What changed in this filing

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Item 1. Business

2023-12-20 compared with 2022-12-19 · 60 added, 42 removed, 161 unchanged (39% of the section changed)

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These products are supported with extensive application expertise and direct global sales and service.

We serve a wide variety of consumer non-durable, consumer durable and technology end markets including packaging, electronics, medical, appliances, energy, transportation, building and construction, and general product assembly and finishing.

We serve a wide variety of consumer non-durable, consumer durable and technology end markets including packaging, electronics, medical, appliances, energy, transportation, precision agriculture, building and construction, and general product assembly and finishing.

Our strategy for long-term growth is based on solving customers’ needs globally.

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We have 7,900 employees worldwide.

Our principal manufacturing facilities are located in the United States, the People’s Republic of China, Germany, Ireland, Israel, Mexico, the Netherlands and the United Kingdom.

CyberOptics Acquisition

On November 3, 2022, the Company completed the acquisition of CyberOptics Corporation (“CyberOptics”) pursuant to the terms of the Agreement and Plan of Merger, dated as of August 7, 2022, by and among the Company, Meta Merger Company and 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 will be reported in our Advanced Technology Solutions segment.

The all-cash transaction of approximately $380,000, net of cash acquired, was funded using our revolving credit facility and is not expected to have a material impact on our Consolidated Financial Statements.

Our principal manufacturing facilities are located in the United States, the People’s Republic of China, Germany, Ireland, Israel, Italy, Mexico, the Netherlands and the United Kingdom.

ARAG Acquisition

On August 24, 2023, the Company completed the acquisition of the ARAG Group and its subsidiaries ("ARAG Group" or "ARAG") pursuant to the terms of the Sale and Purchase Agreement, dated as of June 25, 2023, by and among the Company, its Italian subsidiary, Capvis Equity V LP ("Capvis"), DRIP Co-Investment ("DRIP"), and certain individuals (together with Capvis and DRIP, collectively, the "Sellers").

ARAG is a global market and innovation leader in the development, production and supply of precision control systems and smart fluid components for agricultural spraying.

ARAG operates as a division of our Industrial Precision Solutions segment.

In anticipation of the acquisition, the Company entered into a €760,000 senior unsecured term loan facility with a group of banks in August 2023 (the “364-Day Term Loan Facility”).

The all-cash ARAG acquisition of approximately €957,000, net of the repayment of approximately €30,300 of debt of the acquired companies, was funded using borrowings under the 364-Day Term Loan Facility and the Company's revolving credit facility.

Corporate Purpose and Goals

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Using data in a consistent and disciplined way, leaders across the Company are defining their strategic business priorities.

We drive organic growth by continually introducing new products and technology, providing high levels of customer service and support, capturing rapidly expanding opportunities in emerging geographies, and leveraging existing technology into new applications.

Additional growth comes through the acquisition of companies that have differentiated precision technology-based product portfolios, serve attractive high-growth end-markets applications and have a customer-centric business model.

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primary goals of our acquisition strategy are to complement our current capabilities, diversify our business into new industry sectors with new customers and expand the scope of the solutions we can offer to our customers.

applications.

The primary goals of our acquisition strategy are to complement our current capabilities, diversify our business into new industry sectors with new customers and expand the scope of the solutions we can offer to our customers.

We strive to provide genuine customer satisfaction – it is the foundation upon which we continue to build our business.

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In recent years, we have extended our reach internationally, with giving programs in 11 international locations.

We also expanded our Matching Gifts program internationally in 2022, which further expands our culture of giving around the world.

In 2022, we also expanded our Matching Gifts program internationally, which further expands our culture of giving around the world.

Since 1989, we have donated more than $162 million to communities where we live and work.

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Principal Products and Uses

We engineer, manufacture and market differentiated products and systems used to dispense, apply and control adhesives, coatings, polymers, sealants, biomaterials, medical components, and other fluids, to test and inspect for quality, and to treat and cure surfaces.

Our precision technology can be found in manufacturing facilities around the world producing a wide range of goods for consumer durable, consumer non-durable and technology end markets.

We are a diversified precision technology company that engineers, manufactures and markets differentiated products and systems used to dispense, apply and control adhesives, coatings, polymers, sealants, biomaterials, medical components, and other fluids, to test and inspect for quality, and to treat and cure surfaces.

Our precision technology can be found in manufacturing facilities around the world producing a wide range of goods for consumer durable, consumer non-durable, medical and technology end markets.

Equipment ranges from single-use components to manual, stand-alone units for low-volume operations to microprocessor-based automated systems for high-speed, high-volume production lines.

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Product line specific solutions reduce material consumption, increase line efficiency and enhance product quality and appearance.

Technologies are used for processing polymers, inspection and measurement of food, tubing and films and dispensing adhesives, coatings and sealants.

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

Technologies are used for processing polymers, inspection and measurement of food, tubing and films and dispensing adhesives, coatings, sealants and other materials.

This segment primarily serves the consumer durables, non-durables, agriculture and industrial markets.

• Industrial Coatings – Automated and manual dispensing products and systems for cold materials, container coating, liquid finishing and powder coating, as well as ultraviolet equipment used primarily in curing and drying operations.

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Key strategic markets include consumer non-durable, film extrusion and converting, cable and tubing and energy storage.

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• Nonwovens – Dispensing, coating and laminating systems for applying adhesives, lotions, liquids and fibers to disposable products and continuous roll goods.

Key strategic markets include adult incontinence products, baby diapers and child-training pants, hygiene products and surgical drapes, gowns, shoe covers and face masks.

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• Packaging – Automated adhesive dispensing systems used in the rigid packaged goods industries.

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Key strategic markets include flexible packaging, electronics, medical, building and construction, transportation and aerospace, and general consumer goods.

• Precision Agriculture – On August 24, 2023, we acquired ARAG Group, a global market and innovation leader in precision agriculture spraying solutions.

Its portfolio consists of three key product families:

fluid components, such as nozzles, pumps and filters;

smart components that measure and control the flow, quantity and location of dispensed fluid;

and control systems that provide a greater variety of input and functionality to the customer.

This broad product portfolio is supported by differentiated software and data capabilities.

• Product Assembly – Dispensing, coating and laminating systems for the assembly of plastic, metal and wood products, for paper and paperboard converting applications and for the manufacturing of continuous roll goods.

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Many components are made in standard modules that can be used in more than one product or in combination with other components for a variety of models.

We have principal manufacturing operations and sources of supply in the United States in Ohio, Georgia, California, Colorado, Connecticut, Illinois, Massachusetts, Michigan, Minnesota, New Jersey, Rhode Island, Tennessee and Wisconsin;

as well as in the People’s Republic of China, Germany, Ireland, Israel, Mexico, the Netherlands and the United Kingdom.

We have principal manufacturing operations and sources of supply in the United States in Ohio, Georgia, California, Colorado, Connecticut, Illinois, Michigan, Minnesota, Pennsylvania, Rhode Island, Tennessee and Wisconsin;

as well as in the People’s Republic of China, Germany, Ireland, Israel, Italy, Mexico, the Netherlands and the United Kingdom.

Principal materials used to make our products are metals and plastics, typically in sheets, bar stock, castings, forgings, tubing and pellets.

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Most significant raw materials that we use are available through multiple sources.

We purchase most raw materials and other components on the open market and rely on third parties to provide certain finished goods.

We purchase most raw materials and other

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components on the open market and rely on third parties to provide certain finished goods.

While these items are generally available from multiple sources, the cost of products sold may be affected by changes in the market price of raw materials and tariffs on certain raw materials, particularly imports from China, as well as disruptions in availability of raw materials, components and sourced finished goods.

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We currently source raw materials and components from a number of suppliers, but our ongoing efforts to improve the cost effectiveness of our products and services may result in a reduction in the number of our suppliers.

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Senior operating management supervises an extensive quality control program for our equipment, machinery and systems, and manufacturing processes.

Natural gas and other fuels are our primary energy sources.

Natural gas, electricity, and other fuels are our primary energy sources.

However, standby capacity for alternative sources is available if needed.

Though the COVID-19 pandemic disrupted the global supply chain, we have not experienced significant supply disruption from third-party component suppliers.

However, we have faced and continue to face some supply chain constraints, primarily related to electronic component availability.

While logistics flow continues to improve, we are experiencing much higher costs than pre-pandemic rates due to carrier rate increases, mode changes, fuel costs, port backlog and other factors.

In addition, shipments between countries have been impacted and we have experienced delays due to a variety of factors related to supply chain disruption.

Over the last year, we have seen a stabilization of the global supply chain and improved lead times.

We enhanced our risk mitigation and sourcing efforts as a result of the COVID-19 pandemic and geopolitical tensions.

Logistics flows have improved, and global forwarding rates have returned to pre-pandemic levels.

We continue to see moderate rate increases on parcel and domestic trucking activity.

Intellectual Property

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Compliance with Governmental Regulations

public company that supports manufacturing, designing and servicing highly complex products in regulated environments, our global operations are subject to a variety of laws, regulations and compliance obligations.

We have robust internal controls, quality management systems, and management systems of compliance that govern our internal actions and mitigate our risk of non-compliance.

We also have safeguards established to identify non-compliance concerns through internal and external audits and risk assessments, as well as an ethics helpline reporting system.

Our global operations are subject to a variety of federal, state, local and international laws, regulations and compliance obligations relating to the manufacturing, designing and servicing of highly complex products and solutions.

Examples of such

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related to the collection, storage, use, transmission and protection of personal information and other consumer, customer, vendor or employee data.

Such privacy and data protection laws and regulations, including with respect to the European Union’s General Data Protection Regulation ("GDPR"), the Brazilian General Data Protection Law, and the California Consumer Privacy Act of 2018 ("CCPA"), and the interpretation and enforcement of such laws and regulations, are continuously developing and evolving and there is significant uncertainty with respect to how compliance with these laws and regulations may evolve and the costs and complexity of future compliance.

regulations, include, but are not limited to, import and export controls, data privacy, environmental, product safety, corruption, bribery, employment and labor.

To support our policy of compliance in every jurisdiction we do business, we have robust internal controls, quality management systems, and management systems of compliance that govern our internal actions and mitigate our risk of non-compliance.

We also have safeguards established to identify non-compliance concerns through internal and external audits and risk assessments, as well as an ethics helpline reporting system.

The following describes certain significant regulations that may impact our business.

For additional information about the risks associated with these laws and regulations, see Part I, Item 1A, "Risk Factors."

We transact with customers and suppliers in numerous geographies around the world and are required to comply with U.S.

import, export and sanctions laws (collectively “Trade Laws”).

We have developed compliance programs and training to prevent violations of Trade Laws, and we regularly monitor and adjust our programs and training to reflect changes in Trade Laws or changes in our business.

Geopolitical events may result in changes to Trade Laws that may impact our ability to transact business involving certain countries, certain items or certain counterparties, or may impose additional costs or complexity relating to tariffs, taxes, duties or adjustments to our compliance programs, training, or personnel requirements.

We are also required to comply with increasingly complex and changing laws and regulations enacted to protect business and personal data in the United States and other jurisdictions regarding privacy, data protection and data security, including those related to the collection, storage, use, transmission and protection of personal information and other consumer, customer, vendor or employee data.

The risk of data privacy breaches cannot be entirely eliminated, creating risks of fines and penalties.

Additionally, privacy and data protection laws and regulations, including with respect to the European Union’s General Data Protection Regulation ("GDPR"), and the California Consumer Privacy Act of 2018 ("CCPA"), and the interpretation and enforcement of these and similar laws and regulations, are continuously evolving and there is significant uncertainty with respect to how compliance with these laws and regulations may develop and the costs and complexity of future compliance.

We are also subject to federal, state, local and foreign environmental, safety and health laws and regulations concerning, among other things, emissions to the air, discharges to land and water and the generation, handling, treatment and disposal of hazardous waste and other materials.

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We have incurred, and will continue to incur, costs and capital expenditures to comply with these laws and regulations and to obtain and maintain the necessary permits and licenses.

We maintain insurance coverage that may cover certain costs or legal claims related to environmental regulations, and we accrue for estimated environmental liabilities with charges to expense and believe our environmental accrual is adequate to provide for our portion of the costs of all such known environmental liabilities.

We believe that the cost of complying with environmental laws and regulations will not have a material effect on our earnings, liquidity or competitive position but cannot assure that material compliance-related costs and expenses may not arise in the future.

For example, future adoption of new or amended environmental laws, regulations or requirements or newly discovered contamination or other circumstances could require us to incur costs and expenses that may have a material effect, but cannot be presently anticipated.

We believe that policies, practices and procedures have been properly designed to prevent unreasonable risk of material environmental damage arising from our operations.

We accrue for estimated environmental liabilities with charges to expense and believe our environmental accrual is adequate to provide for our portion of the costs of all such known environmental liabilities.

Compliance with federal, state, local and foreign environmental protection laws during 2022 had no material effect on our capital expenditures, earnings or competitive position.

Based upon consideration of currently available information, we believe liabilities for environmental matters will not have a material adverse effect on our financial position, operating results or liquidity, but we cannot ensure that material environmental liabilities may not arise in the future.

For a discussion of the risks associated with these laws and regulations, see Part I, Item 1A, "Risk Factors."

We believe that policies, practices and procedures have been properly designed to prevent unreasonable risk of material regulation or compliance obligations arising from our operations.

Compliance with federal, state, local and foreign regulation and laws during 2023 had no material effect on our capital expenditures, earnings or competitive position.

Based upon consideration of currently available information, we believe liabilities for any such matters will not have a material adverse effect on our financial position, operating results or liquidity, but we cannot guarantee that material liabilities may not arise from regulation and compliance obligations in the future.

Human Capital Resources

Employee Profile

As of October 31, 2022, we had 7,331 full-time and part-time employees, including 128 at our Amherst, Ohio, facility who are represented by a collective bargaining agreement that expires on November 16, 2025.

As of October 31, 2023, we had approximately 7,900 full-time and part-time employees, including 115 at our Amherst, Ohio, facility who are represented by a collective bargaining agreement that expires on November 16, 2025.

Total Rewards

As part of our compensation philosophy, we believe that we must offer and maintain market competitive total rewards programs for our employees in order to attract and retain superior talent.

These programs not only include base wages and incentives in support of our pay for performance culture, but also health, welfare and retirement benefits.

These programs not only include base wages and

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incentives in support of our pay for performance culture, but also health, welfare and retirement benefits.

We focus many programs on employee wellness and have implemented solutions including mental health support access, telemedicine and healthy weight loss programs.

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The Salaried Pension Plan is designed to work together with social security benefits to provide employees with up to 30 years of service retirement income replacement that is approximately 55% of eligible compensation, subject to the Internal Revenue Code maximum monthly benefit.

Participants fully vest in the Salaried

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Pension Plan after five years of service.

Participants fully vest in the Salaried Pension Plan after five years of service.

All eligible union employees hired prior to November 1, 2004 participate in a Company-sponsored tax-qualified pension plan for U.S.-based employees (the “Hourly Pension Plan”).

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Our approach encompasses inclusion awareness and skill-building, intentionality with respect to diversity in our hiring and selection process and performance management and succession planning that recognizes the importance of diversity.

We strive to promote inclusion through ongoing “Inclusive Leadership” and unconscious bias training across the Company.

Nordson’s employee resource groups strengthen our commitment to fostering an inclusive, diverse workplace where everyone feels like they belong.

Participation in these groups is open to all employees.

We regularly reflect on our progress and explore opportunities to improve our inclusion and diversity programs, including at the executive leadership and Board levels.

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The contents of our website are not incorporated by reference herein and are not deemed to be a part of this report.

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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-K

Item 1. Business