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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 31, 2023
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from           to         
Commission file number   0-7977
____________________________________________________
NORDSON CORPORATION
(Exact name of registrant as specified in its charter)
___________________________________________________
Ohio
(State or other jurisdiction of incorporation or organization)
28601 Clemens Road
Westlake, Ohio
(Address of principal executive offices)
34-0590250
(I.R.S. Employer Identification No.)
44145
(Zip Code)
(440) 892-1580
(Registrant's Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Trading Symbol(s) Name of Each Exchange
On Which Registered
Common Shares, without par valueNDSNNasdaq Stock Market LLC
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  o
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).    Yes  x    No  o
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer Accelerated filer
Non-accelerated filer Smaller reporting company
Emerging growth company   
If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  o
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  x
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:  Common Shares, without par value as of August 22, 2023:  57,014,497



Table of Contents
  
  
  
  

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Table of Contents
Nordson Corporation
                            
Part I – FINANCIAL INFORMATION
ITEM 1.FINANCIAL STATEMENTS (UNAUDITED)

Condensed Consolidated Statements of Income
 Three Months EndedNine Months Ended
(In thousands, except for per share data)July 31, 2023July 31, 2022July 31, 2023July 31, 2022
Sales$648,677 $662,128 $1,909,319 $1,906,697 
Operating costs and expenses:
Cost of sales288,357 296,544 868,007 843,344 
Selling and administrative expenses189,324 180,666 553,590 538,602 
 477,681 477,210 1,421,597 1,381,946 
Operating profit170,996 184,918 487,722 524,751 
Other income (expense):
Interest expense(12,089)(5,737)(32,532)(16,748)
Interest and investment income603 572 1,628 1,456 
Other income (expense)- net2,542 752 (2,059)(37,720)
 (8,944)(4,413)(32,963)(53,012)
Income before income taxes162,052 180,505 454,759 471,739 
Income taxes34,161 38,694 95,044 99,885 
Net income$127,891 $141,811 $359,715 $371,854 
Average common shares56,989 57,409 57,114 57,782 
Incremental common shares attributable to equity compensation541 560 543 610 
Average common shares and common share equivalents57,530 57,969 57,657 58,392 
Basic earnings per share$2.24 $2.47 $6.30 $6.44 
Diluted earnings per share$2.22 $2.45 $6.24 $6.37 
See accompanying notes.

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Table of Contents
Nordson Corporation
Consolidated Statements of Comprehensive Income
 Three Months EndedNine Months Ended
(In thousands)July 31, 2023July 31, 2022July 31, 2023July 31, 2022
Net income$127,891 $141,811 $359,715 $371,854 
Components of other comprehensive income (loss):
Foreign currency translation adjustments3,455 (21,220)79,986 (81,479)
Pension settlement adjustment, net of tax   32,047 
Pension and other postretirement plan adjustments, net of tax(159)1,848 (908)7,686 
Total other comprehensive income (loss)3,296 (19,372)79,078 (41,746)
Total comprehensive income$131,187 $122,439 $438,793 $330,108 
See accompanying notes.
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Table of Contents
Nordson Corporation
Consolidated Balance Sheets
(In thousands)
Assets
Current assets:July 31, 2023October 31, 2022
Cash and cash equivalents$143,138 $163,457 
Receivables - net533,793 537,313 
Inventories - net439,741 383,398 
Prepaid expenses and other current assets60,249 48,803 
Total current assets1,176,921 1,132,971 
Goodwill2,110,780 1,804,693 
Intangible assets - net350,524 329,402 
Property, plant and equipment - net350,735 353,442 
Operating right of use lease assets104,592 102,279 
Deferred income taxes12,199 10,447 
Other assets91,281 87,141 
Total assets$4,197,032 $3,820,375 
Liabilities and shareholders' equity
Current liabilities:
Current maturities of long-term debt and notes payable$110,643 $392,537 
Accrued liabilities169,635 206,828 
Accounts payable105,075 99,276 
Customer advanced payments95,274 92,584 
Income taxes payable26,661 22,333 
Operating lease liability - current16,809 15,738 
Finance lease liability - current4,512 4,907 
Total current liabilities528,609 834,203 
Long-term debt727,455 345,320 
Operating lease liability - noncurrent91,287 90,768 
Deferred income taxes119,734 110,781 
Postretirement obligations57,528 56,804 
Pension obligations46,782 40,551 
Finance lease liability - noncurrent10,507 11,184 
Other long-term liabilities35,324 36,389 
Shareholders' equity:
Common shares12,253 12,253 
Capital in excess of stated value660,218 626,697 
Retained earnings3,900,384 3,652,216 
Accumulated other comprehensive loss(128,704)(207,782)
Common shares in treasury, at cost(1,864,345)(1,789,009)
Total shareholders' equity2,579,806 2,294,375 
Total liabilities and shareholders' equity$4,197,032 $3,820,375 
See accompanying notes.
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Table of Contents
Nordson Corporation
Consolidated Statements of Shareholders’ Equity
 Nine Months Ended July 31, 2023
(In thousands, except for share and per share data)Common
Shares
Additional
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Common
Shares in
Treasury,
at cost
TOTAL
November 1, 2022$12,253 $626,697 $3,652,216 $(207,782)$(1,789,009)$2,294,375 
Shares issued under company stock and employee benefit plans 7,032   1,775 8,807 
Stock-based compensation 7,071    7,071 
Purchase of treasury shares    (6,875)(6,875)
Dividends declared ($0.65 per share)
  (37,199)  (37,199)
Net income  104,261   104,261 
Other Comprehensive Income (Loss):
Foreign currency translation adjustments   76,821  76,821 
Defined benefit pension and post-retirement
plan adjustments
   (576) (576)
January 31, 2023$12,253 $640,800 $3,719,278 $(131,537)$(1,794,109)$2,446,685 
Shares issued under company stock and employee benefit plans 2,632   369 3,001 
Stock-based compensation 4,970    4,970 
Purchase of treasury shares     (47,490)(47,490)
Dividends declared ($0.65 per share)
  (37,264)  (37,264)
Net income  127,563   127,563 
Other Comprehensive Income (Loss):
Foreign currency translation adjustments   (290) (290)
Defined benefit pension and post-retirement
plan adjustments
   (173) (173)
April 30, 2023$12,253 $648,402 $3,809,577 $(132,000)$(1,841,230)$2,497,002 
Shares issued under company stock and employee benefit plans 5,958   683 6,641 
Stock-based compensation 5,858    5,858 
Purchase of treasury shares    (23,798)(23,798)
Dividends declared ($0.65 per share)
  (37,084)  (37,084)
Net income  127,891   127,891 
Other Comprehensive Income (Loss):
Foreign currency translation adjustments   3,455  3,455 
Defined benefit pension and post-retirement
plan adjustments
   (159) (159)
July 31, 2023$12,253 $660,218 $3,900,384 $(128,704)$(1,864,345)$2,579,806 


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Table of Contents
Nordson Corporation
Consolidated Statements of Shareholders’ Equity
 Nine Months Ended July 31, 2022
(In thousands, except for share and per share data)Common
Shares
Additional
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Common
Shares in
Treasury,
at cost
TOTAL
November 1, 2021$12,253 $585,334 $3,265,027 $(175,835)$(1,527,649)$2,159,130 
Shares issued under company stock and employee benefit plans 5,046   675 5,721 
Stock-based compensation 8,392    8,392 
Purchase of treasury shares     (35,002)(35,002)
Dividends declared ($0.51 per share)
  (29,724)  (29,724)
Net income  120,409   120,409 
Other Comprehensive Income (Loss):
Foreign currency translation adjustments   (13,358) (13,358)
Defined benefit pension and post-retirement
plan adjustments
   3,060  3,060 
January 31, 2022$12,253 $598,772 $3,355,712 $(186,133)$(1,561,976)$2,218,628 
Shares issued under company stock and employee benefit plans 1,843   234 2,077 
Stock-based compensation— 7,394 — — — 7,394 
Purchase of treasury shares — — — — (105,464)(105,464)
Dividends declared ($0.51 per share)
— — (29,577)— — (29,577)
Net income— — 109,634 — — 109,634 
Other Comprehensive Income (Loss):
Foreign currency translation adjustments— — — (46,901)— (46,901)
Pension plan settlement adjustment— — — 32,047 — 32,047 
Defined benefit pension and post-retirement
plan adjustments
— — — 2,778 — 2,778 
April 30, 2022$12,253 $608,009 $3,435,769 $(198,209)$(1,667,206)$2,190,616 
Shares issued under company stock and employee benefit plans— 940 — — 107 1,047 
Stock-based compensation— 7,618 — — — 7,618 
Purchase of treasury shares— — — — (93,301)(93,301)
Dividends declared ($0.51 per share)
— — (29,374)— — (29,374)
Net income— — 141,811 — — 141,811 
Other Comprehensive Income (Loss):
Foreign currency translation adjustments— — — (21,220)— (21,220)
Defined benefit pension and post-retirement
plan adjustments
— — — 1,848 — 1,848 
July 31, 2022$12,253 $616,567 $3,548,206 $(217,581)$(1,760,400)$2,199,045 
See accompanying notes.
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Table of Contents
Nordson Corporation
Condensed Consolidated Statements of Cash Flows
(In thousands)Nine Months Ended
Cash flows from operating activities:July 31, 2023July 31, 2022
Net income$359,715 $371,854 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization80,637 75,242 
Non-cash stock compensation17,067 23,404 
Deferred income taxes(930)(11,094)
Other non-cash expense762 43,325 
Loss on sale of property, plant and equipment1,624 (707)
Changes in operating assets and liabilities19,197 (162,333)
Net cash provided by operating activities478,072 339,691 
Cash flows from investing activities:
Additions to property, plant and equipment(24,244)(39,373)
Proceeds from sale of property, plant and equipment91 415 
Acquisition of business, net of cash acquired(377,843)(171,613)
Net cash used in investing activities(401,996)(210,571)
Cash flows from financing activities:
Proceeds from long-term debt1,279,151 63,067 
Repayment of long-term debt(1,205,195)(40,162)
Repayment of finance lease obligations(4,769)(3,726)
Issuance of common shares18,449 8,845 
Purchase of treasury shares(78,163)(233,767)
Dividends paid(111,547)(88,675)
Net cash used in financing activities(102,074)(294,418)
Effect of exchange rate changes on cash5,679 (5,937)
Decrease in cash and cash equivalents(20,319)(171,235)
Cash and cash equivalents at beginning of period163,457 299,972 
Cash and cash equivalents at end of period$143,138 $128,737 
See accompanying notes.

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Notes to Condensed Consolidated Financial Statements
July 31, 2023
NOTE REGARDING AMOUNTS AND FISCAL YEAR REFERENCES
In this quarterly 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.
Unless otherwise noted, all references to years relate to our fiscal year ending October 31.

Significant accounting policies
Basis of presentation.  The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles in the United States (U.S. GAAP) for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine months ended July 31, 2023 are not necessarily indicative of the results that may be expected for the full year. For further information, refer to the Consolidated Financial Statements and notes included in our Annual Report on Form 10-K for the year ended October 31, 2022.
Consolidation.  The Condensed 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% 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.  
Use of estimates.  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 Condensed Consolidated Financial Statements.  Actual amounts could differ from these estimates.
Revenue recognition. 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. Revenue for undelivered items is deferred and included within Accrued liabilities in our Consolidated Balance Sheets. Revenues deferred as of July 31, 2023 and 2022 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, 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 on July 31, 2023 and October 31, 2022. Revenue recognized over time represented approximately less than ten percent of our overall consolidated revenues at July 31, 2023 and October 31, 2022.
Revenue is measured as the amount of consideration we expect to receive 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
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costs is one year or less. These costs are recorded within Selling and administrative expenses in our Condensed 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 are 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, and, 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 our Operating segments Note for details.
Earnings per share.  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 shares 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 excluded from the calculation of diluted earnings per share for the three months ended July 31, 2023 and 2022 were 138 and 76, respectively. Options excluded from the calculation of diluted earnings per share for the nine months ended July 31, 2023 and 2022 were 141 and 79, respectively.
Recently issued accounting standards
There have been no new accounting standards issued which would require either disclosure or adoption during the current periods.
Acquisitions
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 Condensed Consolidated Statements of Income.
2023 Acquisitions
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 (Capvis), DRIP Co-Investment (DRIP), and certain individuals (the Individual Sellers, and together with Capvis and DRIP, collectively, the Sellers). 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 will operate 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 Term Facility). The Term Facility has a 364-day term and matures in August 2024, and loans under the facility bear interest at a eurocurrency rate plus an applicable margin that will range from 1.1250% to 1.625% based on the Company’s Leverage Ratio (as defined in the term loan credit agreement and calculated on a consolidated net debt basis). 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 the Term Facility and Revolving Facility. The financial results of the ARAG Group acquisition are not expected to have a material impact on our Consolidated Financial Statements.
On November 3, 2022, we acquired 100% of CyberOptics Corporation (CyberOptics). CyberOptics is a leading global developer and manufacturer of high-precision 3D optical sensing 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 $279,630 and identifiable intangible assets of $58,600 were recorded. The identifiable intangible assets consist primarily of $15,200 of tradenames (amortized over fifteen years), $14,600 of technology (amortized over seven years), and $28,800 of customer contracts (amortized over twelve years). The results of CyberOptics are not material to our Consolidated Financial Statements. As of July 31, 2023, the purchase price allocation remains preliminary as we complete our assessment of intangibles and income taxes.
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The assets and liabilities acquired were as follows:
 November 3, 2022
Cash$40,890 
Receivables - net21,364 
Inventories - net35,300 
Goodwill279,630 
Intangibles58,600 
Other assets14,046 
Total Assets$449,830 
 
Accounts payable$8,109 
Deferred income taxes14,294 
Other liabilities8,694 
Total Liabilities$31,097 
2022 Acquisition
On November 1, 2021, we acquired 100% 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 thirteen years), $10,000 of technology (amortized over seven years), $9,500 of customer relationships (amortized over four years) and $830 of non-compete agreements (amortized over three 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 results of NDC are not material to our Consolidated Financial Statements.
Receivables
Our allowance for credit losses 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 $8,076 and $8,218 on July 31, 2023 and October 31, 2022, respectively. Provision losses related to allowance for credit losses of $410 and provision income of $239 was recorded for the three and nine months ended July 31, 2023, respectively, compared to provision expense of $788 and $1,439 for the same periods a year ago, respectively. The remaining change in the allowance for credit losses is principally related to net write-off/recoveries of uncollectible accounts as well as currency translation.
Inventories
Components of inventories were as follows:
 July 31, 2023October 31, 2022
Finished goods$234,690 $218,491 
Raw materials and component parts200,475 157,447 
Work-in-process62,856 53,195 
 498,021 429,133 
Obsolescence and other reserves(58,280)(45,735)
 $439,741 $383,398 
See Acquisitions Note for inventory increase attributable to acquisition of CyberOptics.
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Property, Plant and Equipment
Components of property, plant and equipment were as follows:
July 31, 2023October 31, 2022
Land$9,856 $9,278 
Land improvements5,033 4,979 
Buildings282,260 271,450 
Machinery and equipment536,215 505,343 
Enterprise management system52,938 52,513 
Construction-in-progress20,130 31,466 
Leased property under finance leases28,047 27,512 
 934,479 902,541 
Accumulated depreciation and amortization(583,744)(549,099)
 $350,735 $353,442 
Depreciation expense was $13,180 and $12,178 for the three months ended July 31, 2023 and 2022, respectively. Depreciation expense was $38,798 and $36,876 for the nine months ended July 31, 2023 and 2022, respectively.
Goodwill and other intangible assets  
Changes in the carrying amount of goodwill for the nine months ended July 31, 2023 by operating segment were as follows:
 Industrial
Precision
Solutions
Medical Fluid SystemsAdvanced
Technology
Solutions
Total
Balance at October 31, 2022$520,236 $1,172,069 $112,388 $1,804,693 
Acquisitions  279,630 279,630 
Currency effect4,744 3,869 17,844 26,457 
Balance at July 31, 2023$524,980 $1,175,938 $409,862 $2,110,780 
The increase in goodwill for the nine months ended July 31, 2023 was due to the acquisition of CyberOptics. See Acquisitions Note for additional details.

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Information regarding our intangible assets subject to amortization was as follows:
 July 31, 2023
 Carrying 
Amount
Accumulated
Amortization
Net Book 
Value
Customer relationships$517,147 $282,598 $234,549 
Patent/technology costs176,396 109,783 66,613 
Trade name99,413 50,673 48,740 
Non-compete agreements10,559 9,937 622 
Other143 143  
Total$803,658 $453,134 $350,524 
 October 31, 2022
 Carrying 
Amount
Accumulated
Amortization
Net Book 
Value
Customer relationships$480,058 $250,798 $229,260 
Patent/technology costs157,549 96,426 61,123 
Trade name82,759 44,707 38,052 
Non-compete agreements10,253 9,290 963 
Other446 442 4 
Total$731,065 $401,663 $329,402 
Amortization expense for the three months ended July 31, 2023 and 2022 was $13,922 and $12,709, respectively. Amortization expense for the nine months ended July 31, 2023 and 2022 was $41,839 and $38,366, respectively. See Acquisitions Note for details regarding intangibles recorded due to the acquisition of CyberOptics.
Pension and other postretirement plans
During the second quarter of 2022, we completed a partial plan settlement transaction in regards 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 loss of $41,221, which is included in Other-net on the Condensed 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.
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The components of net periodic pension and other postretirement cost for the three and nine months ended July 31, 2023 and 2022 were:
 U.S.International
Three Months Ended2023202220232022
Service cost$2,744 $3,423 $281 $423 
Interest cost4,176 3,322 642 272 
Expected return on plan assets(6,529)(5,692)(392)(347)
Amortization of prior service cost (credit) 12 (13)(13)
Amortization of net actuarial loss 1,197 20 558 
Total benefit cost$391 $2,262 $538 $893 
 U.S.International
Nine Months Ended2023202220232022
Service cost$8,233 $13,338 $838 $1,343 
Interest cost12,526 11,146 1,887 861 
Expected return on plan assets(19,587)(22,082)(1,151)(1,109)
Amortization of prior service cost (credit) 36 (38)(43)
Amortization of net actuarial loss 6,282 61 1,758 
Settlement loss 41,221   
Total benefit cost$1,172 $49,941 $1,597 $2,810 
The components of other postretirement benefit costs for the three and nine months ended July 31, 2023 and 2022 were:
 U.S.International
Three Months Ended2023202220232022
Service cost$100 $172 $1 $3 
Interest cost766 481 3 3 
Amortization of net actuarial (gain) loss 244 (16)(12)
Total benefit cost (income)$866 $897 $(12)$(6)
 U.S.International
Nine Months Ended2023202220232022
Service cost$299 $515 $4 $9 
Interest cost2,297 1,443 8 10 
Amortization of net actuarial (gain) loss 733 (47)(37)
Total benefit cost (income)$2,596 $2,691 $(35)$(18)
The components of net periodic pension and other postretirement cost other than service cost are included in Other – net in our Condensed Consolidated Statements of Income.
Income taxes
We record our interim provision for income taxes based on our estimated annual effective tax rate, as well as certain items discrete to the current periods. The effective tax rate for the three months ended July 31, 2023 and 2022 was 21.1% and 21.4%, respectively. The effective tax rate for the nine months ended July 31, 2023 and 2022 was 20.9% and 21.2%, respectively.
Due to our share-based payment transactions, our income tax provision included a discrete tax benefit of $996 and $2,745 for the three months and nine months ended July 31, 2023, respectively, compared to $115 and $1,539 for the three and nine months ended July 31, 2022, respectively.
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Accumulated other comprehensive income (loss)
The components of accumulated other comprehensive income (loss), including adjustments for items that are reclassified from accumulated other comprehensive loss to net income, are shown below.
Cumulative
translation
adjustments
Pension and
postretirement 
benefit plan
adjustments
Accumulated
other 
comprehensive
income (loss)
Balance at October 31, 2022$(160,046)$(47,736)$(207,782)
Pension and other postretirement plan adjustments, net of tax of ($305)
 (908)(908)
Foreign currency translation adjustments (a)
79,986  79,986 
Balance at July 31, 2023$(80,060)$(48,644)$(128,704)
(a) Includes a net loss of $3,672, net of tax of $1,097, on net investment hedges.
Stock-based compensation
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 remained available to be granted under the 2012 Plan, as well as issuable under the CyberOptics equity plan. As of July 31, 2023, a total of 2,012 common shares were available to be granted under the 2021 Plan.
Stock Options
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% 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 $1,697 and $4,982 for the three month and nine months ended July 31, 2023, respectively, compared to $1,580 and $5,743 for the three and nine months ended July 31, 2022, respectively.
The following table summarizes activity related to stock options for the nine months ended July 31, 2023:
 Number of
Options
Weighted-
Average
Exercise Price 
Per Share
Aggregate
Intrinsic Value
Weighted
Average
Remaining
Term
Outstanding at October 31, 20221,187$141.82 
Granted80239.44 
Exercised(163)115.67 
Forfeited or expired(10)206.93 
Outstanding at July 31, 20231,094$151.09 $111,165 5.1 years
Expected to vest245$214.42 $10,006 7.5 years
Exercisable at July 31, 2023846$132.58 $101,014 4.4 years
As of July 31, 2023, there was $7,013 of total unrecognized compensation cost related to unvested stock options. That cost is expected to be amortized over a weighted average period of approximately 1.7 years.

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The fair value of each option grant was estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions:
Nine Months Ended
July 31, 2023July 31, 2022
Expected volatility30.4%-31.8%30.6%-30.8%
Expected dividend yield1.12%-1.27%0.76%-0.76%
Risk-free interest rate3.79%-4.21%1.36%-1.47%
Expected life of the option (in years)5.0-6.25.3-6.2
The weighted-average expected volatility used to value the 2023 and 2022 options was 30.6% and 30.6%, respectively.
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 U.S. Treasury issues with a term equal to the expected life of the option being valued.
The weighted average grant date fair value of stock options granted during the nine months ended July 31, 2023 and 2022 was $77.99 and $79.03, respectively.
The total intrinsic value of options exercised during the three months ended July 31, 2023 and 2022 was $7,741 and $1,052, respectively. The total intrinsic value of options exercised during the nine months ended July 31, 2023 and 2022 was $19,873 and $10,418, respectively.
Cash received from the exercise of stock options for the nine months ended July 31, 2023 and 2022 was $18,449 and $8,845, respectively.
Restricted Shares and Restricted Share Units
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. We may also grant continuation awards in the form of restricted share units with cliff vesting and a performance measure that must be achieved for the restricted share units to vest.
For employee recipients, in the event of termination of employment due to early retirement, with the 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. Termination for any other reason prior to the lapse of any restrictions or vesting of units results in forfeiture of the shares or units.
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 shares or units are issued, deferred stock-based compensation equivalent to the fair value on the date of grant is expensed over the vesting period.  
The following table summarizes activity related to restricted shares during the nine months ended July 31, 2023:
 Number of SharesWeighted-Average
Grant Date
Fair Value
Restricted shares at October 31, 20226 $167.99 
Vested(6)167.99
Restricted shares at July 31, 2023 $ 
As of July 31, 2023, there was no unrecognized compensation cost related to restricted shares. The amount charged to expense related to restricted shares during the three months ended July 31, 2023 and 2022 was $73 and $243, respectively, which included common share dividends of $2 and $4, respectively. For the nine months ended July 31, 2023 and 2022, the amounts charged to expense related to restricted shares were $336 and $856, respectively, which included common shares dividends of $5 and $14, respectively.

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The following table summarizes activity related to restricted share units during the nine months ended July 31, 2023:
 Number of UnitsWeighted-Average
Grant Date
Fair Value
Restricted share units at October 31, 202281 $223.77 
Granted39 237.18
Forfeited(5)241.37
Vested(45)219.06
Restricted share units at July 31, 202370 $232.88 
As of July 31, 2023, there was $10,080 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 amount charged to expense related to restricted share units during each of the three months ended July 31, 2023 and 2022 was $2,152 and $2,154, respectively, compared to $6,658 and $6,246 for the nine months ended July 31, 2023 and 2022, respectively.
Performance Share Incentive Awards
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 $231.34, $211.25 and $214.51 in 2023, and $260.60, $273.50 and $221.94 for 2022. The amount charged to expense related to performance awards for the three months ended July 31, 2023 and 2022 was $1,831 and $3,555, respectively, compared to charges of $4,785 and $10,296 for the nine months ended July 31, 2023 and 2022, respectively. As of July 31, 2023, there was $7,947 of unrecognized compensation cost related to performance share incentive awards.
Deferred Compensation
Our executive officers and other highly compensated employees may elect to defer up to 100% of their base pay and cash incentive compensation, and for executive officers, up to 90% of their share-based performance incentive payout each year. Additional share units are credited for quarterly dividends paid on our common shares. Expense related to dividends paid under this plan for the three months ended July 31, 2023 and 2022 was $30 and $17, respectively, compared to $77 and $53 for the nine months ended July 31, 2023 and 2022, respectively.
Deferred Directors' Compensation
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.
The following table summarizes activity related to director deferred compensation share equivalent units during the nine months ended July 31, 2023:
 Number of SharesWeighted-Average
Grant Date Fair
Value
Outstanding at October 31, 202290 $77.70 
Distributions(13)52.50
Outstanding at July 31, 202378 $84.02 
The amount charged to expense related to director deferred compensation for the three months ended July 31, 2023 and 2022 was $76 and $73, respectively, compared to $234 and $224 for the nine months ended July 31, 2023 and 2022, respectively.
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Warranties
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) 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.  
Following is a reconciliation of the product warranty liability for the nine months ended July 31, 2023 and 2022:
 July 31, 2023July 31, 2022
Beginning balance at October 31$11,723 $11,113 
Accruals for warranties14,938 12,496 
Warranty payments(12,939)(10,704)
Currency effect566 (676)
Ending balance$14,288 $12,229 
Operating segments
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 Condensed Consolidated Statements 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 the Significant accounting policies Note.
Industrial Precision Solutions: 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, consumer durables and non-durables markets.
Medical and Fluid Solutions: 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.
Advanced Technology Solutions: 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.











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Table of Contents
Nordson Corporation
The following table presents information about our segments:
Three Months EndedIndustrial
Precision
Solutions
Medical and Fluid SolutionsAdvanced
Technology
Solutions
CorporateTotal
July 31, 2023    
Net external sales$338,257 $170,871 $139,549 $ $648,677 
Operating profit (loss)115,346 54,019 27,083 (25,452)170,996 
July 31, 2022
Net external sales$341,215 $177,840 $143,073 $ $662,128 
Operating profit (loss)119,706 58,103 28,155 (21,046)184,918 
Nine Months Ended
July 31, 2023
Net external sales$985,610 $491,683 $432,026 $ $1,909,319 
Operating profit (loss)329,439 141,326 70,136 (53,179)487,722 
July 31, 2022
Net external sales$981,582 $508,836 $416,279 $ $1,906,697 
Operating profit (loss)324,089 165,510 95,533 (60,381)524,751 
We had significant sales in the following geographic regions:
 Three Months EndedNine Months Ended
 July 31, 2023July 31, 2022July 31, 2023July 31, 2022
Americas$290,515 $279,205 $834,125 $792,859 
Europe167,536 151,659 498,379 479,900 
Asia Pacific190,626 231,264 576,815 633,938 
Total net external sales$648,677 $662,128 $1,909,319 $1,906,697 
Fair value measurements
The inputs to the valuation techniques used to measure fair value are classified into the following categories:
Level 1: Quoted market prices in active markets for identical assets or liabilities.
Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.
Level 3: Unobservable inputs that are not corroborated by market data.
The following tables present the classification of our assets and liabilities measured at fair value on a recurring basis:
July 31, 2023TotalLevel 1Level 2Level 3
Assets:    
Foreign currency forward contracts (a)
$9,608 $ $9,608 $ 
Net investment contracts (b)
3,036  3,036  
Total assets at fair value$12,644 $ $12,644 $ 
Liabilities:
Deferred compensation plans (c)
$10,636 $ $10,636 $ 
Foreign currency forward contracts (a)
4,209  4,209