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.
Nordson Corporation is an innovative precision technology company that leverages a scalable growth framework to deliver top tier growth with leading margins and returns. The Company's direct sales model and applications expertise serves global customers through a wide variety of critical applications. Its diverse end market exposure includes consumer non-durable, medical, electronics and industrial end markets. Founded in 1954 and headquartered in Westlake, Ohio, the Company has approximately 7,200 employees with operations and support offices in over 35 countries.
In December 2019, a novel strain of coronavirus (COVID-19) emerged and has since spread to other countries, including the United States. In March 2020, the World Health Organization declared COVID-19 as a pandemic (the COVID-19 pandemic). The COVID-19 pandemic, including multiple variants, has resulted in governments around the world implementing stringent measures to help control the spread of the virus, including quarantines, "shelter in place" and "stay at home" orders, travel restrictions, business interruptions and other measures.
Throughout the COVID-19 pandemic, we have supported, and continue to support, multiple "critical infrastructure" sectors by manufacturing materials and products needed for medical supply chains, packaging, transportation, energy, communications, and other critical infrastructure industries. We have benefited from our geographical and product diversification as the end markets we serve have remained resilient in response to the COVID-19 pandemic, and we continue to invest in the businesses, people, and strategies necessary to achieve our long-term priorities as we focus on driving profitable growth. We have continued to operate during the COVID-19 pandemic in all our production facilities, having taken the recommended public health measures to ensure worker and workplace safety. As a result, there have been unfavorable impacts on our manufacturing efficiencies. Additionally, we are taking steps to offset cost increases from COVID-19 pandemic-related supply chain disruptions.
We continue to actively monitor the rapidly evolving circumstances and impact of the COVID-19 pandemic, which has negatively disrupted, and may continue to negatively disrupt, our business and results of operations in the future. For example, in the second quarter of 2022, our revenue growth in Asia-Pacific was negatively impacted by COVID-19 lockdowns in China. Our revenue in China in the third quarter of 2022 recovered as COVID-19 lockdown restrictions were eased. The full extent of the COVID-19 pandemic on our operations and the markets we serve remains highly uncertain and will depend largely on future developments related to the COVID-19 pandemic, including infection rates increasing or returning in various geographic areas, variations of COVID-19, the ultimate duration of the COVID-19 pandemic, actions by government authorities to contain the outbreak or treat its impact, such as reimposing previously lifted measures or putting in place additional restrictions, and the widespread distribution and acceptance of an effective vaccine, among other things. These developments are constantly evolving and cannot be accurately predicted.
On November 1, 2021, the Company acquired NDC, a test and inspection business, focused on measurement and controls solutions serving consumer non-durable, film extrusion & converting, cable & tubing and energy storage markets. Upon integration, financial reporting for NDC was integrated into the Industrial Precision Solutions segment to better leverage growth opportunities within shared industrial and consumer non-durable end markets and related sales channels.
On August 7, 2022, the Company entered into an Agreement and Plan of Merger (Merger Agreement) with Meta Merger Company, a direct and wholly owned subsidiary of the Company (Merger Sub), and CyberOptics Corporation (CyberOptics). CyberOptics is a leading global developer and manufacturer of high-precision 3D optical sensing technology solutions that generates approximately $100 million in annual revenue. The Merger Agreement provides that, upon the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into CyberOptics, with CyberOptics surviving the merger as a wholly owned subsidiary of the Company. At the effective time of the merger, each issued and outstanding share of common stock of CyberOptics, subject to certain exceptions, will be automatically converted into the right to receive $54.00 in cash, without interest, or approximately $380.0 million, net of cash acquired. The Company intends to fund the merger consideration with cash on hand and by utilizing its revolving credit agreement.
The consummation of the merger is subject to certain closing conditions, including the adoption and approval of the merger by the majority of the issued and outstanding common shares of CyberOptics, the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and other customary conditions specified in the Merger Agreement.
Critical Accounting Policies and Estimates
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, 2021 (the 2021 Form 10-K). There have been no significant changes in critical accounting policies, management estimates or accounting policies followed since the year ended October 31, 2021, except for the voluntary change in accounting principle from LIFO to FIFO as described in the Inventories Note.
Worldwide sales for the three months ended July 31, 2022 were $662,128, an increase of 2.4% from sales of $646,858 for the comparable period of 2021. The increase consisted of a 3.9% increase in organic sales volume and a favorable 3.5% increase due to an acquisition, which was partially offset by an unfavorable effect from currency translation of 5.0%. The organic sales increase was driven by strong demand across most end markets in our Advanced Technology Solutions Segment, particularly in electronics and medical.
Sales outside the United States accounted for 66.9% of our sales in the three months ended July 31, 2022 compared to 68.8% in the comparable period of 2021. On a geographic basis, sales in the United States were $219,067, an increase of 8.7% compared to 2021, consisting of a 5.0% increase in organic sales volume and a 3.7% increase from an acquisition. In the Asia Pacific region, sales were $208,184, a decrease of 1.0% from 2021, consisting of an organic sales volume decrease of 1.0% and 3.5% decrease due to unfavorable currency effects, partially offset by a 3.5% increase due to an acquisition. In Europe, sales were $151,659, a decrease of 6.6% from 2021, consisting of an organic sales volume increase of 1.6% and a 3.8% increase due to an acquisition, offset by unfavorable currency effects of 12.0%. In the Americas region, sales were $60,138, an increase of 26.0% from 2021, consisting of an organic sales volume increase of 25.7%, an increase due to an acquisition of 1.6%, and unfavorable currency effects of 1.3%. In Japan, sales were $23,080, a decrease of 7.5% from 2021, consisting of an organic sales volume increase of 9.3% and a 2.2% increase due to an acquisition, offset by unfavorable currency effects of 19.0%.
Cost of sales for the three months ended July 31, 2022 were $296,544, up from $281,587 in the comparable period of 2021. Gross profit, expressed as a percentage of sales, decreased to 55.2% from 56.5% in the comparable period of 2021. The 1.3 percentage point decrease in gross margin was primarily driven by unfavorable sales mix and cost inflation in material, labor and logistics.
Selling and administrative expenses for the three months ended July 31, 2022 were $180,666, up from $176,995 in the comparable period of 2021. The 2.1% increase was primarily driven by the first-year effect of an acquisition, partially offset by favorable currency translation effects and improved cost controls.
Operating profit decreased to $184,918 for the three months ended July 31, 2022, compared to $188,276 in the comparable period of 2021. Operating profit as a percentage of sales decreased to 27.9% for the three months ended July 31, 2022 compared to 29.1% in the comparable period of 2021. The 1.2 percentage point decline in operating margin was primarily driven by unfavorable sales mix, currency impacts and inflationary pressures, partially offset by continued selling and administrative expense leverage due to the 3.9% increase in organic sales volume.
Interest expense for the three months ended July 31, 2022 was $5,737, compared to $6,139 in the comparable period of 2021. The decrease was primarily due to lower average debt levels compared to the prior year period. Other income was $752 compared to other expense of $2,232 in the comparable period of 2021. Included in 2022 other expense were pension and postretirement costs of $25 and $745 of foreign currency gains. Included in 2021 other expense were pension and postretirement costs of $1,554 and $512 of foreign currency losses.
Net income for the three months ended July 31, 2022 was $141,811, or $2.45 per diluted share, compared to $142,182, or $2.42 per diluted share, in the same period of 2021. This represents a 0.3% decrease in net income, and a 1.2% increase in diluted earnings per share.
Sales of the Industrial Precision Solutions segment were $341,215 in the three months ended July 31, 2022, a decrease of 1.2% from sales in the comparable period of 2021 of $345,449. The decrease in sales volume of 1.2% consisted of an organic sales volume decrease of 1.1% and unfavorable currency effects that decreased sales by 6.6%, partially offset by a 6.5% increase from an acquisition. The organic sales volume decrease was primarily driven by difficult prior year comparisons, particularly in the
Asia-Pacific region, as sales in the comparable period of 2021 were a record for this segment. Additionally, unfavorable currency translation effects were seen across most regions, particularly in Europe and Japan.
Operating profit as a percentage of sales decreased to 35.1% for the three months ended July 31, 2022 compared to 35.8% in the comparable period of 2021. The 0.7 percentage point decline in operating margin was primarily due to inflationary pressures and unfavorable currency impact.
Sales of the Advanced Technology Solutions segment were $320,913 in the three months ended July 31, 2022, an increase of 6.5% from sales in the comparable period of 2021 of $301,409. The increase was the result of organic sales volume increase of 9.6%, partially offset by an unfavorable currency effect of 3.1%. The organic sales growth was driven by robust demand across all major product lines, particularly in electronics dispense and biopharma fluid component product lines.
Operating profit as a percentage of sales increased to 26.9% for the three months ended July 31, 2022 compared to 26.8% in the comparable period of 2021. The 0.1 percentage point improvement in operating margin was primarily due to the 9.6% organic sales volume increase and favorable selling and administrative expense leverage partially driven by cost structure simplification actions taken in the current year, principally offset by cost inflation in material, labor and logistics.
Worldwide sales for the nine months ended July 31, 2022 were $1,906,697, an increase of 8.2% from sales of $1,762,962 for the comparable period of 2021. The increase consisted of an 8.4% increase in organic sales volume and a net 3.1% increase due to an acquisition and divestiture, partially offset by an unfavorable effect from currency translation of 3.3%. Strength in electronics dispense, test and inspection, and industrial end markets were the primary drivers of the growth.
Sales outside the United States accounted for 67.0% of our sales in the nine months ended July 31, 2022 compared to 66.5% in the comparable period of 2021. On a geographic basis, sales in the United States were $628,952, an increase of 6.6% compared to 2021, consisting of a 3.9% increase in organic sales volume and a net 2.7% increase from an acquisition and divestiture. In the Asia Pacific region, sales were $559,857, an increase of 9.6% from 2021, consisting of an organic sales volume increase of 8.3% and a net 3.1% increase from an acquisition and divestiture, partially offset by unfavorable currency effects of 1.8%. In Europe, sales were $479,900, an increase of 5.7% from the comparable period of 2021, consisting of an organic sales volume increase of 10.5% and a net 3.8% increase from an acquisition and divestiture, partially offset by unfavorable currency effects of 8.6%. In the Americas region, sales were $163,907, an increase of 27.3% from 2021, consisting of an organic sales volume increase of 27.0% and a net increase of 1.1% due to an acquisition and divestiture, minimally offset by unfavorable currency effects of 0.8%. In Japan, sales were $74,081, a decrease of 7.3% from the comparable period of 2021, consisting of an organic sales volume increase of 2.3% and a net 2.9% increase due to an acquisition and divestiture, offset by unfavorable currency effects of 12.5%.
Cost of sales for the nine months ended July 31, 2022 were $843,344, up from $770,032 in the comparable period of 2021. Gross profit, expressed as a percentage of sales, decreased slightly to 55.8% from 56.3% in the comparable period of 2021. The 0.5 percentage point decrease in gross margin was primarily driven by unfavorable mix, increased freight and other inflationary pressures, partially offset by favorable sales volume leverage, manufacturing efficiencies, and pricing actions.
Selling and administrative expenses for the nine months ended July 31, 2022 were $538,602, up from $529,238 in the comparable period of 2021. The 1.8% increase was primarily driven by the first-year effect of an acquisition, partially offset by favorable currency translation effects and improved cost controls.
Operating profit increased from $463,692 in the nine months ended July 31, 2021 to $524,751 in the comparable period of 2022. Operating profit as a percentage of sales increased to 27.5% for the nine months ended July 31, 2022 compared to 26.3% in the comparable period of 2021. The 1.2 percentage point increase in operating margin was driven by the 8.4% organic sales volume increase and continued selling and administrative expense leverage, partially offset by unfavorable product mix and currency translation effects.
Interest expense for the nine months ended July 31, 2022 was $16,748, compared to $20,210 in the comparable period of 2021. The decrease was due primarily to lower average debt levels. Other expense was $37,720 compared to $10,736 in the comparable period of 2021. Included in 2022 other expense were non-cash pension settlement charges of $41,221 related to the purchase of an annuity contract to relieve the Company of certain pension benefit obligations, other pension and postretirement income of $1,002 and $2,109 of foreign currency gains. Included in 2021 were pension and postretirement costs of $6,529 and $4,049 of foreign currency losses.
Net income for the nine months ended July 31, 2022 was $371,854, or $6.37 per diluted share, compared to $343,908, or $5.86 per diluted share, in the same period of 2021. This represents an 8.1% increase in net income, and an 8.7% increase in diluted earnings per share. Net income for the nine months ended July 31, 2022 includes after tax non-cash pension settlement charges
with a second quarter impact of 32,450, or $0.56 per diluted share, related to the purchase of an annuity contract to relieve the company of certain pension benefit obligations.
Sales of the Industrial Precision Solutions segment were $981,582 in the nine months ended July 31, 2022, an increase of 5.2% from sales in the comparable period of 2021 of $932,640. The increase was the result of an increase of 4.2% in organic sales volume and a net increase of 5.7% due to an acquisition and divestiture, partially offset by unfavorable currency effects of 4.7%. Growth occurred in all regions except for Japan.
Operating profit as a percentage of sales decreased slightly to 33.0% for the nine months ended July 31, 2022 compared to 33.4% in the comparable period of 2021. The 0.4 percentage point decline in operating margin operating margin was primarily due to unfavorable mix, principally offset by benefits of the divestiture of our screws and barrels product line and favorable selling and administrative expense leverage.
Sales of the Advanced Technology Solutions segment were $925,115 in the nine months ended July 31, 2022, an increase of 11.4% from sales in the comparable period of 2021 of $830,322. The increase was the result of an organic sales volume increase of 13.3%, partially offset by unfavorable currency effects that decreased sales by 1.9%. Sales growth occurred in all product lines, with particular strength in electronic dispense, test and inspection, and biopharma fluid component product lines.
Operating profit as a percentage of sales increased to 28.2% for the nine months ended July 31, 2022 compared to 24.6% in the comparable period of 2021. The 3.6 percentage point improvement in operating margin was principally driven by greater selling and administrative expense leverage and the 13.3% organic sales volume increase.
We record our interim provision for income taxes based on our estimated annual effective tax rate, as well as certain items discrete to the current period. Significant judgment is involved regarding the application of global income tax laws and regulations and when projecting the jurisdictional mix of income. We have considered several factors in determining the probability of realizing deferred income tax assets which include forecasted operating earnings, available tax planning strategies and the time period over which the temporary differences will reverse. We review our tax positions on a regular basis and adjust the balances as new information becomes available. The effective tax rate for the three and nine months ended July 31, 2022 was 21.4% and 21.2%, respectively, compared to 21.2% and 20.8%, respectively, for the comparable periods a year ago.
Due to our share-based payment transactions, our income tax provision included a discrete tax benefit of $115 and $1,539 for the three and nine months ended July 31, 2022, respectively, compared to $570 and $3,165 for the three and nine months ended July 31, 2021, respectively.
In the aggregate, average exchange rates for 2022 used to translate international sales and operating results into U.S. dollars were generally unfavorable compared with average exchange rates existing during 2021. It is not possible to precisely measure the impact on operating results arising from foreign currency exchange rate changes, because of changes in selling prices, sales volume, product mix and cost structure in each country in which we operate. However, if transactions for the three months ended July 31, 2022 were translated at exchange rates in effect during the same period of 2021, we estimated that sales would have been approximately $32,200 higher while costs of sales and selling and administrative expenses would have been approximately $21,300 higher. If transactions for the nine months ended July 31, 2022 were translated at exchange rates in effect during the same period of 2021, we estimated that sales would have been approximately $58,500 higher while costs of sales and selling and administrative expenses would have been approximately $38,900 higher.
During the nine months ended July 31, 2022, cash and cash equivalents decreased $171,235 as cash was used to fund the NDC acquisition and purchase of shares for treasury, partially offset by cash generated from operations in the period. Cash provided by operations during this period was $339,691 compared to $375,456 for the nine months ended July 31, 2021. Changes in operating assets and liabilities decreased cash by $125,573 in the nine months ended July 31, 2022 compared to increasing cash by $12,565 in the comparable period of 2021, primarily related to increases in receivables and investments in inventory. As a result of our pension annuitization transaction, we remeasured the periodic benefit obligation of pension plan and recorded non-cash settlement charges of $41,221 in the second quarter of 2022.
Cash used in investing activities was $210,571 for the nine months ended July 31, 2022, compared to $22,997 used in the comparable period of 2021. During the nine months ended July 31, 2022, cash of $171,613 was used for the NDC acquisition and cash of $39,373 was used for capital expenditures. During the nine months ended July 31, 2021, $28,073 was used for capital expenditures. The increase in capital expenditures related primarily to capacity expansion in our medical fluid dispensing and components product lines.
Cash used in financing activities was $294,418 for the nine months ended July 31, 2022, compared to $388,126 used in the comparable period of 2021. In the nine months ended July 31, 2022, cash of $88,675 was used for dividend payments and cash of $233,767 was used for the purchase of treasury shares, compared to $68,021 and $46,840, respectively, in the comparable period of 2021. The nine months ended July 31, 2021 included net repayments of long-term debt of $292,290 compared to net proceeds of long-term debt of $22,905 for the nine months ended July 31, 2022.
The Company also announced that the Board of Directors approved a 27 percent increase in the Company's quarterly cash dividend to $0.65 per common share from $0.51, effective with the dividend payable on September 6, 2022 to shareholders of record as of the close of business on August 23, 2022.
The following is a summary of significant changes in balance sheet captions from October 31, 2021 to July 31, 2022. Inventories-net increased by $72,384 due to our efforts to manage supply chain disruptions and to meet expected demand and existing backlog and as a result of the NDC acquisition. Goodwill increased by $129,856 due to the NDC acquisition in the first quarter of 2022. The long-term debt decrease was largely due to a Euro loan balance of $270,738 being classified as current.
We believe the combination of present capital resources, cash from operations and unused financing sources are more than adequate to meet cash requirements for the next twelve months and for the foreseeable future thereafter, including the acquisition of CyberOptics. There are no significant restrictions limiting the transfer of funds from international subsidiaries to the parent Company. We were in compliance with all debt covenants as of July 31, 2022. Refer to our Long-term debt footnote in the notes to our condensed consolidated financial statements for additional details regarding our debt outstanding.
Backlog entering the fourth quarter of fiscal year 2022 exceeds $1 billion, as the Company continues to see extended shipment request dates in conjunction with large orders from its customers in electronics, industrial and medical end markets. For the fiscal year 2022, the Company expects, despite significant currency headwinds, year-over-year revenue growth of 8% to 9% and earnings per share growth compared to fiscal year 2021.
Safe Harbor Statements Under the Private Securities Litigation Reform Act of 1995
This Form 10-Q, particularly "Management's Discussion and Analysis of Financial Condition and Results of Operations," 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 United States and global economies. Statements in this annual report 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. These statements reflect management's current expectations and involve a number of risks and uncertainties. These risks and uncertainties include, but are not limited to, U.S. and international economic conditions; financial and market conditions; currency exchange rates and devaluations; possible acquisitions including the Company's ability to complete and successfully integrate acquisitions, including the integration of NDC and the acquisition and integration of CyberOptics; the Company's ability to successfully divest or dispose of businesses that are deemed not to fit with its strategic plan; the effects of changes in U.S. trade policy and trade agreements; the effects of changes in tax law; and the possible effects of events beyond our control, such as political unrest, including the conflicts between Russia and Ukraine, acts of terror, natural disasters and pandemics, including the COVID-19 pandemic.
In light of these risks and uncertainties, actual events and results may vary significantly from those included in or contemplated or implied by such statements. Readers are cautioned not to place undue reliance on such forward-looking statements. These forward-looking statements speak only as of the date made. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Factors that could cause actual results to differ materially from the expected results are discussed in Part I, Item 1A, Risk Factors in our 2021 Form 10-K.
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