What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-02-23 compared with 2022-08-26 · 159 added, 261 removed, 457 unchanged (48% of the section changed)

1 unchanged sentence

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

Three Months Ended

(In thousands, except for per share data) January 31, 2023 January 31, 2022

Sales $ 610,477 $ 609,166

20 unchanged sentences

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

Three Months Ended

(In thousands) January 31, 2023 January 31, 2022

Net income $ 104,261 $ 120,409

1 unchanged sentence

Foreign currency translation adjustments 76,821 ( 13,358 )

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

Pension and other postretirement plan adjustments, net of tax ( 576 ) 3,060

Total other comprehensive income (loss) 76,245 ( 10,298 )

5 unchanged sentences

Current assets:

July 31, 2022 October 31, 2021

January 31, 2023 October 31, 2022

Cash and cash equivalents $ 121,994 $ 163,457

3 unchanged sentences

Total current assets 1,178,416 1,132,971

Property, plant and equipment - net 359,231 355,565

Operating right of use lease assets 100,509 110,851

Goodwill 2,107,113 1,804,693

Intangible assets - net 377,835 329,402

Property, plant and equipment - net 361,447 353,442

Operating right of use lease assets 111,375 102,279

Deferred income taxes 11,994 10,447

3 unchanged sentences

Current liabilities:

Accounts payable $ 100,397 $ 91,689

Income taxes payable 21,473 16,636

Current maturities of long-term debt and notes payable $ 420,947 $ 392,537

Accrued liabilities 156,864 206,828

Accounts payable 90,602 99,276

Customer advanced payments 97,683 92,584

Current maturities of long-term debt and notes payable 401,728 34,188

Income taxes payable 37,161 22,333

Operating lease liability - current 17,319 15,738

3 unchanged sentences

Operating lease liability - noncurrent 97,179 90,768

Finance lease liability - noncurrent 13,466 14,944

Deferred income taxes 121,152 110,781

Pension obligations 75,892 80,584

Postretirement obligations 56,953 56,804

Pension obligations 45,114 40,551

Finance lease liability - noncurrent 11,070 11,184

Other long-term liabilities 38,643 36,389

10 unchanged sentences

Consolidated Statements of Shareholders’ Equity

Three Months Ended January 31, 2023

(In thousands, except for share and per share data) Common

8 unchanged sentences

Stock-based compensation — 7,071 — — — 7,071

Purchase of treasury shares ( 147,784 shares)

— — — — ( 35,002 ) ( 35,002 )

Purchase of treasury shares — — — — ( 6,875 ) ( 6,875 )

Dividends declared ($ 0.65 per share)

4 unchanged sentences

Defined benefit pension and post-retirement

plans adjustment — — — 3,060 — 3,060

plan adjustments — — — ( 576 ) — ( 576 )

January 31, 2023 $ 12,253 $ 640,800 $ 3,719,278 $ ( 131,537 ) $ ( 1,794,109 ) $ 2,446,685

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

Nordson Corporation

Consolidated Statements of Shareholders’ Equity

Three Months Ended January 31, 2022

(In thousands, except for share and per share data) Common

8 unchanged sentences

Stock-based compensation — 8,392 — — — 8,392

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 )

Purchase of treasury shares — — — — ( 35,002 ) ( 35,002 )

Dividends declared ($ 0.51 per share)

4 unchanged sentences

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

plan adjustments — — — 3,060 — 3,060

January 31, 2022 $ 12,253 $ 598,772 $ 3,355,712 $ ( 186,133 ) $ ( 1,561,976 ) $ 2,218,628

See accompanying notes.

1 unchanged sentence

Condensed Consolidated Statements of Cash Flows

(In thousands) Nine Months Ended

(In thousands) Three Months Ended

Cash flows from operating activities:

July 31, 2022 July 31, 2021

January 31, 2023 January 31, 2022

Net income $ 104,261 $ 120,409

11 unchanged sentences

Proceeds from sale of property, plant and equipment 9 7

Other — 4,994

Acquisition of business, net of cash acquired ( 377,843 ) ( 171,613 )

7 unchanged sentences

Dividends paid ( 37,199 ) ( 29,724 )

Net cash used in financing activities ( 294,418 ) ( 388,126 )

Net cash provided by (used in) financing activities 215,693 ( 61,902 )

Effect of exchange rate changes on cash 6,643 ( 1,521 )

5 unchanged sentences

Notes to Condensed Consolidated Financial Statements

July 31, 2022

January 31, 2023

NOTE REGARDING AMOUNTS AND FISCAL YEAR REFERENCES

8 unchanged sentences

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.

Operating results for the three months ended January 31, 2023 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, 2022.

11 unchanged sentences

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.

Revenues deferred as of January 31, 2023 and 2022 were not material.

However, for certain contracts related to the sale of customer-specific products within our Medical and Fluid 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.

3 unchanged sentences

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 recognized over time represented approximately less than ten percent of our overall consolidated revenues at January 31, 2023 and October 31, 2022.

Revenue is measured as the amount of consideration we expect to receive in exchange for transferring products or services.

9 unchanged sentences

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.

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, these items 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.

4 unchanged sentences

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.

Options excluded from the calculation of diluted earnings per share for the three months ended January 31, 2023 and 2022 were 144 and 83 , respectively.

Recently issued accounting standards

2 unchanged sentences

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.

Operating results since the respective dates of acquisitions are included in the Condensed Consolidated Statements of Income.

2023 Acquisition

On November 3, 2022 we acquired 100 % of CyberOptics Corporation (CyberOptics).

CyberOptics is a leading global developer and manufacturer of high-precision 3D optical sensing technology solutions.

The CyberOptics acquisition expanded our test and inspection platform, providing differentiated technology that expands our product offering in the semiconductor and electronics industries and is reported in our Advanced Technology Solutions segment.

We acquired CyberOptics for an aggregate purchase price of $ 377,843 , net of cash of approximately $ 40,890 , funded using borrowing under our revolving credit facility and cash on hand.

Based on the fair value of the assets acquired and the liabilities assumed, goodwill of $ 279,630 and identifiable intangible assets of $ 58,600 were recorded.

The identifiable intangible assets consist primarily of $ 15,200 of tradenames (amortized over fifteen years ), $ 14,600 of technology (amortized over seven years ), and $ 28,800 of customer contracts (amortized over twelve years ).

T he results of CyberOptics are not material to our Consolidated Financial Statements.

As of January 31, 2023, t he purchase price allocation remains preliminary as we complete our assessment of intangibles and income taxes.

The assets and liabilities acquired were as follows:

November 3, 2022

Cash $ 40,890

Receivables - net 21,364

Inventories - net 35,300

Goodwill 279,630

Intangibles 58,600

Other assets 14,046

Total Assets $ 449,830

Accounts payable $ 8,109

Deferred income taxes 14,294

Other liabilities 8,694

Total Liabilities $ 31,097

Nordson Corporation

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.

2 unchanged sentences

Based on the fair value of the assets acquired and the liabilities assumed, goodwill of $ 131,129 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 ).

The identifiable intangible assets consist primarily of $ 10,800 of tradenames (amortized over thirteen 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 $ 72,018 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.

Our allowance for credit losses is principally determined based on aging of receivables.

5 unchanged sentences

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.

Accounts receivable are net of an allowance for credit losses of $ 9,148 and $ 8,218 on January 31, 2023 and October 31, 2022, respectively.

The provision for losses on receivables was $ 348 and $ 471 for the three months ended January 31, 2023 and 2022, 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.

Nordson Corporation

Components of inventories were as follows:

July 31, 2022 October 31, 2021

January 31, 2023 October 31, 2022

Finished goods $ 256,243 $ 218,491

4 unchanged sentences

$ 447,727 $ 383,398

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.

See Acquisitions Note for inventory increase attributable to acquisition of CyberOptics.

Property, Plant and Equipment

Components of property, plant and equipment were as follows:

July 31, 2022 October 31, 2021

January 31, 2023 October 31, 2022

Land $ 9,780 $ 9,278

8 unchanged sentences

$ 361,447 $ 353,442

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.

Depreciation expense was $ 12,562 and $ 12,305 for the three months ended January 31, 2023 and 2022, respectively.

Nordson Corporation

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:

Solutions Advanced

Changes in the carrying amount of goodwill for th e three months ended January 31, 2023 by operating segment were as follows:

Solutions Medical Fluid Systems Advanced

Solutions Total

2 unchanged sentences

Currency effect 15,734 3,751 3,305 22,790

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.

Balance at January 31, 2023 $ 535,970 $ 1,175,820 $ 395,323 $ 2,107,113

The increase in goodwill for the three months ended January 31, 2023 was due to the acquisition of CyberOptics.

See Acquisitions Note for additional details.

Nordson Corporation

Information regarding our intangible assets subject to amortization was as follows:

July 31, 2022

January 31, 2023

Amount Accumulated

15 unchanged sentences

Total $ 731,065 $ 401,663 $ 329,402

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.

Amortization expense for the three months ended January 31, 2023 and 2022 was $ 13,872 and $ 13,085 , respectively.

See Acquisitions Note for details regarding intangibles recorded due to the acquisition of CyberOptics.

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.

Nordson Corporation

The components of net periodic pension cost for the three and nine months ended July 31, 2022 and 2021 were:

The components of net periodic pension and other postretirement cost for the three months ended January 31, 2023 and 2022 were:

International

5 unchanged sentences

Amortization of net actuarial loss — 2,766 20 607

Settlement loss — 303 — —

Total benefit cost $ 390 $ 3,670 $ 508 $ 983

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:

Nordson Corporation

The components of other postretirement benefit costs for the three months ended January 31, 2023 and 2022 were:

International

4 unchanged sentences

Total benefit cost (income) $ 865 $ 946 $ ( 12 ) $ ( 6 )

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.

Nordson Corporation

The components of net periodic pension and other postretirement cost other than service cost are included in Other – net in our Condensed Consolidated Statements of Income.

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.

The effective tax rate for the three months ended January 31, 2023 and 2022 was 20.5 % and 20.8 %, respectively.

Due to our share-based payment transactions, our income tax provision included a discrete tax benefit of $ 1,166 and $ 1,115 , for the three months ended January 31, 2023 and 2022, respectively.

Accumulated other comprehensive loss

6 unchanged sentences

Balance at October 31, 2022 $ ( 160,046 ) $ ( 47,736 ) $ ( 207,782 )

Amortization of prior service costs and net

actuarial losses, net of tax of ($ 2,448 )

Pension and other postretirement plan adjustments, net of tax of ($ 195 )

— ( 576 ) ( 576 )

Foreign currency translation adjustments 76,821 — 76,821

Pension settlement, net of tax of ($ 9,573 )

— 32,047 32,047

Balance at July 31, 2022 $ ( 114,868 ) $ ( 102,713 ) $ ( 217,581 )

Balance at January 31, 2023 $ ( 83,225 ) $ ( 48,312 ) $ ( 131,537 )

Stock-based compensation

1 unchanged sentence

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.

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 and additional shares registered related to the acquisition of CyberOptics.

As of January 31, 2023, a total of 2,005 common shares were available to be granted under the 2021 Plan.

Stock Options

7 unchanged sentences

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.

We recognized compensation expense related to stock options of $ 1,663 and $ 1,772 for the three months ended January 31, 2023 and 2022, respectively.

Nordson Corporation

The following table summarizes activity related to stock options for the nine months ended July 31, 2022:

The following table summarizes activity related to stock options for the three months ended January 31, 2023:

Options Weighted-

6 unchanged sentences

Forfeited or expired ( 2 ) 132.92

Outstanding at July 31, 2022 1,223 $ 140.23 $ 113,724 5.5 years

Outstanding at January 31, 2023 1,190 $ 148.33 $ 114,851 5.4 years

Expected to vest 257 $ 213.45 $ 9,021 7.9 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.

Exercisable at January 31, 2023 930 $ 130.05 $ 105,762 4.7 years

As of January 31, 2023, there was $ 10,669 of total unrecognized compensation cost related to unvested stock options.

That cost is expected to be amortized over a weighted average period of approximately 1.9 years.

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

Three Months Ended

January 31, 2023 January 31, 2022

Expected volatility 30.4 % - 31.8 % 30.6 % - 30.8 %

6 unchanged sentences

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.

The weighted average grant date fair value of stock options granted during the three months ended January 31, 2023 and 2022 was $ 78.12 and $ 79.03 , respectively.

The total intrinsic value of options exercised during the three months ended January 31, 2023 and 2022 was $ 8,350 and $ 6,961 , respectively.

Cash received from the exercise of stock options for the three months ended January 31, 2023 and 2022 was $ 8,807 and $ 5,721 , respectively.

Restricted Shares and Restricted Share Units

8 unchanged sentences

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.

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:

Nordson Corporation

The following table summarizes activity related to restricted shares during the three months ended January 31, 2023:

Number of Shares Weighted-Average

1 unchanged sentence

Vested ( 3 ) 165.21

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.

Restricted shares at January 31, 2023 3 $ 170.56

As of January 31, 2023, there was $ 173 of unrecognized compensation cost related to restricted shares.

The cost is expected to be amortized over a weighted average period of 0.5 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:

The amount charged to expense related to restricted shares during the three months ended January 31, 2023 and 2022 was $ 160 and $ 314 , respectively, which included common share dividends of $ 2 and $ 5 , respectively.

The following table summarizes activity related to restricted share units during the three months ended January 31, 2023:

Number of Units Weighted-Average

3 unchanged sentences

Vested ( 42 ) 218.85

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.

Restricted share units at January 31, 2023 73 $ 233.00

As of January 31, 2023, there was $ 14,661 of remaining expense to be recognized related to outstanding restricted share units, which is expected to be recognized over a weighted average period of 2.1 years.

The amount charged to expense related to restricted share units during each of the three months ended January 31, 2023 and 2022 was $ 2,258 and $ 2,273 .

Performance Share Incentive Awards

4 unchanged sentences

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.

The per share values were $ 231.34 in 2023, and $ 260.60 , $ 273.50 , and $ 221.94 for 2022.

The amount charged to expense related to performance awards for the three months ended January 31, 2023 and 2022 was $ 2,062 and $ 3,944 , respectively.

The cumulative amount recorded in shareholders' equity at January 31, 2023 and 2022 was $ 10,603 and $ 10,959 , respectively.

As of January 31, 2023, there was $ 12,980 of unrecognized compensation cost related to performance share incentive awards.

Deferred Compensation

1 unchanged sentence

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.

Expense related to dividends paid under this plan for the three months ended January 31, 2023 and 2022 was $ 18 and $ 18 , respectively.

Deferred Directors' Compensation

4 unchanged sentences

Nordson Corporation

The following table summarizes activity related to director deferred compensation share equivalent units during the nine months ended July 31, 2022:

The following table summarizes activity related to director deferred compensation share equivalent units during the three months ended January 31, 2023:

Number of Shares Weighted-Average

1 unchanged sentence

Outstanding at October 31, 2022 90 $ 77.70

Dividend equivalents 1 228.45

Distributions ( 4 ) 50.88

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.

Outstanding at January 31, 2023 86 $ 79.73

The amount charged to expense related to director deferred compensation for the three months ended January 31, 2023 and 2022 was $ 80 and $ 76 , respectively .

We offer warranties to our customers depending on the specific product and terms of the customer purchase agreement.

3 unchanged sentences

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

Following is a reconciliation of the product warranty liability for the three months ended January 31, 2023 and 2022:

January 31, 2023 January 31, 2022

Beginning balance at October 31 $ 11,723 $ 11,113

4 unchanged sentences

Operating segments

We conduct business across two primary operating segments:

Industrial Precision Solutions (IPS) and Advanced Technology Solutions (ATS).

We conduct business in three p rimary operating segments:

Industrial Precision Solutions, Medical and Fluid Solutions, and Advanced Technology Solutions.

The composition of segments and measure of segment profitability is consistent with that used by our chief operating decision maker.

3 unchanged sentences

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.

This segment focuses on delivering proprietary dispensing and processing technology, both standard and highly customized equipment, to diverse end markets.

Product lines 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 segment primarily serves the industrial, consumer durables and non-durables markets.

Medical and Fluid Solutions:

This segment includes 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.

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.

This segment focuses on products serving electronics end markets.

Advanced Technology Solutions products integrate our proprietary product 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.

Nordson Corporation

1 unchanged sentence

Three Months Ended Industrial

Solutions Advanced

Solutions Medical and Fluid Solutions Advanced

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

January 31, 2023

Net external sales $ 311,546 $ 154,287 $ 144,644 $ — $ 610,477

Operating profit (loss) 102,319 39,384 16,963 ( 14,447 ) 144,219

July 31, 2021

January 31, 2022

Net external sales $ 323,933 $ 158,784 $ 126,449 $ — $ 609,166

1 unchanged sentence

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

Three Months Ended

January 31, 2023 January 31, 2022

Americas $ 264,878 $ 239,901

Europe 162,939 155,985

Japan 23,080 24,946 74,081 79,913

Asia Pacific 182,660 213,280

6 unchanged sentences

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

January 31, 2023 Total Level 1 Level 2 Level 3

Foreign currency forward contracts (a)

6 unchanged sentences

Total liabilities at fair value $ 14,519 $ — $ 14,519 $ —

Nordson Corporation

October 31, 2022 Total Level 1 Level 2 Level 3

10 unchanged sentences

These foreign exchange contracts are not designated as hedges.

Nordson Corporation

(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.

3 unchanged sentences

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

Amount Fair Value

January 31, 2023

Carrying Amount Fair Value

Long-term debt (including current portion) $ 1,016,113 $ 1,003,337

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.

The carrying amount of long-term debt is shown net of unamortized debt issuance costs as disclosed in the Long-term Debt Note.

Derivative financial instruments

6 unchanged sentences

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.

For the three months ended January 31, 2023, we recognized a net gain of $ 16,139 on foreign currency forward contracts and a net loss of $ 20,710 from the change in fair value of balance sheet positions.

For the three months ended January 31, 2022, we recognized a net loss of $ 3,598 on foreign currency forward contracts and a net gain of $ 3,962 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.

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:

The following table summarizes, by currency, the foreign currency forward contracts outstanding at January 31, 2023 and 2022:

January 31, 2023 contract amounts:

Notional Sell Amounts Notional Buy Amounts

Euro $ 93,142 $ 398,560

British pound 27,965 112,945

Mexican Peso 11,658 31,315

Japanese yen 11,644 35,772

Australian dollar 278 9,426

Hong Kong dollar 4,180 148,653

Australian dollar 375 8,821

Singapore dollar 245 18,862

Taiwan Dollar — 35,047

Others 3,395 65,175

Total $ 152,604 $ 855,150

Notional Amounts

July 31, 2021 contract amounts:

January 31, 2022 contract amounts:

Notional Sell Amounts Notional Buy Amounts

Euro $ 102,132 $ 338,128

1 unchanged sentence

Japanese yen 12,315 40,384

Singapore dollar 1,079 18,214

Australian dollar 325 10,026

Hong Kong dollar — 49,595

Singapore dollar 458 18,448

Others 15,792 87,704

Total $ 166,300 $ 614,920

Nordson Corporation

We are exposed to credit-related losses in the event of nonperformance by counterparties to financial instruments.

2 unchanged sentences

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.

For the three months ended January 31, 2023 and 2022, 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

January 31, 2023 October 31, 2022

Revolving credit agreement, due 2024 $ 250,000 $ —

3 unchanged sentences

Euro loan, due 2023 287,851 261,893

Notes payable and other 2,453 —

1,017,233 738,822

5 unchanged sentences

It expires in April 2024.

The weighted-average interest rate at July 31, 2022 was 2.24 %.

The weighted-average interest rate at January 31, 2023 was 5.07 %.

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 1.21 years.

The weighted-average interest rate at July 31, 2022 was 3.10 %.

The weighted-average interest rate at January 31, 2023 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 2.19 years.

The weighted-average interest rate at July 31, 2022 was 3.10 %.

Nordson Corporation

The weighted-average interest rate at January 31, 2023 was 3.10 %.

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 2.79 years.

The weighted-average interest rate at July 31, 2022 was 3.90 %.

The weighted-average interest rate at January 31, 2023 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.

2 unchanged sentences

€ 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.

The weighted average interest rate at January 31, 2023 was 2.12 %.

Term loan, due 2024 — In January 2023, we entered into a $ 200,000 unsecured term loan facility.

This facility has a 1.25 year term and expires in April 2024.

At January 31, 2023, we had no balance outstanding under this facility.

We were in compliance with all covenants at January 31, 2023 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.

Including the 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.

As of January 31, 2023 and October 31, 2022, our accrual for the ongoing operation, maintenance and monitoring obligation at th e Site was $ 266 a nd $ 266 , 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.

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

Nordson Corporation

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.

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.

Nordson Corporation

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements