Nordson (NASDAQ:NDSN) announced fiscal first-quarter 2019 results on Wednesday after the market closed, detailing an expected revenue decline -- and a more pronounced drop in earnings -- against a tough comparison to the exceptional organic growth it achieved in the same year-ago period.

With shares down around 2.7% on Thursday in response, let's dig deeper into how the adhesive-dispensing systems company kicked off its new year.

Adhesive-dispensing system working on semiconductor chips.

IMAGE SOURCE: NORDSON.

Nordson results: The raw numbers

Metric

Fiscal Q1 2019*

Fiscal Q1 2018

Year-Over-Year Growth

Revenue

$497.9 million

$550.4 million

(9.5%)

GAAP net income

$48.6 million

$104.6 million

(53.5%)

GAAP earnings per share (diluted)

$0.83

$1.78

(53.4%)

Data source: Nordson. *For the quarter ended Jan. 31, 2019. GAAP = generally accepted accounting principles.

What happened with Nordson this quarter?

  • On an adjusted (non-GAAP) basis, which excludes one-time charges like restructuring expenses and discrete tax items, Nordson's earnings were $0.92 per diluted share, down from $1.35 in the same year-ago period.
  • Nordson management decided last quarter to stop providing specific quarterly financial guidance. So for perspective, and though we don't usually pay close attention to Wall Street's demands -- most analysts were modeling higher adjusted earnings of $1.12 per share on roughly the same revenue. 
  • The change in revenue was comprised of a 9% decline in organic volume, a 1% contribution from acquisitions, and a 2% foreign-currency headwind.
  • Adjusted EBITDA declined 24%, to $107.8 million.
  • Revenue by segment included:
    • A 4.2% decline from adhesive-dispensing systems, to $211.5 million, including a 1.6% organic volume decline.
    • A 13.7% drop from advanced technology systems, to $234.5 million, including a 12.4% organic decline.
    • An 8.6% decline from industrial coating systems, to $51.9 million, including an 8.6% drop in organic volume.
  • Nordson's backlog grew 9% year over year, to $439 million.
  • Nordson repurchased 856,000 shares during the quarter for $102 million.

Check out the latest Nordson earnings call transcript.

What management had to say

"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," stated Nordson CEO Michael Hilton. "As our spending is generally consistent throughout the year, segment operating margins in the quarter were impacted by the decline in sales."

Looking forward

For the full fiscal-year 2019 -- and with the caveat that Nordson is continuing to "monitor macroeconomic challenges, as well as the resolution of the international tariff legislation" -- the company reiterated its guidance for organic sales volume growth of 3% to 5%. Nordson further reaffirmed its targets for fiscal 2019 adjusted operating margin and adjusted EBITDA margin to expand by 100 to 150 basis points year over year.

In the end, however unimpressive Nordson's headline numbers appeared, this marked an uneventful performance against a difficult comparison for the company. But given its bottom-line shortfall relative to expectations as its sales decline translated to lost operating leverage, it's no surprise to see Nordson stock down modestly today in response.