CORRESP 1 filename1.htm corresp
 

April 12, 2006
Mr. Rufus Decker
Accounting Branch Chief
U.S. Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20549-0404
     
RE:
  Nordson Corporation
 
  Form 10-K for the fiscal year ended October 30, 2005
 
  File No. 0-7977
Dear Mr. Decker:
Further to your letter dated March 29, 2006, please find, incorporated below, our responses to the issues raised by you. If you have any further questions or would like additional detail, please let us know.
Form 10-K for Fiscal Year Ended October 30, 2005
Note 1 – Significant accounting policies, page 26
General
Issue:
1.   We have read your response to comment five from our letter dated February 17, 2006. As previously requested, please provide us with your proposed revised disclosure regarding the types of expenses that you include in the cost of sales line item in a manner similar to what you described in your supplemental response. Please also include in your proposed disclosure the types of costs that are included in the selling and administrative expenses line item.
Response:
Per phone conversation on March 31, 2006, we understand your desire is to understand the types of expenses included in cost of sales and those included in selling and administrative. As provided in our initial response, costs related to the acquisition, manufacture, warehousing and movement of inventory are included in overhead, which is reported in cost of sales. These costs include inbound freight charges, purchasing and receiving costs, inspection costs, warehousing costs, internal transfer costs, and other costs of our manufacturing distribution network. Our accounting for expenses is consistent with GAAP.

 

 

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Letter to U.S. SEC       April 12, 2006
From: Nordson Corporation        
         
As to revised disclosure, we believe our current practice is consistent with other companies’ filings. If you disagree, please provide information that would help us better understand why you believe revised disclosure is necessary.
Note 3 – Retirement, pension and other postretirement plans, page 30
Issue:
We have read your response to comment six from our letter dated February 17, 2006. Please tell us the amounts of the benefit obligations of your foreign plans and your domestic plans as of October 30, 2005. On page thirteen, you indicate that U.S. plans comprise of 80% of worldwide pension obligations. Please tell us why you do not consider 20% of total benefit obligations related to foreign plans to be significant relative to the total benefit obligations for all plans. Please also tell us whether your foreign plans use the same assumptions as your domestic plans, what the assumptions are, and why you believe they are similar. Refer to paragraphs 7 and B23 of SFAS 132(R).
Response:
The table below summarizes the benefit obligations and assumptions for Nordson Corporation’s U.S. and foreign pension plans:
Nordson Pension Plans — Summary
At October 31, 2005
                                                                                 
    Benefit   Benefit   Plan   Plan                                   Rate of Compensation
    Obligation   Obligation   Assets   Assets   Discount Rate   Rate of Return   Increases
Plan   (000’s)   %   (000’s)   %   Obligation   Expense   Obligation   Expense   Obligation   Expense
Total U.S. plans
     159,206       80.4 %     97,954       86.8 %     5.75 %     6.00 %     8.50 %     8.50 %     3.30 %     3.30 %
 
                                                                                
International Plans:
                                                                                
U.K.
     16,531       8.3 %     9,864       8.7 %     4.90 %     5.50 %     6.75 %     7.00 %     3.60 %     3.90 %
Germany (Plan 1)
     3,246       1.6 %     428       0.4 %     4.25 %     5.25 %     4.25 %     5.25 %     3.00 %     3.00 %
Germany (Plan 2)
     12,367       6.2 %     3,239       2.9 %     4.25 %     5.25 %     4.25 %     5.25 %     3.00 %     3.00 %
Japan (Plan 1)
     1,690       0.9 %     1,354       1.2 %     2.20 %     2.25 %     1.25 %     1.50 %     2.20 %     4.55 %
Japan (Plan 2)
     4,179       2.1 %     —       0.0 %     2.20 %     2.25 %     NA       NA       2.20 %     4.55 %
Japan (Plan 3)
     768       0.4 %     —       0.0 %     2.20 %     2.25 %     NA       NA       3.00 %     3.00 %
                                                     
Total international
     38,781       19.6 %     14,885       13.2 %                                                
 
                                                     
Total
     197,987       100.0 %     112,839       100.0 %                                                
                                                     
As previously noted, the benefit obligation for all of the foreign plans is less than 20 percent of the worldwide benefit obligation, and the plan assets of the foreign plans are 13 percent of the worldwide plan assets. Each of the international plans is independent, and as the information above highlights, none of them is individually material. In

 

 

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Letter to U.S. SEC       April 12, 2006
From: Nordson Corporation        
         
addition, new employees are not eligible to participate in the U.K. plan and the two German plans. As a result, management does not consider the international plans’ obligation to be significant relative to the total benefit obligation. If you disagree and consider our foreign plans to be significant, please let us know and we will provide separate disclosures in the future.
Sincerely,
         
By:
  /s/ Peter S. Hellman
 
    
Peter S. Hellman
    
President, Chief Financial    
and Administrative Officer