NORDSON CORP

Results of Operations

Below is a detailed comparison of our results of operations for the three and nine months ended July 31, 2025 and July 31, 2024.

As used throughout this Quarterly Report on Form 10-Q, geographic regions include the Americas (United States, Canada, Mexico and Central and South America), Asia Pacific and Europe.

Consolidated Financial Results

Consolidated financial results for the three months ended July 31, 2025 and July 31, 2024 were as follows:

Consolidated financial results for the nine months ended July 31, 2025 and July 31, 2024 were as follows:

Net Sales

Net sales for the IPS, MFS and ATS segments were as follows:

Three Months Ended July 31, 2025

The IPS organic sales decrease of 2.0 percent was driven by weaker systems demand in polymer processing partially offset by broad based growth in most other product lines. MFS organic sales decreased 0.4 percent inclusive of the contract manufacturing business that is held for sale. Excluding the pending divestiture in both periods, organic sales increased 4 percent driven by medical fluid components and fluid solutions product lines. The inorganic growth of MFS is due to the acquisition of Atrion. The ATS organic sales increase of 14.6 percent was driven by robust growth in electronics dispense product lines, offset by weakness in x-ray inspections systems.

Nine Months Ended July 31, 2025

The IPS organic sales decrease of 5.7 percent was driven primarily by weaker systems demand in polymer processing and industrial coatings product lines, which was partially offset by broad based growth in most other product lines. MFS organic sales decreased 7.1 percent inclusive of the contract manufacturing business that is held for sale. Excluding the pending divestiture in both periods, organic sales decreased 2.3 percent driven by lower demand and tough year-over-year comparisons in medical interventional solutions product lines, where customer destocking trends continued to impact demand. The ATS organic sales increase of 8.0 percent was driven by robust growth in electronics dispense product lines and electronic processing and optical sensors, partially offset by weakness in x-ray inspection systems and the measurement and control product line.

Net Sales by region were as follows:

Operating Profit

Operating profit for the IPS, MFS and ATS segments were as follows:

Three Months Ended July 31, 2025

IPS operating margin increased 30 basis points on flat sales volume, driven by lower restructuring costs. MFS operating margin declined 510 basis points. Excluding restructuring, costs related to the Atrion acquisition and charges associated with the exit of the medical contract manufacturing business, operating margin increased 80 basis points reflecting increased leverage of selling and administrative expenses in the core business, as well as contribution from the Atrion acquisition. ATS operating margin improved by 370 basis points driven bystrong conversion on increased organic sales and the benefits of strategic cost reduction actions and manufacturing footprint optimization.

Nine Months Ended July 31, 2025

IPS operating margin declined 120 basis points dueto lower sales volumes. MFS operating margin declined 460 basis points. Excluding restructuring costs related to the Atrion acquisition and charges associated with the exit of the medical contract manufacturing business, operating margin decreased 140 basis points reflecting lower organic sales demand partially offset by the impact of the Atrion acquisition. ATS operating margin improved by 360 basis points driven by strong organic sales growth and the benefits of strategic cost reduction actions and manufacturing footprint optimization.

Interest expense and Other-net

Interest expense for the three months ended July 31, 2025 was $26,258, compared to $18,803 in the comparable period of 2024. The increase, compared to the prior year period, was primarily due to higher average debt levels, driven by acquisitions. Other-net for the three months ended July 31, 2025 was expense of $2,945 compared to income of $152 in the comparable period of 2024. Included in other-net for the three months ended July 31, 2025 were pension and postretirement income of $1,008 and $3,041 of foreign currency losses. Included in other-net for the three months ended July 31, 2024 were pension and postretirement income of $1,028 and $464 in foreign currency losses.

Interest expense for the nine months ended July 31, 2025 was $79,389, compared to $60,354 in the comparable period of 2024. The increase, compared to the prior year period, was primarily due to higher average debt levels, driven by acquisitions. Other-net was expense of $5,380 compared to expense of $971 in the comparable period of 2024. Included in other-net for the nine months ended July 31, 2025 were pension and postretirement income of $3,042 and $5,909 of foreign currency losses. Included in other-net for the nine months ended July 31, 2024 were pension and postretirement income of $3,085 and $2,411 in foreign currency losses.

Income Tax Expense

We record our interim provision for income taxes based on our estimated annual effective tax rate, as well as certain items discrete to the current period. Significant judgment is involved regarding the application of global income tax laws and regulations and when projecting the jurisdictional mix of income. We have considered several factors in determining the probability of realizing deferred income tax assets including forecasted operating earnings, available tax planning strategies and the time period over which the temporary differences will reverse. We review our tax positions on a regular basis and adjust the balances as new information becomes available. The effective tax rates for both the three and nine months ended July 31, 2025 were 21.0% and 19.7%, respectively, compared to 21.5% and 21.1%, respectively, for the same periods in 2024. Excluding a discrete tax impact related to the divestiture and related charges taken in the third quarter of 2025, the effective tax rates for the three and nine months ended July 31, 2025 were 19.4% and 19.2%, respectively. The effective tax rate for the nine months ended July 31, 2025 is lower than the U.S. tax rate of 21% primarily due to the foreign-derived intangible income deduction.

Net Income

Net income was $125,784, or $2.22 per diluted share, for the three months ended July 31, 2025, compared to net income of $117,327, or $2.04 per diluted share, in the same period of 2024. This represented a 7.2 percent increase in net income and a 8.8 percent increase in diluted earnings per share. The increase in net income and increase of $0.18 per diluted share was primarily driven by higher operating profit, partially offset by higher interest expense due to prior year's acquisitions and the divestiture and related charges associated with exiting the medical contract manufacturing business.

Net income was $332,840, or $5.83 per diluted share, for the nine months ended July 31, 2025, compared to net income of $345,116, or $5.99 per diluted share, in the same period of 2024. This represented a 3.6 percent decrease in net income and a 2.7 percent decrease in diluted earnings per share. The decrease in net income and decrease of $0.16 per diluted share was primarily driven by higher interest expense due to prior year's acquisition and the divestiture and related charges associated with exiting the medical contract manufacturing business.

Foreign Currency Effects

It is not possible to precisely measure the impact on operating results arising from foreign currency exchange rate changes, because of changes in selling prices, sales volume, product mix and cost structure in each country in which we operate. However, if transactions for the three months ended July 31, 2025 were translated at exchange rates in effect during the same period of 2024, we estimated that sales would have been approximately $13,000 lower while costs of sales and selling and administrative expenses would have been approximately $8,000 lower. If transactions for the nine months ended July 31, 2025 were translated at exchange rates in effect during the same period of 2024, we estimated that sales would have been approximately $3,000 higher while costs of sales and selling and administrative expenses would have been approximately $500 lower.

Other Trends

Changes in trade policies, tariffs, and other import/export regulations of the U.S. and other nations did not have a material impact on our financial results for the nine months ended July 31, 2025. However, the Company does have sales and purchases that could be negatively impacted by recent tariff actions. The Company continues to actively work to minimize the impact of these changes and mitigate risk.