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Nordson Corporation Reports a Strong Fourth Quarter and Record Fiscal Year 2022 Results

Fourth Quarter:

  • Sales were $684 million, a 14% year-over-year increase, 18% organic
  • Operating profit was $178 million, a 17% increase over prior year
  • Earnings were $2.44 per diluted share, a 30% increase from prior year earnings per share

Full Year:

  • Full year sales, operating profit, and earnings per share were all Company records
  • Sales were $2.6 billion, a 10% year-over-year increase
  • Earnings were $8.81 per diluted share; adjusted earnings were $9.43 per diluted share, a 22% increase from prior year adjusted earnings per share

2023 Guidance:

  • Fiscal 2023 forecasted sales growth of 1% to 7% and adjusted earnings in the range of $8.75 to $10.10 per share

Nordson Corporation (Nasdaq: NDSN) today reported results for the fiscal fourth quarter ended October 31, 2022. Sales were $684 million, a 14% increase compared to the prior year’s fourth quarter sales of $599 million. The increase in fourth quarter 2022 sales included 18% organic volume growth, a favorable 4% acquisition impact and unfavorable currency translation of 8%. Organic sales growth was strong in virtually all end markets, and particularly robust for electronics and medical.

Operating profit in the quarter was $178 million, or 26% of sales, a 17% increase compared to the prior year operating profit of $151 million. Sales volume leverage drove the quarterly increase. EBITDA in the quarter totaled $202 million, or 30% of sales, and represents an increase of 14% from the prior year EBITDA of $177 million.

Net income was $141 million, a 28% increase compared to the prior year earnings of $110 million. Fourth quarter diluted earnings per share were $2.44, a 30% increase over the prior year earnings of $1.88 per diluted share.

Commenting on the Company’s fiscal 2022 fourth quarter results, Nordson President and Chief Executive Officer Sundaram Nagarajan said, “Once again, our teams responded to the broad-based demand of our customers and delivered a strong fourth quarter sales and operating performance. This is the second consecutive time that we have broken our quarterly sales record, despite significant currency headwinds. This is a testament to the execution of our Ascend strategy, as well as the resilience of our winning teams.”

Fourth Quarter Segment Results

Industrial Precision Solutions sales of $356 million increased 13% compared to the prior year fourth quarter, driven by a 16% organic sales increase and a favorable acquisition impact of 7%, partially offset by an unfavorable currency impact of 10%. The organic sales increase was driven by robust demand in nearly all end markets with particularly strong system sales in the Americas and Europe. Operating profit totaled $110 million in the quarter, or 31% of sales, an increase of 8% compared to the prior year operating profit.

Medical and Fluid Solutions sales of $181 million increased 11% compared to the prior year fourth quarter, driven by an organic sales increase of 15% that was partially offset by an unfavorable currency impact of 4%. Organic sales growth was driven by strong demand for medical fluid components and interventional solutions product lines. Operating profit totaled $52 million in the quarter, or 29% of sales, an increase of 2% compared to the prior year operating profit.

Advanced Technology Solutions sales of $147 million increased 21% compared to the prior year fourth quarter, driven by an organic sales increase of 28% that was partially offset by an unfavorable currency impact of 7%. Organic sales growth was very strong in test and inspection systems, plus double-digit growth in electronics dispense product lines. Operating profit totaled $38 million in the quarter, or 26% of sales, an increase of 131% compared to the prior year operating profit.

“Our fourth quarter 2022 performance was a strong finish to a record year with double-digit organic sales growth in nearly all end markets. It was a dynamic quarter with increasing currency headwinds, continued inflationary pressure and a less favorable sales mix pressuring gross margins; however, the strong volume growth and related leverage still delivered targeted organic incremental operating profit margins of 43%. We remain focused on passing along price increases to offset inflation and executing the Ascend strategy to drive profitable growth,” said Nordson Executive Vice President and Chief Financial Officer Joseph Kelley.

Fiscal 2022 Full Year Results

Sales for the fiscal year ended October 31, 2022 were $2.6 billion, an increase of 10% compared to the same period a year ago. This sales growth was driven by an 11% increase in organic volume and a favorable acquisition impact of 3%, partially offset by an unfavorable currency impact of 4%. Full year operating profit was $702 million. Net income was $513 million and diluted earnings per share were $8.81.

Adjusted operating profit, excluding non-recurring acquisition and facility consolidation costs, was $707 million, or 27% of sales, an increase of 15% compared to prior year adjusted operating profit. Adjusted net income, excluding the non-cash pension annuitization charge and other non-recurring costs, was $550 million, a 21% increase compared to the prior year adjusted net income of $454 million. Adjusted diluted earnings per share were $9.43, a 22% increase over the prior year earnings of $7.74 per diluted share.

Mr. Nagarajan continued, “Reflecting on fiscal 2022, Nordson employees managed through supply chain constraints, increasing currency pressures, COVID-19 shutdowns and labor challenges. Throughout it all, they remained true to our core values, including excellence, energy and respect for people, while innovating and solving complex problems for our customers. We have added to this differentiating set of core capabilities, our NBS Next growth framework, which has guided our choices and helped us prioritize our efforts and resources this year. Our record performance is the result. As we transition into fiscal 2023, we remain focused on meeting the needs of our customers and expanding the practice of the NBS Next growth framework deeper in the organization to enable us to deliver top tier growth with leading margins and returns.”

Outlook

Following two consecutive years of record setting performance and a strong finish to fiscal 2022, we enter fiscal 2023 with approximately $1 billion in backlog, inclusive of the acquired CyberOptics backlog. The book-to-bill in the fourth quarter of 2022 was slightly unfavorable and the year-over-year currency headwinds are significant as evidenced in our fiscal fourth quarter results.

Based on the combination of order entry, backlog, customer delivery timing requests and current exchange rates, we anticipate delivering sales growth in the range of 1% to 7% in fiscal 2023 when compared to fiscal 2022. Full year fiscal 2023 earnings are forecasted to be in the range of $8.75 to $10.10 per share. This full year guidance assumes an unfavorable currency impact of approximately 2% on sales and 3% on earnings.

First quarter 2023 sales are forecasted in the range of $605 to $630 million with adjusted earnings in the range of $1.85 to $2.00 per diluted share. Included in the forecasted guidance amounts are the unfavorable currency impacts of approximately 4% on sales and 7% on earnings.

Nordson management will provide additional commentary on these results and outlook during its previously announced webcast on Thursday, December 15, 2022 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 these 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, including the conflict between Russia and Ukraine, acts of terror, natural disasters and pandemics, including the 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 is an innovative precision technology company that leverages a scalable growth framework through an entrepreneurial, division-led organization to deliver top tier growth with leading margins and returns. The Company’s direct sales model and applications expertise serves global customers through a wide variety of critical applications. Its diverse end market exposure includes consumer non-durable, medical, electronics and industrial end markets. Founded in 1954 and headquartered in Westlake, Ohio, the Company has operations and support offices in over 35 countries. Visit Nordson on the web at www.nordson.com, www.twitter.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

 

October 31,

2022

 

October 31,

2021

 

October 31,

2022

 

October 31,

2021

 

 

 

 

 

 

 

 

Sales

$

683,581

 

 

$

599,247

 

 

$

2,590,278

 

 

$

2,362,209

 

Cost of sales

 

320,398

 

 

 

268,097

 

 

 

1,163,742

 

 

 

1,038,129

 

Gross profit

 

363,183

 

 

 

331,150

 

 

 

1,426,536

 

 

 

1,324,080

 

Gross margin %

 

53.1

%

 

 

55.3

%

 

 

55.1

%

 

 

56.1

%

 

 

 

 

 

 

 

 

Selling & administrative expenses

 

185,574

 

 

 

179,715

 

 

 

724,176

 

 

 

708,953

 

Operating profit

 

177,609

 

 

 

151,435

 

 

 

702,360

 

 

 

615,127

 

 

 

 

 

 

 

 

 

Interest expense - net

 

(5,095

)

 

 

(4,452

)

 

 

(20,387

)

 

 

(23,341

)

Other income (expense) - net

 

5,026

 

 

 

(6,874

)

 

 

(32,694

)

 

 

(17,610

)

Income before income taxes

 

177,540

 

 

 

140,109

 

 

 

649,279

 

 

 

574,176

 

 

 

 

 

 

 

 

 

Income taxes

 

36,291

 

 

 

29,649

 

 

 

136,176

 

 

 

119,808

 

 

 

 

 

 

 

 

 

Net Income

$

141,249

 

 

$

110,460

 

 

$

513,103

 

 

$

454,368

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

Basic

 

57,170

 

 

 

58,123

 

 

 

57,629

 

 

 

58,091

 

Diluted

 

57,823

 

 

 

58,792

 

 

 

58,249

 

 

 

58,734

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

Basic earnings

$

2.47

 

 

$

1.90

 

 

$

8.90

 

 

$

7.82

 

Diluted earnings

$

2.44

 

 

$

1.88

 

 

$

8.81

 

 

$

7.74

 

NORDSON CORPORATION

CONSOLIDATED BALANCE SHEET (Unaudited)

(Dollars in thousands)

 

 

October 31, 2022

 

October 31, 2021

 

 

 

 

Cash and cash equivalents

$

163,457

 

$

299,972

Receivables - net

 

537,313

 

 

489,389

Inventories - net

 

383,398

 

 

327,195

Other current assets

 

48,803

 

 

48,282

Total current assets

 

1,132,971

 

 

1,164,838

 

 

 

 

Property, plant & equipment - net

 

353,442

 

 

355,565

Goodwill

 

1,804,693

 

 

1,713,148

Other assets

 

529,269

 

 

557,410

 

$

3,820,375

 

$

3,790,961

 

 

 

 

Notes payable and debt due within one year

$

392,537

 

$

34,188

Accounts payable and accrued liabilities

 

441,666

 

 

411,206

Total current liabilities

 

834,203

 

 

445,394

 

 

 

 

Long-term debt

 

345,320

 

 

781,709

Other liabilities

 

346,477

 

 

404,728

Total shareholders' equity

 

2,294,375

 

 

2,159,130

 

$

3,820,375

 

$

3,790,961

 

 

 

 

NORDSON CORPORATION

CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)

(Dollars in thousands)

 

 

Twelve Months Ended

 

October 31, 2022

 

October 31, 2021

 

 

 

 

Cash flows from operating activities:

 

 

 

Net Income

$

513,103

 

 

$

454,368

 

Depreciation and amortization

 

99,923

 

 

 

103,883

 

Other non-cash items

 

63,174

 

 

 

32,356

 

Changes in working capital

 

(107,314

)

 

 

29,011

 

Other

 

(55,755

)

 

 

(73,691

)

Net cash provided by operating activities

 

513,131

 

 

 

545,927

 

 

 

 

 

Cash flows from investing activities:

 

 

 

Additions to property, plant and equipment

 

(51,428

)

 

 

(38,303

)

Acquisitions

 

(171,613

)

 

 

 

Other - net

 

280

 

 

 

5,134

 

Net cash used in investing activities

 

(222,761

)

 

 

(33,169

)

 

 

 

 

Cash flows from financing activities:

 

 

 

Repayment of long-term debt

 

(33,908

)

 

 

(289,416

)

Repayment of finance lease obligations

 

(5,439

)

 

 

(6,624

)

Dividends paid

 

(125,914

)

 

 

(97,683

)

Issuance of common shares

 

12,124

 

 

 

31,780

 

Purchase of treasury shares

 

(262,869

)

 

 

(60,970

)

Net cash used in financing activities

 

(416,006

)

 

 

(422,913

)

 

 

 

 

Effect of exchange rate change on cash

 

(10,879

)

 

 

1,834

 

Net change in cash and cash equivalents

 

(136,515

)

 

 

91,679

 

 

 

 

 

Cash and cash equivalents:

 

 

 

Beginning of period

 

299,972

 

 

 

208,293

 

End of period

$

163,457

 

 

$

299,972

 

 

 

 

 

NORDSON CORPORATION

SALES BY GEOGRAPHIC SEGMENT (Unaudited)

(Dollars in thousands)

 

 

Three Months Ended

 

Sales Variance

 

October 31,

2022

 

October 31,

2021

 

Organic

 

Acquisitions

/ Divestitures

 

Currency

 

Total

SALES BY SEGMENT

 

 

 

 

 

 

 

 

 

 

 

Industrial precision solutions

$

355,659

 

$

314,307

 

15.5

%

 

7.4

%

 

(9.7

) %

 

13.2

%

Medical and fluid solutions

 

181,342

 

 

163,504

 

14.6

%

 

%

 

(3.7

) %

 

10.9

%

Advanced technology solutions

 

146,580

 

 

121,436

 

27.8

%

 

%

 

(7.1

) %

 

20.7

%

Total sales

$

683,581

 

$

599,247

 

17.8

%

 

3.9

%

 

(7.6

) %

 

14.1

%

 

 

 

 

 

 

 

 

 

 

 

 

SALES BY GEOGRAPHIC REGION

 

 

 

 

 

 

 

 

 

 

 

Americas

 

303,738

 

 

250,570

 

18.1

%

 

3.9

%

 

(0.8

) %

 

21.2

%

Europe

 

165,702

 

 

163,592

 

12.3

%

 

3.9

%

 

(14.9

) %

 

1.3

%

Asia Pacific

 

214,141

 

 

185,085

 

22.3

%

 

3.7

%

 

(10.3

) %

 

15.7

%

Total sales

$

683,581

 

$

599,247

 

17.8

%

 

3.9

%

 

(7.6

) %

 

14.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Twelve Months Ended

 

Sales Variance

 

October 31,

2022

 

October 31,

2021

 

Organic

 

Acquisitions

/ Divestitures

 

Currency

 

Total

SALES BY SEGMENT

 

 

 

 

 

 

 

 

 

 

 

Industrial precision solutions

$

1,337,242

 

$

1,246,947

 

7.0

%

 

6.1

%

 

(5.9

) %

 

7.2

%

Medical and fluid solutions

 

690,177

 

 

641,654

 

9.7

%

 

%

 

(2.1

) %

 

7.6

%

Advanced technology solutions

 

562,859

 

 

473,608

 

22.4

%

 

%

 

(3.6

) %

 

18.8

%

Total sales

$

2,590,278

 

$

2,362,209

 

10.8

%

 

3.3

%

 

(4.4

) %

 

9.7

%

 

 

 

 

 

 

 

 

 

 

 

 

SALES BY GEOGRAPHIC REGION

 

 

 

 

 

 

 

 

 

 

 

Americas

 

1,096,596

 

 

969,110

 

10.9

%

 

2.8

%

 

(0.5

) %

 

13.2

%

Europe

 

645,603

 

 

617,492

 

10.7

%

 

3.9

%

 

(10.0

) %

 

4.6

%

Asia Pacific

 

848,079

 

 

775,607

 

11.0

%

 

3.2

%

 

(4.9

) %

 

9.3

%

Total sales

$

2,590,278

 

$

2,362,209

 

10.8

%

 

3.3

%

 

(4.4

) %

 

9.7

%

 

 

 

 

 

 

 

 

 

 

 

 

NORDSON CORPORATION

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

(Dollars in thousands)

 

 

Three Months Ended

 

Twelve Months Ended

 

October 31, 2022

 

October 31, 2021

 

October 31, 2022

 

October 31, 2021

SALES BY SEGMENT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial precision solutions

$

355,659

 

 

 

 

$

314,307

 

 

 

 

$

1,337,242

 

 

 

 

$

1,246,947

 

 

 

Medical and fluid solutions

 

181,342

 

 

 

 

 

163,504

 

 

 

 

 

690,177

 

 

 

 

 

641,654

 

 

 

Advanced technology solutions

 

146,580

 

 

 

 

 

121,436

 

 

 

 

 

562,859

 

 

 

 

 

473,608

 

 

 

Total sales

$

683,581

 

 

 

 

$

599,247

 

 

 

 

$

2,590,278

 

 

 

 

$

2,362,209

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING PROFIT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial precision solutions

$

110,387

 

 

 

 

$

102,677

 

 

 

 

$

434,476

 

 

 

 

$

414,192

 

 

 

Medical and fluid solutions

 

51,689

 

 

 

 

 

50,758

 

 

 

 

 

217,199

 

 

 

 

 

198,194

 

 

 

Advanced technology solutions

 

37,720

 

 

 

 

 

16,346

 

 

 

 

 

133,253

 

 

 

 

 

73,466

 

 

 

Corporate

 

(22,187

)

 

 

 

 

(18,346

)

 

 

 

 

(82,568

)

 

 

 

 

(70,725

)

 

 

Total operating profit

$

177,609

 

 

 

 

$

151,435

 

 

 

 

$

702,360

 

 

 

 

$

615,127

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING PROFIT ADJUSTMENTS (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial precision solutions

$

 

 

 

 

$

 

 

 

 

$

1,563

 

 

 

 

$

 

 

 

Medical and fluid solutions

 

 

 

 

 

 

 

 

 

 

 

2,498

 

 

 

 

 

 

 

 

Corporate

 

 

 

 

 

 

 

 

 

 

 

897

 

 

 

 

 

 

 

 

Total adjustments

$

 

 

 

 

$

 

 

 

 

$

4,958

 

 

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ADJUSTED OPERATING PROFIT (NON-GAAP)

 

 

% of

Sales

 

 

 

% of

Sales

 

 

 

% of

Sales

 

 

 

% of

Sales

Industrial precision solutions

$

110,387

 

 

31

%

 

$

102,677

 

 

33

%

 

$

436,039

 

 

33

%

 

$

414,192

 

 

33

%

Medical and fluid solutions

 

51,689

 

 

29

%

 

 

50,758

 

 

31

%

 

 

219,697

 

 

32

%

 

 

198,194

 

 

31

%

Advanced technology solutions

 

37,720

 

 

26

%

 

 

16,346

 

 

13

%

 

 

133,253

 

 

24

%

 

 

73,466

 

 

16

%

Corporate

 

(22,187

)

 

 

 

 

(18,346

)

 

 

 

 

(81,671

)

 

 

 

 

(70,725

)

 

 

Total operating profit - adjusted

$

177,609

 

 

26

%

 

$

151,435

 

 

25

%

 

$

707,318

 

 

27

%

 

$

615,127

 

 

26

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DEPRECIATION & AMORTIZATION

 

 

 

 

 

 

 

 

 

 

 

 

Industrial precision solutions

$

7,186

 

 

 

 

$

6,259

 

 

 

 

$

27,891

 

 

 

 

$

25,673

 

 

 

Medical and fluid solutions

 

12,528

 

 

 

 

 

14,033

 

 

 

 

 

54,674

 

 

 

 

 

56,600

 

 

 

Advanced technology solutions

 

2,075

 

 

 

 

 

2,954

 

 

 

 

 

8,780

 

 

 

 

 

11,826

 

 

 

Corporate

 

2,892

 

 

 

 

 

2,404

 

 

 

 

 

8,578

 

 

 

 

 

9,784

 

 

 

Total depreciation & amortization

$

24,681

 

 

 

 

$

25,650

 

 

 

 

$

99,923

 

 

 

 

$

103,883

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA (NON-GAAP) (2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial precision solutions

$

117,573

 

 

33

%

 

$

108,936

 

 

35

%

 

$

463,930

 

 

35

%

 

$

439,865

 

 

35

%

Medical and fluid solutions

 

64,217

 

 

35

%

 

 

64,791

 

 

40

%

 

 

274,371

 

 

40

%

 

 

254,794

 

 

40

%

Advanced technology solutions

 

39,795

 

 

27

%

 

 

19,300

 

 

16

%

 

 

142,033

 

 

25

%

 

 

85,292

 

 

18

%

Corporate

 

(19,295

)

 

 

 

 

(15,942

)

 

 

 

 

(73,093

)

 

 

 

 

(60,941

)

 

 

Total EBITDA

$

202,290

 

 

30

%

 

$

177,085

 

 

30

%

 

$

807,241

 

 

31

%

 

$

719,010

 

 

30

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

 

Represents severance and non-cash inventory charges associated with the NDC acquisition.

(2)

 

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 severance and non-cash inventory charges associated with acquisitions or facility closures. 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, 2022

 

October 31, 2021

 

October 31, 2022

 

October 31, 2021

GAAP AS REPORTED

 

 

 

 

 

 

 

Operating profit

$

177,609

 

 

$

151,435

 

 

$

702,360

 

 

$

615,127

 

Other / interest expense - net

 

(69

)

 

 

(11,326

)

 

 

(53,081

)

 

 

(40,951

)

Net income

 

141,249

 

 

 

110,460

 

 

 

513,103

 

 

 

454,368

 

Diluted earnings per share

$

2.44

 

 

$

1.88

 

 

$

8.81

 

 

$

7.74

 

 

 

 

 

 

 

 

 

Shares outstanding - diluted

 

57,823

 

 

 

58,792

 

 

 

58,249

 

 

 

58,734

 

 

 

 

 

 

 

 

 

OPERATING PROFIT ADJUSTMENTS

 

 

 

 

 

 

 

Inventory step-up amortization

$

 

 

$

 

 

$

1,563

 

 

$

 

Severance and other

 

 

 

 

 

 

 

3,395

 

 

 

 

 

 

 

 

 

 

 

 

NON-OPERATING EXPENSE ADJUSTMENTS

 

 

 

 

 

 

 

Pension settlement loss

$

 

 

$

 

 

$

41,221

 

 

$

 

 

 

 

 

 

 

 

 

Total adjustments

$

 

 

$

 

 

$

46,179

 

 

$

 

 

 

 

 

 

 

 

 

Adjustments net of tax

$

 

 

$

 

 

$

36,494

 

 

$

 

EPS effect of adjustments and other discrete tax items

$

 

 

$

 

 

$

0.62

 

 

$

 

 

 

 

 

 

 

 

 

NON-GAAP MEASURES-ADJUSTED PROFITABILITY

 

 

 

 

 

 

 

Operating profit (1)

$

177,609

 

 

$

151,435

 

 

$

707,318

 

 

$

615,127

 

Operating profit % of sales

 

26.0

%

 

 

25.3

%

 

 

27.3

%

 

 

26.0

%

Net income (2)

$

141,249

 

 

$

110,460

 

 

$

549,597

 

 

$

454,368

 

Diluted earnings per share (3)

$

2.44

 

 

$

1.88

 

 

$

9.43

 

 

$

7.74

 

(1)

 

Adjusted operating profit is defined as operating profit plus certain adjustments, such as severance, non-cash inventory charges related to the NDC acquisition, and facility closures. Adjusted operating profit as a percentage of sales is defined as adjusted operating profit divided by sales.

(2)

 

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

(3)

 

Adjusted earnings per share 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.

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