Nordson Corp.'s first quarter sales were down 10 percent compared with last year.
Sales for the quarter, ending Jan. 31, were $498 million. 2018 sales for the first quarter were $550 million. The Westlake, Ohio-based company cited first-year effects of acquisitions and unfavorable effects of currency translation as two reasons for the decrease.
“Given the difficult comparisons to the strong first quarter of fiscal 2018, where total company organic sales growth was 19 percent, this quarter's performance was in line with our expectations for a more typical seasonal pattern of sequential quarterly sales growth,” Nordson President and CEO Michael Hilton said in a first quarter conference call.
In October 2018, Nordson bought Clada Medical Devices, an Irish company that manufactures balloons and balloon catheters using stretch blow molding. The company is now part of Nordson's medical product line in the advanced technology systems segment.
Prior to that, in January last year, the company purchased Sonoscan Inc., an Elk Grove Village, Ill.-based designer and manufacturer of acoustic microscopes and microimaging systems used in a variety of automotive, aerospace and industrial electronics assembly applications.
Sales were down for all three of Nordson's business segments. Compared with first quarter sales from 2018, adhesive dispensing systems decreased 4 percent, advanced technology systems decreased 14 percent and industrial coating systems decreased 10 percent.
“As our spending is generally consistent throughout the year, segment operating margins in the quarter were impacted by the decline in sales,” Hilton said.
Hilton told financial analysts during the earnings call that sales are “typically the softest” in the first quarter. He expects to see more improvement in the second quarter, he said, but more so in the second half of the year.
Nordson continues to monitor macroeconomic challenges, including slower growth in the global economy and new developments in international tariff legislation, Hilton said.
Trade discussions between the United States and China, specifically, continue to be “top of mind for our customers,” Hilton said. The company has not experienced any significant order cancellations, he said, but there is some concern as trade uncertainty continues.
“[Trade] is sort of the one wild card that's out there,” he said.
Operating profit and net profit for the quarter was $84 million and $49 million, respectively. Backlog for the quarter was $439 million, up 9 percent compared with last year's first quarter.
The first quarter results for 2019 include a one-time restructuring charge of approximately $1.5 million as well as a net discrete tax expense of roughly $4 million primarily related to the U.S. Tax Cuts and Jobs Act, the company said.
Nordson also invested $102 million in the repurchase of approximately 856,000 shares and distributed $20 million in dividends in the first quarter of 2019.
The restructuring charge is mostly related to costs from its ongoing facility consolidation initiative in its plastics-related businesses. Nordson is centralizing its Xaloy screw and barrel operations into a single manufacturing facility in Austintown, Ohio. In Europe, the company is building a global hub for its BKG pelletizers, screen changers and melt filters in Münster, Germany.
Additionally, Nordson broke ground in November 2018 on a 145,00-square-foot building that will be the new world headquarters for EDI flat dies and Premier fluid coating dies. All functions of the die operation will be housed in the new headquarters, which is scheduled to open next year.
