NDSN - Earnings call transcript Q4 2018

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Operator

Good day, ladies and gentlemen and welcome to the Nordson Corporation Webcast for Fourth Quarter and Fiscal Year 2018. At this time, all participants are in listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this call will be recorded. I would now like to introduce your host for today’s conference, Ms. Mahoney. Lara

begin. may You

Lara Mahoney

you Thaxton, Good Communications is am and We outlook. our Nordson’s and Thursday, and Mike report our conference year Catherine. and our President year results XXXX here Mahoney, of Hilton, Greg CEO and Corporate fourth Investor President fiscal Chief December welcome Vice call morning. XXXX you, President Lara This Vice XXXX XX, with Financial to Officer. Executive full year Thank to Relations. fiscal today, quarter I and

call is can nordson.com/investor-relations call nordson.com/investors. conference telephone conference accessed be days there being Our a our broadcast XXX-XXX-XXXX. our which at webpage and for available by dialing live until at There and available be of on also Thursday, will will December be replay XXXX XX XX,

reference You number ID will XXXXXXX. need to

discussed maybe risks, conference the Nordson’s on be a Mike. expectations. Securities performance this forward-looking remarks we call will to cause During and with the quarter, call, uncertainties regarding actual other the on number our future your the Exchange After may will based made as These in could to turn involve of differ. results company’s statements filings current statements to With that, our take over questions. I Commission happy and factors that

Mike Hilton

good delivered I operating share and have like who per would to Thank year for joining recognizing Thank conference call. global GAAP and record and everyone. team profit, you, Nordson’s Lara earnings quarter of you begin morning year EBITDA. fiscal XXXX diluted full fourth another our sales, by

to to growth our commitment customer continued to and through are service. the generating superior delivering technology highlights performance solutions best Our innovation and customers

fourth X.X% prior to comparisons to robust quarter the $XXX ago. $X.X sales to and and sales Operating year XXXX fiscal million, growth two compared year X% in our quarter. increase prior XXXX, organic of million in organic respectively. fourth sales a guidance, $XXX This in X% where year the For and current were nearly we XX% the against X% period fiscal sales challenging with of year’s same year ‘XX the was were or decrease prior of of billion, the sales. an line included the quarter Specific profit full in X% of compared a generated

in $XXX year million, common excluding that operating increased for detailed States will about our facility product call the yield conversion first cash to annual more included a income. full the to our Excluding strong over segment and in and XXXX. notable of Greg continued restructuring benefits XXXX of I ERP turn shareholders. quarter service moments. of fourth build-out I provide brings charges The and during an guidance XXX% lines But advanced operating our our that the to center will where on few included net was speak the on more technology that investments the the million. quarter prior consolidation XX% margin fiscal year consolidating perspective systems quarter, platforms shared United facilities in which over Other before of dividends charges customers the Germany. the fourth or States investments in service. cash ultimately conversion our flow restructuring to Free or quarter’s X% United long-term of efforts centralized adhesive included of XX%. $XXX $X previously of to both we the was These XX% announced centralized sales fourth several the investments several performance to and million shared are EBITDA in the support reflects quarter

Greg Thaxton

change related fourth organic to quarter effects of decrease of effect year X% compared compared of the related to year’s translation decrease growth quarter first sales volume, as currency to Fourth the the of the prior good in and to fourth Thank quarter. This and of you, a sales unfavorable Mike X%. morning in a X% year’s acquisitions everyone. included to X% prior decreased approximately

quarter. Within increased Dispensing fourth the over segment, X% Adhesive last year’s organic volume

pleased as of our well growth our with applications as and within pace new the are in end-markets tiering We strategy.

Technology volume in volume challenging fourth Within respectively. System decreased XXXX the segment, of quarters Advanced against X% of organic and comparisons X% XXXX growth XX% organic the and

robust the product to surface serving exception end prior quarter lines, product fluid test and product for inspection the demand lines and during most treatment management namely year of With notably components. those dispense markets, lines comparisons the and facing was electronic the challenging medical

platform volume automotive sales declined related that X%, Within prior mostly repeat organic year. the not the Coatings did to from Industrial segment,

Moving company operating current margin down the reported $XXX total the of the was with in XX% Operating quarter. income statement, the in was million gross quarter. XX% margin profit for

the approximately the As incurred And adjusted margin initiative, also year. benefits. level of consolidation the for duplicate and Mike impacted total to noted fiscal exclude restructuring million during spending cost was Mike charges company other we adhesive that operating $X that facility to about $X in full talked the initiatives XX%. provide performance will future Specific quarter million entity approximately quarter

related both to a consolidation On year end U.S. first with equal this and adjusted of margin excluding of $X was charges segment the during quarter. cost quarter duplicate XX% or mostly fourth XX% performance be facility restructuring the quarter efforts. this in to of with fourth expect minimal when Dispensing calendar the quarter of prior delivered million about the operating Adhesive margin complete year’s consolidation. basis, We project Germany the fiscal to XXXX $X million of by for strong the This

earnings a is in share. spending was a initiatives. operating basis earnings exclude XX% financial a reconciliation $XXX to restructuring share. quarter net mix margin discrete per Industrial On basis, earnings acquisition for the GAAP and total these current XX% segment’s quarter exhibits mix margin, XXX the included result of segment the and Systems was higher and and share continuous one-time release. Coatings delivered to to EBITDA $X.XX This The million items of of of EPS GAAP of an were XX%, improvement of the Within year’s charges margin lower $X.XX. press or per to points was despite charges. A volume, quarter fourth We Adjusted $X.XX of million volume. non-GAAP adjusted sales income fourth $XX $X.XX share contributed benefits sales, dilution, company quarter inclusive product of decline our is tax improvement the the sales decline. in diluted Advanced of per share product quarter was compared $X included per as fourth prior restructuring Technology in of per million segment margin operating

before during the cash $XXX was flow As income. quarter XXX% of million or Mike free dividends noted net previously,

Net which for dividends value increased press well to fiscal volume year year up income of I fiscal to Our restructuring free performance prior charges. EBITDA compared year. as EBITDA. GAAP compared flow perspective, before diluted the an acquisitions net our of compared an year. currency basis due adding to now sheet asset reconciliation intangible increase were year. billion, inventory. adjusted a to Full translation year’s XX% increased first to $XX the and and EBITDA of the to EBITDA charges adjusted financial to million, EBITDA A free end earnings $X.X exhibits one-time was the million add adjusted is of a X% and share million prior dividends GAAP inventory effect our full EBITDA of to the operating prior period debt charges Vention reconciling million compared margin includes for adjusted per Sales $XX $X.XX. $XXX million adjusted and equal X% transaction the included increase acquired adjusted to was associated the included release. of the earnings restructuring increase effects financial exhibits X% step-up with year $XXX full and favorable $XXX release were the adjusted flow the value press share few growth of on to the the to cost, margin is to in diluted for million and net and before X.X%, year trailing a share as to amortization change is add for both compared prior balance incremental From increase back related sales. back to of same and operating in the a and XX with earnings $XXX operating ‘XX $XX cash million of to Adjusted Reported to per of both XX% between were profit or X% to year. the Xx per This acquisitions earnings X% acquired prior margin of a was This step expense of at margin EBITDA will results. back on income a an year year ago. comments XXXX as $X.XX. XX% nearly increased full organic related sales share the year XX% the fiscal EBITDA was our in months XX% and and cash year

funding distributing in initiatives with in and Nordson organic strong to $XX guidance. fiscal repurchase will and our turn closing returned addition In a investing I acquisitive for to million shareholders free the growth fiscal shares its XXXX Mike dividends and call $XX for of during our quarter. the the by million year few over to fourth value now comments cash annual XXXX flow,

Mike Hilton

you, In expense Once sales and very incremental, want intangible, to thank operating full Greg. our year a were we you certain charges. Thank after steady challenging one-time results. able again, to team solid for comparisons, margins I amortization adjust prior year delivering for growth hold

grew about we going investments XX% us strategic XXXX spoke deliver earlier, inclusive fiscal We performance to EBITDA allow improved the believe also which by forward. will of over I

is successful Ireland-based executing and medical step acquiring growing addition such portfolio. quality it technologies in customer Devices balloons forward product balloon vascular primarily of operation makes focused Galway, and These a on key on catheters. expertise in fit angioplasty development disease. applications of our took we used medical and medical the In Clada focus, to October. has innovation, financial another are a our Clada Clada record within by great as targets, Medical which our design in and a track treatment

than its That’s We the million employees our variety live work have of. more and reach and legacy also nearly we an a $XXX something Since of Nordson through hours. investing are communities and quite in has XXXX. into a impact volunteered success of charitable we proud where milestones significant our we given and initiatives XXX,XXX our continued very of inception, portion

by served guidance. will Now, in the longer benchmarking, and guidance I fiscal on to certainly are market from positive quarterly made turn so focusing focus to providing consensus XXXX. is about to external annual we transition the and we performance. doing the investors effects After a best much believe thought term There our to our decision growing of

Our illustrates to a the quarterly press distracts sales create the our can that strength from new long-term annual overall growth, the our have release noise that exhibit guidance of emphasize To business. consistent growth. company’s annual organic added we

fiscal X% to the the compared For the translation XXXX, expected X% year. prior year to We exchange recognized challenging increase to full of unfavorable face that by fiscal sales range to the the will we rate effect in an comparison environment volume currency in X% current based offset quarter. organic first compared of on a is XXXX as

$X of focus With our Nordson will the year sales operating However, and an we growth strength between our restructuring both charges expect diversity over to results up the XXXX improvement accounting points this in to XXXX are value another clear, be on to end-markets, we system, to be basis for execute our margin fiscal performance. on step increase back the organic this the short-term points EBITDA of in of and and basis acquired approximately business charges. enable inventory ability growth. XXX margin will and over sales generate $X related XXX our million solid and adjusted executing of of add initiatives fiscal growth To forecasting purchase million

rate tax and expects approximately to million maintenance The expenditures approximately approximately forecasted million. interest expense be For fiscal to $XX the XXXX, be is company’s capital $XX XX%. effective company

for the prior priorities strategic consistent year years. Our remain with

accelerating end-markets and future. our on diversifying focused growth, acquisitions organic Nordson for We’re optimizing the through

that, you we’ll always With our now support. customers, and employees, questions. As thank and take your for to shareholders pause your continued

Operator

Instructions] Fargo. question [Operator with Poliniak you. Allison our Thank Wells And comes from first

open. line Your is

Allison Poliniak

morning. good Hi,

Greg Thaxton

Allison. morning, Good

Mike Hilton

Good morning.

Allison Poliniak

it, Could Greg, you ATS. out of help understand the to can biggest a bucket maybe you quantify you there? or us called or on had number if margin was headwinds think what impact

Greg Thaxton

in margin sales I’d say mix, to do. prior would the product what the other down of where lines to that out a tend Yes, some lines carry higher were the take the robust if bigger was in dispensing a margins than impact Allison, from dilution our related gross the you been larger versus have point this impact acquisitions, product quarter our year

the that was in quarter. So big a impact

Mike Hilton

up. other be the to And clear, product lines were

Greg Thaxton

Right.

Allison Poliniak

Got it.

Greg Thaxton

there onto one that the over within year, Now, were spending some conversion the like was common lines up initiatives prior the that platforms segment. was called product we that some of also of out our

some which place year. of during the took had fiscal at for So this quarter that we the beginning conversion, readiness

some also impacted incremental So say, items there but that was spend – were those larger spend I’d two. the first it,

Allison Poliniak

given weighted of story Great. much second more assume half, then the context your just And comparisons in first within a should organic the Nordson? the we half this full-year guide, for is growth

Mike Hilton

first see year we picking this the stronger I’d in softer say sort at look is a but typical that’s Allison, be Yes, would in second encouraging, and the up you half. the business expect. second the we’d expect seasonal of to year pattern quarter of it, more seasonal that typical the with we Momentum if

Allison Poliniak

Perfect. you. Thank

Operator

you. Thank

next Christopher Our from comes Glynn question Oppenheimer. with

line Your open. is

Christopher Glynn

Hey, morning. thanks, good

Greg Thaxton

Good morning.

Mike Hilton

morning, Good Chris.

Christopher Glynn

picking moderate the within talked seasonal into variable You seasonality range normal trend, year fourth up seasonality about the was quarter. the revenue on ATS pretty of next

resilient Just more quarter? you the in the if was than expected electronics wondering

Mike Hilton

fourth the In quarter?

Christopher Glynn

was little thought. Yes, The for organics than ATS. better we

Mike Hilton

say, I’d in expected. as about came we electronics

on that mentioned lines diversification inspection we tough efforts the medical offset strong that product still product especially, EFD played some being comparisons quarter our segment But had out really particularly our of side, lines in electronics of in impact. to As test earlier, the Greg both did and outside some the has with – well. our dispense

So I’d the more more than was the say around it it’s been the parts piece. of – segment other electronics

Christopher Glynn

work a one your always Okay. but in And drivers mobile the thoughts if the that’s changes future period your curious kind vertical? into on it’s call, to of the description then, know across right field tough latency to I of latest

Mike Hilton

Yes, I’d say, – still it will

Christopher Glynn

for Just kind of next the wave.

Mike Hilton

early. little still it’s say I’d Yes,

programs the past, kind what we’ve of change November do I development from where as in then a March, through get and talked we even the of think probably February about it’s sense these usually is. early all

things get then Vietnam, like industries as general strong. expand as the using areas, the support EFD as And whether building phenomenon India to before, bigger is geographic into I clear talked we business adhesives both to that our medical, change this innovation well next the product but to second new the lines electronics, so business test about is we’re think I point. coatings we’re is, is is, our the entering on well and and a typical that’s What just things of growth with say mentioned in But doing isn’t ago Thailand in ‘XX diversifying our ‘XX we’ve we would XG. come in As applications, what and and effectively auto, at business, particularly both a good and that, feel tiering the the reach going outside in focus which in or and in markets inspection Africa. in

good the good things say all other I’d particularly feel as effort. well our – we diversification about So

Christopher Glynn

Thanks good. for Sounds that.

Operator

Thank you.

comes question next with Mike Our from Halloran Baird.

open. is line Your

Mike Halloran

Hey, good everyone. morning,

Mike Hilton

morning. Good

Greg Thaxton

morning, Good Mike.

Mike Halloran

implemented XXXX on is that So think be basis don’t you benefits then in just and or margin buckets the should repeat you it basis other buckets it much missing? in much that you’re to is savings and fiscal fiscal ‘XX? things improvement any let’s expansion is from get points, see I How that provide or incurred Could from to in much might how volume things of help you how year-over-year. you’ve start some ‘XX stranded of XXX going the on points, XXX costs how you

Greg Thaxton

Sure.

stab that I’ll Mike Certainly, portion Greg. add a associated then out comments. adhesive take and come Okay, is Mike, we’ve this of costs going at to duplicate with that consolidations. can facility improvement the that the from a of called is some

but in center the of call XX where expect that to slightly first little we out So beyond shared better We’ll get here and then, some bit up are in we do our this quarter, a benefit some here basis of transition to maybe these that have points, to service maybe that’s the points States, we’ve we to basis there. less. expect XX costs of a it continue overlap But benefits got out United to XXXX and in grow office get some leverage as stood facility, of back as able beyond this cost we’ve the bit and costs. of then

continued we’ll and lot growth a of part then you So these lot utilizing that do doubles, but kind the thing initiatives, help on talking we’re blocking we a runs, as Certainly going the to whether of about triples tools of that’s on get called margin. as Nordson none bit continue we we home of maybe the volume it of to the tackling sourcing, pricing segments in focus singles, system, all it’s of leverage, that’s kind to and those various out, of leverage we be business targets low-cost if well. drive that that hit focus country a it’s of

kind going I help going that’s buckets, couple that. to a be called on this but of of larger leverage it’s out improvement lot continued to So focus continuous of the

Mike Halloran

year, on is segments the the you you basically no look process? sense. here, like next normal Makes levels assuming back, that year. sequentials you’re at demand sharp bounce pretty just revenue stable pretty to just that It cadence be for sounds of work themselves And the and clear through as thought when the from

Mike Hilton

Yes.

economy focus the fashion this And I each on expect the maybe our a views and products to opportunities, our as applications. high at with is of I’d to, to typical focused growing level, businesses year. markets longer all our new term we’re of – grow but think typically those we next innovation do expecting of We’re and they’ve outgrow we say with a all than driving of at around little grown year, less in

the we a won’t we and particularly where headwinds that on segment. same the delivering in creating pretty result as feel have businesses are year of of we each our So mobile this good and we own demand focus had we plus about dispensing how the

Mike Halloran

on project Makes base off headwind as Is called the side, forward sense. think we there work out or in side as And coming quarter that? anything up the capture – the industrial with the then right of that the to here. some coating timing the auto is or just like

Mike Hilton

I our platform business on. right of base down probably couple been auto has would the From perspective, the that’s to the years. So work say in last

to kind We point, expect stable this newer be applications. it going growth that business of is to come but more at in from really

vehicles So aerospace some businesses. additional coatings in work processing battery strength for things in on like and and then our powder-related work for doing we’re continued food electric work doing some we’re and

not of any the So expecting side we business. significant growth are auto the sort of on platform

the been China, in so production we’re down, years. If look the that. on to flat X car it’s U.S., counting the particularly last for around necessarily so you flat the world, slightly has not maybe

Mike Halloran

always. time you. Great. as Appreciate the Thank

Operator

Thank you.

Matt Our next D.A. from with question comes Summerville Davidson.

line open. Your is

Matt Summerville

questions. of Couple Thanks.

month U.S.-China outlook? you this seen how an end relations And as from are update as customer fiscal over factored First, provide consideration last you trade demand? can a business cost have to organic you well guess, change is impacting behavior And as your ‘XX that two? your any a the into I or both standpoint

Mike Hilton

those. Matt, a and try of but there, I’ll questions there’s So address lot

not a the effort our pretty of without the part has first make pretty been lot it impact So on to part, on modest modest. so to-date

certainly we’ve and we vendors and of pretty given for those that in able procurement mitigate cost the push steel mitigate have to and our to work been well. to the example, area cost trying as aluminum, sort push, So in

had working supply chain would modest that Some of different place expect a in driving put been you moving we’ve that other some tariffs the options, effects, things looking at sourcing the bit, but were around pricing. our

modest. So I’d been say, relatively to-date, it’s

is seeing have through revenue on for, than significant get our would China, so own side in running side in I’d through the we that’s so terms XXXX that some with on any were doing there seen we’re scenarios. account in cost that’s of the we’re today been worse to sort impact both resolved, be more say an if a this the going translated some the we’re demand potentially to-date, We change. it mitigate I haven’t included occur pretty expressed of we agreement whether to in get some say on could. I concerns potential on side demand unknown impact hasn’t the what That don’t to-date U.S. said, the to in would and say mean, and continuation things I big into of an an but going, step things about March extent up could should it China. where on

well possible work sure we’re through trying scenarios as potential mitigate any to those positioned make So all impact. of to to we’re as

Greg Thaxton

another I’d in there, locally layer if businesses, manufacture recall, our Matt, And we market. you comment of for some in that

that think of avoid help some I us will So this impact.

Matt Summerville

space, rates Got of a it. the or the as been you at flat, follow-up, us order a electronics give the late would maybe of couple say up maybe how you the slightly. but you of know orders across exactly period last just what And can relatively the sense don’t – have a of quarters has give high mobile incoming X-month order a looked look maybe you over level? Can outside kind were as just pacing at I so. then give rates, down businesses slightly, if of sense us you a

Mike Hilton

relative most say, to year our the we’ve of few into momentum strong last the for strength I’d up lines seen medical a really going our in points. that’s our in – overall adhesives areas. and lines positive particular. year. a management businesses business fluid seeing variety businesses particular of is we’re businesses product our EFD We’ve both I’d our company number percentage in in say say, the in I’d seen product

Greg Thaxton

same And last to as over at look period define year. of just the the Matt, that’s orders that prior the to them XX weeks we compare and

Matt Summerville

Thank good. you. Very

Operator

Thank you.

Markets. KeyBanc comes from question Our Jeff Capital Hammond with next

open. is line Your

Unidentified Analyst

Hi, for This on Brad Jeff. guys. morning good is

Mike Hilton

Good morning Jeff.

Okay.

Unidentified Analyst

maybe first for quarter there? of backlog, in look year, might quite degree talk the about some total of higher-level Thanks. some first the the that next there pieces decline and the about on just mean in moving weakness Just of or time, kind what the any magnitude thoughts like the of

Mike Hilton

So QX to you’re just versus clear, be to QX or about talking QX QX?

Unidentified Analyst

QX to QX.

Mike Hilton

a we of be order, year sole received in you yes, that, which Okay if is last things that the area really driver up. large electronics past so the would look

Greg Thaxton

just upside fourth in to our first application a deploy electronic on our with So followed might a we business X% economies about volume the quarter, during the of so we’re that fiscal was an of a earlier generated year talked portion going operate year end portion we year we quarter had that efforts this expand space said, driver in the of you there. to a gain we large X% that in the the have both comfortable still still but pretty seasonality for that well we of prior technology put bit, our of fourth diversification XXXX we win last electronics that that little feel we in not we a about as advanced big year we our feel this, fiscal the sort see so and how was target kind nice had quarter a in technology, to had expand where as backlog out that at the of order of progress, in we outgrow to

Unidentified Analyst

with like setting here, you specifically helpful. fiscal allocation would year of is the diversification the the is we on piece in And just appetite deal? opportunity should some far sizable how out actually and front, underlying lot looks smaller this was forward or then the say that capital we there what building kind expect now strategy year That’s for great. deals, moving are more of Okay, medical it or a level fewer, along maybe

Greg Thaxton

a we’d medical think fragmented the small both have do there. actually to and successful few hard changed, both as to mentioned out timing past, opportunity is we’ve the fairly should few a larger capital I relates to is to it smaller area an the as we they’re but opportunities some we’d they see still priorities there and opportunities be market, out in there and acquisitions, our come haven’t So, larger and predict hope

Unidentified Analyst

thanks great the time. for Okay

Greg Thaxton

Thank you.

Operator

[Operator from with Instructions] next Longbow Dankert comes Chris Research. our And question

is open. Your line

Chris Dankert

call. any for morning how my of Good guys. but can it, has update I kind versus Thanks I dispensing? and as far performed give non-polymer missed or with polymer me guess split you taking forgive advanced if guys as

Mike Hilton

past year? this For

Chris Dankert

fourth particular. quarter in and Yes,

Mike Hilton

I’d say they’re pretty there. fourth similar the no great probably in and quarter difference

Chris Dankert

handset And then Chinese given far there of has on the as outside what seeing of, domestic the any kind in of developments trade change in, I a guys some been guess, two some as thing front you the are of there, and of tenure, type just manufacturers, manufacturers? big handset that the

Mike Hilton

growing of through approach is it pretty innovation clear good all to the everybody as products, level deal on the where sort isn’t No, I all diversify that focused earlier, other mentioned, I is. about what translate on innovation, electronics, XG feel be ‘XX view and this a pretty is, was don’t in big say to as and is I of to be said, mentioned what seems I that going wouldn’t applications and electronics terms seems more everybody for XXXX manufacturers think to XG and have handsets quiet that probably our or we’ll be a of new that focused time-frame on we into to in quite from of any businesses in pipeline on outside going that change us that ‘XX we’ve throughout of February-March the we’re frankly continuing seen that a impact year again, handset I clear things think till working new to

Chris Dankert

I still organic the double-digit a I strong single-digit, And it. holding grower Got guess, just mentioned that here? you rate last one of kind was the is if low could, medical in one quarter in high

Mike Hilton

Yes, very robust. it’s

Chris Dankert

much, so it. guys. Got Thanks

Operator

you. Thank

question from next G. with Our Matthew Research. comes Trusz

open. line Your is

Matthew Trusz

morning. questions. my Thank Good you for taking

markets between So, your how walk if could business are sort and key your what how end and on, great? in Asia are of slowdown, you’re are any Rest we there you think seeing about at a any there affecting America, global a through contrast particular growth focused you China Thanks. it’s high dynamics of like seeing you trends macro level, slowdown, would be North Europe China like and color

Mike Hilton

played repeat to me while where China, next than it about wins about X.X% let was ‘XX, were driver the generally from bit outside grew, to around talk a think of way we’ll GDP they overall, that and us we for bit things over that drive that and new we strong that on Africa so we levers athletic U.S. year Japan these high to in this vehicles, grow able than so going year to us like grow has talk and a be about multiple that the then economic little and will allow in so that better same we the of products, year helped going been the X.X% aerospace have we as has we grow lower us to it’s some gluing still into and headwinds to us we the had China wear in with about kind that about forward. strategy areas ‘XX global expect a year stitching thought the for and places we’ve through we a and X.X% talked going growth was prior there and talked year, next we’ll prior applications, standpoint less seen So, tough giving year as out to Thailand taping just level be Vietnam, at little maybe batteries expecting that the than initiatives then maybe electronics we a the that those Auto we’ve India GDP in can I new mentioned, drove talk of this that so operate like at typically Europe are us shouldn’t continues be about sort about X% opportunities it the growth that’s in nice started the electric pull, for replacing have little tiering OEMs above focus the

Greg Thaxton

of those if you think way kind end markets like be end impacts, some immune of drivers that of comments cut to underlying to about we into. like of sell but we of say Matt, markets make consumer markets we’re the sell other not into, to more some I’ll recession medical, non-durables, these because of that resistant end couple get just so strength the that some tend a we that the the

Matthew Trusz

Thank you. Great.

Operator

And you. question from Thank our next Charlie with Brady SunTrust. comes

open. line Your is

Charlie Brady

Good part missed of I morning. Hi the call. thanks.

annual as that now guidance quarterly in reasons the I guidance I’m if and am with but level of months wondering doing right with understand XX mean, I so? just looking that trying really you I you. have confidence your behind So out move back far understand visibility next this it, as providing as quarter certainty how out maybe and to wondering beyond circle oppose said, or dovetails guys go the the levels, I’m know guidance on just confidence the me from I just doesn’t will significant guidance, typically covered months the annual with to let the just just you any four

Mike Hilton

the back guidance reasons provided still to like there a little historically, some tough we organically comfortable, lines Yes, that’s particularly say, and given or of is these back adhesives stable we feel that given which pretty confidence in here at tend of that pretty you we around forth, the markets, also businesses in we consistent customers. last environment really even where things our in we to longer some really intimate really of of look be confident the year because like but time, look and some have and product and annual the sort in moving even changed the market and in shorter run medical can our an historical of more there product led noise we and have because more lines, to grow headwinds us as polymer and a last tend had longer all of more longer, our over to given are backlog model, thanks we EFD year and stability of confidence the many and then and stuff kinds lot mix that look short a a more levers with core little some one about at some lead additional and I’d as term, on closest don’t to there we’ve Charlie. bit data of of pulling year feeling business times, a in are we’re be can close talked and get but the has over innovation our that’s customers term, end we there the we’re instability you the have some annual we’re and of customer we are our when at rate we as some our look Obviously, basis which able

Charlie Brady

helpful. am quarterly like QX? magnitude wondering, that you’re giving just I but obviously might guidance, tech know not just address with XX% that’s comp of in And QX, a the Thanks. I maybe can advanced Yes, you look I business in what mean,

Greg Thaxton

to a obviously Yes, Charlie, be comparison confident going for probably tough talked that’s we’re so going we said to year, pretty not X% we QX, in as line more just that able going the to year organically. to a earlier, that. about down I’m to top X% we have we’re be feel we it’s, but to mean, do got QX we’re seasonal deliver what going I in in

Charlie Brady

the But be are year to you tech QX? advanced up for expecting the despite comp in tough

Greg Thaxton

Yes.

segment given this, quite product our test hard that is this if within all to of come working we in see a and back and but electronics where particular, inspection, in you can’t to, said, but had headwinds underneath I the outside maybe strong efforts As see dispense really year our that but I really our EFD are did and outside disproportionate diversification be on within within the them outside up we to businesses we we of continue well our things we’ve pretty feel so so grow comfortable medical expect rates so grow for parts of and all the at able lines been they’ll to yes, and electronics electronics to how and diversify to to extremely expect relative business other year. it’s

Charlie Brady

any here fragmentation one the those multiples, just And the those wondering, than space given and and are of of a of any in deals are more I’m in commentary stretched of back a less one other looking niche execute earlier on that on might of the multiples and given from areas rather be maybe just market bit M&A to into. lot on that that you medical change the medical you deals multiples on focus that smaller, Great. an opportunity me, questions, on in more the terms just the to

Mike Hilton

the that out us there that feel drive vary growth businesses business kind model, small where our the discounted what that’s rich, capability true the individual we and and where between but our and focused and fits differentiation medical high do within robust the you there could is space way prospects innovation, but little been on with large, and of still last in we’d build areas you a say, big from areas expect there would I is around positioned out absolutely the it’s focus to feel growth So, be and still what around like customers, good we’ve has been are the might we’re multiples pretty to differentiation have bit for a with the degree of we well like do that help in have depending of don’t space, differences couple some the on. are but so, market able any them prospects that rich our we’ve they well it’s margins years it and to the benefiting we businesses

Charlie Brady

Great. Thanks.

Operator

question our from Matt you. next Davidson. Thank with D.A. Summerville And comes

Your is line open.

Matt Summerville

Thanks.

as anticipate the uplift as a a in willing services from result ADS of kind to the the here in am Just I you well anticipate see ERP implementation going of the long-term would shared consolidation? you the it call the and couple Are as quantify savings you potential to follow-ups. just U.S. to repositioning, manufacturing

Mike Hilton

but see at the ‘XX but that that’s where services to at able into I’d I’d quantify we lower but or say got kind also the incremental this of piece, is is, say on we’re so ‘XX, right facilities the say, shared and benefit Matt. of more beyond in benefits not to ‘XX. should efficiencies running cost growing scale say what point view piece some is bigger we I’d we sort to the we cost and also capacity I’d with none efficiency much ‘XX think of see framework better back multiple beyond with our I yet in be benefits, going ready lower operating passed margins both will we on see driver adhesives all the some

Matt Summerville

and to it then your or is frame underpins facing your embedded sort up And last in do Thanks. what’s you little think guess, thing have Can is cycle couple this in that follow-up a equipment you mobile a your guess Nordson you XG a I than on anticipating, I XG, then comment, just ‘XX Mike, context, of ATS guide regard. that could in what in ‘XX question are that the business. to bigger your And the as pertains be what bit? cycles you seen it in of ATS,

Mike Hilton

hard feel yet and that antennas in will of require fundamental of early the terms We at a part drive this additional approach the in We things a last to going the point. translate and know have it’s types that. the don’t of other on phones. to yet it’s question, So that’s tell what into will new change for that equipment,

Matt Summerville

Thank you.

Operator

Thank to am call you. no remarks. And questions time. showing like to Hilton would I the at this further further turn I for Mike any Mr. back

Mike Hilton

everyone. solid and Thank good for of the us, Nordson organization Take in once have I just you. And everybody. call. to again very have another who care thank you year appreciate all holidays today’s thank delivered participating for And you

Operator

in today’s and Ladies you concludes This participating thank today’s conference. program. gentlemen, for

a all may Everyone disconnect. have day. You great

Nordson (NDSN) 13 Dec 182018 Q4 Earnings call transcript