NORDSON CORP (Form: 10-Q, Received: 03/07/2014 09:50:04)

Large accelerated filer

Accelerated filer

Non-accelerated filer

¨ (Do not check if smaller reporting company)

Smaller reporting company

FORM 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended January 31, 2014

¨	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)

(440) 892-1580

(Telephone Number)

Securities registered pursuant to Section 12(b) of the Act:

Common Shares without par value

Securities registered pursuant to Section 12(g) of the Act:

None

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 ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes x No ¨

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “large accelerated filer,” “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

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 January 31, 2014: 64,351,111

Nordson Corporation

Table of Contents


PART I – FINANCIAL INFORMATION			3

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)			3
C ONDENSED C ONSOLIDATED S TATEMENTS OF I NCOME			3
C ONDENSED C ONSOLIDATED S TATEMENTS OF C OMPREHENSIVE I NCOME			4
C ONDENSED C ONSOLIDATED B ALANCE S HEETS			5
C ONDENSED C ONSOLIDATED S TATEMENT OF C ASH F LOWS			6
N OTES TO C ONDENSED C ONSOLIDATED F INANCIAL S TATEMENTS			7

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			18
*Results of Operations*			19
*Financial Condition*			21
*Critical Accounting Policies*			23
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK			24
ITEM 4. CONTROLS AND PROCEDURES			24

PART II – OTHER INFORMATION			24

ITEM 1. LEGAL PROCEEDINGS			24
ITEM 1A. RISK FACTORS			24
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS			25
ITEM 6. EXHIBITS			26

SIGNATURE			27

Page 2

Nordson Corporation

Part I – FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS (UNAUDITED)

Condensed Consolidated Statements of Income


Three months ended	January 31, 2014			January 31, 2013
(In thousands, except for per share data)
Sales	$	359,420		$	347,043
Operating costs and expenses:
Cost of sales		164,638			149,814
Selling and administrative expenses		140,923			135,079
Severance and restructuring costs		—			586

		305,561			285,479

Operating profit		53,859			61,564
Other income (expense):
Interest expense		(3,575	)		(4,080	)
Interest and investment income		112			98
Other—net		(209	)		(1,200	)

		(3,672	)		(5,182	)

Income before income taxes		50,187			56,382
Income taxes		15,307			14,371

Net income	$	34,880		$	42,011

Average common shares		64,221			64,273
Incremental common shares attributable to outstanding stock options, restricted stock, and deferred stock-based compensation		639			676

Average common shares and common share equivalents		64,860			64,949

Basic earnings per share	$	0.54		$	0.65

Diluted earnings per share	$	0.54		$	0.65

Dividends declared per share	$	0.18		$	0.15

See accompanying notes.

Page 3

Nordson Corporation

Condensed Consolidated Statements of Comprehensive Income


Three months ended	January 31, 2014			January 31, 2013
(In thousands)
Net income	$	34,880		$	42,011
Components of other comprehensive income (loss), net of tax:
Translation adjustments		(5,610	)		3,371
Amortization of prior service cost and net actuarial losses		1,813			2,735

Total other comprehensive income (loss)		(3,797	)		6,106

Total comprehensive income	$	31,083		$	48,117

See accompanying notes.

Page 4

Nordson Corporation

Condensed Consolidated Balance Sheets


	January 31, 2014			October 31, 2013
(In thousands)
Assets
Current assets:
Cash and cash equivalents	$	46,858		$	42,375
Receivables - net		279,978			308,707
Inventories - net		200,617			198,401
Deferred income taxes		29,101			29,354
Prepaid expenses		26,707			21,733

Total current assets		583,261			600,570
Property, plant and equipment - net		201,892			200,979
Goodwill		938,114			939,211
Intangible assets - net		262,542			269,073
Other assets		32,513			32,456

	$	2,018,322		$	2,042,289

Liabilities and shareholders’ equity
Current liabilities:
Notes payable	$	7,945		$	3,604
Accounts payable		62,101			62,123
Income taxes payable		18,417			14,522
Accrued liabilities		79,574			110,528
Customer advanced payments		29,280			28,341
Current maturities of long-term debt		10,779			10,832
Current obligations under capital leases		5,532			5,521

Total current liabilities		213,628			235,471
Long-term debt		613,401			638,158
Deferred income taxes		80,496			79,977
Pension obligations		100,518			103,754
Postretirement obligations		60,182			59,794
Other long-term liabilities		38,422			37,272
Shareholders’ equity:
Common shares		12,253			12,253
Capital in excess of stated value		310,577			304,549
Retained earnings		1,385,903			1,362,584
Accumulated other comprehensive loss		(61,177	)		(57,380	)
Common shares in treasury, at cost		(735,881	)		(734,143	)

Total shareholders’ equity		911,675			887,863

	$	2,018,322		$	2,042,289

See accompanying notes.

Page 5

Nordson Corporation

Condensed Consolidated Statement of Cash Flows


Three months ended	January 31, 2014			January 31, 2013
(In thousands)
Cash flows from operating activities:
Net income	$	34,880		$	42,011
Depreciation and amortization		14,488			13,049
Non-cash stock compensation		5,542			3,555
Deferred income taxes		(230	)		1,232
Other non-cash expense		168			612
Loss on sale of property, plant and equipment		192			133
Tax benefit from the exercise of stock options		(1,088	)		(2,076	)
Changes in operating assets and liabilities		(6,265	)		(18,761	)

Net cash provided by operating activities		47,687			39,755
Cash flows from investing activities:
Additions to property, plant and equipment		(7,891	)		(7,524	)
Proceeds from sale of property, plant and equipment		13			26
Acquisition of businesses, net of cash acquired		—			(1,231	)

Net cash used in investing activities		(7,878	)		(8,729	)
Cash flows from financing activities:
Proceeds from short-term borrowings		5,258			6
Repayment of short-term borrowings		(963	)		—
Proceeds from long-term debt		5,000			11,000
Repayment of long-term debt		(28,890	)		(21,477	)
Repayment of capital lease obligations		(1,543	)		(1,332	)
Issuance of common shares		2,224			3,143
Purchase of treasury shares		(4,564	)		(2,591	)
Tax benefit from the exercise of stock options		1,088			2,076
Dividends paid		(11,561	)		(9,641	)

Net cash used in financing activities		(33,951	)		(18,816	)
Effect of exchange rate changes on cash		(1,375	)		983

Increase in cash and cash equivalents		4,483			13,193
Cash and cash equivalents:
Beginning of year		42,375			41,239

End of quarter	$	46,858		$	54,432

See accompanying notes.

Page 6

Nordson Corporation

Notes to Condensed Consolidated Financial Statements

January 31, 2014

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 otherwise noted, all references to years relate to our fiscal year ending October 31.

Significant accounting policies

Basis of presentation . The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes 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 months ended January 31, 2014 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 included in our annual report on Form 10-K for the year ended October 31, 2013.

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 . Most of our revenues are recognized upon shipment, provided that persuasive evidence of an arrangement exists, the sales price is fixed or determinable, collectibility is reasonably assured, and title and risk of loss have passed to the customer.

A relative selling price hierarchy exists for determining the selling price of deliverables in multiple deliverable arrangements. Vendor specific objective evidence (VSOE) is used, if available. Third-party evidence (TPE) is used if VSOE is not available, and best estimated selling price is used if neither VSOE nor TPE is available. Our multiple deliverable arrangements 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 perfunctory. Revenue for undelivered items is deferred and included within accrued liabilities in the accompanying balance sheet. Revenues deferred in 2014 and 2013 were not material.

Earnings per share . Basic earnings per share are computed based on the weighted-average number of common shares outstanding during each year, while diluted earnings per share are based on the weighted-average number of common shares and common share equivalents outstanding. Common share equivalents consist of shares issuable upon exercise of stock options computed using the treasury stock method, as well as restricted shares and deferred stock-based compensation. Options whose exercise price is higher than the average market price are excluded from the calculation of diluted earnings per share because the effect would be anti-dilutive. No options were excluded from the 2014 and 2013 calculations of diluted earnings per share.

Page 7

Nordson Corporation

Recently issued accounting standards

In February 2013, the FASB issued an Accounting Standards Update (ASU) requiring new disclosures about reclassifications from accumulated other comprehensive income to net income. Companies are required to present these disclosures either on the face of the statement where net income is presented or in the notes to the consolidated financial statements. We adopted this standard on November 1, 2013, and required disclosures are included in Note 7. The updated standard did not impact our consolidated financial statements.

In July 2013, the FASB issued an ASU which requires the netting of unrecognized tax benefits against a deferred tax asset for a loss or other carry forward that would apply in settlement of uncertain tax positions. Under the new standard, unrecognized tax benefits will be netted against all available same-jurisdiction loss or other tax carry forwards that would be utilized, rather than only against carry forwards that are created by the unrecognized tax benefits. The new guidance is effective prospectively to all existing unrecognized tax benefits, but entities can choose to apply it retrospectively. The guidance will be effective for us in our first quarter of 2015, with early adoption permitted. We are currently assessing the impact this guidance will have on our consolidated financial statements.

Inventories

At January 31, 2014 and October 31, 2013, inventories consisted of the following:


	January 31, 2014			October 31, 2013
Raw materials and component parts	$	86,044		$	81,943
Work-in-process		35,350			34,756
Finished goods		113,051			115,078

		234,445			231,777
Obsolescence and other reserves		(26,399	)		(26,579	)
LIFO reserve		(7,429	)		(6,797	)

	$	200,617		$	198,401

Goodwill and other intangible assets

Changes in the carrying amount of goodwill for the three months ended January 31, 2014 by operating segment are as follows:


	Adhesive Dispensing Systems			Advanced Technology Systems			Industrial Coating Systems		Total
Balance at October 31, 2013	$	407,269		$	507,884		$	24,058	$	939,211
Currency effect		(1,031	)		(66	)		—		(1,097	)

Balance at January 31, 2014	$	406,238		$	507,818		$	24,058	$	938,114

Page 8

Nordson Corporation

Accumulated impairment losses, which were recorded in 2009, were $232,789 at January 31, 2014 and October 31, 2013. Of these losses, $229,173 related to the Advanced Technology Systems segment, and $3,616 related to the Industrial Coating Systems segment.

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


	January 31, 2014
	Carrying Amount		Accumulated Amortization		Net Book Value
Customer relationships	$	171,247	$	32,184	$	139,063
Patent/technology costs		85,645		22,865		62,780
Trade name		67,907		8,921		58,986
Non-compete agreements		8,388		6,936		1,452
Other		1,393		1,132		261

Total	$	334,580	$	72,038	$	262,542


	October 31, 2013
	Carrying Amount		Accumulated Amortization		Net Book Value
Customer relationships	$	171,489	$	28,872	$	142,617
Patent/technology costs		85,414		21,145		64,269
Trade name		67,865		7,856		60,009
Non-compete agreements		9,965		8,091		1,874
Other		1,400		1,096		304

Total	$	336,133	$	67,060	$	269,073

Amortization expense for the three months ended January 31, 2014 and 2013 was $6,330 and $5,801, respectively.

Pension and other postretirement plans

The components of net periodic pension cost for the three months ended January 31, 2014 and January 31, 2013 were:


	U.S.						International
	2014			2013			2014			2013
Service cost	$	2,162		$	2,316		$	697		$	547
Interest cost		3,415			3,094			792			729
Expected return on plan assets		(4,161	)		(3,828	)		(431	)		(388	)
Amortization of prior service cost (credit)		59			39			(19	)		(23	)
Amortization of net actuarial loss		2,186			3,486			387			355

Total benefit cost	$	3,661		$	5,107		$	1,426		$	1,220

Page 9

Nordson Corporation

The components of other postretirement benefit cost for the three months ended January 31, 2014 and January 31, 2013 were:


	U.S.						International
	2014			2013			2014			2013
Service cost	$	253		$	336		$	7		$	9
Interest cost		729			678			9			10
Amortization of prior service credit		(112	)		(118	)		—			—
Amortization of net actuarial loss		298			553			(3	)		(1	)

Total benefit cost	$	1,168		$	1,449		$	13		$	18

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 months ended January 31, 2014 was 30.5%, compared to 25.5% for the three months ended January 31, 2013.

The effective tax rate for the three months ending January 31, 2014, was higher than the comparable prior year period due to the expiration of the Federal Research and Development Tax Credit (Federal R&D Tax Credit) on December 31, 2013 and certain discrete tax items recorded in the prior year.

During the three months ending January 31, 2013, we recorded a favorable adjustment to unrecognized tax benefits of $900 primarily related to expiration of certain foreign statutes of limitations. On January 2, 2013, the American Taxpayer Relief Act of 2012 was enacted which retroactively reinstated and extended the Federal R&D Tax Credit from January 1, 2012 to December 31, 2013 and extended certain other tax provisions. As a result, our income tax provision for the three months ended January 31, 2013 included a discrete tax benefit of $1,700 related to 2012.

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, 2013	$	26,699		$	(84,079	)	$	(57,380	)
Reclassification adjustments, net of tax of $(989)		—			1,813			1,813
Current period charge		(5,610	)		—			(5,610	)

Balance at January 31, 2014	$	21,089		$	(82,266	)	$	(61,177	)

Stock-based compensation

During the 2013 Annual Meeting of Shareholders on February 26, 2013, our shareholders approved the 2012 Stock Incentive and Award Plan (the “2012 Plan”). The 2012 Plan provides for the granting of stock options, stock appreciation rights, restricted shares, performance shares, stock purchase rights, stock equivalent units, cash awards and other stock or performance-based incentives. A maximum of 2,900 common shares is available for grant under the Plan, inclusive of shares available to be granted under the 2008 Plan immediately prior to shareholder approval of the 2012 Plan.

Page 10

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 the occurrence of events that involve or may result in a change of control. For grants made prior to November 2012, vesting would cease upon retirement, death or disability, and unvested shares would be forfeited. For grants made in or after November 2012, 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 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 $3,666 and $1,204 in the three months ended January 31, 2014 and 2013, respectively. Most of the increase is related to accelerated amortization of the cost of options.

The following table summarizes activity related to stock options for the three months ended January 31, 2014:


	Number of Options			Weighted-Average Exercise Price Per Share		Aggregate Intrinsic Value		Weighted Average Remaining Term
Outstanding at October 31, 2013		1,749		$	34.63
Granted		276		$	71.75
Exercised		(81	)	$	27.47
Forfeited or expired		(6	)	$	46.18

Outstanding at January 31, 2014		1,938		$	40.19	$	57,130		6.5 years

Vested or expected to vest at January 31, 2014		1,913		$	39.85	$	56,999		6.4 years
Exercisable at January 31, 2014		1,187		$	28.80	$	48,102		5.1 years

At January 31, 2014, there was $13,467 of total unrecognized compensation cost related to nonvested stock options. That cost is expected to be amortized over a weighted average period of approximately 1.5 years.

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:


Three months ended	January 31, 2014	January 31, 2013
Expected volatility	44.2%-44.7%	45.3%-46.9%
Expected dividend yield	1.03%	1.01%
Risk-free interest rate	1.51%-1.79%	0.75%-0.90%
Expected life of the option (in years)	5.4-6.1	5.4-6.1

The weighted-average expected volatility used to value the 2014 and 2013 options was 44.5%, and 46.3%, respectively.

Page 11

Nordson Corporation

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 three months ended January 31, 2014 and 2013 was $27.94 and $24.11, respectively.

The total intrinsic value of options exercised during the three months ended January 31, 2014 and 2013 was $3,654 and $6,583, respectively. Cash received from the exercise of stock options for the three months ended January 31, 2014 and 2013 was $2,224 and $3,143, respectively. The tax benefit realized from tax deductions from exercises for the three months ended January 31, 2014 and 2013 was $1,088 and $2,076, 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.

For employee recipients, in the event of termination of employment due to early retirement, restricted shares granted within 12 months prior to termination are forfeited, and other restricted shares vest on a pro-rata basis. In the event of termination of employment due to retirement at normal retirement age (age 65) restricted shares granted within 12 months prior to termination are forfeited, and, for other restricted shares, the restriction period will terminate and the shares will vest and be transferable. Restrictions lapse in the event of a recipient’s disability or death. Termination for any other reason prior to the lapse of any restrictions results in forfeiture of the shares.

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 market value on the date of grant is expensed over the vesting period. Tax benefits arising from the lapse of restrictions are recognized when realized and credited to capital in excess of stated value.

The following table summarizes activity related to restricted shares during the three months ended January 31, 2014:


	Number of Shares			Weighted-Average Grant Date Fair Value
Restricted shares at October 31, 2013		82		$	52.67
Granted		22		$	71.75
Vested		(34	)	$	46.92

Restricted shares at January 31, 2014		70		$	61.62

As of January 31, 2014, there was $2,961 of unrecognized compensation cost related to restricted shares. The cost is expected to be amortized over a weighted average period of 2.1 years. The amount charged to expense related to restricted shares during the three months ended January 31, 2014 and 2013 was $472 and $581, respectively. These amounts included common share dividends for the three months ended January 31, 2014 and 2013 of $13 and $15, respectively.

Page 12

Nordson Corporation

The following table summarizes activity related to restricted share units during the three months ended January 31, 2014:


	Number of Units			Weighted-Average Grant Date Fair Value
Restricted share units at October 31, 2013		12		$	51.79
Granted		12		$	71.82
Vested		(6	)	$	43.73

Restricted share units at January 31, 2014		18		$	68.71

As of January 31, 2014, there was $660 of remaining expense to be recognized related to outstanding restricted share units, which is expected to be recognized over a weighted average period of 0.8 years. The amount charged to expense related to restricted share units during the three months ended January 31, 2014 and 2013 was $222 and $116, respectively.

Directors Deferred 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 three months ended January 31, 2014:


	Number of Shares			Weighted-Average Grant Date Fair Value
Outstanding at October 31, 2013		148		$	23.22
Restricted share units vested		6		$	43.73
Dividend equivalents		1		$	72.24
Distributions		(15	)	$	18.70

Outstanding at January 31, 2014		140		$	24.79

The amount charged to expense related to director deferred compensation for the three months ended January 31, 2014 and 2013 was $27 and $56, respectively.

Page 13

Nordson Corporation

Long-Term Incentives

Executive officers and selected other key employees participate in a common share- based long-term incentive compensation program. Payouts vary based on the degree to which corporate financial performance exceeds predetermined threshold, target and maximum performance levels over three-year performance periods. No payout will occur unless certain threshold performance objectives are exceeded.

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. This value was $69.25 per share for 2014, $59.59 per share for 2013 and $42.12 per share for 2012. During the three months ended January 31, 2014 and 2013, $1,142 and $1,613, respectively, was charged to expense. The cumulative amount recorded in shareholders’ equity at January 31, 2014 was $4,408.

Our executive officers and other highly compensated employees may elect to defer up to 100% of their base pay and annual cash incentive compensation and for executive officers, up to 90% of their share-based long-term incentive compensation plan payout each year. Additional share units are credited for quarterly dividends paid on our common shares. The amount of expense related to dividends paid under this plan for the three months ended January 31, 2014 was $26. There was no expense for the three months ended January 31, 2013.

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 Consolidated Balance Sheet.

Following is a reconciliation of the product warranty liability for the three months ended January 31, 2014 and 2013:


	January 31, 2014			January 31, 2013
Beginning balance	$	9,409		$	8,929
Accruals for warranties		1,624			1,725
Warranty payments		(1,578	)		(2,062	)
Currency effect		(20	)		29

Ending balance	$	9,435		$	8,621

10.

Operating segments

We conduct business across three primary business segments: Adhesive Dispensing Systems, Advanced Technology Systems, and Industrial Coating Systems. 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 Consolidated Statement of Income (interest and investment income, interest expense and other income/expense) are excluded from the measure of segment profitability reviewed by our chief operating decision maker and are not presented by operating segment. The accounting policies of the segments are generally the same as those described in Note 1, Significant Accounting Policies, of our annual report on Form 10-K for the year ended October 31, 2013.

Page 14

Nordson Corporation

The following table presents information about our reportable segments:


	Adhesive Dispensing Systems			Advanced Technology Systems			Industrial Coating Systems		Corporate			Total
Three months ended January 31, 2014
Net external sales	$	209,471		$	97,541		$	52,408	$	—		$	359,420
Operating profit (loss)		47,920			10,378			4,956		(9,395	)		53,859
Three months ended January 31, 2013
Net external sales	$	183,378		$	108,709		$	54,956	$	—		$	347,043
Operating profit (loss)		43,674	(a)		20,733	(b)		7,161		(10,004	)		61,564

(a)	Includes $258 of severance and restructuring costs in 2013.

(b)	Includes $328 of severance and restructuring costs in 2013.

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


Three months ended	January 31, 2014			January 31, 2013
Total profit for reportable segments	$	53,859		$	61,564
Interest expense		(3,575	)		(4,080	)
Interest and investment income		112			98
Other-net		(209	)		(1,200	)

Income before income taxes	$	50,187		$	56,382

We have significant sales in the following geographic regions:


Three months ended	January 31, 2014		January 31, 2013
United States	$	115,506	$	111,304
Americas		27,265		27,687
Europe		116,475		94,635
Japan		26,245		35,596
Asia Pacific		73,929		77,821

Total net external sales	$	359,420	$	347,043

Page 15

Nordson Corporation

11.

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 table presents the classification of our assets and liabilities measured at fair value on a recurring basis at January 31, 2014:


	Total		Level 1		Level 2		Level 3
Assets:
Rabbi trust (a)	$	13,491	$	—	$	13,491	$	—
Foreign currency forward contracts (b)		1,581		—		1,581		—

Total assets at fair value	$	15,072	$	—	$	15,072	$	—

Liabilities:
Deferred compensation plans (c)	$	7,827	$	7,827	$	—	$	—
Foreign currency forward contracts (b)		2,674		—		2,674		—

Total liabilities at fair value	$	10,501	$	7,827	$	2,674	$	—

(a)	We maintain a rabbi trust that serves as an investment to shadow our deferred compensation plan liability. The investment assets of the trust consist of life insurance policies for which we recognize income or expense based upon changes in cash surrender value.

(b)

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 currency forward contracts are valued using market exchange rates. Foreign currency forward contracts are not designated as hedges.

(c)

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.

12.

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 currencies are recorded 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. We do not use financial instruments for trading or speculative purposes.

Page 16

Nordson Corporation

Gains and losses on foreign currency forward contracts are recorded in “Other – net” on the Consolidated Statement of Income together with the transaction gain or loss from the hedged balance sheet position. For the three months ended January 31, 2014, we recognized losses of $3,429 on foreign currency forward contracts and gains of $3,512 from the change in fair value of balance sheet positions. For the three months ended January 31, 2013, we recognized gains of $3,512 on foreign currency forward contracts and losses of $5,027 from the change in fair value of balance sheet positions.

The following table summarizes, by currency, the contracts outstanding at January 31, 2014:


	Sell				Buy
	Notional Amounts		Fair Market Value		Notional Amounts		Fair Market Value
Euro	$	190,022	$	188,780	$	139,522	$	138,314
British pound		16,998		17,351		30,994		31,295
Japanese yen		9,793		9,745		2,150		2,179
Australian dollar		934		926		9,031		8,538
Hong Kong dollar		1,146		1,145		60,383		60,246
Singapore dollar		—		—		10,013		9,785
Others		3,868		3,793		25,255		24,903

Total	$	222,761	$	221,740	$	277,348	$	275,260

The carrying amounts and fair values of financial instruments at January 31, 2014, other than receivables and accounts payable, are shown in the table below. The carrying values of receivables and accounts payable approximate fair value due to the short-term nature of these instruments.


	Carrying Amount			Fair Value
Cash and cash equivalents	$	46,858		$	46,858
Notes payable		7,945			7,945
Long-term debt, including current maturities		624,180			612,313
Foreign currency forward contracts (net)		(1,093	)		(1,093	)

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

•

Cash, cash equivalents and notes payable are valued at their carrying amounts due to the relatively short period to maturity of the 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.

•

Foreign currency forward contracts are valued using observable market based inputs, which are considered to be Level 2 inputs under the fair value hierarchy.

Page 17

Nordson Corporation

13.

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 environmental matter discussed below, it is our opinion, after consultation with legal counsel, that resolutions of these matters are not expected to result in a material effect on our financial condition, quarterly or annual operating results or cash flows.

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 January 31, 2014 and October 31, 2013 our accrual for the ongoing operation, maintenance and monitoring obligation at the Site was $668. 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.

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 dispensing and processing adhesives, coatings, polymers, sealants and biomaterials, and for managing fluids, testing and inspecting for quality, treating surfaces and curing. 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 5,800 employees and direct operations in more than 30 countries.

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 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 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.

Page 18

Nordson Corporation

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, 2013. There have been no significant changes in critical accounting policies, management estimates or accounting policies followed since the year ended October 31, 2013.

Results of Operations

Sales

Worldwide sales for the three months ended January 31, 2014 were $359,420, a 3.6% increase from sales of $347,043 for the comparable period of 2013. Sales volume increased 4.7%, consisting of 6.1% from acquisitions offset by a reduction in organic volume of 1.4%. Unfavorable currency effects reduced sales by 1.1%.

Sales of the Adhesive Dispensing Systems segment for the three months ended January 31, 2014 were $209,471, an increase of 14.2% from the comparable period of 2013. Sales volume increased 15.8%, consisting of 11.6% from the first-year effect of the Kreyenborg acquisition, and an increase of 4.2% in organic volume. Unfavorable currency translation effects reduced sales by 1.6%. Growth was driven by our food and industrial packaging end markets, as well as plastics processing end markets. Sales volume, inclusive of acquisitions, increased in the United States, the Americas, Europe and Asia Pacific, and was offset by a slight decrease in Japan.

Sales of the Advanced Technology Systems segment for the three months ended January 31, 2014 were $97,541 compared to $108,709 in the comparable period of 2013, a 10.3% decrease. Sales volume decreased 10.0%, and unfavorable currency effects reduced sales by 0.3%. Softness in automated dispensing equipment for mobile device and other niche electronic end markets was offset by growth in fluid management serving medical and general industrial end markets and for test and inspection equipment in electronics end markets. Within this segment, sales volume increases in the United States and Europe were offset by decreases in the Americas, Japan and Asia Pacific.

Sales of the Industrial Coating Systems segment for the three months ended January 31, 2014 were $52,408, a decrease of 4.6% from the comparable period of 2013. Sales volume decreased 3.4% and unfavorable currency effects reduced sales by 1.2%. Sales growth in powder and liquid coating product lines for consumer and industrial durable goods end markets was offset by softness in our large dollar systems supporting automotive OEMs and UV end markets. Sales volume increased in the United States and the Americas and was offset by decreases in Europe, Japan and Asia Pacific.

Sales outside the United States accounted for 67.9% of sales in the three months ended January 31, 2014 and 2013. On a geographic basis, sales in the United States increased 3.8% for the three months ended January 31, 2014 compared to the three months ended January 31, 2013. The increase in sales volume consisted of 2.5% organic growth and 1.3% from acquisitions. Sales in the Americas region were down 1.5%, driven primarily by unfavorable currency effects of 3.6%. Sales volume increased by 2.1%, which consisted of 1.9% organic growth and 0.2% from acquisitions. Sales in Europe increased 23.1%, which consisted of a volume increase of 20.7% and 2.4% from favorable currency effects. This increase in sales volume consisted of 7.9% organic growth and 12.8% from acquisitions. Sales in Japan decreased 26.3% from the comparable period of the prior year. Sales volume was lower by 12.2%, which consisted of a decrease in organic volume of 15.1% offset by 2.9% growth from acquisitions, and unfavorable currency effects reduced sales by 14.1%. Asia Pacific sales decreased 5.0% from the comparable period of 2013. Sales volume was lower by 4.8%, which consisted of a decrease in organic volume of 13.2% offset by 8.4% growth from acquisitions, and unfavorable currency effects reduced sales by 0.2%.

Page 19

Nordson Corporation

Operating Profit

Cost of sales for the three months ended January 31, 2014 were $164,638, up from $149,814 in 2013, an increase of 9.9%. The gross margin was 54.2% for the three months ended January 31, 2014, compared to 56.8% in 2013. The decrease was caused by the dilutive effect of our fourth quarter 2013 Kreyenborg acquisition and short-term purchase price accounting valuation adjustment associated with the acquisition. In addition, the combination of product mix and less absorption as a result of lower sales volume in the Advanced Technology segment also impacted total company gross margin.

Selling and administrative expenses for the three months ended January 31, 2014 were $140,923, compared to $135,665 for the comparable period of 2013, which included $586 of severance and restructuring costs. The current quarter’s selling and administrative expense increase of $5,258, or 3.9%, was primarily due to the first-year effect of the Kreyenborg acquisition, higher compensation expenses related to increased employment levels and spending for initiatives to generate future growth and improve performance. Selling and administrative expenses for the three months ended January 31, 2014 as a percent of sales increased to 39.2% from 39.1% for the comparable period of 2013.

During the three months ended January 31, 2013, we recognized severance costs of $258 in the Adhesive Dispensing Systems segment and $328 in the Advanced Technology Systems segment, both as a result of implementing certain restructuring initiatives to optimize global operations.

Operating profit as a percentage of sales was 15.0% in the three months ended January 31, 2014, compared to 17.7% for the comparable period in 2013. This decrease was primarily affected by lower sales volume in the Advanced Technology segment, as well as the first-year effect of the Kreyenborg acquisition.

Operating profit as a percent of sales for the Adhesive Dispensing Systems segment decreased to 22.9% for the three months ended January 31, 2014, compared to 23.8% for the comparable period of the prior year. The decrease was primarily due to a short-term purchase accounting valuation adjustment associated with the Kreyenborg acquisition as mentioned above. For the Advanced Technology Systems segment, operating profit for the first three months as a percent of sales decreased to 10.6% in the current year from 19.1% in the first three months of 2013. The decrease was primarily due to lower sales volume in automated dispensing equipment for mobile device and other niche electronic end markets. Operating profit as a percent of sales for the Industrial Coating Systems segment was 9.5% for the three months ended January 31, 2014, down from 13.0% in the same period of 2013. The decrease was primarily due to the quarter’s level of revenue and product mix in this segment.

Interest and Other Income (Expense)

Interest expense for the three months ended January 31, 2014 was $3,575, down from $4,080 for the three months ended January 31, 2013, due to lower borrowing levels.

Other expense was $209 for the three months ended January 31, 2014, compared to $1,200 for the three months ended January 31, 2013. Foreign exchange losses of $1,515 were included in 2013.

Page 20

Nordson Corporation

Income Taxes

The effective tax rates for the three months ended January 31, 2014 was 30.5%, compared to 25.5% for the three months ended January 31, 2013. The effective tax rate for the three months ending January 31, 2014, was higher than the comparable prior year period due to the expiration of the Federal Research and Development Tax Credit (Federal R&D Tax Credit) on December 31, 2013 and certain discrete tax items recorded in the prior year.

Net Income

Net income for the three months ended January 31, 2014 was $34,880, or $0.54 per share on a diluted basis, compared to $42,011 or $0.65 per share on a diluted basis in 2013.

Foreign Currency Effects

In the aggregate, average exchange rates for the three months ended January 31, 2014 used to translate international sales and operating results into U.S. dollars were unfavorable compared with average exchange rates existing during the comparable 2013 period. 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 January 31, 2014 were translated at exchange rates in effect during the same period of 2013, sales would have been approximately $3,973 higher while third-party costs and expenses would have been approximately $1,139 higher.

Financial Condition

During the three months ended January 31, 2014, cash and cash equivalents increased $4,483. Cash provided by operations during this period was $47,687, compared to $39,755 for the three months ended January 31, 2013. Cash of $55,040 was generated from net income adjusted for non-cash income and expenses (consisting of depreciation and amortization, non-cash stock compensation, deferred income taxes, other non-cash expense and gain on sale of property, plant and equipment), compared to $60,592 for the same three-month period of the prior year. Changes in operating assets and liabilities and the effect of the tax benefit from the exercise of stock options used $7,353 of cash in the three months ended January 31, 2014, compared to $20,837 in the comparable period of 2013.

Cash used in investing activities was $7,878 for the three months ended January 31, 2014, compared to $8,729 in the comparable period of the prior year. Capital expenditures in the three months ended January 31, 2014 were $7,891, compared to $7,524 in the comparable period of 2013. Current year expenditures were focused on production machinery and continued investment in our information systems platform. In the three months ended January 31, 2013, cash of $1,231 was used for the acquisition of certain assets of Kodama Chemical Industry Co., Ltd., a Japanese licensed distributor of our EDI business.

Cash used in financing activities was $33,951 for the three months ended January 31, 2014, compared to $18,816 for the three months ended January 31, 2013. Principal uses of cash in the current year were $19,595 for the net repayment of long-term and short-term borrowings and $11,561 for dividend payments.

Page 21

Nordson Corporation

The following is a summary of significant changes in balance sheet captions from the end of 2013 to January 31, 2014. Receivables decreased $28,729 due to lower sales in the first quarter of 2014 compared to the fourth quarter of 2013, which is consistent with the seasonality of our business. Inventories increased $2,216 due to the higher level of business activity expected in the second quarter of 2014 as compared to the first quarter. Prepaid expenses increased $4,974 primarily due to annual insurance and other payments made in the first quarter of the year. The decrease of $6,531 in intangible assets – net was primarily due to amortization.

The increase of $3,895 in income taxes payable was primarily due to the timing of tax payments. The decrease of $30,954 in accrued liabilities was primarily due to payments of annual incentive compensation in the first quarter. The $3,236 decrease in long-term pension obligations was due to contributions to U.S. plans during the three months ended January 31, 2014.

The board of directors approved a repurchase program of up to $200,000 in August 2013. Uses for repurchased shares include the funding of benefit programs including stock options, restricted stock and 401(k) matching. 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. During the three months ended January 31, 2014, 29 shares were repurchased under this program for a total amount of $2,002.

Contractual Obligations

We have a $500,000 unsecured, multicurrency credit facility with a group of banks that expires in December 2016 and may be increased to $750,000 under certain conditions. At January 31, 2014, $236,960 was outstanding under this facility, compared to $254,000 outstanding at October 31, 2013. This facility contains customary events of default and covenants related to limitations on indebtedness and the maintenance of certain financial ratios. We were in compliance with all debt covenants at January 31, 2014, 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 Private Shelf Note agreement with New York Life Investment Management LLC in 2011, and the amount of the facility was increased from $150,000 to $175,000 in 2013. Borrowings under the agreement may be up to 12 years, with an average life of up to 10 years, and are unsecured. The interest rate on each borrowing can be fixed or floating and is based upon the market rate at the borrowing date. At January 31, 2014 and October 31, 2013, $63,889 was outstanding under this facility at a fixed rate of 2.21 percent per annum. This agreement contains customary events of default and covenants related to limitations on indebtedness and the maintenance of certain financial ratios. We were in compliance with all covenants at January 31, 2014, and the amount we could borrow would not have been limited by any debt covenants.

In 2012, we entered into a Note Purchase Agreement with a group of insurance companies under which we sold $200,000 of Senior Notes. The notes mature between July 2017 and July 2025 and bear interest at fixed rates between 2.27 percent and 3.13 percent. We were in compliance with all covenants at January 31, 2014.

In 2013, we entered into a € 100,000 agreement with The Bank of Tokyo-Mitsubishi UFJ, Ltd. The term of the agreement is three years and can be extended by one year at the end of the third and fourth anniversaries. The interest rate is variable based upon the EUR LIBOR rate. At January 31, 2014, there was € 90,000 ($121,392) outstanding under this agreement, compared to € 95,000 ($129,058) outstanding at October 31, 2013. The interest rate was 1.16 percent at January 31, 2014. We were in compliance with all covenants at January 31, 2014.

In addition, we have notes payable that our subsidiaries use for short-term financing needs.

Page 22

Nordson Corporation

Critical Accounting Policies

Our condensed consolidated financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information. The preparation of these financial statements requires management to make estimates, judgments and assumptions that affect reported amounts of assets, liabilities, revenues and expenses. On an ongoing basis, we evaluate the accounting policies and estimates used to prepare financial statements. Estimates are based on historical experience and assumptions believed to be reasonable under current facts and circumstances. Actual amounts and results could differ from these estimates used by management.

Certain accounting policies that require significant management estimates and are deemed critical to the results of operations or financial position were discussed in Item 7 of the 10-K for the year ended October 31, 2013. There were no material changes in these policies during the three months ended January 31, 2014.

Outlook

We continue to manage the business with caution regarding expectations for the balance of fiscal 2014, given slowing growth in emerging markets and economists’ expectations for global GDP indicating a low-growth macroeconomic environment. Though the near-term global macroeconomic outlook remains unclear, our growth potential has been demonstrated over time from our capacity to build and enhance our core businesses by entering emerging markets and pursuing market adjacencies. 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 these efforts will continue to provide more than sufficient cash from operations for meeting our liquidity needs and paying dividends to common shareholders, as well as enabling us to invest in the development of new applications and markets for our technologies. Our cash and available borrowing capacity will enable us to make other strategic investments.

For the second quarter of 2014, sales growth is expected to be in the range of 5% to 9% as compared to the second quarter a year ago. This outlook reflects expectations of organic volume growth of 0% to 4%, acquisitive growth of 5% and no significant currency translation effect based on the current exchange rate environment. Diluted earnings per share are expected to be in the range of $0.85 to $0.94.

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

This Form 10-Q, particularly “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 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.

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 Item 1A, Risk Factors in our 10-K for the year ended October 31, 2013.

Page 23

Nordson Corporation

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 in our 10-K for the year ended October 31, 2013. The information disclosed has not changed materially in the interim period since then.

ITEM 4.

CONTROLS AND PROCEDURES

Our management with the participation of the principal executive officer (President and Chief Executive Officer) and principal financial officer (Senior 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 January 31, 2014. 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 January 31, 2014 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 controls over financial reporting that occurred during the three months ended January 31, 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Part II – OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

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 constructing a potable water delivery system serving the impacted area down gradient of the Site. At January 31, 2014 and October 31, 2013 our accrual for the ongoing operation, maintenance and monitoring obligation at the Site was $668. 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.

ITEM 1A.

RISK FACTORS

Information regarding our risk factors was disclosed in Form 10-K filed for the year ended October 31, 2013. The information disclosed has not changed materially in 2014.

Page 24

Nordson Corporation

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 January 31, 2014:


	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)		Maximum Value of Shares that May Yet Be Purchased Under the Plans or Programs
November 1, 2013 to November 30, 2013		6	$	72.22		—	$	196,030
December 1, 2013 to December 31, 2013		4	$	73.73		—	$	196,030
January 1, 2014 to January 31, 2014		29	$	69.94		29	$	194,029

Total		39				29

(1)

In August 2013 the board of directors approved a repurchase program of up to $200,000. Uses for repurchased shares include the funding of benefit programs including stock options, restricted stock and 401(k) matching. 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.

Page 25

Nordson Corporation

ITEM 6.

EXHIBITS



10.1		Assurance Trust Agreement between Nordson Corporation and Key Trust Company of Ohio, N.A. amended and restated as of January 22, 2014*

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		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		Certification of CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification of CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101		The following financial information from Nordson Corporation’s Quarterly Report on Form 10-Q for the three months ended January 31, 2014, formatted in Extensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Statements of Income for the three months ended January 31, 2014 and 2013, (ii) the Condensed Consolidated Statements of Comprehensive Income for the three months ended January 31, 2014 and 2013 (iii) the Condensed Consolidated Balance Sheet at January 31, 2014 and October 31, 2013, (iv) the Condensed Consolidated Statement of Cash Flows for the three months ended January 31, 2014 and 2013, and (v) the Notes to Condensed Consolidated Financial Statements.

*	Indicates management contract or compensatory plan, contract or arrangement in which one or more directors and/or executive officers may be participants.

Page 26

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: March 7, 2014		Nordson Corporation

		By: /s/ GREGORY A. THAXTON
		Gregory A. Thaxton
		Senior Vice President, Chief Financial Officer
		(Principal Financial Officer)

Page 27

Exhibit 10.1

NORDSON CORPORATION

ASSURANCE TRUST

THIS TRUST AGREEMENT, originally effective as of the 12th day of December, 1998 between Nordson Corporation, an Ohio corporation (“Nordson”), and Key Trust Company of Ohio, N.A. (the “Trustee”) is hereby amended and restated effective January 22, 2014.

WHEREAS, Nordson is obligated to provide certain supplemental pension benefits to certain of its employees and directors and to provide benefits pursuant to certain other deferred compensation and executive compensation arrangements, including agreements with certain of its executives under which those executives may become entitled to payments and benefits after a change in control of Nordson;

WHEREAS, Nordson desires to establish a trust (the “Trust”) and to contribute to the Trust assets that shall be held therein and that shall be subject to the claims of the creditors of Nordson in the event that Nordson becomes Insolvent (as defined in Section 5.1 below), until distributed as provided herein or returned to Nordson; and

WHEREAS, it is the intention of the parties that the Trust shall constitute an unfunded arrangement for purposes of Title I of the Employee Retirement Income Security Act of 1974, as amended;

NOW, THEREFORE, Nordson and the Trustee do hereby amend and restate the Trust and agree that the Trust shall be comprised, held, and disposed of as follows:

Article 1. Establishment of Trust

1.1 Nordson, upon the original establishment of the Trust, deposited with the Trustee in trust $100, which became the principal of the Trust to be held, administered, and disposed of by the Trustee as provided in this Trust Agreement.

1.2 The Trust hereby amended and restated may be revoked by Nordson at any time before the occurrence of the first to occur of (a) a Funding Event (as defined in Section 15.6) and (b) a Change of Control (as defined in Section 15.3). If any Funding Event occurs, the Trust hereby amended and restated may not be revoked by Nordson until both that particular Funding Event and any other Funding Event that may have also occurred have been “terminated” (as defined in Section 15.7) and the Trust then may be revoked by Nordson if and only if no Change of Control has then occurred. Upon the occurrence of a Change of Control, the Trust hereby amended and restated shall become irrevocable. Nordson’s General Counsel shall notify the Trustee promptly upon the occurrence of any Funding Event and of any Change of Control.

1.3 The Trust is intended to be a grantor trust, of which Nordson is the grantor, within the meaning of subpart E, part I, subchapter J, chapter 1, subtitle A of the Internal Revenue Code, and shall be construed accordingly.

1.4 The principal of the Trust and any earnings thereon shall be held separate and apart from other funds of Nordson and shall be used exclusively for the uses and purposes herein set forth. No employee of Nordson shall have any preferred claim on, or any beneficial ownership interest in, any assets of the Trust. Any rights created under any Covered Plan or under this Trust Agreement shall be mere unsecured contractual rights against Nordson. Any assets held by the Trust will be subject to the claims of general creditors of Nordson under federal and state law in the event Nordson becomes Insolvent.

Article 2. Additional Funding

2.1 Nordson, in its sole discretion, may at any time, or from time to time, make or cause to be made, directly or indirectly, additional deposits of cash or other property in trust with the Trustee to augment the principal to be held, administered, and disposed of by the Trustee as provided in this Trust Agreement.

2.2 If a Funding Event occurs, Nordson shall, as soon as practicable and in no event later than the day before the occurrence of any Change of Control related to that Funding Event, contribute to the Trust an amount equal to the excess, if any, of the Full Funding Amount (as defined in Section 15.5) over the sum of the value of the assets in the Trust (the “Current Trust Asset Value”) immediately prior to the contribution.

2.3 Immediately upon the occurrence of the first Change of Control to occur after the execution of this Trust Agreement and thereafter on each and every anniversary of that Change of Control, Nordson shall contribute to the Trust an amount equal to the excess, if any, of the Full Funding Amount over the Current Trust Asset Value immediately prior to the contribution.

2.4 Any contribution made under this Article 2 shall be subject to withdrawal by Nordson only as provided in Article 3, dealing with discretionary withdrawals.

2.5 In the event that any contribution described in this Article 2 would result in the imposition of taxes and penalties under Section 409A of the Code with respect to any Participant, the Trust shall not be funded with respect to such Participant.

Article 3. Discretionary Withdrawals

3.1 Nordson, in its sole discretion, at any time before the occurrence of the first to occur of a Funding Event or a Change of Control, may withdraw assets from the Trust provided that no such withdrawal shall reduce the Current Trust Asset Value, immediately after the withdrawal, to an amount below $100.

3.2 Nordson shall not be entitled to make any discretionary withdrawal of assets from the Trust, after any Funding Event has occurred, until both that particular Funding Event and any other Funding Event that may have also occurred have been terminated and Nordson may then make such a discretionary withdrawal only if no Change of Control has then occurred. No discretionary withdrawal under this Section 3.2 shall reduce the Current Trust Asset Value, immediately after the withdrawal, to an amount below $100.

3.3 After a Change of Control has occurred, Nordson may not make any discretionary withdrawal from the Trust. Nothing in this Article 3 shall restrict the right of Nordson to receive a reversion of excess assets under Article 6.

Article 4. Payments to Participants

4.1 Not later than 120 days after the occurrence of a Funding Event and again not later than 10 days following the occurrence of a Change of Control, Nordson shall deliver to the Trustee a schedule (the “Payment Schedule”) that lists the names and addresses of all Participants and indicates the amounts payable and to become payable to each Participant and/or provides a formula or other instructions acceptable to the Trustee for determining the amounts so payable and that indicates the form in which such amounts are to be paid, as provided for or available under each Covered Plan, and the time of commencement for payment of such amounts. At the same time as Nordson delivers the Payment Schedule to the Trustee, Nordson shall deliver to each Participant that portion of the Payment Schedule that pertains to amounts that may become payable to that particular Participant. After the occurrence of a Change of Control, Nordson shall update the Payment Schedule, provide revised versions thereof to the Trustee, and provide the relevant portions thereof to each Participant from time to time and at such times so that each termination of the employment of any Participant (or the occurrence of any other fact or circumstance that alters the payments due or to become due to any Participant under any of the Covered Plans) is taken into account in a current revised Payment Schedule that has been appropriately delivered to the Trustee and to each Participant (to the extent relevant to each such Participant) not later than ten days after its occurrence. Except as otherwise provided herein, the Trustee shall make payments to the Participants in accordance with the Payment Schedule as it may be revised from time to time. The Trustee shall make provision for the reporting and withholding of any federal, state, or local taxes that may be required to be withheld with respect to the payment of benefits pursuant to the terms of each Covered Plan and shall pay amounts withheld to the appropriate taxing authorities or determine that such amounts have been reported, withheld, and paid by Nordson.

4.2 Except as otherwise specifically provided herein, the entitlement of a Participant to payments from Nordson under a particular Covered Plan shall be determined under the terms of the particular Covered Plan at issue. It is Nordson’s intention that any and all amounts that may become payable to Participants under the Covered Plans will be paid to the Participants at the times and in the amounts specified in the relevant Covered Plan and in accordance with Section 409A of the Code and any regulations or other guidance thereunder.

4.3 In order to provide added assurances to the Participants that the amounts to which they may be entitled under the Covered Plans will be calculated in good faith and paid promptly at the times and in the amounts specified in the respective Covered Plans, the following procedure shall be followed:

(a)

If, concurrently with or after the occurrence of a Change of Control, Nordson delivers to the Trustee a Payment Schedule indicating that a Participant is entitled to payments under a Covered Plan, the Trustee shall promptly thereafter deliver a copy of the relevant portion of the Payment Schedule to the Participant and shall make the payments so indicated in the Payment Schedule.

(b)

If, after the occurrence of a Change of Control, a Participant (either because no Payment Schedule has been delivered to the Trustee or because the Participant believes that the amounts specified in the Payment Schedule are incorrect) delivers written notice (a “Participant Payment Notice”) to the Trustee that the Participant is entitled to payments under a Covered Plan and requesting that the Trustee make payments to the Participant pursuant to that Covered Plan, the Trustee shall promptly deliver a copy of the Participant Payment Notice to Nordson and thereafter:

(i)

if Nordson has not, within ten business days of the delivery of the Participant Payment Notice to the Trustee, delivered to the Trustee a notice (a “Nordson Stop Payment Notice”) in which Nordson asserts that the Participant is not entitled to the payments set forth in the Participant Payment Notice, the Trustee shall make the payments set forth in the Participant Payment Notice, or, alternatively,

(ii)

if Nordson has, within ten business days of the delivery of the Participant Payment Notice to the Trustee, delivered to the Trustee a Nordson Stop Payment Notice, the disparity between the Participant Payment Notice and the Nordson Stop Payment Notice shall be resolved as provided in Section 4.4 below and any payments or portions thereof that are not in dispute shall be paid by the Trustee as and when due to the Participant.

4.4 If the Trustee has received both a Participant Payment Notice and a Nordson Stop Payment Notice with regard to the same Covered Plan:

(a)

the Trustee shall engage the Accounting Firm (as defined in Section 15.1), at Nordson’s expense, to determine what payments the Participant is entitled to under the particular Covered Plan, which determination shall be made by the Accounting Firm as promptly as practicable but in all events within 30 days of the engagement of the Accounting Firm by the Trustee,

(b)

Nordson shall cooperate with the Accounting Firm and provide to it all information that is available to Nordson and is required by the Accounting Firm to make the determination referred to in (a) above within the time frame set forth therein, and

(c)

unless and until ordered to do otherwise by an award of arbitrators following arbitration proceedings instituted pursuant to Section 4.5 below, the Trustee shall make payments to the Participant in the amount or amounts and at the time or times determined by the Accounting Firm.

4.5 In the event of any dispute between a Participant and Nordson with respect to whether the Participant is entitled to payments (or the amounts thereof) under a Covered Plan and/or to payment thereof from the assets of the Trust, either party (Nordson or the Participant) may deliver to the other a demand for binding arbitration. If either party delivers any such demand to the other, the dispute shall be determined by binding arbitration conducted in Cleveland, Ohio according to the Commercial Arbitration Rules of the American Arbitration Association. In any such arbitration the arbitrators may consider, with such weight as they may deem appropriate, any determination by the Accounting Firm that may have been made as provided in Section 4.4 above. The award of the arbitrators will be final and binding and judgment on the award may be entered in any court having jurisdiction over the subject matter and the parties.

4.6 In order to discourage Nordson from disputing, other than in good faith, any amounts properly due to a Participant, the costs and expenses related to any arbitration proceeding referred to in Section 4.5 shall be borne as provided in this Section 4.6. Nordson shall bear the cost of its own attorneys and other representatives and all of the fees and expenses of the arbitrators and the arbitration proceedings. The reasonable fees and expenses of the Participant’s attorneys relating to the subject matter of the arbitration shall be paid by Nordson unless and to the extent the arbitrators determine (which determination shall be final and binding upon the parties) that the positions advanced by the Participant in any such arbitration have no reasonable basis (which determination need not be made simply because the arbitrators decide against the Participant on any or all substantive points). If Nordson fails to pay any of the costs and expenses related to any arbitration as specified in this Section 4.6, the Trustee shall pay such amounts from the assets of the Trust. Regardless of whether such reasonable fees and expenses are paid by Nordson or by the Trustee from the assets of the Trust, such reasonable fees and expenses shall be paid no later than the last day of the calendar year following the calendar year in which the reasonable fees and expenses are incurred.

4.7 Nordson may make payments under any Covered Plan directly to or on behalf of a Participant as they become due under the terms of the Covered Plan. If Nordson makes any such payment it shall notify the Trustee of its decision to make such payments directly prior to the time amounts are payable to or on behalf of the Participant. In addition, if the principal of the Trust and any earnings thereon are not sufficient to make any payments that are due and payable under any Covered Plan in accordance with its terms, Nordson shall make the balance of each such payment as it falls due. The Trustee shall notify Nordson whenever principal and earnings are not sufficient.

4.8 When making any payment to a Participant under a Covered Plan that is overdue, the Trustee shall increase the amount of the payment to include interest on the overdue payment from the date due to the date of the distribution calculated on a daily basis, compounded as of the end of each calendar month, and using as the interest rate for each calendar month or part thereof during the period with respect to which interest is due the prime lending rate published by KeyBank National Association or its successor and in effect on the first day of that calendar month.

4.9 Whenever a payment under a Covered Plan with respect to a participant is payable to a beneficiary of the Participant rather than to the Participant, the beneficiary shall be entitled to all of the rights of the Participant under all of the provisions of this Trust Agreement with respect to that payment.

Article 5. Trustee Responsibility when Nordson Is Insolvent

5.1 The Trustee shall cease payments to Participants from the Trust if Nordson is Insolvent. Nordson shall be considered “Insolvent” for purposes of this Trust Agreement if (a) it is unable to pay its debts as they become due, or (b) it is subject to a pending proceeding as a debtor under the United States Bankruptcy Code. In determining whether Nordson is Insolvent for purposes of this Trust Agreement, the Trustee may engage the service of legal, accounting, financial and other advisors, which may be advisors to Nordson, to assist it in the determination. Nordson agrees to cooperate fully with any reasonable inquiry of the Trustee or such advisors in making the determination of Nordson’s Insolvency. During the determination of Nordson’s Insolvency, the Trustee may, in its discretion, suspend any transfer or distribution of assets. To the extent that the Trustee engages the services of an advisor, the Trustee may rely, without further inquiry, on the written determination of that advisor as to the solvency or Insolvency of Nordson. All costs reasonably incurred by the Trustee in making the determination of Nordson’s Insolvency shall be reimbursed to the Trustee by Nordson, and if not so reimbursed, shall be chargeable against the Trust.

5.2 At all times during the continuance of the Trust, the principal and income of the Trust shall be subject to claims of general creditors of Nordson under federal and state law as set forth below.

(a)

The Board of Directors (the “Board”) and the Chief Executive Officer of Nordson shall have the duty to inform the Trustee in writing of Nordson’s Insolvency. If a person claiming to be a creditor of Nordson alleges in writing to the Trustee that Nordson has become Insolvent, the Trustee shall determine whether Nordson is Insolvent and, pending such determination, the Trustee shall not transfer any Trust assets to any other party.

(b)

Unless the Trustee has actual knowledge of Nordson’s Insolvency, or has received notice from Nordson or a person claiming to be a creditor alleging that Nordson is Insolvent, the Trustee shall have no duty to inquire whether Nordson is Insolvent. The Trustee may in all events rely on such evidence concerning Nordson’s solvency as may be furnished to the Trustee and that provides the Trustee with a reasonable basis for making a determination concerning Nordson’s solvency.

(c)

If at any time the Trustee has determined that Nordson is Insolvent, the Trustee shall hold the assets of the Trust for the benefit of the general creditors of Nordson. Nothing in this Trust Agreement shall in any way diminish any rights of Participants to pursue their rights as general creditors of Nordson.

(d)

The Trustee shall resume the making of payments to Participants in accordance with Section 4 of this Trust Agreement only after the Trustee has determined that Nordson is not Insolvent (or is not any longer Insolvent).

5.3 Provided that there are sufficient assets, if the Trustee discontinues payments under the Covered Plans from the Trust pursuant to Section 5.2 hereof and subsequently resumes such payments, the first payment following such discontinuance shall include the aggregate amount of all payments due to Participants under the terms of the Covered Plans for the period of such discontinuance, less the aggregate amount of any payments made to the Participants by Nordson in lieu of the payments provided for hereunder during any such period of discontinuance.

Article 6. Reversion of Excess Assets

From time to time after the third anniversary of the first Change of Control occurring after the execution of this Trust Agreement, if and when requested by Nordson to do so, the Trustee shall engage the services of the Accounting Firm, at the expense of Nordson, to determine the Aggregate Plan Liability (as defined in Section 15.2). If the Current Trust Asset Value at the time of the calculation exceeds 150% of the dollar amount of the Aggregate Plan Liability and the Trustee is requested to do so by Nordson, the Trustee shall pay the amount of any such excess over 150% to Nordson. The Trustee shall determine, in its sole discretion, how the funds necessary to make any such payment are to be raised from Trust assets.

Article 7. Payments to Nordson

Except as provided in Article 3 or in Article 6, Nordson shall not have any right or power to direct the Trustee to return to Nordson or to divert to others any of the Trust assets before all payments that may become payable to any and all Participants under the Covered Plans (as defined in Section 15.4) have been made to Participants. At such point in time as no further payments are payable or may become payable in the future to or with respect to any Participant under any Covered Plan, the remaining assets of the Trust shall be paid to Nordson.

Article 8. Investment Authority

8.1 The Trustee shall invest and reinvest the trust property, including any income accumulated and added to principal, only in (a) annuity or life insurance contracts that either have been contributed to the trust property by Nordson or are issued by one or more insurance companies that are rated at least A++ by Best Life Insurance Reports; (b) interest-bearing deposit accounts or certificates issued or offered by any one or more Federal Deposit Insurance Corporation insured financial institutions having in each case a high credit rating and a capital and surplus of at least $1,000,000,000 in the aggregate; (c) direct obligations of the United States of America, or obligations the payment of which is guaranteed, as to both principal and interest, by the government or an agency of the government of the United States of America; (d) readily marketable debt securities listed on a United States national securities exchange (other than securities of Nordson) that are rated at least “investment grade” by one or more nationally recognized rating agencies; or (e) shares or other units of participation in any mutual fund, investment trust, or common trust fund maintained by the Trustee, which are invested exclusively or predominantly in assets described in the foregoing clauses (a) through (d) of this Section 8.1. In no event may the Trustee invest in securities (including stock or the right to acquire stock) or obligations issued by Nordson, other than a de minimis amount held in common investment vehicles in which the Trustee invests. All rights associated with

assets of the Trust shall be exercised by the Trustee or the person designated by the Trustee. The Trustee shall not be liable to any Participant for any insufficiency of the Trust property to discharge all benefits due the same under the Covered Plans; rather, the liability for all such benefits shall be and remain the primary and ultimate responsibility of Nordson. Further, to the extent that Nordson has either contributed, or directed the purchase of, annuity or life insurance contracts pursuant to this Section 8.1, then the Trustee, for all purposes of this Trust Agreement, shall be deemed to be a directed trustee as to those insurance contracts, shall have no investment discretion over those insurance contracts, and shall have no other duties, responsibilities, or other obligations with respect to those insurance contracts.

8.2 The Trustee is empowered to register securities, and to take and hold title to other property, in the name of the Trustee or in the name of a nominee without disclosing the Trust. Securities also may be held in bearer form and may be held in bulk with certificates of the same class and issuer which are assets of other fiduciary accounts. The Trustee shall be responsible for any wrongful acts of any nominee of the Trustee.

8.3 The Trustee is empowered to take all actions necessary or advisable in order to collect any life insurance, annuity, or other benefits or payments of which the Trustee is the designated beneficiary.

8.4 Nordson may maintain in force all life insurance policies held in the Trust by paying premiums and other charges due thereon. If any such premiums or other charges are not paid directly by Nordson, the Trustee shall, to the extent it has cash or its equivalent readily available for the payment of premiums due or policy loans and/or dividends are available for such purpose, pay premiums due with such cash or its equivalent or policy loans and/or dividends, as the Trustee may deem best; but if the Trustee does not have sufficient cash or its equivalent readily available and policy loans and dividends are not available, then the Trustee shall dispose of or otherwise use other assets held by it in the Trust to generate the necessary cash or, if no such other assets are available, the Trustee may surrender one or more of the life insurance policies in order to generate cash with which to pay premiums on one or more of the other life insurance policies. The Trustee shall have no liability to Nordson or any other person if, as a result of an insufficiency of cash or its equivalent, policy loans and dividends, and assets that can be disposed of or otherwise used to generate cash, the Trustee is unable to pay premiums as they become due.

8.5 The Trustee shall be named sole owner and beneficiary of each life insurance policy held in the Trust and shall have full authority and power to exercise all rights of ownership relating to the policy, except that the Trustee shall have no power to name a beneficiary of the policy other than the Trust, to assign the policy (as distinct from conversion of the policy to a different form) other than to a successor Trustee, or to loan to any person the proceeds of any borrowing against such policy.

8.6 The Trustee shall have the power to acquire additional life insurance coverage on Participants through application for new life insurance. Prior to a Change in Control, the Trustee shall acquire any additional life insurance from the agent or agents designated by Nordson. After a Change in Control, the Trustee may acquire any additional life insurance from any agent or agents that it, in its sole discretion, deems appropriate.

Article 9. Accounting by Trustee

The Trustee shall keep accurate and detailed records of all investments, receipts, disbursements, and other transactions required to be made, including such specific records as shall be agreed upon in writing between Nordson and the Trustee. All such accounts, books, and records shall be open to inspection and audit at all reasonable times by Nordson. Within 60 days following the close of each calendar year and within 60 days after the removal or resignation of the Trustee, the Trustee shall deliver to Nordson a written account of its administration of the Trust during such year or during the period from the close of the last preceding year to the date of such removal or resignation, setting forth all investments, receipts, disbursements, and other transactions effected by it, including a description of all securities and investments purchased and sold with the cost or net proceeds of such purchases or sales, and showing all cash, securities, and other property held in the Trust at the end of such year or as of the date of such removal or resignation, as the case may be.

Article 10. Calculations of Current Trust Asset Value and Aggregate Plan Liability

10.1 Any determination of the Current Trust Asset Value that is to be made before the occurrence of any Change of Control shall be made by Nordson. After the occurrence of a Change of Control, all determinations of the Current Trust Asset Value shall be made by the Trustee and may be based on the determination of one or more qualified independent appraisers, consultants, or other experts retained by the Trustee for that purpose.

10.2 Any determination of the Aggregate Plan Liability that is to be made before the occurrence of any Change of Control shall be made by Nordson. After the occurrence of a Change of Control, all determinations of the Aggregate Plan Liability (as defined in Section 15.2) shall be made by the Trustee and may be based on the determination of one or more qualified independent actuaries, consultants, or other experts retained by the Trustee for that purpose. All such determinations shall be based on the terms of the Covered Plans and the actuarial assumptions and methodology set forth in Exhibit B.

10.3 Nordson shall pay all costs incurred in determining from time to time the Current Trust Asset Value and/or the Aggregate Plan Liability. If not so paid, these costs shall be paid from the Trust. Nordson shall reimburse the Trust within 30 days after receipt of a bill from the Trustee for any such costs paid out of the Trust.

Article 11. Responsibility of Trustee

11.1 The Trustee shall act with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims; provided, however, that the Trustee shall incur no liability to any person for any action taken pursuant to a direction, request, or approval that is contemplated by, and in conformity with, the terms of the Trust and is given in writing by Nordson prior to the occurrence of any Change of Control. In the event of a dispute between Nordson and any other party, the Trustee may apply to a court of competent jurisdiction to resolve the dispute.

11.2 If the Trustee undertakes or defends any litigation arising in connection with the Trust, Nordson agrees to indemnify the Trustee against the Trustee’s costs, expenses, and liabilities (including, without limitation, attorneys’ fees and expenses) relating thereto and to be primarily liable for such payments. If such costs, expenses, and liabilities are not paid by Nordson in a reasonably timely manner, the Trustee may obtain payment from the Trust. Nordson shall reimburse the Trust within 30 days after receipt of a bill from the Trustee for any such costs, expenses, and liabilities paid out of the Trust.

11.3 The Trustee may consult with legal counsel (who may also be counsel for the Trustee generally) with respect to any of its duties or obligations hereunder.

11.4 The Trustee may hire agents, accountants, actuaries, investment advisors, financial consultants, or other professionals to assist it in performing any of its duties or obligations hereunder, including, without limitation, to assist it in enforcing against Nordson any of the obligations of Nordson under this Trust Agreement.

11.5 The Trustee shall have, without exclusion, all powers conferred on trustees by applicable law, unless expressly provided otherwise herein.

11.6 Notwithstanding any powers granted to the Trustee pursuant to this Trust Agreement or to applicable law, the Trustee shall not have any power that could give the Trust the objective of carrying on a business and dividing the gains therefrom, within the meaning of section 301.7701-2 of the Procedure and Administrative Regulations promulgated pursuant to the Internal Revenue Code nor shall the Trustee have any power to administer the Trust in a manner inconsistent with Section 409A of the Code or any regulations or other guidance issued thereunder.

Article 12. Compensation and Expenses of Trustee

The Trustee shall be entitled to receive reasonable compensation for its services in accordance with its published fee schedule as in effect from time to time. The Trustee shall be entitled to receive its reasonable expenses incurred with respect to the administration of the Trust, including fees incurred by the Trustee pursuant to Sections 11.3 and 11.4 of this Trust Agreement. Such compensation and expenses shall be payable by Nordson. If not so paid, the fees and expenses shall be paid from the Trust. Nordson shall reimburse the Trust within 30 days after receipt of a bill from the Trustee for any such fees or expenses paid out of the Trust.

Article 13. Tenure and Succession of Trustee

13.1 Nordson may remove any trustee from time to time serving under this Trust Agreement at any time upon giving 60 days written notice to such trustee, and each trustee from time to time serving under this instrument shall have the right to resign by delivering a written notice of resignation to Nordson, except that: (a) Nordson shall not have any power to remove the Trustee at any time after a Change of Control, and (b) no such removal or resignation shall become effective until the acceptance of the trust by a successor trustee designated in accordance with Section 13.2.

13.2 If Key Trust Company of Ohio, N.A., or any successor to it designated in accordance with this Section 13.2, for any reason shall decline, cease, or otherwise fail to serve as trustee, the vacancy in the trusteeship shall be filled by such bank or trust company, wherever located, having a capital and surplus of at least $25,000,000 in the aggregate, as shall be designated by Nordson (if the designation is made prior to the occurrence of any Change of Control) or by the resigning Trustee (if the designation is made after the occurrence of any Change of Control).

13.3 Upon acceptance of the Trust, each successor trustee shall be vested with the title to the Trust property possessed by the trustee that it succeeds and shall have all the powers, discretion, and duties of such predecessor trustee. No successor trustee shall be required to furnish bond.

13.4 Each successor trustee may accept as complete and correct and may rely upon any accounting by any predecessor trustee and upon any statement or representation by any predecessor trustee as to the assets comprising or any other matter pertaining to the administration of the Trust. No successor trustee shall be liable for any act or omission of any predecessor trustee or have any duty to enforce or seek to enforce any claim of any kind against any predecessor trustee on account of any such act or omission.

Article 14. Amendment or Termination

14.1 Except as provided in the second sentence of this Section 14.1, at any time before the occurrence of the first Change of Control to occur after the execution of this Agreement, Nordson, in its sole discretion, may amend this Trust Agreement (including the exhibits hereto) in any manner and may terminate this Trust Agreement. If at any particular point in time (a) one or more Funding Events have occurred, (b) one or more of those Funding Events has not yet been terminated, and (c) no Change of Control has occurred, then Nordson may not, at that particular time, terminate this Trust Agreement and may amend this Trust Agreement only if and to the extent permitted by Section 14.2 below.

14.2 Whenever (a) one or more Funding Events have occurred, (b) one or more of those Funding Events has not yet been terminated, and (c) no Change of Control has occurred, Nordson may not terminate this Trust Agreement but may add one or more additional plans or agreements to the class of Covered Plans and may amend this Trust Agreement (including the exhibits hereto), provided that (x) Nordson determines, in the exercise of its reasonable discretion, that the amendment is in the best interests of the Participants, taken as a group, (y) no such amendment shall remove any plan or agreement from the class of Covered Plans unless the plan has been terminated and there are no further obligations due or to become due thereunder to any Participant, and (z) no such amendment shall have the effect of adding circumstances under which a Funding Event shall be deemed to have terminated, affect the determination of the Aggregate Plan Liability or the Full Funding amount so as to reduce these amounts, or in any manner permit the withdrawal or diversion of assets from the Trust.

14.3 After a Change of Control has occurred, this Trust Agreement (including the exhibits hereto) may not be amended or terminated except as provided in Section 14.5.

14.4 Unless earlier revoked pursuant to Section 1.2, the Trust shall not terminate until the date on which Participants are no longer entitled to any further payments pursuant to the terms of any Covered Plans. Upon termination of the Trust on or after that date, any assets remaining in the Trust shall be returned to Nordson.

14.5 Upon written approval of all Participants who are or may in the future be entitled to receive any payment pursuant to the terms of any of the Covered Plans, Nordson may terminate the Trust prior to the time all payments that are or may become due in the future under the Covered Plans have been made. All assets in the Trust at any such termination shall be returned to Nordson.

Article 15. Certain Definitions

Certain capitalized terms not defined elsewhere in this Trust Agreement are defined in Article 15 below.

15.1 From and after the occurrence of the first Change of Control to occur after the execution of this Trust Agreement, the term “Accounting Firm” shall mean the independent auditors of Nordson for the fiscal year preceding the first year in which there occurred either (a) that Change of Control or (b) any Funding Event that had not terminated before the occurrence of that Change of Control and such firm’s successor or successors; provided, however, if such firm is unable or unwilling to serve and perform in the capacity contemplated by this Trust Agreement, those members of the Board (as constituted immediately before the Change of Control) who are not and have never been employees of Nordson shall select another national accounting firm of recognized standing to serve and perform in that capacity under this Trust Agreement, except that such other accounting firm shall not be the then independent auditors for Nordson or any of its affiliates (as defined in Rule 12b-2 promulgated under the 1934 Act).

15.2 The term “Aggregate Plan Liability” as at any time shall mean the maximum amount of payments that have not yet been paid but could become payable in the future under the Covered Plans, determined as provided in Section 10.2.

15.3 A “Change of Control” shall mean the occurrence of one of the following events:

(a)

a report is filed with the Securities and Exchange Commission on Schedule 13D or Schedule 14D-1 (or any successor schedule, form, or report), each as promulgated pursuant to the 1934 Act, disclosing that any “person” (as the term “person” is used in Section 13(d) or Section 14(d)(2) of the 1934 Act) is or has become a beneficial owner, directly or indirectly, of securities of Nordson representing 35% or more of the combined voting power of Nordson’s then outstanding securities;

(b)

Nordson is merged or consolidated with another corporation and, as a result thereof, securities representing less than 50% of the combined voting power of the surviving or resulting corporation’s securities (or of the securities of a parent corporation in case of a merger in which the surviving or resulting corporation becomes a wholly-owned subsidiary of the parent corporation) are owned in the aggregate by holders of Nordson’s securities immediately before such merger or consolidation;

(c)

all or substantially all of the assets of Nordson are sold in a single transaction or a series of related transactions to a single purchaser or a group of affiliated purchasers; or

(d)

during any period of 24 consecutive months, individuals who were Directors of Nordson at the beginning of the period cease to constitute at least a majority of the Board unless the election, or nomination for election by Nordson’s shareholders, of more than one half of any new Directors was approved by a vote of at least two-thirds of the Directors then still in office who were Directors at the beginning of the 24 month period.

15.4 The term “Covered Plan” means any one of the plans and agreements identified on Exhibit A, as the same may be amended from time to time in accordance with Sections 14.1 and 14.2 above.

15.5 The term “Full Funding Amount” as of any point in time shall mean an amount equal to 125% of the Aggregate Plan Liability as of that point in time.

15.6 A “Funding Event” shall be deemed to occur if and when there occurs any of the circumstances set forth in any of the following clauses (a) through (d):

(a)

Nordson enters into a definitive agreement pursuant to which Nordson is to be merged with or into, or to be consolidated with, or is to become the subsidiary of another corporation and the definitive agreement contemplates that, immediately after giving effect to that transaction, securities representing less than 50% of the combined voting power of the surviving or resulting corporation’s securities (or of the securities of a parent corporation in case of a merger in which the surviving or resulting corporation becomes a wholly-owned subsidiary of the parent corporation) will be owned in the aggregate by holders of Nordson’s securities immediately before such merger or consolidation;

(b)

a tender offer or exchange offer is commenced providing for the acquisition of 35% or more of the combined voting power of Nordson’s then outstanding securities, or any application, letter or notice is delivered to or filed with any state or federal authority indicating an intention to acquire 35% or more of the combined voting power of Nordson’s outstanding securities;

(c)

without the prior approval, solicitation or recommendation of the Board, any “person” (as the term “person” is used in Section 13(d) or Section 14(d)(2) of the 1934 Act) makes a public announcement of a bona fide intention (i) to engage in a transaction that, if consummated, would constitute a Change of Control, (ii) to “solicit” (as defined in Rule 14a-1 under the 1934 Act) proxies in connection with a proposal that is not approved or recommended by the Board, or (iii) to engage in an election contest relating to the election of directors of Nordson which, if successful, would result in the election of one or more directors not nominated by the Board; or

(d)

there is delivered to shareholders of Nordson proxy material soliciting approval of a plan providing for the dissolution of Nordson or for the sale, lease, exchange or other disposal (in one transaction or in a series of related transactions) all or substantially all of the assets of Nordson.

15.7 A Funding Event shall be deemed to have “terminated:”

(a)

In the case of a Funding Event described in Section 15.6(a), upon the termination of the definitive agreement without the occurrence of a Change of Control.

(b)

In the case of a Funding Event described in Section 15.6(b), upon the termination of the tender or exchange offer, or the withdrawal, rejection or denial of the application, letter or notice, without the acquisition of 35% or more of the combined voting power of Nordson’s outstanding securities.

(c)

In the case of a Funding Event described in Section 15.6(c), upon the abandonment of the intention to engage in the transaction that, if consummated, would have constituted a Change of Control, the termination of the solicitation without a shareholder vote, or the defeat by the shareholders of the proposal or the termination of the election contest without the election of any director not nominated by the Board, as the case may be.

(d)

In the case of a Funding Event described in Section 15.6(d), upon the abandonment of the plan before a shareholder vote or the defeat by the shareholders of the proposal to approve the plan.

15.8 The term “Internal Revenue Code” shall mean the Internal Revenue Code of 1986, as amended.

15.9 The term “Person” shall mean a “person” as used in Section 13(d) and Section 14(d)(2) of the 1934 Act.

15.10 The term “Participant” shall mean a person who is a participant in or party to any of the Covered Plans.

15.11 The term “1934 Act” shall mean the Securities Exchange Act of 1934, as amended.

16. Miscellaneous

16.1 Any action to be taken by Nordson hereunder shall be by action of the Chief Executive Officer or any Vice President of Nordson, except that the actions described in Sections 1.2, 13.1, 14.1, and 14.2 may be taken only by the Board of Directors of Nordson.

16.2 Any provision of this Trust Agreement prohibited by law shall be ineffective to the extent of any such prohibition, without invalidating the remaining provisions hereof.

16.3 This Trust Agreement shall be governed by and construed in accordance with the laws of the State of Ohio.

IN WITNESS WHEREOF, Nordson and the Trustee have executed this Trust Agreement on the dates set forth below effective as of the date first above written.


Key Trust Company of Ohio, N.A.						Nordson Corporation

By:						By:

Printed Name:						Printed Name:

Title:						Vice President, General Counsel and Secretary

Date:						Date:

EXHIBIT A

COVERED PLANS

Nordson Corporation Excess Defined Benefit Pension Plan

Nordson Corporation 2005 Excess Defined Benefit Pension Plan

Nordson Corporation 2005 Excess Defined Benefit Pension Plan (as Amended and Restated Effective January 1, 2009)

Nordson Corporation Excess Defined Contribution Retirement Plan

Nordson Corporation 2005 Excess Defined Contribution Retirement Plan

Nordson Corporation 2005 Excess Defined Contribution Retirement Plan (as Amended and Restated Effective January 1, 2009)

Nordson Corporation Deferred Compensation Plan

Nordson Corporation 2005 Deferred Compensation Plan

Nordson Corporation 2005 Deferred Compensation Plan (as Amended and Restated Effective January 1, 2009)

Amended and Restated Nordson Corporation 2004 Long-Term Performance Plan

Nordson Corporation 2012 Stock and Incentive Award Plan

2013 Directors Deferred Compensation Sub-Plan

Employment Agreement with Michael F. Hilton

Supplemental Retirement Agreement with Michael F. Hilton

Change-of-Control Retention Agreements with Executive Officers

EXHIBIT B

Assumptions and Methodology for

Determining Aggregate Plan Liability

The liability for benefits under each Covered Plan will be calculated using two different assumptions as to when Participants terminate service:

(a)

As of the date of the first Change of Control occurring after the execution of this Trust Agreement.

(b)

Thirty months after the first Change of Control occurring after the execution of this Trust Agreement, assuming future compensation continues at current levels, and future deferrals under deferred compensation plans continue pursuant to prior elections.

The liability for accrued benefits under each Covered Plan will be the greater of the liabilities calculated in accordance with (a) and (b) above.

Calculations will be based upon the most valuable optional form of payment available to the Participant.

The liability for benefits under deferred compensation or other defined contribution Covered Plans shall be equal to the deferral or other account balances (vested and unvested) of Participants as of the applicable date, plus projected deferrals expected to be made within 30 months after the applicable date pursuant to prior elections. Account balances of Participants under a Plan shall be calculated based on crediting the highest rate of interest which may become payable to Participants under the Plan.

The liability for benefits under other Covered Plans shall be equal to the present value of accrued benefits (vested and unvested) of Participants as of the relevant dates under 1(a) or (b) above.

No mortality is assumed prior to the commencement of benefits. Future mortality is assumed to occur in accordance with the 1983 Group Annuity Table Unisex Rates after the commencement of benefits.

The present value of amounts shall be determined using a discount rate equal to the then current Pension Benefit Guaranty Corporation immediate annuity rate for a nonmultiemployer plan.

In determining the dollar cost of providing any benefit that is to be provided in stock or the value of which is dependent upon the value of common shares of Nordson, the dollar cost shall of providing those benefits shall be determined using a value for common shares of Nordson equal to 140% of the highest closing price for common shares of Nordson at any time within the six month period ending on the determination date.

Where left undefined above, calculations will be performed in accordance with generally accepted actuarial principles.

EXHIBIT 31.1

Nordson Corporation

CERTIFICATIONS

CERTIFICATION PURSUANT TO RULE 13a-14(a)/15d-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Michael F. Hilton, certify that:

I have reviewed this quarterly report on Form 10-Q of Nordson Corporation;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 7, 2014

/s/ Michael F. Hilton

Michael F. Hilton

President and Chief Executive Officer

EXHIBIT 31.2

Nordson Corporation

CERTIFICATION PURSUANT TO RULE 13a-14(a)/15d-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Gregory A. Thaxton, certify that:

I have reviewed this quarterly report on Form 10-Q of Nordson Corporation;

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 7, 2014

/s/ Gregory A. Thaxton

Gregory A. Thaxton

Senior Vice President, Chief Financial Officer

EXHIBIT 32.1

Nordson Corporation

Certification

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(Section 1350, Chapter 63 of Title 18, United States Code)

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Section 1350, Chapter 63 of Title 18, United States Code), I, Michael F. Hilton, President and Chief Executive Officer of Nordson Corporation, an Ohio corporation (the “ Company ”), do hereby certify that:

1. The Quarterly Report on Form 10-Q for the quarter ended January 31, 2014 of the Company (the “ Form 10-Q ”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. Information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.


Dated: March 7, 2014		/s/ Michael F. Hilton
		Michael F. Hilton
		President and Chief Executive Officer

EXHIBIT 32.2

Nordson Corporation

Certification

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(Section 1350, Chapter 63 of Title 18, United States Code)

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Section 1350, Chapter 63 of Title 18, United States Code), I, Gregory A. Thaxton, Senior Vice President, Chief Financial Officer of Nordson Corporation, an Ohio corporation (the “ Company ”), do hereby certify that:

2. Information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.


Dated: March 7, 2014		/s/ Gregory A. Thaxton
		Gregory A. Thaxton
		Senior Vice President, Chief Financial Officer