FinanceLooker

Excrept from filing document 2024-10-31

In this annual report all amounts related to United States dollars and foreign currency and to the number of Nordson Corporation s common shares except for per share earnings and dividend amounts are expressed in thousands unless otherwise indicated Unless the context otherwise indicates all references to we us our or the Company mean Nordson Corporation
Nordson is an innovative precision technology company that leverages a scalable growth framework to deliver top tier growth with leading margins and returns We engineer manufacture and market differentiated products and systems used for precision dispensing applying and controlling of adhesives coatings polymers sealants biomaterials and other fluids to test and inspect for quality and to treat and cure surfaces and various medical products such as catheters cannulas medical balloons and medical tubing These products are supported with extensive application expertise and direct global sales and service We serve a wide variety of consumer non durable consumer durable and technology end markets including packaging electronics medical appliances energy transportation precision agriculture building and construction and general product assembly and finishing
Our strategy for long term growth is based on solving customers needs globally We were incorporated in the State of Ohio in 1954 and are headquartered in Westlake Ohio Our products are marketed through a network of direct operations in more than 35 countries Consistent with this global strategy approximately 67 percent of our revenues were generated outside the United States in 2024
We strive to be a vital self renewing worldwide organization that within the framework of ethical behavior and enlightened citizenship grows and produces wealth for our customers employees shareholders and communities
We focus on long term growth and returns Each quarter we may not produce increased sales net income or earnings per share or exceed the comparative prior year s quarter When short term swings occur we do not intend to alter our foundational objectives in efforts to mitigate the impact of these temporary occurrences
In 2021 we launched the Ascend strategy which is designed to deliver top tier revenue growth with leading margins and returns Ascend is driven by three interconnected pillars the NBS Nordson Business System Next growth framework Owner Mindset our division led organizational structure and Winning Teams our talent strategy These three pillars are built upon the foundation of what makes Nordson special our culture and our values
The NBS Next growth framework the heart of the Ascend strategy uses data based segmentation to identify our greatest opportunities for profitable growth and ensure we are investing our resources in those areas Using data in a consistent and disciplined way leaders across the Company are defining their strategic business priorities
We drive organic growth by continually introducing new products and technology providing high levels of customer service and support capturing rapidly expanding opportunities in emerging geographies and leveraging existing technology into new applications Additional growth comes through the acquisition of companies that have differentiated precision technology based product portfolios serve attractive high growth end markets applications and have a customer centric business model The primary goals of our acquisition strategy are to complement our current capabilities diversify our business into new industry sectors with new customers and expand the scope of the solutions we can offer to our customers
Complementing our business strategy is the objective to provide opportunities for employee self fulfillment growth security recognition and equitable compensation This goal is met through the Human Resources department s facilitation of employee training leadership training and the creation of on the job growth opportunities The result is a highly qualified and
We recognize the value of employee participation in the planning process Strategic and operating plans are developed by all divisions resulting in a sense of ownership and commitment on the part of employees in accomplishing our objectives
At Nordson we have a long and proud history of investing in the communities where we live and work We are committed to contributing up to five percent of domestic pretax earnings to education human welfare services and other charitable activities particularly in communities where we have significant operations Through the Nordson Corporation Foundation we give back by providing grants to nonprofits in communities where we have facilities employing approximately 100 people In recent years we have extended our reach internationally through our 2 1 employee Matching Gifts as well as community giving programs in ten international locations Since 1989 we have donated more than 173 million to communities where we live and work In addition our employees volunteered more than 113 000 hours through our Time N Talent and Dollars for Doers programs
We are a diversified precision technology company that engineers manufactures and markets differentiated products and systems used to dispense apply and control adhesives coatings polymers sealants biomaterials medical components and other fluids to test and inspect for quality and to treat and cure surfaces Our precision technology can be found in manufacturing facilities around the world producing a wide range of goods for consumer durable consumer non durable medical and technology end markets Equipment ranges from single use components to manual stand alone units for low volume operations to microprocessor based automated systems for high speed high volume production lines
We market our products globally primarily through a direct sales force and also through qualified distributors and sales representatives We have built a worldwide reputation for creativity and expertise in the design and engineering of high technology application equipment that meets the specific needs of our customers We create value for our customers by developing solutions that increase uptime enable faster line speeds and reduce consumption of materials We serve a broad customer base both in terms of industries and geographic regions In 2024 no single customer accounted for ten percent or more of our sales
This segment delivers proprietary dispensing and material processing technology as well as measurement inspection and control solutions to diverse end markets Product line specific solutions reduce material consumption increase line efficiency and enhance product quality and appearance Technologies are used for processing polymers inspection and measurement of food tubing and films and dispensing adhesives coatings sealants and other materials This segment primarily serves the consumer durables non durables agriculture and industrial markets
Automated and manual dispensing products and systems for cold materials container coating liquid finishing and powder coating as well as ultraviolet equipment used primarily in curing and drying operations Key strategic markets include beverage containers and food cans electric battery appliances automotive building and construction composites electronics and medical
In line measurement sensors gauges and analyzers using near infrared laser X ray optical and nucleonic technologies as well as proprietary algorithms and software These precision applications ensure quality and reliability within the customers manufacturing processes Key strategic markets include consumer non durable film extrusion and converting cable and tubing and energy storage
Dispensing coating and laminating systems for applying adhesives lotions liquids and fibers to disposable products and continuous roll goods Key strategic markets include adult incontinence products baby diapers and child training pants hygiene products and surgical drapes gowns shoe covers and face masks
Components and systems used in the thermoplastic and biopolymer melt stream in extrusion injection molding compounding polymerization and recycling processes Key strategic markets include flexible packaging electronics medical building and construction transportation and aerospace and general consumer goods
Precision agriculture spraying solutions including fluid components such as nozzles pumps and filters smart components that measure and control the flow quantity and location of dispensed fluid and control systems that provide a greater variety of input and functionality to the customer This broad product portfolio is supported by differentiated software and data capabilities
Dispensing coating and laminating systems for the assembly of plastic metal and wood products for paper and paperboard converting applications and for the manufacturing of continuous roll goods Key strategic markets include appliances automotive components building and construction materials electronics furniture solar energy and the manufacturing of bags sacks books envelopes and folding cartons
Components and devices for minimally invasive interventional surgical procedures including cannulas catheters and medical balloons Products also include proprietary single use plastic components in medical applications including biopharmaceutical patient care surgical and diagnostic systems
Precision manual and semi automated dispensers and highly engineered single use plastic molded syringes cartridges tips and fluid connection components Products are used within critical medical and industrial production processes and for applying and controlling the flow of adhesives sealants and lubricants Key strategic markets include electronics industrial medical and animal health
On August 21 2024 Nordson acquired Atrion Corporation a Delaware corporation Atrion pursuant to the Agreement and Plan of Merger the Merger Agreement dated as of May 28 2024 among Nordson Alpha Medical Merger Sub Inc a Delaware corporation and a wholly owned subsidiary of Nordson Merger Sub and Atrion Headquartered in Allen Texas Atrion is a manufacturer of proprietary medical products and generated approximately 169 million in annual revenue in 2023 Established in 1944 Atrion supports customers globally through three FDA registered U S Food and Drug Administration manufacturing facilities located in the United States Atrion s portfolio is included in the Company s Medical and Fluid Solutions segment It consists of three key businesses that we believe will significantly expand Nordson s addressable market in infusion and cardiovascular therapies
Atrion Medical is a leading provider of OEM interventional inflation devices for balloon catheterization stent deployment and fluid delivery in structural heart ears nose and throat and gastrointestinal procedures
This segment integrates our proprietary product technologies into the progressive stages of a customer s production processes such as surface treatment precisely controlled dispensing of material and pre and post dispense test and inspection to ensure quality This segment predominantly serves customers in the electronics end markets
Automated dispensing systems for high speed accurate application of a broad range of attachment protection and coating fluids and related gas plasma treatment systems for cleaning and conditioning surfaces prior to dispense Key strategic markets include the breadth of the electronics industry manufacturing supply chain that produces semiconductor printed circuit board assemblies and electronic components
Bond testing and automated optical acoustic microscopy and x ray inspection systems used in the semiconductor and printed circuit board industries Key strategic markets include mobile phones tablets personal computers wearable technology liquid crystal displays micro hard drives microprocessors printed circuit boards flexible circuits micro mechanical systems and semiconductor packaging
Our production operations include machining molding and assembly We manufacture specially designed parts and assemble components into finished equipment Many components are made in standard modules that can be used in more than one product or in combination with other components for a variety of models We have principal manufacturing operations and
sources of supply in the United States in Ohio Georgia California Colorado Connecticut Illinois Michigan Minnesota Pennsylvania Rhode Island Tennessee Florida Texas Alabama and Wisconsin as well as in the People s Republic of China Germany Ireland India Israel Italy Mexico the Netherlands and the United Kingdom
Principal materials used to make our products are metals and plastics typically in sheets bar stock castings forgings tubing and pellets We also purchase many electrical and electronic components fabricated metal parts high pressure fluid hoses packings seals and other items integral to our products Suppliers are competitively selected based on cost quality and service Most significant raw materials that we use are available through multiple sources We purchase most raw materials and other components on the open market and rely on third parties to provide certain finished goods While these items are generally available from multiple sources the cost of products sold may be affected by changes in the market price of raw materials and tariffs on certain raw materials particularly imports from China as well as disruptions in availability of raw materials components and sourced finished goods
We monitor and investigate alternative suppliers and materials based on numerous attributes including quality service financial stability and price We currently source raw materials and components from a number of suppliers but our ongoing efforts to improve service and manage compliance requirements and the cost effectiveness of our products may result in a reduction in the number of our suppliers
We continue to see a stabilization of the global supply chain improved lead times and lower inflation risk We enhanced our risk mitigation and sourcing efforts as a result of the COVID 19 pandemic and geopolitical tensions Logistics flows have improved and global forwarding rates have returned closer to pre pandemic levels except for Asia origin shipments which continue to be more volatile We continue to see moderate rate increases on parcel and domestic trucking activity
We rely on a combination of intellectual property rights including patents trademarks copyrights trade secrets and contractual provisions to protect our intellectual property Our worldwide intellectual property portfolio is strengthened through innovation and brand recognition and our comprehensive approach for protection and enforcement We enter into confidentiality and intellectual property agreements with our employees that require them to disclose any inventions created in the scope of employment convey all rights to those inventions to us and restrict the distribution of proprietary information Risk factors associated with our intellectual property are discussed in Item 1A Risk Factors
We protect and promote our intellectual property portfolio and take those actions we deem appropriate to enforce our intellectual property rights and to defend our rights to sell our products both domestically and internationally Although in the aggregate our global portfolio of more than 2 100 granted and pending patents and more than 1 000 trademarks are valuable assets that are important to our operations we believe that our competitive advantage is also largely attributable to the technical marketing and sales competence and capabilities of our employees rather than on any individual patent or trademark Therefore we do not consider the expiration or loss of any single patent trademark or intellectual property right to be material to our business as a whole
Historically the highest volume of sales occurs in the second half of the fiscal year due in large part to the timing of customers capital spending programs Accordingly fiscal first quarter sales volume is typically the lowest of the year due to timing of customers capital spending programs and customer holiday shutdowns
We operate in a competitive global marketplace and compete with many large well established and highly competitive manufacturers and service providers Our business is affected by a range of macroeconomic conditions including industry capacity changes global competition and economic conditions in the U S and abroad as well as fluctuations in currency exchange rates Our equipment is sold in competition with a wide variety of alternative bonding sealing finishing coating processing testing inspecting and fluid control techniques Potential uses for our equipment include any production processes that require preparation modification or curing of surfaces dispensing application processing or control of fluids and materials or testing and inspecting for quality
Many factors influence our competitive position including pricing product quality and service We maintain a leadership position in our business segments by delivering high quality innovative products and technologies as well as global service and technical support Working with customers to understand their processes and developing the application solutions that help them meet their production requirements also contributes to our leadership position Our worldwide network of direct sales and technical resources also is a competitive advantage
Our global operations are subject to a variety of federal state local and international laws regulations and compliance obligations relating to the manufacturing designing and servicing of highly complex products and solutions Examples of such regulations include but are not limited to import and export controls data privacy environmental product safety corruption bribery employment and labor To support our policy of compliance in every jurisdiction we do business we have robust internal controls quality management systems and management systems of compliance that govern our internal actions and mitigate our risk of non compliance We also have safeguards established to identify non compliance concerns through internal and external audits and risk assessments as well as an ethics helpline reporting system The following describes certain significant regulations that may impact our business For additional information about the risks associated with these laws and regulations see Part I Item 1A Risk Factors
We transact with customers and suppliers in numerous geographies around the world and are required to comply with U S and non U S import export and sanctions laws collectively Trade Laws We have developed compliance programs and training to prevent violations of Trade Laws and we regularly monitor and adjust our programs and training to reflect changes in Trade Laws or changes in our business Geopolitical events may result in changes to Trade Laws that may impact our ability to transact business involving certain countries certain items or certain counterparties or may impose additional costs or complexity relating to tariffs taxes duties or adjustments to our compliance programs training or personnel requirements
We are also required to comply with increasingly complex and changing laws and regulations enacted to protect business and personal data in the United States and other jurisdictions regarding privacy data protection and data security including those related to the collection storage use transmission and protection of personal information and other consumer customer vendor or employee data The risk of data privacy breaches cannot be entirely eliminated creating risks of fines and penalties Additionally privacy and data protection laws and regulations including with respect to the European Union s General Data Protection Regulation GDPR and the California Consumer Privacy Act of 2018 CCPA and the interpretation and enforcement of these and similar laws and regulations are continuously evolving and there is significant uncertainty with respect to how compliance with these laws and regulations may develop and the costs and complexity of future compliance
We are also subject to federal state local and foreign environmental safety and health laws and regulations concerning among other things emissions to the air discharges to land and water and the generation handling treatment and disposal of hazardous waste and other materials Under certain of these laws we can be held strictly liable for hazardous substance contamination of any real property we have ever owned operated or used as a disposal site or for natural resource damages associated with such contamination We are also required to maintain various related permits and licenses many of which require periodic modification and renewal The operation of manufacturing plants unavoidably entails environmental safety and health risks and we could incur material unanticipated costs or liabilities in the future if any of these risks were realized in ways or to an extent that we did not anticipate
We believe that we operate in compliance in all material respects with applicable environmental laws and regulations Compliance with environmental laws and regulations requires continuing management effort and expenditures We have incurred and will continue to incur costs and capital expenditures to comply with these laws and regulations and to obtain and maintain the necessary permits and licenses We maintain insurance coverage that may cover certain costs or legal claims related to environmental regulations and we accrue for estimated environmental liabilities with charges to expense and believe our environmental accrual is adequate to provide for our portion of the costs of all such known environmental liabilities We believe that the cost of complying with environmental laws and regulations will not have a material effect on our earnings liquidity or competitive position but cannot assure that material compliance related costs and expenses may not arise in the future For example future adoption of new or amended environmental laws regulations or requirements or newly discovered contamination or other circumstances could require us to incur costs and expenses that may have a material effect but cannot be presently anticipated
We believe that policies practices and procedures have been properly designed to prevent unreasonable risk of material regulation or compliance obligations arising from our operations Compliance with federal state local and foreign regulation and laws during 2024 had no material effect on our capital expenditures earnings or competitive position Based upon consideration of currently available information we believe liabilities for any such matters will not have a material adverse effect on our financial position operating results or liquidity but we cannot guarantee that material liabilities may not arise from regulation and compliance obligations in the future
As part of our compensation philosophy we believe that we must offer and maintain market competitive total rewards programs for our employees in order to attract and retain superior talent These programs not only include base wages and incentives in support of our pay for performance culture but also health welfare and retirement benefits We focus many programs on employee wellness and have implemented solutions including mental health support access telemedicine and healthy weight loss programs We believe that these solutions have helped us successfully manage healthcare and prescription drug costs for our employee population
In the U S we match contributions to a tax qualified defined contribution retirement savings plan the Savings Plan for all eligible employees in an amount equal to 50 cents for every dollar contributed by the employee until the employee contributions reach 6 of her or his base compensation In addition non union new hires and re hires as of July 1 2021 are eligible for an additional enhanced 401 k contribution of 3 eligible earnings All contributions by employees into the Savings Plan are fully vested immediately Company contributions both the match and enhanced contribution have a three year graded vesting schedule and vest at 33 1 3 each year until fully vested after three years of employment We also maintain a non qualified unfunded and unsecured deferred compensation plan for the benefit of eligible management In addition non union employees hired prior to July 1 2021 are eligible to participate in a Company sponsored tax qualified pension plan for U S based employees the Salaried Pension Plan The Salaried Pension Plan is designed to work together with social security benefits to provide employees with up to 30 years of service retirement income replacement that is approximately 55 of eligible compensation subject to the Internal Revenue Code maximum monthly benefit Participants fully vest in the Salaried Pension Plan after five years of service All eligible union employees hired prior to November 1 2004 participate in a Company sponsored tax qualified pension plan for U S based employees the Hourly Pension Plan The Hourly Pension Plan provides a multiplier for each year of service to supplement employees retirement income We also maintain a supplemental retirement benefit restoration plan Excess Defined Benefit Pension Plan which is an unfunded non qualified plan that is designed to provide retirement benefits to U S based eligible officers hired prior to July 1 2021 as a replacement for retirement benefits limited by regulations under the Internal Revenue Code
In 2022 we launched a global recognition program that allows managers and peers to recognize the special achievements of others through both written recognition shared on a company awards feed as well as monetary recognition that allows a recipient to choose a physical gift gift card or donate the value of their recognition to charity We also continue our service award program which demonstrates appreciation and thanks to longstanding employees with five or more years of service Service milestones are recognized at each five year increment by presentation of a digital and or printed certificate with an invitation to select a recognition award via an online catalog
Our key talent philosophy is to develop talent from within and supplement with external hires This approach has yielded a deep understanding among our employee base of our business products and customers while adding new employees and ideas in support of our continuous improvement mindset Attracting and retaining the best talent relies on our ability to provide a diverse and inclusive workplace personal and professional growth opportunities and a rewarding employee experience We strive to uphold a culture of shared knowledge appreciation and success We believe that our average tenure across the globe reflects our positive workplace culture and the strong engagement of our employees Our talent acquisition team uses internal and external resources to recruit highly skilled and talented workers and we encourage employee referrals for open positions
Talent development and succession planning for critical roles is a cornerstone of our talent program Development plans are created and monitored to ensure progress is made along the established timelines Development plans also intersect with our mission particularly as we strive to be responsible to our communities
One of our core values Respect for People reflects the behavior we strive to include in every aspect of the way we conduct business Our approach encompasses inclusion awareness and skill building intentionality with respect to diversity in our hiring and selection process and performance management and succession planning that recognizes the importance of diversity Nordson s employee resource groups strengthen our commitment to fostering an inclusive diverse workplace where everyone feels like they belong Participation in these groups is open to all employees We regularly reflect on our progress and explore opportunities to improve our inclusion and diversity programs including at the executive leadership and Board levels
Our annual report quarterly reports and current reports Form 8 K and amendments to those reports filed or furnished with the Securities and Exchange Commission SEC pursuant to Section 13 a or 15 d of the Securities Exchange Act of 1934 are available free of charge at https investors nordson com as soon as reasonably practical after such material is electronically filed with or furnished to the SEC Copies of these reports may also be obtained free of charge by sending written requests to Corporate Communications Nordson Corporation 28601 Clemens Road Westlake Ohio 44145 The contents of our website are not incorporated by reference herein and are not deemed to be a part of this annual report
In an enterprise as diverse as ours a wide range of factors could affect future performance We discuss in this section some of the risk factors that could materially and adversely affect our business financial condition value and results of operations You should consider these risk factors in connection with evaluating the forward looking statements contained in this annual report because these factors could cause our actual results and financial condition to differ materially from those projected in forward looking statements You should not interpret the disclosure of any risk factor to imply that the risk factor has not already materialized Additional risks factors may exist that are not presently known by the Company or that are currently deemed immaterial may also be present
In 2024 approximately 33 percent of our revenue was generated in the United States while approximately 67 percent was generated outside the United States The COVID 19 pandemic and related preventative and mitigation measures implemented by governments around the world and the conflicts in Europe and the Middle East have negatively impacted the global economy and created significant volatility and disruption of financial markets and may continue to do so in future periods
A general sustained slowdown in the global economy or in a particular region or industry or an increase in trade tensions with U S trading partners could negatively impact our business financial condition or liquidity Our largest markets include consumer non durable industrial medical electronics consumer durable and automotive A slowdown in any of these specific end markets could directly affect our revenue stream and profitability
A portion of our product sales is attributable to industries and markets such as the electronics polymer processing agriculture and metal finishing industries which historically have been cyclical and sensitive to relative changes in supply and demand and general economic conditions The demand for our products depends in part on the general economic conditions of the industries or national economies of our customers Downward economic cycles in our customers industries or markets may reduce sales of some of our products It is not possible to accurately predict the factors that will affect demand for our products in the future
Any significant downturn in the health of the general economy or any recession depression or other sustained adverse market event or conditions including inflationary pressures could have an adverse effect on our revenues and financial performance resulting in impairment of assets We cannot predict the strength or duration of any economic slowdown and instability or the timing of any recovery
Our financial results have been and could continue to be significantly impacted by uncertainty in U S trade policy including uncertainty surrounding changes in tariffs trade agreements or other trade restrictions imposed by the U S or other governments
Our ability to conduct business can be significantly impacted by changes in tariffs changes or repeals of trade agreements including the impact of the United States Mexico Canada Agreement with Mexico and Canada which replaced the North American Free Trade Agreement or the imposition of other trade restrictions or retaliatory actions imposed by various governments For example the incoming U S presidential administration has proposed to significantly increase tariffs on foreign imports into the United States particularly from Canada China and Mexico Other effects of these changes including impacts on the price of raw materials responsive actions from governments and the opportunity for competitors to establish a presence in markets where we participate could also have significant impacts on our financial results We cannot predict what further action may be taken with respect to tariffs or trade relations between the U S and other governments and any further changes in U S or international trade policy could have an adverse impact on our business Further the conflicts in Europe and the Middle East may have significant adverse effects on international trade policy
We are exposed to fluctuations in foreign currency exchange rates particularly with respect to the euro the yen the pound sterling and the Chinese yuan Any significant change in the value of the currencies of the countries in which we do business against the United States dollar could affect our ability to sell products competitively and control our cost structure which could have a material adverse effect on our business financial condition and results of operations For additional detail related to this risk see Part II Item 7A Quantitative and Qualitative Disclosure About Market Risk
A significant portion of our consolidated revenues in 2024 were generated in currencies other than the United States dollar which is our reporting currency We recognize foreign currency transaction gains and losses arising from our operations in the period incurred As a result currency fluctuations between the United States dollar and the currencies in which we do business have caused and may continue to cause foreign currency transaction and translation movements which historically have been material and could continue to be material We cannot predict the effects of exchange rate fluctuations upon our future operating results because of the number of currencies involved the variability of currency exposures and the potential volatility of currency exchange rates We take actions to manage our foreign currency exposure such as entering into hedging transactions where applicable but we cannot assure that our strategies will adequately protect our consolidated operating results from the effects of exchange rate fluctuations For example the impact of conflicts in Europe and the Middle East changes in monetary policies and the effects of the departure of the United Kingdom from the European Union Brexit have caused increased volatility in global currency exchange rates that have resulted in the strengthening of the United States dollar against the foreign currencies in which we conduct business Future adverse consequences arising from the conflicts in Europe and the Middle East and Brexit may include continued volatility in exchange rates Any significant fluctuation in exchange rates may be harmful to our financial condition and results of operations We also face risks arising from the imposition of exchange controls and currency devaluations Exchange controls may limit our ability to convert foreign currencies into United States dollars or to remit dividends and other payments by our foreign subsidiaries or customers located in or conducting business in a country imposing controls Currency devaluations diminish the United States dollar value of the currency of the country instituting the devaluation and if they occur or continue for significant periods could adversely affect our earnings or cash flow
We conduct our manufacturing sales and distribution operations on a worldwide basis and are subject to risks associated with doing business both within and outside the United States We expect that international operations and United States export sales will continue to be important to our business for the foreseeable future Both sales from international operations and export sales are subject to varying degrees of risks inherent in doing business outside the United States Such risks include but are not limited to the following
changes in tax rates adoption of new tax laws or other additional tax policies and other proposals to reform United States and foreign tax laws that impact how United States multinational corporations are taxed on foreign earnings
the imposition of tariffs import or export licensing requirements and other potential changes in trade policies and relations arising from policy initiatives implemented by the U S presidential administration and
Any of these events could reduce the demand for our products limit the prices at which we can sell our products interrupt our supply chain or otherwise have an adverse effect on our operating performance
Our international operations also depend upon favorable trade relations between the U S and those foreign countries in which our customers subcontractors and materials suppliers have operations A protectionist trade environment in either the U S or those foreign countries in which we do business such as a change in the current tariff structures export compliance or other
trade policies may materially and adversely affect our ability to sell our products in foreign markets The incoming U S presidential administration has criticized existing trade agreements and while it remains unclear what actions the current or future administration may take with respect to existing and proposed trade agreements or restrictions on trade generally more stringent export and import controls may be ultimately imposed in the future
Our success will continue to depend to a significant extent on the continued service of our executive management team and the ability to recruit hire and retain other key management personnel including factory production workers and other staff to support our growth and operational initiatives and replace those who retire or resign Failure to retain our leadership team and workforce and to attract and retain other important management and technical personnel could place a constraint on our global growth and operational initiatives possibly resulting in inefficient and ineffective management and operations which would likely harm our revenues operations and product development efforts and eventually result in a decrease in profitability
We regularly execute organizational changes such as acquisitions divestitures and realignments to support our growth and cost management strategies We also engage in initiatives aimed to increase productivity efficiencies and cash flow and to reduce costs The Company commits significant resources to identify develop and retain key employees to ensure uninterrupted leadership and direction If we are unable to successfully manage these and other organizational changes the ability to complete such activities and realize anticipated synergies or cost savings as well as our results of operations and financial condition could be materially adversely affected We cannot offer assurances that any of these initiatives will be beneficial to the extent anticipated or that the estimated efficiency improvements incremental cost savings or cash flow improvements will be realized as anticipated or at all
We have experienced and expect to continue to experience cybersecurity threats and some cybersecurity incidents to our systems and networks We do not believe that any risks from cybersecurity threats including as a result of past cybersecurity incidents have had or are reasonably likely to have a material adverse effect on the company including our business strategy results of operations or financial condition To conduct our business we rely extensively on information technology systems networks and services some of which are managed hosted and provided by third party business partners Increased global information technology security threats computer crime and cyberterrorism pose a risk to the security of our systems and networks and those of our third party service providers and the confidentiality availability and integrity of our data Cybersecurity incidents and similar attacks vary in their form and can include the deployment of harmful malware or ransomware denial of services attacks and other attacks which may affect business continuity and threaten the availability confidentiality and integrity of our systems and information Cybersecurity incidents can also include employee or personnel failures fraud phishing or other social engineering attempts or other methods to cause confidential information payments account access or access credentials or other data to be transmitted to an unintended recipient Cybersecurity threat actors also may attempt to exploit vulnerabilities in software including software commonly used by companies in cloud based services and bundled software Depending on their nature and scope such threats could potentially lead to the compromising of confidential information including but not limited to confidential information relating to customer or employee data improper use of our systems and networks manipulation and destruction of data defective products production downtimes and operational disruptions which in turn could adversely affect our reputation competitiveness and results of operations A cybersecurity incident or failure or disruption relating to our information or systems or that of our third party business partners or any failure by us or our third party business partners to effectively address enforce and maintain our information technology infrastructure and cybersecurity requirements may result in substantial harm to our business strategy results of operations and financial condition including major disruptions to business operations loss of intellectual property release of confidential information alteration or corruption of data or systems costs related to remediation or the payment of ransom and litigation including individual claims or consumer class actions commercial litigation administrative and civil or criminal investigations or actions regulatory intervention and sanctions or fines investigation and remediation costs and possible prolonged negative publicity
We have taken steps and incurred costs to further strengthen the security of our computer systems and continue to assess maintain and enhance the ongoing effectiveness of our information security systems While we attempt to mitigate these risks by employing a number of measures including employee training comprehensive monitoring of our networks and systems and maintenance of backup and protective systems our systems networks products solutions and services remain potentially vulnerable to advanced persistent threats The techniques used by criminals to obtain unauthorized access to sensitive data change frequently and often are not recognizable until launched against a target Accordingly we may be unable to anticipate
these techniques or implement adequate preventative measures It is therefore possible that in the future we may suffer a criminal attack unauthorized parties may gain access to personal information in our possession and we may not be able to identify any such incident in a timely manner
The interpretation and application of data protection laws including federal state and international laws relating to the collection use retention disclosure security and transfer of personally identifiable data in the U S Europe and elsewhere including but not limited to the European Union s GDPR and the CCPA are uncertain and evolving It is possible that these laws may be interpreted and applied in a manner that is inconsistent with our data practices In addition as a result of existing or new data protection requirements we incur and expect to continue to incur significant ongoing operating costs as part of our significant efforts to protect and safeguard our sensitive data and personal information These efforts also may divert management and employee attention from other business and growth initiatives A breach in information privacy could result in legal or reputational risks and could have a negative impact on our revenues and results of operations
We may face particular data protection and privacy risks in connection with the European Union s Global Data Protection Regulation the California Consumer Privacy Act and other privacy laws and regulations
The interpretation and application of data protection laws and other regulations including federal state and international laws relating to the collection use retention disclosure security and transfer of personal information in the U S Europe and elsewhere including but not limited to the European Union s GDPR and the CCPA are uncertain and evolving
These laws and regulations may grant among other things individual rights to access and delete personal information and the right to opt out of the sale of personal information These laws and regulations can also impose significant forfeitures and penalties for noncompliance and afford private rights of action to individuals under certain circumstances
It is possible that these laws may be interpreted and applied in a manner that is inconsistent with our data practices In addition as a result of existing or new data protection laws and regulations we incur and expect to continue to incur significant ongoing operating costs as part of our significant efforts to protect and safeguard our confidential or sensitive data and personal information These efforts also may divert management and employee attention from other business and growth initiatives A breach in information privacy could result in legal or reputational risks and could have a negative impact on our revenues and results of operations Any failure to manage data privacy in compliance with applicable laws and regulations could result in significant regulatory investigations fines and sanctions consumer and class action litigation commercial litigation prolonged negative publicity data breaches declining customer confidence loss of key customers employee liability and other unfavorable consequences
While we manufacture certain parts and components used in our products we require substantial amounts of raw materials and purchase some parts and components from suppliers The availability and prices for raw materials parts and components may be subject to curtailment or change due to among other things suppliers allocation to other purchasers interruptions in production by suppliers and changes in exchange rates and prevailing price levels including as a result of inflation or the imposition of tariffs import or export licensing requirements and other potential changes in trade policies The conflicts in Europe and the Middle East have negatively impacted and may continue to negatively impact the availability and prices for raw materials parts and components While we generally attempt to pass along higher raw material part and component costs to our customers in the form of price increases there historically has been a delay between an increase in our raw material costs and our ability to increase the prices of our products
Shortages in raw materials or our inability to pass along price increases could affect the prices we charge our operating costs and our competitive position which could adversely affect our business financial condition results of operations and cash flows
In addition our facilities supply chains distribution systems and products may be impacted by natural or man made disruptions including armed conflict demand surges damaging weather or other acts of nature including weather or other acts of nature caused by climate change pandemics or other public health crises A shutdown of or inability to utilize one or more of our facilities our supply chain or our distribution system could significantly disrupt our operations delay production and shipments impact our relationships and reputation with customers suppliers employees and others result in lost or decreased sales or result in legal exposure and large remediation or other expenses which could adversely affect our business financial condition results of operations and cash flows
If our intellectual property protection is inadequate others may be able to use our technologies and tradenames and thereby reduce our ability to compete which could have a material adverse effect on our business financial condition and results of operations
We regard much of the technology underlying our products and the trademarks under which we market our products as proprietary The steps we take to protect our proprietary technology may be inadequate to prevent misappropriation of our technology or third parties may independently develop similar technology We rely on a combination of patents trademark
copyright and trade secret laws employee and third party non disclosure agreements and other contracts to establish and protect our technology and other intellectual property rights The agreements may be breached or terminated and we may not have adequate remedies for any breach and existing trade secrets patent and copyright law afford us limited protection Policing unauthorized use of our intellectual property is difficult A third party could copy or otherwise obtain and use our products or technology without authorization Litigation may be necessary for us to defend against claims of infringement or to protect our intellectual property rights and could result in substantial cost to us and diversion of our efforts Further we might not prevail in such litigation which could harm our business
Our products could infringe on the intellectual property of others which may cause us to engage in costly litigation and if we are not successful could cause us to pay substantial damages and prohibit us from selling our products
Third parties may assert infringement or other intellectual property claims against us based on their patents or other intellectual property claims and we may have to pay substantial damages possibly including treble damages if it is ultimately determined our products infringe We may have to obtain a license to sell our products if it is determined that our products infringe upon another party s intellectual property We might be prohibited from selling our products before we obtain a license which if available at all may require us to pay substantial royalties Even if infringement claims against us are without merit defending these types of lawsuits takes significant time may be expensive and may divert management attention from other business concerns
We continually assess the strategic fit of our existing businesses and may divest or otherwise dispose of businesses that are deemed not to fit with our strategic plan or are not achieving the desired return on investment and we cannot be certain that our business operating results and financial condition will not be materially and adversely affected
A successful divestiture depends on various factors including reaching an agreement with potential buyers on terms we deem attractive as well as our ability to effectively transfer liabilities contracts facilities and employees to any purchaser identify and separate the intellectual property to be divested from the intellectual property that we wish to retain reduce fixed costs previously associated with the divested assets or business and collect the proceeds from any divestitures These efforts require varying levels of management resources which may divert our attention from other business operations If we do not realize the expected benefits of any divestiture transaction our consolidated financial position results of operations and cash flows could be negatively impacted In addition divestitures of businesses involve a number of risks including significant costs and expenses the loss of customer relationships and a decrease in revenues and earnings associated with the divested business Furthermore divestitures potentially involve significant post closing separation activities which could involve the expenditure of material financial resources and significant employee resources Any divestiture may result in a dilutive impact to our future earnings if we are unable to offset the dilutive impact from the loss of revenue associated with the divestiture as well as significant write offs including those related to goodwill and other intangible assets which could have a material adverse effect on our results of operations and financial condition
If we fail to develop new products or enhance existing products or our customers do not accept the new or enhanced products we develop our financial condition results of operations cash flows and liquidity could be adversely affected
Innovation is critical to our success We believe that we must continue to enhance our existing products and to develop and manufacture new products with improved capabilities in order to continue to be a leading provider of precision technology solutions We also believe that we must continue to make improvements in our productivity in order to maintain our competitive position Difficulties or delays in research development or production of new or enhanced products or failure to gain market acceptance of new or enhanced products and technologies may reduce future sales and adversely affect our competitive position We continue to invest in the development and marketing of new or enhanced products There can be no assurance that we will have sufficient resources to make such investments that we will be able to make the technological advances necessary to maintain competitive advantages or that we can recover major research and development expenses If we fail to make innovations launch products with quality problems or the market does not accept our new products our financial condition results of operations cash flows and liquidity could be adversely affected In addition as new or enhanced products are introduced we must successfully manage the transition from older products to minimize disruption in customers ordering patterns avoid excessive levels of older product inventories and ensure that we can deliver sufficient supplies of new products to meet customers demands
Our recent historical growth has depended and our future growth is likely to continue to depend in part on our acquisition strategy and the successful integration of acquired businesses into our existing operations For example in August 2024 we completed our acquisition of Atrion We intend to continue to seek additional acquisition opportunities both to expand into new
markets and to enhance our position in existing markets throughout the world We cannot assure we will be able to successfully identify suitable acquisition opportunities prevail against competing potential acquirers negotiate appropriate acquisition terms obtain financing that may be needed to consummate such acquisitions complete proposed acquisitions successfully integrate acquired businesses into our existing operations or expand into new markets In addition we cannot assure that any acquisition including the recent acquisitions of Atrion the ARAG Group ARAG and CyberOptics Corporation CyberOptics once successfully integrated will perform as planned be accretive to earnings or prove to be beneficial to our operations and cash flow
In addition an acquisition could adversely impact our operating performance as a result of incurring acquisition related debt pre acquisition potential tax or other liabilities acquisition expenses the amortization of acquisition acquired assets or possible future impairments of goodwill or intangible assets associated with the acquisition
We may also face liability with respect to acquired businesses for violations of environmental laws occurring prior to the date of our acquisition and some or all of these liabilities may not be covered by environmental insurance secured to mitigate the risk or by indemnification from the sellers from which we acquired these businesses We could also incur significant costs including but not limited to remediation costs natural resources damages civil or criminal fines and sanctions and third party claims as a result of past or future violations of or liabilities associated with environmental laws
Our total assets reflect substantial intangible assets primarily goodwill The goodwill results from our acquisitions and represents the excess of cost over the fair value of the identifiable net assets we acquired We assess at least annually whether there has been any impairment in the value of our intangible assets If future operating performance at one or more of our business units were to fall significantly below current levels if competing or alternative technologies emerge if market conditions for acquired businesses decline if significant and prolonged negative industry or economic trends exist if our stock price and market capitalization declines or if future cash flow estimates decline we could incur under current applicable accounting rules a non cash charge to operating earnings for goodwill impairment In addition any determination requiring the write off of a significant portion of unamortized intangible assets would negatively affect our results of operations and equity book value the effect of which could be material
We are subject to income taxes in the United States and various foreign jurisdictions Changes in applicable domestic or foreign tax laws and regulations or their interpretation and application including the possibility of retroactive effect could affect our business financial condition and profitability by increasing our tax liabilities Our future results of operations could be adversely affected by changes in our effective tax rate as a result of a change in the mix of earnings in jurisdictions with differing statutory tax rates changes in our overall profitability changes in tax legislation and rates changes in generally accepted accounting principles and changes in the valuation of deferred tax assets and liabilities The U S federal government may adopt changes to international trade agreements tariffs taxes and other government rules and regulations While we cannot predict what changes will actually occur with respect to any of these items such changes could affect our business and results of operations
We are subject to compliance with various laws and regulations including the FCPA UK Bribery Act and similar worldwide anti bribery and anti corruption laws which generally prohibit companies and their intermediaries from engaging in bribery or making other improper payments to private or public parties for the purpose of obtaining or retaining business or gaining an unfair business advantage The FCPA also requires proper record keeping and characterization of such payments in our reports filed with the SEC Our employees are trained and required to comply with these laws and we are committed to legal compliance and corporate ethics Violations of these laws could result in severe criminal or civil sanctions and financial penalties and other consequences that may have a material adverse effect on our business reputation financial condition or results of operations
Our operating results may be positively or negatively impacted by the amount of expense we record for our defined benefit pension plans U S GAAP requires that we calculate pension expense using actuarial valuations which are dependent upon our various assumptions including estimates of expected long term rate of return on plan assets discount rates for future payment obligations and the expected rate of increase in future compensation levels Our pension expense and funding requirements may also be affected by our actual return on plan assets and by legislation and other government regulatory actions Changes in assumptions laws or regulations and how the Company manages pension liabilities could lead to variability in financial results and could have a material adverse impact on liquidity
Our global operations are subject to increasingly complex environmental regulatory requirements and compliance with evolving environmental regulatory requirements could negatively impact our business capital expenditures results of operations financial condition and competitive position
We are subject to increasingly complex environmental regulations affecting international manufacturers including those related to air and water emissions waste management and climate change Some environmental laws impose strict retroactive and joint and several liability for the remediation of the release of hazardous substances even for conduct that was lawful at the time it occurred or for the conduct of or conditions caused by prior operators predecessors or third parties Failure to comply with environmental laws could expose us to penalties or clean up costs civil or criminal liability and sanctions on certain of our activities as well as damage to property or natural resources These liabilities sanctions damages and remediation efforts related to any non compliance with such laws and regulations could negatively impact our ability to conduct our operations and our financial condition and results of operations In addition there can be no assurances that we will not be adversely affected by costs liabilities or claims with respect to existing or subsequently acquired operations or under present laws and regulations or those that may be adopted or imposed in the future
Changes in environmental laws or regulations could result in higher expenses and payments and uncertainty relating to environmental laws or regulations may also affect how we conduct our operations and structure our investments and could limit our ability to enforce our rights Changes in environmental and climate change laws or regulations including laws relating to greenhouse gas emissions could subject us to additional costs and restrictions including increased energy and raw material costs If environmental laws or regulations are either changed or adopted and impose significant operational restrictions and compliance requirements upon us or our products they could negatively impact our business capital expenditures results of operations financial condition and competitive position
It is our policy to apply strict standards for environmental protection to all of our operations within and outside of the United States even when we are not subject to local government regulations We may incur substantial costs including cleanup costs fines and civil or criminal sanctions liabilities resulting from third party property damage or personal injury claims or our products could be prohibited from entering certain jurisdictions if we were to violate or become liable under environmental laws if our products become non compliant with environmental laws or if we were to undertake environmental protection actions voluntarily
Many governments regulators investors employees customers and other stakeholders are increasingly focused on ESG considerations relating to businesses including climate change and greenhouse gas emissions human capital and diversity equity and inclusion We make statements about our ESG goals and initiatives through information provided on our website press statements and other communications including through our ESG Report Responding to these ESG considerations and implementation of these goals and initiatives involves risks and uncertainties requires investments and are impacted by factors that may be outside our control
stakeholders may change and evolve over time Stakeholders also may have very different views on where ESG focus should be placed including differing views of regulators in various jurisdictions in which we operate Any failure or perceived failure by us to achieve our goals further our initiatives adhere to our public statements comply with federal state or international ESG laws and regulations or meet evolving and varied stakeholder expectations and standards could result in legal and regulatory proceedings against us and materially adversely affect our business reputation results of operations financial condition and stock price
Our inability to comply with the restrictive covenants included in the agreements governing our debt or to access additional sources of capital could impede our growth or the repayment or refinancing of existing debt
Our ability to comply with the covenants and other terms of the agreements governing our debt will depend on our future operating performance If we fail to comply with such covenants and terms we may be in default and the maturity of the related debt could be accelerated and become immediately due and payable We may be required to obtain waivers from our lenders in order to maintain compliance under our credit facilities including waivers with respect to our compliance with certain financial covenants If we are unable to obtain necessary waivers and the debt under our credit facilities is accelerated we would be required to obtain replacement financing at prevailing market rates
We may need to obtain new or additional financing in the future to expand our business or refinance existing debt If we are unable to access capital on satisfactory terms and conditions we may not be able to expand our business or meet our payment requirements under our existing debt Our ability to obtain new or additional financing will depend on a variety of factors many of which are beyond our control We may not be able to obtain new or additional financing because we have substantial debt or because we may not have sufficient cash flow to service or repay our existing or future debt In addition depending on market conditions and our financial performance neither debt nor equity financing may be available on satisfactory terms or at all Finally if financial market conditions worsen our credit facility providers may not provide the agreed credit if they become undercapitalized
We maintain property business interruption and casualty insurance but such insurance may not cover all risks associated with the hazards of our business and is subject to limitations including deductibles and maximum liabilities covered We are potentially at risk if one or more of our insurance carriers fail or deny our claims Additionally severe disruptions in the domestic and global financial markets could adversely impact the ratings and survival of some insurers In the future we may not be able to obtain coverage at current levels and our premiums may increase significantly on coverage that we maintain
While we have taken precautions to prevent production and service interruptions at our global facilities severe weather conditions including any that may be caused by global climate change such as hurricanes or tornadoes as well as major earthquakes wildfires and other natural disasters in areas in which we have manufacturing facilities or from which we obtain products may cause physical damage to our properties closure of one or more of our manufacturing or distribution facilities lack of an adequate work force in a market temporary disruption in the supply of inventory disruption in the transport of products and utilities and delays in the delivery of products to our customers Any of these factors may disrupt our operations and adversely affect our business financial condition and results of operations
Nordson Corporation manages cybersecurity risks by implementing processes for assessment identification and mitigation of cybersecurity threats Nordson s cybersecurity program is designed to align with the National Institute of Standards and Technology NIST Cybersecurity Framework enabling us to develop policies regarding information access asset protection and personal data security However this does not mean that we meet any particular technical standards specifications or requirements but rather that we use the NIST Cybersecurity Framework as a guide to help us identify assess and manage cybersecurity risks and threats relevant to our business We strive to protect our information assets through key cybersecurity measures such as the implementation of multifactor authentication and advanced malware defenses and we collaborate with internal stakeholders to establish layered cybersecurity defenses and restricted access based on business needs We conduct regular continuous education sessions for our employees on cybersecurity awareness including confidential information protection and simulated phishing attacks
We engage with experts to assist with regular third party penetration testing to evaluate our program against industry standards We also have standing engagements with incident response experts and external counsel to enhance our cybersecurity resilience We frequently collaborate with cybersecurity experts to share insights on threats best practices and emerging trends
Our cybersecurity risk management is a critical component of our comprehensive business continuity and enterprise risk management programs Our information security team regularly collaborates with cross functional subject matter experts and leaders to assess and enhance our cybersecurity risk posture and preparedness Management employs the following defense mechanisms throughout the enterprise employee training program to increase cybersecurity awareness vulnerability management to identify and address potential weaknesses multifactor authentication for secure access tabletop exercises to simulate and prepare for potential incidents and evaluation of third party service providers business partners and cloud suppliers including through assessments of their cybersecurity practices prior to service utilization
To date management has not identified any risks from cybersecurity threats including as a result of previous cybersecurity incidents that have materially affected or are reasonably likely to materially affect Nordson Corporation including its business strategy results of operations or financial condition See Item 1A Risk Factors Increased information technology threats and cybersecurity incidents and threats could pose a risk to our systems networks products solutions and services and those of our business partners above for more information While we are committed to safeguarding our information and the proprietary and confidential information they contain we note that no security measures can guarantee complete protection against cybersecurity incidents
The Board of Directors as a whole has overarching responsibility for overseeing our strategic and operational risks The Audit Committee specifically monitors risk management including cybersecurity threats Management led by the Vice President Information Systems and Technology regularly reports to the Board of Directors primarily through the Audit Committee providing an annual report on specific risks mitigation efforts and a review of Nordson s cybersecurity maturity
Management is responsible for day to day assessment and management of cybersecurity threats and risks Nordson s Senior Director of Security and Compliance primarily leads these efforts The Vice President Information Systems and Technology is responsible for oversight of Nordson s entire global IT operations including the cybersecurity program and brings more than 25 years of experience and leadership across various information technology engineering business and management roles including direct oversight of strategic direction program execution and operational excellence of technology initiatives
The Senior Director of Security and Compliance assesses cybersecurity readiness using a variety of tools including internal assessment tools as well as third party control tests vulnerability assessments audits and evaluation against industry standards Our security and compliance organization elevates issues relating to cybersecurity to our Chief Executive Officer and Board of Directors such as potential threats or vulnerabilities We also seek to prevent detect mitigate and remediate cybersecurity incidents by employing various defensive and continuous monitoring techniques using recognized industry frameworks and cybersecurity standards
Our Vice President Information Systems and Technology meets regularly with the Audit Committee to review our information technology systems and discuss key cybersecurity risks Additionally the Director Internal Audit and Chief Financial Officer presents an overview of our global enterprise risk management program including cybersecurity risks to the Audit Committee which is subsequently reported to the Board of Directors
Other properties at international subsidiary locations and at branch locations within the United States are leased Lease terms do not exceed 25 years and generally contain a provision for cancellation with some penalty at an earlier date Information about leases is reported in Note 9 of Notes to Consolidated Financial Statements that can be found in Part II Item 8 of this document
Effective August 1 2019 Sundaram Nagarajan was appointed President and Chief Executive Officer and as a member of the Board of Directors of the Company Prior to becoming our President and Chief Executive Officer Mr Nagarajan served as Executive Vice President Automotive OEM Segment with Illinois Tool Works Inc NYSE ITW a global manufacturer of a diversified range of industrial products and equipment since 2015 Prior to that Mr Nagarajan served as Executive Vice President Welding Segment with Illinois Tool Works Inc from 2010 to 2015 Mr Nagarajan joined the Board of Directors of Wesco International Inc NYSE WCC in 2022 He previously served as a member of the Board of Directors of Sonoco Products Company NYSE SON from 2015 to 2022
Vice President and Chief Financial Officer Prior to joining Nordson Mr Hopgood was Controller and Chief Accounting Officer from April 2021 to May 2024 and Senior Vice President Global Financial Services and Systems from September 2017 to March 2021 of Eaton Corporation NYSE ETN a multinational power management company Prior to joining Eaton Corporation Mr Hopgood served in various roles of increasing responsibility such as Vice President Aftermarket Americas for Meritor Inc NYSE MTOR a Fortune 500 manufacturer of commercial vehicle components and systems and Manager of Corporate Finance and Reporting for MSX International Inc a management consulting company for leading automotive brands
Effective November 1 2023 Joseph P Kelley was appointed as Executive Vice President Industrial Precision Solutions Previously Mr Kelley served as Executive Vice President and Chief Financial Officer of the Company since July 2020 Prior to joining the Company Mr Kelley had previously served as Chief Financial Officer of Materion Corporation NYSE MTRN an advanced materials company since 2015 Throughout his career he served in roles of increasing financial responsibility at Materion Avient Corporation formerly known as PolyOne Corporation NYSE AVNT a specialty chemicals company and Lincoln Electric Holdings Inc Nasdaq LECO a global manufacturer
Effective August 1 2022 Stephen P Lovass was named Executive Vice President Medical and Fluid Solutions Previously Mr Lovass served as Corporate Vice President since November 2016 Prior to joining the Company Mr Lovass served as President for one of the global sensors and controls businesses for Danaher Corporation NYSE DHR an international Fortune 200 diversified science and technology company from 2012 to 2016 Prior to joining Danaher Corporation Mr Lovass served as a Senior Vice President and Corporate Officer for Gerber Scientific Inc an automated systems manufacturer for sign making specialty graphics and packaging
Effective November 1 2021 Jennifer L McDonough was named Executive Vice President General Counsel and Secretary and leads the Company s global legal function in ethics and compliance intellectual property and other general corporate legal matters Ms McDonough brings over 20 years of experience advising companies on wide ranging critical corporate initiatives and previously served as Vice President Deputy General Counsel and Assistant Secretary at PPL Corporation NYSE PPL a Fortune 500 utility company where she was responsible to deliver extensive legal counsel and services including in the areas of general corporate law mergers and acquisitions corporate venture capital and investment transactions securities and finance Prior to joining PPL in 2017 Ms McDonough served as Senior Vice President General Counsel and Secretary at REX Energy Corporation an independent condensate and natural gas company having joined REX Energy REX in April 2011 and before that as Assistant General Counsel and Assistant Secretary at Kennametal Inc NYSE KMT a global manufacturer and provider of engineered products and solutions which she joined in May 2005 She began her career as a business and finance attorney with the international law firm Morgan Lewis and Bockius LLP
Effective February 20 2023 Sarah Siddiqui was named Executive Vice President Chief Human Resources Officer Prior to joining the Company Ms Siddiqui served as Vice President of HR Operations Engineering Digital and Corporate Functions from August 2020 to February 2023 and Executive Director of HR Operations UTC Aerospace Systems from February 2018 to July 2020 of Collins Aerospace at Raytheon Technologies NYSE RTX an aerospace and defense company Before joining Collins Aerospace she had various roles of increasing responsibilities within the HR function at United Technologies and Citigroup
Effective August 1 2022 Srinivas Subramanian was named Executive Vice President Advanced Technology Solutions Previously Mr Subramanian served as Vice President of the Electronics Processing Solutions business having served in various roles of increasing responsibility since joining the Company in 2006
While we have historically paid dividends to holders of our common shares on a quarterly basis the declaration and payment of future dividends will depend on many factors including but not limited to our earnings financial condition business development needs and regulatory considerations and are at the discretion of our board of directors
The following graph compares the 10 year cumulative return calculated on a dividend reinvested basis from investing 100 on November 1 2014 in Nordson common shares the S P 500 Index the S P MidCap 400 Index the S P 500 Industrial Machinery Index the S P MidCap 400 Industrial Machinery Index and our New Peer Group which includes AME B DCI ENTG GGG GTLS ICUI IEX ITT KEYS LECO MKSI NATI TER TFX TRMB VNT WTS and WWD
In December 2014 the board of directors authorized a 300 000 common share repurchase program In August 2015 the board of directors authorized the repurchase of up to an additional 200 000 of the Company s common shares In August 2018 the board of directors authorized the repurchase of an additional 500 000 of the Company s common shares In September 2022 the board of directors authorized the repurchase of up to an additional 500 000 of the Company s common shares Approximately 523 798 of the total 1 500 000 authorized remained available for share repurchases at October 31 2024 Uses for repurchased shares include the funding of benefit programs including stock options and restricted stock Shares purchased are treated as treasury shares until used for such purposes The repurchase program will be funded using cash from operations and proceeds from borrowings under our credit facilities The repurchase program does not have an expiration date
In this annual report all amounts related to United States dollars and foreign currency and to the number of Nordson Corporation s common shares except for per share earnings and dividend amounts are expressed in thousands Unless the context otherwise indicates all references to we us our or the Company mean Nordson Corporation
Our Consolidated Financial Statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States The preparation of these financial statements requires management to make estimates judgments and assumptions that affect reported amounts of assets liabilities revenues and expenses On an ongoing basis we evaluate the accounting policies and estimates that are used to prepare financial statements We base our estimates on historical experience and assumptions believed to be reasonable under current facts and circumstances Actual amounts and results could differ from these estimates used by management
Certain accounting policies that require significant management estimates and are deemed critical to our results of operations or financial position are discussed below On a regular basis critical accounting policies are reviewed with the Audit Committee of the board of directors
A contract exists when it has approval and commitment from both parties the rights of the parties are identified payment terms are identified the contract has commercial substance and collectability of the consideration is probable Revenue is recognized when performance obligations under the terms of the contract with a customer are satisfied Generally our revenue results from short term fixed price contracts and is recognized as of a point in time when the product is shipped or at a later point when the control of the product transfers to the customer Refer to Note 1 to the Consolidated Financial Statements for further discussion regarding the Company s revenue recognition policy
The acquisitions of our businesses are accounted for under the acquisition method of accounting The amounts assigned to the identifiable assets acquired and liabilities assumed in connection with acquisitions are based on estimated fair values as of the date of the acquisition with the remainder if any recorded as goodwill The fair values are determined by management taking into consideration information supplied by the management of the acquired entities and other relevant information Such information typically includes valuations obtained from independent appraisal experts which management reviews and considers in its estimates of fair values The valuations are generally based upon future cash flow projections for the acquired assets discounted to present value Determining the fair value of assets acquired and liabilities assumed requires management s judgment and often involves the use of significant estimates and assumptions including assumptions with respect to future revenue growth rates and EBITDA margins discount rates customer attrition rates and asset lives among other items This judgment could result in either a higher or lower value assigned to amortizable or depreciable assets The impact could result in either higher or lower amortization and or depreciation expense
Goodwill is the excess of purchase price over the fair value of tangible and identifiable intangible net assets acquired in various business combinations Goodwill is not amortized but is tested for impairment annually at the reporting unit level or more often if indications of impairment exist
We test goodwill in accordance with Accounting Standards Codification ASC 350 We did not record any goodwill impairment charges in 2024 We use an independent valuation specialist to assist with refining our assumptions and methods used to determine fair values To test for goodwill impairment we estimate the fair value of each of our reporting units using a combination of the discounted cash flow method Income Approach and the Market Approach
The Income Approach uses assumptions for revenue growth operating margin and working capital turnover that are based on management s strategic plans tempered by performance trends and reasonable expectations about those trends Terminal value calculations employ a published formula known as the Gordon Growth Model Method that essentially captures the present value of perpetual cash flows beyond the last projected period assuming a constant Weighted Average Cost of Capital WACC methodology and growth rate For each reporting unit a sensitivity analysis is performed to vary the discount and terminal growth rates in order to provide a range of reasonableness for detecting impairment Discount rates are developed using a WACC methodology
The WACC represents the blended average required rate of return for equity and debt capital based on observed market return data and company specific risk factors For 2024 the WACC rates used ranged from 8 0 percent to 9 0 percent depending upon the reporting unit s size end market volatility and projection risk See Note 5 to the Consolidated Financial Statements for further details regarding the valuation methodologies used
The fair value FV was compared to the carrying value CV for each reporting unit Based on the results shown in the table below and based on our measurement date of August 1 2024 our conclusion is that no goodwill was impaired in 2024 Potential events or circumstances such as a sustained downturn in global economies could have a negative effect on estimated fair values
The measurement of the liabilities related to our domestic pension plan is based on management s assumptions related to future factors including interest rates return on pension plan assets compensation increases mortality and turnover assumptions and health care cost trend rates The liabilities associated with the Company s international pension plans and OPEB are not as materially sensitive to changes in assumptions as the pension plan in the United States
The weighted average discount rate used to determine the present value of our domestic pension plan obligations was 5 27 percent at October 31 2024 and 6 08 percent at October 31 2023 The discount rate used was determined by using quality fixed income investments with a duration period approximately equal to the period over which pension obligations are expected to be settled
In determining the expected return on plan assets we consider both historical performance and an estimate of future long term rates of return on assets similar to those in our plans We consult with and consider the opinions of financial and actuarial experts in developing appropriate return assumptions The expected rate of return long term investment rate on domestic pension assets used to determine net benefit costs was 6 50 percent and 6 40 percent in 2024 and 2023 respectively
The assumed rate of compensation increases used to determine the present value of our domestic pension plan obligations was 3 96 percent and 3 92 percent at October 31 2024 and October 31 2023 respectively
Annual expense amounts are determined based on the discount rate used at the end of the prior year Differences between actual and assumed investment returns on pension plan assets result in actuarial gains or losses that are amortized into expense over a period of years
Economic assumptions have a significant effect on the amounts reported The effect of a one percent change in the discount rate expected return on assets and compensation increase is shown in the table below Bracketed numbers represent decreases in expense and obligation amounts
Income taxes are estimated based on income for financial reporting purposes Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes and certain changes in valuation allowances We provide valuation allowances against deferred tax assets if based on available evidence it is more likely than not that some portion or all of the deferred tax assets will not be realized
Management believes the valuation allowances are adequate after considering future taxable income allowable carryforward periods and ongoing prudent and feasible tax planning strategies In the event we were to determine that we would be able to realize the deferred tax assets in the future in excess of the net recorded amount including the valuation allowance an adjustment to the valuation allowance would increase income in the period such determination was made Conversely should we determine that we would not be able to realize all or part of the net deferred tax asset in the future an adjustment to the valuation allowance would be expensed in the period such determination was made
Further at each interim reporting period we estimate an effective income tax rate that is expected to be applicable for the full year Significant judgment is involved regarding the application of global income tax laws and regulations and when projecting the jurisdictional mix of income Additionally interpretation of tax laws court decisions or other guidance provided by taxing authorities influences our estimate of the effective income tax rates As a result our actual effective income tax rates and related income tax liabilities may differ materially from our estimated effective tax rates and related income tax liabilities Any resulting differences are recorded in the period they become known
On August 21 2024 the Company completed the acquisition of Atrion pursuant to the terms of the Merger Agreement with Merger Sub and Atrion Pursuant to the Merger Agreement Merger Sub merged with and into Atrion the Merger with Atrion surviving the Merger as a wholly owned subsidiary of Nordson Atrion is a leader in
The all cash acquisition of Atrion of 789 996 net of cash acquired was funded using borrowings under our revolving credit facility and the 364 day term loan agreement with a group of banks for a delayed draw term loan facility in the aggregate principal amount of 500 000 the 364 Day Term Loan Agreement see Note 8 to the Consolidated Financial Statements for additional details and cash on hand Based on the fair value of the assets acquired and the liabilities assumed a preliminary purchase price allocation resulted in the recognition of 494 279 of goodwill and 129 600 of identifiable intangible assets The identifiable intangible assets consist primarily of 40 100 of tradenames amortized over 15 years 24 900 of technology amortized over 15 years and 64 600 of customer relationships amortized over 19 years The financial results of the Atrion acquisition are not expected to have a material impact on our Consolidated Financial Statements
Below is a detailed comparison of our results of operations for the fiscal years ended October 31 2024 and October 31 2023 For a discussion of other changes from the fiscal year ended October 31 2023 to the fiscal year ended October 31 2022 refer to Part II Item 7 Management s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10 K for the fiscal year ended October 31 2023
The IPS organic sales increase of 0 1 percent was driven by increases in packaging nonwovens and industrial coatings product lines principally offset by declines in measurements and controls and polymer processing The MFS organic sales decrease of 0 2 was driven by a decrease in the medical fluid components product line partially offset by an increase in the fluid solutions product line The ATS organic sales decrease of 11 4 percent was driven by lower demand in electronics dispense product lines as well as test and inspection product lines
Gross margins improved 1 0 percentage point reflecting the impact of favorable product mix and lower incremental inventory step up amortization related to acquisitions of 7 703 in 2024 versus 8 862 in 2023 while the increase in selling and administrative expenses was primarily driven by acquisitions
Included in other expense in 2024 were 5 499 in net foreign currency losses which were partially offset by pension gains Included in the prior year s other expense were 7 742 in foreign currency losses which were largely offset by pension gains
The effective tax rate decreased 60 basis points primarily due to a decline in the impact of foreign tax rate variances The income tax provision for 2024 included a tax benefit of 4 037 due to our share based payment transactions Our income tax provision for 2023 included a tax benefit of 4 286 due to our share based payment transactions
Net income was 467 284 or 8 11 per diluted share in 2024 compared to net income of 487 493 or 8 46 per diluted share in 2023 This represented a 4 1 percent decrease in net income and a 4 1 percent decrease in diluted earnings per share The decrease of 0 35 per diluted share was primarily driven by higher interest expense in 2024 compared to 2023
Cash and cash equivalents increased 273 in 2024 to 115 952 as of October 31 2024 compared to 115 679 as of October 31 2023 Approximately 81 percent of our consolidated cash and cash equivalents were held at various foreign subsidiaries as of October 31 2024
The changes in operating assets and liabilities were principally driven by decreases in customer advance payments and income taxes payable Additions to property plant and equipment were largely driven by productivity and growth projects including a new manufacturing facility
We have a 1 150 000 unsecured multi currency credit facility with a group of banks that provides for a term loan facility in the aggregate principal amount of 300 000 maturing in June 2026 and a multicurrency revolving credit facility in the aggregate principal amount of 850 000 maturing in June 2028 In anticipation of the ARAG acquisition the Company entered into a 760 000 senior unsecured term loan facility with a group of banks in August 2023 the 364 Day Term Loan Facility On September 13 2023 the Company completed an underwritten public offering of 350 000 aggregate principal amount of the Company s 5 600 Notes due 2028 the 2028 Notes and 500 000 aggregate principal amount of the Company s 5 800 Notes due 2033 together with the 2028 Notes the Notes The Company used the net proceeds from the sale of the Notes to repay its borrowings under the 364 Day Term Loan Facility At October 31 2024 we had 280 000 outstanding on the term loan facility and 240 000 outstanding on the revolving credit facility
In anticipation of the Atrion acquisition the Company entered into a 364 Day Term Loan Agreement with Morgan Stanley Senior Funding for 500 000 on June 21 2024 with a maturity date of August 20 2025 In September 2024 the Company completed an underwritten public offering of 600 000 aggregate principal amount of 4 500 Notes due 2029 the 2029 Notes The Company used a portion of the net proceeds from the sale of the 2029 Notes to repay all of the outstanding borrowings under the 364 Day Term Loan Agreement plus accrued and unpaid interest
Our operating performance balance sheet position and financial ratios for 2024 remained strong The Company is well positioned to manage liquidity needs that arise from working capital requirements capital expenditures and contributions related to pension and postretirement obligations as well as principal and interest payments on our outstanding debt Primary sources of capital to meet these needs as well as other opportunistic investments are a combination of cash on hand which was 115 952 as of October 31 2024 cash provided by operations which was 556 193 in 2024 and available borrowings under our loan agreements and unused bank lines of credit which totaled 785 880 as of October 31 2024 Cash from operations which when combined with our available borrowing capacity and ready access to capital markets is expected to be more than adequate to fund our liquidity needs over the twelve months and the foreseeable future thereafter The Company believes it has the ability to generate and obtain adequate amounts of cash to meet its long term needs for cash
Pension and postretirement plan funding amounts reflect known amounts over the next twelve months Future amounts will be determined based on the future funded status of the plans and therefore cannot be estimated at this time Refer to Note 6 to the Consolidated Financial Statements for further discussion
We believe that the combination of present capital resources cash from operations and unused financing sources such as our credit facilities including our revolving credit facility are more than adequate to meet cash requirements for the twelve months and the foreseeable future thereafter There are no significant restrictions limiting the transfer of funds from international subsidiaries to the parent company
ASU 2023 07 requires enhanced disclosures about significant segment expenses and enhanced disclosures in interim periods The guidance in ASU 2023 07 will be applied retrospectively and is effective for annual reporting periods in fiscal years beginning after December 15 2023 and interim reporting periods in fiscal years beginning after December 31 2024 with early adoption permitted The Company is currently evaluating the impact that the adoption of ASU 2023 07 will have on its consolidated financial statements and disclosures and anticipates adoption in 2025
ASU 2023 09 is intended to improve income tax disclosure requirements by requiring specific disclosure in the rate reconciliation and additional information for reconciling items that meet a quantitative threshold The guidance in ASU 2023 09 will be effective for annual reporting periods in fiscal years beginning after December 15 2024 The Company is currently evaluating the impact that the adoption of ASU 2023 09 will have on its consolidated financial statements and disclosures and anticipates adoption in fiscal 2026
ASU 2024 03 does not change or remove current expense presentation requirements within the Consolidated Statements of Income However the amendments require disclosure on an annual and interim basis disaggregated information about certain income statement expense line items within the notes to the consolidated financial statements The amendments in this update are
effective for annual reporting periods beginning after December 15 2026 and interim reporting periods beginning after December 15 2027 The Company is currently evaluating the impact that the adoption of ASU 2024 03 will have on its consolidated financial statements and disclosures and anticipates adoption in fiscal 2028
The impact of changes in foreign currency exchange rates on sales and operating results cannot be precisely measured due to fluctuating selling prices sales volume product mix and cost structures in each country where we operate As a general rule a weakening of the United States dollar relative to foreign currencies has a favorable effect on sales and net income while a strengthening of the dollar has a detrimental effect
In 2024 as compared with 2023 the United States dollar was slightly stronger against foreign currencies If 2023 exchange rates had been in effect during 2024 sales would have been approximately 3 352 higher and third party costs would have been approximately 903 higher In 2023 as compared with 2022 the United States dollar was generally stronger against foreign currencies If 2022 exchange rates had been in effect during 2023 sales would have been approximately 23 153 higher and third party costs would have been approximately 15 210 higher These effects on reported sales do not include the impact of local price adjustments made in response to changes in currency exchange rates
Our solid historical performance is attributed to our diverse geographic and end market participation and our long term commitment to develop and provide quality products and worldwide service to meet our customers changing needs
This annual report particularly Management s Discussion and Analysis of Financial Condition and Results of Operations contains forward looking statements within the meaning of the Securities Act of 1933 as amended the Securities Exchange Act of 1934 as amended and the Private Securities Litigation Reform Act of 1995 Such statements relate to among other things income earnings cash flows changes in operations operating improvements businesses in which we operate and the United States and global economies Statements in this annual report that are not historical are hereby identified as forward looking statements and may be indicated by words or phrases such as anticipates supports plans projects expects believes should would could hope forecast management is of the opinion use of the future tense and similar words or phrases These forward looking 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 and political conditions financial and market conditions currency exchange rates and devaluations possible acquisitions including the Company s ability to complete and successfully integrate acquisitions including the integration of Atrion and ARAG 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 conflicts in Europe and the Middle East acts of terror natural disasters and pandemics
In light of these risks and uncertainties actual events and results may vary significantly from those included in or contemplated or implied by such forward looking statements Readers are cautioned not to place undue reliance on such forward looking statements These forward looking statements speak only as of the date made We undertake no obligation to publicly update or revise any forward looking statements whether as a result of new information future events or otherwise except as required by law
We operate internationally and enter into intercompany transactions denominated in foreign currencies Consequently we are subject to market risk arising from exchange rate movements between the dates foreign currencies are recorded and the dates they are settled We regularly use foreign exchange contracts to reduce our risks related to most of these transactions These contracts primarily associated with the euro yen and pound sterling typically have maturities of 90 days or less and generally require the exchange of foreign currencies for United States dollars at rates stated in the contracts Gains and losses from changes in the market value of these contracts offset foreign exchange losses and gains respectively on the underlying transactions We use foreign exchange contracts on a routine basis to help mitigate the risks related to transactions denominated in foreign currencies
rcent at October 31 2024 and 6 26 percent at October 31 2023 As of October 31 2024 a one percent increase in interest rates would result in additional annual interest expense of approximately 5 383 on the variable rate long term debt
In this annual report all amounts related to United States dollars and foreign currency and to the number of Nordson Corporation s common shares except for per share earnings and dividend amounts are expressed in thousands Unless the context otherwise indicates all references to we or the Company mean Nordson Corporation
The consolidated financial statements include the accounts of Nordson Corporation and its 100 owned and controlled subsidiaries Investments in affiliates and joint ventures in which our ownership is 50 percent or less or in which we do not have control but have the ability to exercise significant influence are accounted for under the equity method All significant intercompany accounts and transactions have been eliminated in consolidation
The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and notes Actual amounts could differ from these estimates
A contract exists when it has approval and commitment from both parties the rights of the parties are identified payment terms are identified the contract has commercial substance and collectability of the consideration is probable Revenue is recognized when performance obligations under the terms of the contract with a customer are satisfied Generally our revenue results from short term fixed price contracts and primarily is recognized as of a point in time when the product is shipped or at a later point when the control of the product transfers to the customer For products in which control transfers upon delivery revenue is deferred for undelivered items and included within Accrued liabilities in our Consolidated Balance Sheets Revenues deferred as of October 31 2024 and 2023 were not material
However for certain contracts related to the sale of customer specific products within our Medical and Fluid Solutions segment revenue is recognized over time as we satisfy performance obligations because of the continuous transfer of control to the customer The continuous transfer of control to the customer occurs as we enhance assets that are customer controlled and we are contractually entitled to payment for work performed to date plus a reasonable margin
As control transfers over time for these products or services revenue is recognized based on progress toward completion of the performance obligations The selection method to measure progress towards completion requires judgment and is based on the nature of the products or services to be provided We have elected to use the input method costs incurred for these contracts because it best depicts the transfer of products or services to the customer based on incurring costs on the contract Under this method revenues are recorded proportionally as costs are incurred Contract assets recognized are recorded in Prepaid expenses and other current assets and contract liabilities are recorded in Accrued liabilities in our Consolidated Balance Sheets and were not material at October 31 2024 or 2023 Revenue recognized over time represented approximately less than ten percent of our overall consolidated revenues for October 31 2024 and 2023
Revenue is measured as the amount of consideration we expect to be entitled to in exchange for transferring products or services Taxes including sales and value add that we collect concurrently with revenue producing activities are excluded from revenue As a practical expedient we may exclude the assessment of whether goods or services are performance obligations if they are immaterial in the context of the contract and combine these with other performance obligations While payment terms and conditions vary by contract type we have determined that our contracts generally do not include a significant financing component We have elected to apply the practical expedient to treat all shipping and handling costs as fulfillment costs as a significant portion of these costs are incurred prior to transfer of control to the customer We have also elected to apply the practical expedient to expense sales commissions as they are incurred as the amortization period resulting from capitalizing the costs is one year or less These costs are recorded within Selling and administrative expenses in our Consolidated Statements of Income
We offer assurance type warranties on our products as well as separately sold warranty contracts Revenue related to warranty contracts that are sold separately is recognized over the life of the warranty term and is not material Certain arrangements may include installation installation supervision training and spare parts which tend to be completed in a short period of time at an insignificant cost and utilizing skills not unique to us therefore these items are typically regarded as inconsequential or not material
We disclose disaggregated revenues by operating segment and geography in accordance with the revenue standard and on the same basis used internally by the chief operating decision maker for evaluating performance of operating segments and for allocating resources Refer to Note 14 for details on our operating segments
Investments in research and development are important to our long term growth enabling us to keep pace with changing customer and marketplace needs through the development of new products and new applications for existing products We place strong emphasis on technology developments and improvements through internal engineering and research teams Research and development costs are expensed as incurred and were 64 992
Basic earnings per share are computed based on the weighted average number of common shares outstanding during each year while diluted earnings per share are based on the weighted average number of common shares and common share equivalents outstanding Common share equivalents consist of shares issuable upon exercise of stock options computed using the treasury stock method as well as restricted stock and deferred stock based compensation Options whose exercise price is higher than the average market price are excluded from the calculation of diluted earnings per share because the effect would be anti dilutive Options f
ommon shares were excluded from the diluted earnings per share calculation in 2024 and 140 and 78 options were excluded from the calculation of diluted earnings per share in 2023 and 2022 respectively because their effect would have been anti dilutive Under the 2021 Stock Incentive and Award Plan executive officers and selected other key employees receive common share awards based on corporate performance measures over three year performance periods Awards for which performance measures have not been met were excluded from the calculation of diluted earnings per share
An allowance for doubtful accounts is maintained for estimated losses resulting from the inability of customers to make required payments The amount of the allowance is determined principally on the basis of past collection experience and known factors regarding specific customers Accounts are written off against the allowance when it becomes evident that collection will not occur Credit is extended to customers satisfying pre defined credit criteria We believe we have limited concentration of credit risk due to the diversity of our customer base
Our primary allowance for credit losses is the allowance for doubtful accounts which is principally determined based on aging of receivables Receivables are exposed to credit risk based on the customers ability to pay which is influenced by among other factors their financial liquidity We perform ongoing customer credit evaluation to maintain sufficient allowances for potential credit losses Our segments perform credit evaluation and monitoring to estimate and manage credit risk through the review of customer information credit ratings approval and monitoring of customer credit limits and assessment of market conditions We may also require prepayments or bank guarantees from customers to mitigate credit risk Our receivables are generally short term in nature with a majority of receivables outstanding less than 90 days Accounts receivable balances are written off against the allowance if deemed uncollectible
Accounts receivable are net of an allowance for credit losses of 9 769 and 10 015 at October 31 2024 and October 31 2023 respectively The provision for losses on receivables was 619 for the twelve months ended October 31 2024 compared to 283 for the same period a year ago The remaining change in the allowance for credit losses is principally related to increases due to acquisitions and the write off of uncollectible accounts
Inventories are valued at the lower of cost or net realizable value Effective in the third quarter of 2022 we changed our accounting method for certain U S inventories from a last in first out basis LIFO to a first in first out basis Previously the LIFO method was used to determine the cost of a portion of our inventories in the U S We believe this change in accounting method is preferable as it is consistent with how we manage our business results in a uniform method to value our inventory across all regions of our business improves comparability with our peers and is expected to better reflect the current value of inventory on the consolidated balance sheets We applied this accounting change as a cumulative effect adjustment to cost of sales in the third quarter of 2022 and did not restate prior period financial statements because the impact was not material
We operate internationally and enter into intercompany transactions denominated in foreign currencies Consequently we are subject to market risk arising from exchange rate movements between the dates foreign currency transactions occur and the dates they are settled We regularly use foreign currency forward contracts to reduce our risks related to most of these transactions These contracts usually have maturities of
90 days or less and generally require us to exchange foreign currencies for U S dollars at maturity at rates stated in the contracts These contracts are not designated as hedging instruments under U S GAAP Accordingly the changes in the fair value of the foreign currency forward contracts are recognized in each accounting period in Other net on the Consolidated Statements of Income together with the transaction gain or loss from the related balance sheet position The settlement of these contracts is recorded in operating activities on the Consolidated Statements of Cash Flows
We utilize net investment hedges to offset the translation adjustment arising from re measuring our investment in foreign subsidiaries These hedges are included on the balance sheet at fair value Changes in the fair value of derivative assets or liabilities i e gains or losses are recognized depending upon the type of hedging relationship and whether a hedge has been designated For derivative instruments that qualify for hedge accounting and are used to hedge net assets of certain foreign subsidiaries we designate the hedging instrument as a hedge of a net investment in a foreign operation with the effective portion of the derivative s gain or loss reported in Accumulated other comprehensive loss as part of the cumulative translation adjustment and amounts reclassified out of accumulated other comprehensive loss into earnings when the hedged net investment is either sold or substantially liquidated The settlement of these hedges is recorded in investing activities on the Consolidated Statement of Cash Flows Changes in fair value of derivative instruments that do not qualify for hedge accounting are recognized immediately in current net earnings in Other net on the Consolidated Statements of Income
The Company has entered into treasury locks to fix the interest rate related to notes issued The derivative positions are closed when the debt is priced with a cash settlement net payment that offsets changes in the benchmark treasury rate between execution of the treasury rate locks and the debt pricing date The treasury locks are designed as cash flow hedges and the deferred amounts are reported in Accumulated Other Comprehensive Income loss AOCI and subsequently reclassed to interest expense as payments are made on the notes through the maturity date
Property plant and equipment are carried at cost Additions and improvements that extend the lives of assets are capitalized while expenditures for repairs and maintenance are expensed as incurred Plant and equipment are depreciated for financial reporting purposes using the straight line method over the estimated useful lives of the assets or in the case of property under finance leases over the terms of the leases Leasehold improvements are depreciated over the shorter of the lease term or their useful lives
Depreciation expense is included in Cost of sales and Selling and administrative expenses on the Consolidated Statements of Income Internal use software costs are expensed or capitalized depending on whether they are incurred in the preliminary project stage application development stage or the post implementation stage Amounts capitalized are amortized over the estimated useful lives of the software beginning with the project s completion All re engineering costs are expensed as incurred Interest costs on significant capital projects are capitalized No interest was capitalized in 2024 2023 or 2022
Goodwill is the excess of cost of an acquired entity over the amounts assigned to assets acquired and liabilities assumed in a business combination Goodwill relates to and is assigned directly to specific reporting units Goodwill is not amortized but is subject to annual impairment testing Our annual impairment testing is performed as of August 1 Testing is done more frequently if an event occurs or circumstances change that would indicate the fair value of a reporting unit is less than the carrying amount of those assets
The acquisitions of our businesses are accounted for under the acquisition method of accounting The amounts assigned to the identifiable assets acquired and liabilities assumed in connection with acquisitions are based on estimated fair values as of the date of the acquisition with the remainder if any recorded as goodwill The fair values are determined by management taking into consideration information supplied by the management of the acquired entities and other relevant information Such information typically includes valuations obtained from independent appraisal experts which management reviews and considers in its estimates of fair values The valuations are generally based upon future cash flow projections for the acquired assets discounted to present value Determining the fair value of assets acquired and liabilities assumed requires management s judgment and often involves the use of significant estimates and assumptions including assumptions with respect to future revenue growth rates and EBITDA margins discount rates customer attrition rates and asset lives among other items This judgment could result in either a higher or lower value assigned to amortizable or depreciable assets The impact could result in either higher or lower amortization and or depreciation expense
Other amortizable intangible assets which consist primarily of patent technology costs customer relationships non compete agreements and trade names are amortized over their useful lives on a straight line basis
The financial statements of subsidiaries outside the United States are generally measured using the local currency as the functional currency Assets and liabilities of these subsidiaries are translated at the rates of exchange at the balance sheet dates Income and expense items are translated at average monthly rates of exchange The resulting translation adjustments are included in AOCI a separate component of Shareholders equity Generally gains and losses from foreign currency transactions including forward contracts of these subsidiaries and the United States parent are included in net income Gains and losses from intercompany foreign currency transactions of a long term investment nature are included in AOCI
We offer warranties to our customers depending on the specific product and terms of the customer purchase agreement A typical warranty program requires that we repair or replace defective products within a specified time period generally one year measured from the date of delivery or first use We record an estimate for future warranty related costs based on actual historical return rates Based on analysis of return rates and other factors the adequacy of our warranty provisions is adjusted as necessary The liability for warranty costs is included in Accrued liabilities in the Consolidated Balance Sheets
ASU 2023 07 requires enhanced disclosures about significant segment expenses and enhanced disclosures in interim periods The guidance in ASU 2023 07 will be applied retrospectively and is effective for annual reporting periods in fiscal years beginning after December 15 2023 and interim reporting periods in fiscal years beginning after December 31 2024 with early adoption permitted The Company is currently evaluating the impact that the adoption of ASU 2023 07 will have on its consolidated financial statements and disclosures and anticipates adoption in 2025
ASU 2023 09 is intended to improve income tax disclosure requirements by requiring specific disclosure in the rate reconciliation and additional information for reconciling items that meet a quantitative threshold The guidance in ASU 2023 09 will be effective for annual reporting periods in fiscal years beginning after December 15 2024 The Company is currently evaluating
ASU 2024 03 does not change or remove current expense presentation requirements within the Consolidated Statements of Income However the amendments require disclosure on an annual and interim basis disaggregated information about certain income statement expense line items within the notes to the consolidated financial statements The amendments in this update are effective for annual reporting periods beginning after December 15 2026 and interim reporting periods beginning after December 15 2027 The Company is currently evaluating the impact that the adoption of ASU 2024 03 will have on its consolidated financial statements and disclosures and anticipates adoption in fiscal 2028
Business acquisitions have been accounted for using the acquisition method with the acquired assets and liabilities recorded at estimated fair value on the dates of acquisition The cost in excess of the net assets of the business acquired is included in goodwill Operating results since the respective dates of acquisitions are included in the Consolidated Statements of Income
On August 21 2024 the Company completed the acquisition of Atrion Corporation a Delaware corporation Atrion pursuant to the terms of the Agreement and Plan of Merger the Merger Agreement dated May 28 2024 with Alpha Medical Merger Sub Inc a Delaware corporation and a wholly owned subsidiary of Nordson Merger Sub and Atrion Pursuant to the Merger Agreement Merger Sub merged with and into Atrion the Merger with Atrion surviving the Merger as a wholly owned subsidiary of Nordson Atrion is a leader in
The all cash acquisition of Atrion of 789 996 net of cash acquired was funded using borrowings under our revolving credit facility and the 364 day term loan agreement with a group of banks for a delayed draw term loan facility in the aggregate principal amount of 500 000 the 364 Day Term Loan Agreement see Note 8 to the Consolidated Financial Statements for additional details and cash on hand Based on the fair value of the assets acquired and the liabilities assumed a preliminary purchase price allocation resulted in the recognition of 494 279 of goodwill and 129 600 of identifiable intangible assets The identifiable intangible assets consist primarily of 40 100 of tradenames amortized over 15 years 24 900 of technology amortized over 15 years and 64 600 of customer relationships amortized over 19 years Goodwill associated with the acquisition was not tax deductible As of October 31 2024 the purchase price allocation remains preliminary as we complete our assessment principally related to income taxes The financial results of the Atrion acquisition are not expected to have a material impact on our Consolidated Financial Statements
On August 24 2023 the Company completed the acquisition of the ARAG Group and its subsidiaries ARAG Group or ARAG pursuant to the terms of the Sale and Purchase Agreement dated as of June 25 2023 by and among the Company its Italian subsidiary Capvis Equity V LP DRIP Co Investment and certain individuals ARAG is a global market and innovation leader in the development production and supply of precision control systems and smart fluid components for agricultural spraying ARAG operates as a division of our Industrial Precision Solutions segment In anticipation of the acquisition the Company entered into a 760 000 senior unsecured term loan facility with a group of banks in August 2023 the 364 Day
Term Loan Facility The all cash ARAG acquisition of approximately 957 000 net of the repayment of approximately 30 300 of debt of the acquired companies was funded using borrowings under the 364 Day Term Loan Facility and the Company s revolving credit facility The 364 Day Term Loan Facility was subsequentially paid off in September 2023 with the net proceeds of a senior notes offering see Note 8 to the Consolidated Financial Statements for additional details Based on the fair value of the assets acquired and the liabilities assumed goodwill of 684 938 and identifiable intangible assets of 353 500 were recorded The identifiable intangible assets consist primarily of 27 500 of tradenames amortized over
Goodwill associated with the acquisition was not tax deductible As of October 31 2024 the purchase price allocation is final The financial results of the ARAG Group acquisition are not expected to have a material impact on our Consolidated Financial Statements
ensing technology solutions The CyberOptics acquisition expanded our test and inspection platform providing differentiated technology that expands our product offering in the semiconductor and electronics industries and is reported in our Advanced Technology Solutions segment We acquired CyberOptics for an aggregate purchase price of 377 843 net of cash of approximately 40 890 funded using borrowings under our revolving credit facility and cash on hand Based on the fair value of the assets acquired and the liabilities assumed goodwill of 285 330 and identifiable intangible assets of 58 600 were recorded The identifiable intangible assets consist primarily of 15 200 of tradenames amortized over 15 years 14 600 of technology amortized over 7 years and 28 800 of customer relationships amortized over 12 years Goodwill associated with the acquisition was not tax deductible
of NDC Technologies NDC a leading global provider of precision measurement solutions for in line manufacturing process control NDC s technology portfolio includes in line measurement sensors gauges and analyzers using near infrared laser X ray optical and nucleonic technologies as well as proprietary algorithms and software We acquired NDC for an aggregate purchase price of 171 613 net of cash of approximately 7 533 and other working capital adjustments of 2 763 utilizing cash on hand Based on the fair value of the assets acquired and the liabilities assumed goodwill of 131 129 and identifiable intangible assets of 31 130 were recorded The identifiable intangible assets consist primarily of 10 800 of tradenames amortized over 13 years 10 000 of technology amortized over 7 years 9 500 of customer relationships amortized over 4 years and 830 of non compete agreements amortized over 3 years Goodwill associated with this acquisition of 72 018 is tax deductible This acquisition is being reported in our Industrial Precision Solutions segment and the financial results of NDC are not material to our Consolidated Financial Statements
We account for goodwill and other intangible assets in accordance with the provisions of ASC 350 and account for business combinations using the acquisition method of accounting and accordingly the assets and liabilities of the entities acquired are recorded at their estimated fair values at the acquisition date Goodwill is the excess of purchase price over the fair value of tangible and identifiable intangible net assets acquired in various business combinations Goodwill is not amortized but is subject to annual impairment testing Our annual impairment testing is performed as of August 1 Testing is done more frequently if an event occurs or circumstances change that would indicate the fair value of a reporting unit is less than the carrying amount of those assets We assess the fair value of reporting units on a non recurring basis using a quantitative analysis that uses a combination of the Income Approach and the guideline public company method of the Market Approach and compare the result against the reporting unit s carrying value of net assets The implied fair value of our reporting units is determined based on significant unobservable inputs as discussed below accordingly these inputs fall within Level 3 of the fair value hierarchy The Income Approach uses assumptions for revenue growth operating margin and working capital turnover that are based on management s strategic plans tempered by performance trends and reasonable expectations about those trends Terminal value calculations employ a published formula known as the Gordon Growth Model Method that essentially captures the present value of perpetual cash flows beyond the last projected period assuming a constant Weighted Average Cost of Capital WACC methodology and growth rate For each reporting unit a sensitivity analysis is performed to vary the discount and terminal growth rates in order to provide a range of reasonableness for detecting impairment Discount rates are developed using a WACC methodology The WACC represents the blended average required rate of return for equity and debt capital based on observed market return data and company specific risk factors
In the application of the guideline public company method fair value is determined using transactional evidence for similar publicly traded equity The comparable company guideline group is determined based on relative similarities to each reporting unit since exact correlations are not available An indication of fair value for each reporting unit is based on the placement of each reporting unit within a range of multiples determined for its comparable guideline company group Valuation multiples are derived by dividing latest twelve month performance for revenues and Earnings Before Interest Taxes Depreciation and Amortization EBITDA into total invested capital which is the sum of traded equity plus interest bearing debt less cash These multiples are applied against the revenue and EBITDA of each reporting unit While the implied indications of fair value using the guideline public company method yield meaningful results the discounted cash flow method of the Income Approach includes management s thoughtful projections and insights as to what the reporting units will accomplish in the near future Accordingly the reasonable implied fair value of each reporting unit is a blend based on the consideration of both the Income and Market approaches
An impairment charge is recorded for the amount by which the carrying value of the reporting unit exceeds the fair value of the reporting unit as calculated in the quantitative analysis described above Based on our annual impairment tests in 2024 2023 and 2022 the fair value of each reporting unit exceeded its carrying value and accordingly we did not record any goodwill impairment charges in 2024 2023 or 2022
Our reporting units include components of the Industrial Precision Solutions Medical and Fluid Solutions and the Advanced Technology Solutions segments Changes in the carrying amount of goodwill during 2024 by operating segment
We have funded contributory retirement plans covering certain employees Our contributions are primarily determined by the terms of the plans subject to the limitation that they shall not exceed the amounts deductible for income tax purposes We also sponsor unfunded contributory supplemental retirement plans for certain employees Generally benefits under these plans vest gradually over a period of approximately three years from date of employment and are based on the employee s contribution The expense applicable to retirement plans for 2024 2023 and 2022 was approximately 30 564 29 511 and 26 635 respectively
We have various pension plans covering a portion of our United States and international employees Pension plan benefits are generally based on years of employment and for salaried employees the level of compensation Actuarially determined amounts are contributed to United States plans to provide sufficient assets to meet future benefit payment requirements We also sponsor an unfunded supplemental pension plan for certain employees International subsidiaries fund their pension plans according to local requirements
During the second quarter of 2022 we completed a partial plan settlement transaction in regard to two of our U S pension plans in which plan assets amounting to 171 181 were used to purchase a group annuity contract from The Prudential Insurance Company of America Prudential The settlement resulted in a
h is included in Pension settlement charge for U S Plans on the Consolidated Statements of Income This transaction relieved the Company of its responsibility for the pension obligation related to certain retired employees and transferred the obligation and payment responsibility to Prudential for retirement benefits owed to approximately 1 500 retirees and other beneficiaries The annuity contract covered retirees who commenced receiving benefits on or before November 1 2021 The monthly retirement benefit payment amounts currently received by retirees and their beneficiaries did not change as a result of this transaction Plan participants not included in the transaction remain in the plans and responsibility for payment of the retirement benefits remains with the Company
The net actuarial loss included in the projected benefit obligation for the United States and international pension plans for 2024 was primarily due to lower discount rates partially offset by gains due to demographic experience The actuarial gain included in the projected benefit obligation for the United States pension plans for 2023 was primarily due to higher discount rates partially offset by losses due to demographic experience
cost for 2024 included a settlement loss of 151 due to lump sum retirement payments Net periodic pension cost for 2023 included a settlement gain of 335 due to lump sum retirement payments Net periodic pension cost for 2022 included a settlement loss of 298 due to lump sum retirement payments Net periodic pension cost for 2022 included a curtailment gain of 2 112 due to the freeze of an international defined benefit plan
The discount rate reflects the current rate at which pension liabilities could be effectively settled at the end of the year The discount rate used considers a yield derived from matching projected pension payments with maturities of a portfolio of available bonds that receive the highest rating given from a recognized investments ratings agency The changes in the discount rates in 2024 2023 and 2022 are due to changes in yields for these types of investments as a result of the economic environment
In determining the expected return on plan assets using the calculated value of plan assets we consider both historical performance and an estimate of future long term rates of return on assets similar to those in our plans We consult with and consider the opinions of financial and other professionals in developing appropriate return assumptions The rate of compensation increase is based on management s estimates using historical experience and expected increases in rates
Net actuarial gains or losses are amortized to expense on a plan by plan basis when exceeding the accounting corridor which is set at 10 percent of the greater of the plan assets or benefit obligations Gains or losses within the corridor remain in other comprehensive income and are retested in subsequent measurements Gains or losses outside of the corridor are subject to amortization over an average employee future service period that differs by plan If substantially all of the plan s participants are no longer actively accruing benefits the average life expectancy is used
Our United States plans comprise 89 percent of the Company s worldwide pension assets In general the investment strategies focus on asset class diversification liquidity to meet benefit payments and an appropriate balance of long term investment return and risk Target ranges for asset allocations are determined by dynamically matching the actuarial projections of the plans future liabilities and benefit payments with expected long term rates of return on the assets taking into account investment return volatility and correlations across asset classes For 2024 the target in return seeking assets is 30 percent and 70 percent in longer duration fixed income assets Plan assets are diversified across multiple investment managers and are invested in liquid funds that are selected to track broad market indices Investment risk is carefully controlled with plan assets rebalanced to target allocations on a periodic basis and continual monitoring of investment managers performance relative to the guidelines established with each investment manager
Our international plans comprise 11 percent of the Company s worldwide pension assets Asset allocations are developed on a country specific basis Our investment strategy is to cover pension obligations with insurance contracts or to employ independent managers to invest the assets
U S government securities are valued using bid evaluations and are classified as Level 2 Corporate fixed income securities are valued using evaluated prices such as dealer quotes bids and offers and are therefore classified as Level 2
Insurance contracts are investments with various insurance companies The contract value represents the best estimate of fair value These contracts do not hold any specific assets These investments are classified as Level 3
These funds are valued using the net asset value of the underlying properties Net asset value is calculated using a combination of key inputs such as revenue and expense growth rates terminal capitalization rates and discount rates
These are public investment vehicles valued using the net asset value The net asset value is based on the value of the assets owned by the plan less liabilities These investments are not quoted on an active exchange
The following tables present an analysis of changes during the years ended October 31 2024 and 2023 in Level 3 plan assets by plan asset class for U S and international pension plans using significant unobservable inputs to measure fair value
We sponsor an unfunded postretirement health care benefit plan covering certain of our United States employees Employees hired after January 1 2002 are not eligible to participate in this plan For eligible retirees under the age of 65 who enroll in the plan the plan is contributory in nature with retiree contributions in the form of premiums that are adjusted annually For eligible retirees age 65 and older who enroll in the plan the plan delivers a benefit in the form of a Health Reimbursement Account HRA which retirees use for eligible reimbursable expenses including premiums paid for purchase of a Medicare supplement plan or other out of pocket medical expenses such as deductibles or co pays
The weighted average health care trend rates reflect expected increases in the Company s portion of the obligation The decrease in the health care cost trend rates in 2024 for the U S postretirement plan is due to a reduction in the long term increase assumption for the HRA benefit
Net actuarial gains or losses are amortized to expense on a plan by plan basis when exceeding the accounting corridor which is set at 10 percent of the greater of the plan assets or benefit obligations Gains or losses outside of the corridor are subject to amortization over an average employee future service period that differs by plan If substantially all of the plan s participants are no longer actively accruing benefits the average life expectancy is used
Deferred income taxes are not provided on undistributed earnings of international subsidiaries that are intended to be permanently invested in their operations These undistributed earnings represent the post income tax earnings under U S GAAP not adjusted for previously taxed income which aggregated approximately 1 433 106 and 1 533 889 at October 31 2024 and 2023 respectively Should these earnings be distributed applicable foreign tax credits distributions of previously taxed income and utilization of other attributes would substantially offset taxes due upon the distribution It is not practical to estimate the amount of additional taxes that might be payable on these basis differences because of the multiple methods by which these differences could reverse and the impact of withholding U S state and local taxes and currency translation considerations
At October 31 2024 and 2023 total unrecognized tax benefits were 7 481 and 8 002 respectively The amounts that if recognized would impact the effective tax rate were 6 670 and 4 497 at October 31 2024 and 2023 respectively During 2024 unrecognized tax benefits related primarily to domestic positions and as recognized a substantial portion of the gross unrecognized tax benefits were offset against assets recorded in the Consolidated Balance Sheets
At October 31 2024 and 2023 we had accrued interest and penalty expense related to unrecognized tax benefits of 800 and 401 respectively We include interest accrued related to unrecognized tax benefits in interest expense Penalties if incurred would be recognized as other income expense
We are subject to United States Federal income tax as well as income taxes in numerous state and foreign jurisdictions We are subject to examination in the U S by the Internal Revenue Service IRS for the years 2021 through 2024 years prior to 2021 year are closed to further examination by the IRS Generally major state and foreign jurisdiction tax years remain open to examination for years after 2018 Within the next twelve months it is reasonably possible that certain statute of limitations periods would expire which could result in a minimal decrease in our unrecognized tax benefits
At October 31 2024 we had 20 367 of tax credit carryforwards 15 116 of which expires in 2026 2038 and 5 251 of which has an indefinite carryforward period We also had 30 897 of state operating loss carryforwards 47 966 of foreign operating loss carryforwards and a 4 459 capital loss carryforward of which 58 426 will expire in 2025 through 2043 and 24 897 of which has an indefinite carryforward period The net change in the valuation allowance was an increase of 9 864 in 2024 and an increase of 13 602 in 2023 The valuation allowance of 33 596 at October 31 2024 related primarily to tax credits and loss carryforwards that may expire before being realized We continue to assess the need for valuation allowances against deferred tax assets based on determinations of whether it is more likely than not that deferred tax benefits will be realized
In April 2019 we entered into a 850 000 unsecured multi currency credit facility with a group of banks which amended restated and extended our then existing syndicated revolving credit agreement This facility had a five year term expiring in April 2024 and included a 75 000 sub facility for swing line loans On April 17 2023 we entered into an amendment to among other things replace London Interbank Offered Rate with the Secured Overnight Financing Rate SOFR the Euro Interbank Offered Rate the Sterling Overnight Index Average and the Tokyo Interbank Offered Rate for U S Dollar Euro British Pound Sterling and Japanese Yen borrowings respectively On June 6 2023 this credit agreement was terminated and replaced by the New Credit Agreement as defined below
In June 2023 we entered into a 1 150 000 unsecured multi currency credit facility with a group of banks which provides for a term loan facility in the aggregate principal amount of 300 000 the Term Loan Facility maturing in June 2026 and a multicurrency revolving credit facility in the aggregate principal amount of 850 000 the Revolving Facility maturing in June 2028 the New Credit Agreement In June 2024 the Revolving Facility was amended to increase the aggregate principal amount to 922 500 The Company borrowed and has outstanding 280 000 on the Term Loan Facility and 240 000 on the Revolving Facility as of
The Revolving Facility permits borrowing in U S Dollars Euros Sterling Swiss Francs Singapore Dollars Yen and each other currency approved by a Revolving Facility lender The New Credit Agreement provides that the applicable margin for i Risk Free Rate RFR as defined in the New Credit Agreement and Eurodollar Loans will range from 0 85 to 1 20 and ii Base Rate Loans will range from 0 00 to 0 20 in each case based on the Company s Leverage Ratio as defined in the Credit Agreement and calculated on a consolidated net debt basis Borrowings under the New Credit Agreement bear interest at i either a base rate or a SOFR rate with respect to borrowings in U S dollars ii a eurocurrency rate with respect to borrowings in Euros and Yen or iii Daily Simple RFR with respect to borrowings in Sterling Swiss Francs or Singapore Dollars plus in each case an applicable margin and solely in the case of Singapore Dollars a spread adjustment The applicable margin is based on the Company s Leverage Ratio The weighted average interest rate at October 31 2024 was 5 66
These unsecured fixed rate notes entered into in 2015 with a group of insurance companies have a remaining weighted average life of 1 55 years The weighted average interest rate at October 31 2024 was 3 13 percent
These unsecured fixed rate notes entered in 2018 with a group of insurance companies have a remaining weighted average life of 2 70 years The weighted average interest rate at October 31 2024 was 4 03 percent
We review new contracts to determine if the contracts include a lease To the extent a lease agreement includes an extension option that is reasonably certain to be exercised we have recognized those amounts as part of the right of use assets and lease liabilities We combine lease and non lease components such as common area maintenance in the calculation of the lease assets and related liabilities As most lease agreements do not provide an implicit rate we use an incremental borrowing rate IBR based on information available at the lease commencement date in determining the present value of lease payments and to help classify the lease as operating or financing We calculate the IBR based on a bond yield curve which considers secured borrowing rates based on our credit rating and current economic environment as well as other publicly available data
We lease certain manufacturing facilities warehouse space machinery and equipment and vehicles We often have options to renew lease terms for buildings and other assets We evaluate renewal and termination options at the lease commencement date to determine if we are reasonably certain to exercise the option on the basis of economic factors Leases with an initial term of 12 months or less short term leases are not recorded on the Consolidated Balance Sheets Lease expense for operating leases is recognized on a straight line basis over the lease term with variable lease payments recognized in the period those payments occur Variable payments for leases primarily relate to future rates or amounts miles or other quantifiable usage factors which are not determinable at the time the lease agreement commences Finance lease assets are recorded in Property plant and equipment net on the Consolidated Balance Sheets with related amortization recorded in depreciation expense on the Consolidated Statement of Cash Flows As of October 31 2024 we had no material leases that had yet to commence
The following table reconciles the undiscounted cash flows for five years and thereafter to the operating and finance lease liabilities recognized on the Consolidated Balance Sheet as of October 31 2024 The reconciliation excludes short term leases that are not recognized on the Consolidated Balance Sheet
We enter into foreign currency forward contracts to reduce the risk of foreign currency exposures resulting from receivables payables intercompany receivables intercompany payables and loans denominated in foreign currencies Foreign exchange contracts are valued using market exchange rates These foreign exchange contracts are not designated as hedges
Net assets of our foreign subsidiaries are exposed to volatility in foreign currency exchange rates We utilize net investment hedges to offset the translation adjustment arising from re measuring our investment in foreign subsidiaries The fair value of these hedges is primarily based on the exchange rate between the currency pair of the hedge upon which settlement is based and includes an adjustment for the counterparty s or Company s credit risk The notional amount of our net investment hedge contracts as of October 31 2024 was 845 333
Executive officers and other highly compensated employees may defer up to 100 percent of their salary and annual cash incentive compensation and for executive officers up to 90 percent of their long term incentive compensation into various non qualified deferred compensation plans Deferrals can be allocated to various market performance measurement funds Changes in the value of compensation deferred under these plans are recognized each period based on the fair value of the underlying measurement funds
The carrying amounts and fair values of financial instruments other than cash and cash equivalents receivables and accounts payable are shown in the table below The carrying values of cash and cash equivalents receivables and accounts payable approximate fair value due to the short term nature of these instruments
Long term debt is valued by discounting future cash flows at currently available rates for borrowing arrangements with similar terms and conditions which are considered to be Level 2 inputs under the fair value hierarchy The carrying amount of long term debt is shown net of unamortized debt issuance costs and bond discounts as described in the Long term debt Note
We operate internationally and enter into intercompany transactions denominated in foreign currencies Consequently we are subject to market risk arising from exchange rate movements between the dates foreign currency transactions occur and the dates they are settled We regularly use foreign currency forward contracts to reduce our risks related to most of these transactions These contracts usually have maturities of 90 days or less and generally require us to exchange foreign currencies for U S dollars at maturity at rates stated in the contracts These contracts are not designated as hedging instruments under U S GAAP Accordingly the changes in the fair value of the foreign currency forward contracts are recognized in each accounting period in Other net on the Consolidated Statement of Income together with the transaction gain or loss from the related balance sheet position The settlement of these contracts is recorded in operating activities on the Consolidated Statement of Cash Flows
In 2024 we recognized net gains of 7 553 on foreign currency forward contracts and net loss of 13 052 from the change in fair value of balance sheet positions In 2023 we recognized net losses of 3 041 on foreign currency forward contracts and net loss of 4 701 from the change in fair value of balance sheet positions In 2022 we recognized net losses of 4 937 on foreign currency forward contracts and net gains of 11 207 from the change in fair value of balance sheet positions The fair values of our foreign currency forward contract assets and liabilities are included in Receivables net and Accrued liabilities respectively in the Consolidated Balance Sheets
We are exposed to credit related losses in the event of nonperformance by counterparties to financial instruments These financial instruments include cash deposits and foreign currency forward contracts We periodically monitor the credit ratings of these counterparties in order to minimize our exposure Our customers represent a wide variety of industries and geographic regions As of October 31 2024 and 2023 there were no significant concentrations of credit risk
During the fourth quarter of 2024 the Company entered into treasury locks to fix the interest rate related to 250 000 of the 600 000 of 2029 Notes issued on September 4 2024 The derivative positions were closed when the debt was priced on September 4 2024 with a cash settlement net payment of 2 306 that offset changes in the benchmark treasury rate between execution of the treasury rate locks and the debt pricing date These derivatives were designed as cash flow hedges and the deferred amount reported in AOCI is being reclassed to interest expense as payments are made on the notes through the maturity date
Net assets of our foreign subsidiaries are exposed to volatility in foreign currency exchange rates We may utilize net investment hedges to offset the translation adjustment arising from re measuring our investment in foreign subsidiaries
During 2024 the Company was party to various cross currency swaps between the U S Dollar and Euro Japanese Yen Taiwan Dollar Singapore Dollar and Chinese Yuan which were designated as hedges of our net investments in certain foreign subsidiaries to mitigate the foreign exchange risk associated with certain investments in these subsidiaries Any increases or decreases related to the remeasurement of the hedges are recorded in the currency translation component of Accumulated other comprehensive income loss within Shareholders Equity in the Consolidated Balance Sheets until the sale or substantial liquidation of the underlying investments A net gain of 16 214 net of tax of 5 366 was recorded in 2024 related to all net investment hedges which is included in foreign currency translation adjustments in the Consolidated Statements of Shareholders Equity
Changes in fair value of derivative instruments that do not qualify for hedge accounting are recognized immediately in current net earnings The settlement of net investment hedges is recorded in investing activities on the Consolidated Statements of Cash Flows
We have 160 000 authorized common shares without par value At October 31 2024 and 2023 there were 98 023 common shares issued At October 31 2024 and 2023 the number of outstanding common shares net of treasury shares was 57 197 and 57 007 respectively
During the 2021 Annual Meeting of Shareholders our shareholders approved the Nordson Corporation 2021 Stock Incentive and Award Plan the 2021 Plan as the successor to the Amended and Restated 2012 Stock Incentive and Award Plan the 2012 Plan The 2021 Plan provides for the granting of stock options stock appreciation rights restricted shares restricted share units performance shares cash awards and other stock or performance based incentives A maximum of 900 common shares were authorized for grant under the 2021 Plan plus the number of shares that were available to be granted under the 2012 Plan as well as issuable under the CyberOptics equity plan As of October 31 2024 a total of 1 875 common shares were available to be granted under the 2021 Plan
Nonqualified or incentive stock options may be granted to our employees and directors Generally options granted to employees may be exercised beginning one year from the date of grant at a rate not exceeding 25 percent per year and expire 10 years from the date of grant Vesting accelerates upon a qualified termination in connection with a change in control In the event of termination of employment due to early retirement or normal retirement at age 65 options granted within 12 months prior to termination are forfeited and vesting continues post retirement for all other unvested options granted In the event of disability or death all unvested stock options granted within 12 months prior to termination fully vest Termination for any other reason results in forfeiture of unvested options and vested options in certain circumstances The amortized cost of options is accelerated if the retirement eligibility date occurs before the normal vesting date Option exercises are satisfied through the issuance of treasury shares on a first in first out basis We recognized compensation expense related to stock options of 4 616 6 655 and 7 265 for 2024 2023 and 2022 respectively
As of October 31 2024 there was 4 981 of total unrecognized compensation cost related to unvested stock options That cost is expected to be amortized over a weighted average period of approximately 2 8 years
Historical information was the primary basis for the selection of the expected volatility expected dividend yield and the expected lives of the options The risk free interest rate was selected based upon yields of United States Treasury issues with terms equal to the expected life of the option being valued
We may grant restricted shares and or restricted share units to our employees and directors These shares or units may not be transferred for a designated period of time generally one to three years defined at the date of grant
For employee recipients in the event of termination of employment due to early retirement with consent of the Company restricted shares and units granted within 12 months prior to termination are forfeited and other restricted shares and units vest on a pro rata basis subject to the consent of the Compensation Committee In the event of termination of employment due to normal retirement at age 65 restricted shares and units granted within 12 months prior to termination are forfeited and for other restricted shares and units the restriction period applicable to restricted shares will lapse and the shares will vest and be transferable and all unvested units will become vested in full subject to the consent of the Compensation Committee In the event of a recipient s disability or death all restricted shares and units granted within 12 months prior to termination fully vest
For non employee directors all restrictions lapse in the event of disability or death of the non employee director Termination of service as a director for any other reason within one year of date of grant results in a pro rata vesting of shares or units
As of October 31 2024 there was no unrecognized compensation cost related to restricted shares The amount charged to expense related to restricted shares was 0 336 and 1 096 in 2024 2023 and 2022 respectively These amounts included common share dividends of 0 5 and 19 in 2024 2023 and 2022 respectively
As of October 31 2024 there was 8 883 of remaining expense to be recognized related to outstanding restricted share units which is expected to be recognized over a weighted average period of 1 8 years The amounts charged to expense related to restricted share units in 2024 2023 and 2022 were 8 853 8 765 and 8 403 respectively Restricted share unit expense increased beginning in 2021 compared to prior years as the granting of restricted share units has generally replaced the granting of stock options for key employees
Executive officers and selected other key employees are eligible to receive common share based incentive awards Payouts in the form of unrestricted common shares vary based on the degree to which corporate financial performance exceeds predetermined threshold target and maximum performance goals over three year performance periods No payout will occur unless threshold performance is achieved
The amount of compensation expense is based upon current performance projections and the percentage of the requisite service that has been rendered The calculations are based upon the grant date fair value which is principally driven by the stock price on the date of grant or a Monte Carlo valuation for awards with market conditions The per share values were 229 58 and 225 14 for 2024 231 34 211 25 and 214 51 for 2023 and 260 60 273 50 and 221 94 for 2022 The amount charged to expense for executive officers and selected other key employees in 2024 2023 and 2022 were 5 070 6 543 and 13 626 respectively As of October 31 2024 there was 6 529 of unrecognized compensation cost related to performance share incentive awards
Our executive officers and other highly compensated employees may elect to defer up to 100 percent of their base pay and cash incentive compensation and for executive officers up to 90 percent of their share based performance incentive award payout each year Additional share units are credited for quarterly dividends paid on our common shares Expense related to dividends paid under this plan was 97 107 and 72 for 2024 2023 and 2022 respectively
Non employee directors may defer all or part of their cash and equity based compensation until retirement Cash compensation may be deferred as cash or as share equivalent units Deferred cash amounts are recorded as liabilities and share equivalent units are recorded as equity Additional share equivalent units are earned when common share dividends are declared
We conduct business in three primary operating segments Industrial Precision Solutions Medical and Fluid Solutions and Advanced Technology Solutions The composition of segments and measure of segment profitability is consistent with that used by our chief operating decision maker The primary measure used by the chief operating decision maker for purposes of making decisions about allocating resources to the segments and assessing performance is operating profit which equals sales less cost of sales and certain operating expenses Items below the operating profit line of the Consolidated Statement of Income interest and investment income interest expense and other income expense are excluded from the measure of segment profitability reviewed by our chief operating decision maker and are not presented by operating segment The accounting policies of the segments are the same as those described in Note 1
This segment focuses on delivering proprietary dispensing and processing technology both standard and highly customized equipment to diverse end markets Product lines commonly reduce material consumption increase line efficiency through precision dispense and measurement and control and enhance product brand and appearance Components are used for dispensing adhesives coatings paint finishes sealants and other materials This segment primarily serves the industrial agricultural consumer durables and non durables markets
This segment includes the Company s fluid management solutions for medical high tech industrial and other diverse end markets Related plastic tubing balloons catheters syringes cartridges tips and fluid connection components are used to dispense or control fluids within customers medical devices or products as well as production processes
This segment focuses on products serving electronics end markets Advanced Technology Solutions products integrate our proprietary product technologies found in progressive stages of an electronics customer s production processes such as surface treatment precisely controlled dispensing of material and test and inspection to ensure quality and reliability Applications include but are not limited to semiconductors printed circuit boards electronic components and automotive electronics
Operating segment identifiable assets include notes and accounts receivable net of allowance for doubtful accounts inventories net of reserves property plant and equipment net of accumulated depreciation and goodwill Corporate assets are principally cash and cash equivalents deferred income taxes leases headquarter facilities and intangible assets
Including the environmental matter discussed below after consultation with legal counsel we do not believe that losses in excess of the amounts we have accrued would have a material adverse effect on our financial condition quarterly or annual operating results or cash flows
We have voluntarily agreed with the City of New Richmond Wisconsin and other Potentially Responsible Parties to share costs associated with the remediation of the City of New Richmond municipal landfill the Site and the construction of a potable water delivery system serving the impacted area down gradient of the Site At October 31 2024 and October 31 2023 our accrual for the ongoing operation maintenance and monitoring obligation at the Site was 181 and 231 respectively The liability for environmental remediation represents management s best estimate of the probable and reasonably estimable undiscounted costs related to known remediation obligations The accuracy of our estimate of environmental liability is affected by several uncertainties such as additional requirements that may be identified in connection with remedial activities the complexity and evolution of environmental laws and regulations and the identification of presently unknown remediation requirements Consequently our liability could be greater than our current estimate However we do not expect that the costs associated with remediation will have a material adverse effect on our financial condition or results of operations
Using criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission COSO in Internal Control Integrated Framework 2013 framework Nordson s management assessed the effectiveness of our internal control over financial reporting as of October 31 2024
We completed the acquisition of Atrion Corporation and its subsidiaries Atrion on August 21 2024 As permitted by SEC guidance the scope of our evaluation of internal control over financial reporting as of October 31 2024 did not include the internal control over financial reporting of Atrion The results of Atrion are included in our consolidated financial statements from the date the business was acquired The total assets of the Atrion represented 14 of our total assets at October 31 2024 The net revenues represented 1 of consolidated revenues for the year ended October 31 2024 and the net income
The independent registered public accounting firm Ernst Young LLP has also audited the effectiveness of our internal control over financial reporting as of October 31 2024 Ernst Young LLP s report on Nordson s internal control over financial reporting is included herein
We have audited Nordson Corporation s internal control over financial reporting as of October 31 2024 based on criteria established in Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission 2013 framework the COSO criteria In our opinion Nordson Corporation the Company maintained in all material respects effective internal control over financial reporting as of October 31 2024 based on the COSO criteria
As indicated in the accompanying Management s Report on Internal Control Over Financial Reporting management s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of Atrion Corporation and its subsidiaries Atrion which is included in the 2024 consolidated financial statements of the Company and constitu
then ended did not have a material impact on the Company s operations Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of Atrion
We also have audited in accordance with the standards of the Public Company Accounting Oversight Board United States PCAOB the consolidated balance sheets of the Company as of October 31 2024 and 2023 the related consolidated statements of income comprehensive income shareholders equity and cash flows for each of the three years in the period ended October 31 2024 and the related notes and schedule listed in the Index at Item 15 a and our report dated December 18 2024 expressed an unqualified opinion thereon
The Company s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management s Report on Internal Control Over Financial Reporting Our responsibility is to express an opinion on the Company s internal control over financial reporting based on our audit We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U S federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB
We conducted our audit in accordance with the standards of the PCAOB Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects
Our audit included obtaining an understanding of internal control over financial reporting assessing the risk that a material weakness exists testing and evaluating the design and operating effectiveness of internal control based on the assessed risk and performing such other procedures as we considered necessary in the circumstances We believe that our audit provides a reasonable basis for our opinion
A company s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles A company s internal control over financial reporting includes those policies and procedures that 1 pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company 2 provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company and 3 provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition use or disposition of the company s assets that could have a material effect on the financial statements
Because of its inherent limitations internal control over financial reporting may not prevent or detect misstatements Also projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate
and the related notes and financial statement schedule listed in the Index at Item 15 a collectively referred to as the consolidated financial statements In our opinion the consolidated financial statements present fairly in all material respects the financial position of the Company at
These financial statements are the responsibility of the Company s management Our responsibility is to express an opinion on the Company s financial statements based on our audits We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U S federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB
We conducted our audits in accordance with the standards of the PCAOB Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement whether due to error or fraud Our audits included performing procedures to assess the risks of material misstatement of the financial statements whether due to error or fraud and performing procedures that respond to those risks Such procedures included examining on a test basis evidence regarding the amounts and disclosures in the financial statements Our audits also included evaluating the accounting principles used and significant estimates made by management as well as evaluating the overall presentation of the financial statements We believe that our audits provide a reasonable basis for our opinion
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that 1 relates to accounts or disclosures that are material to the financial statements and 2 involved our especially challenging subjective or complex judgments The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements taken as a whole and we are not by communicating the critical audit matter below providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates
At October 31 2024 the Company had 3 280 819 thousand of goodwill As discussed in Note 5 to the consolidated financial statements the Company evaluates the carrying amount of goodwill for impairment annually as of August 1 and between annual evaluations if an event occurs or circumstances change that would indicate the fair value of a reporting unit is less than the carrying amount of those assets The Company performed a quantitative impairment test for all reporting units in fiscal 2024 As part of the quantitative impairment tests the Company estimated the fair value of each reporting unit using a combination of valuation techniques including the discounted cash flow method a form of the income approach and the guideline public company method a form of the market approach
Auditing management s annual goodwill impairment assessment relating to goodwill was complex due to the use of valuation methodologies in the determination of the estimated fair values of the reporting units These fair value estimates are impacted by assumptions such as discount rates revenue growth rates and operating margins which are affected by expectations about future market or economic conditions
We obtained an understanding evaluated the design and tested the operating effectiveness of controls over the Company s goodwill impairment process whereby the Company develops assumptions that are used as inputs to the annual goodwill impairment tests This included controls over management s review of the valuation models and the assumptions described above
To test the implied fair value of the Company s reporting units we performed audit procedures that included among others assessing the valuation methodologies testing the assumptions and testing the completeness and accuracy of the underlying data We involved our internal valuation specialists in assessing the fair value methodologies applied and evaluating the reasonableness of certain assumptions selected by management We assessed the historical accuracy of management s estimates and performed sensitivity analyses of assumptions to evaluate the changes in the fair value of the reporting units that would result from changes in the assumptions We tested management s reconciliation of the fair value of the reporting units to the market capitalization of the Company We also assessed the appropriateness of the disclosures in the consolidated financial statements
Our management with the participation of the principal executive officer president and chief executive officer and the principal financial officer executive vice president and chief financial officer has reviewed and evaluated our disclosure controls and procedures as defined in the Securities Exchange Act Rule 13a 15e as of October 31 2024 Based on that evaluation our management including the principal executive and financial officers has concluded that our disclosure controls and procedures were effective as of October 31 2024 in ensuring that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded processed summarized and reported within the time periods specified in the SEC s rules and forms and is accumulated and communicated to our management including the principal executive officer and the principal financial officer as appropriate to allow timely decisions regarding required disclosure
The Report of Management on Internal Control over Financial Reporting and the Report of Independent Registered Public Accounting Firm Ernst Young LLP PCAOB ID 42 thereon are set forth in Part II Item 8 of this annual report and are incorporated by reference
There were no changes in our internal control over financial reporting that occurred during the fourth quarter of 2024 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting
During the quarter ended October 31 2024 no director or officer as defined in Rule 16a 1 f promulgated under the Exchange Act of the Company adopted or terminated any Rule 10b5 1 trading arrangement or any non Rule 10b5 1 trading arrangement as each term is defined in Item 408 of Regulation S K
Information regarding the Audit Committee and Audit Committee financial experts is incorporated by reference to the caption Committees of the Board of Directors of our definitive Proxy Statement for the 2025 Annual Meeting of Shareholders
Our executive officers serve for a term of one year from date of election to the next organizational meeting of the board of directors and until their respective successors are elected and qualified except in the case of death resignation or removal Information concerning executive officers is contained in Part I of this annual report under the caption Information about Our Executive Officers
The information required by this item regarding our insider trading policy and procedures is incorporated by reference to the information contained under the caption Insider Trading Anti Hedging and Anti Pledging Policies in our definitive proxy statement for the 2024 Annual Meeting of Stockholders
We have adopted a Code of Ethics and Business Conduct the Code for all employees and directors including the principal executive officer principal financial officer principal accounting officer other executive officers and other finance personnel A copy of the Code is available free of charge on our website at https www nordson com en about us corporate responsibility code of ethics We intend to satisfy our disclosure requirement under Item 5 05 of Form 8 K regarding any amendment to or waiver of a provision of our code of ethics and business conduct that applies to our principal executive officer principal financial officer principal accounting officer or controller or persons performing similar functions and that relates to any element of the code of ethics definition enumerated in Item 406 b of Regulation S K by posting such information on our website
The information required by this Item is incorporated by reference to the Executive Compensation Discussion and Analysis section of the definitive Proxy Statement for the 2025 Annual Meeting of Shareholders along with the sections captioned Directors Compensation Summary Compensation for Fiscal Year 2024 Grants of Plan Based Awards Outstanding Equity Awards at October 31 2024 Stock Option Exercises and Stock Vested Tables Pension Benefits Nonqualified Deferred Compensation Potential Benefits Upon Termination or Change of Control CEO Pay Ratio Risks Related to Executive Compensation Policies and Practices and Compensation Committee Report in our definitive Proxy Statement for the 2025 Annual Meeting of Shareholders
The information required by this Item is incorporated by reference to the caption Security Ownership of Nordson Common Shares by Certain Beneficial Owners and Management in our definitive Proxy Statement for the 2025 Annual Meeting of Shareholders
The information required by this Item is incorporated by reference to the captions Corporate Governance Director Independence and Corporate Governance Review and Approval of Transactions with Related Persons in our definitive Proxy Statement for the 2025 Annual Meeting of Shareholders
The information required by this Item is incorporated by reference to the caption Proposal 2 Ratify the Appointment of Ernst Young LLP as our independent registered public accounting firm for the year ending October 31 2024 Fees Paid to Ernst Young LLP and the caption Proposal 2 Ratify the Appointment of Independent Registered Public Accounting Firm Pre Approval of Audit and Non Audit Services in our definitive Proxy Statement for the 2025 Annual Meeting of Shareholders
No other consolidated financial statement schedules are presented because the schedules are not required because the required information is not present or not present in amounts sufficient to require submission of the schedule or because the information required is included in the financial statements including the notes thereto
Agreement and Plan of Merger dated as of August 7 2022 by and among Nordson Corporation Meta Merger Company and CyberOptics Corporation incorporated herein by reference to Exhibit 2 1 to Registrant s Current Report on Form 8 K dated August 10 2022
Agreement and Plan of Merger dated as of May 28 2024 by and among Nordson Corporation Alpha Medical Merger Sub Inc and Atrion Corporation incorporated herein by reference to Exhibit 2 1 to Registrant s Current Report on Form 8 K dated May 28 2024
Voting and Support Agreement dated as of May 28 2024 by and among Nordson Corporation Montclair Harbour LLC David A Battat and Emile A Battat incorporated herein by reference to Exhibit 2 2 to Registrant s Current Report on Form 8 K dated May 28 2024
Voting and Support Agreement dated as of May 28 2024 by and among Nordson Corporation Stupp Bros Inc and John P Stupp Jr incorporated herein by reference to Exhibit 2 3 to Registrant s Current Report on Form 8 K dated May 28 2024
Description of Nordson Corporation s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 incorporated herein by reference to Exhibit 4 a to Registrant s Annual Report on Form 10 K for the year ended October 31 2019
Master Note Purchase Agreement dated July 26 2012 between Nordson Corporation and the purchasers listed therein incorporated herein by reference to Exhibit 4 e to Registrant s Annual Report on Form 10 K for the year ended October 31 2018
Master Note Purchase Agreement dated July 28 2015 between Nordson Corporation and the purchasers listed therein incorporated herein by reference to Exhibit 4 1 to Registrant s Quarterly Report on Form 10 Q for the quarter ended July 31 2015
Master Note Purchase Agreement dated as of June 22 2018 by and among Nordson Corporation and the purchasers named therein incorporated herein by reference to Exhibit 4 1 to Registrant s Current Report on Form 8 K dated June 28 2018
Indenture dated September 13 2023 by and between the Company and U S Bank Trust Company National Association as trustee incorporated herein by reference to Exhibit 4 1 to Registrant s Current Report on Form 8 K dated September 13 2023
First Supplemental Indenture dated September 13 2023 by and between the Company and U S Bank Trust Company National Association as trustee to the Indenture dated September 13 2023 incorporated herein by reference to Exhibit 4 2 to Registrant s Current Report on Form 8 K dated September 13 2023
Second Supplemental Indenture dated September 9 2024 by and between the Company and U S Bank Trust Company National Association as trustee to the Indenture dated September 13 2023 incorporated herein by reference to Exhibit 4 2 to Registrant s Current Report on Form 8 K dated September 9 2024
364 Day Term Loan Agreement dated as of June 21 2024 by and among Nordson Corporation as Borrower Morgan Stanley Senior Funding Inc as Administrative Agent Sole Lead Arranger and Sole Bookrunner and various financial institutions named therein as lenders incorporated herein by reference to Exhibit 4 1 to Registrant s Current Report on Form 8 K dated June 24 2024
Incremental Amendment to Credit Agreement dated as of June 21 2024 by and among Nordson Corporation as Borrower Nordson Engineering GmbH as German Borrower Wells Fargo Bank National Association as Administrative Agent and various financial institutions named therein as lenders incorporated herein by reference to Exhibit 4 2 to Registrant s Current Report on Form 8 K dated June 24 2024
Nordson Corporation 2005 Deferred Compensation Plan as Amended and Restated Effective January 1 2009 incorporated herein by reference to Exhibit 10 b 2 to Registrant s Annual Report on Form 10 K for the year ended October 31 2014
First Amendment to the Nordson Corporation 2005 Deferred Compensation Plan as Amended and Restated Effective January 1 2009 incorporated herein by reference to Exhibit 10 1 to Registrant s Quarterly Report on Form 10 Q for the quarter ended April 30 2016
Form of Indemnity Agreement between the Registrant and Directors effective November 1 2016 incorporated herein by reference to Exhibit 10 c 1 to Registrant s Annual Report on Form 10 K for the year ended October 31 2016
Form of Indemnity Agreement between the Registrant and Executive Officers effective November 1 2016 incorporated herein by reference to Exhibit 10 c 2 to Registrant s Annual Report on Form 10 K for the year ended October 31 2016
First Amendment to Restated Nordson Corporation Excess Defined Contribution Retirement Plan incorporated herein by reference to Exhibit 10 d 1 to Registrant s Annual Report on Form 10 K for the year ended October 31 2018
Nordson Corporation 2005 Excess Defined Contribution Retirement Plan as Amended and Restated Effective January 1 2009 incorporated herein by reference to Exhibit 10 d 3 to Registrant s Annual Report on Form 10 K for the year ended October 31 2014
First Amendment to Nordson Corporation Excess Defined Benefit Pension Plan incorporated herein by reference to Exhibit 10 f 1 to Registrant s Annual Report on Form 10 K for the year ended October 29 2000
Second Amendment to Nordson Corporation Excess Defined Benefit Pension Plan incorporated herein by reference to Exhibit 10 e 1 to Registrant s Annual Report on Form 10 K for the year ended October 31 2018
Nordson Corporation 2005 Excess Defined Benefit Pension Plan as Amended and Restated Effective January 1 2009 incorporated herein by reference to Exhibit 10 e 3 to Registrant s Annual Report on Form 10 K for the year ended October 31 2014
Nordson Corporation 2005 Excess Defined Benefit Pension Plan First Amendment Effective July 9 2009 incorporated by reference to Exhibit 10 e 4 to Registrant s Annual Report on Form 10 K for the year ended October 31 2021
Nordson Corporation 2005 Excess Defined Benefit Pension Plan Second Amendment Effective July 1 2021 incorporated by reference to Exhibit 10 e 5 to Registrant s Annual Report on Form 10 K for the year ended October 31 2021
Amended and Restated Nordson Corporation 2004 Long Term Performance Plan incorporated herein by reference to Exhibit 10 g 1 to Registrant s Annual Report on Form 10 K for the year ended October 31 2013
Nordson Corporation 2012 Stock Incentive and Award Plan Form of Notice of Award Key Employees as amended November 24 2014 incorporated herein by reference to Exhibit 10 g 3 to Registrant s Annual Report on Form 10 K for the year ended October 31 2014
Nordson Corporation 2012 Stock Incentive and Award Plan Form of Notice of Award Executive Officers as amended November 24 2014 incorporated herein by reference to Exhibit 10 g 4 to Registrant s Annual Report on Form 10 K for the year ended October 31 2014
Nordson Corporation 2012 Stock Incentive and Award Plan Directors Deferred Compensation Sub Plan incorporated herein by reference to Exhibit 10 g 5 to Registrant s Annual Report on Form 10 K for the year ended October 31 2013
Nordson Corporation 2012 Stock Incentive and Award Plan Directors Deferred Compensation Sub Plan Form of Notice of Award incorporated herein by reference to Exhibit 10 g 6 to Registrant s Annual Report on Form 10 K for the year ended October 31 2013
Amended and Restated Nordson Corporation Directors Deferred Compensation Sub Plan incorporated herein by reference to Exhibit 10 g 7 to Registrant s Annual Report on Form 10 K for the year ended October 31 2017
Nordson Corporation 2021 Stock Incentive and Award Plan Form of Notice of Award Key Employees incorporated herein by reference to Exhibit 10 1 to Registrant s Current Report on Form 8 K dated April 19 2021
Nordson Corporation 2021 Stock Incentive and Award Plan Form of Notice of Award Executive Officers incorporated herein by reference to Exhibit 10 2 to Registrant s Current Report on Form 8 K dated April 19 2021
Assurance Trust Agreement between Nordson Corporation and Key Trust Company of Ohio N A amended and restated as of January 22 2014 incorporated herein by reference to Exhibit 10 1 to Registrant s Quarterly Report on Form 10 Q for the quarter ended January 31 2014
Form of Change in Control Retention Agreement between the Registrant and Executive Officers incorporated herein by reference to Exhibit 10 h 1 to Registrant s Annual Report on Form 10 K for the year ended October 31 2014
Compensation Committee Rules of the Nordson Corporation Amended and Restated Nordson Corporation 2004 Long Term Performance Plan governing directors deferred compensation incorporated herein by reference to Exhibit 10 j to Registrant s Annual Report on Form 10 K for the year ended October 31 2016
Amended and Restated Term Loan Agreement dated April 30 2019 among Nordson Corporation various financial institutions named therein and PNC Bank National Association as administrative agent incorporated herein by reference to Exhibit 4 2 to Registrant s Current Report on Form 8 K dated May 6 2019
Employment Agreement effective as of August 1 2019 between Nordson Corporation and Sundaram Nagarajan incorporated herein by reference to Exhibit 10 2 to Registrant s Current Report on Form 8 K dated June 14 2019
Separation agreement between Gregory P Merk and Nordson Corporation effective January 27 2022 incorporated herein by reference to Exhibit 10 1 to Registrant s Quarterly Report on Form 10 Q dated February 25 2022
Nordson Corporation 2021 Stock Incentive and Award Plan Form of Notice of Stock Options Award incorporated herein by reference to Exhibit 10 1 to Registrant s Quarterly Report on Form 10 Q dated February 23 2023
Nordson Corporation 2021 Stock Incentive and Award Plan Form of Notice of Restricted Share Units Award incorporated herein by reference to Exhibit 10 2 to Registrant s Quarterly Report on Form 10 Q dated February 23 2023
Nordson Corporation 2021 Stock Incentive and Award Plan Form of Notice of Performance Share Units Award incorporated herein by reference to Exhibit 10 3 to Registrant s Quarterly Report on Form 10 Q dated February 23 2023
Term Loan Agreement dated as of January 18 2023 by and among Nordson Corporation and Nordson Engineering GmbH as Borrowers and the Lenders party thereto and PNC Bank as Administrative Agent and PNC Capital Markets LLC as Sole Lead Arranger and Sole Bookrunner incorporated herein by reference to Exhibit 4 1 to Registrant s Current Report on Form 8 K dated January 23 2023
Credit Agreement dated as of June 6 2023 by and among Nordson Corporation and Nordson Engineering GmbH as Borrowers Wells Fargo Bank National Association as Agent and Wells Fargo Securities LLC BofA Securities Inc JPMorgan Chase Bank N A PNC Capital Markets LLC and U S Bank National Association as Joint Lead Arrangers and Bookrunners and various financial institutions named therein as lenders incorporated herein by reference to Exhibit 4 1 to Registrant s Current Report on Form 8 K dated June 6 2023
364 Day Term Loan Credit Agreement dated as of August 23 2023 by and among Nordson Corporation as Borrower JPMorgan Chase Bank N A as Administrative Agent Sole Lead Arranger and Sole Bookrunner and various financial institutions named therein as lenders incorporated herein by reference to Exhibit 4 1 to Registrant s Current Report on Form 8 K dated August 24 2023
Nordson Corporation 2021 Stock Incentive and Award Plan Form of Notice of Stock Option Award incorporated by reference to Exhibit 10 u to Registrant s Annual Report on Form 10 K for the year ended October 31 2023
Nordson Corporation 2021 Stock Incentive and Award Plan Form of Notice of Restricted Share Unit Award incorporated by reference to Exhibit 10 v to Registrant s Annual Report on Form 10 K for the year ended October 31 2023
Nordson Corporation 2021 Stock Incentive and Award Plan Form of Notice of Performance Share Unit Award incorporated by reference to Exhibit 10 w to Registrant s Annual Report on Form 10 K for the year ended October 31 2023
Nordson Corporation 2021 Stock Incentive and Award Plan Form of Notice of Restricted Share Unit Award with cliff vesting incorporated by reference to Exhibit 10 x to Registrant s Annual Report on Form 10 K for the year ended October 31 2023
The following financial information from Nordson Corporation s Annual Report on Form 10 K for the year ended October 31 2024 formatted in inline Extensible Business Reporting Language iXBRL i the Consolidated Statements of Income for the years ended October 31 2024 2023 and 2022 ii the Consolidated Statements of Comprehensive Income for the years ended October 31 2024 2023 and 2022 iii the Consolidated Balance Sheets at October 31 2024 and 2023 iv the Consolidated Statements of Changes in Shareholders Equity for the years ended October 31 2024 2023 and 2022 v the Consolidated Statements of Cash Flows for the years ended October 31 2024 2023 and 2022 and vi the Notes to Consolidated Financial Statements
Pursuant to the requirements of Section 13 or 15 d of the Securities Exchange Act of 1934 the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized
KNOW ALL MEN BY THESE PRESENTS that each person whose signature appears below hereby constitutes and appoints Daniel R Hopgood as his or her true and lawful attorney in fact and agent with full power to act alone for him or her and in his or her name place and stead in any and all capacities to sign any and all amendments to this Annual Report on Form 10 K and to file the same with all exhibits thereto and all other documents in connection therewith with the Securities and Exchange Commission granting unto said attorney in fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises as fully to all intents and purposes as he might or could do in person hereby ratifying and confirming all that said attorney in fact and agent may lawfully do or cause to be done by virtue hereof
Pursuant to the requirements of the Securities Exchange Act of 1934 this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated

Company Name	NORDSON CORP Vist SEC web-site
Category	GENERAL INDUSTRIAL MACHINERY & EQUIPMENT, NEC
Trading Symbol	NDSN