~~FORM 10-Q~~

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~~January 31, ~~2020~~

2021

☐
☐			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		~~34-0590250~~
~~(State of incorporation)~~		~~(I.R.S. Employer Identification No.)~~

~~28601 Clemens Road~~ ~~Westlake, Ohio~~		~~44145~~
~~(Address of principal executive offices)~~		~~(Zip Code)~~

(State of incorporation)

28601 Clemens Road

Westlake, Ohio

(Address of principal executive offices)

34-0590250

(I.R.S. Employer Identification No.)

44145

(Zip Code)

(440) 892-1580

(Telephone Number)

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 value

~~NDSN~~

NDSN

Nasdaq 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, 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 25, 2020: 58,034,535~~

February 26, 2021: 58,085,657

~~Nordson Corporation~~

Table of Contents


PART I – FINANCIAL INFORMATION			3

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)			3
CONDENSED CONSOLIDATED STATEMENTS OF INCOME			3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME			4
CONDENSED CONSOLIDATED BALANCE SHEETS			5
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY			6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS			8 7
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS			9 8
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			24 22
Critical Accounting Policies and Estimates			25 23
Results of Operations			25 23
Financial Condition			29 25
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK			31 25
ITEM 4. CONTROLS AND PROCEDURES			31 26

PART II – OTHER INFORMATION			32 26

ITEM 1. LEGAL PROCEEDINGS			32 26
ITEM 1A. RISK FACTORS			32 26
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS			33 26
ITEM 6. EXHIBITS			34 27

SIGNATURE			35 28

Page 2

Table of Contents

Nordson Corporation

Part I – FINANCIAL INFORMATION


ITEM 1.			FINANCIAL STATEMENTS (UNAUDITED)

Condensed Consolidated Statements of Income


	Three Months Ended						Nine Months Ended							Three Months Ended
	July 31, 2020			July 31, 2019			July 31, 2020			July 31, 2019				January 31, 2021		January 31, 2020
(In thousands, except for per share data)													(In thousands, except for per share data)
Sales	$	538,181		$	559,746		$	1,562,575		$	1,608,775		Sales	$	526,566	$	494,916
Operating costs and expenses:													Operating costs and expenses:
Cost of sales		257,373			257,123			728,975			735,647		Cost of sales	236,606		231,722
Selling and administrative expenses		168,753			172,347			521,423			529,675		Selling and administrative expenses	180,935		188,101

		426,126			429,470			1,250,398			1,265,322			417,541		419,823
Operating profit		112,055			130,276			312,177			343,453		Operating profit	109,025		75,093
Other income (expense):													Other income (expense):
Interest expense		(7,314	)		(11,500	)		(25,348	)		(36,238	)	Interest expense	(6,932)		(9,740)
Interest and investment income		434			511			1,301			1,153		Interest and investment income	380		588
Other - net		(9,668	)		210			(12,943	)		(4,546	)	Other - net	(4,661)		(2,846)
		(16,548	)		(10,779	)		(36,990	)		(39,631	)		(11,213)		(11,998)
Income before income taxes		95,507			119,497			275,187			303,822		Income before income taxes	97,812		63,095
Income taxes		8,526			25,569			44,123			69,404		Income taxes	20,230		11,091
Net income	$	86,981		$	93,928		$	231,064		$	234,418		Net income	$	77,582	$	52,004
Average common shares		57,693			57,395			57,679			57,463		Average common shares	58,059		57,668
Incremental common shares attributable to equity compensation		734			722			725			720		Incremental common shares attributable to equity compensation	696		856
Average common shares and common share equivalents		58,427			58,117			58,404			58,183		Average common shares and common share equivalents	58,755		58,524
Basic earnings per share	$	1.51		$	1.64		$	4.01		$	4.08		Basic earnings per share	$	1.34	$	0.90
Diluted earnings per share	$	1.49		$	1.62		$	3.96		$	4.03		Diluted earnings per share	$	1.32	$	0.89

See accompanying notes.

Page 3

Table of Contents

Nordson Corporation

Condensed Consolidated Statements of Comprehensive Income


	Three Months Ended					Nine Months Ended					Three Months Ended
	July 31, 2020		July 31, 2019			July 31, 2020		July 31, 2019			January 31, 2021		January 31, 2020
(In thousands)										(In thousands)
Net income	$	86,981	$	93,928		$	231,064	$	234,418	Net income	$	77,582	$	52,004
Components of other comprehensive income (loss):
Components of other comprehensive income:										Components of other comprehensive income:
Foreign currency translation adjustments		28,943		(7,172	)		10,509		227	Foreign currency translation adjustments	28,433		2,793
Amortization of prior service cost and net actuarial losses, net of tax		2,621		2,378			9,748		5,328	Amortization of prior service cost and net actuarial losses, net of tax	2,997		3,229
Total other comprehensive income (loss)		31,564		(4,794	)		20,257		5,555
Total other comprehensive income										Total other comprehensive income	31,430		6,022
Total comprehensive income	$	118,545	$	89,134		$	251,321	$	239,973	Total comprehensive income	$	109,012	$	58,026

See accompanying notes.

Page 4

Table of Contents

Nordson Corporation

Condensed Consolidated Balance Sheets

	July 31, 2020			October 31, 2019
(In thousands)							(In thousands)
Assets							Assets
Current assets:							Current assets:	January 31, 2021		October 31, 2020
Cash and cash equivalents	$	221,783		$	151,164		Cash and cash equivalents	$	225,738	$	208,293
Receivables - net		498,283			530,765		Receivables - net	455,376		471,873
Inventories - net		310,557			283,399		Inventories - net	282,440		277,033
Prepaid expenses and other current assets		50,075			45,867		Prepaid expenses and other current assets	45,124		43,798
Assets held for sale							Assets held for sale	19,451		19,615
Total current assets		1,080,698			1,011,195		Total current assets	1,028,129		1,020,612
Property, plant and equipment - net		414,982			398,895		Property, plant and equipment - net	358,670		358,618
Operating right of use lease assets		132,062			—		Operating right of use lease assets	123,041		122,125
Goodwill		1,701,914			1,614,739		Goodwill	1,722,824		1,713,354
Intangible assets - net		435,817			445,575		Intangible assets - net	396,935		407,586
Deferred income taxes		11,674			11,261		Deferred income taxes	9,926		9,831
Other assets		42,811			34,782		Other assets	43,876		42,530
Total assets	$	3,819,958		$	3,516,447		Total assets	$	3,683,401	$	3,674,656

Liabilities and shareholders' equity							Liabilities and shareholders' equity
Current liabilities:							Current liabilities:
Accounts payable	$	71,355		$	85,139		Accounts payable	$	74,148	$	70,949
Income taxes payable		635			15,601		Income taxes payable	8,238		7,841
Accrued liabilities		161,044			161,655		Accrued liabilities	150,751		167,883
Customer advanced payments		45,713			41,131		Customer advanced payments	50,934		42,323
Current maturities of long-term debt		43,598			168,738		Current maturities of long-term debt	38,043		38,043
Operating lease liability - current		18,636			—		Operating lease liability - current	17,215		16,918
Finance lease liability - current		6,237			5,362		Finance lease liability - current	6,069		5,984
Liabilities held for sale							Liabilities held for sale	14,211		13,148
Total current liabilities		347,218			477,626		Total current liabilities	359,609		363,089
Long-term debt		1,221,082			1,075,404		Long-term debt	981,284		1,067,952
Operating lease liability - noncurrent		117,609			—		Operating lease liability - noncurrent	109,839		109,317
Finance lease liability - noncurrent		10,969			9,513		Finance lease liability - noncurrent	10,806		10,470
Deferred income taxes		85,363			83,564		Deferred income taxes	67,912		66,995
Pension obligations		132,769			158,506		Pension obligations	165,831		165,529
Postretirement obligations		87,448			86,368		Postretirement obligations	85,358		85,249
Other long-term liabilities		47,588			44,421		Other long-term liabilities	45,579		47,064
Shareholders' equity:							Shareholders' equity:
Common shares		12,253			12,253		Common shares	12,253		12,253
Capital in excess of stated value		526,923			483,116		Capital in excess of stated value	551,266		534,684
Retained earnings		2,912,848			2,747,650		Retained earnings	2,963,252		2,908,738
Accumulated other comprehensive loss		(211,624	)		(231,881	)	Accumulated other comprehensive loss	(194,688)		(226,118)
Common shares in treasury, at cost		(1,470,488	)		(1,430,093	)	Common shares in treasury, at cost	(1,474,900)		(1,470,566)
Total shareholders' equity		1,769,912			1,581,045		Total shareholders' equity	1,857,183		1,758,991
Total liabilities and shareholders' equity	$	3,819,958		$	3,516,447		Total liabilities and shareholders' equity	$	3,683,401	$	3,674,656

See accompanying notes.

Page 5

Table of Contents

Nordson Corporation

Condensed Consolidated Statements of Shareholders’ Equity

Nine Month Period Ended July 31, 2020

(In thousands, except for 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, 2019

$
12,253

$
483,116

$
2,747,650

$
(231,881
)

$
(1,430,093
)

$
1,581,045

Shares issued under company stock and employee
   benefit plans

—

12,330

—

—

4,049

16,379

Stock-based compensation

—

6,105

—

—

—

6,105

Purchase of treasury shares (26,223 shares)

—

—

—

—

(4,311
)

(4,311
)
Dividends declared ($0.38 per share)

—

—

(21,915
)

—

—

(21,915
)
Net income

—

—

52,004

—

—

52,004

Impact of adoption of ASU 2016-02 (See Note 2)

—

—

(1,055
)

—

—

(1,055
)
Other Comprehensive Income:

Foreign currency translation adjustments

—

—

—

2,793

—

2,793

Defined benefit pension and post-retirement
   plans adjustment

—

—

—

3,229

—

3,229

January 31, 2020

$
12,253

$
501,551

$
2,776,684

$
(225,859
)

$
(1,430,355
)

$
1,634,274

Shares issued under company stock and employee
   benefit plans

—

2,362

—

—

(194
)

2,168

Stock-based compensation

—

(72
)

—

—

—

(72
)
Purchase of treasury shares (300,894 shares)

—

—

—

—

(37,619
)

(37,619
)
Dividends declared ($0.38 per share)

—

—

(21,963
)

—

—

(21,963
)
Net income

—

—

92,079

—

—

92,079

Impact of adoption of ASU 2016-02 (See Note 2)

956

956

Other Comprehensive Income (Loss):

Foreign currency translation adjustments

—

—

—

(21,227
)

—

(21,227
)
Defined benefit pension and post-retirement
   plans adjustment

—

—

—

3,898

—

3,898

April 30, 2020

$
12,253

$
503,841

$
2,847,756

$
(243,188
)

$
(1,468,168
)

$
1,652,494

Shares issued under company stock and employee
   benefit plans

—

20,110

—

—

7,647

27,757

Stock-based compensation

—

2,972

—

—

—

2,972

Purchase of treasury shares (53,735 shares)

—

—

—

—

(9,967
)

(9,967
)
Dividends declared ($0.38 per share)

—

—

(21,859
)

—

—

(21,859
)
Net income

—

—

86,981

—

—

86,981

Impact of adoption of ASU 2016-02 (See Note 2)

(30
)

(30
)
Other Comprehensive Income:

Foreign currency translation adjustments

—

—

—

28,943

—

28,943

Defined benefit pension and post-retirement
   plans adjustment

—

—

—

2,621

—

2,621

July 31, 2020

$
12,253

$
526,923

$
2,912,848

$
(211,624
)

$
(1,470,488
)

$
1,769,912


	Three Month Period Ended January 31, 2021
(In thousands, except for 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, 2020	$	12,253	$	534,684	$	2,908,738	$	(226,118)	$	(1,470,566)	$	1,758,991
Shares issued under company stock and employee benefit plans	—		6,462		—		—		976		7,438
Stock-based compensation	—		10,120		—		—		—		10,120
Purchase of treasury shares (27,347 shares)	—		—		—		—		(5,310)		(5,310)
Dividends declared ($0.39 per share)	—		—		(22,672)		—		—		(22,672)
Net income	—		—		77,582		—		—		77,582
Impact of adoption of ASU 2016-13	—		—		(396)		—		—		(396)
Other Comprehensive Income:
Foreign currency translation adjustments	—		—		—		28,433		—		28,433
Defined benefit pension and post-retirement plans adjustment	—		—		—		2,997		—		2,997
January 31, 2021	$	12,253	$	551,266	$	2,963,252	$	(194,688)	$	(1,474,900)	$	1,857,183

~~Page 6~~

~~Nordson Corporation~~

Nine Month Period Ended July 31, 2019

(In thousands, except for 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, 2018

$
12,253

$
446,555

$
2,488,375

$
(179,314
)

$
(1,317,128
)

$
1,450,741

Shares issued under company stock and employee
   benefit plans

—

1,016

—

—

2,591

3,607

Stock-based compensation

—

4,359

—

—

—

4,359

Purchase of treasury shares (901,545 shares)

—

—

—

—

(107,667
)

(107,667
)
Dividends declared ($0.35 per share)

—

—

(20,210
)

—

—

(20,210
)
Net income

—

—

48,567

—

—

48,567

Impact of adoption of ASU 2014-09

—

—

4,329

—

—

4,329

Other Comprehensive Income:

Foreign currency translation adjustments

—

—

—

16,463

—

16,463

Defined benefit pension and post-retirement
   plans adjustment

—

—

—

1,352

—

1,352

January 31, 2019

$
12,253

$
451,930

$
2,521,061

$
(161,499
)

$
(1,422,204
)

$
1,401,541

Shares issued under company stock and employee
   benefit plans

—

8,116

—

—

2,731

10,847

Stock-based compensation

—

4,869

—

—

—

4,869

Purchase of treasury shares (78,957 shares)

—

—

—

—

(10,422
)

(10,422
)
Dividends declared ($0.35 per share)

—

—

(20,029
)

—

—

(20,029
)
Net income

—

—

91,923

—

—

91,923

Other Comprehensive Income (Loss):

Foreign currency translation adjustments

—

—

—

(9,064
)

—

(9,064
)
Defined benefit pension and post-retirement
   plans adjustment

—

—

—

1,598

—

1,598

April 30, 2019

$
12,253

$
464,915

$
2,592,955

$
(168,965
)

$
(1,429,895
)

$
1,471,263

Shares issued under company stock and employee
   benefit plans

—

2,245

—

—

576

2,821

Stock-based compensation

—

3,791

—

—

—

3,791

Purchase of treasury shares (261 shares)

—

—

—

—

(35
)

(35
)
Dividends declared ($0.35 per share)

—

—

(20,086
)

—

—

(20,086
)
Net income

—

—

93,928

—

—

93,928

Other Comprehensive Income (Loss):

Foreign currency translation adjustments

—

—

—

(7,172
)

—

(7,172
)
Defined benefit pension and post-retirement
   plans adjustment

—

—

—

2,378

—

2,378

July 31, 2019

$
12,253

$
470,951

$
2,666,797

$
(173,759
)

$
(1,429,354
)

$
1,546,888


	Three Month Period Ended January 31, 2020
(In thousands, except for 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, 2019	$	12,253	$	483,116	$	2,747,650	$	(231,881)	$	(1,430,093)	$	1,581,045
Shares issued under company stock and employee benefit plans	—		12,330		—		—		4,049		16,379
Stock-based compensation	—		6,105		—		—		—		6,105
Purchase of treasury shares (26,223 shares)	—		—		—		—		(4,311)		(4,311)
Dividends declared ($0.38 per share)	—		—		(21,915)		—		—		(21,915)
Net income	—		—		52,004		—		—		52,004
Impact of adoption of ASU 2016-02	—		—		(1,055)		—		—		(1,055)
Other Comprehensive Income:
Foreign currency translation adjustments	—		—		—		2,793		—		2,793
Defined benefit pension and post-retirement plans adjustment	—		—		—		3,229		—		3,229
January 31, 2020	$	12,253	$	501,551	$	2,776,684	$	(225,859)	$	(1,430,355)	$	1,634,274

See accompanying notes.

Page 7

Table of Contents

Nordson Corporation

Condensed Consolidated Statements of Cash Flows

Nine months ended	July 31, 2020			July 31, 2019

(In thousands)							(In thousands)	Three Months Ended
Cash flows from operating activities:							Cash flows from operating activities:	January 31, 2021		January 31, 2020
Net income	$	231,064		$	234,418		Net income	$	77,582	$	52,004
Adjustments to reconcile net income to net cash provided by operating activities:							Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		84,164			83,331		Depreciation and amortization	26,020		28,618
Non-cash stock compensation		9,005			13,019		Non-cash stock compensation	10,120		6,105
Deferred income taxes		(6,402	)		(1,828	)	Deferred income taxes	(373)		(182)
Other non-cash expense		5,874			2,455		Other non-cash expense	163		1,135
Loss on sale of property, plant and equipment		274			1,053		Loss on sale of property, plant and equipment	361		109
Changes in operating assets and liabilities		(14,021	)		(96,017	)	Changes in operating assets and liabilities	29,416		28,486
Net cash provided by operating activities		309,958			236,431		Net cash provided by operating activities	143,289		116,275
Cash flows from investing activities:							Cash flows from investing activities:
Additions to property, plant and equipment		(36,096	)		(46,002	)	Additions to property, plant and equipment	(7,917)		(13,881)
Proceeds from sale of property, plant and equipment		164			1,037		Proceeds from sale of property, plant and equipment	22		65
Equity investments		(2,000	)		(844	)
Acquisition of businesses, net of cash acquired		(125,260	)		(12,110	)

Net cash used in investing activities		(163,192	)		(57,919	)	Net cash used in investing activities	(7,895)		(13,816)
Cash flows from financing activities:							Cash flows from financing activities:
Proceeds from long-term debt		165,734			184,892

Repayment of long-term debt		(163,994	)		(148,883	)	Repayment of long-term debt	(100,000)		(125,951)
Repayment of finance lease obligations		(5,814	)		(4,442	)	Repayment of finance lease obligations	(1,734)		(2,421)
Issuance of common shares		46,304			17,275		Issuance of common shares	7,438		16,379
Purchase of treasury shares		(51,897	)		(118,124	)	Purchase of treasury shares	(5,310)		(4,311)
Dividends paid		(65,737	)		(60,325	)	Dividends paid	(22,672)		(21,915)
Net cash used in financing activities		(75,404	)		(129,607	)	Net cash used in financing activities	(122,278)		(138,219)

Effect of exchange rate changes on cash		(743	)		3,262		Effect of exchange rate changes on cash	4,329		(307)
Increase in cash and cash equivalents		70,619			52,167
Cash and cash equivalents:
Beginning of year		151,164			95,678
End of period	$	221,783		$	147,845
Increase (decrease) in cash and cash equivalents							Increase (decrease) in cash and cash equivalents	17,445		(36,067)
Cash and cash equivalents at beginning of period							Cash and cash equivalents at beginning of period	208,293		151,164
Cash and cash equivalents at end of period							Cash and cash equivalents at end of period	$	225,738	$	115,097

Three Months Ended

See accompanying notes.

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Notes to Condensed Consolidated Financial Statements

~~July~~

January 31, ~~2020~~

2021

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.

1.	~~Significant accounting policies~~

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 ~~footnotes~~notes required by generally accepted accounting principles 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 three ~~and nine~~ months ended ~~July~~January 31, ~~2020~~2021 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 ~~footnotes~~notes included in our Annual Report on Form 10-K for the year ended October 31, ~~2019. Certain reclassifications have been made to the prior year financial statements to conform to current year classifications, which included the reclassification of amounts as a result of the~~ ~~realignment of our operating segments. Refer to Note 11 for details on our operating segments~~2020..

Basis of consolidation. The consolidated financial statements include the accounts of Nordson Corporation and its majority-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 accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the 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 Condensed Consolidated Balance Sheets. Revenues deferred as of ~~July~~January 31, ~~2020~~2021 and ~~2019~~2020 were not material.

However, for certain contracts related to the sale of customer-specific products within our Advanced Technology Solutions segment, revenue ~~for these contracts~~ 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 ~~July~~January 31, ~~2020~~2021 and October 31, ~~2019.~~2020. Revenue recognized over time is not material to our overall Consolidated Financial Statements.

Revenue is measured as the amount of consideration we expect to receive in exchange for transferring products or services. Sales, value add, and other taxes 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

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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.

~~Page 9~~

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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.~~term and are generally 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, 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 11 for details on~~ our ~~operating segments.~~

Operating Segments note.

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 with an exercise price 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~~January 31, ~~2020~~2021 were ~~210.~~92. NaN o~~ptions~~options were excluded from the calculation of diluted earnings per share for the three months ended ~~July~~January 31, ~~2019.~~2020. ~~Options excluded from the calculation of diluted earnings per share for the nine months ended July 31, 2020 and 2019 were 127 and 235, respectively.~~

2.	~~Recently issued accounting standards~~

Recently issued accounting standards

New accounting guidance adopted:

On November 1, 2019, we adopted Accounting Standards Update (ASU) 2016-02, Accounting Standards Codification (ASC) 842, “Leases.” This standard requires a lessee to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases with a lease term of more than 12 months. We elected to use the transition option, which allows entities to initially apply the new standard at the adoption date and recognize a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption without restating prior periods. We elected the practical expedient package related to the identification of leases in contracts, lease classification, and accounting for initial direct costs whereby prior conclusions do not have to be reassessed for leases that commenced before the effective date. As we have not reassessed such conclusions, we did not adopt the practical expedient to use hindsight to determine the likelihood of whether a lease will be extended or terminated, to separate non-lease components within our lease portfolios, or to determine whether a purchase option will be exercised. There was not a material cumulative-effect adjustment to our beginning retained earnings for the adoption of this standard. Upon adoption, we recognized operating right-of-use assets and lease liabilities in our Consolidated Balance Sheet of $130,583 and $134,853 as of November 1, 2019, respectively, and operating right-of-use assets and lease liabilities were $132,062 and $136,245 as of July 31, 2020, respectively. Adoption of the new standard did not have a material impact on our Consolidated Statements of Income and Cash Flows. Refer to Note 14 for further discussion of leases.

~~New accounting guidance issued and not yet adopted:~~

In June 2016, the Financial Accounting Standards Board (FASB) issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326),” which ~~changes~~changed the impairment model for most financial instruments. ~~Current~~Prior guidance ~~requires~~required the recognition of credit losses based on an incurred loss impairment methodology that ~~reflects~~reflected losses once the losses are probable. We ~~will be required to use~~adopted the new standard on November 1, 2020 and are now applying a current expected credit loss model that ~~will immediately recognize~~requires recognizing an estimate of credit losses that are expected to occur over the life of the financial instruments that are in the scope of ~~this~~the update, including trade receivables. The standard ~~does not prescribe a specific method to make an estimate so the application will require~~requires judgment and ~~should consider~~consideration of historical information, current information, and reasonable and supportable forecasts, ~~and includes estimates~~as well as the impact of ~~prepayment. This guidance will become effective for us on November 1, 2020. We are advancing in the implementation process as~~any prepayments. In addition, we ~~are gathering and evaluating historical data to determine our policy and are reviewing~~reviewed our business processes and controls to support the recognition and disclosure as required under the new standard. The adoption of this new standard ~~and are currently assessing the~~did not have a material impact ~~this standard will have~~ on our Consolidated Financial Statements.

In August 2018, the FASB issued ASU ~~2018-13, “Fair Value Measurement (Topic 820)~~2018-15, “Intangibles – Goodwill and Other Internal-Use Software (Subtopic 350-40),” which is meant to help entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement (hosting arrangement), by providing guidance in determining when the arrangement includes a software license.We adopted the new standard on November 1, 2020.Hosted arrangements deemed to be in scope will follow the capitalization criteria for implementation costs as though they were internal-use computer software.There may be multiple elements besides the software license (such as: training, future upgrades, data conversion, and other elements) which require the allocation of the contract price to each of the elements; entities are to capitalize only those elements which meet the capitalization criteria.Capitalized implementation costs are amortized over the term of the hosted arrangement including consideration for renewal or termination options. In addition, we reviewed our business processes and controls to support the recognition and disclosure as required under the new standard. The adoption of this new standard did not have a material impact on our Consolidated Financial Statements.

In August 2018, the FASB issued a new standard which ~~removes, modifies,~~removed, modified, and ~~adds~~added certain disclosure requirements on fair value measurements. The guidance ~~removes~~removed disclosure requirements pertaining to the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers between levels, and the valuation processes for Level 3 fair value measurements. For investments in certain entities that calculate net asset value, an entity is required to disclose the timing of liquidation of an investee’s assets and the date when restrictions from redemption might lapse only if the investee has communicated the timing to the entity or announced the timing publicly. In addition, the amendment ~~clarifies~~clarified that the measurement uncertainty disclosure is to communicate

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~~Nordson Corporation~~

information about the uncertainty in measurement as of the reporting date. The guidance ~~adds~~added disclosure requirements for changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period as well as the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. ~~It will be effective for us beginning~~We adopted the new standard on November 1, ~~2020. Early adoption is permitted. We currently do not expect this standard will have a~~2020 with no material impact ~~on our~~to the Consolidated Financial Statements.

~~In August 2018, the FASB~~

New accounting guidance issued ~~ASU 2018-15, “Intangibles – Goodwill~~ and Other Internal-Use Software (Subtopic 350-40),” a new standard which makes a number of changes meant to help entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement (hosting arrangement), by providing guidance in determining when the arrangement includes a software license. It will be effective for us beginning November 1, 2020. Early adoption is permitted. We are currently evaluating our arrangements to determine policy and transition approach with efforts focused on business processes and controls to support the new standard.

not yet adopted:

In August 2018, the FASB issued ASU 2018-14, “Compensation – Retirement Benefits – Defined Benefit Plans – General (Subtopic 715-20),” a new standard which addresses defined benefit plans. The amendments modify the following disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans: the amounts in accumulated other

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comprehensive income expected to be recognized as components of net periodic benefit cost over the next fiscal year, amount and timing of plan assets expected to be returned to the employer, related party disclosure about the amount of future annual benefits covered by insurance and annuity contracts and significant transactions between the employer or related parties and the plan, and the effects of a 1-percentage point change in assumed health care cost trend rates on the (a) aggregate of the service and interest cost components of net periodic benefit costs and (b) benefit obligations for postretirement health care benefits. A disclosure requirement was added for the explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period. Additionally, the standard clarifies disclosure requirements surrounding the projected benefit obligation (PBO) and fair value of plan assets for plans with PBOs in excess of plan assets and the accumulated benefit obligation (ABO) and fair value of plan assets for plans with ABOs in excess of plan assets. It will be effective for us beginning November 1, 2021. Early adoption is permitted. We are currently assessing the impact this standard will have on our Consolidated Financial Statements.

In December 2019, the FASB issued ASU 2019-12, “Income Taxes (ASC 740) – Simplifying the Accounting for Income Taxes,” which simplifies the accounting for income taxes by removing certain exceptions to the general principles in ASC 740. The amendments also improve consistent application of and simplify U.S. GAAP for other areas of ASC 740 by clarifying and amending existing guidance. It will be effective for us beginning November 1, 2021. Early adoption is permitted, including adoption in any interim period for which financial statements have not yet been issued. Depending on the amendment, adoption may be applied on the retrospective, modified retrospective or prospective basis. We are currently assessing the impact of this standard will have on our Consolidated Financial Statements.

3.	~~Acquisitions~~

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.

On September 1, 2020, we acquired 100 percent of the outstanding shares of vivaMOS Ltd. ("vivaMOS"), a developer and fabricator of high-end large-area complementary metal–oxide–semiconductor (CMOS) image sensors for a wide range of X-ray applications. We acquired vivaMOS for an aggregate purchase price of $17,154, net of cash and other closing adjustments of approximately $158, utilizing cash on hand. Based on the fair value of the assets acquired and the liabilities assumed, goodwill of $14,394 and identifiable intangible assets of $4,040 were recorded. The identifiable intangible assets consist primarily of $3,900 of technology (amortized over 10 years) and $140 of non-compete agreements (amortized over 3 years). Goodwill associated with this acquisition

is not tax deductible. This acquisition is being reported in our Advanced Technology Solutions segment and the results of vivaMOS are not material to our Consolidated Financial Statements. As of January 31, 2021, the purchase price allocation remains preliminary as we complete our assessments of income taxes.

On June 1, 2020, we acquired ~~100%~~100 percent of the outstanding shares of Fluortek, Inc. ("Fluortek"), a precision plastic extrusion manufacturer that provides custom dimensioned tubing to the medical device industry. We acquired Fluortek for an aggregate purchase price of $~~125,260~~,$125,260, net of cash and other closing adjustments of approximately $~~515~~,$515, utilizing cash on hand. Based on the fair value of the assets acquired and the liabilities assumed, property, plant and equipment and working capital – net of $19,843, goodwill of $76,047 and identifiable intangible assets of $29,370 were recorded. The identifiable intangible assets consist primarily of $19,700 of customer relationships (amortized over 12 years), $7,400 of technology (amortized over 10 years), $1,500 of tradenames (amortized over 10 years), and $770 of non-compete agreements (amortized over 5 years). Goodwill associated with this acquisition is tax deductible. This acquisition is being reported in our Advanced Technology Solutions segment and the results for Fluortek are not material to ~~the company’s consolidated financial statements.~~our Consolidated Financial Statements. As of ~~July~~January 31, ~~2020,~~2021, the purchase price allocations remain preliminary as we complete our assessments of ~~intangible~~income taxes.

Assets Held for Sale

In the fourth quarter of 2020, we committed to a plan to sell our screws and barrels product line within the Adhesives reporting unit under our Industrial Precision Solutions operating segment and determined that it met the criteria to be classified as held for sale. Therefore, these assets and ~~income taxes.~~

liabilities have been presented as held for sale in the Condensed Consolidated Balance Sheets as of January 31, 2021 and October 31, 2020. Assets and liabilities classified as held for sale are measured at the lower of carrying value or fair value less costs to sell. We entered into a letter of intent to sell the screws and barrels product line in October 2020. In December 2020, we entered into a definitive agreement with the buyer and the transaction was completed in February 2021.

Before measuring the fair value less costs to sell of the disposal group as a whole, we first reviewed individual assets and liabilities to determine if any fair value adjustments were required and concluded no individual asset impairments were required. Then, based on the definitive agreement entered into by us and the buyer, we determined the fair value of the disposal group to be equal to the selling price, less costs to sell. Based on this review, we recorded a non-cash, assets held for sale impairment charge

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~~2019 acquisition~~

~~On July 1, 2019, we purchased certain~~

of $87,371 in 2020. Subsequent adjustments to the loss due to changes in the carrying value of net assets held for sale as well as estimated sales proceeds less costs to sell were immaterial.

The assets and liabilities of ~~Optical Control GmbH & Co. KG (“Optical”), a Nuremberg, Germany designer~~the screws and ~~developer~~barrels product line classified as held for sale at January 31, 2021 and October 31, 2020 were as follows:


	January 31, 2021		October 31, 2020
Receivables - net	$	9,883	$	14,327
Inventories - net	11,399		9,854
Prepaid expenses and other current assets	1,424		696
Property, plant and equipment - net	59,260		58,950
Other assets	24,016		23,159
Impairment on carrying value	(86,531)		(87,371)
Assets held for sale	$	19,451	$	19,615

Accounts payable	$	5,010	$	4,625
Accrued liabilities	4,315		3,352
Other liabilities	4,886		5,171
Liabilities held for sale	$	14,211	$	13,148

Excluding the non-cash, assets held for sale impairment charge recorded in the fourth quarter of ~~high speed, fully automatic counting systems utilizing x-ray technology. This transaction was~~2020, the operating results of the screws and barrels product line were not material to our Consolidated Financial ~~Statements. We recorded~~Statements for any period presented.

Receivables

Our primary allowance for credit losses is the ~~acquisition~~allowance for doubtful accounts, which is principally determined based on aging of ~~Optical~~receivables. Receivables are exposed to credit risk based on the ~~fair value~~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. Account receivable balances are written-off against the ~~assets acquired~~allowance if deemed uncollectible.

Accounts receivable are net of an allowance for credit losses of $9,243 and ~~the liabilities assumed. Goodwill associated with this acquisition is tax deductible. This acquisition is being reported in our Advanced Technology Solutions segment.~~

4.	~~Inventories~~

~~At July~~$9,045 at January 31, ~~2020~~2021 and October 31, ~~2019,~~2020, respectively. The change in the allowance for expected credit losses includes a provision for losses on receivables of $103 as well as an immaterial accounting standard adoption impact from ASU 2016-13 of $396 for the three months ended January 31, 2021 compared to a provision for losses on receivables $388 in the three months ended October 31, 2020, which were principally offset by write-offs of uncollectible accounts.

Inventories

At January 31, 2021 and October 31, 2020, inventories consisted of the following:


	July 31, 2020			October 31, 2019				January 31, 2021		October 31, 2020
Finished goods	$	196,611		$	183,973		Finished goods	$	184,065	$	183,860
Raw materials and component parts		107,145			102,044		Raw materials and component parts	100,496		94,630
Work-in-process		54,123			42,904		Work-in-process	47,345		44,403
		357,879			328,921			331,906		322,893
Obsolescence and other reserves		(41,570	)		(39,377	)	Obsolescence and other reserves	(44,471)		(41,315)
LIFO reserve		(5,752	)		(6,145	)	LIFO reserve	(4,995)		(4,545)
	$	310,557		$	283,399			$	282,440	$	277,033

5.	~~Goodwill and other intangible assets~~

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Property, Plant and Equipment

At January 31, 2021 and October 31, 2020, property, plant and equipment consisted of the following:


	January 31, 2021		October 31, 2020
Land	$	8,883	$	8,816
Land improvements	4,631		4,611
Buildings	256,886		253,621
Machinery and equipment	476,264		464,171
Enterprise management system	51,697		56,103
Construction-in-progress	32,391		29,897
Leased property under capitalized leases	34,283		32,590
	865,035		849,809
Accumulated depreciation and amortization	(506,365)		(491,191)
	$	358,670	$	358,618

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. Internal use software costs are expensed or capitalized depending on whether they are incurred in the preliminary project stage, application development or the post implementation stage. Amounts capitalized are amortized over the estimated useful lives of the software beginning with the project's completion or the non-cancelable term of the arrangement with consideration for renewal options. Depreciation expense was $12,940 and $12,445 for the three months ended January 31, 2021 and January 31, 2020, respectively.

Goodwill and other intangible assets

Changes in the carrying amount of goodwill for the ~~nine~~three months ended ~~July~~January 31, ~~2020~~2021 by operating segment are as follows:

Industrial
Precision
Solutions

Advanced
Technology
Solutions

Total

Balance at October 31, 2019

$
411,461

$
1,203,278

$
1,614,739

Acquisitions

—

76,047

76,047

Currency effect

6,088

5,040

11,128

Balance at July 31, 2020

$
417,549

$
1,284,365

$
1,701,914


	Industrial Precision Solutions		Advanced Technology Solutions		Total
Balance at October 31, 2020	$	415,862	$	1,297,492	$	1,713,354

Currency effect	4,614		4,856		9,470
Balance at January 31, 2021	$	420,476	$	1,302,348	$	1,722,824

~~As part~~

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Table of our change in operating segments as described in Note 11, we considered whether the reporting units used for purposes of assessing impairment of goodwill should be changed and concluded that no changes were necessary.Contents

Nordson Corporation

Information regarding our intangible assets subject to amortization is as follows:


	July 31, 2020							January 31, 2021
	Carrying Amount		Accumulated Amortization		Net Book Value			Carrying Amount		Accumulated Amortization		Net Book Value
Customer relationships	$	503,804	$	203,589	$	300,215	Customer relationships	$	487,336	$	204,435	$	282,901
Patent/technology costs		163,550		81,590		81,960	Patent/technology costs	155,455		81,205		74,250
Trade name		98,691		46,553		52,138	Trade name	74,737		36,250		38,487
Non-compete agreements		12,472		10,972		1,500	Non-compete agreements	10,031		8,734		1,297
Other		1,401		1,397		4	Other	1,404		1,404		0
Total	$	779,918	$	344,101	$	435,817	Total	$	728,963	$	332,028	$	396,935

	October 31, 2019							October 31, 2020
	Carrying Amount		Accumulated Amortization		Net Book Value			Carrying Amount		Accumulated Amortization		Net Book Value
Customer relationships	$	480,007	$	173,996	$	306,011	Customer relationships	$	483,568	$	193,617	$	289,951
Patent/technology costs		154,735		71,663		83,072	Patent/technology costs	153,555		76,934		76,621
Trade name		96,655		41,303		55,352	Trade name	74,240		34,693		39,547
Non-compete agreements		11,540		10,406		1,134	Non-compete agreements	9,908		8,444		1,464
Other		1,400		1,394		6	Other	1,403		1,400		3
Total	$	744,337	$	298,762	$	445,575	Total	$	722,674	$	315,088	$	407,586

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~~Nordson Corporation~~

Amortization expense for the three months ended ~~July~~January 31, 2021 and 2020 was $13,080 and ~~2019 was $16,577~~$16,173, respectively.

Pension and $13,903, respectively. Amortization expense for the nine months ended July 31, 2020 and 2019 was $47,410 and $41,665, respectively. Refer to Note 3 for an explanation of the change in goodwill and intangible assets due to the Fluortek acquisition.

other postretirement plans

6.	~~Pension and other postretirement plans~~

The components of net periodic pension cost for the three ~~and nine~~ months ended ~~July~~January 31, 2021 and 2020 ~~and 2019~~ were:


	U.S.						International							U.S.				International
Three Months Ended	2020			2019			2020			2019			Three Months Ended	2021		2020		2021		2020
Service cost	$	5,146		$	3,740		$	519		$	484		Service cost	$	5,766	$	5,057	$	518	$	571
Interest cost		3,970			4,736			256			416		Interest cost	3,340		3,918		220		262
Expected return on plan assets		(6,165	)		(5,908	)		(313	)		(397	)	Expected return on plan assets	(6,753)		(6,159)		(391)		(330)
Amortization of prior service credit		(21	)		(16	)		(72	)		(76	)	Amortization of prior service credit	(20)		(21)		(77)		(74)
Amortization of net actuarial loss		3,510			1,938			739			424		Amortization of net actuarial loss	3,574		3,398		790		734
Settlement loss		2,508			—			—			—

Total benefit cost	$	8,948		$	4,490		$	1,129		$	851		Total benefit cost	$	5,907	$	6,193	$	1,060	$	1,163

	U.S.						International
Nine Months Ended	2020			2019			2020			2019
Service cost	$	15,439		$	10,895		$	1,550		$	1,454
Interest cost		11,913			13,726			769			1,262
Expected return on plan assets		(18,499	)		(17,506	)		(948	)		(1,204	)
Amortization of prior service credit		(63	)		(46	)		(214	)		(228	)
Amortization of net actuarial loss		10,529			5,026			2,201			1,280
Settlement loss		2,508			—			—			—
Total benefit cost	$	21,827		$	12,095		$	3,358		$	2,564

~~During the third quarter of 2020, we recognized a settlement loss of $2,508 as a result of a lump sum distribution from our supplemental executive retirement plan.~~

The components of other postretirement benefit cost for the three ~~and nine~~ months ended ~~July~~January 31, 2021 and 2020 ~~and 2019~~ were:


	U.S.						International							U.S.				International
Three Months Ended	2020			2019			2020			2019			Three Months Ended	2021		2020		2021		2020
Service cost	$	187		$	70		$	4		$	3		Service cost	$	176	$	190	$	4	$	4
Interest cost		657			698			3			3		Interest cost	454		614		3		3
Amortization of prior service credit		(5	)		(6	)		—			—		Amortization of prior service credit	0		(4)		0		0
Amortization of net actuarial (gain) loss		380			162			(9	)		(5	)	Amortization of net actuarial (gain) loss	347		419		(10)		(9)
Total benefit cost	$	1,219		$	924		$	(2	)	$	1		Total benefit cost	$	977	$	1,219	$	(3)	$	(2)


	U.S.						International
Nine Months Ended	2020			2019			2020			2019
Service cost	$	520		$	401		$	11		$	13
Interest cost		1,830			2,195			10			15
Amortization of prior service credit		(13	)		(20	)		—			—
Amortization of net actuarial (gain) loss		1,057			467			(27	)		(22	)
Total benefit cost	$	3,394		$	3,043		$	(6	)	$	6

The components of net periodic pension cost other than service cost are included in Other – net in our Condensed Consolidated Statements of Income.

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Nordson Corporation

7.	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 period. The effective tax rate for the three ~~and nine~~ months ended ~~July~~January 31, 2021 and 2020 was ~~8.9%~~20.7% and ~~16.0%~~17.6%, respectively. The effective tax rate for the ~~three and nine months ended July 31, 2019~~current quarter was ~~21.4% and 22.8%, respectively. The effective tax rate for the three and nine months ended July 31, 2020 was lower~~higher than the comparable prior year ~~periods~~period primarily due to ~~excess tax benefits associated with share-based payment transactions.~~

~~Due to our~~ share-based payment transactions ~~our income tax provision included a~~which resulted in discrete tax ~~benefit~~benefits of ~~$11,373~~$799 and ~~$14,048~~$2,537 for the three and nine months ended July 31, 2020, respectively. Our income tax provision included a similar discrete tax benefit of $210 and $3,227 for the three and nine months ended July 31, 2019, respectively.

During the nine months ended July 31, 2019, a discrete tax expense of $4,866 was recorded to update the provisional amounts recognized in 2018 due to changes in interpretations and assumptions and the finalization of estimates related to the U.S. Tax Cuts and Jobs Act.

~~During~~ the three months ended ~~July~~January 31, 2021 and 2020, ~~and July 31, 2019, we recorded a favorable adjustment to unrecognized tax benefits of $443 and $858,~~ respectively. In addition, during the three months ended July 31, 2020 there was an increase of $5,664 in unrecognized tax benefits and, if recognized, the gross unrecognized tax benefits would be offset against assets currently recorded in the Consolidated Balance Sheet.

8.	~~Accumulated other comprehensive loss~~

Accumulated other comprehensive loss

The components of accumulated other comprehensive loss, including adjustments for items that are reclassified from accumulated other comprehensive loss to net income, are shown below.

Cumulative

Pension and

Accumulated

translation

postretirement benefit

other comprehensive

adjustments

plan adjustments

loss

Balance at October 31, 2019

$
(53,332
)

$
(178,549
)

$
(231,881
)
Amortization of prior service costs and net
actuarial losses, net of tax of $(3,026)

—

9,748

9,748

Foreign currency translation adjustments

10,509

—

10,509

Balance at July 31, 2020

$
(42,823
)

$
(168,801
)

$
(211,624
)


	Cumulative translation adjustments		Pension and postretirement benefit plan adjustments		Accumulated other comprehensive loss
Balance at October 31, 2020	$	(40,422)	$	(185,696)	$	(226,118)
Amortization of prior service costs and net actuarial losses, net of tax of ($930)	0		2,997		2,997
Foreign currency translation adjustments	28,433		0		28,433
Balance at January 31, 2021	$	(11,989)	$	(182,699)	$	(194,688)

9.	~~Stock-based compensation~~

Stock-based compensation

During the 2018 Annual Meeting of Shareholders, our shareholders approved the Amended and Restated 2012 Stock Incentive and Award Plan (the “2012 Plan”). The 2012 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 4,525 common shares were originally available for grant under the 2012 Plan.

~~Page 14~~

~~Nordson Corporation~~

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 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 (or at any time prior to December 28, 2017) 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 ~~$2,385~~$2,236 and ~~$2,525~~$2,725 in the three months ended ~~July~~January 31, 2021 and 2020, ~~and 2019,~~ respectively. ~~Corresponding amounts for the nine months ended July 31, 2020 and 2019 were $7,648 and $7,583, respectively.~~

The following table summarizes activity related to stock options for the ~~nine~~three months ended ~~July~~January 31, ~~2020:~~

2021:

	Number of Options			Weighted- Average Exercise Price Per Share		Aggregate Intrinsic Value		Weighted Average Remaining Term
Outstanding at October 31, 2019		1,787		$	97.74
										Number of Options	Weighted- Average Exercise Price Per Share		Aggregate Intrinsic Value		Weighted Average Remaining Term
Outstanding at October 31, 2020									Outstanding at October 31, 2020	1,487	$	122.45
Granted		391			166.38				Granted	92	201.50
Exercised		(587	)		78.87				Exercised	(64)	116.96
Forfeited or expired		(39	)		144.70				Forfeited or expired	(6)	146.89
Outstanding at July 31, 2020		1,552		$	121.00	$	112,752	7.2 years
Outstanding at January 31, 2021									Outstanding at January 31, 2021	1,509	$	127.40	$	80,152	7.0 years
Expected to vest		853		$	141.34	$	44,597	8.4 years	Expected to vest	600	$	156.03	$	16,077	8.5 years
Exercisable at July 31, 2020		689		$	95.33	$	67,769	5.7 years
Exercisable at January 31, 2021									Exercisable at January 31, 2021	902	$	108.12	$	63,938	5.9 years

As of ~~July~~January 31, ~~2020,~~2021, there was ~~$13,963~~$14,122 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~~1.8 years.

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Nordson Corporation

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, 2020~~	~~July 31, 2019~~
~~Expected volatility~~	~~24.5%-30.5%~~	~~24.1%-24.5%~~
~~Expected dividend yield~~	~~0.87%-1.16%~~	~~1.04%~~
~~Risk-free interest rate~~	~~0.44%-1.69%~~	~~2.84%-2.95%~~
~~Expected life of the option (in years)~~	~~5.3-6.3~~	~~5.3-6.2~~


Three Months Ended	January 31, 2021			January 31, 2020
Expected volatility	30.8%	-	32.6%	24.5%	-	25.4%
Expected dividend yield	0.83%			0.93%	-	1.16%
Risk-free interest rate	0.43%	-	0.54%	1.64%	-	1.69%
Expected life of the option (in years)	5.3	-	6.2	5.3	-	6.2

The weighted-average expected volatility used to value the ~~2020~~2021 and ~~2019~~2020 options was ~~25.4%~~31.0% and ~~24.3%~~25.1%, 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~~three months ended ~~July~~January 31, 2021 and 2020 was $56.05 and ~~2019 was $38.57 and $31.74,~~$37.82, respectively.

The total intrinsic value of options exercised during the three months ended ~~July~~January 31, 2021 and 2020 was $5,435 and ~~2019 was $39,811 and $2,449,~~$17,244, respectively. ~~The total intrinsic value of options exercised during the nine months ended July 31, 2020 and 2019 was $58,758 and $21,770, respectively.~~

Cash received from the exercise of stock options for the ~~nine~~three months ended ~~July~~January 31, 2021 and 2020 was $7,438 and ~~2019 was $46,304 and $17,275,~~$16,379, 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.

~~Page 15~~

~~Nordson Corporation~~

We may also grant continuation awards in the form of restricted share units with cliff vesting and a gateway 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.~~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. For~~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 (or at any time prior to December 28, 2017), ~~the restrictions lapse in the event of a recipient’s disability or death.~~fully vest. Termination for any other reason prior to the lapse of any restrictions or vesting of units results in forfeiture of the ~~shares.~~

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~~three months ended ~~July~~January 31, ~~2020:~~

2021:

	Number of Shares			Weighted-Average Grant Date Fair Value
Restricted shares at October 31, 2019		66		$	126.83
							Number of Shares	Weighted-Average Grant Date Fair Value
Restricted shares at October 31, 2020						Restricted shares at October 31, 2020	58	$	148.75
Granted		25			169.62	Granted	0	0
Forfeited		(6	)		131.06	Forfeited	(1)	147.93
Vested		(26	)		120.23	Vested	(15)	139.70
Restricted shares at July 31, 2020		59		$	147.17
Restricted shares units at January 31, 2021						Restricted shares units at January 31, 2021	42	$	151.90

As of ~~July~~January 31, ~~2020,~~2021, there was ~~$5,053~~$3,263 of unrecognized compensation cost related to restricted shares. The cost is expected to be amortized over a weighted average period of ~~2.0~~1.9 years. The amount charged to expense related to restricted shares during the three months ended ~~July~~January 31, 2021 and 2020 was $964 and ~~2019 was $734 and $898,~~$1,573, respectively. These amounts included common share dividends for the three months ended ~~July~~January 31, 2021 and 2020 of $18 and ~~2019~~$25, respectively.

Page 15

Table of ~~$21 and $22, respectively.~~ For the nine months ended July 31, 2020 and 2019, the amounts charged to expense related to restricted shares were $2,995 and $2,762, respectively. These amounts included common share dividends for the nine months ended July 31, 2020 and 2019 of $64 and $58, respectively. Contents

Nordson Corporation

The following table summarizes activity related to restricted share units during the ~~nine~~three months ended ~~July~~January 31, ~~2020:~~

2021:

Number of Units

Weighted-Average
Grant Date Fair
Value

Restricted share units at October 31, 2019

—

$
—

Granted

7

160.68

Restricted share units at July 31, 2020

7

$
160.68


	Number of Units	Weighted-Average Grant Date Fair Value
Restricted shares units at October 31, 2020	0	$	0
Granted	85	202.14
Forfeited	(2)	198.68
Vested	(1)	201.50
Restricted shares units at January 31, 2021	82	$	202.26

As of ~~July~~January 31, ~~2020,~~2021, there was ~~$295~~$14,526 of remaining expense to be recognized related to outstanding restricted share units, which is expected to be recognized over a weighted average period of ~~0.3~~1.5 years. The amount charged to expense related to restricted share units during each of the three months ended ~~July~~January 31, 2021 and 2020 was $2,092 and ~~2019 was $299 and $263,~~$286, respectively. ~~For the nine months ended July 31, 2020 and 2019, the corresponding amounts were $883 and $789, 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 for each three-year period and the percentage of the requisite service that has been rendered. The calculations are also based upon the grant date fair value determined using the closing market price of our common shares at the grant date, reduced by the implied value of dividends not to be paid. The per share values were $196.17 and $191.23 for 2021, $160.02, $133.01 and $184.04 for ~~2020, $120.12 and $138.53 for 2019, and $123.45 and $138.53 for 2018. During the three months ended July 31, 2020, $552 was credited~~2020. The amount charged to expense ~~and~~ for the three months ended ~~July~~January 31, ~~2019, $15~~2021 and 2020 was ~~charged to expense. For the nine months ended July 31, 2020, $2,834 was credited to expense,~~$4,755 and ~~for the nine months ended July 31, 2019, $1,611 was charged to expense.~~$1,421, respectively. The cumulative amount recorded in shareholders’ equity at ~~July~~January 31, ~~2020~~2021 was ~~$1,455.~~

~~Page 16~~

~~Nordson Corporation~~

$4,592.

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~~January 31, 2021 and 2020 was $29 and ~~2019 was $83 and $74,~~$81, respectively. ~~For the nine months ended July 31, 2020 and 2019, the corresponding amounts were $247 and $219, 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~~three months ended ~~July~~January 31, ~~2020:~~

2021:


	Number of Shares		Weighted-Average Grant Date Fair Value			Number of Shares	Weighted-Average Grant Date Fair Value
Outstanding at October 31, 2019		114	$	55.52	Outstanding at October 31, 2019	120	$	60.81
Dividend equivalents		1		164.44	Dividend equivalents	0	0
Outstanding at July 31, 2020		115	$	56.27
Distributions					Distributions	(7)	81.32
Outstanding at January 31, 2021					Outstanding at January 31, 2021	113	$	59.93

The amount charged to expense related to director deferred compensation for the three months ended ~~July~~January 31, 2021 and 2020 was $62 and ~~2019 was~~ $44, ~~and $~~38, respectively. ~~For the nine months ended July 31, 2020 and 2019, the corresponding amounts were $130 and $113, respectively.~~

~~10.~~

~~Warranties~~

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 are adjusted as necessary. The liability for warranty costs is included in Accrued liabilities in the Condensed Consolidated Balance ~~Sheet.~~

Sheets.

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Nordson Corporation

Following is a reconciliation of the product warranty liability for the ~~nine~~three months ended ~~July~~January 31, ~~2020~~2021 and ~~2019:~~

2020:


	July 31, 2020			July 31, 2019				January 31, 2021		January 31, 2020
Beginning balance at October 31	$	11,006		$	12,195		Beginning balance at October 31	$	10,550	$	11,006
Accruals for warranties		8,219			7,628		Accruals for warranties	3,870		2,954
Warranty payments		(8,180	)		(7,837	)	Warranty payments	(3,594)		(2,551)
Currency effect		221			(78	)	Currency effect	259		8
Ending balance	$	11,266		$	11,908		Ending balance	$	11,085	$	11,417

~~11.~~

~~Operating segments~~

Operating segments

We conduct business across 2 primary operating segments: Industrial Precision Solutions (IPS) and Advanced Technology Solutions (ATS). 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.

Effective in the second quarter of 2020, we made changes to realign our management team and our operating ~~segments.~~segments, which are reflected in our disclosures. This realignment will enable us to better serve global customers and markets, to more efficiently leverage technology synergies, to operate divisions of significant size in a consistent and focused way and to position ourselves for our next chapter of profitable growth. The revised operating segments better reflect how we manage the Company, allocate resources, and assess performance of the businesses.

~~Page 17~~

~~Nordson Corporation~~

We realigned our former ~~three~~3 operating segments into ~~two:~~2: Industrial Precision Solutions and Advanced Technology Solutions. Existing product lines were unchanged as part of this new structure.

Industrial Precision Solutions: This segment ~~combines our former Adhesive Dispensing Systems (ADS) and Industrial Coating Systems (ICS) businesses. IPS enhances the technology synergies between ADS and ICS to deliver~~delivers proprietary dispensing and processing technology to diverse end markets. Product lines reduce material consumption, increase line efficiency and enhance product brand and appearance. Components are used for dispensing adhesives, coatings, paint, finishes, sealants and other materials. This segment primarily serves the non-durables, industrial and consumer durables ~~and non-durables~~ markets.

Advanced Technology Solutions: This segment integrates our proprietary product technologies found in progressive stages of a customer’s production processes, such as surface treatment, precisely controlled dispensing of material and post-dispense test and inspection to ensure quality. Related single-use plastic molded syringes, cartridges, tips, fluid connection components, tubing, balloons and catheters are used to dispense or control fluids in production processes or within customers’ end products. This segment predominantly serves customers in the electronics, medical and related high-tech industrial markets.

~~The financial information presented herein reflects the impact of the preceding changes and prior periods have been revised to reflect these changes.~~

The following table presents information about our segments:

	Industrial Precision Solutions		Advanced Technology Solutions		Corporate			Total
Three months ended
July 31, 2020
Three Months Ended										Three Months Ended	Industrial Precision Solutions		Advanced Technology Solutions		Corporate		Total
January 31, 2021										January 31, 2021
Net external sales	$	288,965	$	249,216	$	—		$	538,181	Net external sales	$	288,416	$	238,150	$	—	$	526,566
Operating profit (loss)		74,744		49,952		(12,641	)		112,055	Operating profit (loss)	83,403		47,201		(21,579)		109,025
July 31, 2019
January 31, 2020										January 31, 2020
Net external sales	$	306,648	$	253,098	$	—		$	559,746	Net external sales	$	263,799	$	231,117	$	—	$	494,916
Operating profit (loss)		88,811		53,562		(12,097	)		130,276	Operating profit (loss)	56,404		32,287		(13,598)		75,093
Nine months ended
July 31, 2020
Net external sales	$	835,038	$	727,537	$	—		$	1,562,575
Operating profit (loss)		207,603		140,928		(36,354	)		312,177
July 31, 2019
Net external sales	$	871,925	$	736,850	$	—		$	1,608,775
Operating profit (loss)		229,702		150,882		(37,131	)		343,453

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Nordson Corporation

A reconciliation of total segment operating income to total consolidated income before income taxes is as follows:


	Three Months Ended						Nine Months Ended							Three Months Ended
	July 31, 2020			July 31, 2019			July 31, 2020			July 31, 2019				January 31, 2021		January 31, 2020
Total profit for reportable segments	$	112,055		$	130,276		$	312,177		$	343,453		Total profit for reportable segments	$	109,025	$	75,093
Interest expense		(7,314	)		(11,500	)		(25,348	)		(36,238	)	Interest expense	(6,932)		(9,740)
Interest and investment income		434			511			1,301			1,153		Interest and investment income	380		588
Other-net		(9,668	)		210			(12,943	)		(4,546	)	Other-net	(4,661)		(2,846)
Income before income taxes	$	95,507		$	119,497		$	275,187		$	303,822		Income before income taxes	$	97,812	$	63,095

We have significant sales in the following geographic regions:


	Three Months Ended				Nine Months Ended					Three Months Ended
	July 31, 2020		July 31, 2019		July 31, 2020		July 31, 2019			January 31, 2021		January 31, 2020
United States	$	183,508	$	190,460	$	560,941	$	551,510	United States	$	185,316	$	188,500
Americas		38,265		47,040		106,021		123,159	Americas	36,138		31,083
Europe		132,107		143,449		394,554		425,650	Europe	135,151		126,391
Japan		31,226		30,488		90,353		89,566	Japan	27,115		27,552
Asia Pacific		153,075		148,309		410,706		418,890	Asia Pacific	142,846		121,390
Total net external sales	$	538,181	$	559,746	$	1,562,575	$	1,608,775	Total net external sales	$	526,566	$	494,916

~~Page 18~~

~~Nordson Corporation~~

~~12.~~

~~Fair value measurements~~

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, 2020

Total

Level 1

Level 2

Level 3

Assets:

Foreign currency forward contracts (a)

$
22,241

$
—

$
22,241

$
—

Total assets at fair value

$
22,241

$
—

$
22,241

$
—

Liabilities:

Deferred compensation plans (b)

$
12,030

$
—

$
12,030

$
—

Foreign currency forward contracts (a)

6,484

—

6,484

—

Total liabilities at fair value

$
18,514

$
—

$
18,514

$
—

October 31, 2019

Total

Level 1

Level 2

Level 3

Assets:

Foreign currency forward contracts (a)

$
5,042

$
—

$
5,042

$
—

Total assets at fair value

$
5,042

$
—

$
5,042

$
—

Liabilities:

Deferred compensation plans (b)

$
11,850

$
—

$
11,850

$
—

Foreign currency forward contracts (a)

2,381

—

2,381

—

Total liabilities at fair value

$
14,231

$
—

$
14,231

$
—

~~(a)~~

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.

~~(b)~~

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.


January 31, 2021	Total		Level 1		Level 2		Level 3
Assets:
Foreign currency forward contracts (a)	$	8,255	$	0	$	8,255	$	0
Total assets at fair value	$	8,255	$	0	$	8,255	$	0
Liabilities:
Deferred compensation plans (b)	$	13,708	$	0	$	13,708	$	0
Foreign currency forward contracts (a)	2,150		0		2,150		0
Total liabilities at fair value	$	15,858	$	0	$	15,858	$	0


October 31, 2020	Total		Level 1		Level 2		Level 3
Assets:
Foreign currency forward contracts (a)	$	2,700	$	0	$	2,700	$	0
Total assets at fair value	$	2,700	$	0	$	2,700	$	0
Liabilities:
Deferred compensation plans (b)	$	12,304	$	0	$	12,304	$	0
Foreign currency forward contracts (a)	5,937		0		5,937		0
Total liabilities at fair value	$	18,241	$	0	$	18,241	$	0

(a)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.

(b)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

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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.

July 31, 2020

Carrying
Amount

Fair Value

Long-term debt (including current portion), excluding unamortized debt
issuance costs

1,264,680

1,330,739

January 31, 2021

Carrying
Amount

Fair Value

Long-term debt (including current portion), excluding unamortized debt issuance costs

1,019,326

1,084,467

We used the following methods and assumptions in estimating the fair value of financial 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.

~~Page 19~~

~~Nordson Corporation~~

~~13.~~

~~Derivative financial instruments~~

Derivative financial instruments

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 Condensed Consolidated Statements of Income together with the transaction gain or loss from the related balance sheet position. For the three months ended ~~July~~January 31, ~~2020,~~2021, we recognized a net ~~gains~~gain of ~~$17,255~~$9,342 on foreign currency forward contracts and a realized net ~~losses~~loss of ~~$20,809~~$12,102 from the change in fair value of balance sheet positions. For the three months ended ~~July~~January 31, ~~2019,~~2020, we recognized a net ~~gains~~loss of ~~$975~~$431 on foreign currency forward contracts and a net ~~gains~~gain of ~~$407~~$431 from the change in fair value of balance sheet positions. For the nine months ended July 31, 2020, we recognized net gains of $13,096 on foreign currency forward contracts and losses of $13,658 from the change in fair value of balance sheet positions. For the nine months ended July 31, 2019, we recognized gains of $769 on foreign currency forward contracts and gains of $267 from the change in fair value of balance sheet positions.

The following table summarizes, by currency, the foreign currency forward contracts outstanding at ~~July~~January 31, ~~2020~~2021 and ~~2019:~~

2020:

	Notional Amounts
July 31, 2020 contract amounts:	Sell		Buy
						Notional Amounts
January 31, 2021 contract amounts:					January 31, 2021 contract amounts:	Sell		Buy
Euro	$	108,856	$	207,198	Euro	$	122,414	$	270,516
British pound		18,861		60,397	British pound	20,206		60,579
Japanese yen		15,815		32,009	Japanese yen	25,011		42,370
Australian dollar		174		7,682	Australian dollar	193		9,255
Hong Kong dollar		56,279		74,714	Hong Kong dollar	60,949		88,915
Singapore dollar		1,357		15,982	Singapore dollar	204		16,983
Others		4,412		59,921	Others	9,649		81,018
Total	$	205,754	$	457,903	Total	$	238,626	$	569,636

	Notional Amounts					Notional Amounts
July 31, 2019 contract amounts:	Sell		Buy
January 31, 2020 contract amounts:					January 31, 2020 contract amounts:	Sell		Buy
Euro	$	219,910	$	90,043	Euro	$	227,292	$	118,275
British pound		20,542		45,955	British pound	18,934		54,818
Japanese yen		32,560		48,670	Japanese yen	37,429		58,672
Australian dollar		350		7,683	Australian dollar	345		7,817
Hong Kong dollar		1,209		136,818	Hong Kong dollar	643		152,452
Singapore dollar		782		15,449	Singapore dollar	1,109		15,987
Others		3,460		63,388	Others	6,505		68,395
Total	$	278,813	$	408,006	Total	$	292,257	$	476,416

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

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counterparties in order to minimize our exposure. Our customers represent a wide variety of industries and geographic regions. For the ~~nine~~three months ended ~~July~~January 31, ~~2020~~2021 and ~~2019,~~2020, there were no significant concentrations of credit risk.

~~14.~~

~~Leases~~

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.

~~Page 20~~

~~Nordson Corporation~~

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 Sheet. 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 Sheet. As of July 31, 2020, we have no material leases that have yet to commence.~~

~~Additional lease information is summarized below for the three and nine months ended July 31, 2020:~~

Three months ended

Nine months ended

July 31, 2020

July 31, 2020

Finance Leases

Operating Leases

Finance Leases

Operating Leases

Amortization of right of use assets

$
1,779

$
—

$
5,293

$
—

Interest

93

—

266

—

Lease cost⁽¹⁾

1,872

5,406

5,559

16,073

Short-term and variable lease cost⁽¹⁾

200

617

1,023

1,917

Total lease cost

$
2,072

$
6,023

$
6,582

$
18,000

Long-term debt

~~(1)~~

~~Lease costs are recorded in both Cost of sales and Selling and administrative expenses on the Consolidated Statements of Income.~~

~~Supplemental cash flow information is summarized below for the nine months ended July 31, 2020:~~

Finance Leases

Operating Leases

Cash outflows for leases

$
5,814

$
15,935

Weighted average remaining lease term (years)

4.72 years

10.48 years

Weighted average discount rate

2.51
%

1.69
%

The following table reconciles the undiscounted cash flows for five years and thereafter to the operating and finance lease liabilities recognized on the statement of financial position as of July 31, 2020. The reconciliation excludes short-term leases that are not recognized on the Consolidated Balance Sheet.

Year:

Finance Leases

Operating Leases

2020

$
6,479

$
20,709

2021

4,445

19,056

2022

2,735

16,106

2023

1,130

14,163

2024

669

12,160

Later years

3,210

68,085

Total minimum lease payments

$
18,668

$
150,279

Amounts representing interest

1,462

14,034

Present value of minimum lease payments

$
17,206

$
136,245

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~~Nordson Corporation~~

~~15.~~

~~Long-term debt~~

A summary of long-term debt is as follows:


	January 31, 2021		October 31, 2020
Senior notes, due 2021-2025	$	109,900	$	109,900
Senior notes, due 2021-2027	85,714		85,714
Senior notes, due 2023-2030	350,000		350,000
Term loan, due 2024	155,000		255,000
Euro loan, due 2023	321,602		308,642
	1,022,216		1,109,256
Less current maturities	38,043		38,043
Less unamortized debt issuance costs	2,889		3,261
Long-term maturities	$	981,284	$	1,067,952

Revolving credit agreement

— 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 existing syndicated revolving credit agreement that was scheduled to expire in February 2020. This facility has a five-year term and includes a $75,000 subfacility for swing-line loans. It expires in April 2024. At January 31, 2021 and October 31, 2020, we had no balances outstanding under this facility. We were in compliance with all covenants at January 31, 2021, and the amount we could borrow under the facility would not have been limited by any debt covenants.

July 31, 2020

October 31, 2019

Senior notes, due 2020-2025

$
109,900

$
140,800

Senior notes, due 2020-2027

85,714

92,857

Senior notes, due 2023-2030

350,000

350,000

Term loan, due 2022-2024

405,000

505,000

Euro loan, due 2023

312,022

128,219

Private shelf facility, due 2020

5,556

30,556

Development loans, due 2020-2026

—

951

1,268,192

1,248,383

Less current maturities

43,598

168,738

Less unamortized debt issuance costs

3,512

4,241

Long-term maturities

$
1,221,082

$
1,075,404

Senior notes, due 2021-2025 — These unsecured fixed-rate notes entered into in 2012 with a group of insurance companies had a remaining weighted-average life of 2.08 years. The weighted-average interest rate at January 31, 2021 was 3.07 percent.

Senior notes, due 2021-2027 — These unsecured fixed-rate notes entered into in 2015 with a group of insurance companies had a remaining weighted-average life of 3.66 years. The weighted-average interest rate at January 31, 2021 was 3.06 percent.

Senior notes, due 2023-2030 —These unsecured fixed-rate notes entered into in 2018 with a group of insurance companies had a remaining weighted-average life of 4.79 years. The weighted-average interest rate at January 31, 2021 was 3.90 percent.

Term loan, due 2024 — In April 2019, we amended, restated and extended the term of our existing $605,000 term loan facility with a group of banks. The interest rate is variable based upon the LIBOR rate. At January 31, 2021, $155,000 was outstanding under this facility. The term loan outstanding under this facility is due in March 2024. The weighted average interest rate for borrowings under this agreement was 0.93 percent at January 31, 2021. We were in compliance with all covenants at January 31, 2021.

Euro loan, due 2023 — In March 2020 we amended, restated and extended the term of our existing term loan facility with Bank of America Merrill Lynch International Limited. The interest rate is variable based on the EURIBOR rate. The Term Loan Agreement provides for the following term loans due in two tranches: ~~€ 115,000~~€115,000 is due in March 2023 and an additional €150,000 that was drawn down in March 2020 ~~and~~ is due in March 2023. The weighted average interest rate at ~~July~~January 31, ~~2020~~2021 was 0.71%~~. At July 31, 2020, the balance outstanding was € 265,000 ($312,022).~~ percent. We were in compliance with all covenants at ~~July~~January 31, ~~2020.~~

In April 2019, we amended, restated and extended the term of our existing $605,000 term loan facility with a group of banks. The interest rate is variable based upon the LIBOR rate. At July 31, 2020, $405,000 was outstanding under this facility. The Term Loan Agreement provides for the following term loans in two tranches: $200,000 due in September 2022, and $205,000 due in March 2024. The weighted average interest rate for borrowings under this agreement was 0.82% at July 31, 2020. We were in compliance with all covenants at July 31, 2020.

Contingencies

~~five-year~~ term and includes a $75,000 subfacility for swing-line loans. It expires in April 2024. We had 0 balances outstanding under this facility at July 31, 2020 and October 31, 2019. We were in compliance with all covenants at July 31, 2020, and the amount we could borrow under the facility would not have been limited by any debt covenants.

In June 2018, we entered into a Note Purchase Agreement with a group of insurance companies under which we sold $350,000 of Senior Notes to the insurance companies and their affiliates. The notes start to mature between June 2023 and June 2030 and bear interest at fixed rates between 3.71% and 4.17%. We were in compliance with all covenants at July 31, 2020.

In July 2015, we entered into a Note Purchase Agreement with a group of insurance companies under which we sold $100,000 of unsecured Senior Notes. At July 31, 2020 and October 31, 2019, $85,714 and $92,857, respectively, was outstanding under this agreement. Existing notes mature between July 2021 and July 2027 and bear interest at fixed rates between 2.89% and 3.19%. We were in compliance with all covenants at July 31, 2020.

In 2012, we entered into a Note Purchase Agreement with a group of insurance companies under which we sold $200,000 of unsecured Senior Notes. At July 31, 2020 and October 31, 2019, $109,900 and $140,800, respectively, was outstanding under this agreement. Existing notes mature between July 2021 and July 2025 and bear interest at fixed rates between 2.62% and 3.13%. We were in compliance with all covenants at July 31, 2020.

~~We entered into a $150,000~~ ~~three-year~~ Note Purchase and Private Shelf agreement with New York Life Investment Management LLC in 2011. In 2015, the amount of the facility was increased to $180,000, and in 2016 it was increased to $200,000. At July 31, 2020 and October 31, 2019, $5,556 and $30,556, respectively, was outstanding under this facility. Existing notes mature in September 2020 and bear interest at a fixed rate of 2.21%. We were in compliance with all covenants at July 31, 2020.

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~~16.~~

~~Contingencies~~

We are involved in pending or potential litigation regarding environmental, product liability, patent, contract, employee and other matters arising from the normal course of business. Including the litigation and environmental matters 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.

Class Action Litigation

On February 22, 2019, a former employee, Mr. Ortiz, filed a purported class action lawsuit in the San Diego County Superior Court, California, against Nordson Asymtek, Inc. and Nordson Corporation, alleging various violations of the California Labor Code. Plaintiff seeks, among other things, an unspecified amount for unpaid wages, actual, consequential and incidental losses, penalties, and attorneys’ fees and costs. Following mediation in June 2020, the parties agreed to settle the lawsuit, subject to the execution of a written settlement agreement and court approval. If the settlement agreement is approved, the class action lawsuit will be resolved. Management believes, based on currently available information, that the ultimate outcome of the proceeding described above will not have a material adverse effecton the Company’s financial condition or results of operations.

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Environmental

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 ~~July~~January 31, ~~2020~~2021 and October 31, ~~2019,~~2020, our accrual for the ongoing operation, maintenance and monitoring obligation at the Site was ~~$360 and $401, respectively.~~$360. 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.

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~~ITEM 2.~~

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is Management's discussion and analysis of certain significant factors affecting our financial condition and results of operations for the periods included in the accompanying condensed consolidated financial statements.

Overview

Founded in 1954, Nordson Corporation delivers precision technology solutions to help customers succeed worldwide. We engineer, manufacture and market differentiated products and systems used for precision dispensing, applying and controlling of adhesives, coatings, sealants, biomaterials, polymers, plastics and other materials; fluid management; test and inspection; and UV curing and plasma surface treatment. 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, nonwovens, electronics, medical, appliances, energy, transportation, building and construction, and general product assembly and finishing. We have approximately 7,600 employees and direct operations in more than 35 countries.

Segment Update

~~As described in Note 11, effective~~

Effective in the second quarter of 2020, we made changes to realign our management team and our operating segments. This realignment will enable us to better serve global customers and markets, to more efficiently leverage technology synergies, to operate divisions of significant size in a consistent and focused way and to position ourselves for our next chapter of profitable growth. The revised segments better reflect how we manage the Company, allocate resources, and assess performance of the businesses.

We realigned our former three operating segments into two: Industrial Precision Solutions (IPS) and Advanced Technology Solutions. Existing product lines were unchanged as part of this new structure.

Industrial Precision Solutions:This segment combines our former Adhesive Dispensing Systems (ADS) and Industrial Coating Systems (ICS) businesses. IPS enhances the technology synergies between ADS and ICS to deliver proprietary dispensing and processing technology, to diverse end markets. Product lines reduce material consumption, increase line efficiency 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.

Advanced Technology Solutions:This segment integrates our proprietary product technologies found in progressive stages of a customer’s production processes, such as surface treatment, precisely controlled dispensing of material and post-dispense test and inspection to ensure quality. Related single-use plastic molded syringes, cartridges, tips, fluid connection components, tubing, balloons and catheters are used to dispense or control fluids in production processes or within customers’ end products. This segment predominantly serves customers in the electronics, medical and related high-tech industrial markets.

The financial information presented herein reflects the impact of the preceding changes and prior periods have been revised to reflect these changes.

COVID-19 Update

We continue to support multiple “critical infrastructure” sectors by manufacturing materials and products needed for medical supply chains, packaging, transportation, energy, communications, and other critical infrastructure industries. We have benefited from our geographical and product diversification as the end markets we serve have remained resilient in response to the COVID-19 pandemic. Despite overall demand remaining modestly below prior year levels heading into the fourth quarter, during the third quarter, we experienced a reduction in demand in certain medical product lines due to elective surgeries being reduced as a result of the COVID-19 pandemic along with a reduction in demand in our industrial end markets due to the uncertainty ahead. We continue to actively monitor the impact of the COVID-19 pandemic, which may negatively impact our business and results of operations for ~~the fourth quarter~~2021 and potentially beyond. However, the full extent of the COVID-19 pandemic on our operations and the markets we serve is ~~highly~~ uncertain and will depend largely on future developments, ~~related to~~including the ~~pandemic, including~~availability and effectiveness of vaccines, new information which may emerge concerning the severity of the pandemic and actions by government authorities to contain the ~~outbreak~~pandemic or ~~treat~~mitigate its ~~impact, among~~economic, public health and other ~~things.~~impacts. These developments are constantly evolving and cannot be accurately predicted. We continue to invest in the business, people, and strategies necessary to achieve our long-term priorities as we focus on driving profitable growth. We have continued to operate during the course of the COVID-19 pandemic in all our production facilities, having taken the recommended public health measures to ensure worker and workplace safety. As a result, there have been unfavorable impacts on our manufacturing efficiencies. Additionally, we ~~are taking~~continue to take steps to offset cost increases from pandemic-related supply chain disruptions.

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For more information about the risks to the Company as a result of the COVID-19 pandemic and its potential impact on our ability to operate, results of operations, financial condition, liquidity and capital investments, see “Part II, Item 1A. Risk Factors” in this report.

Critical Accounting Policies and Estimates

The preparation and fair presentation of the consolidated unaudited interim financial statements and accompanying notes included in this report are the responsibility of management. The financial statements and ~~footnotes~~notes have been prepared in accordance with U.S. generally accepted accounting principles for interim financial statements and contain certain amounts that were based upon management’s best estimates, judgments and assumptions that were believed to be reasonable under the circumstances. On an ongoing basis, we evaluate the accounting policies and estimates used to prepare our financial statements. Estimates are based on historical experience, judgments and assumptions believed to be reasonable under current facts and circumstances. Actual amounts and results could differ from these estimates used by management.

A comprehensive discussion of the Company’s critical accounting policies and management estimates and significant accounting policies followed in the preparation of the financial statements is included in Item 7 of our Annual Report on Form 10-K for the year ended October 31, ~~2019.~~ ~~Other than the adoption of the new lease standard as described in Note 2 of this report,~~ ~~there~~2020. There have been no significant changes in critical accounting policies, management estimates or accounting policies followed since the year ended October 31, ~~2019.~~

2020.

Results of Operations

Three months ended ~~July~~January 31, ~~2020~~

2021

Worldwide sales for the three months ended ~~July~~January 31, ~~2020~~2021 were ~~$538,181 a decrease~~$526,566 an increase of ~~3.9%~~6.4% from sales of ~~$559,746~~$494,916 for the comparable period of ~~2019. Sales volume decreased 3.2% and unfavorable currency effects decreased sales by 0.7%.~~2020. The ~~decrease~~increase consisted of a 2.6% increase in organic sales volume, ~~consisted~~a favorable effect from currency translation of ~~4.0% from an organic volume decrease, partially offset by 0.8% sales growth~~2.8% and a 1.0% increase due to acquisitions. Strength in consumer non-durable and industrial end markets were the ~~Fluortek acquisition.~~ ~~While sales were likely negatively impacted by the general decline in the global business environment due to the pandemic, the portion~~primary drivers of the ~~sales decline attributable to the pandemic is not determinable.~~

growth.

Sales outside the United States accounted for ~~65.9%~~64.8% of our sales in the three months ended ~~July~~January 31, ~~2020~~2021 compared to ~~66.0%~~61.9% in the comparable period of ~~2019.~~2020. On a geographic basis, sales in the United States were ~~$183,508,~~$185,316, a decrease of ~~3.6%~~1.7% compared to the comparable period of 2020 consisting of a 2.8% decrease in organic sales volume partially offset by a 1.1% increase from acquisitions. In the Americas region, sales were $36,138, an increase of 16.3% from 2020, consisting of an organic sales volume increase of 9.9% and an increase of 9.8% due to acquisitions, partially offset by unfavorable currency effects of 3.4%. In Europe, sales were $135,151, an increase of 6.9% from the comparable period of ~~2019. The~~2020, consisting of an organic sales volume increase of 0.3% and favorable currency effects of 6.6%. In Japan, sales were $27,115, a decrease ~~in sales was due to~~of 1.6% from the comparable period of 2020, consisting of an organic sales volume decrease of ~~4.4%~~6.3%, offset by ~~a 0.8%~~favorable currency effects of 4.7%. In the Asia Pacific region, sales were $142,846, an increase ~~from acquisitions.~~ ~~Sales in the Americas region were $38,265, a decrease~~ of ~~18.7%~~17.7% from the comparable period of ~~2019, with volume decreasing 13.3% and unfavorable currency effects~~2020, consisting of ~~5.4%. The decrease in~~an organic sales volume consisted of lower organic volume of 17.5%, offset by a 4.2% increase from acquisitions. Sales in Europe were $132,107, a decrease of 7.9% from the comparable period of 2019, with volume decreasing 7.3% and unfavorable currency effects of 0.6%. The decrease in sales volume consisted of lower organic volume of 7.6%, offset by a 0.3% increase from acquisitions. Sales in Japan were $31,226, an increase of ~~2.4% from the comparable period of 2019, with volume increasing 1.0%,~~13.4% and favorable currency effects of ~~1.4%~~4.3%. The increase in sales volume consisted of organic volume growth of 0.6%, and a 0.4% increase from acquisitions. Sales in the Asia Pacific region were $153,075, an increase of 3.2% from the comparable period of 2019, with volume increasing 4.0%, offset by unfavorable currency effects of 0.8%. The increase in sales volume consisted of organic volume growth of 3.7%, and a 0.3% increase from acquisitions.

Cost of sales for the three months ended ~~July~~January 31, ~~2020~~2021 were ~~$257,373, slightly~~$236,606 up from ~~$257,123~~$231,722 in the comparable period of ~~2019.~~2020. Gross profit, expressed as a percentage of sales, ~~decreased~~increased to ~~52.2% for this same~~55.1% from 53.2% in the comparable period ~~from 54.1% in 2019. Of the~~of 2020. The 1.9 percentage point ~~decline~~increase in gross margin ~~unfavorable~~was driven by a favorable sales volume and product mix ~~contributed 1.2~~impact of 1.0 percentage ~~points, unfavorable~~point, favorable currency translation effects ~~contributed 0.3~~of 0.5 of a percentage point, ~~and an inventory step-up related to the Fluortek acquisition as well as higher severance costs each contributed~~ a ~~negative~~favorable impact of 0.2 of a percentage point ~~respectively. Severance~~related to acquisitions, and lower costs ~~were incurred in both of our segments as part of~~related to cost structure simplification actions ~~made to improve operational efficiencies.~~

of 0.2 of a percentage point.

Selling and administrative expenses for the three months ended ~~July~~January 31, ~~2020~~2021 were ~~$168,753,~~$180,935 down from ~~$172,347~~$188,101 in the comparable period of ~~2019. The 2.1%~~2020. Of the 3.8% decrease, ~~includes a~~ ~~5.0% decrease~~lower services and employee related costs contributed 5.5 percentage points, and lower costs related to ~~the base business and 0.5% due to favorable currency translation effects. This improvement was~~cost structure simplification actions contributed 1.3 percentage points. These improvements were partially offset by ~~2.5%~~2.2 percentage points due to ~~higher severance costs~~unfavorable currency translation effects, and ~~0.9%~~0.8 of a percentage point due to ~~the first-year effect of~~ acquisitions.~~Selling and administrative expenses~~

Operating profit as a percentage of sales increased to ~~31.4% for~~20.7% for the three months ended ~~July~~January 31, ~~2020~~2021 compared to ~~30.8%~~ 15.2% in ~~2019. The 0.6%~~the comparable period of 2020. Of the 5.5 percent increase in operating margin, lower services and employee related costs contributed 3.0 percentage ~~point increase includes a 1.0% percentage point increase~~points, favorable absorption due to higher ~~severance costs and a 0.3% percentage point increase due to the first-year effect of acquisitions, which~~ ~~was partially offset by a 0.7% percentage point decrease in base business costs.~~

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Operating profit as a percentage of sales decreased to 20.8% for the three months ended July 31, 2020 compared to 23.3% in 2019. Of the 2.5 percentage point decrease, unfavorable absorption due to lower sales volume and ~~unfavorable~~ product mix contributed ~~1.5~~1.4 percentage points, ~~higher severance~~and lower costs related to cost structure simplification actions and favorable currency translations effects each contributed ~~1.0 percentage point, unfavorable currency translation effects contributed 0.3~~0.6 of a percentage point, and the first-year effect of acquisitions and an inventory step-up related to the Fluortek acquisition each unfavorably contributed a negative impact of 0.2 of a percentage point, respectively. These were partially offset by a positive 0.7 percentage point impact of lower base business costs.point.

Interest expense for the three months ended ~~July~~January 31, ~~2020~~2021 was ~~$7,314, down from $11,500 for~~$6,932, compared to $9,740 in the comparable period of ~~2019. This~~2020. The decrease was ~~primarily~~ due to lower average debt levels and lower variable interest rates compared to the prior ~~year.~~

year period. Other expense was ~~$9,668 for the three months ended July 31, 2020,~~$4,661 compared to other income of $210 for the comparable period of 2019. Included in the current quarter’s other expense were pension costs of $5,326 and $3,554 of foreign currency losses. Included in the prior year’s other income were $1,382 of foreign currency gains and $2,024 of pension costs.

Net income for the three months ended July 31, 2020, was $86,981, or $1.49 per diluted share, compared to $93,928, or $1.62 per diluted share, in the same period of 2019. This represents a 7.4% decrease in net income, and a 8.0% decrease in diluted earnings per share.

~~Industrial Precision Solutions~~

~~Sales of the Industrial Precision Solutions segment for the three months ended July 31, 2020 were $288,965 compared to $306,648~~$2,846 in the comparable period of 2019, a decrease of $17,683, or 5.8%. The decrease was due to an organic sales volume decrease of 4.5% and unfavorable currency effects that decreased sales by 1.3%. Growth in Asia geographic regions plus stable demand from product lines serving consumers in the non-durable end markets were offset by weakness in sales of product lines serving industrial markets primarily in the United States and Europe.

~~For the Industrial Precision Solutions segment, operating profit as a percentage of sales decreased to 25.9% for the three months ended July 31,~~ 2020 compared to 29.0% in 2019. Of the 3.1 percentage point decrease in operating margin, 2.5 percentage points were due to unfavorable absorption due to lower sales volume and unfavorable product mix, 0.8 of a percentage point was due to higher ~~severance costs and 0.5 of a percentage point was due to unfavorable~~foreign currency ~~translation effects. These were partially offset by a positive 0.7 of a percentage point impact due to lower base business costs.~~

~~Advanced Technology Solutions~~

Sales of the Advanced Technology Solutions segment for the three months ended July 31, 2020 were $249,216 compared to $253,098 in the comparable period of 2019, a decrease of $3,882, or 1.5%. The sales volume decrease consisted of 3.3% from an organic volume decrease, partially offset by a 1.8% increase due to acquisitions. Sales volume increases in test and inspection product lines serving electronics end markets and stable demand in certain medical product lines were offset by weakness in fluid dispense product lines serving industrial end markets. The stable demand in medical is reflective of strength in some product lines, offset by meaningful softness in other medical products more closely tied to elective surgeries, which have been reduced as a result of the COVID-19 pandemic.

For the Advanced Technology Solutions segment, operating profit as a percentage of sales decreased to 20.0% for the three months ended July 31, 2020 compared to 21.2% in 2019. Of the 1.2 percentage point decline in operating margin, 0.6 of a percentage point was due to higher severance costs, 0.6 of a percentage point was due to the first-year effect of acquisitions, 0.4 of a percentage point was due to an inventory step-up related to the Fluortek acquisition and 0.2 of a percentage point was due to unfavorable absorption due to lower sales volume and unfavorable product mix. These were partially offset by a positive 0.6 of a percentage point impact due to lower base business costs.

~~Nine months ended July 31, 2020~~

Worldwide sales for the nine months ended July 31, 2020 were $1,562,575, a 2.9% decrease from sales of $1,608,775 for the comparable period of 2019. The decrease was due to lower sales volume of 2.0%, and unfavorable currency effects that decreased sales by 0.9%. The decrease in sales volume consisted of an organic volume decrease of 2.5%, offset by a 0.5% increase from acquisitions.

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~~Nordson Corporation~~

Sales outside the United States accounted for 64.1% of sales in the nine months ended July 31, 2020 compared to 65.7% in the comparable period of 2019. On a geographic basis, sales in the United States were $560,941, an increase of 1.7% from 2019. The increase in sales was due to an organic sales volume increase of ~~1.2% and a 0.5% increase from acquisitions.~~ Sales in the Americas region were $106,021, a decrease of 13.9% from 2019, with sales volume decreasing 10.2%, and unfavorable currency effects of 3.7%. The decrease in sales volume consisted of an organic volume decrease of 12.0% partially offset by a 1.8% increase from acquisitions. Sales in Europe were $394,554, a decrease of 7.3% from 2019, with sales volume decreasing 5.5% and unfavorable currency effects of 1.8%. The decrease in sales volume consisted of an organic volume decrease of 6.0% partially offset by a 0.5% increase from acquisitions. Sales in Japan were $90,353, an increase of 0.9% from 2019, with sales volume decreasing 0.8%, offset by favorable currency effects of 1.7%. The decrease in sales volume consisted of an organic volume decrease of 1.1% partially offset by a 0.3% increase from acquisitions. Sales in the Asia Pacific region were $410,706, a decrease of 2.0% from 2019, with sales volume decreasing 1.0% and unfavorable currency effects of 1.0%. The decrease in sales volume consisted of an organic volume decrease of 1.3%, partially offset by a 0.3% increase from acquisitions.

Cost of sales for the nine months ended July 31, 2020 were $728,975, down from $735,647 in the comparable period of 2019. Gross profit, expressed as a percentage of sales, decreased to 53.3% for this same period from 54.3% in 2019. Of the 1.0 percentage point decline in gross margin, unfavorable product mix contributed 0.5 of a percentage point, unfavorable currency translation effects contributed 0.3 of a percentage point, and an inventory step-up related to the Fluortek acquisition as well as higher severance costs each contributed a negative impact of 0.1 of a percentage point, respectively.

~~Selling and administrative expenses for the nine months ended July 31, 2020 were $521,423, down from $529,675 in the comparable period of 2019. The 1.6% decrease includes a~~ 2.6% decrease related to the base business and 0.8% due to favorable currency translation effects. This improvement was partially offset by 1.1% due to higher severance costs and 0.7% due to the first-year effect of acquisitions. Selling and administrative expenses as a percentage of sales increased to 33.4% for the nine months ended July 31, 2020 compared to 32.9% in 2019. The 0.5% percentage point increase includes a 0.5% percentage point increase due to higher severance costs and a 0.1% percentage point increase due to the first-year effect of acquisitions, which was partially offset by a 0.1% percentage point decrease in base business costs.

Operating profit as a percentage of sales decreased to 20.0% for the nine months ended July 31, 2020 compared to 21.3% in 2019. Of the 1.3 percentage point decrease, unfavorable absorption due to lower sales volume and unfavorable product mix contributed 0.5 of a percentage point, higher severance costs contributed 0.5 of a percentage point, unfavorable currency translation effects contributed 0.3 of a percentage point, and an inventory step-up related to the Fluortek acquisition and the first-year effect of acquisitions each contributed a negative impact of 0.1 of a percentage point, respectively. These were partially offset by a positive 0.2 of a percentage point due to lower base business costs.

Interest expense for the nine months ended July 31, 2020 was $25,348, down from $36,238 for the comparable period of 2019. This decrease was primarily due to lower average debt levels and lower variable interest rates compared to the prior year.

~~Other expense was $12,943 for the nine months ended July 31, 2020, compared to $4,546 for the comparable period of 2019.~~losses. Included in the current year’s other expense were pension costs of ~~$10,941,~~$1,476 and ~~$562 of~~$2,760 in foreign currency losses. Included in the prior ~~year’s other expense~~year were ~~$5,004 of~~ pension costs of $2,772 and ~~$1,036 of~~an immaterial impact from foreign ~~currency gains.~~

currency.

Net income for the ~~nine~~three months ended ~~July~~January 31, ~~2020, net income~~2021 was ~~$231,064,~~$77,582, or ~~$3.96~~$1.32 per diluted share, compared to ~~$234,418,~~$52,004, or ~~$4.03~~$0.89 per diluted share, in the same period of ~~2019.~~2020. This represents a ~~1.4% decrease~~49.2% increase in net income, and a ~~1.7% decrease~~48.6% increase in diluted earnings per share.

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Nordson Corporation

Industrial Precision Solutions

Sales of the Industrial Precision Solutions segment ~~for~~were $288,416 in the ~~nine~~three months ended ~~July~~January 31, ~~2020 were $835,038 compared to $871,925~~2021, an increase of 9.3%, from sales in the comparable period of ~~2019, a decrease~~2020 of ~~$36,887, or 4.2%.~~$263,799. The ~~decrease~~increase was ~~due to~~the result of an organic sales volume ~~decrease~~increase of ~~2.8%,~~5.9% and ~~unfavorable~~favorable currency effects that ~~decreased~~increased sales by ~~1.4%~~3.4%. Growth in ~~Asia geographic regions plus stable demand from~~ product lines serving consumers in the non-durable and industrial end markets, ~~were~~particularly in the Asia Pacific region, was partially offset by weakness in ~~sales of product lines serving industrial markets primarily in the United States and Europe.~~

~~For the Industrial Precision Solutions segment, operating~~Japan.

Operating profit as a percentage of sales ~~decreased~~increased to ~~24.9%~~28.9% for the ~~nine~~three months ended ~~July~~January 31, ~~2020~~2021 compared to ~~26.3%~~21.4% in ~~2019.~~ the comparable period of 2020. Of the ~~1.4~~7.5 percentage point ~~decline~~improvement in operating margin, ~~0.8~~lower services and employee related costs contributed 5.2 percentage points, favorable absorption due to higher sales volume and product mix contributed 2.0 percentage points, and favorable currency translation effects contributed 0.3 of a percentage point was due to unfavorable absorption due to lower sales volume and unfavorable product mix, 0.4 of a percentage point was due to unfavorable currency translation effects and 0.2 of a percentage point was due to higher severance costs.

~~Page 27~~

~~Nordson Corporation~~

point.

Advanced Technology Solutions

Sales of the Advanced Technology Solutions segment ~~for~~were $238,150 in the ~~nine~~three months ended ~~July~~January 31, ~~2020 were $727,537 compared to $736,850~~2021, an increase of 3.0% from sales in the comparable period of ~~2019,~~2020 of $231,117. The increase was the result of a ~~decrease of $9,313, or 1.3%. The decrease was due to a~~2.2% increase from acquisitions and favorable currency effects that increased sales by 2.1%, offset by an organic sales volume decrease of ~~1.0 %, and unfavorable currency effects that decreased sales by 0.3%~~1.3%. ~~The sales volume decrease consisted of an organic volume decrease of 2.1%, partially offset by 1.1%~~Sales growth ~~from acquisitions. Sales volume increases~~ in test and inspection ~~product lines serving electronics end markets~~ and ~~stable demand in certain medical product lines were offset by weakness in~~ fluid dispense product lines ~~serving industrial end markets. The stable demand~~was offset by weaker shipments in electronic dispense and medical ~~is reflective of strength in some~~interventional solutions product lines during the quarter. Growth in the Asia, Americas and Japan regions was partially offset by ~~meaningful softness in other medical products more closely tied to elective surgeries, which have been reduced as a result of the COVID-19 pandemic.~~

~~For the Advanced Technology Solutions segment, operating~~declines elsewhere.

Operating profit as a percentage of sales ~~decreased~~increased to ~~19.4%~~19.8% for the ~~nine~~three months ended ~~July~~January 31, ~~2020~~2021 compared to ~~20.5%~~14.0% in ~~2019.~~ the comparable period of 2020. Of the ~~1.1~~5.8 percentage point ~~decrease~~improvement in operating margin, ~~higher severance~~lower services and employee related costs contributed ~~0.6~~3.6 percentage points, lower costs related to cost structure simplification actions contributed 1.3 percentage points, favorable currency translation effects contributed 0.7 of a percentage point, ~~unfavorable absorption due to lower sales volume~~ and ~~unfavorable product~~favorable product mix contributed 0.5 of a percentage point. These improvements were minimally offset by 0.3 of a percentage point inventory step-up related to the Fluortek acquisition contributed 0.1 of a percentage point, and the first-year effect of acquisitions and unfavorable currency translation effects each had a negative impact of 0.1 of a percentage point, respectively. These were partially offset by a positive 0.1 of a percentage point impact due to ~~lower base business costs.~~

Operating capacity for each of our segments can support fluctuations in order activity without significant changes in operating costs. Changes in exchange rates can materially impact reported operating margins. Operating margins for each segment were unfavorably impacted by a stronger dollar primarily against the Euro and Chinese Yuan during the first nine months of 2020 as compared to the same period in 2019.

acquisitions.

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 period. Significant judgment is involved regarding the application of global income tax laws and regulations and when projecting the jurisdictional mix of income. We have considered several factors in determining the probability of realizing deferred income tax assets which include forecasted operating earnings, available tax planning strategies and the time period over which the temporary differences will reverse. We review our tax positions on a regular basis and adjust the balances as new information becomes available. The effective tax rate for the three ~~and nine~~ months ended ~~July~~January 31, 2021 and 2020 was ~~8.9%~~20.7% and ~~16.0%~~17.6%, respectively. The effective tax rate for the ~~three and nine months ended July 31, 2019~~current quarter was ~~21.4% and 22.8%, respectively. The effective tax rate for the three and nine months ended July 31, 2020 was lower~~higher than the comparable prior year period primarily due to ~~increased tax benefits from share-based payment transactions.~~

~~During~~ the three months ended ~~July~~January 31, 2021 and 2020, ~~and July 31, 2019, we recorded a favorable adjustment to unrecognized tax benefits of $443 and $858,~~ respectively. In addition, during the three months ended July 31, 2020, there was an increase of $5,664 in unrecognized tax benefits and, if recognized, the gross unrecognized tax benefits would be offset against assets currently recorded in the Consolidated Balance Sheet.

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~~Nordson Corporation~~

Foreign Currency Effects

In the aggregate, average exchange rates for ~~2020~~2021 used to translate international sales and operating results into U.S. dollars were generally ~~unfavorable~~favorable comparedwith average exchange rates existing during ~~2019.~~2020, particularly due to a strengthening EURO and Chinese Yuan. It is not possible to precisely measure the impact on operating results arising from foreign currency exchange rate changes, because of changes in selling prices, sales volume, product mix and cost structure in each country in which we operate. However, if transactions for the three months ended ~~July~~January 31, ~~2020~~2021 were translated at exchange rates in effect during the same period of ~~2019,~~2020, sales would have been approximately ~~$4,000 higher~~$13,800 lower while ~~third-party~~ costs of sales and selling and administrative expenses would have been approximately ~~$1,500 higher. If transactions for the nine months ended July 31, 2020 were translated at exchange rates in effect during the same period~~$7,800 lower.

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Table of ~~2019, sales would have been approximately $14,600 higher while third-party costs and expenses would have been approximately $6,600 higher.~~

Contents

Nordson Corporation

Financial Condition

Liquidity and Capital Resources

During the ~~nine~~three months ended ~~July~~January 31, ~~2020,~~2021, cash and cash equivalents increased ~~$70,619.~~$17,445. Cash provided by operations during this period was ~~$309,958,~~$143,289, compared to ~~$236,431~~$116,275 for the ~~nine~~three months ended ~~July~~January 31, ~~2019.~~2020. This increase was primarily due to higher net income. Changes in operating assets and liabilities ~~decreased~~increased cash by ~~$14,021~~$29,416 in the ~~nine~~three months ended ~~July~~January 31, ~~2020,~~2021, compared to ~~decreasing cash by $96,017~~$28,486 in the comparable period of ~~2019. The primary reasons for this increase was due to high liquidation of working capital and changes in deferred taxes between periods.~~

2020.

Cash used in investing activities was ~~$163,192~~$7,895 for the ~~nine~~three months ended ~~July~~January 31, ~~2020,~~2021, compared to ~~$57,919~~$13,816 used in the comparable period of ~~2019. During the nine months ended July 31,~~ 2020 ~~cash~~which included capital expenditures of ~~$125,260 was used~~$7,917 and $13,881 for the Fluortek acquisition while cash of $12,110 was used for the Optical acquisition in the comparable period of 2019. Capital expenditures in the nine months ended July 31, 2020 were $36,096, compared to $46,002 in 2019.

same periods, respectively.

Cash used in financing activities was ~~$75,404~~$122,278 for the ~~nine~~three months ended ~~July~~January 31, ~~2020,~~2021, compared to ~~$129,607~~$138,219 used in the comparable period of ~~2019. Net Proceeds~~2020. Repayments of long-term debt were ~~$1,740 during~~$100,000 in the ~~nine~~three months ended ~~July~~January 31, ~~2020,~~2021, compared to ~~net proceeds~~$125,951 for the same period of ~~long-term debt of $36,009 in 2019.~~2020. Cash of ~~$65,737~~$22,672 was used for dividend payments and cash of ~~$51,897~~$5,310 was used for the purchase of treasury shares associated with employee benefit plans in the current year period, compared to ~~$60,325~~$21,915 and ~~$118,124,~~$4,311, respectively, in the comparable period of ~~2019.~~2020. Issuance of common shares related to employee benefit plans generated ~~$46,304~~$7,438 during the ~~nine~~three months ended ~~July~~January 31, ~~2020~~2021 compared to ~~$17,275~~$16,379 in ~~2019, resulting from recent executive retirement activity and increased stock option exercises.~~

2020.

The following is a summary of significant changes in balance sheet captions from October 31, ~~2019~~2020 to ~~July~~January 31, ~~2020. Goodwill increased by $87,175 driven~~2021. The decrease of $17,132 in accrued liabilities was primarily ~~by the Fluortek acquisition. Refer to Note 3 for an explanation of the change in goodwill~~ due to compensation adjustments and bonuses paid out in the ~~Fluortek acquisition. Current maturities~~first quarter of ~~long-term~~2021. Long-term debt decreased ~~$125,140~~$86,668 primarily ~~driven by~~due to a ~~payment~~repayment of $100,000 on our Term ~~Loan Agreement~~loan.

We believe that the combination of present capital resources, cash from operations and ~~a $25,000 payment on notes issued under our agreement with New York Life which matured in July 2020.~~ ~~Long-term debt increased $145,678 primarily due~~unused financing sources are more than adequate to ~~Euro loan borrowings during~~meet cash requirements for 2021. There are no significant restrictions limiting the ~~period.~~

~~Contractual Obligations~~

~~In March 2020, we amended, restated and extended~~transfer of funds from international subsidiaries to the term of our existing term loan facility with Bank of America Merrill Lynch International Limited. The interest rate is variable based on the EURIBOR rate. The Term Loan Agreement provides for the following term loans in two tranches: € 115,000 due in March 2023 and an additional € 150,000 that was drawn down in March 2020 and is due in March 2023. The weighted average interest rate at July 31, 2020 was 0.71%. At July 31, 2020, the balance outstanding was €265,000 ($312,022).parent company. We were in compliance with all covenants at ~~July~~January 31, ~~2020.~~

~~In April 2019, we amended, restated and extended~~2021. See Long-term debt in the ~~term of~~notes to these financial statements for additional details regarding our existing $605,000 term loan facility with a group of banks. The interest rate is variable based upon the LIBOR rate. At July 31, 2020, $405,000 was outstanding under this facility. The Term Loan Agreement provides for the following term loans in two tranches: $200,000 due in September 2022, and $205,000 due in March 2024. The weighted average interest rate for borrowings under this agreement was 0.82% at July 31, 2020. We were in compliance with all covenants at July 31, 2020.

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~~Nordson Corporation~~

In April 2019, we entered into a $850,000 unsecured, multicurrency credit facility with a group of banks, which amended, restated and extended our existing syndicated revolving credit agreement that was scheduled to expire in February 2020. This facility has a five-year term and includes a $75,000 subfacility for swing-line loans. It expires in April 2024. We had no balances outstanding under this facility at July 31, 2020 and October 31, 2019. We were in compliance with all covenants at July 31, 2020, and the amount we could borrow under the facility would not have been limited by any debt ~~covenants.~~

We entered into a $150,000 three-year Note Purchase and Private Shelf agreement with New York Life Investment Management LLC in 2011. In 2015, the amount of the facility was increased to $180,000, and in 2016 it was increased to $200,000. At July 31, 2020 and October 31, 2019, $5,556 and $30,556, respectively, was outstanding under this facility. Existing notes mature in September 2020 and bear interest at a fixed rate of 2.21%. We were in compliance with all covenants at July 31, 2020.

outstanding.

Outlook

We are optimistic about our longer-term growth opportunities in the diverse consumer non-durable, industrial, medical, electronics, consumer durable and automotive end markets we serve. We also support our customers with parts and consumables, where a significant percentage of our revenue is recurring. ~~For~~Based on backlog and order entry trends, and the ~~fourth quarter of 2020,~~correlation to sales timing, we expect 2021 full year sales growth to be ~~comparable~~approximately 4% to ~~slightly better than the third quarter of 2020 and operating profit is forecasted to improve modestly.~~

We move forward with caution given the potential for a lower-growth macroeconomic environment, continued trade negotiations between the U.S. and other countries and the marketplace effects of political instability in certain areas of the world. We6% over 2020. Additionally, we are ~~also monitoring the COVID-19 pandemic, which may negatively impact our business and results of operations for the fourth quarter and potentially beyond. We are unable to predict the ultimate impact that it may have on our business, future results of operations, financial position or cash flows.~~

Though the status of the global economy remains unclear, our growth potential has been demonstrated over time through our ability to build and enhance our core businesses by entering emerging markets, pursuing market adjacencies and driving growth initiatives. We drive value for our customers through our application expertise, differentiated technology, and direct sales and service support. Our priorities also are focused on operational efficiencies by employing continuous improvement methodologies in our business processes. We expect our efforts will continue to provide more than sufficient cash from operations to meet our liquidity needs, pay dividends to common shareholders and enable us to investforecasting full year 2021 earnings per diluted share in the ~~development~~range of ~~new applications and markets for our technologies.~~

$6.30 to $6.70.

Safe Harbor Statements Under The Private Securities Litigation Reform Act Of 1995

This Form 10-Q, particularly the “Management’s Discussion and Analysis”, 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 U.S. and global economies. Statements in this Form 10-Q 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.

~~Page 30~~

~~Nordson Corporation~~

In light of these risks and uncertainties, actual events and results may vary significantly from those included in or contemplated or implied by such 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.

Factors that could cause actual results to differ materially from the expected results are discussed in Part I, Item 1A, Risk Factors in our Form 10-K for the year ended October 31, ~~2019 and in Part II, Item 1A, Risk Factors in this report.~~

2020.

~~ITEM 3.~~

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Information regarding our financial instruments that are sensitive to changes in interest rates and foreign currency exchange rates was disclosed under Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” in our Form 10-K for the year ended October 31, ~~2019.~~2020. The information disclosed has not changed materially in the interim period since then.

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Nordson Corporation

~~ITEM 4.~~

ITEM 4. CONTROLS AND PROCEDURES

Our management with the participation of the principal executive officer (President and Chief Executive Officer) and principal financial officer (Executive Vice President, Chief Financial Officer) has reviewed and evaluated our disclosure controls and procedures (as defined in the Securities Exchange Act Rule 13a-15(e)) as of ~~July~~January 31, ~~2020.~~2021. 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 ~~July~~January 31, ~~2020~~2021 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 management, including the principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

There were no changes in our internal control over financial reporting that occurred during the three months ended ~~July~~January 31, ~~2020~~2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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~~Nordson Corporation~~

Part II – OTHER INFORMATION

~~ITEM 1.~~

ITEM 1. LEGAL PROCEEDINGS

~~We are involved in pending or potential litigation regarding environmental, product liability, patent, contract, employee and other matters arising from the normal course of business.~~ Including the litigation and environmental matters 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.

~~Class Action Litigation~~

See Contingencies note to the ~~execution of~~condensed consolidated financial statements for a ~~written settlement agreement and court approval. If the settlement agreement is approved, the class action lawsuit will be resolved.~~ Management believes, based on currently available information, that the ultimate outcome of the proceeding described above will not have a material adverse effect on the Company’s financial condition or results of operations.

~~Environmental~~

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 July 31, 2020 and October 31, 2019, our accrual for the ongoing operation, maintenance and monitoring obligation at the Site was $360 and $401, 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 accuracydiscussion 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~~contingencies and evolution of environmental laws and regulations, and the identification of presently unknown remediation requirements. Consequently, our liability could be different 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.

legal matters.

~~ITEM 1A.~~

ITEM 1A. RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the risk factors disclosed in “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended October 31, ~~2019~~2020 (the ~~“2019~~“2020 Form 10-K”). Many of the risks identified in the ~~2019~~2020 Form 10-K are, and will be further, exacerbated by the impact of the COVID-19 pandemic and the actions taken by governmental entities, businesses, individuals and others in response to the pandemic. ~~Other than as set forth below, there have been no material changes to the risk factors previously disclosed in the 2019 Form 10-K.~~

~~The COVID-19 pandemic may have a negative impact, which could be material, on our ability to operate, results of operations, financial condition, liquidity and capital investments.~~

In March 2020, the World Health Organization categorized the current coronavirus disease (“COVID-19”) as a pandemic, and the President of the United States declared the COVID-19 outbreak a national emergency. COVID-19 continues to spread throughout the United States and other countries across the world, and the duration and severity of its effects are currently unknown. The pandemic has resulted in governments around the world implementing increasingly stringent measures to help control the spread of the virus, including quarantines, social distancing protocols, “shelter in place” and “stay at home” orders, travel restrictions, business curtailments, school closures and other measures. In addition, governments and central banks in several parts of the world have enacted fiscal and monetary stimulus measures to counteract the impacts of COVID-19.

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~~Nordson Corporation~~

We manufacture and provide essential products and services to a variety of critical infrastructure customers around the globe, and we intend to continue providing our products and services to these customers. However, any negative impact of the COVID-19 pandemic and similar issues in the future could have a material adverse effect on our ability to operate, results of operations, financial condition, liquidity, and capital investments. In addition, preventive measures we have voluntarily put in place as well as other measures enacted by governments may have a material adverse effect on our business for an indefinite period of time, such as the potential shut down of certain locations, decreased employee availability, potential border closures, disruptions to the businesses of our channel partners and other potential adverse effects. Our suppliers and customers may also face these and other challenges, which could lead to a disruption in our supply chain, as well as decreased customer demand for our products and services. These issues may also materially affect our future access to our sources of liquidity, particularly our cash flows from operations, financial condition, capitalization and capital investments. The long-term economic impact and near-term financial impacts of the COVID-19 pandemic cannot be reasonably estimated at this time due to the uncertainty of future developments.

~~ITEM 2.~~

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table summarizes common stock repurchased by the Company during the three months ended ~~July~~January 31, ~~2020:~~

2021:

Total Number of

Approximate
Dollar Value

Shares Purchased

of Shares that

Total Number

Average

as Part of Publicly

May Yet Be Purchased

of Shares

Price Paid

Announced Plans

Under the Plans

Purchased⁽¹⁾

per Share

or Programs⁽²⁾

or Programs⁽²⁾

May 1, 2020 to May 31, 2020

—

—

—

$
447,703

June 1, 2020 to June 30, 2020

—

—

—

$
447,703

July 1, 2020 to July 31, 2020

—

—

—

$
447,703

Total

—

—


(in whole shares)	Total Number of Shares Purchased (1)	Average Price Paid per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)	Maximum Value of Shares that May Yet Be Purchased Under the Plans or Programs (2)
November 1, 2020 to November 30, 2020	1,136	193.01	1,136	$	446,884
December 1, 2020 to December 31, 2020	5,348	202.12	942	$	446,701
January 1, 2021 to January 31, 2021	16,533	190.38	16,306	$	443,599
Total	23,017		18,384

(1)Includes shares tendered for taxes related to vesting of restricted stock.

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.~~ Approximately $447,703 of the total $1,000,000 authorized remained available for share repurchases at July 31, 2020. 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 is being funded using cash from operations and proceeds from borrowings under our credit facilities.

(2)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. Approximately $443,599 of the total $1,000,000 authorized remained available for share repurchases at January 31, 2021. 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 is being funded using cash from operations and proceeds from borrowings under our credit facilities.

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ITEM 6.			EXHIBITS


~~31.1~~ 10.1		Separation Agreement and Release between John J. Keane and Nordson Corporation, effective February 1, 2021.
31.1		Certification pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934 by the Chief Executive Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2
~~31.2~~	Certification pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934 by the Chief Financial Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1
~~32.1~~	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
32.2
~~32.2~~	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
101
~~101~~	The following financial information from Nordson Corporation’s Quarterly Report on Form 10-Q for the three months ended ~~July~~January 31, ~~2020,~~2021 formatted in inline Extensible Business Reporting Language (iXBRL): (i) the Condensed Consolidated Statements of Income for the three ~~and nine~~ months ended ~~July~~January 31, ~~2020~~2021 and ~~2019,~~2020, (ii) the Condensed Consolidated Statements of Comprehensive Income for the three ~~and nine~~ months ended ~~July~~January 31, ~~2020~~2021 and ~~2019,~~2020, (iii) the Condensed Consolidated Balance Sheets at ~~July~~January 31, ~~2020~~2021 and October 31, ~~2019,~~2020, (iv) the Condensed Consolidated Statements of Shareholders’ Equity for the three ~~and nine~~ months ended ~~July~~January 31, ~~2020~~2021 and ~~2019,~~2020, (v) the Condensed Consolidated Statements of Cash Flows for the ~~nine~~three months ended ~~July~~January 31, ~~2020~~2021 and ~~2019,~~2020, and (vi) the Notes to Condensed Consolidated Financial Statements.
104
~~104~~	The cover page from Nordson Corporation’s Quarterly Report on Form 10-Q for the quarter ended ~~July~~January 31, ~~2020,~~2021, formatted in inline Extensible Business Reporting Language (iXBRL) (included in Exhibit 101).


*			Furnished herewith.

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Nordson Corporation

SIGNATURE

Pursuant to the requirements 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.

~~Date: September 4, 2020~~	~~Nordson Corporation~~
Date: March 4, 2021			Nordson Corporation

		By: /s/ Joseph P. Kelley
			Joseph P. Kelley
			Executive Vice President, Chief Financial Officer
			(Principal Financial Officer)

Page 35

	Nine Month Period Ended July 31, 2020
(In thousands, except for 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, 2019	$	12,253	$	483,116		$	2,747,650		$	(231,881	)	$	(1,430,093	)	$	1,581,045
Shares issued under company stock and employee benefit plans		—		12,330			—			—			4,049			16,379
Stock-based compensation		—		6,105			—			—			—			6,105
Purchase of treasury shares (26,223 shares)		—		—			—			—			(4,311	)		(4,311	)
Dividends declared ($0.38 per share)		—		—			(21,915	)		—			—			(21,915	)
Net income		—		—			52,004			—			—			52,004
Impact of adoption of ASU 2016-02 (See Note 2)		—		—			(1,055	)		—			—			(1,055	)
Other Comprehensive Income:
Foreign currency translation adjustments		—		—			—			2,793			—			2,793
Defined benefit pension and post-retirement plans adjustment		—		—			—			3,229			—			3,229
January 31, 2020	$	12,253	$	501,551		$	2,776,684		$	(225,859	)	$	(1,430,355	)	$	1,634,274
Shares issued under company stock and employee benefit plans		—		2,362			—			—			(194	)		2,168
Stock-based compensation		—		(72	)		—			—			—			(72	)
Purchase of treasury shares (300,894 shares)		—		—			—			—			(37,619	)		(37,619	)
Dividends declared ($0.38 per share)		—		—			(21,963	)		—			—			(21,963	)
Net income		—		—			92,079			—			—			92,079
Impact of adoption of ASU 2016-02 (See Note 2)							956									956
Other Comprehensive Income (Loss):
Foreign currency translation adjustments		—		—			—			(21,227	)		—			(21,227	)
Defined benefit pension and post-retirement plans adjustment		—		—			—			3,898			—			3,898
April 30, 2020	$	12,253	$	503,841		$	2,847,756		$	(243,188	)	$	(1,468,168	)	$	1,652,494
Shares issued under company stock and employee benefit plans		—		20,110			—			—			7,647			27,757
Stock-based compensation		—		2,972			—			—			—			2,972
Purchase of treasury shares (53,735 shares)		—		—			—			—			(9,967	)		(9,967	)
Dividends declared ($0.38 per share)		—		—			(21,859	)		—			—			(21,859	)
Net income		—		—			86,981			—			—			86,981
Impact of adoption of ASU 2016-02 (See Note 2)							(30	)								(30	)
Other Comprehensive Income:
Foreign currency translation adjustments		—		—			—			28,943			—			28,943
Defined benefit pension and post-retirement plans adjustment		—		—			—			2,621			—			2,621
July 31, 2020	$	12,253	$	526,923		$	2,912,848		$	(211,624	)	$	(1,470,488	)	$	1,769,912

	Nine Month Period Ended July 31, 2019
(In thousands, except for 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, 2018	$	12,253	$	446,555	$	2,488,375		$	(179,314	)	$	(1,317,128	)	$	1,450,741
Shares issued under company stock and employee benefit plans		—		1,016		—			—			2,591			3,607
Stock-based compensation		—		4,359		—			—			—			4,359
Purchase of treasury shares (901,545 shares)		—		—		—			—			(107,667	)		(107,667	)
Dividends declared ($0.35 per share)		—		—		(20,210	)		—			—			(20,210	)
Net income		—		—		48,567			—			—			48,567
Impact of adoption of ASU 2014-09		—		—		4,329			—			—			4,329
Other Comprehensive Income:
Foreign currency translation adjustments		—		—		—			16,463			—			16,463
Defined benefit pension and post-retirement plans adjustment		—		—		—			1,352			—			1,352
January 31, 2019	$	12,253	$	451,930	$	2,521,061		$	(161,499	)	$	(1,422,204	)	$	1,401,541
Shares issued under company stock and employee benefit plans		—		8,116		—			—			2,731			10,847
Stock-based compensation		—		4,869		—			—			—			4,869
Purchase of treasury shares (78,957 shares)		—		—		—			—			(10,422	)		(10,422	)
Dividends declared ($0.35 per share)		—		—		(20,029	)		—			—			(20,029	)
Net income		—		—		91,923			—			—			91,923
Other Comprehensive Income (Loss):
Foreign currency translation adjustments		—		—		—			(9,064	)		—			(9,064	)
Defined benefit pension and post-retirement plans adjustment		—		—		—			1,598			—			1,598
April 30, 2019	$	12,253	$	464,915	$	2,592,955		$	(168,965	)	$	(1,429,895	)	$	1,471,263
Shares issued under company stock and employee benefit plans		—		2,245		—			—			576			2,821
Stock-based compensation		—		3,791		—			—			—			3,791
Purchase of treasury shares (261 shares)		—		—		—			—			(35	)		(35	)
Dividends declared ($0.35 per share)		—		—		(20,086	)		—			—			(20,086	)
Net income		—		—		93,928			—			—			93,928
Other Comprehensive Income (Loss):
Foreign currency translation adjustments		—		—		—			(7,172	)		—			(7,172	)
Defined benefit pension and post-retirement plans adjustment		—		—		—			2,378			—			2,378
July 31, 2019	$	12,253	$	470,951	$	2,666,797		$	(173,759	)	$	(1,429,354	)	$	1,546,888

	Cumulative			Pension and			Accumulated
	translation			postretirement benefit			other comprehensive
	adjustments			plan adjustments			loss
Balance at October 31, 2019	$	(53,332	)	$	(178,549	)	$	(231,881	)
Amortization of prior service costs and net actuarial losses, net of tax of $(3,026)		—			9,748			9,748
Foreign currency translation adjustments		10,509			—			10,509
Balance at July 31, 2020	$	(42,823	)	$	(168,801	)	$	(211,624	)

	Number of Units		Weighted-Average Grant Date Fair Value
Restricted share units at October 31, 2019		—	$	—
Granted		7		160.68
Restricted share units at July 31, 2020		7	$	160.68

	Finance Leases			Operating Leases
Cash outflows for leases	$	5,814		$	15,935
Weighted average remaining lease term (years)	4.72 years			10.48 years
Weighted average discount rate		2.51	%		1.69	%

Year:	Finance Leases		Operating Leases
2020	$	6,479	$	20,709
2021		4,445		19,056
2022		2,735		16,106
2023		1,130		14,163
2024		669		12,160
Later years		3,210		68,085
Total minimum lease payments	$	18,668	$	150,279
Amounts representing interest		1,462		14,034
Present value of minimum lease payments	$	17,206	$	136,245

	July 31, 2020		October 31, 2019
Senior notes, due 2020-2025	$	109,900	$	140,800
Senior notes, due 2020-2027		85,714		92,857
Senior notes, due 2023-2030		350,000		350,000
Term loan, due 2022-2024		405,000		505,000
Euro loan, due 2023		312,022		128,219
Private shelf facility, due 2020		5,556		30,556
Development loans, due 2020-2026		—		951
		1,268,192		1,248,383
Less current maturities		43,598		168,738
Less unamortized debt issuance costs		3,512		4,241
Long-term maturities	$	1,221,082	$	1,075,404

					Total Number of		Approximate Dollar Value
					Shares Purchased		of Shares that
	Total Number		Average		as Part of Publicly		May Yet Be Purchased
	of Shares		Price Paid		Announced Plans		Under the Plans
	Purchased⁽¹⁾		per Share		or Programs⁽²⁾		or Programs⁽²⁾
May 1, 2020 to May 31, 2020		—		—		—	$	447,703
June 1, 2020 to June 30, 2020		—		—		—	$	447,703
July 1, 2020 to July 31, 2020		—		—		—	$	447,703
Total		—				—