Atrion Acquisition's Accelerated Integration and Impact on Earnings
Nordson completed the Atrion acquisition on August 21, 2024, and this quarter marked its final full quarter of contribution.
The integration of Atrion has exceeded expectations, contributing to higher sales and earnings earlier than initially projected.
Operational execution of the Atrion integration, including deployment of NBS Next, has been a key factor in its success.
The acquisition has expanded Nordson's Medical portfolio into proprietary infusion and cardiovascular solutions, positioning the company for growth in niche markets.
Management highlighted the operational and financial success of Atrion as a testament to disciplined acquisition strategy.
The company expects ongoing operational efficiencies from Atrion to continue benefiting earnings.
Record Sales, EBITDA, and EPS Achieved in Fiscal 2025
Applied Industrial Technologies achieved new records for sales, EBITDA, and EPS in fiscal 2025, demonstrating strong operational resilience.
Full year EPS growth of 4% exceeded initial guidance, highlighting effective management despite a muted demand environment.
Gross margins expanded nearly 50 basis points, surpassing 30% for the first time in the company's history, indicating margin improvement.
The company generated over $465 million of free cash flow, a 34% increase, enabling significant capital deployment including acquisitions and share buybacks.
The strategic acquisition of Hydradyne, its largest in 6 years, contributed over 400 basis points of inorganic growth and was a key driver of the record performance.
Adjusted EBITDA declined 7.6% in Q4 to $14.2 million and 11.6% for the year to $52.1 million, with margins around 28%.
Cash flow from operations increased 18% to $53.5 million for the year, with $99.1 million in cash and no debt at year-end.
Equipment sales declined 5.5% in Q4 to $28.3 million and 15.7% for the full year to $95.3 million due to distributor destocking and project timing.
Full fiscal year 2025 net sales decreased 3.8% to $181.6 million from $188.8 million in 2024.
Gross margin for recurring revenue remained strong at 91% for both Q4 and full year, while equipment gross margin declined to 23% in Q4 and 24% for the year.
Net income decreased 14% in Q4 to $11.6 million ($0.33 per share) and 13% for the year to $43.4 million ($1.19 per share).
Net sales for Q4 2025 increased slightly by 0.8% to $50.7 million compared to $50.3 million last year.
Recurring monthly service revenue grew 10% in Q4 to $22.4 million and 14% for the full year to $86.3 million, driven by StarLink radios.
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