Nordson Corporation (NASDAQ:NDSN) released fiscal second-quarter 2017 results on Monday that easily exceeded expectations, highlighting broad-based organic growth and solid contributions from its recently acquired businesses.

With shares up modestly in after-hours trading as of this writing, let's have a closer look at how the adhesive dispensing equipment specialist finished the first half of its fiscal year, as well as what investors can expect going forward.

Electrical panel


Nordson results: The raw numbers


Fiscal Q2 2017*

Fiscal Q2 2016

Growth (YOY)


$496.1 million

$437.6 million


GAAP net income

$64.5 million



GAAP earnings per share (diluted)





What happened with Nordson this quarter?

  • On an adjusted (non-GAAP) basis -- which adds perspective by excluding items like acquisition and restructuring costs -- earnings per diluted share increased 13.4% year over year to $1.35.
  • Year-over-year revenue growth was comprised of a 9% increase in organic volume, a 6% contribution from acquired businesses, and a 2% negative impact from unfavorable foreign currency translation. By comparison, Nordson's guidance provided last quarter -- which, to be fair, didn't include contributions from the April 3, 2017, closing of its acquisition of Vention Medical's Advanced Technologies business -- called for lower organic growth of 3% to 7%, and a 2% contribution from acquisitions.
  • Operating margin was 29%, also above guidance for 24%.
  • Revenue by segment included the following:
    • 5% growth in adhesive dispensing systems sales volume, driven by general product assembly and polymer processing product lines.
    • 34% growth in advanced technology systems sales volume, including 18% organic volume growth and 16% from acquisitions. Organic growth was broad-based across electronics, medical, and industrial end markets.
    • 3% growth in industrial coating systems sales volume, driven by liquid painting and container coating products.
  • Revenue by geography included the following:
    • 18.9% growth in the United States to $156.1 million,
    • 8.2% growth (8.3% excluding currency) from the rest of the Americas to $36.3 million,
    • 2% growth (6.6% excluding currency) in Europe to $128.5 million,
    • 5.1% growth (4.9% excluding currency) in Japan to $30.9 million,
    • 22.9% growth (24.2% excluding currency) in the Asia-Pacific region to $144.4 million.

What management had to say

Nordson CEO Michael Hilton stated:

These results demonstrate the underlying strength of our base business, the strategic fit of our recent acquisitions, and strong execution across the enterprise by our global team. Excluding the Vention Medical AT acquisition, which was not included in our quarterly guidance, our performance exceeded the high end of our revenue expectations, and operating margin expanded by 1 percentage point above the prior-year second quarter. ... We're also pleased with the four acquisitions we have added fiscal year to date, including Vention, which closed during the quarter, all of which are performing as expected and where integration efforts are proceeding as planned.

Looking forward 

For the current fiscal third quarter, Nordson expects revenue growth of 15% to 19%, as 6% to 10% organic volume growth and 10% growth from acquisitions will more than offset a 1% currency headwind. Nordson also expects operating margin of roughly 24%, and GAAP diluted earnings per share of $1.51 to $1.65. 

"We are forecasting strong third-quarter organic sales volume growth in each of our segments, given the strength of our current backlog, recent order rates, and project activity," Hilton elaborated. "Our recent acquisitions add to our profitable growth opportunities, particularly Vention AT, which significantly expands our medical platform and remains on track to deliver $0.05 to $0.10 EPS accretion this fiscal year, excluding transaction costs."

In the end, it's hard for investors to ask much more of Nordson than it delivered in its latest impressive quarter. With shares touching a fresh all-time high on Monday ahead of this release, I think Nordson shareholders should be more than happy with their company right now.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.