What changed in this filing

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Item 1. Financial Statements

2024-02-22 compared with 2023-08-24 · 162 added, 242 removed, 501 unchanged (45% of the section changed)

1 unchanged sentence

Condensed Consolidated Statements of Income

Three Months Ended Nine Months Ended

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

Three Months Ended

(In thousands, except for per share data) January 31, 2024 January 31, 2023

Sales $ 633,193 $ 610,477

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Consolidated Statements of Comprehensive Income

Three Months Ended Nine Months Ended

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

Three Months Ended

(In thousands) January 31, 2024 January 31, 2023

Net income $ 109,572 $ 104,261

1 unchanged sentence

Foreign currency translation adjustments 43,943 76,821

Pension settlement adjustment, net of tax — — — 32,047

Pension and other postretirement plan adjustments, net of tax ( 459 ) ( 576 )

Total other comprehensive income (loss) 3,296 ( 19,372 ) 79,078 ( 41,746 )

Total other comprehensive income 43,484 76,245

Total comprehensive income $ 153,056 $ 180,506

4 unchanged sentences

Current assets:

July 31, 2023 October 31, 2022

January 31, 2024 October 31, 2023

Cash and cash equivalents $ 136,201 $ 115,679

38 unchanged sentences

Consolidated Statements of Shareholders’ Equity

Nine Months Ended July 31, 2023

Three Months Ended January 31, 2024

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

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January 31, 2024 $ 12,253 $ 685,275 $ 4,060,070 $ ( 152,957 ) $ ( 1,880,674 ) $ 2,723,967

Shares issued under company stock and employee benefit plans — 2,632 — — 369 3,001

Stock-based compensation — 4,970 — — — 4,970

Purchase of treasury shares — — — — ( 47,490 ) ( 47,490 )

Dividends declared ($ 0.65 per share)

— — ( 37,264 ) — — ( 37,264 )

Net income — — 127,563 — — 127,563

Other Comprehensive Income (Loss):

Foreign currency translation adjustments — — — ( 290 ) — ( 290 )

Defined benefit pension and post-retirement

plan adjustments — — — ( 173 ) — ( 173 )

April 30, 2023 $ 12,253 $ 648,402 $ 3,809,577 $ ( 132,000 ) $ ( 1,841,230 ) $ 2,497,002

Shares issued under company stock and employee benefit plans — 5,958 — — 683 6,641

Stock-based compensation — 5,858 — — — 5,858

Purchase of treasury shares — — — — ( 23,798 ) ( 23,798 )

Dividends declared ($ 0.65 per share)

— — ( 37,084 ) — — ( 37,084 )

Net income — — 127,891 — — 127,891

Other Comprehensive Income (Loss):

Foreign currency translation adjustments — — — 3,455 — 3,455

Defined benefit pension and post-retirement

plan adjustments — — — ( 159 ) — ( 159 )

July 31, 2023 $ 12,253 $ 660,218 $ 3,900,384 $ ( 128,704 ) $ ( 1,864,345 ) $ 2,579,806

Nordson Corporation

Consolidated Statements of Shareholders’ Equity

Nine Months Ended July 31, 2022

Three Months Ended January 31, 2023

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

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

Shares issued under company stock and employee benefit plans — 1,843 — — 234 2,077

Stock-based compensation — 7,394 — — — 7,394

Purchase of treasury shares — — — — ( 105,464 ) ( 105,464 )

Dividends declared ($ 0.51 per share)

— — ( 29,577 ) — — ( 29,577 )

Net income — — 109,634 — — 109,634

Other Comprehensive Income (Loss):

Foreign currency translation adjustments — — — ( 46,901 ) — ( 46,901 )

Pension plan settlement adjustment — — — 32,047 — 32,047

Defined benefit pension and post-retirement

plan adjustments — — — 2,778 — 2,778

April 30, 2022 $ 12,253 $ 608,009 $ 3,435,769 $ ( 198,209 ) $ ( 1,667,206 ) $ 2,190,616

Shares issued under company stock and employee benefit plans — 940 — — 107 1,047

Stock-based compensation — 7,618 — — — 7,618

Purchase of treasury shares — — — — ( 93,301 ) ( 93,301 )

Dividends declared ($ 0.51 per share)

— — ( 29,374 ) — — ( 29,374 )

Net income — — 141,811 — — 141,811

Other Comprehensive Income (Loss):

Foreign currency translation adjustments — — — ( 21,220 ) — ( 21,220 )

Defined benefit pension and post-retirement

plan adjustments — — — 1,848 — 1,848

July 31, 2022 $ 12,253 $ 616,567 $ 3,548,206 $ ( 217,581 ) $ ( 1,760,400 ) $ 2,199,045

See accompanying notes.

1 unchanged sentence

Condensed Consolidated Statements of Cash Flows

(In thousands) Nine Months Ended

(In thousands) Three Months Ended

Cash flows from operating activities:

July 31, 2023 July 31, 2022

January 31, 2024 January 31, 2023

Net income $ 109,572 $ 104,261

6 unchanged sentences

Changes in operating assets and liabilities 14,614 ( 58,371 )

Other 8,074 44,789

Net cash provided by operating activities 172,356 123,337

2 unchanged sentences

Proceeds from sale of property, plant and equipment 22 9

Other 1,783 —

Acquisition of business, net of cash acquired — ( 377,843 )

1 unchanged sentence

Cash flows from financing activities:

Proceeds from long-term debt 1,279,151 63,067

Repayment of long-term debt ( 1,205,195 ) ( 40,162 )

Proceeds from issuance of debt 805 566,978

Repayment of debt ( 108,000 ) ( 314,700 )

Repayment of finance lease obligations ( 1,488 ) ( 1,318 )

2 unchanged sentences

Dividends paid ( 38,855 ) ( 37,199 )

Net cash used in financing activities ( 102,074 ) ( 294,418 )

Net cash provided (used) in financing activities ( 140,491 ) 215,693

Effect of exchange rate changes on cash ( 5,618 ) 6,643

5 unchanged sentences

Notes to Condensed Consolidated Financial Statements

July 31, 2023

January 31, 2024

NOTE REGARDING AMOUNTS AND FISCAL YEAR REFERENCES

In this quarterly report, all amounts related to United States dollars and foreign currency and to the number of Nordson Corporation’s common shares, except for per share earnings and dividend amounts, are expressed in thousands.

In this Quarterly Report on Form 10-Q, all amounts related to United States dollars and foreign currency and to the number of Nordson Corporation’s common shares, except for per share earnings and dividend amounts, are expressed in thousands.

Unless the context otherwise indicates, all references to “we” or the “Company” mean Nordson Corporation.

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In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

Operating results for the nine months ended July 31, 2023 are not necessarily indicative of the results that may be expected for the full year.

Operating results for the three months ended January 31, 2024 are not necessarily indicative of the results that may be expected for the full year.

For further information, refer to the Consolidated Financial Statements and notes included in our Annual Report on Form 10-K for the year ended October 31, 2023.

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Revenue for undelivered items is deferred and included within Accrued liabilities in our Consolidated Balance Sheets.

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

Revenues deferred as of January 31, 2024 and 2023 were not material.

However, for certain contracts related to the sale of customer-specific products within our Medical and Fluid Solutions segment, revenue is recognized over time as we satisfy performance obligations because of the continuous transfer of control to the customer.

The continuous transfer of control to the customer occurs as we enhance assets that are customer controlled and we are contractually entitled to payment for work performed to date plus a reasonable margin.

As control transfers over time, revenue is recognized based on progress toward completion of the performance obligations.

As control transfers over time for these products or services, revenue is recognized based on progress toward completion of the performance obligations.

The selection method to measure progress towards completion requires judgment and is based on the nature of the products or services to be provided.

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Under this method, revenues are recorded proportionally as costs are incurred.

Contract assets recognized are recorded in Prepaid expenses and other current assets and contract liabilities are recorded in Accrued liabilities in our Consolidated Balance Sheets and were not material on July 31, 2023 and October 31, 2022.

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

Revenue recognized over time represented approximately less than ten percent of our overall consolidated revenues at January 31, 2024 and October 31, 2023.

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

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Options whose exercise price is higher than the average market price are excluded from the calculation of diluted earnings per share because the effect would be anti-dilutive.

Options excluded from the calculation of diluted earnings per share for the three months ended July 31, 2023 and 2022 were 138 and 76 , respectively.

Options excluded from the calculation of diluted earnings per share for the nine months ended July 31, 2023 and 2022 were 141 and 79 , respectively.

Options excluded from the calculation of diluted earnings per share for the three months ended January 31, 2024 and 2023 were 74 and 144 , respectively.

Recently issued accounting standards

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

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures .

ASU 2023-07 requires enhanced disclosures about significant segment expenses and enhanced disclosures in interim periods.

The guidance in ASU 2023-07 will be applied retrospectively and is effective for annual reporting periods in fiscal years beginning after December 15, 2023 and interim reporting periods in fiscal years beginning after December 31, 2024, with early adoption permitted.

The Company is currently evaluating the impact that the adoption of ASU 2023-07 will have on its consolidated financial statements and disclosures and anticipates adoption in 2025.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures .

ASU 2023-09 is intended to improve income tax disclosure requirements by requiring specific disclosure in the rate reconciliation and additional information for reconciling items that meet a quantitative threshold.

The guidance in ASU 2023-09 will be effective for annual reporting periods in fiscal years beginning after December 15, 2024.

The Company is currently evaluating the impact that the adoption of ASU 2023-09 will have on its consolidated financial statements and disclosures and anticipates adoption in fiscal 2026.

Business acquisitions have been accounted for using the acquisition method, with the acquired assets and liabilities recorded at estimated fair value on the dates of acquisition.

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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 (Capvis), DRIP Co-Investment (DRIP), and certain individuals (the Individual Sellers, and together with Capvis and DRIP, collectively, the Sellers).

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 will operate 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 Term F acility ).

The Term Facility has a 364-day term and matures in August 2024, and loans under the facility bear interest at a eurocurrency rate plus an applicable margin that will range from 1.1250 % to 1.625 % based on the Company’s Leverage Ratio (as defined in the term loan credit agreement and calculated on a consolidated net debt basis).

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 the Term Facility and Revolving Facility.

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 F acility" ).

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 subsequently paid off in September 2023 with the net proceeds of a senior notes offering.

Based on the fair value of the assets acquired and the liabilities assumed, goodwill of $ 687,200 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 January 31, 2024, 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.

Nordson Corporation

The assets and liabilities acquired were as follows:

August 24, 2023

Cash $ 32,966

Receivables - net 29,765

Inventories - net 52,130

Goodwill 687,200

Intangibles 353,500

Other assets 57,238

Total Assets $ 1,212,799

Accounts payable $ 18,915

Deferred income taxes 100,057

Other liabilities 15,924

Total Liabilities $ 134,896

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

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

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

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

Nordson Corporation

Goodwill associated with the acquisition was not tax deductible .

As of January 31, 2024, the purchase price allocation is final.

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

The assets and liabilities acquired were as follows:

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Total Liabilities $ 34,858

2022 Acquisition

On November 1, 2021, we acquired 100 % of NDC Technologies (NDC), a leading global provider of precision measurement solutions for in-line manufacturing process control.

NDC's technology portfolio includes in-line measurement sensors, gauges and analyzers using near-infrared, laser, X-ray, optical and nucleonic technologies, as well as proprietary algorithms and software.

We acquired NDC for an aggregate purchase price of $ 171,613 , net of cash of approximately $ 7,533 and other working capital adjustments of $ 2,763 , utilizing cash on hand.

Based on the fair value of the assets acquired and the liabilities assumed, goodwill of $ 131,129 and identifiable intangible assets of $ 31,130 were recorded.

The identifiable intangible assets consist primarily of $ 10,800 of tradenames (amortized over thirteen years ), $ 10,000 of technology (amortized over seven years ), $ 9,500 of customer relationships (amortized over four years ) and $ 830 of non-compete agreements (amortized over three years ).

Goodwill associated with this acquisition of $ 72,018 is tax deductible.

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

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

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Accounts receivable balances are written-off against the allowance if deemed uncollectible.

Accounts receivable are net of an allowance for credit losses of $ 8,076 and $ 8,218 on July 31, 2023 and October 31, 2022, respectively.

Provision losses related to allowance for credit losses of $ 410 and provision income of $ 239 was recorded for the three and nine months ended July 31, 2023, respectively, compared to provision expense of $ 788 and $ 1,439 for the same periods a year ago, respectively.

Accounts receivable are net of an allowance for credit losses of $ 10,460 and $ 10,015 on January 31, 2024 and October 31, 2023, respectively.

The p rovision for losses on receivables was $ 80 and $ 348 for the three months ended January 31, 2024 and 2023,

Nordson Corporation

respectively.

The remaining change in the allowance for credit losses is principally related to net write-off/recoveries of uncollectible accounts as well as currency translation.

Components of inventories were as follows:

July 31, 2023 October 31, 2022

January 31, 2024 October 31, 2023

Finished goods $ 253,283 $ 233,552

4 unchanged sentences

$ 451,217 $ 454,775

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

Nordson Corporation

Property, Plant and Equipment

Components of property, plant and equipment were as follows:

July 31, 2023 October 31, 2022

January 31, 2024 October 31, 2023

Land $ 16,049 $ 15,792

8 unchanged sentences

$ 394,467 $ 392,846

Depreciation expense was $ 13,180 and $ 12,178 for the three months ended July 31, 2023 and 2022, respectively.

Depreciation expense was $ 38,798 and $ 36,876 for the nine months ended July 31, 2023 and 2022, respectively.

Depreciation expense was $ 14,157 and $ 12,562 for the three months ended January 31, 2024 and 2023, respectively.

Goodwill and other intangible assets

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

Changes in the carrying amount of goodwill for th e three months ended January 31, 2024 by operating segment were as follows:

Solutions Medical Fluid Systems Advanced

3 unchanged sentences

Currency effect 25,705 1,304 1,576 28,585

Balance at July 31, 2023 $ 524,980 $ 1,175,938 $ 409,862 $ 2,110,780

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

Balance at January 31, 2024 $ 1,227,001 $ 1,175,162 $ 402,923 $ 2,805,086

See Acquisitions Note for additional details.

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

July 31, 2023

January 31, 2024

Amount Accumulated

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Total $ 1,135,513 $ 462,769 $ 672,744

Amortization expense for the three months ended July 31, 2023 and 2022 was $ 13,922 and $ 12,709 , respectively.

Amortization expense for the nine months ended July 31, 2023 and 2022 was $ 41,839 and $ 38,366 , respectively.

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

Amortization expense for the three months ended January 31, 2024 and 2023 was $ 19,387 and $ 13,872 , respectively.

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

Pension and other postretirement plans

During the second quarter of 2022, we completed a partial plan settlement transaction in regards to two of our U.S.

pension plans in which plan assets amounting to $ 171,181 were used to purchase a group annuity contract from The Prudential Insurance Company of America (Prudential).

The settlement resulted in a loss of $ 41,221 , which is included in Other-net on the Condensed Consolidated Statements of Income.

This transaction relieved the Company of its responsibility for the pension obligation related to certain retired employees and transferred the obligation and payment responsibility to Prudential for retirement benefits owed to approximately 1,500 retirees and other beneficiaries.

The annuity contract covered retirees who commenced receiving benefits on or before November 1, 2021.

The monthly retirement benefit payment amounts currently received by retirees and their beneficiaries did not change as a result of this transaction.

Plan participants not included in the transaction remain in the plans and responsibility for payment of the retirement benefits remains with the Company.

Nordson Corporation

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

The components of net periodic pension and other postretirement cost for the three months ended January 31, 2024 and 2023 were:

International

3 unchanged sentences

Expected return on plan assets ( 6,652 ) ( 6,529 ) ( 417 ) ( 377 )

Amortization of prior service cost (credit) — 12 ( 13 ) ( 13 )

Amortization of net actuarial loss — 1,197 20 558

Total benefit cost $ 391 $ 2,262 $ 538 $ 893

International

Nine Months Ended 2023 2022 2023 2022

Service cost $ 8,233 $ 13,338 $ 838 $ 1,343

Interest cost 12,526 11,146 1,887 861

Expected return on plan assets ( 19,587 ) ( 22,082 ) ( 1,151 ) ( 1,109 )

Amortization of prior service cost (credit) — 36 ( 38 ) ( 43 )

Amortization of prior service credit — — ( 2 ) ( 13 )

Amortization of net actuarial loss — — 9 20

Settlement loss — 41,221 — —

Total benefit cost $ 607 $ 390 $ 516 $ 508

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

The components of other postretirement benefit costs for the three months ended January 31, 2024 and 2023 were:

International

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Interest cost 754 765 3 3

Amortization of net actuarial (gain) loss — 244 ( 16 ) ( 12 )

Total benefit cost (income) $ 866 $ 897 $ ( 12 ) $ ( 6 )

International

Nine Months Ended 2023 2022 2023 2022

Service cost $ 299 $ 515 $ 4 $ 9

Interest cost 2,297 1,443 8 10

Amortization of net actuarial (gain) loss — 733 ( 47 ) ( 37 )

Amortization of net actuarial gain ( 147 ) — ( 14 ) ( 16 )

Total benefit cost (income) $ 677 $ 865 $ ( 10 ) $ ( 12 )

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

We record our interim provision for income taxes based on our estimated annual effective tax rate, as well as certain items discrete to the current periods.

The effective tax rate for the three months ended July 31, 2023 and 2022 was 21.1 % and 21.4 %, respectively.

The effective tax rate for the nine months ended July 31, 2023 and 2022 was 20.9 % and 21.2 %, respectively.

Due to our share-based payment transactions, our income tax provision included a discrete tax benefit of $ 996 and $ 2,745 for the three months and nine months ended July 31, 2023, respectively, compared to $ 115 and $ 1,539 for the three and nine months ended July 31, 2022, respectively.

Nordson Corporation

We record our interim provision for income taxes based on our estimated annual effective tax rate, as well as certain items discrete to the current period.

The effective tax rate for the three months ended January 31, 2024 and 2023 was 21.0 % and 20.5 %, respectively.

Due to our share-based payment transactions, our income tax provision included a discrete tax benefit of $ 369 and $ 1,166 for the three months ended January 31, 2024 and 2023, respectively .

Accumulated other comprehensive income (loss)

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43,943 — 43,943

Balance at July 31, 2023 $ ( 80,060 ) $ ( 48,644 ) $ ( 128,704 )

Balance at January 31, 2024 $ ( 89,337 ) $ ( 63,620 ) $ ( 152,957 )

(a) Includes a net loss of $ 11,855 , net of tax of $ 3,541 , on net investment hedges.

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

As of July 31, 2023, a total of 2,012 common shares were available to be granted under the 2021 Plan.

As of January 31, 2024, a total of 1,885 common shares were available to be granted under the 2021 Plan.

Stock Options

Nonqualified or incentive stock options may be granted to our employees and directors.

Generally, options granted to employees may be exercised beginning one year from the date of grant at a rate not exceeding 25 % per year and expire 10 years from the date of grant.

Generally, options granted to employees may be exercised beginning one year from the date of grant at a rate not exceeding 25 percent per year and expire 10 years from the date of grant.

Vesting accelerates upon a qualified termination in connection with a change in control.

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Option exercises are satisfied through the issuance of treasury shares on a first-in, first-out basis.

We recognized compensation expense related to stock options of $ 1,697 and $ 4,982 for the three month and nine months ended July 31, 2023, respectively, compared to $ 1,580 and $ 5,743 for the three and nine months ended July 31, 2022, respectively.

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

We recognized compensation expense related to stock options of $ 1,088 and $ 1,663 for the three months ended January 31, 2024 and 2023, respectively.

The following table summarizes activity related to stock options for the three months ended January 31, 2024:

Options Weighted-

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Forfeited or expired ( 6 ) 228.20

Outstanding at July 31, 2023 1,094 $ 151.09 $ 111,165 5.1 years

Outstanding at January 31, 2024 995 $ 159.51 $ 92,894 5.1 years

Expected to vest 164 $ 237.41 $ 2,927 8.4 years

Exercisable at July 31, 2023 846 $ 132.58 $ 101,014 4.4 years

As of July 31, 2023, there was $ 7,013 of total unrecognized compensation cost related to unvested stock options.

That cost is expected to be amortized over a weighted average period of approximately 1.7 years.

Exercisable at January 31, 2024 828 $ 143.80 $ 89,927 4.4 years

Nordson Corporation

As of January 31, 2024, there was $ 8,042 of total unrecognized compensation cost related to unvested stock options.

That cost is expected to be amortized over a weighted average period of approximately 2.7 years.

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

Nine Months Ended

July 31, 2023 July 31, 2022

Three Months Ended

January 31, 2024 January 31, 2023

Expected volatility 30.5 % - 31.7 % 30.4 % - 31.8 %

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Treasury issues with a term equal to the expected life of the option being valued.

The weighted average grant date fair value of stock options granted during the nine months ended July 31, 2023 and 2022 was $ 77.99 and $ 79.03 , respectively.

The total intrinsic value of options exercised during the three months ended July 31, 2023 and 2022 was $ 7,741 and $ 1,052 , respectively.

The total intrinsic value of options exercised during the nine months ended July 31, 2023 and 2022 was $ 19,873 and $ 10,418 , respectively.

Cash received from the exercise of stock options for the nine months ended July 31, 2023 and 2022 was $ 18,449 and $ 8,845 , respectively.

The weighted average grant date fair value of stock options granted during the three months ended January 31, 2024 and 2023 was $ 79.81 and $ 78.12 , respectively.

The total intrinsic value of options exercised during the three months ended January 31, 2024 and 2023 was $ 14,127 and $ 8,350 , respectively.

Cash received from the exercise of stock options for the three months ended January 31, 2024 and 2023 was $ 14,418 and $ 8,807 , respectively.

Restricted Shares and Restricted Share Units

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Termination of service as a director for any other reason within one year of date of grant results in a pro-rata vesting of shares or units.

As shares or units are issued, deferred stock-based compensation equivalent to the fair value on the date of grant is expensed over the vesting period.

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

Number of Shares Weighted-Average

Restricted shares at October 31, 2022 6 $ 167.99

Vested ( 6 ) 167.99

Restricted shares at July 31, 2023 — $ —

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

The amount charged to expense related to restricted shares during the three months ended July 31, 2023 and 2022 was $ 73 and $ 243 , respectively, which included common share dividends of $ 2 and $ 4 , respectively.

For the nine months ended July 31, 2023 and 2022, the amounts charged to expense related to restricted shares were $ 336 and $ 856 , respectively, which included common shares dividends of $ 5 and $ 14 , respectively.

As shares or units are issued, stock-based compensation equivalent to the fair value on the date of grant is expensed over the vesting period.

As of January 31, 2024, there were no unrecognized compensation cost related to restricted shares.

The amount charged to expense related to restricted shares during the three months ended January 31, 2024 and 2023 was $ 0 and $ 160 , respectively, which included common share dividends of $ 0 and $ 2 , respectively.

Nordson Corporation

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

The following table summarizes activity related to restricted share units during the three months ended January 31, 2024:

Number of Units Weighted-Average

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Vested ( 28 ) 233.59

Restricted share units at July 31, 2023 70 $ 232.88

As of July 31, 2023, there was $ 10,080 of remaining expense to be recognized related to outstanding restricted share units, which is expected to be recognized over a weighted average period of 1.8 years.

The amount charged to expense related to restricted share units during each of the three months ended July 31, 2023 and 2022 was $ 2,152 and $ 2,154 , respectively, compared to $ 6,658 and $ 6,246 for the nine months ended July 31, 2023 and 2022, respectively.

Restricted share units at January 31, 2024 75 $ 235.89

As of January 31, 2024, there was $ 15,288 of remaining expense to be recognized related to outstanding restricted share units, which is expected to be recognized over a weighted average period of 2.2 years.

The amount charged to expense related to restricted share units during each of the three months ended January 31, 2024 and 2023 was $ 2,226 and $ 2,258 , respectively.

Performance Share Incentive Awards

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The amount of compensation expense is based upon current performance projections and the percentage of the requisite service that has been rendered.

The calculations are based upon the grant date fair value, which is principally driven by the stock price on the date of grant or a Monte Carlo valuation for awards with market conditions.

The per share values were $ 231.34 , $ 211.25 and $ 214.51 in 2023, and $ 260.60 , $ 273.50 and $ 221.94 for 2022.

The amount charged to expense related to performance awards for the three months ended July 31, 2023 and 2022 was $ 1,831 and $ 3,555 , respectively, compared to charges of $ 4,785 and $ 10,296 for the nine months ended July 31, 2023 and 2022, respectively.

As of July 31, 2023, there was $ 7,947 of unrecognized compensation cost related to performance share incentive awards.

The calculations are based upon the grant date fair value, which is principally driven by the stock price on the date of grant.

The per share values were $ 229.58 in 2024, and $ 231.34 , $ 211.25 and $ 214.51 for 2023.

The amount charged to expense related to performance awards for the three months ended January 31, 2024 and 2023 was $ 1,268 and $ 2,062 , respectively.

As of January 31, 2024, there was $ 11,531 of unrecognized compensation cost related to performance share incentive awards.

Deferred Compensation

Our executive officers and other highly compensated employees may elect to defer up to 100 % of their base pay and cash incentive compensation, and for executive officers, up to 90 % of their share-based performance incentive payout each year.

Our executive officers and other highly compensated employees may elect to defer up to 100 percent of their base pay and cash incentive compensation, and for executive officers, up to 90 percent of their share-based performance incentive payout each year.

Additional share units are credited for quarterly dividends paid on our common shares.

Expense related to dividends paid under this plan for the three months ended July 31, 2023 and 2022 was $ 30 and $ 17 , respectively, compared to $ 77 and $ 53 for the nine months ended July 31, 2023 and 2022, respectively.

Expense related to dividends paid under this plan for the three months ended January 31, 2024 and 2023 was $ 21 and $ 18 , respectively.

Deferred Directors' Compensation

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

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

The following table summarizes activity related to director deferred compensation share equivalent units during the three months ended January 31, 2024:

Number of Shares Weighted-Average

Grant Date Fair

Outstanding at October 31, 2023 78 $ 93.11

Distributions ( 5 ) 53.35

Outstanding at July 31, 2023 78 $ 84.02

The amount charged to expense related to director deferred compensation for the three months ended July 31, 2023 and 2022 was $ 76 and $ 73 , respectively, compared to $ 234 and $ 224 for the nine months ended July 31, 2023 and 2022, respectively.

Nordson Corporation

Outstanding at January 31, 2024 73 $ 96.11

The amount charged to expense related to director deferred compensation for the three months ended January 31, 2024 and 2023 was $ 56 and $ 80 , respectively .

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

A typical warranty program requires that we repair or replace defective products within a specified time period (generally one year ) from the date of delivery or first use.

A typical warranty program requires that we repair or replace defective products within a specified time period (generally one year ) measured from the date of delivery or first use.

We record an estimate for future warranty-related costs based on actual historical return rates.

1 unchanged sentence

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

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

July 31, 2023 July 31, 2022

Nordson Corporation

Following is a reconciliation of the product warranty liability for the three months ended January 31, 2024 and 2023:

January 31, 2024 January 31, 2023

Beginning balance at October 31 $ 14,401 $ 11,723

7 unchanged sentences

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

The primary measure used by the chief operating decision maker for purposes of making decisions about allocating resources to the segments and assessing performance is operating profit, which equals sales less cost of sales and certain operating expenses.

The primary measure us ed by the chief operating decision maker for purposes of making decisions about allocating resources to the segments and assessing performance is operating profit, which equals sales less cost of sales and certain operating expenses.

Items below the operating profit line of the Condensed Consolidated Statements of Income (interest and investment income, interest expense and other income/expense ) are excluded from the measure of segment profitability reviewed by our chief operating decision maker and are not presented by operating segment.

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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:

5 unchanged sentences

Applications include, but are not limited to, semiconductors, printed circuit boards, electronic components and automotive electronics.

Nordson Corporation

The following table presents information about our segments:

2 unchanged sentences

Solutions Corporate Total

July 31, 2023

Net external sales $ 338,257 $ 170,871 $ 139,549 $ — $ 648,677

Operating profit (loss) 115,346 54,019 27,083 ( 25,452 ) 170,996

July 31, 2022

Net external sales $ 341,215 $ 177,840 $ 143,073 $ — $ 662,128

Operating profit (loss) 119,706 58,103 28,155 ( 21,046 ) 184,918

Nine Months Ended

July 31, 2023

January 31, 2024

Net external sales $ 354,547 $ 159,526 $ 119,120 $ — $ 633,193

Operating profit (loss) 108,364 46,100 19,038 ( 14,067 ) 159,435

July 31, 2022

January 31, 2023

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

1 unchanged sentence

We had significant sales in the following geographic regions:

Three Months Ended Nine Months Ended

July 31, 2023 July 31, 2022 July 31, 2023 July 31, 2022

Three Months Ended

January 31, 2024 January 31, 2023

Americas $ 274,012 $ 264,878

2 unchanged sentences

Total net external sales $ 633,193 $ 610,477

Nordson Corporation

Fair value measurements

4 unchanged sentences

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

July 31, 2023 Total Level 1 Level 2 Level 3

January 31, 2024 Total Level 1 Level 2 Level 3

Foreign currency forward contracts (a)

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Total liabilities at fair value $ 32,436 $ — $ 32,436 $ —

Nordson Corporation

October 31, 2023 Total Level 1 Level 2 Level 3

1 unchanged sentence

$ 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)

6 unchanged sentences

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 July 31, 2023 was $ 385,000 .

The notional amount of our net investment hedge contracts as of January 31, 2024 was $ 815,256 .

(c) Executive officers and other highly compensated employees may defer up to 100 % of their salary and annual cash incentive compensation and for executive officers, up to 90 % of their long-term incentive compensation, into various non-qualified deferred compensation plans.

1 unchanged sentence

Changes in the value of compensation deferred under these plans are recognized each period based on the fair value of the underlying measurement funds.

The carrying amounts and fair values of financial instruments, other than cash and cash equivalents, receivables, and accounts payable, are shown in the table below.

The carrying values of cash and cash equivalents, receivables and accounts payable approximate fair value due to the short-term nature of these instruments.

July 31, 2023

The carrying amounts and fair values of financial instruments, other than cash and cash equivalents, receivables, accounts payable and notes payable, are shown in the table below.

The carrying values of cash and cash equivalents, receivables, accounts payable and notes payable approximate fair value due to the short-term nature of these instruments.

January 31, 2024

Carrying Amount Fair Value

Long-term debt (including current portion) $ 1,624,514 $ 1,676,192

Nordson Corporation

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.

9 unchanged sentences

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

For the three months ended July 31, 2023, we recognized a net loss of $ 93 on foreign currency forward contracts and a net loss of $ 885 from the change in fair value of balance sheet positions.

For the three months ended July 31, 2022, we recognized a net gain of $ 15,181 on foreign currency forward contracts and a net loss of $ 14,436 from the change in fair value of balance sheet positions.

For the nine months ended July 31, 2023, we recognized a net gain of $ 12,086 on foreign currency forward contracts and a net loss of $ 19,710 from the change in fair value of balance sheet positions.

For the nine months ended July 31, 2022, we recognized a net gain of $ 2,503 on foreign currency forward contracts and a net loss of $ 394 from the change in fair value of balance sheet positions.

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

For the three months ended January 31, 2024, we recognized a net gain of $ 12,094 on foreign currency forward contracts and a net loss of $ 12,916 from the change in fair value of balance sheet positions.

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

The fair values of our foreign currency forward contract assets and liabilities are included in Receivable-net and Accrued liabilities, respectively, in our Consolidated Balance Sheets.

Nordson Corporation

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

July 31, 2023 contract amounts:

The following table summarizes, by currency, the foreign currency forward contracts outstanding at January 31, 2024 and 2023:

January 31, 2024 contract amounts:

Notional Sell Amounts Notional Buy Amounts

9 unchanged sentences

Total $ 149,312 $ 464,886

July 31, 2022 contract amounts:

January 31, 2023 contract amounts:

Notional Sell Amounts Notional Buy Amounts

1 unchanged sentence

British pound 27,965 112,945

Mexican Peso 11,658 31,315

Japanese yen 11,644 35,772

2 unchanged sentences

Australian dollar 375 8,821

Taiwan Dollar — 35,047

Others 3,395 65,175

Total $ 152,604 $ 855,150

Nordson Corporation

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

2 unchanged sentences

Our customers represent a wide variety of industries and geographic regions.

For the three and nine months ended July 31, 2023 and 2022, there were no significant concentrations of credit risk.

For the three months ended January 31, 2024 and 2023, there were no significant concentrations of credit risk.

Net Investment Hedges

1 unchanged sentence

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.

On June 30, 2023, the hedge was terminated.

Any increase or decrease related to the remeasurement of the € 180,000 borrowing into U.S.

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

A gain of $ 1,144 , net of tax, and a loss of $ 2,467 , net of tax, was recorded on these net investment hedges for the three and nine months ended July 31, 2023, respectively.

During the quarter ended July 31, 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.

As of January 31, 2024, the Company was party to various cross currency swaps between the U.S.

Dollar and Euro, Japanese Yen, Taiwan Dollar and Chinese Yuan, which were designated as 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 Sheet until the sale or substantial liquidation of the underlying investments.

A loss of $ 1,205 , net of tax, was recorded for both the three and nine months ended July 31, 2023.

Nordson Corporation

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

A loss of $ 11,855 , net of tax, was recorded for the three months ended January 31, 2024.

The following table summarizes the fair values of our net investment contracts designated as net investment hedges in the Company's Consolidated Balance Sheets as of January 31, 2024:

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

Net investment contracts $ 8,365 $ 84 $ 1,121 $ 18,966

There were no net investment hedges as of January 31, 2023.

Long-term debt

A summary of long-term debt is as follows:

July 31, 2023 October 31, 2022

January 31, 2024 October 31, 2023

Notes Payable $ 5,942 $ 5,019

Revolving credit agreement, due 2028 160,000 248,000

Term loan due 2026 280,000 300,000

Senior notes, due 2024-2025 32,000 32,000

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Senior notes, due 2024-2030 260,000 260,000

Term loan due 2026 300,000 —

Euro Loan — 261,893

5.600% Notes due 2028 350,000 350,000

5.800% Notes due 2033 500,000 500,000

1,642,228 1,749,305

Less current maturities and notes payable 110,643 392,537

Less current maturities 116,585 115,662

Less unamortized debt issuance costs 10,335 10,773

Less bond discounts 1,437 1,476

Long-term maturities $ 1,513,871 $ 1,621,394

Revolving credit agreement, due 2028 — 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 on June 6, 2023.

Revolving credit agreement — 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 $ 280,000 on the Term Loan Facility and $ 160,000 on the Revolving Facility as of January 31, 2024.

The Revolving Facility permits borrowing in U.S.

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

The weighted-average interest rate at July 31, 2023 was 6.00 %.

Revolving credit agreement, due 2024 — In April 2019, we entered into a $ 850,000 unsecured multi-currency credit facility with a group of banks, which amended, restated and extended our then existing syndicated revolving credit agreement.

This facility had a five-year term expiring in April 2024 and included a $ 75,000 subfacility 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.

The weighted-average interest rate at January 31, 2024 was 6.38 %.

Nordson Corporation

Senior notes, due 2024-2025 — These unsecured fixed-rate notes entered into in 2012 with a group of insurance companies have a remaining weighted-average life of 0.75 years.

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

The weighted-average interest rate at January 31, 2024 was 3.10 %.

Senior notes, due 2024-2027 — These unsecured fixed-rate notes entered into in 2015 with a group of insurance companies have a remaining weighted-average life of 1.73 years.

The weighted-average interest rate at July 31, 2023 was 3.11 %.

The weighted-average interest rate at January 31, 2024 was 3.11 %.

Senior notes, due 2024-2030 — These unsecured fixed-rate notes entered into in 2018 with a group of insurance companies have a remaining weighted-average life of 2.62 years.

The weighted-average interest rate at July 31, 2023 was 3.97 %.

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

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

Nordson Corporation

The weighted-average interest rate at January 31, 2024 was 3.97 %.

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 January 31, 2024, and the amount we could borrow would not have been limited by any debt covenants.

Contingencies

3 unchanged sentences

We have voluntarily agreed with the City of New Richmond, Wisconsin and other potentially responsible parties to share costs associated with the remediation of the City of New Richmond municipal landfill (the "Site") and the construction of a potable water delivery system serving the impacted area down gradient of the Site.

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

As of January 31, 2024 and October 31, 2023, our accrual for the ongoing operation, maintenance and monitoring obligation at th e Site was $ 231 .

The liability for environmental remediation represents management’s best estimate of the probable and reasonably estimable undiscounted costs related to known remediation obligations.

2 unchanged sentences

However, we do not expect that the costs associated with remediation will have a material adverse effect on our financial condition or results of operations.

Subsequent Event

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 will operate 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 Term F acility ).

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

Nordson Corporation

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

What changed 10-Q

Item 1. Financial Statements