Nordson Corp Q3 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Saree Boroditsky - Jefferies - Analyst : Hi, good morning. I want to focus a little bit on the acquisition. So the margins at Atrion, they've come down rather significantly from since 2022. Could you just talk about the right margin profile for this business and the steps you're taking to get the margins to Nordson levels?

Question: Saree Boroditsky - Jefferies - Analyst : I appreciate that. And then you noted that you saw year-over-year growth in some of the test and inspection products on an order basis. Could you just quantify this and then provide some additional color on what's driving this improvement and how you see that expanding into 2025? Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 22, 2024 / 12:30PM, NDSN.OQ - Q3 2024 Nordson Corp Earnings Call

Question: Saree Boroditsky - Jefferies - Analyst : Appreciate the questions. Thank you.

Question: Canyon Hayes - D.A. Davidson & Company - Analyst : Good morning. You've got Canyon Hayes on for Matt Summerville today. So I just wanted to start with a quick review on implied guidance in the fourth quarter. And I was curious how your thoughts might have progressed relative to the prior quarter on IPS, ATS, and MFS organic growth.

Question: Canyon Hayes - D.A. Davidson & Company - Analyst : I apologize. I think I might have cut out there, but I think I got what I needed there. Okay. Across the broader industrial space, we've seen project activity get pushed out a little bit as a function of REITs, macro, geopolitical -- election concerns. I'd be curious if we could get a little bit of color on how that is not affecting Nordson and how we can think about -- how that implies into the 2025?

Question: Jeffrey Hammond - KeyBanc Capital Markets - Analyst : Hi, good morning, guys.

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

Question: Jeffrey Hammond - KeyBanc Capital Markets - Analyst : No, that's okay. And then Atrion, I just want to kind of unpack the deal impact. It seems like they did $169 million in '23. They were seeing high single-digit growth. We only have kind of a [start] quarter in the fourth quarter. But just what's kind of the next 12 months' run rate of revenue we should think about? Where do we snap lines on EBITDA margins? How should we think about incremental interest, the [AMRT, ADVAC], D&A, et cetera? Just a little more color there.

Question: Jeffrey Hammond - KeyBanc Capital Markets - Analyst : Okay. Appreciate it.

Question: Walter Liptak - Seaport Global Securities LLC - Analyst : Hey. Good morning, guys.

Question: Walter Liptak - Seaport Global Securities LLC - Analyst : Good quarter. I want to ask kind of a follow-on to the IPS segment question and get some color around the stable sort of low single-digit outlook for IPS. And I guess, what I'm trying to get to is that we have seen other similar industrial companies kind of pauses in their industrial goods businesses, especially longer-term kind of project businesses. So I wonder if you can provide just some more color around geographic regions, China, Europe versus North America. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 22, 2024 / 12:30PM, NDSN.OQ - Q3 2024 Nordson Corp Earnings Call And you called out some growth areas. And I wonder how much of the focus from NBS Next helps you to gain market share in some of those growing markets as opposed to maybe some others that might be weaker.

Question: Walter Liptak - Seaport Global Securities LLC - Analyst : Okay. Great. Yeah, no doubt, the margin improvement has been there. And it's good to see you're getting some -- you're able to shift around to these different markets. Okay. Yeah. I guess, maybe just to see if we can get some geographic thoughts, how you're seeing some of the Asian markets or Europe. I wonder if we can get any comments there. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 22, 2024 / 12:30PM, NDSN.OQ - Q3 2024 Nordson Corp Earnings Call

Question: Walter Liptak - Seaport Global Securities LLC - Analyst : Okay, great. Appreciate the color.

Question: Chris Dankert - Loop Capital - Analyst : Hey, morning guys. Thanks for taking the questions.

Question: Chris Dankert - Loop Capital - Analyst : I guess, first off, if we could kind of look at backlog a little bit more, can you just maybe give us some comments on how you see the complexion there, how the systems are kind of normalizing as a part of that mix? Would you agree there's still about $100 million or so left of kind of elevated backlog versus normal? Maybe just some commentary around how you see that piece of the business and then how that's progressing.

Question: Chris Dankert - Loop Capital - Analyst : Got it. That's helpful color. Thank you, Naga. And then maybe just quickly on ARAG. Forgive me if I missed it. Again, obviously, a little bit more weakness in that end market from a sales perspective. But just curious how you're seeing the margin performance in that business. How's the team handling the lower volumes? Any color would be great.

Question: Chris Dankert - Loop Capital - Analyst : Understood. Thanks so much for the detail, Naga.