NDSN - Earnings call transcript Q3 2024

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Operator

Thank you for standing by, and welcome to the Nordson Corporation Third Quarter Fiscal Year 2024 Conference Call.

[Operator Instructions] I'd now like to turn the call over to Lara Mahoney. Please begin.

Lara Mahoney

Thank you. Good morning. Vice Investor Mahoney, Communications. and Lara is President Relations of Corporate This here President President Executive Officer. our Sundaram and CEO; Financial I'm Nagarajan, Hopgood, and with and Dan Chief Vice

XX, conference results. quarter today, our XXXX to you Nordson's fiscal welcome Thursday, We August to report third call

that both on presentation and our is www.nordson.com/investors. conference August will can website webcast of find well being our during there call for will available the There telephone call on be website press at will our You refer our broadcast as Thursday, to release until as days. slide conference we call investor XX, available a live today's This XXXX. XX be replay

these conference references comparable will make most call, press metrics. GAAP to metric this in We've issued we to reconciliation metrics yesterday. the the financial During of release non-GAAP provided a

may expectations. X uncertainties to Before our discussed and number filings that during regarding future we other of differ. performance Exchange of that could certain results Nordson's These presentation, where call materially risks cause with Commission as forward-looking to please the company's made statements refer actual note that in current our be a factors may statements begin, Securities are based upon Slide we the and involve this

agenda full provide our and guidance. review as will Dan will and today's an a then sheet cash then and to business markets the for Slide well total share fiscal on company to the turn our Dan balance and about commentary flow. on discuss Medical the performance will highlights XXXX will sales update also the segments. year He discuss acquisition. Moving X over the as high-level X. Naga of end third quarter Naga Atrion yesterday's close earnings call to

that, We be your Naga. to to will With turn questions. happy call I'll the over take then

Sundaram Nagarajan

Third fiscal Call. Thank morning, Nordson's everyone. joining for Quarter Good XXXX Conference you

release a we Atrion's I fluid will issued our our infusion family. products. category acquisition interventional colleagues Before Nordson niche of medical closure leader expand the solutions the Medical portfolio to Atrion in and welcome in current delivery I and therapy into begin, cardiovascular announced would I'm fluid products like by adding pleased in press a as new yesterday Atrion with components the from morning.

streams. Nordson's to by by addressable significant offering expands components products Atrion drug This single-use infusion customers than also solutions market revenue higher-growth extends recurring XX% therapies markets end fluid for to adding device medical with more broadens consumables top delivery. exposure current and our medical and and with

Medical will Fluid part our Going segment. forward, Atrion Solutions and of be

delivered to team results would At shift have let's our in to strong earnings IPS driven deliver which increased the acquisition. X% third were Now with operating quarter on to $XXX our who dedicated recognize expectations, segment, in I to organic Next results. NBS of from by sales addition growth Nordson Sales growth line framework the of X. the million strong leveraged Slide ARAG like outset, our

year lower partially was well our medical demand to in growth businesses. impacting softness as prior compared offset This continued as electronics by

improved products consolidated EBITDA mix. over XX%. of costs and improvements margin commitment managing margins our addition, a product gross to top quartile differentiated to top strategic focus and in on and This In customers focus led

$X.XX, which In $X.XX midpoint delivered share guidance. adjusted the earnings quarter, per the of we of our from is up

which million, quarter income. third our highlight to like free was flow net XXX% I'd of cash Finally, of $XXX

debt million and with quarter. generate capital in cash balanced to repurchases; and deployment reduction million $XX flow $XX paid; a in $XX strong execute the during in share million We dividends continue strategy

over on provide speak turn results But more a to to enterprise about I'll I'll perspective moments. detailed quarter. for call performance in first, financial the a our few the the Dan

Daniel Hopgood

X% ARAG fiscal third from of XXXX to guidance. X% translation and quarterly was of quarter $XXX million, with the the sales of increase up from offset by you'll a see morning unfavorable Naga, were third X% prior everyone. Slide This X%. by driven line partially quarter million decrease in good an acquisition, and year currency #X, of you, On sales our $XXX Thank and midpoint sales overall organic

Naga top in IPS electronics in lines. the particular, As offset segment during divisions, packaging quarter, organic Gross growth medical sales mentioned, in by we saw product softness our were nonwovens and certain our which and Deploying products, profit mix also improve NBS during manufacturing our favorable XX% of product focusing we're at framework, quarter remained our growth while continuing driving sales. the to strong Next a efficiency. on

or basis EBITDA points, by selling quarter XX.X% totaled for acquisition. driven $XXX which of of impact adjusted ARAG in below million the special including periods prior the and slightly by costs, first was administrative both sales, the the year year for items XX about higher

exchange quarter Looking on at to nonoperating reflecting $X net the interest our expense $XX million for Net rate XXXX. the associated in of increased ARAG which tied variations Other higher range income XX.X%, a expense prior approximately the transactional decreased guidance levels acquisition. foreign Tax expenses, with effective rate was million the year. by year primarily an $X debt certain million, compared and prior for with about is to and basis or line

the income in million Net share. per or $XXX totaled $X.XX quarter

of lower X% earnings of earnings the decrease for interest $XX share per to Excluding acquisition-related our $X.XX, intangibles, $X.XX from year-over-year as share expense totaled The prior nonrecurring I quarterly in above adjusted margin quarter midpoint million as in and the slightly walked $X per decrease acquisition of of charges million costs the the $X.XX. a guidance, increased just reflects and Atrion well restructuring amortization earnings adjusted operating but year the related selected through.

build review third turn sales X that compared sales XXXX revenue Solutions Precision packaging X% XX% in year-over-year, important by performance. to quarters. nonwovens. offset of organic upon with of growth XX note strength unfavorable million Organic third translation sales $XXX IPS particular year X% to segment, were It's to acquisition of organic fiscal increased XX most the The product delivered partially now Slide quarter and Industrial sales the of to our up X%. record the the while continue for in which through last X XXXX to prior let's has results currency improved across ARAG growth Now contributed lines segment quarter. these

segment of XX% acquisition sales, for in EBITDA was that or the an EBITDA of $XXX quarters EBITDA the and of million. by compared highlighting from segment. growth. the increase in growth increase consecutive was XX sales of for to XX It's worth XX% quarter the driven The ARAG strong quarter $XXX our organic contribution third million this out marks the year of prior IPS also EBITDA

Turning to Slide X.

$XXX Fluid prior the decreased quarter, year's in solutions X% compared lower of our demand components million interventional driven and fluid You'll product see Medical to lines. and third Solutions by sales medical

product patterns. components despite for the underlying stabilized, and patient applications Solutions order sales This These portion surgical lines partially lines year. our last solid While has of customer improved care product biopharma applications demand are in patient adjusting is versus for also conservative our entry other product were by decreases to fluid Fluid procedures. more offset

In margins quarter. XX the now volume during of segment lower $XX than the of EBITDA recent the and XX% mix the has X% was the greater Medical to for driven by EBITDA which product quarters. EBITDA of XX% Fluid XX year was for growth prior reduction spite delivered and Solutions unfavorable The these sales, decrease million. in of headwinds, $XX quarter a last was million or

Slide to Turning X.

by an decline growth $XXX in driven X%. sales to quarter. in compared Solutions was by includes third volume decrease sales currency XX% and and businesses. Technology product Advanced prior were The offset optical of see decrease well as year You'll x-ray million, The electronics, test unfavorable XX% lines, sensors decrease the our organic as translation processing

weakness the modest in serve semiconductor While we we continue and year-over-year, intake as show of increased segment versus over and X% electronic expected applications QX, to continue to order signs sales see improvement. improvement sequentially we

EBITDA sales, quarter Third million $X reduction special XX% of of of or year was prior year. $XX related which items prior $XX million cost below excluded actions in quarter million, EBITDA the to third

to XX% sales. ahead mix contributed reduction While lower well XX%. This was favorable our and tied on achieving volume, the year-over-year in in overall of the decrease approximately of target the is decremental a cost reduction decremental actions to EBITDA

turning within acquisition leverage cash trailing leverage quarter, Atrion end the on net months resulting Pro Finally, the $XXX and rise billion. million remains that and our announced, sheet of on range. Slide XX. approximately about X.Xx the near just which targeted had net will the $X.X in ratio to ratio of third flow forma our debt of a will in hand we to cash to and was X.Xx balance we for on XX debt At EBITDA. the $X.X term, billion increase about based

public revolver. time. revolver and refinance bond hand. and We greater use a repay $XXX million term the still cash liquidity After the loan cash our and in term over acquisition, cash the Atrion on the greater with $XXX including continue million funded company, borrowings than our from of we'll to operations the than on on to to plan revolver our we on to XX% available borrowings We acquisition markets, hand availability loan have

be Our $XXX on a or the generation flow net strength free at cash continues quarter during XXX% to rate million income. conversion

we cash reduced shares, strong while dividends mentioned in to product and million Naga capital to in $XX $XX the deploy earlier, investments growth. and quarter, repurchased paid we all strategically As debt as $XX flow, by continuing million continue fund the in development for million

dividend, we as building week, quarter, all, Slide returns our had XXst to turn year XX, last our solid a to grow annual call upon we're with And legacy turn year. we of of company. out well capital positioned Naga. close we and to increasing our the I'll the back the let's that, Notably, All in growing announced and

Sundaram Nagarajan

also select under Nordson want a performance the demand for team challenging operating environment delivering I Dan. in Thanks, congratulate strong businesses. to

Let's we XXXX. the minutes move a of into markets end quarter few spend about as fourth fiscal our talking

Starting Industrial with segment. Solutions our Precision

full modestly quarter. flat to X starting cycle. versus consumer in end about levels feel this up sales the record intimate of excluding and our diversification the confident normalizing at continue customer the be nondurable IPS, model. years of year. this implies with about appear general, markets to up steadiness recurring its we pick ARAG revenue at in ARAG, and in third mix to segment, point industrial year We guidance lower prior of to agriculture is growth, In After see nonwoven business

more far with teams being medical after years. Within device our a unique purchases Medical segment, and chain inventory Solutions very their cautious supply customer are few Fluid

and starting product lines see in the component While we are fluid biopharma. of demand interventional lower to solutions, outside certain

in confident are drivers growth and end volumes. procedure rising toward techniques chronic surgical health and increased trends the noninvasive in of spending market, We health including care aging long-term this population conditions, the

customers, challenging of activity, longer-term medical Medical have are close and term, this in business. of outlook We to year-over-year future lines. we Solutions product for we pipeline the in comparisons of robust lines, our product Staying customer particularly way with years. a light we spending certain are electronics, Near electronics advanced softness project comfortable past expect for a working as Interventional one-of-a-kind The over the onshoring, increasing AI, from segment our has CapEx as benefit been ATS few demand demand through automotive well Act in will of support broader cycle. CHIPS chips the environment what

to in sequential We the experience inspection test increase and are entry a order year-over-year in beginning and applications.

in with optical momentum inspection an acoustic product For the example, we of are and test lines. pleased CyberOptics our

cycle. are fourth chips. Our later advanced the XXXX, continue line of these x-ray in end of back semiconductor with the lines, applications product the occur in fiscal Electronics Demand growth products experienced challenging dispense in for quarter. which to in double-digit product manufacturing comparisons deal largely

Given the segment in sequential we XXXX. in to order ATS expect revenues to improvement return growth and entry, the

customer now concentrated on patterns revenue increase remains holding backlog quarter. fourth entry range rest trends, year fourth have the entered outlook XXXX. over in previously the the Based fiscal of X% returned businesses. by order to in approximately historical million our approximately of quarter the will Atrion $XX flat then million business The and visibility order full Turning up We in backlog. our in our norms entry our base issued addition systems we record XX. $XXX in on while current Slide fiscal base businesses, This the are guidance of to sales to with

is of Investors This per a XXXX are acquisitive the be guidance This adjusted mind the inclusion the diluted ARAG $X.XX share earnings that in at slightly range the exchange quarter. the share unchanged per neutral impact we Atrion diluted to year of year XXXX. dilutive despite fourth of in rates. for of to midpoint impact in fiscal $X.XX Full expected anniversary the full fiscal foreign impact assumes quarter. from should keep the in growth fourth fiscal

our the strengths Nordson revenue, core growth not face to close NBS looking under conditions. there, operating Day and presentation to growth and to QR innovation. We're deliver to strategy New October we see you long-term the certain demand Investor high-quality customer of including sharing core register. We the hope diversified as upcoming deployment update on in These recurring code our to Even plans portfolio since business York in strengths we model, economic challenging forward enable to performance remain use end an X. our equipment to you encourage in on level framework webcast Next conditions varying a at markets, capital high

always, for that, and we want your the thank your to will and As I take customers, team shareholders pause continued With our support. questions. Nordson

Operator

Boroditsky first of Your line comes Instructions] [Operator from Jefferies. Saree question from the

Saree Boroditsky

on a focus to want I little bit acquisition. the

margin for you're to right down since to come So talk rather Atrion, significantly and the margins steps the Could XXXX. Nordson just levels. you get the business the margins this taking from about at profile they've

Sundaram Nagarajan

has certainly have issues to through supply Saree. you, The Thank go and business issues. chain gone had some through

margins so in EBITDA margins in degraded you are We business, past believe Nordson see with the have last if look couple line their years, the at the And track record them public margins. like fundamentally this for of as can you in of information.

same would we're we back business able fully those return the so that be over to confident time. to And margins

Saree Boroditsky

XXXX. appreciate that I order and the inspection of and on then how quantify and some into you noted saw what's expanding provide additional some improvement year-over-year you an then see you color growth And on test basis, products this just that you driving could this in that.

Sundaram Nagarajan

some Thank see momentum you, pretty We lines. in and product acoustic strong our optical Saree.

also, new helping last addition, So you So our Optical are applications is like manufacturing business cycle the that downturn our business. is to But one What of the this products end CyberOptics us. steps. these front you you terms right? semiconductor the there a of the first find is manufacturing processing cyclicality exciting lot in But is was used in have a in semiconductor of the year, have experience the WaferSense early some in business.

new And so manufacturing cycle you in combination semiconductor where the products, of our a have and used are products process.

pretty momentum continues have year. pretty the to business This good. from year-on-year last is growth nice So a

about we pretty in what So excited we're see this business.

Operator

from comes D.A. the Matt of Your Summerville next question line from Davidson.

Canyon Hayes

Hayes got You've Matt Summerville on Canyon for today.

I and the in have progressed wanted MFS I with to fourth how quarter. just was thoughts ATS So IPS, on curious guidance start the a organic on your review quarter quick might And growth? to prior implied relative

Sundaram Nagarajan

go you, ahead... Could

Daniel Hopgood

pretty I guess business. at far as you we're much if base as our look -- the thoughts, our underlying guidance, we holding

would I more The quarter. are our so as And fourth question. thoughts playing give you are things behind me But little maybe for color can expected your the is playing. bit a year say about out

Canyon Hayes

apologize. I

what might have I think there, I think cut I there. I needed out I got but

bit a that how macro, color little of broader about, could the activity if can geopolitical rates, a not project industrial and pushed bit out we've election Across we that little is we Nordson think the I'd into Okay. affecting get XXXX? of curious function how implies how be space, seen a get concerns. as on

Sundaram Nagarajan

Yes. about talking Obviously, not XXXX. we're

important and portfolio, a talk it So have diversified about right? we months sure Nordson markets, of here. market very we good today, consumables piece as now. that's stands in we geography, end diversified of a make diversified So systems to couple puzzle will conditions ourselves to has But about it's within remind diversified revenues, recurring chance it in in as end company the a the are from think in an

record by XX be slight that segment flattish quarters Think see here right? if context year-on-year a as ag without to So IPS think of growth We I growth, see an of our in organic to years you So non-ARAG out that's XX after remember. about business. order what steady. segment, pretty business X we think to is important entry

little to pretty to IPS increase And right? bit steady. add revenues. our part to deferring going want are expectation folks is so our here, spend, if of our a things is And XX%. of revenue color segment, recurring CapEx It of remains you are their business are north that recurring couple high more you expect is this sort There they a our when of

So that's one piece of it.

a pickup. of some we have entry good is it of you our other The where see pretty the businesses nonwovens, couple piece order like

And business. is so that this certainly helping

do that One the remember other you CapEx around still is thing market electric of spends like have looking battery trends to down. sort vehicles is although overall large big activity,

recapitalization packaging. bonding, fabric electronics, e-commerce automotive base reshoring, have You our of

of trends helping are to us number make So a small that wins.

singles these are It working applications runs by segment on call like winning about. those market this is what application to not application. we So and are but These is end like doubles big and that's them. about home

by a outlook steady So recurring revenues. for IPS helped

order do to On ATS, up. we entry see starting pick

has when We are order This cyclical, that revenue market are seeing cautious saw last modestly to but segment growth we sequential compared end an is We here. being pickup. this quarter. in been entry a

so and lines little acoustic talked product last in optical a bit and about is the we coming And that back answer.

after what Solutions their medical this very and last chain cautious tough Medical inventory year significantly. business grew Our particularly segment, of Fluid pandemic, of teams comparison supply to levels. see being that also chain, is customers, compared about unique find customers when supply is very And years device where what you a you

and active increased population is long-term confident about with procedure as that entry opening have this business business. we So in we excited this healthy. I conversations our drivers, And fuels this. This about customers talked my do see increased growth that are in very us volumes, strong weakness population, continue term, health a makes project segment. is we with in to conditions, order aging the Long about and very chronic remarks, of aging all

and to finally, are addressable development add expect work have on And market increases new to this is the an segment this Atrion also we Atrion's hear. product that work segment. And We exciting continuing products that we nicely. for

Operator

from Jeffrey from of KeyBanc Hammond line question Capital next comes Your the Markets.

Jeffrey Hammond

So of just destocking, this medical I to seems normal? are before inventories kind or kind I you chains dynamic. of want persists to that are kind newer long supply And of I'm like that's normalization guess wondering or it with start interventional, it's -- how a think back

Sundaram Nagarajan

Yes.

here: As business talked stabilized, two has going starting back. there in are we that biopharma come on our things that is about, to a,

these businesses business, In year, terms of XX%. XX%, our interventional were up last

something you we so year supply be comps. remain customers lot a you're the than And chain drivers is they Certainly, our cautious to were find a some have that with tough -- dealing more ago. today same. Growth

So that kind nothing when procedure for approvals is and are project, tough FDA in-sourcing, products of these things associated volumes but see lot to are of to regulations are even difficult when with -- a but it is they is going more to let's We way. company sticky, up, these businesses there a this that call projects there. on is are all it so approvals, and these very it put changes, a be the some tend winning that look, that

about if it so tough when this this to think call to this, turn. is you And going is

are a we of are. relationships in have We not that things and This strong broad a with are have These -- where handful are strong medical device these customers. of understand with, set customers is We of touch customers. them. small thousands we

giving but you trying overall you the not to environment, answer that. exact I'm recognize of for picture paint So I an the

Jeffrey Hammond

How rate unpack D&A, on interest, just to run single-digit We want No, do little in add-back, $XXX think the stub revenue a fourth we the the have 'XX. deal seems It growth. a kind were impact. of color margins. They they cetera? But of snap incremental the And I only of did in we kind Atrion, Where think high of kind XX should months like then seeing Just EBITDA et that's quarter. quarter about should what's we okay. million lines more about? next there. just

Sundaram Nagarajan

business can want some you right? through you a Broadly, That's this me broad and this take think company. So Dan as let a pictures, more what about little paint is. then bit to mid-single-digit -- get detail,

these based synergies said it You of terms to is the chain back which years, because right, have this X of using think they X recognizes issues also time, we say the would I see performances, EBITDA and operational what is model had. Next. and 'XX, our gets performance, over signed to mainly performance below that this somewhere these business in expect fully in historical synergies and up good historical period issues over EBITDA like that We we want on Nordson achieve the of a of their resolved for have are years, a and some many fact margin to path over we synergies period supply these have we business want margins, was. NBS we of achieving

-- that give to sort want me bit little if the color Jeff Dan, let level, add to more question of a So with you has. high

Daniel Hopgood

I'd what there's a, to expected guess see I say no And second in quarter is, Yes. surprise we what their versus results on the based business.

And as far for us we it's owned quarter. think with on would the a which seen give fact, think line quarter, next to we nothing public a give had We know say comfortable business I next know, we've you I modeling with for we've next guidance more color year, year, access we that what we're largely information as in for our specific is little in again, as very a the that well. model to But that We'll surprises as give day. I have that the right us. color acquisition.

Operator

Your Mike from next Halloran line the question comes from of Baird.

Michael Pesendorfer

should level about that be consequently, we're that Mike. that? expecting the year, half kind calendar a carry the cadence more customers simply of this as then to This cost to destocking want is near should thinking new this conservative a go inventory. this the term desired in of side that we interventional I get inventory the And from normal of how for of comps expecting back be and is discussion? to Is we be to the back business. To in incremental comment clear, to tough order is the Pesen

Sundaram Nagarajan

you now. tell Yes. would is that What what are we I experiencing is right

to year, grows If teens. Typically, you in from anywhere the this about grew business X%. X% think last this business

at mid-teens, growing the in are pretty orders So what -- today are what that. adjustment high, experiencing to And you right? is so really that's we in some

activity, look development we at intact. believe growth you project thesis volumes, product procedure our our work, look the fundamentally in If at is that look business at long-term of this

inventory Certainly, to it We a -- It amount also rates? we amount difficult device from certainly, see do see me to of we guess of certain But are about I interest when of pattern medical see I It's comps, customers. there thinking reasonable Could that to some say is see slowness, levels when want an any and So you be time. our cautious this, clear get of will right? about. of is it difficult would conservative, impact amount their think about that. levels. device a do slowness. manufacturers from tough what order -- be them for And but do we're out adjusting as talking we some to about we

Michael Pesendorfer

little Understood. we MFS stay maybe That's Naga. if on And helpful, could a then bit.

have on trends on think And the earlier could -- fluid me then EFD you the call. out help on missed there? I on I may bit components little help a you side? me it Could the

Sundaram Nagarajan

was and of we're order is entry one the well. doing electronic is early of see businesses are Order more. that to where quarters commented those a that is Sure. starting pretty this EFD in think customers in This of we maybe -- encouraging. returning. a is indicators I this business We do ago of electronics seeing couple entries pretty -- customers lot order Asia-based the work doing business they're encouraging

Operator

comes Andrew from of BNP from [Operator Your Buscaglia line next Paribas. question Instructions] the

Edward Magi

is X the X.Xx on cash mentioned you Ed and finance closing which XXXX. remarks, puts debt prepared you leverage the to deal, This Andrew. the In about to for mix of

can leverage specifically, refresh With us strong cash M&A? pipeline? And the in about free thinking the flow what you manageable, you're on how remains profile, more

Sundaram Nagarajan

growth sort no a of same, over around the and deployment. to of change acquisition-led there. take comments first growth our capital balanced then will for start me having couple there's remains organic Let Look, a Dan commitment other and

feel adding with on same. and how to what us a allow able will do been strategic remains around pretty disciplined particular Our for acquisition to we're what the financial disciplined criteria deliver the acquisitions financial about be returns we strongly that we around the the We need the strategic rigor for to portfolio we being target. acquisitions criteria to have

So our we pipeline and to types different this remains and pipeline. remains to are year, over And deals, pretty of we that the work past healthy. seen continue many you've the open

little leverage talk deployment. Dan have bit me to Let you about a capital and

Daniel Hopgood

Yes. Maybe just couple to add a of points.

the target when the this be as but quarter, for stated you we end at end similar obviously, we'll term. happened maybe has Atrion, leverage thing higher And then been of acquired X of give And to back long to down a X.Xx is of the completing we're ARAG. to saw be best X.Xx Our with just acquisition that, that last will temporary. year example we leverage. the And

And out, Naga ready be as the capacity. delever. right along, deal pipeline. mentioned, of an point have to when we'll you as And plenty with obviously, active And can flow got, we we've profile, move our we quickly comes So forward. cash

Edward Magi

back Great to hear. you And then, to for Dan, this one.

been now. CFO about You've for a quarter

you further to improvement are initial at is You expansion. in company for from opportunities and your business assessments, the great progress what come From areas margin here? seeing as a which

Daniel Hopgood

healthy. as company are of is the continuing which lot very our I time a and opportunity major is and to a guess this, best our spend on Our I I I'll appreciate organically, Naga say margins grow question. focus, right?

healthy. is time. margins Squeezing flow the is best of cash not very our Our use

how company out to better figuring spent is time organically Our and to the inorganically. continue grow

Operator

comes of line the from Research Partners. from Your next Liptak Seaport Walter question

Walter Liptak

especially some ask the companies seen of of quarter. and longer to industrial in single-digit outlook follow-on I trying segment around term stable And businesses, get IPS. kind the businesses. low color their for to of we other want kind of project is what guess I industrial have Good IPS similar pauses sort that kind a get goods to I'm question to

if you others from provide I North of around maybe color called versus as opposed of the growing Next I some some more growth weaker? Europe to NBS helps game out how So China, those that might be much And regions, wonder focus share just in America. some wonder areas, markets and you geographic can you to market some

Sundaram Nagarajan

-- couple you give bit little divisions maybe a Let's the where we're a into some and thinking. color of

foremost, of a which our -- is certain NBS end one diversified market be what are XX And in high MFS Next. important a quarters, of X of operate businesses, these another being Next, application But for IPS, is at end more particular what of over markets set the or other implemented find particularly demand is having businesses quarters within couple investments were Clearly, X IPS getting or in this and time. more find we have niches. growing and those First you some cases, year what and demand becoming and growth a you where end implemented business. in the of you is find here market and first of businesses, to we

to be that growing, end Next another the growing able dynamic end agile and understanding end for be us market being set it each period these So to -- teams resource in are a for markets a clarity So a of to resources niches niches one to to shift entrepreneurial and applications of continue is right? of allows operating great in are markets shifting each market another are way that to NBS those time, leaders, another. to from one our the and have division around to them able that in. is and markets not participate of for

certainly helps that within markets the have the well, see do the on us, you us the so company, to doing -- steady that some But see others performance, outside. is which that not within well. you divisions, So allows doing

So of to that we've dynamic sort -- important that's that's one recognize.

we maybe talk to best within are constantly differentiated very is those? to pleased we our like on customers, And years. for growth. is, the that's for there And an because the opportunities, certainly, -- you end for expect The how markets the Next, incredible your are best X.X run example. best a company NBS using the is plastic some those, had processing, X, We've Yes, understanding your ticket pullback possibility. But opportunity modest are second teams with businesses understanding might there your certain win. deploying market Nordson products overall, last our for how

so teams playing these systems still and same, a believe really, market helps. and close The own entrepreneurial, fundamentally recurring to customer with the company allows and effective end core differentiated our the Next markets, asset high dynamic of conditions certainly to I that be revenues, structure strength are the mindset, diversified strategy with And different, division-led model, NBS but products. remains our

ahead have had of to because of last varying All core years cases, X the not some successful. strengths had these EBITDA In demand In makes economic is proud the to over conditions, some I am Nordson team everybody. is And we've cases, adjust our invest at curve. delivered that percent team of XX-plus same incredibly we what our consistently for costs. margins.

of to goes that kind strategy growth NBS speak Ascend Next and framework. our think to I

Walter Liptak

Great. Okay. see good the some has no there able and -- you're to improvement different doubt, margin to around it's you're getting been to these Yes, shift markets.

Yes, can how there. geographic can just thoughts, if some I Asian any of Okay. get or see to the we you're Europe. wonder if markets maybe guess get some seeing I comments we

Sundaram Nagarajan

the different been markets been the have best strongest. the about and you still think regions, U.S.-based have If

are If our in businesses in you benefiting at business. particularly, near term we look Asia see what from our specific, they electronics

Asia-Pac and coming have also businesses. strength customers our see back so for doing customers, of some nicely. are a nonwoven also are you OEM China our our is markets our businesses you but in being China of electronic Our source well, recovering

our we is organic in than Europe weaker there growth OEM little Europe, a there. our but -- own is have still So customers

Our revenues parts are good. pretty

system Our little a revenues bit.

also is because business. You a ARAG European also is in see is our mostly ARAG impact Europe Europe

Operator

line of Your Markets. Dankert comes next question Chris Loop from Capital from the

Christopher Dankert

normalizing give comments us I could bit see the you of some more. just as on you kind that the how how and of $XXX million business around elevated guess, normal. how so still Maybe see there's versus then kind piece mix that how of part backlog progressing. of would first are there, we little backlog of Can complexion off, just maybe kind if a the look you systems agree you some a about of commentary that's or left at

Sundaram Nagarajan

Yes.

historically it where about think $XXX you and If important around was $XXX our backlog, level historically, was business the to million, million. set it's

Of course, of in time, has business the this incredible period grown.

businesses historically would happen go different. give blanket is . So normalized we are in would backlog. orders the patterns I customer changed our or medical doesn't in you In But into the a Well, other used our expect we which at different, right? past, scale anymore. normalized the that example get large to backlog is order also that thing one that has

performance delivery has Our improved. significantly

to we And certainly we have in customers expectation we much starting have than ever can our faster so an have ship things history. that

are of you our order do $XXX quarters. is in to couple entry, regular dynamics. our businesses, think million, see backlogs system weighted which a they've all several about $XXX we book businesses, and returned still million to ship What our if is, normal now for type backlog But it So different businesses. normal

this nothing is for us. new So

comes -- to continue system as down. our really We business it our coming backlog backlog down, is

Christopher Dankert

That's helpful maybe And it. on just quickly Got then ARAG. color.

if the be me the how volumes? end it, from but would I in perspective, just How handling in that more sales performance market seeing lower little weakness you're a that business? Any missed obviously, curious team bit the is a margin color Forgive again, great.

Sundaram Nagarajan

and really performing levels. The good. notes company EBITDA is Yes. margin has performance margin been like The at

the pleased more with be couldn't we so And team.

that I to ag are making we like we components we that focused we liked We think the in the business, largest some technology. and customers. Europe. market the We are presence about like like precision delivering things of reinforce sure we on the our the

focused downturn, really The Most is the on that the are much is of starting development, So a Italy, for They're decades have we, to on. it cycle in demand is in integration staying for team the going long as been new in an and the it operate We is NBS is in staying as for a this we pretty to in really Europe getting us, on done. U.K. implementing company, . And right? are Germany even a been doing generate time. wonderful. focused team. like on product enthusiasm new learning where customers important, are comes back They're And Next. geography to but We've know it a Europe in to we've in their businesses. focused

a to adding new is this our country So mix of businesses.

They So great well learning in operations. company, overall, integration cadence NBS well, our love people. technology, going of are the into Next, integrating getting the

opinion. distracted take on not time. in and will back. things not to But is market think exciting technology a need are time letting development an it's from It prepared, focused is come that that I perspective. So us. But we be are temporary, we my on helping and The we focused to

Operator

Naga call session. remarks. That to will I for back question-and-answer concludes over our the closing turn now

Sundaram Nagarajan

Thank you value long-term on XXXX. today's attention shareholder look Have October fuels your call. York that to in our time our for total at you person growth The on seeing day. and great forward remain strong. Day New profitable a strategy Investor X, We

Operator

concludes Thank for participation. your conference call. today's you This

You may now disconnect.

Nordson (NDSN) 22 Aug 242024 Q3 Earnings call transcript