What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2023-12-20 compared with 2022-12-19 · 261 added, 176 removed, 1180 unchanged (27% of the section changed)

7 unchanged sentences

Selling and administrative expenses 752,644 724,176 708,953

Assets held for sale impairment charge — — 87,371

1,955,871 1,887,918 1,747,082

8 unchanged sentences

Income before income taxes 615,339 649,279 574,176

Income tax provision:

Current 146,908 115,737 65,906

Deferred ( 10,732 ) 4,071 ( 13,956 )

136,176 119,808 51,950

Income tax expense 127,846 136,176 119,808

Net income $ 487,493 $ 513,103 $ 454,368

14 unchanged sentences

Pension and postretirement benefit plans:

Prior service (cost) credit arising during the year — 124 ( 6 )

Prior service credit arising during the year — — 124

Net actuarial gain (loss) arising during the year ( 15,106 ) 54,065 25,289

Amortization of prior service cost ( 34 ) ( 201 ) ( 304 )

Amortization of actuarial loss 7,575 14,954 12,767

Amortization of actuarial (gain) loss ( 24 ) 7,575 14,954

Curtailment gain ( 2 ) 1,052 —

Settlement loss recognized 32,219 3,187 1,931

Settlement (gain) loss recognized ( 259 ) 32,219 3,187

Total pension and postretirement benefit plans ( 15,425 ) 94,710 43,250

64 unchanged sentences

Purchase of treasury shares — — — — ( 60,970 ) ( 60,970 )

( 384,498 shares)

— — — — ( 52,614 ) ( 52,614 )

Dividends declared ($ 1.69 per share)

1 unchanged sentence

Net income — — 454,368 — — 454,368

Reclassification due to adoption of ASU 2016-02 — — ( 104 ) — — ( 104 )

Impact of adoption of ASU 2016-13 — — ( 396 ) — — ( 396 )

Other comprehensive income (loss):

5 unchanged sentences

Purchase of treasury shares — — — — ( 262,869 ) ( 262,869 )

( 291,253 shares)

— — — — ( 60,970 ) ( 60,970 )

Dividends declared ($ 2.18 per share)

1 unchanged sentence

Net income — — 513,103 — — 513,103

Impact of adoption of ASU 2016-13 — — ( 396 ) — — ( 396 )

Other comprehensive income (loss):

Foreign currency translation adjustments — — — ( 126,657 ) — ( 126,657 )

Pension plan settlement adjustment — — — 33,271 — 33,271

Defined benefit pension and post-retirement plans adjustment — — — 61,439 — 61,439

3 unchanged sentences

Purchase of treasury shares — — — — ( 89,708 ) ( 89,708 )

( 1,200,546 shares)

— — — — ( 262,869 ) ( 262,869 )

Dividends declared ($ 2.63 per share)

3 unchanged sentences

Foreign currency translation adjustments — — — 26,766 — 26,766

Pension plan settlement adjustment — — — 33,271 — 33,271

Defined benefit pension and post-retirement plans adjustment — — — ( 15,425 ) — ( 15,425 )

15 unchanged sentences

Loss (gain) on sale of property, plant and equipment 1,092 ( 581 ) 589

Impairment loss on assets held for sale — — 87,371

Pension settlement charge for U.S.

24 unchanged sentences

Dividends paid ( 150,356 ) ( 125,914 ) ( 97,683 )

Net cash used in financing activities ( 416,006 ) ( 422,913 ) ( 251,529 )

Net cash provided (used) in financing activities 750,512 ( 416,006 ) ( 422,913 )

Effect of exchange rate changes on cash ( 2,693 ) ( 10,879 ) 1,834

71 unchanged sentences

The provision for losses on receivables was $ 283 for the twelve months ended October 31, 2023 compared to $ 1,259 for the same period a year ago.

The remaining change in the allowance for credit losses is principally related to the write-off of uncollectible accounts.

The remaining change in the allowance for credit losses is principally related to increases due to acquisitions and the write-off of uncollectible accounts.

Inventories — Inventories are valued at the lower of cost or net realizable value.

4 unchanged sentences

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.

Cost was determined using the LIFO method for 16 percent of consolidated inventories at October 31, 2021.

Consolidated inventories would have been $ 4,216 higher than reported at October 31, 2021 had the FIFO method, which approximates current cost, been used for valuation of all inventories.

Property, plant and equipment and depreciation — Property, plant and equipment are carried at cost.

Additions and improvements that extend the lives of assets are capitalized, while expenditures for repairs and maintenance are expensed as incurred.

Plant and equipment are depreciated for financial reporting purposes using the straight-line method over the estimated

Derivatives — The Company does not enter into derivative financial instruments for trading purposes.

Derivative instruments are used to manage risks associated with foreign exchange rates.

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

Nordson Corporation 37

Notes to Consolidated Financial Statements — (Continued)

useful lives of the assets or, in the case of property under finance leases, over the terms of the leases.

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.

Accordingly, the changes in the fair value of the foreign currency forward contracts are recognized in each accounting period in “Other – net” on the Consolidated Statements of Income together with the transaction gain or loss from the related balance sheet position.

The settlement of these contracts is recorded in operating activities on the Consolidated Statements of Cash Flows.

We utilize net investment hedges to offset the translation adjustment arising from re-measuring our investment in foreign subsidiaries.

These hedges are included on the balance sheet at fair value.

Changes in the fair value of derivative assets or liabilities (i.e., gains or losses) are recognized depending upon the type of hedging relationship and whether a hedge has been designated.

For derivative instruments that qualify for hedge accounting and are used to hedge net assets of certain foreign subsidiaries, we designate the hedging instrument as a hedge of a net investment in a foreign operation with the effective portion of the derivative's gain or loss reported in Accumulated other comprehensive loss as part of the cumulative translation adjustment and amounts reclassified out of accumulated other comprehensive loss into earnings when the hedged net investment is either sold or substantially liquidated.

The settlement of these hedges is recorded in investing activities on the Consolidated Statement of Cash Flows.

Changes in fair value of derivative instruments that do not qualify for hedge accounting are recognized immediately in current net earnings in "Other-net" on the Consolidated Statements of Income.

Property, plant and equipment and depreciation — Property, plant and equipment are carried at cost.

Additions and improvements that extend the lives of assets are capitalized, while expenditures for repairs and maintenance are expensed as incurred.

Plant and equipment are depreciated for financial reporting purposes using the straight-line method over the estimated useful lives of the assets or, in the case of property under finance leases, over the terms of the leases.

Leasehold improvements are depreciated over the shorter of the lease term or their useful lives.

4 unchanged sentences

Enterprise management systems 5 - 13 years

Depreciation expense is included in cost of sales and selling and administrative expenses.

Depreciation expense is included in Cost of sales and Selling and administrative expenses on the Consolidated Statements of Income.

Internal use software costs are expensed or capitalized depending on whether they are incurred in the preliminary project stage, application development stage or the post-implementation stage.

8 unchanged sentences

Testing is done more frequently if an event occurs or circumstances change that would indicate the fair value of a reporting unit is less than the carrying amount of those assets.

Other amortizable intangible assets, which consist primarily of patent/technology costs, customer relationships, noncompete agreements and trade names, are amortized over their useful lives on a straight-line basis.

The acquisitions of our businesses are accounted for under the acquisition method of accounting.

The amounts assigned to the identifiable assets acquired and liabilities assumed in connection with acquisitions are based on estimated fair values as of the date of the acquisition, with the remainder, if any, recorded as goodwill.

The fair values are determined by management, taking into consideration information supplied by the management of the acquired entities, and other relevant information.

Such information typically includes valuations obtained from independent appraisal experts, which management reviews and considers in its estimates of fair values.

The valuations are generally based upon future cash flow projections for the acquired assets, discounted to present value.

Determining the fair value of assets acquired and liabilities assumed requires management’s judgment and often involves the use of significant estimates and assumptions, including assumptions with respect to future revenue growth rates and EBITDA margins, discount rates, customer attrition rates, and asset lives, among other items.

This judgment could result in either a higher or lower value assigned to amortizable or depreciable assets.

The impact could result in either higher or lower amortization and/or depreciation expense.

Other amortizable intangible assets, which consist primarily of patent/technology costs, customer relationships, non-compete agreements and trade names, are amortized over their useful lives on a straight-line basis.

Nordson Corporation 38

Notes to Consolidated Financial Statements — (Continued)

At October 31, 2023, the weighted-average useful lives for each major category of amortizable intangible assets were:

23 unchanged sentences

Based on analysis of return rates and other factors, the adequacy of our warranty provisions is adjusted as necessary.

The liability for warranty costs is included in Accrued liabilities in the Consolidated Balance Sheet.

Nordson Corporation 38

Notes to Consolidated Financial Statements — (Continued)

The liability for warranty costs is included in Accrued liabilities in the Consolidated Balance Sheets.

Following is a reconciliation of the product warranty liability as of October 31, 2023 and 2022:

5 unchanged sentences

Note 2 — Recently issued accounting standards

There have been no new accounting standards issued that would require either disclosure or adoption for 2022 by the Company.

There have been no new material accounting standards issued which would require either disclosure or adoption during the current period.

Note 3 — Acquisitions

1 unchanged sentence

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 Statement of Income.

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

Nordson Corporation 39

Notes to Consolidated Financial Statements — (Continued)

2023 Acquisitions

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, DRIP Co-Investment, and certain individuals.

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.

The 364-Day Term Loan Facility was subsequentially paid off in September 2023 with the net proceeds of a senior notes offering (see Note 9 for additional details).

Based on the fair value of the assets acquired and the liabilities assumed, goodwill of $ 694,900 and identifiable intangible assets of $ 353,500 were recorded.

The identifiable intangible assets consist primarily of $ 27,500 of tradenames (amortized over nine years ), $ 31,000 of technology (amortized over five years ), and $ 295,000 of customer relationships (amortized over twenty-two years ).

Goodwill associated with the acquisition was not tax deductible.

As of October 31, 2023, the purchase price allocation remains preliminary as we complete our assessment principally of income taxes.

The financial results of the ARAG Group acquisition are not expected to have a material impact on our Consolidated Financial Statements.

The assets and liabilities acquired were as follows:

August 24, 2023

Cash $ 32,966

Receivables - net 29,765

Inventories - net 54,389

Goodwill 694,900

Intangibles 353,500

Other assets 50,379

Total Assets $ 1,215,899

Accounts payable $ 18,915

Deferred income taxes 103,157

Other liabilities 15,924

Total Liabilities $ 137,996

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

CyberOptics is a leading global developer and manufacturer of high-precision 3D optical s ensing 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 borrowings under our revolving credit facility and cash on hand.

Based on the fair value of the assets acquired and the liabilities assumed, goodwill of $ 285,330 and identifiable intangible assets of $ 58,600 were recorded.

The identifiable intangible assets consist primarily of $ 15,200 of tradenames (amortized over 15 years), $ 14,600 of technology (amortized over 7 years), and $ 28,800 of customer relationships (amortized over 12 years).

Goodwill associated with the acquisition was not tax deductible .

As of October 31, 2023, the purchase price allocation is final.

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

Nordson Corporation 40

Notes to Consolidated Financial Statements — (Continued)

The assets and liabilities acquired were as follows:

November 3, 2022

Cash $ 40,890

Receivables - net 21,364

Inventories - net 33,639

Goodwill 285,330

Intangibles 58,600

Other assets 13,768

Total Assets $ 453,591

Accounts payable $ 8,109

Deferred income taxes 14,826

Other liabilities 11,923

Total Liabilities $ 34,858

2022 acquisition

6 unchanged sentences

This acquisition is being reported in our Industrial Precision Solutions segment and the results of NDC are not material to our Consolidated Financial Statements.

2020 acquisitions

On September 1, 2020, we acquired 100 percent of the outstanding shares of vivaMOS Ltd.

("vivaMOS"), a developer and fabricator of high-end large-area complementary metal–oxide–semiconductor ("CMOS") image sensors for a wide range of X-ray applications.

We acquired vivaMOS for an aggregate purchase price of $ 17,154 net of cash and other closing adjustments of approximately $ 158 , utilizing cash on hand.

Based on the fair value of the assets acquired and the liabilities assumed, goodwill of $ 14,394 and identifiable intangible assets of $ 4,040 were recorded.

The identifiable intangible assets consist primarily of $ 3,900 of technology (amortized over 10 years) and $ 140 of non-compete agreements (amortized over 3 years).

Goodwill associated with this acquisition was not tax deductible.

This acquisition is being reported in our Advanced Technology Solutions segment and the results of vivaMOS were not material to our Consolidated Financial Statements.

On June 1, 2020, we acquired 100 percent of the outstanding shares of Fluortek, Inc.

("Fluortek"), a precision plastic extrusion manufacturer that provides custom dimensioned tubing to the medical device industry.

We acquired Fluortek for an aggregate purchase price of $ 125,260 , net of cash and other closing adjustments of approximately $ 515 , utilizing cash on hand.

Based on the fair value of the assets acquired and the liabilities assumed, property, plant and equipment and working capital – net of $ 19,843 , goodwill of $ 76,047 and identifiable intangible assets of $ 29,370 were recorded.

The identifiable intangible assets consist primarily of $ 19,700 of customer relationships (amortized over 12 years), $ 7,400 of technology (amortized over 10 years), $ 1,500 of tradenames (amortized over 10 years) and $ 770 of non-compete agreements (amortized over 5 years).

Goodwill associated with this acquisition was tax deductible.

This acquisition is being reported in our Medical and Fluid Solutions segment and the results for Fluortek were not material to the our Consolidated Financial Statements.

Nordson Corporation 41

Notes to Consolidated Financial Statements — (Continued)

Note 4 — Divestiture

In the fourth quarter of 2020, we committed to a plan to sell our screws and barrels product line within our Industrial Precision Solutions operating segment and determined the criteria to be classified as held for sale were met.

We entered into a letter of intent to sell the screws and barrels product line in October 2020, and in December 2020, we entered into a definitive agreement with the buyer.

The assets and liabilities were presented as held for sale in the Condensed Consolidated Balance Sheets and measured at the lower of carrying value or fair value less cost to sell from October 31, 2020 until the transaction was completed on February 1, 2021.

Before measuring the fair value less costs to sell of the disposal group as a whole, we first reviewed individual assets and liabilities to determine if any fair value adjustments were required and concluded no individual asset impairments were required.

Then, based on the definitive agreement entered into by us and the buyer, we determined the fair value of the disposal group to be equal to the selling price, less costs to sell.

Based on this review, we recorded a non-cash, assets held for sale impairment charge of $ 87,371 in 2020.

Excluding the non-cash, assets held for sale impairment charge recorded in the fourth quarter of 2020, the operating results of the screws and barrels product line were not material to our Consolidated Financial Statements for any period presented.

There were no significant adjustments in 2021 to the loss recognized in 2020.

Note 4 — Details of Consolidated Balance Sheet 2023 2022

20 unchanged sentences

970,630 902,541

Accumulated depreciation and amortization ( 549,099 ) ( 533,795 )

Accumulated depreciation ( 577,784 ) ( 549,099 )

$ 392,846 $ 353,442

4 unchanged sentences

Interest 11,240 6,018

Foreign currency forward contracts 10,425 11,724

Pension and retirement 5,445 4,456

27 unchanged sentences

Based on our annual impairment tests in 2023, 2022 and 2021, the fair value of each reporting unit exceeded its carrying value, and accordingly, we did not record any goodwill impairment charges in 2023, 2022 or 2021.

Effective in the fourth quarter of 2022, we realigned our former two operating segments into three :

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

Previously, Advanced Technology Solutions was comprised of Medical and Fluid Solutions and the former Advanced Technology Solutions.

Our segment change did not have any impact on our reporting units.

Our reporting units include components of the Industrial Precision Solutions, Medical and Fluid Solutions, and the Advanced Technology Solutions segments.

5 unchanged sentences

Balance at October 31, 2023 $ 1,208,996 $ 1,173,858 $ 401,347 $ 2,784,201

The increase in goodwill for 2022 was due to the acquisition of NDC.

The increase in goodwill for 2023 was due to the acquisition of CyberOptics and the ARAG Group.

See Note 3 for additional details.

4 unchanged sentences

Balance at October 31, 2021 $ 415,020 $ 1,176,149 $ 121,979 $ 1,713,148

Acquisitions 131,129 — — 131,129

Currency effect ( 25,913 ) ( 4,080 ) ( 9,591 ) ( 39,584 )

Balance at October 31, 2022 $ 520,236 $ 1,172,069 $ 112,388 $ 1,804,693

Accumulated impairment losses, which were recorded in 2009, were $ 232,789 of which $ 229,173 related to the Advanced Technology Solutions segment and $ 3,616 related to the Industrial Precision Solutions segment.

The increase in goodwill for 2022 was due to the acquisition of NDC.

See Note 3 for additional details.

Information regarding intangible assets subject to amortization:

18 unchanged sentences

Amortization expense for 2023, 2022 and 2021 was $ 59,719 , $ 50,825 and $ 50,551 , respectively.

See Note 3 for details regarding intangibles recorded due to the acquisition of NDC.

See Note 3 for details regarding intangibles recorded due to the acquisition of CyberOptics and the ARAG Group.

Estimated amortization expense for each of the five succeeding years:

8 unchanged sentences

Pension plan benefits are generally based on years of employment and, for salaried employees, the level of compensation.

Actuarially determined amounts are contributed to United States plans to provide sufficient assets to meet future benefit payment

Nordson Corporation 44

Notes to Consolidated Financial Statements — (Continued)

requirements.

determined amounts are contributed to United States plans to provide sufficient assets to meet future benefit payment requirements.

We also sponsor an unfunded supplemental pension plan for certain employees.

16 unchanged sentences

Participant contributions — — 79 72

Amendments — — — 15

Settlements ( 1,499 ) ( 171,181 ) ( 607 ) ( 1,446 )

19 unchanged sentences

Total amount recognized in financial statements $ 2,490 $ 30,331 $ ( 22,950 ) $ ( 22,564 )

The net actuarial gain included in the projected benefit obligation for the United States pension plans for 2023 was primarily due to higher discount rates partially offset by losses due to demographic experience.

The net actuarial gain included in the projected benefit obligation for the United States pension plans for 2022 was primarily due to higher discount rates partially offset by an increase in the compensation increase assumption.

Nordson Corporation 45

Notes to Consolidated Financial Statements — (Continued)

The net actuarial loss included in the projected benefit obligation for the United States pension plans for 2021 was primarily due to updated census data partially offset by gains due to changes in the discount rates.

Amounts recognized in accumulated other comprehensive (gain) loss:

Amounts recognized in accumulated other comprehensive loss (income):

United States International

7 unchanged sentences

Balance at beginning of year $ 74,293 $ 142,118 $ ( 2,413 ) $ 28,736

Net (gain) loss arising during the year ( 16,010 ) ( 29,091 ) ( 28,234 ) 1,220

Prior service cost arising during the year — — — 15

Net loss (gain) arising during the year 28,303 ( 16,010 ) ( 943 ) ( 28,234 )

Net (gain) recognized during the year — ( 7,504 ) ( 79 ) ( 2,278 )

24 unchanged sentences

Total benefit cost $ 1,646 $ 52,630 $ 26,729 $ 1,679 $ 1,401 $ 4,295

Nordson Corporation 44

Notes to Consolidated Financial Statements — (Continued)

Net periodic pension cost for 2022, 2021 and 2020 also included settlement losses of $ 298 , $ 4,143 and $ 2,508 , respectively, due to lump sum retirement payments.

Net periodic pension cost for 2023 included a settlement gain of $ 335 due to lump sum retirement payments.

Net periodic pension cost for 2022 and 2021 included settlement losses of $ 298 and $ 4,143 , respectively, due to lump sum retirement payments.

Net periodic pension cost for 2022 included a curtailment gain of $ 2,112 due to the freeze of an international defined benefit plan.

1 unchanged sentence

Plans and Other – net in our Consolidated Statements of Income .

Nordson Corporation 46

Notes to Consolidated Financial Statements — (Continued)

The weighted average assumptions used in the valuation of pension benefits were as follows:

83 unchanged sentences

Technology 1,569 1,569 — — — — — —

Mutual funds 52,319 52,319 — — — — — —

Fixed income securities:

14 unchanged sentences

• Money market funds - Money market funds are public investment vehicles that are valued with a net asset value of one dollar.

This is a quoted price in an active market and is classified as Level 1.

This value is a quoted price in an active market and is classified as Level 1.

• Equity securities - Common stocks and mutual funds are valued at the closing price reported on the active market on which the individual securities are traded and are classified as Level 1.

63 unchanged sentences

Foreign currency exchange rate change — — 10 ( 37 )

Actuarial gain ( 25,513 ) ( 2,799 ) ( 215 ) ( 83 )

Actuarial (gain) loss ( 7,301 ) ( 25,513 ) 35 ( 215 )

Benefits paid ( 3,193 ) ( 3,223 ) ( 8 ) ( 5 )

20 unchanged sentences

Balance at beginning of year $ ( 5,035 ) $ 21,456 $ ( 661 ) $ ( 543 )

Net gain arising during the year ( 25,513 ) ( 2,799 ) ( 217 ) ( 83 )

Net (gain) loss arising during the year ( 7,301 ) ( 25,513 ) 35 ( 217 )

Net gain (loss) recognized during the year — ( 978 ) 62 51

36 unchanged sentences

Note 7 — Income taxes

Income tax expense includes the following:

Income before income taxes and income tax expense (benefit) are comprised of the following:

2023 2022 2021

Income before income taxes:

Domestic $ 269,934 $ 302,549 $ 279,701

Foreign 345,405 346,730 294,475

Total income before income taxes $ 615,339 $ 649,279 $ 574,176

federal $ 54,157 $ 59,639 $ 40,879

7 unchanged sentences

$ 127,846 $ 136,176 $ 119,808

Earnings before income taxes of domestic operations, which are calculated after intercompany profit eliminations, were $ 302,549 , $ 279,701 and $ 111,704 in 2022, 2021 and 2020, respectively.

Our income tax provision for 2022 included a tax benefit of $ 3,273 due to our share-based payment transactions.

Our income tax provision for 2021 included a tax benefit of $ 5,982 due to our share-based payment transactions.

Our income tax provision for 2020 included a tax benefit of $ 15,661 due to our share-based payment transactions.

Income before taxes in 2020 included a non-cash, assets held for sale impairment charge of $ 87,371 related to our commitment to sell our screws and barrels product line within the Adhesives reporting unit under our Industrial Precision Solutions segment and the tax benefit of the impairment was $ 15,254 .

A portion of the impairment charge did not have related tax benefits.

A reconciliation of the U.S.

9 unchanged sentences

Effective tax rate 20.78 % 20.97 % 20.87 %

Earnings before income taxes of international operations, which are calculated before intercompany profit elimination entries, were $ 346,730 , $ 294,475 and $ 189,785 in 2022, 2021 and 2020, respectively.

Deferred income taxes are not provided on undistributed earnings of international subsidiaries that are intended to be permanently invested in their operations.

6 unchanged sentences

The amounts that, if recognized, would impact the effective tax rate were $ 4,497 and $ 2,769 at October 31, 2023 and 2022, respectively.

During 2022, unrecognized tax benefits related primarily to domestic positions and, as recognized, a substantial portion of the gross unrecognized tax benefits were offset against assets recorded in the Consolidated Balance Sheet.

During 2023, unrecognized tax benefits related primarily to domestic positions and, as recognized, a substantial portion of the gross unrecognized tax benefits were offset against assets recorded in the Consolidated Balance Sheets.

Nordson Corporation 53

2 unchanged sentences

2023 2022 2021

Balance at beginning of year $ 3,720 $ 6,717 $ 2,909

Gross balance at beginning of year $ 2,872 $ 3,720 $ 6,717

Additions based on tax positions related to the current year 410 310 370

Additions for tax positions of prior years 10 — —

Increases related to acquired businesses 6,602 — —

Reductions for tax positions of prior years — ( 70 ) ( 350 )

Settlements — — ( 137 )

Lapse of statute of limitations ( 1,892 ) ( 1,088 ) ( 3,017 )

Balance at end of year $ 2,872 $ 3,720 $ 6,717

Gross balance at end of year $ 8,002 $ 2,872 $ 3,720

At October 31, 2023 and 2022, we had accrued interest and penalty expense related to unrecognized tax benefits of $ 401 and $ 541 , respectively.

3 unchanged sentences

We are subject to examination in the U.S.

by the Internal Revenue Service (IRS) for the 2019 through 2022 tax years;

tax years prior to the 2019 year are closed to further examination by the IRS.

Generally, major state and foreign jurisdiction tax years remain open to examination for tax years after 2016.

by the Internal Revenue Service ("IRS") for the years 2020 through 2023;

years prior to 2020 year are closed to further examination by the IRS.

Generally, major state and foreign jurisdiction tax years remain open to examination for years after 2017.

Within the next twelve months, it is reasonably possible that certain statute of limitations periods would expire, which could result in a minimal decrease in our unrecognized tax benefits.

17 unchanged sentences

We also had $ 35,906 of state operating loss carryforwards, $ 36,850 of foreign operating loss carryforwards, and a $ 3,570 capital loss carryforward, of which $ 52,330 will expire in 2024 through 2038, and $ 23,997 of which has an indefinite carryforward period.

The net change in the valuation allowance was a decrease of $ 4,011 in 2022 and a decrease of $ 8,092 in 2021.

The net change in the valuation allowance was an increase of $ 13,602 in 2023 and a decrease of $ 4,011 in 2022.

The valuation allowance of $ 23,732 at October 31, 2023, related primarily to tax credits and loss carryforwards that may expire before being realized.

We continue to assess the need for valuation allowances against deferred tax assets based on determinations of whether it is more likely than not that deferred tax benefits will be realized.

Nordson Corporation 54

Notes to Consolidated Financial Statements — (Continued)

Note 8 — Bank lines of credit

1 unchanged sentence

Maximum borrowings available under bank lines of credit (all foreign banks) $ 114,464 $ 61,213

Outstanding borrowings / notes payable (all foreign bank debt) ( 5,019 ) —

Unused bank lines of credit $ 109,445 $ 61,213

Nordson Corporation 52

Notes to Consolidated Financial Statements — (Continued)

Note 9 — Long-term debt

1 unchanged sentence

Notes Payable $ 5,019 $ —

Revolving credit agreement, due 2028 248,000 —

Term loan, due 2026 300,000 —

Senior notes, due 2023-2025 32,000 55,500

2 unchanged sentences

Euro loan, due 2023 — 261,893

5.600% Notes due 2028 350,000 —

5.800% Notes due 2033 500,000 —

1,749,305 738,822

1 unchanged sentence

Less unamortized debt issuance costs 10,773 965

Less bond discounts 1,476 —

Long-term maturities $ 1,621,394 $ 345,320

Revolving credit agreement — 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.

At October 31, 2022 and October 31, 2021, we had no balances outstanding under this facility.

Senior notes, due 2023-2025 — These unsecured fixed-rate notes entered into in 2012 with a group of insurance companies have a remaining weighted-average life of 1.47 years.

This facility had a five-year term expiring in April 2024 and included a $ 75,000 sub-facility for swing-line loans.

On April 17, 2023, we entered into an amendment to, among other things, replace LIBOR with SOFR, EURIBOR, SONIA and TIBOR for U.S.

Dollar, Euro, British Pound Sterling and Japanese Yen borrowings, respectively.

On June 6, 2023, this credit agreement was terminated and replaced by the New Credit Agreement (as defined below).

At October 31, 2023 , there were no borrowings outstanding under this facility.

In June 2023, we entered into a $ 1,150,000 unsecured multi-currency credit facility with a group of banks, which provides for a term loan facility in the aggregate principal amount of $ 300,000 (the "Term Loan Facility"), maturing in June 2026, and a multicurrency revolving credit facility in the aggregate principal amount of $ 850,000 (the "Revolving Facility"), maturing in June 2028 (the "New Credit Agreement").

The Company borrowed and has outstanding $ 300,000 on the Term Loan Facility and $ 248,000 on the Revolving Facility as of October 31, 2023 .

The Revolving Facility permits borrowing in U.S.

Dollars, Euros, Sterling, Swiss Francs, Singapore Dollars, Yen, and each other currency approved by a Revolving Facility lender.

The New Credit Agreement provides that the applicable margin for (i) RFR, as defined in the New Credit Agreement, and Eurodollar Loans will range from 0.85 % to 1.20 % and (ii) Base Rate Loans will range from 0.00 % to 0.20 %, in each case, based on the Company’s Leverage Ratio (as defined in the Credit Agreement and calculated on a consolidated net debt basis).

Borrowings under the New Credit Agreement bear interest at (i) either a base rate or a SOFR rate, with respect to borrowings in U.S.

dollars, (ii) a eurocurrency rate, with respect to borrowings in Euros and Yen, or (iii) Daily Simple RFR, with respect to borrowings in Sterling, Swiss Francs or Singapore Dollars, plus, in each case, an applicable margin (and, solely in the case of Singapore Dollars, a spread adjustment).

The applicable margin is based on the Company’s Leverage Ratio.

The weighted-average interest rate at October 31, 2023 was 6.27 %.

Senior notes, due 2023-2025 — These unsecured fixed-rate notes entered into in 2012 with a group of insurance companies have a remaining weighted-average life of 1.00 year.

The weighted-average interest rate at October 31, 2023 was 3.10 percent.

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The weighted-average interest rate at October 31, 2023 was 3.11 percent.

Nordson Corporation 55

Notes to Consolidated Financial Statements — (Continued)

Senior notes, due 2023-2030 — These unsecured fixed-rate notes entered in 2018 with a group of insurance companies have a remaining weighted-average life of 2.88 years.

The weighted-average interest rate at October 31, 2023 was 3.97 percent.

Euro loan, due 2023 — In March 2020 we amended, restated and extended the term of our existing term loan facility with Bank of America Merrill Lynch International Limited.

The interest rate is variable based on the EURIBOR rate.

The term loan facility 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 October 31, 2022 was 0.71 percent.

Euro loan, due 2023 — The euro term loan facility with Bank of America Merrill Lynch International Limited was due in March 2023 and was repaid.

5.600% Notes due 2028 and 5.800% Notes due 2033 — In September 2023, we completed an underwritten public offering (the "Offering") of $ 350,000 aggregate principal amount of 5.600 % Notes due 2028 and $ 500,000 aggregate principal amount of 5.800 % Notes due 2033.

We were in compliance with all covenants at October 31, 2023 and the amount we could borrow would not have been limited by any debt covenants.

Annual maturities — The annual maturities of long-term debt for the five years subsequent to October 31, 2022, are as follows:

Annual maturities — The annual ma turities of long-term debt for the five years subsequent to October 31, 2023, are as follows:

$ 115,662 in 2024;

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We evaluate renewal and termination options at the lease commencement date to determine if we are reasonably certain to exercise the option on the basis of economic factors.

Leases with an initial term of 12 months or less (short-term leases) are not recorded on the Consolidated Balance Sheet.

Leases with an initial term of 12 months or less (short-term leases) are not recorded on the Consolidated Balance Sheets.

Lease expense for operating leases is recognized on a straight-line basis over the lease term, with variable lease payments recognized in the period those payments occur.

Variable payments for leases primarily relate to future rates or amounts, miles, or other quantifiable usage factors which are not determinable at the time the lease agreement commences.

Finance lease assets are recorded in Property, plant and equipment – net on the Consolidated Balance Sheet with related amortization recorded in depreciation expense on the Consolidated Statement of Cash Flows.

Finance lease assets are recorded in Property, plant and equipment – net on the Consolidated Balance Sheets with related amortization recorded in depreciation expense on the Consolidated Statement of Cash Flows.

As of October 31, 2023, we had no material leases that had yet to commence.

Nordson Corporation 53

Notes to Consolidated Financial Statements — (Continued)

Additional lease information is summarized below for the twelve months ended October 31:

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Weighted average discount rate 2.85 % 1.97 %

Nordson Corporation 56

Notes to Consolidated Financial Statements — (Continued)

The following table reconciles the undiscounted cash flows for five years and thereafter to the operating and finance lease liabilities recognized on the Consolidated Balance Sheet as of October 31, 2023.

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Unobservable inputs that are not corroborated by market data.

Nordson Corporation 54

Notes to Consolidated Financial Statements — (Continued)

The following tables present the classification of our assets and liabilities measured at fair value on a recurring basis:

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$ 696 $ — $ 696 $ —

Net investment contracts (b)

13,713 — 13,713 —

Total assets at fair value $ 14,409 $ — $ 14,409 $ —

Deferred compensation plans (b)

Deferred compensation plans (c)

$ 9,637 $ — $ 9,637 $ —

Net investment contracts (b)

9,985 — 9,985 —

Foreign currency forward contracts (a)

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Total assets at fair value $ 5,035 $ — $ 5,035 $ —

Deferred compensation plans (b)

Deferred compensation plans (c)

$ 9,076 $ — $ 9,076 $ —

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(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.

Nordson Corporation 57

Notes to Consolidated Financial Statements — (Continued)

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 percent of their salary and annual cash incentive compensation and for executive officers, up to 90 percent of their long-term incentive compensation, into various non-qualified deferred compensation plans.

(b) Net assets of our foreign subsidiaries are exposed to volatility in foreign currency exchange rates.

We utilize net investment hedges to offset the translation adjustment arising from re-measuring our investment in foreign subsidiaries.

The notional amount of our net investment hedge contracts as of October 31, 2023 was $ 801,857 .

(c) Executive officers and other highly compensated employees may defer up to 100 percent of their salary and annual cash incentive compensation and for executive officers, up to 90 percent 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.

Fair value disclosures related to goodwill and indefinite-lived intangible assets are disclosed in Note 6.

Fair value disclosures related to goodwill are disclosed in Note 5.

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.

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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 as described in Note 10.

The carrying amount of long-term debt is shown net of unamortized debt issuance costs and bond discounts as described in Note 9.

Note 12 — Derivative financial instruments

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Accordingly, the changes in the fair value of the foreign currency forward contracts are recognized in each accounting period in “Other – net” on the Consolidated Statement of Income together with the transaction gain or loss from the related balance sheet position.

The settlement of these contracts is recorded in operating activities on the Consolidated Statement of Cash Flows.

In 2023, we recognized net losses of $ 3,041 on foreign currency forward contracts and net loss of $ 4,701 from the change in fair value of balance sheet positions.

In 2022, we recognized net losses of $ 4,937 on foreign currency forward contracts and net gains of $ 11,207 from the change in fair value of balance sheet positions.

In 2021, we recognized net gains of $ 1,485 on foreign currency forward contracts and net

In 2021, we recognized net gains of $ 1,485 on foreign currency forward contracts and net losses of $ 7,411 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 Receivables-net and Accrued liabilities, respectively in the Consolidated Balance Sheets.

Nordson Corporation 58

Notes to Consolidated Financial Statements — (Continued)

losses of $ 7,411 from the change in fair value of balance sheet positions.

In 2020, we recognized net losses of $ 5,899 on foreign currency forward contracts and net gains of $ 4,367 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 Receivables-net and Accrued liabilities, respectively in the Consolidated Balance Sheets.

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

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Hong Kong dollar 5,174 73,953

Australian dollar 709 10,088

Singapore dollar 411 18,817

Australian dollar 327 9,163

Taiwan Dollar — 24,047

Other 4,327 60,104

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As of October 31, 2023 and 2022, there were no significant concentrations of credit risk.

Net Investment Hedges

Net assets of our foreign subsidiaries are exposed to volatility in foreign currency exchange rates.

We may utilize net investment hedges to offset the translation adjustment arising from re-measuring our investment in foreign subsidiaries.

During the second quarter of 2023, the Company designated € 180,000 of borrowings as a hedge of our net investment in certain foreign subsidiaries to mitigate the foreign exchange risk associated with certain investments in these subsidiaries.

In June 2023, the hedge was terminated.

Any increases or decreases related to the remeasurement or termination of the € 180,000 borrowing into U.S.

dollars were recorded in the currency translation component of Accumulated other comprehensive income (loss) within Shareholders' Equity in the Consolidated Balance Sheets.

A loss of $ 2,467 , net of tax, was recorded in 2023 on these net investment hedges.

During the fourth quarter of 2023, the Company designated € 760,000 of borrowings as a hedge of our net investment in certain foreign subsidiaries to mitigate the foreign exchange risk associated with certain investments in these subsidiaries.

In September 2023, the hedge was terminated.

Any increases or decreases related to the remeasurement or termination of the € 760,000 borrowing into U.S.

dollars were recorded in the currency translation component of Accumulated other comprehensive income (loss) within Shareholders' Equity in the Consolidated Balance Sheets.

A gain of $ 7,846 , net of tax, was recorded in 2023 on these net investment hedges.

During 2023, the Company entered into various cross currency swaps between the U.S.

Dollar and Euro, Japanese Yen, Taiwan Dollar and Chinese Yuan which were designated as a hedges of our net investments in certain foreign subsidiaries to mitigate the foreign exchange risk associated with certain investments in these subsidiaries.

Any increases or decreases related to the remeasurement of the hedges are recorded in the currency translation component of Accumulated other comprehensive income (loss) within Shareholders' Equity in the Consolidated Balance Sheets until the sale or substantial liquidation of the underlying investments.

A gain of $ 10,165 , net of tax, was recorded in 2023.

Nordson Corporation 59

Notes to Consolidated Financial Statements — (Continued)

Changes in fair value of derivative instruments that do not qualify for hedge accounting are recognized immediately in current net earnings.

The settlement of net investment hedges is recorded in investing activities on the Consolidated Statements of Cash Flows.

A net gain of $ 15,544 , net of tax of $ 4,643 , was recorded in 2023 related to all net investment hedges, which is included in foreign currency translation adjustments in the Consolidated Statements of Shareholders' Equity.

The following table summarizes the fair values of our net investment contracts designated as net investment hedges in the Company's Consolidated Balance Sheet as of October 31, 2023:

Prepaid expenses and other current assets Other assets Accrued liabilities Other long-term liabilities

Net investment contracts $ 11,379 $ 2,334 $ — $ 9,985

Note 13 — Capital shares

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These amounts exclude share repurchases associated with employee equity award exercises and vesting.

Nordson Corporation 56

Notes to Consolidated Financial Statements — (Continued)

Note 14 — Stock-based compensation

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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 were available to be granted under the 2012 Plan.

A maximum of 900 common shares were authorized for grant under the 2021 Plan plus the number of shares that were available to be granted under the 2012 Plan, as well as issuable under the CyberOptics equity plan.

As of October 31, 2023, a total of 2,009 common shares were available to be granted under the 2021 Plan.

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We recognized compensation expense related to stock options of $ 6,655 , $ 7,265 and $ 6,946 for 2023, 2022 and 2021, respectively.

Nordson Corporation 60

Notes to Consolidated Financial Statements — (Continued)

The following table summarizes activity related to stock options during 2023:

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As of October 31, 2023, there was $ 5,108 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.

That cost is expected to be amortized over a weighted average period of approximately 1.6 years.

The fair value of each option grant was estimated at the date of the grant using the Black-Scholes option-pricing model with the following assumptions:

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The weighted-average expected volatility used to value options granted in 2023, 2022 and 2021 was 30.6 percent, 30.6 percent and 31.0 percent, respectively.

Nordson Corporation 57

Notes to Consolidated Financial Statements — (Continued)

Historical information was the primary basis for the selection of the expected volatility, expected dividend yield and the expected lives of the options.

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In the event of a recipient's disability or death, all restricted shares and units granted within 12 months prior to termination fully vest.

Nordson Corporation 61

Notes to Consolidated Financial Statements — (Continued)

Termination for any other reason prior to the lapse of any restrictions or vesting of units results in forfeiture of the shares or units.

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Restricted at October 31, 2023 — $ —

As of October 31, 2022, there was $ 331 of unrecognized compensation cost related to restricted shares.

The cost is expected to be amortized over a weighted average period of 0.3 years.

As of October 31, 2023, there was no unrecognized compensation cost related to restricted shares.

The amount charged to expense related to restricted shares was $ 336 , $ 1,096 and $ 2,054 in 2023, 2022 and 2021, respectively.

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The amounts charged to expense related to restricted share units in 2023, 2022 and 2021 were $ 8,765 , $ 8,403 and $ 6,264 , respectively.

Restricted share unit expense increased in 2021 compared to prior years as the granting of restricted share units has generally replaced the granting of stock options for key employees.

Nordson Corporation 58

Notes to Consolidated Financial Statements — (Continued)

Restricted share unit expense increased beginning in 2021 compared to prior years as the granting of restricted share units has generally replaced the granting of stock options for key employees.

Performance share incentive awards — Executive officers and selected other key employees are eligible to receive common share-based incentive awards.

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The per share values were $ 231.34 , $ 211.25 and $ 214.51 for 2023;

$ 202.05 for 2021;

and $ 201.50 modified per share value compared to original per share values of $ 160.02 , $ 133.01 and $ 184.04 for 2020.

The amount charged to expense for executive officers and selected other key employees in 2022 was $ 13,626 and $ 7,178 in 2021 while the amount credited to expense in 2020 was $ 2,732 .

The cumulative amount recorded in shareholders’ equity at October 31, 2022 and 2021 was $ 20,641 and $ 7,015 , respectively.

$ 260.60 , $ 273.50 and $ 221.94 for 2022;

and $ 202.05 for 2021.

The amount charged to expense for executive officers and selected other key employees in 2023, 2022 and 2021 were $ 6,543 , $ 13,626 and $ 7,178 , respectively.

As of October 31, 2023, there was $ 5,939 of unrecognized compensation cost related to performance share incentive awards.

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Additional share equivalent units are earned when common share dividends are declared.

Nordson Corporation 62

Notes to Consolidated Financial Statements — (Continued)

The following table summarizes activity related to director deferred compensation share equivalent units during 2023:

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Items below the operating profit line of the Consolidated Statement 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 Note 1, Significant Accounting Policies.

Effective in the fourth quarter of 2022, we realigned our former two operating segments into three :

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

Existing product lines were unchanged as part of this new structure.

We made changes to realign our management team and our operating segments.

This realignment gives us better visibility into our medical and electronics platforms, which have grown significantly through both organic and acquisitive opportunities.

The revised operating segments better reflect how we now manage the Company, allocate resources and assess performance of the businesses.

Certain reclassifications have been made to our segment disclosures, principally related to this segment change.

We also revised our geographic regions, such that the United States and Japan are now included in the Americas and Asia Pacific, respectively.

As such, our geographical regions as used throughout this report include the Americas (United States, Canada, Mexico and Central and South America), Asia Pacific (including Japan) and Europe.

Nordson Corporation 59

Notes to Consolidated Financial Statements — (Continued)

The accounting policies of the segments are the same as those described in Note 1.

Industrial Precision Solutions:

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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.

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

Medical and Fluid Solutions:

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No single customer accounted for 10 percent or more of sales in 2023, 2022 or 2021.

Nordson Corporation 63

Notes to Consolidated Financial Statements — (Continued)

The following table presents information about our reportable segments:

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Operating profit (loss) 460,889 189,367 101,662 ( 79,157 ) 672,761

Identifiable assets (b)

1,112,825 1,558,861 397,250 812,964 (a)

Identifiable assets (a)

1,932,527 1,544,456 730,192 1,105,471

Property, plant and equipment expenditures 9,257 15,716 4,209 5,401 34,583

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Operating profit (loss) 434,476 217,199 133,253 ( 82,568 ) 702,360

Identifiable assets (b)

964,840 1,519,144 394,572 967,796 (a)

Identifiable assets (a)

1,112,825 1,558,861 397,250 812,964

Property, plant and equipment expenditures 9,490 31,009 2,383 8,546 51,428

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Operating profit (loss) 414,192 198,194 73,466 ( 70,725 ) 615,127

Identifiable assets (b)

915,148 1,482,585 396,617 928,358 (a)

Identifiable assets (a)

964,840 1,519,144 394,572 967,796

Property, plant and equipment expenditures 9,009 21,115 1,949 6,230 38,303

(a) Corporate assets are principally cash and cash equivalents, deferred income taxes, leases, headquarter facilities, the major portion of our enterprise management system and intangible assets.

Includes assets held for sale in 2020, see Note 4.

(b) Operating segment identifiable assets include notes and accounts receivable net of allowance for doubtful accounts, inventories net of reserves, property, plant and equipment net of accumulated depreciation and goodwill.

Nordson Corporation 60

Notes to Consolidated Financial Statements — (Continued)

(a) Operating segment identifiable assets include notes and accounts receivable net of allowance for doubtful accounts, inventories net of reserves, property, plant and equipment net of accumulated depreciation and goodwill.

Corporate assets are principally cash and cash equivalents, deferred income taxes, leases, headquarter facilities, the major portion of our enterprise management systems and intangible assets.

We have significant sales and long-lived assets in the following geographic areas:

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Total long-lived assets $ 499,022 $ 455,721 $ 466,416

Long-lived assets includes property, plant and equipment - net and operating right of use lease assets, which were recorded as a result of the new lease standard as codified in ASC 842 and excludes amounts held for sale in 2020, see Note 4.

Long-lived assets include property, plant and equipment - net and operating right of use lease assets.

Nordson Corporation 64

Notes to Consolidated Financial Statements — (Continued)

A reconciliation of total assets for reportable segments to total consolidated assets is as follows:

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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.

Note 19 — Subsequent Events

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.

Nordson Corporation 65

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Using criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") in Internal Control-Integrated Framework ("2013 framework"), Nordson’s management assessed the effectiveness of our internal control over financial reporting as of October 31, 2023.

We completed the acquisitions of the ARAG Group and its subsidiaries ("ARAG Group" or "ARAG") and CyberOptics Corporation ("CyberOptics") on August 24, 2023 and November 3, 2022, respectively.

As permitted by SEC guidance, the scope of our evaluation of internal control over financial reporting as of October 31, 2023 did not include the internal control over financial reporting of the ARAG Group and CyberOptics.

The results of the ARAG Group and CyberOptics are included in our consolidated financial statements from the date each business was acquired.

The combined total assets of the ARAG Group and CyberOptics represented 30% of our total assets at October 31, 2023.

The combined net revenues represented 4% of consolidated revenues for the year ended October 31, 2023 and the combined net income for the year ended October 31, 2023 did not have a material impact on the Company’s operations .

Based on our assessment, management concluded that our internal control over financial reporting was effective as of October 31, 2023.

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Their report is included herein.

/s/ Sundaram Nagarajan /s/ Joseph P.

President and Chief Executive Officer Executive Vice President, Chief Financial Officer

/s/ Sundaram Nagarajan /s/ Stephen Shamrock

President and Chief Executive Officer Vice President and Corporate Controller, Interim Chief Financial Officer

December 20, 2023

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In our opinion, Nordson Corporation (the Company) maintained, in all material respects, effective internal control over financial reporting as of October 31, 2023, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of October 31, 2022 and 2021, the related consolidated statements of income, comprehensive income, shareholders' equity and cash flows for each of the three years in the period ended October 31, 2022, and the related notes and financial statement schedule listed in the Index at Item 15(a) and our report dated December 19, 2022 expressed an unqualified opinion thereon.

As indicated in the accompanying Management’s Report on Internal Control Over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of ARAG Group and its subsidiaries (ARAG Group or ARAG) and CyberOptics Corporation (CyberOptics), which are included in the 2023 consolidated financial statements of the Company and on a combined basis constitu ted 30% of total assets as of October 31, 2023 and 4% of total revenues for the year then ended.

The combined net income for the year then ended did not have a material impact on the Company’s operations.

Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of the ARAG Group and CyberOptics.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of October 31, 2023 and 2022, the related consolidated statements of income, comprehensive income, shareholders' equity and cash flows for each of the three years in the period ended October 31, 2023, and the related notes and schedule listed in the Index at Item 15(a) and our report dated December 20, 2023 expressed an unqualified opinion thereon.

Basis for Opinion

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Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates.

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Nordson Corporation 68

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Auditing management’s annual goodwill impairment assessment relating to goodwill was complex due to the use of valuation methodologies in the determination of the estimated fair values of the reporting units.

These fair value estimates are impacted by assumptions such as the selection of comparable guideline companies and the related valuation multiples, as well as discount rates, revenue growth rates, and operating margins which are affected by expectations about future market or economic conditions.

These fair value estimates are impacted by assumptions such as discount rates, revenue growth rates, and operating margins which are affected by expectations about future market or economic conditions.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s goodwill impairment process whereby the Company develops assumptions that are used as inputs to the annual goodwill impairment test.

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We also assessed the appropriateness of the disclosures in the consolidated financial statements.

Valuation of acquired customer relationship intangible asset in the ARAG Group acquisition

Description of the Matter During 2023, the Company completed its acquisition of ARAG Group (ARAG) for net consideration of €957,000 thousand, as disclosed in Note 3 to the consolidated financial statements.

The transaction was accounted for as a business combination.

The acquisition date fair value of the acquired customer relationship intangible asset was estimated to be $295,000 thousand.

Auditing the acquisition date fair value of the customer relationship intangible asset was complex due to the significant estimation used by management in determining the fair value.

In particular, the fair value estimate required the use of valuation methodologies that were sensitive to significant and subjective assumptions, such as forecasted revenue growth rates, EBITDA margins, customer attrition rate, and discount rate, which are affected by expectations about future market or economic conditions.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls used by management for the determination of the estimated fair value of the customer relationship intangible asset.

For example, we tested controls over management’s review of the valuation of the intangible asset, including the review of the valuation model and significant assumptions used to develop the fair value estimate of the intangible asset.

We also tested management's internal controls to validate that the data used in the valuation models was complete and accurate.

Nordson Corporation 69

To test the estimated fair value of the customer relationship intangible asset, our audit procedures included, among others, assessing methodologies and testing the significant assumptions discussed above and the underlying data supporting the significant assumptions and estimates used by the Company in the valuations.

We tested significant assumptions through a combination of procedures, as applicable for each assumption, including comparing them to forecasted industry trends, as well as to the historical results of the acquired business.

We performed sensitivity analyses of the significant assumptions used in the valuation model to evaluate the change in fair value resulting from changes in the significant assumptions.

With the assistance of our valuation specialists, we evaluated the methodology used by the Company and certain significant assumptions included in the fair value estimate.

We also assessed the appropriateness of the disclosures in the consolidated financial statements.

/s/ Ernst & Young LLP

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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 8. Financial Statements and Supplementary Data