Nordson (NDSN) Q3 2024 earnings summary

Executive summary

• Third quarter sales reached $662 million, up 2% year-over-year, driven by acquisitions and strong industrial performance, though organic sales declined 1% due to softness in electronics and medical segments.

• Adjusted EPS was $2.41, $0.08 above guidance midpoint but down 6% year-over-year, with net income at $117 million ($2.04 per diluted share), impacted by higher expenses and interest.

• Closed the Atrion Medical acquisition, expanding the medical fluid components portfolio and addressable market by over $600 million, funded by a new term loan and cash.

• Free cash flow was $143 million, representing 122% of net income, supporting dividends, share repurchases, and debt reduction.

• EBITDA remained flat at $208 million (31% of sales), with improved gross margins offset by higher SG&A and integration costs.

Financial highlights

• Sales: $662 million, up 2% year-over-year; organic sales down 1%, ARAG acquisition added 4%, currency translation -1%.

• Gross margin for the quarter was 55.8%, up from 55.5% year-over-year.

• Adjusted EBITDA: $208 million (31% of sales), flat year-over-year; operating profit margin was 25.3%.

• Net income: $117 million; adjusted EPS $2.41 (excluding non-recurring costs and amortization).

• Free cash flow: $143 million, 122% of net income.

Outlook and guidance

• Full-year 2024 revenue guidance raised to $2.665–$2.705 billion, reflecting the Atrion acquisition.

• Full-year adjusted EPS guidance at $9.45–$9.65 per diluted share, unchanged at midpoint, with Atrion expected to be slightly dilutive in Q4.

• Neutral FX impact assumed; ARAG acquisitive growth anniversaried in Q4.

• ATS segment expected to return to growth in 2025 as semiconductor and electronics demand recovers.

• Backlog entering Q4 is approximately $650 million, concentrated in systems businesses.