Business Wire | Dec 15, 2020 04:30PM EST

Nordson Corporation Reports Fiscal Year 2020 Fourth Quarter and Full Year Results

Dec. 15, 2020

WESTLAKE, Ohio--(BUSINESS WIRE)--Dec. 15, 2020--Nordson Corporation (Nasdaq: NDSN) today reported results for the fiscal fourth quarter ended October 31, 2020. Sales were $559 million, a 5% decrease compared to the prior year's fourth quarter sales of $585 million. Continued strength in test and inspection product lines serving electronics end markets and growth in our medical product lines was offset by weakness in industrial and automotive end markets. The change in fourth quarter 2020 sales included a decrease of approximately 7% organic volume, acquisitions contributed 1%, and a favorable effect from currency translation of approximately 2%.

Operating profit in the quarter was $37 million. As the company announced on December 3, 2020, it intends to divest the non-strategic screws and barrels product line within the Industrial Precision Solutions segment, which will strengthen the company's ongoing earnings and profitable growth profile. This strategic portfolio transaction required a one-time, non-cash asset impairment charge of $87 million, which was recognized during the fourth quarter. Excluding this non-cash impairment charge and other non-recurring charges associated with cost structure simplification actions and amortization of the step-up in acquired inventory, adjusted operating profit was $130 million, or 23% of sales. EBITDA, which is defined as adjusted operating profit plus depreciation and amortization, in the quarter totaled $159 million, or 29% of sales, which represents a decrease of 5% from the prior year EBITDA of $168 million.

Net income was $18 million, and GAAP diluted earnings per share were $0.31. Adjusted earnings, which excludes non-recurring charges and discrete tax benefits of $2 million, totaled $93 million, or $1.59 per share, an 11% decrease from the prior year adjusted earnings of $104 million.

Commenting on the company's fiscal fourth quarter 2020 results, Nordson President and Chief Executive Officer Sundaram Nagarajan said, "I am proud of the dedication shown by our global team through their ongoing commitment to superior customer service and continued deployment of the NBS Next growth framework. Fourth quarter sales were the strongest quarter of the year. We also continued to make progress on strategically positioning our portfolio for sustainable long-term growth with the acquisition of vivaMOS, Ltd. and the recently announced divestiture of the screws and barrels product line. This combination of focusing on Nordson strengths and prioritizing future profitable growth opportunities has us well positioned heading into fiscal year 2021."

Fourth Quarter Segment Results

Industrial Precision Solutions sales of $308 million decreased approximately 8% compared to the prior year fourth quarter, driven by a 10% organic decrease partially offset by favorable currency impacts. This organic sales decline was in part driven by weaker demand in industrial and automotive end markets, where we had record sales in the prior year fourth quarter. Operating profit totaled $0.4 million in the quarter, including an $87 million non-cash impairment charge for the pending divestiture of the screws and barrels product line and $4 million in structural cost reduction actions. Adjusted operating profit, excluding these non-recurring items, was $92 million, or 30% of sales, equal to prior year adjusted operating profit margin.

Advanced Technology Solutions sales of $250 million increased approximately 1% compared to the prior year fourth quarter. Acquisitions and favorable currency impacts increased sales by approximately 2% and 1%, respectively, which was principally offset by organic volume decreases of 3%. Continued sales growth in test and inspection product lines, coupled with stable demand in medical product lines, was offset by weaker demand in fluid dispense product lines serving industrial end markets. Operating profit, which included $1 million of the step-up in acquired inventory amortization, totaled $51 million. Adjusted operating profit was $52 million, or 21% of sales, which was down slightly compared to prior year profits.

Fiscal 2020 Full Year Results

Sales for the fiscal year ended October 31, 2020 were $2.1 billion, a decrease of 3% compared to the same period a year ago. This change in sales included a decrease in organic volume of 4%, offset by growth related to acquisitions. The full year impact of currency translation differences was not significant. Full year operating profit was $350 million and diluted earnings per share were $4.27. Excluding the non-cash impairment charge, structural cost reduction expenses, the step up in value of acquired inventory, and discrete tax expense, adjusted operating profit was $454 million and adjusted diluted earnings per share were $5.48, a 7% decrease from the prior year adjusted diluted earnings per share of $5.87.

Outlook

"Throughout this unprecedented year, the safety of our people and the value they deliver to our customers remained among our top priorities," Nagarajan stated. "We continue to make progress by deploying the NBS Next growth framework and aligning the organization to remain invested in our key strengths during this unique macroeconomic environment. The commitment of our employees combined with the resilience of our diverse end markets resulted in sound financial performance in fiscal 2020. We are entering fiscal 2021 from this solid foundation, and we have strong backlog entering the fiscal first quarter. I am confident in our ability to deliver long-term profitable growth."

Backlog for the quarter ended October 31, 2020 was approximately $416 million, an increase of 5% compared to the same period a year ago, and the trailing twelve-week order entry is 5% above prior year levels. Based on these current order entry trends, backlog amounts and the correlation to sales timing, we expect the fiscal 2021 first quarter sales growth to be approximately 2 to 3%, with adjusted earnings growth in the range of 15 to 20% as compared to fiscal 2020 first quarter.

Nordson management will provide additional commentary on these results and outlook during its previously announced webcast on Wednesday, December 16, 2020 at 8:30 a.m. eastern time, which can be accessed at https://investors.nordson.com. For persons unable to listen to the live broadcast, a replay will be available for 14 days after the event. Information about Nordson's investor relations and shareholder services is available from Lara Mahoney, vice president, investor relations and corporate communications at (440) 204-9985 or lara.mahoney@nordson.com.

Certain statements contained in this release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by terminology such as "may," "will," "should," "could," "expects," "anticipates," "believes," "projects," "forecasts," "outlook," "guidance," "continue," "target," or the negative of such terms or comparable terminology. These statements reflect management's current expectations and involve a number of risks and uncertainties. These risks and uncertainties include, but are not limited to, U.S. and international economic conditions, financial, and market conditions, currency exchange rates and devaluations, possible acquisitions including the Company's ability to successfully integrate acquisitions; the Company's ability to successfully divest or dispose of businesses that are deemed not to fit with its strategic plan; the effects of changes in U.S. trade policy and trade agreements; the effects of changes in tax law; and the possible effects of events beyond our control, such as political unrest, acts of terror, natural disasters and pandemics, including the current coronavirus (COVID-19) pandemic and the other factors discussed in Item 1A (Risk Factors) in the Company's most recently filed Annual Report on Form 10-K and in its Forms 10-Q filed with the Securities and Exchange Commission, which should be reviewed carefully. The Company undertakes no obligation to update or revise any forward-looking statement in this press release.

Nordson Corporation engineers, manufactures and markets differentiated products and systems used for the precision dispensing of adhesives, coatings, sealants, biomaterials, polymers, plastics and other materials, fluid management, test and inspection, UV curing and plasma surface treatment, all supported by application expertise and direct global sales and service. Nordson serves a wide variety of consumer non-durable, durable and technology end markets including packaging, nonwovens, electronics, medical, appliances, energy, transportation, construction, and general product assembly and finishing. Founded in 1954 and headquartered in Westlake, Ohio, the Company has operations and support offices in more than 35 countries. Visit Nordson on the web at http://www.nordson.com, @Nordson_Corp, or www.facebook.com/nordson.

NORDSON CORPORATION

CONSOLIDATED STATEMENT OF INCOME (Unaudited)

(Dollars in thousands except for per-share amounts)

Three months ended Twelve months ended

10/31/2020 10/31/2019 10/31/2020 10/31/2019



Sales $ 558,525 $ 585,451 $ 2,121,100 $ 2,194,226

Cost of sales 261,657 266,476 990,632 1,002,123

Gross profit 296,868 318,975 1,130,468 1,192,103

Gross margin % 53.2 % 54.5 % 53.3 % 54.3 %



Selling &administrative 172,129 179,315 693,552 708,990 expenses

Assets held for sale 87,371 - 87,371 - impairment charge

Operating profit 37,368 139,660 349,545 483,113



Interest expense - (6,432) (10,216) (30,479) (45,301) net

Other expense - net (4,634) (2,162) (17,577) (6,708)

Income before income 26,302 127,282 301,489 431,104 taxes



Income taxes 7,827 24,609 51,950 94,013



Net Income $ 18,475 $ 102,673 $ 249,539 $ 337,091



Weighted-averagecommon shares outstanding:

Basic 57,988 57,456 57,757 $ 57,462

Diluted 58,679 58,255 58,473 58,202



Earnings per share:

Basic earnings $ 0.32 $ 1.79 $ 4.32 $ 5.87

Diluted earnings $ 0.31 $ 1.76 $ 4.27 $ 5.79

NORDSON CORPORATION

CONSOLIDATED BALANCE SHEET (Unaudited)

(Dollars in thousands)

October 31, 2020

October 31, 2019

Cash and cash equivalents

$

208,293

$

151,164

Receivables - net

471,873

530,765

Inventories - net

277,033

283,399

Other current assets

43,798

45,867

Assets held for sale

19,615

-

Total current assets

1,020,612

1,011,195

Property, plant & equipment - net

358,618

398,895

Goodwill

1,713,354

1,614,739

Other assets

582,072

491,618

$

3,674,656

$

3,516,447

Current maturities of long-term debt

$

38,043

$

168,738

Accounts payable and accrued liabilities

311,898

308,888

Liabilities held for sale

13,148

-

Total current liabilities

363,089

477,626

Long-term debt

1,067,952

1,075,404

Other liabilities

484,624

382,372

Total shareholders' equity

1,758,991

1,581,045

$

3,674,656

$

3,516,447

NORDSON CORPORATION

CONSOLIDATED BALANCE SHEET (Unaudited)

(Dollars in thousands)

October 31, October 31, 2020 2019



Cash and cash equivalents $ 208,293 $ 151,164

Receivables - net 471,873 530,765

Inventories - net 277,033 283,399

Other current assets 43,798 45,867

Assets held for sale 19,615 -

Total current assets 1,020,612 1,011,195



Property, plant & equipment - net 358,618 398,895

Goodwill 1,713,354 1,614,739

Other assets 582,072 491,618

$ 3,674,656 $ 3,516,447



Current maturities of long-term debt $ 38,043 $ 168,738

Accounts payable and accrued liabilities 311,898 308,888

Liabilities held for sale 13,148 -

Total current liabilities 363,089 477,626



Long-term debt 1,067,952 1,075,404

Other liabilities 484,624 382,372

Total shareholders' equity 1,758,991 1,581,045

$ 3,674,656 $ 3,516,447



NORDSON CORPORATION

CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)

(Dollars in thousands)

Twelve Months Ended

October 31, 2020

October 31, 2019

Cash flows from operating activities:

Net Income

$

249,539

$

337,091

Depreciation and amortization

113,302

110,244

Impairment loss on assets held for sale

87,371

-

Other non-cash items

5,278

19,606

Changes in working capital

46,931

(84,048)

Net cash provided by operating activities

502,421

382,893

Cash flows from investing activities:

Additions to property, plant and equipment

(50,535)

(64,244)

Acquisitions

(142,414)

(12,486)

Other - net

(1,160)

441

Net cash used in investing activities

(194,109)

(76,289)

Cash flows from financing activities:

Repayment of long-term debt

(153,816)

(69,580)

Repayment of finance lease obligations

(7,605)

(4,859)

Dividends paid

(88,347)

(82,145)

Issuance of common shares

50,853

26,020

Purchase of treasury shares

(52,614)

(120,510)

Net cash used in financing activities

(251,529)

(251,074)

Effective of exchange rate change on cash

346

(44)

Net change in cash and cash equivalents

57,129

55,486

Cash and cash equivalents:

Beginning of period

151,164

95,678

End of period

$

208,293

$

151,164

NORDSON CORPORATION

CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)

(Dollars in thousands)

Twelve Months Ended

October 31, October 31, 2020 2019



Cash flows from operating activities:

Net Income $ 249,539 $ 337,091

Depreciation and amortization 113,302 110,244

Impairment loss on assets held for sale 87,371 -

Other non-cash items 5,278 19,606

Changes in working capital 46,931 (84,048)

Net cash provided by operating activities 502,421 382,893



Cash flows from investing activities:

Additions to property, plant and equipment (50,535) (64,244)

Acquisitions (142,414) (12,486)

Other - net (1,160) 441

Net cash used in investing activities (194,109) (76,289)



Cash flows from financing activities:

Repayment of long-term debt (153,816) (69,580)

Repayment of finance lease obligations (7,605) (4,859)

Dividends paid (88,347) (82,145)

Issuance of common shares 50,853 26,020

Purchase of treasury shares (52,614) (120,510)

Net cash used in financing activities (251,529) (251,074)



Effective of exchange rate change on cash 346 (44)

Net change in cash and cash equivalents 57,129 55,486



Cash and cash equivalents:

Beginning of period 151,164 95,678

End of period $ 208,293 $ 151,164



NORDSON CORPORATION

SALES BY GEOGRAPHIC SEGMENT (Unaudited)

(Dollars in thousands)

Three Months Ended

Sales Variance

Oct 31, 2020

Oct 31, 2019

Organic

Acquisitions

Currency

Total

SALES BY SEGMENT

Industrial precision solutions

$

308,385

$

336,451

(10.0)

%

-

%

1.7

%

(8.3)

%

Advanced technology solutions

250,140

249,000

(3.1)

%

2.2

%

1.4

%

0.5

%

Total Sales

$

558,525

$

585,451

(7.1)

%

0.9

%

1.6

%

(4.6)

%

SALES BY GEOGRAPHIC REGION

United States

$

194,701

$

206,874

(7.1)

%

1.2

%

-

%

(5.9)

%

Americas

35,452

44,503

(22.5)

%

6.4

%

(4.2)

%

(20.3)

%

Europe

142,082

145,946

(7.4)

%

0.1

%

4.7

%

(2.6)

%

Japan

36,248

37,190

(4.5)

%

-

%

2.0

%

(2.5)

%

Asia Pacific

150,042

150,938

(2.9)

%

-

%

2.3

%

(0.6)

%

Total Sales

$

558,525

$

585,451

(7.1)

%

0.9

%

1.6

%

(4.6)

%

Twelve Months Ended

Sales Variance

Oct 31, 2020

Oct 31, 2019

Organic

Acquisitions

Currency

Total

SALES BY SEGMENT

Industrial precision solutions

$

1,143,423

$

1,208,376

(4.8)

%

-

%

(0.6)

%

(5.4)

%

Advanced technology solutions

977,677

985,850

(2.3)

%

1.4

%

0.1

%

(0.8)

%

Total Sales

$

2,121,100

$

2,194,226

(3.7)

%

0.6

%

(0.2)

%

(3.3)

%

SALES BY GEOGRAPHIC REGION

United States

$

755,642

$

758,383

(1.1)

%

0.7

%

-

%

(0.4)

%

Americas

141,473

167,661

(14.8)

%

3.0

%

(3.8)

%

(15.6)

%

Europe

536,636

571,596

(6.4)

%

0.4

%

(0.1)

%

(6.1)

%

Japan

126,601

126,756

(2.1)

%

0.2

%

1.8

%

(0.1)

%

Asia Pacific

560,748

569,830

(1.7)

%

0.2

%

(0.1)

%

(1.6)

%

Total Sales

$

2,121,100

$

2,194,226

(3.7)

%

0.6

%

(0.2)

%

(3.3)

%

NORDSON CORPORATION

SALES BY GEOGRAPHIC SEGMENT (Unaudited)

(Dollars in thousands)

Three Months Ended Sales Variance

Oct 31, Oct 31, Organic Acquisitions Currency Total 2020 2019

SALES BY SEGMENT

Industrialprecision $ 308,385 $ 336,451 (10.0) % - % 1.7 % (8.3) %solutions

Advancedtechnology 250,140 249,000 (3.1) % 2.2 % 1.4 % 0.5 %solutions

Total $ 558,525 $ 585,451 (7.1) % 0.9 % 1.6 % (4.6) %Sales



SALES BYGEOGRAPHIC REGION

United $ 194,701 $ 206,874 (7.1) % 1.2 % - % (5.9) %States

Americas 35,452 44,503 (22.5) % 6.4 % (4.2) % (20.3) %

Europe 142,082 145,946 (7.4) % 0.1 % 4.7 % (2.6) %

Japan 36,248 37,190 (4.5) % - % 2.0 % (2.5) %

Asia 150,042 150,938 (2.9) % - % 2.3 % (0.6) %Pacific

Total $ 558,525 $ 585,451 (7.1) % 0.9 % 1.6 % (4.6) %Sales





Twelve Months Ended Sales Variance

Oct 31, Oct 31, Organic Acquisitions Currency Total 2020 2019

SALES BY SEGMENT

Industrialprecision $ 1,143,423 $ 1,208,376 (4.8) % - % (0.6) % (5.4) %solutions

Advancedtechnology 977,677 985,850 (2.3) % 1.4 % 0.1 % (0.8) %solutions

Total $ 2,121,100 $ 2,194,226 (3.7) % 0.6 % (0.2) % (3.3) %Sales



SALES BYGEOGRAPHIC REGION

United $ 755,642 $ 758,383 (1.1) % 0.7 % - % (0.4) %States

Americas 141,473 167,661 (14.8) % 3.0 % (3.8) % (15.6) %

Europe 536,636 571,596 (6.4) % 0.4 % (0.1) % (6.1) %

Japan 126,601 126,756 (2.1) % 0.2 % 1.8 % (0.1) %

Asia 560,748 569,830 (1.7) % 0.2 % (0.1) % (1.6) %Pacific

Total $ 2,121,100 $ 2,194,226 (3.7) % 0.6 % (0.2) % (3.3) %Sales



NORDSON CORPORATION

RECONCILIATION OF NON-GAAP MEASURES - ADJUSTED OPERATING PROFIT AND EBITDA (Unaudited)

(Dollars in thousands)

Three months ended

Twelve months ended

October 31, 2020

October 31, 2019

October 31, 2020

October 31, 2019

SALES BY SEGMENT

Industrial precision solutions

$

308,385

$

336,451

$

1,143,423

$

1,208,376

Advanced technology solutions

250,140

249,000

977,677

985,850

Total sales

$

558,525

$

585,451

$

2,121,100

$

2,194,226

OPERATING PROFIT

Industrial precision solutions

$

425

$

99,353

$

208,028

$

329,054

Advanced technology solutions

50,674

54,727

191,602

205,609

Corporate

(13,731)

(14,420)

(50,085)

(51,550)

Total operating profit

$

37,368

$

139,660

$

349,545

$

483,113

OPERATING PROFIT ADJUSTMENTS (1)

Industrial precision solutions

$

91,419

$

314

$

94,896

$

2,123

Advanced technology solutions

1,424

733

7,807

1,568

Corporate

-

681

1,387

873

Total adjustments

$

92,843

$

1,728

$

104,090

$

4,564

ADJUSTED OPERATING PROFIT (NON-GAAP)

% of Sales

% of Sales

% of Sales

% of Sales

Industrial precision solutions

$

91,844

30

%

$

99,667

30

%

$

302,924

26

%

$

331,177

27

%

Advanced technology solutions

52,098

21

%

55,460

22

%

199,409

20

%

207,177

21

%

Corporate

(13,731)

(13,739)

(48,698)

(50,677)

Total operating profit - adjusted

$

130,211

23

%

$

141,388

24

%

$

453,635

21

%

$

487,677

22

%

DEPRECIATION & AMORTIZATION

Industrial precision solutions

$

9,951

$

9,669

$

38,939

$

38,333

Advanced technology solutions

16,710

15,462

64,543

62,836

Corporate

2,477

1,782

9,820

9,075

Total depreciation & amortization

$

29,138

$

26,913

$

113,302

$

110,244

EBITDA (NON-GAAP)

Industrial precision solutions

$

101,795

33

%

$

109,336

32

%

$

341,863

30

%

$

369,510

31

%

Advanced technology solutions

68,808

28

%

70,922

28

%

263,952

27

%

270,013

27

%

Corporate

(11,254)

(11,957)

(38,878)

(41,602)

Total EBITDA

$

159,349

29

%

$

168,301

29

%

$

566,937

27

%

$

597,921

27

%

(1) Represents assets held for sale impairment charge, costs and adjustments related to cost structure simplification actions, and charges associated with our 2020 and 2019 acquisitions.

Adjusted operating profit and EBITDA are non-GAAP measures used by management to evaluate the Company's ongoing operations. Adjusted operating profit is defined as operating profit plus certain adjustments, such as an assets held for sale impairment charge, cost structure simplification actions, and non-cash inventory charges related to acquisitions. EBITDA is defined as adjusted operating profit plus depreciation and amortization.

NORDSON CORPORATION

RECONCILIATION OF NON-GAAP MEASURES - ADJUSTED OPERATING PROFIT AND EBITDA(Unaudited)

(Dollars in thousands)

Three months ended Twelve months ended

October 31, October 31, October 31, October 31, 2020 2019 2020 2019

SALES BY SEGMENT

Industrialprecision $ 308,385 $ 336,451 $ 1,143,423 $ 1,208,376 solutions

Advancedtechnology 250,140 249,000 977,677 985,850 solutions

Total sales $ 558,525 $ 585,451 $ 2,121,100 $ 2,194,226



OPERATING PROFIT

Industrialprecision $ 425 $ 99,353 $ 208,028 $ 329,054 solutions

Advancedtechnology 50,674 54,727 191,602 205,609 solutions

Corporate (13,731) (14,420) (50,085) (51,550)

Totaloperating $ 37,368 $ 139,660 $ 349,545 $ 483,113 profit



OPERATINGPROFIT ADJUSTMENTS^(1)

Industrialprecision $ 91,419 $ 314 $ 94,896 $ 2,123 solutions

Advancedtechnology 1,424 733 7,807 1,568 solutions

Corporate - 681 1,387 873

Total $ 92,843 $ 1,728 $ 104,090 $ 4,564 adjustments



ADJUSTEDOPERATING % of % of % of % ofPROFIT Sales Sales Sales Sales(NON-GAAP)

Industrialprecision $ 91,844 30 % $ 99,667 30 % $ 302,924 26 % $ 331,177 27 %solutions

Advancedtechnology 52,098 21 % 55,460 22 % 199,409 20 % 207,177 21 %solutions

Corporate (13,731) (13,739) (48,698) (50,677)

Totaloperating $ 130,211 23 % $ 141,388 24 % $ 453,635 21 % $ 487,677 22 %profit -adjusted



DEPRECIATION& AMORTIZATION

Industrialprecision $ 9,951 $ 9,669 $ 38,939 $ 38,333 solutions

Advancedtechnology 16,710 15,462 64,543 62,836 solutions

Corporate 2,477 1,782 9,820 9,075

Totaldepreciation $ 29,138 $ 26,913 $ 113,302 $ 110,244 &amortization



EBITDA (NON-GAAP)

Industrialprecision $ 101,795 33 % $ 109,336 32 % $ 341,863 30 % $ 369,510 31 %solutions

Advancedtechnology 68,808 28 % 70,922 28 % 263,952 27 % 270,013 27 %solutions

Corporate (11,254) (11,957) (38,878) (41,602)

Total EBITDA $ 159,349 29 % $ 168,301 29 % $ 566,937 27 % $ 597,921 27 %



(1) Represents assets held for sale impairment charge, costs and adjustments related to cost structure simplification actions, and charges associated with our 2020 and 2019 acquisitions.

Adjusted operating profit and EBITDA are non-GAAP measures used by management to evaluate the Company's ongoing operations. Adjusted operating profit is defined as operating profit plus certain adjustments, such as an assets held for sale impairment charge, cost structure simplification actions, and non-cash inventory charges related to acquisitions. EBITDA is defined as adjusted operating profit plus depreciation and amortization.

NORDSON CORPORATION

RECONCILIATION OF NON-GAAP MEASURES - PROFITABILITY (Unaudited)

(Dollars in thousands)

Three Months Ended Twelve Months Ended October 31, October 31,

2020 2019 2020 2019

GAAP AS REPORTED

Operating Profit $ 37,368 $ 139,660 $ 349,545 $ 483,113

Other / interest income (11,066) (12,378) (48,056) (52,009) (expense) - net

Net Income 18,475 102,673 249,539 337,091

EPS diluted $ 0.31 $ 1.76 $ 4.27 $ 5.79



Shares outstanding - 58,679 58,255 58,473 58,202 diluted



OPERATING PROFIT ADJUSTMENTS

Inventory step-up $ 1,298 $ 342 $ 2,527 $ 530 amortization

Severance and other 4,174 1,386 14,192 4,034

Assets held for sale 87,371 - 87,371 - impairment charge



NON-OPERATING EXPENSE ADJUSTMENTS

Pension settlement loss $ - $ - $ 2,508 $ -



Total adjustments $ 92,843 $ 1,728 $ 106,598 $ 4,564



Adjustments net of tax $ 76,390 $ 1,396 $ 87,214 $ 3,578

Other discrete tax items $ (1,820) $ 171 $ (16,311) $ 911

EPS effect ofadjustments and other $ 1.27 $ 0.03 $ 1.21 $ 0.08 discrete tax items



NON-GAAPMEASURES-ADJUSTED PROFITABILITY

Operating Profit $ 130,211 $ 141,388 $ 453,635 $ 487,677

Operating profit % of 23.3 % 24.2 % 21.4 % 22.2 %sales

Net income $ 93,045 $ 104,240 $ 320,442 $ 341,580

Diluted earnings $ 1.59 $ 1.79 $ 5.48 $ 5.87

Adjusted operating profit is defined as operating profit plus certain adjustments such as an assets held for sale impairment charge, cost structure simplification actions and non-cash inventory charges related to acquisitions. Adjusted operating profit as a percentage of sales is defined as adjusted operating profit divided by sales.

Adjusted net income is defined as net income plus tax effected adjustments and other discrete tax items.

Adjusted earnings is defined as GAAP EPS adjusted for tax effected adjustments and other discrete tax items.

Management uses these non-GAAP measures internally to make strategic decisions, forecast future results, and evaluate the Company's current performance. Given management's use of these non-GAAP measures, the Company believes these measures are important to investors in understanding the Company's current and future operating results as seen through the eyes of management. In addition, management believes these non-GAAP measures are useful to investors in enabling them to better assess changes in the Company's core business across different time periods. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures to other companies' non-GAAP financial measures, even if they have similar names. Amounts may not add due to rounding.

View source version on businesswire.com: https://www.businesswire.com/news/home/20201215006049/en/

CONTACT: Lara Mahoney Vice President, Investor Relations & Corporate Communications 440.204.9985 Lara.Mahoney@nordson.com