Nordson Corporation recently released its 10-K report, providing a comprehensive insight into its financial performance for the fiscal year ending October 31. Nordson is a global company that engineers, manufactures, and markets products and systems for dispensing, applying, and controlling adhesives, coatings, polymers, sealants, biomaterials, and other fluids. It operates through three segments: Industrial Precision Solutions, Medical and Fluid Solutions, and Advanced Technology Solutions. Nordson markets its products through a direct sales force, as well as distributors and sales representatives.
In its 10-K report, Nordson delves into the critical accounting policies and estimates that impact its financial condition and results of operations. The company emphasizes that its consolidated financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States. Nordson's management makes estimates, judgments, and assumptions that affect reported amounts of assets, liabilities, revenues, and expenses. The company evaluates the accounting policies and estimates on an ongoing basis and bases its estimates on historical experience and assumptions believed to be reasonable under current facts and circumstances.
One of the critical accounting policies highlighted in the report is revenue recognition. Nordson recognizes revenue when performance obligations under the terms of the contract with a customer are satisfied. Generally, the company's revenue results from short-term, fixed-price contracts and is recognized at a point in time when the product is shipped or at a later point when the control of the product transfers to the customer.
Another significant accounting policy discussed in the report is business combinations. Nordson accounts for the acquisitions of its businesses 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. Determining the fair value of assets acquired and liabilities assumed requires management’s judgment and often involves the use of significant estimates and assumptions.
The report also highlights Nordson's approach to pension plans in the United States. The measurement of the liabilities related to the company's 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.
Additionally, the report provides insights into Nordson's income taxes, including the estimation of income taxes based on income for financial reporting purposes and 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.
Furthermore, the 10-K report discusses Nordson's acquisition of Atrion, a leader in proprietary medical infusion fluid delivery and niche cardiovascular solutions. The all-cash acquisition of Atrion was funded using borrowings under Nordson's revolving credit facility and a 364-day term loan agreement with a group of banks. The report notes that based on the fair value of the assets acquired and the liabilities assumed, a preliminary purchase price allocation resulted in the recognition of goodwill and identifiable intangible assets.
The report also provides a detailed comparison of Nordson's results of operations for the fiscal years ended October 31, 2024, and October 31, 2023, including net sales, operating profit, and sales by region.
The market has reacted to these announcements by moving the company's shares -0.0% to a price of $212.77. If you want to know more, read the company's complete 10-K report here.
