Nordson Corporation (NDSN) has reported a 21.45 percent rise in profit for the quarter ended Jan. 31, 2017. The company has earned $49.99 million, or $0.86 a share in the quarter, compared with $41.16 million, or $0.72 a share for the same period last year. On an adjusted basis, earnings per share were at $0.86 for the quarter compared with $0.61 in the same period last year.
Revenue during the quarter grew 9.47 percent to $407.47 million from $372.22 million in the previous year period. Gross margin for the quarter expanded 235 basis points over the previous year period to 55.25 percent. Total expenses were 81.37 percent of quarterly revenues, down from 86.04 percent for the same period last year. This has led to an improvement of 467 basis points in operating margin to 18.63 percent.
Operating income for the quarter was $75.92 million, compared with $51.98 million in the previous year period.
"Nordson delivered record first quarter sales, including 10 percent organic volume growth over the same period a year ago, as all three segments continued to perform at a high level," said Michael F. Hilton, Nordson president and chief executive officer. "We leveraged the increased revenue to drive reported operating margin to 19 percent in the quarter, an improvement of 5 percentage points over the first quarter a year ago and an excellent performance given the seasonally lower volume we typically see in our first quarter. Incremental operating margin on the increased volume was 68 percent. Reported diluted earnings per share of $0.86 were a first quarter record and an increase of 41 percent compared to the prior year on a normalized basis. Free cash flow before dividends was $71 million or 143 percent of net income."
For the second-quarter 2017, Nordson Corporation projects revenue to grow in the range of 3 percent to 7 percent. The company projects operating income to grow at 24 percent. It forecasts diluted earnings per share to be in the range of $1.21 to $1.33.
Working capital decreases marginally
Nordson Corporation has witnessed a decline in the working capital over the last year. It stood at $429.74 million as at Jan. 31, 2017, down 3.22 percent or $14.32 million from $444.05 million on Jan. 31, 2016. Current ratio was at 2.48 as on Jan. 31, 2017, down from 2.88 on Jan. 31, 2016.
Cash conversion cycle (CCC) has decreased to 65 days for the quarter from 175 days for the last year period. Days sales outstanding went down to 84 days for the quarter compared with 91 days for the same period last year.
Days inventory outstanding has decreased to 61 days for the quarter compared with 118 days for the previous year period. At the same time, days payable outstanding went up to 80 days for the quarter from 34 for the same period last year.
Debt comes down
Nordson Corporation has recorded a decline in total debt over the last one year. It stood at $954.53 million as on Jan. 31, 2017, down 16.35 percent or $186.58 million from $1,141.11 million on Jan. 31, 2016. Total debt was 39.89 percent of total assets as on Jan. 31, 2017, compared with 49.24 percent on Jan. 31, 2016. Debt to equity ratio was at 1.07 as on Jan. 31, 2017, down from 1.76 as on Jan. 31, 2016. Interest coverage ratio improved to 14.14 for the quarter from 9.11 for the same period last year.
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