Nordson Corp Q4 2024 Earnings Call Summary

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

Question: Mike Halloran - Baird - Analyst : Hey, good morning, everyone.

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

Question: Mike Halloran - Baird - Analyst : Okay. That was really helpful. Thanks for that follow up. On the electronic side in the fourth quarter was there anything unusual? I mean, was there just kind of a flush that happened because I know we've had some delays that have materialized. Was it just an element of finally getting some of those projects pushed through? Would you consider that the right run rate and then related, what are you seeing that gives you confidence that there's some modest improvement coming on the electronic side. I know the capital piece you're cautious on but any kind of more subtext on where that improvement is coming from on the electronic side, even if it is modest.

Question: Mike Halloran - Baird - Analyst : And then just the fourth quarter piece, anything in the fourth quarter that you thought was an anomaly or is that relatively normal

Question: Mike Halloran - Baird - Analyst : Normal?

Question: Mike Halloran - Baird - Analyst : (multiple speaker) Yeah. Appreciate that.

Question: Saree Boroditsky - Jefferies - Analyst : Hi, thanks for taking the questions. A couple of small items, you cited the backlog including Atrion at $580 million. But could you just help us understand the backlog excess acquisition?

Question: Saree Boroditsky - Jefferies - Analyst : Appreciate that. You mentioned the impact of the Chinese New Year on 1Q, I believe you've historically put this out of $15 million to $20 million sales impact. So, would that be similar this year? And does this just get pushed to the second quarter?

Question: Saree Boroditsky - Jefferies - Analyst : Thanks. And just lastly for me, you've talked a lot about entering this year with conservative estimates, what would get you to the higher end of your full year guidance or maybe how do you think about potential upside to guidance in a more positive scenario?

Question: Saree Boroditsky - Jefferies - Analyst : Appreciate that. Thank you so much.

Question: Christopher Glynn - Oppenheimer & Company - Analyst : Yeah, thanks. No, I think early in the call, you talked about factory efficiency gains and did you say you have inflecting efficiency gains? Just looking for a little more color on, you calling that out early in the call today? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 12, 2024 / 1:30PM, NDSN.OQ - Q4 2024 Nordson Corp Earnings Call

Question: Christopher Glynn - Oppenheimer & Company - Analyst : Great. Thanks. And with Atrion looks like the revenue trends are solid and growing if we prorate to a full quarter. Our EBITDA margins back in that high 20s range and then curious what the DNA is now that you've owned it and probably the accounting settled out.

Question: Christopher Glynn - Oppenheimer & Company - Analyst : Great. Thank you for that color. If I could get a quick one on ATS, the implementation of NBS next growth framework helps mix leverage, we just talked about that. I'm curious if the revenue run rate today, which was very healthy in the quarter includes any things you've kind of treated or minimized in the holistic NBS next process. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 12, 2024 / 1:30PM, NDSN.OQ - Q4 2024 Nordson Corp Earnings Call

Question: Christopher Glynn - Oppenheimer & Company - Analyst : Thanks guys.

Question: Matt Summerville - D.A. Davidson & Co. - Analyst : Yeah, thanks. Can you maybe talk about the monthly or order cadence you experienced in fiscal first quarter, what you're seeing thus far in fiscal Q1 and any discernible trends, you'd call out pre or post the election with respect to order patterns and then I will follow up.

Question: Matt Summerville - D.A. Davidson & Co. - Analyst : Thanks just as a follow up based on Dan's commentary. It sounds like you at least expect modest organic growth in ATS in fiscal '25. If I understood him correctly, can you maybe just flush out then what your kind of baseline expectation is for organic at the segment level for IPS and MFS? Thank you.

Question: Matt Summerville - D.A. Davidson & Co. - Analyst : Got it. 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. DECEMBER 12, 2024 / 1:30PM, NDSN.OQ - Q4 2024 Nordson Corp Earnings Call

Question: Jeff Hammond - KeyBanc Capital Markets - Analyst : Hi, good morning, everyone.

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

Question: Jeff Hammond - KeyBanc Capital Markets - Analyst : Okay, then on polymer processing is that just a tough comp dynamic? Is that a Europe issue? I think there was a some recycling activity or something else that's hitting that.

Question: Jeff Hammond - KeyBanc Capital Markets - Analyst : Yeah, and then interventional destock, what are your customers telling you in terms of where inventories are, what's kind of built into the guide, for when that kind of runs its course.

Question: Jeff Hammond - KeyBanc Capital Markets - Analyst : Great. Thanks.

Question: Andrew Buscaglia - BNP Paribas - Analyst : Hey, good morning everyone.

Question: Andrew Buscaglia - BNP Paribas - Analyst : So just back to the full year outlook. So you're assuming no -- let's call no or low, very low organic growth at the midpoint, but EPS at the midpoint is still up and I guess my confusion is MFS probably margins are flat or down just given, you have a that dilute of some solution with the acquisition. ATS probably up because of, if it grows and you got costs, you've taken costs out. So you have to assume some decent margin expansion IPS despite what you're -- what's implied to be probably a down or flat or down, probably down organic growth here. So how -- I guess are you -- is there additional cost cutting coming or what -- how are you getting to such margin expansion, I guess to get to the midpoint of that EPS.

Question: Andrew Buscaglia - BNP Paribas - Analyst : Yeah. Okay. Okay. And then MFS too, just maybe touching on that the margins there. It seems like things are going well as of now. But we -- you probably do see margins decline or do we see that, I don't know these costs -- the cost savings and that side of things taking hold, this year or mid year to get to some margin expansion in the back half.

Question: Andrew Buscaglia - BNP Paribas - Analyst : Yeah, just MFS.

Question: Andrew Buscaglia - BNP Paribas - Analyst : Yeah, because it'll be, it seems to be diluted but not, maybe not as much as we initially thought. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 12, 2024 / 1:30PM, NDSN.OQ - Q4 2024 Nordson Corp Earnings Call

Question: Andrew Buscaglia - BNP Paribas - Analyst : Yeah. Okay.

Question: Andrew Buscaglia - BNP Paribas - Analyst : Yeah. Okay. All right. Thank you guys.

Question: Walter Liptak - Seaport Research Partners - Analyst : Hi, thanks guys. Good morning.

Question: Walter Liptak - Seaport Research Partners - Analyst : Okay. I wanted to -- good morning. I'm going to try one, about, kind of orders and the comment that you made about not calling recoveries in the high end, with some recovery. So what we've seen from some other industrial companies that have exposure to, kind of medical and semicon is that -- they get, sort of blanket orders or early orders in the year like it -- at what point will we know that there's not the recovery happening? Do you find it in the December quarter, the quarter that we're in or is it in the first quarter? And how important do you think, for those larger systems, are sort of early year orders that you deliver later on in the year? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 12, 2024 / 1:30PM, NDSN.OQ - Q4 2024 Nordson Corp Earnings Call

Question: Walter Liptak - Seaport Research Partners - Analyst : Okay, great. And --

Question: Walter Liptak - Seaport Research Partners - Analyst : Okay, great. Okay. So the next question would be, as we're talking about the hesitancy, the interest rates, have been coming down, right? The election is over and then are we talking about sort of the tariff issue? And that's causing the uncertainty in the headwind? Is that what those comments are coming from or is it something else?

Question: Walter Liptak - Seaport Research Partners - Analyst : Yes, absolutely. So there may be a last one for me is, thanks for pointing out the a ATS EBITDA margins being really nice on sort of the bottom-ish part of the cycle. Where do you think you can get the, like in a normalized market, a couple, two, three years from now, where do you think ATS margins go or maybe another way to look at it. What do you think the operating leverage will be as the revenue improves? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 12, 2024 / 1:30PM, NDSN.OQ - Q4 2024 Nordson Corp Earnings Call

Question: Walter Liptak - Seaport Research Partners - Analyst : Okay, great. Thank you very much.