Nordson (NDSN) 12 Dec 242024 Q4 Earnings call transcript

Thank you for standing by, and welcome to the Nordson Corporation Fourth Quarter Fiscal Year 2024 Conference Call. [Operator Instructions] Thank you. I'd now like to turn the call over to Lara Mahoney, Vice President of Investor Relations and Corporate Communications.

You may begin.

Thank you. morning. Good Mahoney, Investor Lara Communications. and President Vice is Relations of Corporate This quarter results. welcome call Nordson's to fourth conference to fiscal full Thursday, XXXX We our XXXX, today, you December XX, year and year report

Dan I'm here our Vice Nagarajan, with Officer. and Financial Hopgood, CEO; Chief President President Executive and Sundaram and

website release find will today's during refer press as at webcast as our nordson.com/investors. can You our slide our to call well both presentation we on that

will on conference replay there be call available and is XXXX. investor This will of telephone XX, call available live XX a our There broadcast conference days. until for December website being be the

this During provided press release these references of metrics metrics financial to issued the yesterday. in will the GAAP non-GAAP been be conference most A has reconciliation call, made. complete comparable to metric

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

our performance, full with Ascend an the and the year-end fiscal commentary update for quarter Dan on total talk about and Naga as segments. Slide performance to then enterprise quarter flow. guidance. Moving agenda year company today's year business as will and will discuss and X also sheet including highlights. well the over the X. XXXX sales strategy to earnings review and first fourth high-level will call full the turn will He cash Naga about Dan our to balance conclude on

your We will then happy take questions. to be

Naga. With that, X over Slide to hand to and I'll call the turn

of our you strategy, Call. make $X.X Year joining sales we Nordson's our delivering employees, more. of delivered Good or progress XX% growth and on Ascend sales. and last the fiscal million in market results This disruptions Thank morning, years In conditions, framework, of EBITDA and record Next, despite macro XXXX to Fourth have X who chain supply dollars NBS Conference changes, Quarter record our everyone. $XXX with testament to Fiscal a billion XXXX, and dynamic for Full global end continue is deployed

business consumables. throughout geographic The a includes diversified these growth of a core high customers, to focus our aftermarket elements recurring profitable our through exposures market on enabled have end challenges. and and revenue model This level parts deliver to steadfast commitment us innovation, and of

the launching changing including to a growth in added we've division-led and respond market to strategy Next which conditions. rapidly capabilities to XXXX, teams Since empowered Ascend new our the have model, structure, our framework business NBS

turn Dan I results for quarter now will I moments. performance in the year the to to XXXX. more speak But detailed a the more on and call perspective will over provide to few enterprise our financial fiscal

Slide Naga, the good results you, overall start everyone. summarizes our I'll to Thank X, on for fourth morning which quarter. and

we quarter fourth sales the year's weeks fourth acquisitions, increase to final of from from X% of million. included acquisition quarter the sales growth were $XXX from X% up contribution Atrion the XXXX prior compared ARAG You'll million, see also but in recent $XXX the acquisition, prior The the year. that primarily completed

each and fourth segments bit Fluid in These moment. organic our Medical within and of our organic comparisons more year-over-year I'll a Technology favorable in categories driven by our by Advanced were sales year. partially quarter year-over-year in and were product on selected Solutions return to in segment, a compared translation was of sales offset down Industrial Currency Precision decrease segment. X%, growth Solutions X% The cover the a and declines by the Solutions was prior our to segment challenging

related costs from of nonrecurring a in restructuring reflecting million a $XX prior up of the excludes basis during XXX Atrion percentage million, quarter, year to which acquisition parts higher of improvements about gross and basis. efficiency $XXX XX points, and factory costs basis sales points revenue. gains was onetime the was by profit, driven margin on the operating Adjusted This mix

end Selling, general expenses All growth a about administrative investment increased a year-over-year, company, is performance. percentage for points of XX% of and sales which this of targeted the continued in margin reflecting Atrion the represents operating front-end XX the addition on incremental as initiatives. basis and our high in,

our as That sales of initial integration X% of translates quarter. on quarter This operational for is also the above record a increased fourth to our prior million $XXX compares into the our over X% basis both profitability a of prior the quarter for really a the XX% XXX in This EBITDA target to million, articulated the year EBITDA XX% execution sales. incremental in long-term Atrion sales strong points $XXX fourth strategy. or overall quarter, Ascend year also and of growth acquisition. XX% at the

Looking quarter, to year. nonoperating at interest to nominally debt increase driven the higher in million. modest the by increased expenses quarter levels and the expense is net to due prior income This compared in $XX acquisitions

near to in X-year to increased term. which basis the year-over-year. The in net the balance purchase a pay finance the on million and price the year-over-year pension reminder, income million fluctuations Other in we $XXX September, our public funded accessed currency reduction revolver, debt in $X some notes a priced As primarily expense X.X% we with in of Atrion down at expect raising markets, to was order due acquisition.

rate of Tax expense $XX for million was effective the an quarter, tax XX%.

is our rate and full year tax reflects It approximately a a in bit will that structural mix acquisitions changes. cover continue due to of effective and see our quarter tax XX%. later. XXXX Naga This expected rate improved forward, in earnings changes fourth this other Our mix guidance reflected to going reflects of you'll

year. midpoint X% restructuring-related income expenses, totaled net share, and diluted $X.XX share acquisition or per prior while favorable that earnings differential $X.XX nonrecurring $XXX a the totaled guidance from GAAP quarter per I million were operating share per reflecting just the above over share, performance Adjusted $X.XX adjusted mentioned. contributions the excluding rate increase for and the strong tax of during equal our per earnings quarter, the

turn to X X% performance. fourth let's quarter the the favorable review impact acquisition Now prior of Organically, decreased segment sales and ARAG another the X% compared Slides to providing $XXX X% quarter million Precision currency of Industrial our X%. in year to X through decreased Solutions a fourth IPS quarter. with adding

IPS in delivered overall segment for our sales the driving decline comparisons the elevated in quarter. by for are processing that fourth and the deliveries polymer organic fiscal XXXX line year-over-year tough quarter the sales in recall the and You'll coatings create segment products. product record of driven record in industrial These IPS

year. For were XX% EBITDA the the $XXX lower full million with or the performance for flat sales sales, year, prior quarter was slightly reflecting sales. consistent of IPS organic on operational

partially in volume softness X% $X a compared sales Medical Fluid of benefit, year's was increased in $XXX a of and Atrion lines, minor acquisition the by fluid product lines. XX% in to some modest X. organic dispense volume improvement components solutions and organic quarter. Slide decrease product our fluid sales fourth or interventional million. by decline offset This medical offset by The increase reflects a currency and million Solutions to Turning prior primarily driven the

XX% was million were sales. EBITDA the inclusion or the of Fourth acquired XX% $XX due compared year margins of prior to to the or slightly EBITDA $XX which increase than of business. quarter EBITDA of XX% of million year an prior sales, the lower is Atrion

implement business we You'll and to time Atrion's over our EBITDA NBS framework. we as recall that integrate continue expect margins the growth improve Next to

to Turning X. Slide

to compared benefit. a You'll Technology X% increased quarter. currency prior Solutions increase fourth see included sales as well Advanced an $XXX sales X% change organic the volume of million This in small year's of as

driven as the and well product selected in inspection modest improvement by quarter as within lines was our test lines. electronics in Growth improvement dispense product

third improvement quarter electronics in ATS year-over-year semiconductor since reflect show to the a the seen markets of segment sales We've quarter and signs nominal improvement. sequential fiscal this end Our continue stable growth XXXX. continued time and return to in first the of for first from

as sales. sales, of really EBITDA particularly an it million growth. positions with and increase million cycle step-up Fourth quarter quarter from $X was of in the performance. the XX% to historical the from EBITDA $XX segment's a when efforts EBITDA testament year performance prior performance, base It's well XX% We're the margin EBITDA $XX down or a team's to electronics significant fourth business, or of XX% more million of us pleased represents markets meaningful a of improve the to the the structure return

from X% X. year's full decrease results. sales year turning a X% acquisitions, full increase previous of results. driven I'll record billion, an This the a sales X%. share XXXX compared year was our on an by a Slide impact to offset to comments by $X.X few were prior organic record of Now

sales did see Advanced On by improve decrease we as Fluid is a on The the combined all orders sales continue and product Technology organic full to our year for ATS with industrial and basis medical Solutions, driven essentially exited basis, although Solutions Medical were in the down organically slightly segment, flat year. XXXX. up lines essentially Solutions slightly segments a Industrial Precision we and our

year comparable of full it year EBITDA a million a year $XXX record And of solid incremental X% of or Ascend sales. which delivering sales, increased million represents XX%. or of profit for operating the This to the prior Adjusted consecutive EBITDA fourth XX% year. was XX% $XXX was the EBITDA marks to full the strategy, growth. margin

the the per And GAAP year, from diluted reflecting and a with share adjusted X% October On earnings we near-term ARAG we higher how the Atrion certain XXXX the our weakness diluted per we're year. confident were our at for and costs interest in associated decrease remain acquisitions. established the earnings end $X.XX, share $X.XX Investor prior targets balance, despite in Day. year X-year pleased with some finished markets, were

flow had net a the sheet in on million generating flow to cash another turning $XXX flow cash rate XX. of free income. on strong XXX% cash We Finally, balance conversion at Slide year, and

capital While of still working capital, additional both cash to was down from which and going expect forward. normalize strong, due flow was higher investments to And XXXX. this we of use conversion

in balance the While cash we quarter debt due deploy acquisition, increased Atrion to continue to efficiently. our the

During we XX%, annual annual by marking increased consecutive year our dividend XXst quarter, increases. the our of

of sheet $X.X of targeted of on billion, leverage the impact resulting line Through full shares open year million a of we a and at million a excluding our repaid net paid our This $XXX and with based XX-month the with within in range X.Xx our long-term in EBITDA. of approximately and the also ratio Atrion on repurchased of strong expectations for debt, market. year deployment, ended million with On strategic is year. acquisition, debt the million balances balance we cash trailing the $XXX $XX out $XXX dividends capital basis,

with our continue positive conversion demand. IPS deliver came business, line balance And in closing, guidance. with for in very in operational to and show summarize, an from in And segment better sheet, fourth our and demand some a pleased segments positioning product overall fiscal XXXX. our steadily previous Advanced we selected ourselves Technology improvement standpoint. near-term quarter to our a closed performance of lines. see signs we profit So just strong to We're We MFS were sales continue in well in weakness XXXX strong the dynamic despite to reinvested

now call to turn I'll Naga. the back

Dan. you, Thank

deep differentiated years a many As demanding niche high position products revenues, diversified strength advantages, recurring competitive Ascend of on parts on with a X in past started and markets, strategy, since I reflect position from applications. built our we our we leadership customers' end direct-to-customer the launched knowledge model of

In X advantages new we mode. to have expand our past X competitive the added years,

through a acquisitive recurring increased profitable to electronics. medical strategically accelerate high-growth Over our positioned This portfolio The expanded has time, end growth. have of of emphasis markets into and revenue, and strategically on has that means. driven been bias growth is renewed and have we first us mix mix our we the organic

In term, slowed cycles increases with importance market and of conditions end acquisitions. This unique these have organic the balancing macro the in segments. growth growth short organic

products a adding infusion This our great our acquisition top acquisition growth strategy. in solid exposure to to It more expands device fluid XXXX will and solutions XX% broadens therapies consumables quarter components' to be by offering beyond. Our a significant expands with addressable is and recent of customers also recurring our it example single-use a medical this and Medical than delivery. fourth market and drug revenue current for fiscal by Atrion was Atrion driver and contributor revenue, Nordson's streams.

is we It advantage. that the have is very becoming the advantage drives framework. which Nordson NBS in competitive a our The of growth second added growth profitable creates and implementation acquisitions. Next, to value pleased Next NBS I'm with

of many that growth and to run we October me NBS and is how the to is framework our Nordson XXXX, It including in Throughout traveled the I've now Next India sites, Europe, clear China November. businesses.

it of evidenced see can in ATS fourth results quarter You our segment. the

achieved still customers ATS while its when repositioning. cycle EBITDA electronic respond to of margins They As downside strategic very Dan to be due will the to noted, XX% in turns. market the well the positioned

Day and Nordson recording, protect Investor improved October, website. the share. product our examples shared Next to in how listen to Investor investor delivery has in our you At market NBS to Day several driven encourage on-time divisions I performance available and in allowing of grow quality, webcast we which is the

Ascend to ample to we and work be Next As new the X in financial next our strategy have the successful the performance towards targets, team Nordson NBS runway enable years.

we to results, when look to the average XX% leverage annual XX% our adjusted and announced we to at Ascend XXXX strategy EPS X% XXXX, expect performance we growth X% on organic revenue Investor Also in targets. balanced In to growth. and between financial to deliver of growth back acquisitive Day, our our XXXX in

As years lower and this target in that others. growth annual for an period, growth in can is higher be some average

markets. for We are entering our with conservative prudently many end XXXX of expectations

recognize cause the in in We macro judicious change the spending term. global level customers be could of to which in the also environment, their near our

and segment, our muted based order capital customer we although Industrial term the In Precision in near levels. backlog investments are to our entry trends on are Solutions large expecting current encouraging, be reduced conversations

in processing areas large record as recycling system investment product reduced years. polymer particularly our after be businesses, X will such lines, headwinds significant sales For

end are cautiously agricultural stabilized, seems European meaningful awaiting although to Additionally, market have we growth.

Medical weakness of which our XX% interventional more line, device product sales. patterns. Solutions being Fluid this customer approximately teams our cautious their far inventory in and within currently impact Within medical segment, supply purchase chain see with We are is solutions segment's this

product solid. this pressure, stay from Atrion varied not the their our post-COVID we in XXXX. Positively, from components growth understand and pipelines largely from our electronics continued we our acquisition in see as product fluid to supply MFS will come continue needs. project remain offset And our growth lines we in customers to chain Long-term we ensure cycles, said, somewhat close that and expect dispense in to fluid compared but to fiscal Modest significant spending improvement purchasing to play. electronic We been remain particularly particularly ramp expect a That have steady issues sales with prior semiconductor capital is do customers, eminent customers. in customer to we geopolitical patterns applications. close expect

Slide with Now to XX. of paced backlog. reflective on turning financial more million normalized reduction backlog $XXX XXXX the to levels. a sequential We enter approximately outlook is in fiscal return The

per X% X% Full neutral share. in diluted anticipated forecasted order above and Based of in current are backlog, earnings anticipate on entry XXXX of combination the range the end growth of expectations, to market XXXX range exchange adjusted the rates delivering sales foreign to to be we sales. X% fiscal year

will an For $XX to assumes we expenditures adjust. approximately rate X.X% significant our to interest tax at XX% agricultural impact If million of approximately modeling of capital Atrion from purposes, of exchange and electronics foreign we guidance million full improvements million the of effective in This year million. recovery in markets and approximately in expense end negative markets, acquisition rates, estimated growth guidance. a and fiscal ramp or to XX%, $XX $XXX XXXX, $XX end contributing see X% no midpoint the assume

our start Based seasonality, modestly. on first quarter expect we fiscal to

forecasted in and diluted XXXX of million the $XXX earnings will you of share. quarter sales fiscal Slide to range XX, the to million in $X.XX adjusted on As per $X.XX first see range are $XXX

excellence team flow competitive our our operational to strong delivers cash in Even times, and due strong advantages. uncertain

while growth continue and your to in a we customers reinvest to I will As the Again, thank want shareholders. to compounder, business returning shareholders employees, support. cash continued our for our

We for will lines the open phone now questions.

Your from Instructions] [Operator Baird. comes Halloran of Mike from the first question line

like saying and the frame thoughts through relatively on end works sound give doesn't improvement. the it the maybe just first in on markets end growth and could But the guidance at about thinking of your year. you're thoughts assuming the we customers up patterns. the all how some maybe variable fundamental order and as through Appreciate cadencing the work how conservatism you there quarter outlook the or as some embedding It seasonality, you're the these see are normal any what Is year. you

thank Mike, question. We'll the this you for it do way.

through the Let can what we and end the Dan then me markets, how outlook. walk give we're guidance first think have seeing how you in -- you we the built and

Right.

I is -- right. are seems are outlook. that what IPS. you and So have there tell a IPS, end let's steady. steady good, all And consumer that really We'll to the our start then parts would markets parts are with with there In start -- nondurable are

this as this last Further, year. business And our recurring is revenue high, fairly in you know. has grown

it We the expect year. contribute to nicely in

what On reduced have term in virgin X I investments with in years investments of and product out would sales customer expecting record investments in based investment -- after we X be recycling also are reduced processing that line, backlog. polymer to sales Asia. pushed record you the seen and near polymer the capital reduced some we on and headwinds, large in the muted in is share of Particularly years conversations

with automotive We're also ICS seeing business. our slowness in

Our agricultural there. precision we're return business cautiously awaiting the have in and Europe, things ag stabilized,

So takes IPS. puts that's in and the

sort We're up some If entry components business dispense -- in our you doing is pick modest biopharma. we order is exposure is business, also modestly fluid fairly at which Fluid of growth seeing there. MFS, look there do see steady. in

seeing business. in are offset our X So these will we medical pressure businesses the interventional

their product weakness seeing in chain pipelines teams far this are we're this out purchases. of And that revenues. the conservative hence, segment's about supply line. interventional pretty is for this what you, strong about our finding we're product product project and more And remind look cautious OEM inventory In the is Long-term XX% medical category, category.

In addition, growth business is our this primarily very acquisition. Atrion increase market Atrion come segment would And positive the in addressable for a development. from

don't you significant business quarter. saw find capital rates sustain what the assumptions spending. growth positive are segment, not to there of The ATS is our improvement steady is a you We in the in fourth kind ramp and order there entry --

close geopolitical the the see this play we choppier recovery than is seen that in at issues are that a Mainly, in of It have here, remain this and number order more our patterns far We customers. past. we business. to impacts

gives overview broad of that the So in plays end you how me a sort markets. into And you maybe experiencing Dan have through what our outlook. of are that walk we let

Yes. rates -- business. overview on And this and a just tough and and ag more just book market order might comparables is thing of that still quarter X only Thanks, have reminder seen in stabilize, our bill the while we add in of our is business, QX Naga. I the on maybe certainly we've that

you off large of recall, a working As business. our in were backlog last we ag QX year,

as we've good, But to very the a backlog one got stable last in So business due QX the the place. off underlying seen comparable Naga we've ag in work said, is business, year. more in tough

see overall if to you we market said, full you Mike, think would tell typically that business. growth in of at you you of the right some year, the much what So flat would seasonality and QX I line just organic year, in in that look outlook the basically give guidance the color, pretty profile the is for if sales the it's our think with

annual our look XX% always excluding around history, QX acquisitions. if you quarter, our is of at sales lowest typically

you'll play think guidance. our that in I so And see out

is big quarter that year anomaly quarter of last New is a whereas it factor, hit Chinese a see couple this first the Year our timing only and factor the of it's it we but hits second contributing actually this year The not our years.

QX pretty much lose seen QX if in would with weaker QX. production than our it's historically. typically us just will seasonality normal hit because that So means slightly than that line in anything, that be we've right that But that, other in we

helpful. really was That Okay.

the was finally Would some there because that flush in know just happened have those side just anything we've kind quarter, element delays of projects electronics had a unusual? materialized. pushed an fourth run the getting consider was you of through? there that of right the I that rate? On some Was mean I there

you on, I is improvement the some on what modest then are electronics coming but that confidence you're And it side? where on there's on related, cautious of seeing more capital from you even the improvement electronics piece gives if subtext know any modest? is the kind that side coming that

to. there things would are that couple of Yes. I a point Look,

we are seeing First that certainly strong our and with and our things continued around foremost, way. coming customers conversations are projects

that's So one. number

to the beginning we're Second, into conversations entry fourth to deliver quarter, And is translate did in growth of to those beginning time. in the allowing first the that a what entry. we see probably kind long, order order is time long us

We that in The us. is spend. parts not business we're steady conservatism seeing are revenue and that for caution seeing also be significant pretty capital

call this And we business to trying growth here trying in ATS that so be would conservative us the modest are significant But order uptick. positive the pretty confidence for in a to the essentially, period trends XXXX. as this in gives be

thought that relatively quarter then an in is fourth fourth anomaly? was piece, And the Or anything normal? quarter that just the you

normal. Pretty

the Your Saree next comes from of line Boroditsky from question Jefferies.

A small couple of items.

Atrion the us including just backlog, understand the this could $XXX you but cited at help backlog ex acquisition? You million,

Yes.

Dan, that want take think you do I to -- that, please?

about I'd million to the $XX added tell you, backlog. the Atrion

million in $XXX the excluding range be So that. we'd

XX%, the like I expand. is significant that this, ship. it of portion you And thing backlog book more color around a if is question, would but company's recurring continues XX%. know to add and remember, to Saree, I ask north is you backlog one give more I would Today, of your revenue didn't some

context about got well. you as the backlog into you're So thinking when that to reduction put

I appreciate that.

to believe impact. the impact you've $XX You million XQ. Year on a mentioned million of I the $XX New put historically at Chinese sales those

the And year? pushed second So to be this just get quarter? does would similar that this

Yes.

call Yes, QX to still that's in between think just range. timing the I it, the, yes, appropriate. been and And XX in XX QX. typically

And just for lastly me.

full You've conservative higher guidance? a entering to upside scenario? year you would talked about of end a about lot get with your in year how think positive maybe What guidance do more estimates. you this Or to the potential

me take Do to I you that, can... Naga? want

please. Yes,

So hopefully, get think with the -- some I you -- markets. from very no, recoveries it's I color we're trying a great question. when look, to not call And look And [indiscernible] at the think stronger end and markets these would in of as some you guidance, upper our of anticipate it ag, recovery as end precision you technology ATS of businesses. think of our

so the that that's in were quo be to recovery if recovery look now. I And would it and be some kind markets industrial at stronger There electronics we're end, status some semiconductor seeing the right in other of versus think -- I of a and upper strong general the markets. the would

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

Just I early a Naga, looking out have in gains. And on efficiency for the think talked color that today. early more Yes. you're you call, gains? say call inflecting in little you about did you the calling factory efficiency

impact Yes. Look, than have helpful before. Next higher as a making when NBS our more this the see where beginning Next continue volume businesses, to to also certainly begin we is we product products, to see efficiently and in you're are mix NBS being deploy you and lot of them --

way. things. of different is of efficiency couple a a of combination better of a products, it also is the but choice them making it's It in So

improved That efficiency. of businesses. significantly us in certainly has delivery helps our with all on-time Our

we of making. different with progress pretty but So the are pleased factors, number a

and EBITDA settled out. Great. that are accounting then And curious And we looks with is solid the if that D&A back it prorate high Are what to you've trends and growing it margins quarter. Atrion, a full the the range? XXs now like revenue owned probably in

Yes.

Let sort me pleased integration. give We're with the then questions. you very just some broad financial Dan can more very pleased. color, of We're and maybe some take of the

We and a are part Atrion for have coming year. the are in big employees excited who of story our our joined

Integration we progressing going well, revenue as expected. is

had had model. that making around we synergies we -- are included synergies that operating our the in progress We

All way provide those the that of looking of if would points let Chris think. that is out -- great. we Maybe can coming that is you Dan, some for, data

yes, of think you acquisition one, of if start And a really early. good is And certainly or right? question. slightly in It's performing ahead Yes. the the even -- off early and appreciate to line number expectations,

now. comfortable from towards are very margins EBITDA in we're very that yes, Nordson-like integration we with in also X-year right XX% comfortable still standpoint, And the our feel path an more But upper range they -- absolutely period.

D&A D&A it's a in than a bit From accounting. standpoint, higher is little their when acquisition -- factor you particularly ours,

And little D&A, but from bit on of percent a us standpoint so a they'd materially. be north not

EBITDA upper improvement yes, I'd now, pretty then, say, months X path X sustained the And towards comfortable I our in margin in And [indiscernible]. think we're going comfortable forward. more months, and even with

I'm curious NBS rate the helps We just talked in holistic Great. the that. the mix if quick minimized If kind I growth framework revenue run was or quarter, includes of healthy could any get the a one on about very attrited today, you've ATS, implementation in of process? which Next NBS things leverage. Next

of job see the cycle, a during margin couple this even beginning at you downturn. a is incredible that you the of an done see -- things take a why business strategically team me And let has can that of repositioning XX% the So begin the EBITDA. to

well So that positioned way.

A couple the the reposition growth points this would now I framework allowed to make team business. that our has that -- of additional

our new who in really of have of plus and That trying team that has been address has India one the need some to the customers positioned manufacturing us well manufacturing have are to We a China strategy. distribution working a on. location

XXXX. So we are well impact positioned there. The to growth will from that begin in location

innovation in couple our One about would a or very recognition. the in to products. really period invest you, And tell the thing won has that excited growth of also of this second the team I have. X new customers them side have pretty us time will that are The that products applications position industry we of used new and some good

And time make team impact an really strategy beginning position for and to strategically using a our our of us so number this to growth.

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

cadence you in to the pre quarter, Can patterns? thus follow-up. about any experienced fiscal election respect fiscal what you'd the discernible post in order maybe first with or far monthly you're QX? seeing call out I And talk then a have order Yes. you trends And

would the Yes. if seeing largely reflective near it's what at I our we're look say in Again, term. you guidance, of

On certainly, that side, that seeing think order organic pretty us uptick tell X growth from the growth. there. return QX. looks we're we I to nominal had We're -- in But that, ATS seeing sustainable. would big X% And not for a support patterns the ongoing our

story one segments. backlog. say into I our support a I normalized back Similar A, have that to kind in year-over-year difference And other guidance order worked coming we would is given. we're that we've our the think now of patterns, the

So a year-over-year. factor that's certainly

I any say discernible we haven't shift election. would post that seen

think bit early. a I it's

I there's I summarize hearing, think I were what if to some we're think still uncertainty.

customers some things trying out a our wait and going see see to to I are frankly, of little to how bit are think play here.

down make near-term figure implications the innings. think And going things And the play that people settle still that are be. think out. I they seeing what as pretty to frankly, I that still out our trying in will it's and we're of what certainly I should think are uncertainty decisions to some But early outlook,

you of -- want think if further, anything we're know don't Naga, kind that's add I I to hearing. but what

environment. I is certainly add would what an uncertain it's So macro

into environment we are really outlook. uncertain to our the do. that the is think same things taking conservative And approach we I to what playing see You market

based what the challenging be than be it we But today see significantly be what to conservative it we like on appropriate could could have expect. and we more this in we or we general, feel better know Look, on today. -- based could taken steps be

remind company a of couple I'll strong has very a model. But operating things. just you The

with direct-to-customer as recurring model Next a have high diversified the markets, to how we We end run company. differentiated beginning and products, be is growth revenue, NBS framework a

take guided margins, if So the you and margin the of well team look incremental had, trends EBITDA and if conversion, those has this you our Day. of track you north record all operating we the you look in that's combine excellence, where the at had if if at Investor 'XX

you that under the combine and way conditions different and out strong but strengths, it be EBITDA well us and the environment to margins. will environment, to our Nordson competitive do operate cash our combine deliver you if a any ability sets So of figure will confidence deliver fairly gives operate

Based follow-up. at it growth organic IPS what then expect segment I expectation at baseline level sounds in correctly. the in if kind out fiscal ATS Can commentary, on you a your organic as 'XX and just is Just flush maybe like for him for modest MFS? of you Dan's least understood

the Yes. -- I appreciate question. We typically don't

for But guidance I say if I you forward, think maybe good right? it's you'd give a would QX, of on we segments. at what typically the don't look each precursor specific going expect

some and Our it, given But in we've IPS and call And pluses of they're stable. invasive generally, even I'll kind medical, business some got is minuses. in holding pretty the minimally uncertainty space. the of serve, the

yes. so And

If you best answer to look question. way at your it overall, the maybe that's

then from ATS, a Atrion If the you it, our guidance, the or the FX in other on let's ongoing acquisition back growth from growth year-over-year segments. ranges. of based and coming growth that single-digit is FX you the low you tells peel factor slight for kind current call what in, if offset answer X essentially organically And with it's growth

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

maybe bit businesses would So got backlog set But backlog if backlog. up just stretched kind the during just over the given made of issues. lead what normalization this time have done, a wondering is you most largely and kind COVID orders elevated tough I think seen and and last out, backlog people that little of would comp? the normalization on know of more a year

Yes.

large start, Let add Mostly, system businesses. then is can system and businesses, Dan our additional. it me

this, ago, even And we continue in quarters reduction a industrial to business. of a when system continue other to see backlog we talk one about think processing large the of couple is plastic businesses. the coatings I from is

large system to our in extent, some business. And orders part we of one have adhesive

and where And you out. be ongoing a year, point have it typically would has those So order we rightly seen for normalization. been

think then some activity or polymer issue? that's recycling And dynamic? Okay. a Europe something Is else comp hitting on just tough there is that I that a that. processing, was

polymer a Europe recycling as of in well in investments you production Certainly, in have X couple also years Asia, there. a of China. comps, sales, Yes, particularly virgin reduction in in as record reduction investment in right? tough but things

of now in So this the business years. to our the have couple impacting be has of year. been this going they're And you last a huge cycle them, contributor growth down and

Yes.

maybe I systems thing versus to just think with other the our continues of, call mix. our it, increase reiterate backlog percentage normalization, book-and-bill to parts business

that's of acquisition. Some

organically. of Some doing we've what that's also been

approaching overall. XX% so And we're

It XX% and [indiscernible] we're right I or as as there. up parts around think services. far at

historically well. backlog, that that's looking important think thing as to the an consider so as -- at And you're I

interventional are? built that destock, kind kind Yes. telling customers in its inventories where are your of run you of into for terms the then when course? guide And what What's of

the if middle far in -- I like to product I particular. as said, put working innings [indiscernible], were -- kind through so interventional businesses as it Yes. supply the chain or we're would of changes as middle the it lines in say in feels We're I somewhere

normalization, a there. go that has And how and And then to we of little so out we normal have the some back another we we're way to works about of to way get This return kind kind X, or play think but year. thinking quarter that's from to still in its out.

business. for our we've long-term out The this that I couple very the only supports And why point mentioned -- outlook that. other with of the is and thing on We in that what conversations. would a different really growth in remain is prospects pipeline we comfortable

-- of normal returning plenty medical return to to to see line of business. We areas already growth project normal our in activity component seen growth. our still components other in interventional sight of We've some solutions

exact pick So prospects. this really to what we're long-term our is with very the comfortable trying with plays It's through timing we're work just I out how of to continuing think the customers.

One growth. area, an thing I think framework again, we interventional portfolio is NBS to our how add in Next, growth approach would using to about our this that business, is

Over there months, of where out that areas capacity come post-COVID growth help have additional of in destocking new been that the situation. to and in. us a will COVID, investing new XX to this And XX us last the in category months, as product investing prior it's are we to in XX past we we XX were modest for positions

of Your next question comes Buscaglia from from Andrew line the BNP.

outlook. So just full back to the year

very but dilution dilutive -- let's the or probably organic no margins I MFS, acquisition. low with guess low a given growth EPS you up. my have down it flat -- is no at at assuming -- the the midpoint, you're call some or just confusion And are So midpoint still is

of you it costs. -- grows, [indiscernible] ATS probably because up if

You've taken costs out.

growth have decent in be what's -- probably you organic assume to IPS some flat So what or to margin expansion down, probably down you're year. down despite implied or

expansion, guess to So are how margin you -- additional cost-cutting how I is Or coming? getting of the guess, midpoint are to get to there -- such what you -- that I ESP?

it's you take a of -- would base forward. here's and in form keep I part what guidance incremental, great restructuring NBS our kind business better. company continuing some of is going made to And the some in if question. to of Yes. Next of No, actions I the mean the cost also tell a improve you. that the taken run our And mind look normal at say I sales would we've

from you're so additional get going those some from year-over-year And actions. incremental standpoint an to performance

we're And year in which mentioned a the think high last do, out. X mind, rate And point. are create factor call, as which those starting in delever that as [indiscernible], plays year-over-year our with throughout the leverage will also then we is keep as the conversion. of typically year debt a the we tax we item, addition, kind what improvement the factors drives I that In at to our continue in you in

Yes.

Okay.

are of margins well we touching there. MFS you It But that, probably as margins the Okay. -- see too, things now. decline? And then just do on maybe going seems like see costs Or taking year the this these of things do in that to half? that some -- or back get in the midyear hold to cost savings we expansion side margin

to MFS business, talking specific segment? the to the You're MFS

Yes, just MFS.

asking about I really, And think assume, right? Okay. you're I Atrion

will to it thought. because not be as Yes, dilutive, it much be but -- we as maybe seems initially

Yes.

significantly XX% point, to your on I think, As our X not good X model in EBITDA I And to with track below largely we're think I a on range said, but upper that. And current, improvements years. our path first factored dilutive. they're, the in in on the

in play some even year I to so well. out into think but you'll of or out And will of XXXX, that some start certainly XXXX play next see that as

Okay.

integration Andrew, what I would add is going well.

nicely. year structures And Dan a synergies is we're next deliver off that in to that pretty what for to. completely cost but -- we you is start, margins good us and in when you over model X the We have made -- the for is Dan calls But very committed indicating MFS are our early. on to we to holding adjustments

Your next line Walt of Seaport. the Liptak question comes from from

recovery. kind I'm you going about in of and with recoveries to about try comment the that the some made orders high one end not calling

early companies exposure orders of from they have semicon orders sort and other So medical what seen of blanket kind we've to is or that industrial get some in that the year.

December of early deliver the you there's think what And later is how do for that it recovery important know in? first in Or the larger Do at sort quarter happening? you the find that are the that quarter, not systems those year? orders on Like will in point it we in we're you year the quarter?

what question to Yes. QX on going much second think is to QX start what seeing I play Maybe outlook. now play half is maybe the and I'll out. with I'll our think viewpoint we're answer better think as current we'll I I take the this. out, Again, a have supports And how is your

there's lot also a Yes, hesitance. of it's of are lot going a There's discussions but interesting. that on,

in have today we're earlier kind some a back viewpoint uncertainty out, on generally is we're I And of that's are plans we'll and comments, so this into, term. play translated And think I'll generally the think better seeing a to guarded those seeing the But what the just investments. that's And for of kind much plans. looks say, near as and year. QX what like of that's I QX what lot

Okay. Great. And...

change something And one should will what asking, on might we today. like we know Look, let based be Walt, before you're adjust. add you follow-on, suggesting this me ask just is or the thing.

of there the rate supports the that the of though, And particularly we IPS fourth -- in kind current ATS, orders order in the large momentum that areas the quarter. area are system of growth see clearly the concern. entry, where But delivered one we is

Okay. Great.

Okay.

talking what issue and right, question as would we the something else? causing that's sort the about been hesitancy, and down, that tariff headwind? uncertainty the are Or those we're it interest next in Is be from? the talking about is then have of the comments over, are is the the coming rates So coming election

or thinking. to presume, be what Well, we or are is some have Walt, our their will in of customers why exactly -- for some impact that hesitant are difficult hesitant. tell But we certainly us can may nobody telling it obviously they're describing us you why

stable lots solar, All we amount a who environment can right level to is in change to now. be certainly to is There they're macro that is hesitancy and right? all be certain there great. battery It's The projects, the say be environment going going knows, of geopolitical is leads in customers. of our but environment as maybe And There's -- about manifests change is to in not investments. in I talking some uncertainty. not hesitancy. different that itself mean EV

So...

Yes, absolutely.

the years being cycle. normalized Where So another maybe of -- in get from for a ATS for really X be a where to can think X, part maybe like improves? operating one do thanks think market, think revenue of ATS margins EBITDA Or last the pointing on it, bottom-ish do the will you me the is a sort at you now, couple, the nice out leverage go? way as you do look you margins what

Yes.

our products new of to is think than lot among important business class area And at in probably a where our is I an requires any XX% and EBITDA technologies our best right? remember ATS businesses. more it investment it other peers, in really a it's

your you to We fully technology to in in to be And typically to, investing able they more ahead invest bring customers' area. XX%, needs XX% competition, revenues this support importantly, of about as [indiscernible]. the of have but stay

looking to So be. place for XX% great us We're a EBITDA to is grow here.

So margins. any continue grow, rather to to we than get expand can to want this we business grow opportunity

rather at code. lot while going story you've company, be were incrementals the top for to you're a we at now of that Look, We're strong continue line If margins. in XX% this the margin. running ZIP XX more to on as than EBITDA grow the look focused in EBITDA XX%, the you us, happier seen XX, total we company

And continue right? like to Really comment apply I'd take We XX%. to company the want and the same ATS, to for the grow business.

the we to of Naga for will And end our back have reached some turn now the call over I session. final question-and-answer closing remarks.

great and Thank on progress call. the your making time We're you strategy. today's for attention on Ascend

wish We we are enter as well you season. positioned fiscal I really a XXXX. holiday happy

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

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