 1.0 year. The amount charged to expense related to restricted share units during each of the three months ended July 31, 2022 and 2021 was $ 2,154 and $ 487 , respectively, compared to $ 6,246 and $ 4,771 for the nine months ended July 31, 2022 and 2021, respectively. Performance Share Incentive Awards Executive officers and selected other key employees are eligible to receive common share-based incentive awards. Payouts, in the form of unrestricted common shares, vary based on the degree to which corporate financial performance exceeds predetermined threshold, target and maximum performance goals over three-year performance periods. No payout will occur unless threshold performance is achieved. The amount of compensation expense is based upon current performance projections and the percentage of the requisite service that has been rendered. The calculations are based upon the grant date fair value, which is principally driven by the stock price on the date of grant or a Monte Carlo valuation for awards with market conditions. The per share values were $ 260.60 and $ 273.50 for 2022 and $ 202.05 for 2021. The amount charged to expense related to performance awards for the three months ended July 31, 2022 and 2021 was $ 3,555 and $ 1,456 , respectively, compared to charges of $ 10,296 and $ 5,751 for the nine months ended July 31, 2022 and 2021, respectively. The cumulative amount recorded in shareholders' equity at July 31, 2022 and 2021 was $ 17,312 and $ 5,588 , respectively. As of July 31, 2022, there was $ 11,675 of unrecognized compensation cost related to performance share incentive awards. Deferred Compensation Our executive officers and other highly compensated employees may elect to defer up to 100 % of their base pay and cash incentive compensation, and for executive officers, up to 90 % of their share-based performance incentive payout each year. Additional share units are credited for quarterly dividends paid on our common shares. Expense related to dividends paid under this plan for the three months ended July 31, 2022 and 2021 was $ 17 and $ 19 , respectively, compared to $ 53 and $ 77 for the nine months ended July 31, 2022 and 2021, respectively. Deferred Directors’ Compensation Non-employee directors may defer all or part of their cash and equity-based compensation until retirement. Cash compensation may be deferred as cash or as share equivalent units. Deferred cash amounts are recorded as liabilities, and share equivalent units are recorded as equity. Additional share equivalent units are earned when common share dividends are declared. Page 16 Table of Contents Nordson Corporation The following table summarizes activity related to director deferred compensation share equivalent units during the nine months ended July 31, 2022: Number of Shares Weighted-Average Grant Date Fair Value Outstanding at October 31, 2021 106 $ 68.11 Dividend equivalents 1 228.45 Distributions ( 16 ) 72.83 Outstanding at July 31, 2022 91 $ 69.00 The amount charged to expense related to director deferred compensation for the three months ended July 31, 2022 and 2021 was $ 73 and $ 63 , respectively, compared to $ 224 and $ 188 for the nine months ended July 31, 2022 and 2021, respectively. Warranties We offer warranties to our customers depending on the specific product and terms of the customer purchase agreement. A typical warranty program requires that we repair or replace defective products within a specified time period (generally one year ) from the date of delivery or first use. We record an estimate for future warranty-related costs based on actual historical return rates. Based on analysis of return rates and other factors, the adequacy of our warranty provisions are adjusted as necessary. The liability for warranty costs is included in Accrued liabilities in the Consolidated Balance Sheets. Following is a reconciliation of the product warranty liability for the nine months ended July 31, 2022 and 2021: July 31, 2022 July 31, 2021 Beginning balance at October 31 $ 11,113 $ 10,550 Accruals for warranties 12,496 11,103 Warranty payments ( 10,704 ) ( 10,889 ) Currency effect ( 676 ) 153 Ending balance $ 12,229 $ 10,917 Operating segments We conduct business across two primary operating segments: Industrial Precision Solutions (IPS) and Advanced Technology Solutions (ATS). The composition of segments and measure of segment profitability is consistent with that used by our chief operating decision maker. The primary measure used by the chief operating decision maker for purposes of making decisions about allocating resources to the segments and assessing performance is operating profit, which equals sales less cost of sales and certain operating expenses. Items below the operating profit line of the Condensed Consolidated Statements of Income (interest and investment income, interest expense and other income/expense) are excluded from the measure of segment profitability reviewed by our chief operating decision maker and are not presented by operating segment. The accounting policies of the segments are the same as those described in the Significant accounting policies Note. Industrial Precision Solutions: This segment delivers proprietary dispensing and processing technology to diverse end markets. Product lines reduce material consumption, increase line efficiency and enhance product brand and appearance. Components are used for dispensing adhesives, coatings, paint, finishes, sealants and other materials. This segment primarily serves the industrial, consumer durables and non-durables markets. Advanced Technology Solutions: This segment integrates our proprietary product technologies found in progressive stages of a customer’s production processes, such as surface treatment, precisely controlled dispensing of material and post-dispense test and inspection to ensure quality. Related single-use plastic molded syringes, cartridges, tips, fluid connection components, tubing, balloons and catheters are used to dispense or control fluids in production processes or within customers’ end products. This segment predominantly serves customers in the electronics, medical and related high-tech industrial markets. Page 17 Table of Contents Nordson Corporation The following table presents information about our segments: Three Months Ended Industrial Precision Solutions Advanced Technology Solutions Corporate Total July 31, 2022 Net external sales $ 341,215 $ 320,913 $ — $ 662,128 Operating profit (loss) 119,706 86,258 ( 21,046 ) 184,918 July 31, 2021 Net external sales $ 345,449 $ 301,409 $ — $ 646,858 Operating profit (loss) 123,829 80,769 ( 16,322 ) 188,276 Nine Months Ended July 31, 2022 Net external sales $ 981,582 $ 925,115 $ — $ 1,906,697 Operating profit (loss) 324,089 261,043 ( 60,381 ) 524,751 July 31, 2021 Net external sales $ 932,640 $ 830,322 $ — $ 1,762,962 Operating profit (loss) 311,515 204,556 ( 52,379 ) 463,692 We had significant sales in the following geographic regions: Three Months Ended Nine Months Ended July 31, 2022 July 31, 2021 July 31, 2022 July 31, 2021 United States $ 219,067 $ 201,531 $ 628,952 $ 589,771 Americas 60,138 47,717 163,907 128,769 Europe 151,659 162,298 479,900 453,900 Japan 23,080 24,946 74,081 79,913 Asia Pacific 208,184 210,366 559,857 510,609 Total net external sales $ 662,128 $ 646,858 $ 1,906,697 $ 1,762,962 Fair value measurements The inputs to the valuation techniques used to measure fair value are classified into the following categories: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs that are not corroborated by market data. The following tables present the classification of our assets and liabilities measured at fair value on a recurring basis: July 31, 2022 Total Level 1 Level 2 Level 3 Assets: Foreign currency forward contracts (a) $ 4,238 $ — $ 4,238 $ — Total assets at fair value $ 4,238 $ — $ 4,238 $ — Liabilities: Deferred compensation plans (b) $ 10,629 $ — $ 10,629 $ — Foreign currency forward contracts (a) 3,486 — 3,486 — Total liabilities at fair value $ 14,115 $ — $ 14,115 $ — Page 18 Table of Contents Nordson Corporation October 31, 2021 Total Level 1 Level 2 Level 3 Assets: Foreign currency forward contracts (a) $ 2,755 $ — $ 2,755 $ — Total assets at fair value $ 2,755 $ — $ 2,755 $ — Liabilities: Deferred compensation plans (b) $ 9,115 $ — $ 9,115 $ — Foreign currency forward contracts (a) 4,507 — 4,507 — Total liabilities at fair value $ 13,622 $ — $ 13,622 $ — (a) We enter into foreign currency forward contracts to reduce the risk of foreign currency exposures resulting from receivables, payables, intercompany receivables, intercompany payables and loans denominated in foreign currencies. Foreign exchange contracts are valued using market exchange rates. These foreign exchange contracts are not designated as hedges. (b) Executive officers and other highly compensated employees may defer up to 100 % of their salary and annual cash incentive compensation and for executive officers, up to 90 % of their long-term incentive compensation, into various non-qualified deferred compensation plans. Deferrals can be allocated to various market performance measurement funds. Changes in the value of compensation deferred under these plans are recognized each period based on the fair value of the underlying measurement funds. The carrying amounts and fair values of financial instruments, other than cash and cash equivalents, receivables, and accounts payable, are shown in the table below. The carrying values of cash and cash equivalents, receivables and accounts payable approximate fair value due to the short-term nature of these instruments. July 31, 2022 Carrying Amount Fair Value Long-term debt (including current portion) $ 803,426 $ 799,701 We used the following methods and assumptions in estimating the fair value of financial instruments: • Long-term debt is valued by discounting future cash flows at currently available rates for borrowing arrangements with similar terms and conditions, which are considered to be Level 2 inputs under the fair value hierarchy. The carrying amount of long-term debt is shown net of unamortized debt issuance costs. Derivative financial instruments We operate internationally and enter into intercompany transactions denominated in foreign currencies. Consequently, we are subject to market risk arising from exchange rate movements between the dates foreign currency transactions occur and the dates they are settled. We regularly use foreign currency forward contracts to reduce our risks related to most of these transactions. These contracts usually have maturities of 90 days or less and generally require us to exchange foreign currencies for U.S. dollars at maturity, at rates stated in the contracts. These contracts are not designated as hedging instruments under U.S. GAAP. Accordingly, the changes in the fair value of the foreign currency forward contracts are recognized in each accounting period in “Other – net” on the Condensed Consolidated Statements of Income together with the transaction gain or loss from the related balance sheet position. For the three months ended July 31, 2022, we recognized a net gain of $ 15,181 on foreign currency forward contracts and a net loss of $ 14,436 from the change in fair value of balance sheet positions. For the three months ended July 31, 2021, we recognized a net loss of $ 1,714 on foreign currency forward contracts and a net gain of $ 1,202 from the change in fair value of balance sheet positions. For the nine months ended July 31, 2022, we recognized a net gain of $ 2,503 on foreign currency forward contracts and a net loss of $ 394 from the change in fair value of balance sheet positions. For the nine months ended July 31, 2021, we recognized a net loss of $ 505 on foreign currency forward contracts and a net loss of $ 3,544 from the change in fair value of balance sheet positions. The fair values of our foreign currency forward contract assets and liabilities are included in Receivable-net and Accrued liabilities, respectively, in our Consolidated Balance Sheets. Page 19 Table of Contents Nordson Corporation The following table summarizes, by currency, the foreign currency forward contracts outstanding at July 31, 2022 and 2021: Notional Amounts July 31, 2022 contract amounts: Sell Buy Euro $ 88,275 $ 333,285 British pound 36,779 78,942 Japanese yen 16,688 37,163 Australian dollar 278 9,426 Hong Kong dollar — 67,341 Singapore dollar 378 18,025 Others 26,012 98,113 Total $ 168,410 $ 642,295 Notional Amounts July 31, 2021 contract amounts: Sell Buy Euro $ 118,988 $ 337,817 British pound 27,861 86,778 Japanese yen 15,939 43,281 Australian dollar 934 10,462 Hong Kong dollar 283 37,556 Singapore dollar 458 18,448 Others 22,374 93,079 Total $ 186,837 $ 627,421 We are exposed to credit-related losses in the event of nonperformance by counterparties to financial instruments. These financial instruments include cash deposits and foreign currency forward contracts. We periodically monitor the credit ratings of these counterparties in order to minimize our exposure. Our customers represent a wide variety of industries and geographic regions. For the three and nine months ended July 31, 2022 and 2021, there were no significant concentrations of credit risk. Long-term debt A summary of long-term debt is as follows: July 31, 2022 October 31, 2021 Notes payable $ 346 $ 3,545 Revolving credit agreement, due 2024 56,500 — Senior notes, due 2023-2025 55,500 79,000 Senior notes, due 2023-2027 71,429 78,572 Senior notes, due 2023-2030 350,000 350,000 Euro loan, due 2023 270,738 306,358 804,513 817,475 Less current maturities and notes payable 401,728 34,188 Less unamortized debt issuance costs 1,087 1,578 Long-term maturities $ 401,698 $ 781,709 Revolving credit agreement, due 2024 — In April 2019, we entered into a $ 850,000 unsecured multi-currency credit facility with a group of banks, which amended, restated and extended our then existing syndicated revolving credit agreement. This facility has a five-year term and includes a $ 75,000 subfacility for swing-line loans. It expires in April 2024. The weighted-average interest rate at July 31, 2022 was 2.24 %. Senior notes, due 2023-2025 — These unsecured fixed-rate notes entered into in 2012 with a group of insurance companies had a remaining weighted-average life of 1.72 years. The weighted-average interest rate at July 31, 2022 was 3.10 %. Senior notes, due 2023-2027 — These unsecured fixed-rate notes entered into in 2015 with a group of insurance companies had a remaining weighted-average life of 2.69 years. The weighted-average interest rate at July 31, 2022 was 3.10 %. Page 20 Table of Contents Nordson Corporation Senior notes, due 2023-2030 — These unsecured fixed-rate notes entered into in 2018 with a group of insurance companies had a remaining weighted-average life of 3.30 years. The weighted-average interest rate at July 31, 2022 was 3.90 %. Euro loan, due 2023 — In March 2020, we amended, restated and extended the term of our existing euro term loan facility with Bank of America Merrill Lynch International Limited. The interest rate is variable based on the EURIBOR rate. The term loan agreement provides for the following term loans due in two tranches: € 115,000 is due in March 2023 and an additional € 150,000 that was drawn down in March 2020 is due in March 2023. The weighted average interest rate at July 31, 2022 was 0.61 %. We were in compliance with all covenants at July 31, 2022 and the amount we could borrow would not have been limited by any debt covenants. Contingencies We are involved in pending or potential litigation regarding environmental, product liability, patent, contract, employee and other matters arising from the normal course of business. Including the litigation and environmental matters discussed below, after consultation with legal counsel, we do not believe that losses in excess of the amounts we have accrued would have a material adverse effect on our financial condition, quarterly or annual operating results or cash flows. Environmental We have voluntarily agreed with the City of New Richmond, Wisconsin and other potentially responsible parties to share costs associated with the remediation of the City of New Richmond municipal landfill (the Site) and the construction of a potable water delivery system serving the impacted area down gradient of the Site. As of July 31, 2022 and October 31, 2021, our accrual for the ongoing operation, maintenance and monitoring obligation at the Site was $ 313 and $ 319 , respectively. The liability for environmental remediation represents management’s best estimate of the probable and reasonably estimable undiscounted costs related to known remediation obligations. The accuracy of our estimate of environmental liability is affected by several uncertainties such as additional requirements that may be identified in connection with remedial activities, the complexity and evolution of environmental laws and regulations, and the identification of presently unknown remediation requirements. Consequently, our liability could be greater than our current estimate. However, we do not expect that the costs associated with remediation will have a material adverse effect on our financial condition or results of operations. Subsequent Events Segment reorganization On July 8, 2022, Nordson Corporation announced a reorganization into three financial reporting segments effective August 1, 2022, the beginning of the Company’s fiscal fourth quarter. The Company believes this new structure enhances its ability to deliver the Ascend strategy goal of top-tier growth with leading margins and returns. Medical and Fluid Solutions (MFS) The new MFS segment will include the Company’s fluid management solutions for medical, high-tech industrial and other diverse end markets. Related plastic tubing, balloons, catheters, syringes, cartridges, tips, and fluid connection components are used to dispense or control fluids within customers’ medical devices or products, as well as production processes. This remains one of the Company’s growth engines both organically and acquisitively. In fiscal 2021, this segment had revenues of approximately $ 0.6 billion. Advanced Technology Solutions (ATS) The ATS segment now will focus on products serving electronics end markets. ATS products integrate our proprietary technologies found in progressive stages of an electronics customer’s production processes, such as surface treatment, precisely controlled dispensing of material and test and inspection to ensure quality and reliability. Applications include, but are not limited to, semiconductors, printed circuit boards, electronic components, and automotive electronics. In fiscal 2021, this segment had revenues of approximately $ 0.5 billion. Industrial Precision Solutions (IPS) There is no change to the IPS segment, which is focused on delivering proprietary dispensing and processing technology, both standard and highly customized equipment, to diverse end markets. Product lines for IPS commonly reduce material consumption, increase line efficiency through precision dispense and measurement and control, and enhance product brand and appearance. Components are used for dispensing adhesives, coatings, paint, finishes, sealants and other materials. This business primarily serves the industrial, consumer durables and non-durables markets. In fiscal 2021, IPS had revenues of approximately $ 1.2 billion. Page 21 Table of Contents Nordson Corporation CyberOptics Corporation Pending Acquisition On August 7, 2022, the Company entered into an Agreement and Plan of Merger (Merger Agreement) with Meta Merger Company, a direct and wholly owned subsidiary of the Company (Merger Sub), and CyberOptics Corporation (CyberOptics). CyberOptics is a leading global developer and manufacturer of high-precision 3D optical sensing technology solutions that generates approximately $ 100 million in annual revenue. The Merger Agreement provides that, upon the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into CyberOptics, with CyberOptics surviving the merger as a wholly owned subsidiary of the Company. At the effective time of the merger, each issued and outstanding share of common stock of CyberOptics, subject to certain exceptions, will be automatically converted into the right to receive $ 54.00 in cash, without interest, or approximately $ 380 million, net of cash acquired. The Company intends to fund the merger consideration with cash on hand and by utilizing its revolving credit agreement. The consummation of the merger is subject to certain closing conditions, including the adoption and approval of the merger by the majority of the issued and outstanding common shares of CyberOptics, the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and other customary conditions specified in the Merger Agreement. Page 22 Table of Contents Nordson Corporation