NDSN - Earnings call transcript Q4 2017

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Operator

Good morning, and welcome to the Nordson Corporation Conference Call today, December 14, 2017 to report Fiscal Year 2017 Fourth Quarter Results and Fiscal Year 2018's First Quarter outlook. Today's conference call is being broadcast live on Nordson's webpage at Nordson.com/investors and will be available there for 14 days. There will be a telephone replay for the conference call available until December 28, 2017. This can be accessed by dialing 404-537-3406.

You will need to reference ID number 7396249.

forward-looking Nordson's be current call, performance regarding conference on based expectations. this statements made may future During These statements filings may actual and and other involve Commission results a number as Exchange in of to discussed differ. the could company's that with Securities factors the cause risks, uncertainties, After the will quarter, be question-and-answer session. remarks on there a and Officer of Nordson that I like will Executive With to introduce Chief being said, Mike Hilton, President Corporation. Please ahead, sir. go

Mike Hilton

joined morning, Good Officer. Quarter Thank you Greg Nordson's Vice joining Senior Fourth operating I'm begin I'd by Financial everyone. for Conference recognizing effort XXXX President Call. EBITDA. for team process, the year Thank global delivering by to Chief record-sales our per Thaxton, earnings outstanding and you. and our full of like share

customers' best more will annual in on some meeting delivering our our and performance be to record-setting to provide technology Greg continues this helping commitment us offer $X the priority, financial highlights detailed year. commentary. I'll Our our surpass solutions revenue billion needs and

at with very Looking in ago market, Dispensing serving Against organic end Adhesive was of X% comparisons organic medical electronics the strong quarter's of along by the growth a exceeded where this our growth those driven total performance end demand in segment. and increased market fourth year company growth challenging solid the quarter, XX%, guidance.

and with Our dividend to very in for recent our XX% compared what solid acquisitions improvement consecutive X quarter continuous by margin during again improvement Overall, performance in Also the was marking our the Nordson. coupled year ago. was fourth resulted our we added XXth the increases. initiatives EBITDA quarter, the our year the volume a year for as a percentage annual XX% fourth increased of EBITDA growth strong period of of sales and quarter dividend XX%, in growth same quarter, point about

Year, for quarter the fiscal our another indicates to ahead XXXX. New Looking backlog robust first

I'll our by call few largely markets Greg? Greg demand speak quarter about to and where to fourth very moments, perspective more in Advanced the medical the more detailed strong strong quarter the on our performance. driven Our I'll and in is guidance outlook electronics driving turn over Technology our for end is quarter first, and first segment provide but is a guidance.

Greg Thaxton

in prior Mike, related year Fourth included exceeded morning to you, end This first an our good provide the before market. change organic the moving comments fiscal increase of the increase quarter I'll strong range quarter. results end in related quarter Thank a our quarter the over some X% and by $XXX increase and prior to quarter. demand were in fourth outlook everyone. volume; fourth to to sales X% and million, first the acquisitions; Organic fiscal of increase currency year's of for year translation first effects guidance high XXXX. sales to driven the of on the on our full fourth favorable primarily XX% growth compared year's effective the electronics XX%

all to the in to in favorable product compared segment, quarter for segment growth growth where effects as inclusive X% volume performance fourth of translation. XXth marks increase quarter in lines current quarter. of consecutive currency the of the This nearly all drove organic regions the by the related organic Adhesive segment, X% in increased prior the sales Dispensing at sales X% year's Looking quarter, and

year was This the markets growth medical quarter of effects acquisitions. currency the increased year X% prior The Within of quarter, Advanced year growth were immaterial. effect the related Technology inclusive and volume growth segment, XX% sales of to quarter's first demand from fourth to fourth the for translation current end the is performance drove comparison outstanding segment organic considering this and volume from organic exceeded that difficult our Strong growth. prior XX%. expectations electronics where the XX%

decreased quarter. in by year Americas quarter in one We of demand from month solutions. application includes product fiscal in organic Vention. line. fiscal this the also in in industrial segment's acquisitive current LinkTech of X% Regionally, with the Europe very XX%. our up ongoing performance a Customer growth the was was growth. geographically Ace, cold growth strongest Organic ago XXXX volume technology Japan to and growth the the XXXX the acquisition to coating This segment where in also product comparison segment lines continue marketplace sales was strongest volume strong U.S. benefit where our year the Interselect, prior was and Japan to and challenging to offset our fourth broaden and material and the were against changing most a Plas-Pak adding ability this acquisitions

Moving amortization margin year's fourth quarter down where performance XX% for acquisitions profit $XXX expense XX% related quarter margin basis operating total which million in operating was to of by asset statement, of prior compared year quarter. current the made the XX% company and to margin a as $X the full in the gross in the point. intangible income operating dilutes to includes million improved This approximately the reported

Looking approximately compared XX% product year. charges in delivered in related restructuring The at fourth margin changes by improvement operating This charges operating efforts. prior and $X performance on the driven as X includes restructuring to of quarter. quarter points mix to a facility million impressive the segment in basis, Adhesive percentage consolidation of was current Dispensing an fewer

the acquisitions total per in current in GAAP Within prior charges of the company excluding or the amortization net $X quarter, performance year asset volume to million per margin over XX% by earnings performance year's operating acquisition. earnings basis, the a million reported in $XX prior $X.XX, intangible the segment. Industrial segment, X% current the fourth where for share The but $X.XX. related XX% GAAP still On exceptional to quarter $X earnings strong the were year asset due year this segment a in was share fourth per for quarter Advanced leverage from income intangible Technology expense diluted when current diluted Coating share. mix, and of was amortization quarter of margin increase million XX% down operating reduced delivered

year's delivered Cash strong operations continued a million, improved the prior of As XXX% million million to over fourth margin year percentage was as our free flow EBITDA was Mike noted, or from fourth EBITDA and fourth income, of liquidity. $XXX before quarter. the point quarter compared highlighting prior $XXX XX% X to quarter flow cash $XXX dividends increase and we focus on XX% net

results. includes Our a few exhibits and EBITDA as to now reconciling free income dividends cash well before EBITDA. strong full I'll X% fiscal organic which were for flow as for XXXX billion, $X.X comments the of was share a very our flow Sales as to year before strong also net dividends Nordson. press cash year year, on free and compared prior adjusted inclusive release financial growth adjusted of

of a increased of $XXX compared our dividends debt sheet cash release. margin of to adjusted highlighted EBITDA and ratio include $XXX was performance asset payout basis adjusted trailing million and charges EBITDA prior for Adjusted acquisitions. the adjusted included year prior GAAP the million, regarding forecast inclusive earnings in first diluted based added XXXX. is law October amortization per where XXX increase CPS improvement one-time to respectively, and the $X reconciliation XX% entered first XX%. is in the point income first per XX% acquired margin representing XX% based fiscal amortization growth XX% to to expense our EBITDA from earnings million of XX% to a within rate amortization intangible of share share. to XX% Backlog $XXX on expense, increased financial includes basis growth related of XX% at XX% with forecasting I'll fiscal dividends in earnings prior the increased over operating quarter and of adjusted XX% amortization of $XX to We're not are of amounts XX% of Reported XX% million volume as quarter just asset $XX as The GAAP and rate financial momentum earnings the Full acquisitions. was share or year and the the continue XX% positive quarter amortization this these quarter or an midpoint quarter intangible to first we and XXXX balance amounts compared diluted per expense calculated intangible to were the intangible did an on strong XX% organic to for per be now year. for backlog XX%, move effective We're net the quarter per the for prior XX% to fourth is was quarter of XXXX XX% $XX acquisitions. the effective as the was of perspective, up XX, was XX% million exchange XX% and related expense inclusive estimating prior the over million XX% inclusive points to over share current $X.XX growth a the of both acquisitions first pleased the approximately of basis we range $X.XX the X% current diluted to exchange in million comments the fiscal fiscal between both year, the for during $X.XX asset expense XXXX. expect sales resulting operating EPS to range the fiscal compared quarter. approximately million, in range to and asset These the of first year's XXXX; XXXX of $X.XX. be prior prior At growth per for full exclude and $XXX an about the as GAAP X% October million We EBITDA year. with exhibits of of the both for occur increase reconciliation Both press XXXX quarter an the exhibit with share gross first A to or on a to at year of be per EBITDA From This which to sales depreciation outlook acquisition. million million XX% diluted associated adjusted full of effective charges X.Xx XXX earnings on margin organic acquisitions. of $XXX inclusive and EBITDA margin year asset million, effective rates. tax operating of the interest margin to $X Net XX% amortization approximately diluted compared about XX% of tax were of is to profit quarter. year year growth before due for to $XX and outlook, free year's of XX, at intangible acquisitions. The compared and EPS currency the first ago. effect to the of forecasted margin. operating the increase growth $XX acquisitions expense the year year environment. share year excluding distributed end $X.XX. margin under flow share and $XXX the over We XX-month current generated million, $X.XX about expense first charges EBITDA

the range of to $XXX to $XXX million. EBITDA expect be in million We

rate first be this on you, year back our that, million. approximately to effective law we're data based the and full to with forecasting spending $XX I'll points In following the to Mike. rate tax were forecasting over the capital helpful may turn And where current addition call XX% be to tax be full year quarter outlook,

Mike Hilton

full helping both the you, I fiscal XXXX. the fourth for again quarter This our us Thank and deliver record Greg. want results fiscal team outstanding for thank these to is global performance for year.

Technology driven Advanced Our first medical where electronics in demand and strong segment strong, performance. end is markets largely guidance quarter very driving by is the

limited acquisitions start. Our visibility off good to applications, With quarter. of growth to short-cycled sales off we diversification tiering markets, first beyond to a and new the our a end drive and technology are efforts recent have nature through our are paying

sales more do beyond to growth giving moderate we quarter, first organic levels the to challenging XXXX. our from future particularly comparisons a fiscal anticipate However, typical strong

consistent operating an segment. across remain our improvement in to target perspective, use and year the to continue business enterprise. for questions. From to initiatives focused continue targeted priorities strategic on driving With now and growth years will and be prior [indiscernible] we'll drive system Nordson companies each our with we'll continue take the within the your high-quality pause we'll to tools space across that, Our

Operator

Global Alembic comes question from Instructions] Summerville Advisors. Matt first of Thank the Our you. line [Operator of

line is Your open.

Matt Summerville

as a I Whether you. projects, surge clearly-defined whether element Tech this? Advanced first your talk then in few customer be providing described data. you is Is guess there Thank this response Good also morning. that indeed something given handful reason word you've Can driving more if historically timing to that's broad-based are a a to may the in you and that's or concentrations it so, to best that are not question? about and you you're provide business QX? order the there's anticipate quarterly the business able in of the and

Mike Hilton

Yes.

newer related Let me of mobile-related. underlying really strong into seen is segment. some some our electronic and the we've technologies. demand the portion quarter the in that But in first quarter the of end first we're also, large on growth is orders A comment piece. What seeing to fourth tail in continuing good

that rigid saw customers come design flexibility say is supporting to smaller footprints. of I'd through, flex more broadly-based. example, What some of would from projects couple to of provide directly, some that we some moving that with more that circuits one For large be to a mobile

So has quarter continued first the into little level, that we've quarter. a this a into had we're and what year year on high pretty of At the seeing a strong electronic that's mobile and obviously the side. introductions fourth bit

couple the thought a guidance has our and quite about as recently we've you windows a the process growth with across couple with business reasons pretty additional electronics changed business. through mix of seen thought the been in the let bit that underlying give our be out And was rate order have more little the in that [ph]. guidance the because delivery provided a with and behind Originally, backlog But We've we it of we year-to-year Advanced far fold the varied thinking rates are both Particularly years, to The business. around of the our been of last providing side, guidance. of whack As over and/or has the sales the insight considerably. our while. segment, regard timing run me in shrinking orders, Technology medical order for now here. electronics orders in the

looks And at places customers order way deliveries quarters. of to [indiscernible] out have the we we're end of rate to multiple addition, and with the at kinds wasn't into projects, healthy quarter insight. in orders that make why and then our decided of give guidance that going who you thought guidance a In look by large getting over some sort forward sales change. We've of was why of for our we that those effect. confused takes rate and situations growth ourselves backlog getting where That's necessarily were many to it feedback look to order also shareholders found explaining they consistent at additional were data all we but provide from things things our we more the our

Matt Summerville

a XXs, high per at out, se, to Advanced gain, with think with one follow-up with Got guess number I amortization, that positive the the in back Tech; come high it. of maybe I but isn't I the a would $X in bit if respect fourth as margins a intangibles would million quarter, up be little then number I just incremental higher. And I the number which the bad I volume think look

going it intangibles Advanced include you're of to -- out to assume the I going the and -- way sort in Tech forward guidance as the amortization what's incrementals about you've forward? going think right laid So continue your to in

Greg Thaxton

growth helping growth is segment. Greg. the intangible necessarily an on that this see incremental was that's had Have organic there In in excluding fourth is lift true. quarter, what organic those wasn't margins see prior strong and was success growth. quarters organic stronger suggested the that did operating growth? asset seen the acquisitions largely we opt had when single-digit very near Or but We amortization this What we margins. very where for we see the volume we case, in margins of that stronger growth, low acquisitive basis I'll we was Matt, add good margin

Matt Summerville

Got guys. it. Thanks,

Operator

you. Thank

from of next Our comes of question Michael Baird. Halloran the line

line is open. Your

Michael Halloran

conversion side, On segment. by was it backlog year respects? was revenue? in you context to also meres the useful the on gave exit little a thought the just that guessing, to you Mike, comments little as of the [indiscernible] into backlog the give look the question, the about Matt's as one through that a order think and how but One, that I'm thing the two you on backlog composition we Could segments

Mike Hilton

Tech the you on is Number electronics reasons; Advanced all acquisitions standpoint, if segment, particularly Yes. most and into of the is couple obviously the From that for an fall medical to backlog an one, take -- strongest strong, number two, segment strong. basis, of They're organic falling change overall one. in year-on-year out a that. is

QX, and the As business you in say where as was year work more down bit prior flip in is a a biggest driver Coating strong Adhesives is then we and QX comparison well. that up our I'd really strong Adhesives little businesses, segment, the the had of look at the piece repeat. but year-on-year didn't our auto was the general, Advanced business that's other up, some some platform Tech

again, look segments the As all we first to be quarter, piece. expect of driver Advanced Tech to be key going to the up, we the is but the

Michael Halloran

the And conversion question? backlog

Mike Hilton

quarter portion push potentially out. then quarter. some have the you within the I'd know orders what area, longer do even particularly Adhesives get converted side some we forward, in in say technology this coatings the see that some the for polymers as we the will and of the but of quarter, backlog lowest say in to in I'd have coming good a industrial of first converts some and you the both projects of where

Michael Halloran

of my obviously That's is second seasonality And guess. the Advanced on Tech here. around side sort question, the shifted then

electronics some previous how some Your in you're moved helping limited you out. you the half of some have than larger maybe the of in got in the piece first thinking quarter, seasonality the Are but materialized provide smoother you've question, expecting just portfolio Something on could side, back that before answer hard Maybe being second that quite the that ramping materialize the year? thoughts in to project quarter I now activity, quarter some would cadence. fiscal is 'XX? that help your of have complexity visibility that through that on items know the seasonality nice pieces higher fiscal a about fiscal to medical?

Mike Hilton

be a but When of comments the there. just There Yes, double-digit second you have than the out, stronger say that first we year-end, large that's to growth. would some tougher quarters got. comps expected I'd at going the couple we really had to linked obviously third we and a going orders those little quarter look of are organic is at year-over-year. strong

So we're part the to being the technology basis, likely I range. in be things, I side of of that that at you Advanced forma up XX% it's that we would on medical challenge think businesses are a the that the piece, pro a sizable now will against. across and looking say and start Tech portfolio be

then going stable look I'd little be the So much not bit another as something a is XX%. if that's as say probably and pieces, medical at you beyond to electronic-related that's more

can seasonal. work project likely less year I robust. the the on stable and year a would is look the throughout one and the project be key we bit to is activity customers piece vary, at also of to our our electronics and more where that's time activity with continues but say that is this The So be

but of provide newer But out higher launch comps in the or think share growth. the here seeing side the the the that think that's guys, will is mix whether at has stronger on some in on or marketplace challenge. some whether of it's which flexible been like third challenge things We'd can a we the be we're that's lot strong against technology, wafer interest of mobile that's particularly some packaging things be the is of I this insight the of quarter some point. by side best the that figuring gaining and in segment generally that second in I a

Michael Halloran

Congrats I that. very nice color. appreciate Thanks the on a for quarter.

Greg Thaxton

Thank you.

Operator

you. Thank

next Company. line Our comes the of of & Matt Gabelli Trusz question from

Your is line open.

Matthew Trusz

Thanks morning. Good question. taking for the

that, chip away technology mobile discuss on the up dynamics and following and more on you electronics driving and Just could the and through growth more go from semi detail side?

Mike Hilton

I'll a make comments. couple Yes. of

the the seeing packaging, Advanced diced. after on we've as stacking opposed historically we're On to some but wafer actually at that Technologies the customers side, the semi wafer done where lot on now they're looking are is a

customers customer the potential new we would very have just And on application going and wafer. so so will say that electronics that sort these through on adopt are chip also architecture vertical what's the concert silicon That's in of still of a in months. last side with that some for [ph]; a a ultimately growth that additional side, that on of that nice that the in think the the enabled and over resulted proceed particular sophisticated expense called the number towards products of growth areas. but us that's XX on new has side, via doing approach lot the on There inspection applications. developed technology I'd

is Coatings equipment that for company in Technologies look today, And about something when you and into see from new for I'd and the cram space, side, and batteries, that's would probably more the a the electronics is the Technology eventually packaging then our of as lot the we to with rigid flexible term customers supporting we the that total goes towards focuses opportunity growth been enabling. business packaging, our And the longer autonomous virtually or doing new more a customers On in driving. and We're packaging, you auto senses right then basis, to Advanced to flexible as on move more that in support on broader basically packaging more if a of allow now, and flexible say and our go smaller are the technology and starting packages in that's growth packages XX% last businesses, in medical already all there. environment driving several coming or products create of Adhesives the area, do own whether over in demand hallmark lower our our the applications growth and that's relatively area of Technology piece, Advanced really our how area. development That's look years. we've of around we've Advanced growth you something our in that in that's at in all part medical focus non-electronics seen

Matthew Trusz

you for the thank Great, detail.

follow-up to supply many of ask and penetration Just your portion to sense market the a adapt? these on the technologies need that. newer more of will into of how or chain What's years the

Mike Hilton

for early it's say on, all will be what sense say to it's but at I adapted. I'd hard

think growing that's technology, signal through of if the look rates that's broader rigid over. right something now high circuit as you at basically board flex some the gets digits I converted circuit

and there. depends electronics take, on wafer offer one different on customers still of to a then there's we approach. whole area and and It are companies products is haven't to more the that the about test that three-dimensional good recent [indiscernible] well. get our start then based in additional process smaller the really ways doing got inspection technology. the either becoming as talked well set approaches acquisitions three-dimensions opportunity dimensions inspection. Customers the a x-ray yet that's we've go particularly interconnect the of to critical other most side off things there which three-dimension. to side, at is and ultimately but multiple of things were or particularly The And new or space, some are this on On And we

that's also terms good as new we earlier, the and lot of that. growth, feel about a Greg application all and of try we business. to driving about tiering across do in product new So, our electronics, It's philosophy but pretty what said

Greg Thaxton

Matt, of more trends coming I'll just Mike customers, Greg. and difficult the likely in smaller this Nordson sophisticated A to more tighter, for the that application high-level a quantities that solution more dispensing they're add comment. translate spaces solutions talked for provider. about the more that they're our is sophisticated the reach is, into to lot

Matthew Trusz

much. very you Thank

Operator

you. Thank

line Our from Stratton comes the next Lakes. Great question of of David

open. line is Your

David Stratton

Thanks for morning. question. the taking Good

Just capacity adding the can as one for in impact this Or really growth near your me a ability the potential that demand some need where create to bottlenecks a meet and expand? Have there to talk you today; future? to you stand growth ATS, capacities bit about little is acquisitions? to they to especially you given don't been in

Mike Hilton

There's in suggest question, adapted but very let that the become on me particularly and down. I'd up we've a flexing say lot side, electronics a -- that

we re-layout factory the world systems to have business We our we've Nordson facilities across and capability. and where cost have also low capacity to to flex cases, up our used and down relatively many our

latest customers the all capacity capability to and but Mexico give and in efficient, have the acquisitions of adding our in more combination where additional good say So to only been and equipment been capability increasing I'd some work. us areas the expanded development I of centered acquisitions; but facility think used example, we are all the upgrading our then the U.S. we across doing But not make key U.S. we've expanding. We continuous in our all we and we're levels we've us their our built we're very a need. improvement in only of facility there. I'd automation activity businesses, of with capacity not and Colorado; outside new got say medical have business we've our the an as a through with

shape the than we're in this pretty in capacity, other shape year transition finishing that pretty normal good from of with maintenance up good business' and sort we're regard [ph] business, So in consolidation. that standpoint. We're to Palmers our

Operator

you. Thank

Hammond comes KeyBanc. next the Our question of of Jeff from line

is line Your open.

Mike Hilton

Jeff?

Jeffrey Hammond

Hey.

about that. Sorry

Mike Hilton

okay. It's Good morning.

Jeffrey Hammond

morning. Good

or that you opportunities on track, early but cost on the notable uncovering I terms revenue acquisitions, they're maybe synergies on just Just anything you're of said in think on? it

Mike Hilton

Well, say smaller number things. some ones. the break couple a I'll and of I a maybe down with would them We've start of and done of acquisitions

area new start, as the to that in space the did plan were ones with business. Our side inspection our a the selective is off is electronics two which local smaller good company the of in there we side got a just into and globalized the acquisitions us matrix

our good design added portfolio and capability. established added the we've those. back So also in companies on got really what success, with to the to development broader term, venture as came think some to products a I'd businesses that But term, of in organization short and we've larger for opportunities able product side. say story to medical seize to in allows capability product in and some product but into our utilizing will it involved gives us space, we've in these that line sales footprint. our product been in think looking only with start customers longer not our early and new through good us, create from acquisition, some off we've be there benefits chain customers significant and their opportunities development the further added optimize we're I'd lot and I a of us just in a front, optimize EFT there with complement Vention I critical seen on opportunities start; the helpful some plus people and our with some really development, of to new We've new new there. area think say the which across design and of get pull to and global I case opportunities in brought we're entrepreneurial supply force established portfolio health of are the animal say us with of say and I'd capability to and to various [indiscernible] close very seeing through particular capability business I'd

Jeffrey Hammond

Tech et further cetera? to great. a inquiries, on you're speak project look the of just you cetera mentioned Okay, And what little QX. active and and out Can out past If side? from customer your et terms Advanced quoting same customers in looking Adhesive you we on hearing the feedback,

Mike Hilton

the say Yes. pretty [ph] a of it's see. I'd what on adhesive we skeptical side,

think we opportunities our growth in things of of there's most of businesses in holidays, forward, of for Just for say opportunity in but an timing the slowdown the terms businesses. I'd going all

we've we're tier built a tiering. This lowered on of and non-woven digital design them for and this is with some about going Shanghai products. really our this and introduced and relative I'd we in we in some at where businesses, help opportunities time. point in for both to is businesses like competing all think now and it's new based our product a underwater China, from bringing. new palletizing I'd some the used got the say got well businesses in Adhesives but interest are to up short benefit Some visibility these good then new we've set business side customers expect and complete that like traditional what growth Asia the more gone activity us we've We to business, on see of development typical example recapitalize what say us palletizers. there. there palletizing our in at feel our to businesses the first of in opportunity continue and facility product of new we've of are of activity year started technology out we've there technology point to time, lot to I our with assembly in the typical term, seeing but We've of And

Jeffrey Hammond

Mike. lot, a Thanks Okay.

Mike Hilton

Yes.

Operator

Thank you.

from Oppenheimer. the Christopher line question Glynn comes next of of Our

open. is line Your

Christopher Glynn

and morning. the inorganic Hey, good on Congrats organic performance.

Mike Hilton

Chris. Thanks,

Christopher Glynn

pipeline Just wondering activity pay down? the about debt the all you've as medium focus on Or stand? term; relative robust on that does continued allocation where come capital some the in there to pretty execution

Mike Hilton

capital foremost say is allocation organic and growth. first supporting I'd our

some then second, those gave I mild. are together relatively dividend's Greg of but both the on piece, numbers and around that think you

to still a mentioned. on I we and focus debt reduction short-term opportunities up that capacity for will we free that, in have out areas the think opportunities we've targeted beyond see there

most to there us market side are think medical give reducing fragmented. very probably the I'd I the just year. still is debt to some opportunities board more free through continues But term, in it be the in opportunities say the this around because short

been So after similar of where I'd year. to are say priorities first the last quarter they've pretty

Christopher Glynn

then spiked there? for a on little the what's but to way the in the number. a run up And in question rates Okay. corporate plug best modeling quarter, bit It

Greg Thaxton

time some to business with call was most one the Greg. and This portion Chris. associated America the the shared service North course in a the is had and -- we -- Yes, prior increase an items' it year initiative over have 'unusual of that quarter We that more in in a of of move to model. type

we And you've trend fourth most in kind expect of seen that to recent quarter normalize as into quarters. we'll move down the amounts 'XX, then spend over time. I'd that FY So the to

Christopher Glynn

is benefits my the then can on one fiscal revisit want over just 'XX I if structural for last to 'XX? And quantify consolidation ADS. from you Okay.

Mike Hilton

progress build where were it's way, would three the part going and under the in relatively in multiple major the of one. I further we're North later. say year, we're we bit two running have equipment's It and little for facility facilities U.S. completed facilities. to We're completed transition ahead the one the America in the going have get because will out as still Yes. a consolidating one project Europe be but into first to and both year, we the in Europe the we'll one in started from the modest new

larger impacts 'XX. So year modest some and be in I'd there in this impact say will some

Greg Thaxton

firm better heading within improvement Yes. Chris, up give margin number we'll and probably on as some segment guidance 'XX. you that that we're that into

Christopher Glynn

Okay. guys. Thanks,

Mike Hilton

Thank you.

Operator

Thank you.

Global. from comes of Walter the Liptak question next Seaport Our line of

is line open. Your

Walter Liptak

Hi, thanks. morning. Good

Mike Hilton

Hi, Walt.

Walter Liptak

too. congratulations, And

the Jeff the over do sounds on quarter or coatings? He if first least. commentary Any that probably I on asked the could and seeing year? same projects from growing wonder thing about it. the talked backlog think It down is even the says what on next you're You I maybe we probably about like one

Mike Hilton

Yes.

we quarter. primarily for mentioned to But and do quarter think the up quarter first I As the be the tough on in I first the fourth some earlier, in Coatings seen side. on the all businesses this business, comps auto say I'd expect haven't we

for I we nicely. our year. growth in significant see businesses tick Tier to in anticipate revenue you changes. future auto a some we But had about that model into more the went big to going customers and and have look grown continued this customers it the only through that end X do those We as as quarter container, powder suppliers of talked present that change had look first through some the of that were aerospace at do opportunities both going before some activity sort area and quarter kind up through liquid couple for If expect platform We'd fourth the work model we've the customers and business think automation. of of over where areas the would good time. One last

sales work So of development to some had and I'd say modest lot we've date. a

We expect to over pick time. up that

opportunity There Another seeing of the in around vehicles. in we're themselves area seeing on work the development. in is more some most going Coatings batteries opportunities and things more electric importantly is to that we're battery business, support area the across the the with but

platform. piece in we So we the area. time. been the auto been issue expect over I'd this a drag has that's that there little really thing that see see In longer year, of growth bit 'XX opportunities say of the term a to the being

Walter Liptak

in evolves. if ask maybe could that rapidly for where makers the Thanks growth the test any flexibles, talked the I features a more in like the color sounds there's large mobile as delineating that dead is phone if mean Tech, the difference the with you work, first with just beat China but there's time we're more the then but way traditional there just this is technologies then and these more don't thing? I And Okay. there? short-term hearing it growing you or versus a Is that. wonder about Advanced comment any in this horse and as I rates visibility to there's think could on behind -- new I then I there? wonder if of projects, orders then And technologies, been if it that market you've go

Mike Hilton

highest Yes. just our you look Advance business of components Tech in lot there; level the at just mix There's if maybe of start the I'll today. at and a

Advance and that Semiconductor a directly electronics as be total the XX is other be a electronics got little 'XX, auto So you to XX% could going to XX% of similar of electronics There's pro so be industrial business that other about Of little that Then and that gaming consoles, mobile then are forma falls for you consumer things. Tech, medical. into our would smaller side. variety of and types space. a if half LEDs, at other about about look application. is smaller, probably another close is

across it a because to than primarily was the there's the one, couple go So segment medical different in I'd that just of there you diversification, whole the applications breadth years and these other some piece if of say a the is two, applications. back of

the yet the most some do after the cram do dice to out customers are is to phones, of it biggest reduced means newest Everything see thing the is of wafer. following the the battery, other newer The and that in before space that mentioned, some regard others go With in capability up it towards in equipment. not at larger wafer, applications you we've indications that's been flexible There's I significant look chips. we're and and you are one things you the whether it's of say some going in to way, in battery. in that's things step successful semiconductor or both else so most inspection that that I'd use lot go do clear a So recent doing and to we'll are of on. technology space, makers on of in mobile and work to customers now that some the on the couple going that that to side got We seeing but examples a everything circuits we've will be on XD, technology direction, the I more Those think capacity more our for is side. a and how typically circuits growth whether working offering is is working the are app. sophisticated that support The certainly but three-dimensional outsize on opportunities, flexible the that ways area that is -- those things where on. question if direction not that an of other is to of and going squeezes technologies which everybody but is about you dispense

more Chinese versus more also a the you 'XX launch has traditional. been year a the for mobile good ask about folks players. Now, global traditional

We in as particularly over China. time players, from growing, but Chinese share haven't much they been heard taking the have

beyond China train as So not is they the mentioned past, far to grow expect in that still along animation opportunity on as we've we China, trend the and do we now in and they have and expect global them they It's grow folks way. growth the for the they're moving further gone continue see there continue. to that to that

side on we're time the businesses particularly technology-related newer medical lot well, other space, that's all is year So where we on these And I'd we've that time then going in what projects development working work, of a of as judge. are to got ones the electronics folks the for outside lots is particularly the to areas and the of difficult of of robust. And typically -- the the projects. which go this have other always say are in

Walter Liptak

Okay, Thanks, color. guys. appreciate alright, that I

Mike Hilton

Walt. Thanks,

Operator

Thank you.

question next the of Brady SunTrust. of Charlie comes line Our from

Your line is open.

Unidentified Analyst

my [ph] question. Hi, This guys. in is Thanks taking for standing actually Charlie. Patrick for

Mike Hilton

Patrick. Hey,

Unidentified Analyst

Good morning.

Looking the adjusted sort to wanted for guys and consumables in and margins were the just terms out, mix was know very mean beyond? margins have I of adhesive you at what parts dispensing expanding adhesive Obviously good. of in 'XX margin, of XX%. I in segment what looking expectations

Mike Hilton

to I'd here. that XXs level. the heads XX% a XXs, range. and you get perspective I'd term but to up in for on looking we'd the like a middle might a a say margin's our be Typically, parts up give it's longer little higher the number But the lower where say parts segment; that average are Greg from we'll the that's that. to closer is segment than

that will our systems. normal from Some of our business improvement using come continuous

XX% [ph] through Some be longer restructuring level. that goal of to that business, we're would our to come but Palmer the side in will of going get from term that the the

Unidentified Analyst

Okay, great.

Greg for wait I on As the consumables part.

Mike Hilton

the us follow now. page we have back to you on jumping It's up to for not and that. get right Yes, may off

Greg Thaxton

quarters Adhesives Patrick, prior that, in was of the I in and to mentioned, pretty as about to closely close it in to fourth quarter, the parts -- mix about have Mike fourth trending and was Within company quarter. in be been our XX% that XX% where pretty company total that. had the tends what total

well a consumable, as up we've general acquisitions so that that's Now, as in mix are driven year, they of into fall in bit more of category. from of a one, there a couple the things: prior the by quarter got the impact that

points, of as lifting a otherwise acquisitions those that's Advanced segment. been well what couple by total have percentage in would the So Tech timing be primarily to way prior the mix That's to their in. going

Unidentified Analyst

a want Okay. for to And second. then just go Coatings to I

lower on to to being impact for Looking of margins should the at quarter we volume talked I you fourth Is back fourth -- about those the be autos? be or here items an that there seems we going it anything had is that one where at 'XX, looking down bigger in quarters, 'XX. in guess the previous guys than three the

Mike Hilton

so some to have we think on then something a area; on volume in mix quite move and there nothing for little going impact good that's the being that I There's bit and little nothing while been structurally there. effects there's a structurally path a there. year-on-year changed of bit a a little from of that up Obviously improvement we've and opportunity continued down there's bit

Unidentified Analyst

Thank you. right. That's Okay. all

Operator

And you. Fargo. line Allison of from the of next Wells question Poliniak our is Thank

Your line is open.

Allison Poliniak-Cusic

want just 'XX. in question of back morning. Good customer go terms to or thoughts Jeff's I into to clients'

today As point? customers or year a maybe talking about change spending stand 'XX, versus at optimistically no ago, are this our more really we

Mike Hilton

our that further for change If opportunity significant particularly I'd point. happens, in we say potential this coming of dialog customers terms for up. see would say the I encouraging. I might But be haven't some change at reinvestment. here seen mid-sized have could Obviously a we the that tax smaller this an of mood is

thought probably the than a you at going Europe year Japan I most standpoint, to just little are look the than we year this stronger better a macro from is U.S. be clearly expected. and think if

a we've I'd for of us. terms change some attitude. but say terms not good seen change Not in dramatic list performance So there, in project a in dramatic volumes, customer of

Allison Poliniak-Cusic

at I Got that you we range it, high thanks. then on have single the you're but Are seeing missed this that And this, digit talk rate might about medically? point? could growth still

Mike Hilton

we'd There's double-digit a our us and high and that that long we this to of for a good year, that and see approaches earlier, as that new strong as is the by talked run particularly that lot I them that of a driven had We've favor customer with expectation to for lot products year forward. the minimally single opportunity support developed a invasive year going procedures, and us procedures, towards there. trends and double-digit we Yes. a drive think and

Allison Poliniak-Cusic

Great. Thank you.

Mike Hilton

you. Thank

Operator

have follow-up the do from We of you. Thank line a question of Global. Walter Liptak Seaport

is line Your open.

Walter Liptak

savings do the Hi. increased project of wanted expense. and part Is project Greg, from where were that's I this the some -- be just the services you answered follow-up. the is more services it? Thanks a and question, if shared true, multi-quarter in the about going to you for there to taking to shared bigger

Greg Thaxton

years you several drive prior to from efficient the business model, can suggest type this and Yes, this bring Walter, several with part businesses parts the and of we executing more go world, last had back a our is that drive we more to to under the improve phase acquisitions years, of approach ongoing kind how under overall is performance, in to of that the way could model. really effort but of of been over an this acquisitions

that then America. the So we're half so in complete we largely or FY first that 'XX effort. of say in and North first let's that in We'll We're most of into starting to it shared where of are not had integrate businesses then some of some look services. the parts where world other the the to in of we will makes that locations sense established

effort modeled as expect we the get significant through a do I this suggest that expense 'XX here. to I continue. will be I So being wouldn't once that in see this

Mike Hilton

benefit Walt, support biggest we And -- to about capacity capacity a there that and question see earlier is I'd really growth. was the say

For fair us bit been the systems have and there we to platform has said, here and biggest of benefit that's Greg a as to is efficiently scale to integrate more allow acquisitions I a effectively needed some our the and that across North to with to going us we're term starting see of do work the of the Organizations. in now think around American to upfront the and longer benefits phase and sort up more we'll and efficiently. scale stand are process ability Again, the to effectively

Walter Liptak

going services be? In to is Where Okay. location? shared the one

Mike Hilton

Yes.

the be have we and to the For was partial different going In today, U.S., in I'd in for it's Ohio. say Greg going But places services mentioning. as Europe Asia be Ohio. shared to U.S., in it's

Walter Liptak

Okay, you. great. All Thank right.

Greg Thaxton

an In existing facility.

Mike Hilton

refitting. facility that at an we're existing Yes,

Walter Liptak

Okay, thank you.

Mike Hilton

Thank you.

Operator

to back for Thank any questions. at And like Hilton Mike the remarks. you. this showing I'd no I'm further time, to turn conference over Mr. closing

Mike Hilton

care. once and like our allowing again to I'd participating say everybody to team thank outstanding results. our of customers' meeting First of in needs happy for outstanding just job effective like everyone. very and global deliver I'd that an thank Take for all, this to I'd to With holidays a way doing us year

Operator

This gentlemen, thank program. Ladies your today's does the and in for you conference. participation conclude

You may great day. have a now Everyone, disconnect.

Nordson (NDSN) 14 Dec 172017 Q4 Earnings call transcript