Nordson Corporation (NDSN) F3Q2012 Results Earnings Call August 21, 2012 8:30 AM ET Executives Jim Jaye - Director, Investor Relations Mike Hilton - President and CEO Greg Thaxton - Senior Vice President and CFO Analysts Christopher Glynn - Oppenheimer John Franzreb - Sidoti & Company Matt Summerville - KeyBanc Kevin Maczka - BB&T Capital Markets Mark Douglass - Longbow Research Charlie Brady - BMO Capital Markets Jason Ursaner - CJS Securities Liam Burke - Janney Montgomery Scott Walt Liptak - Barrington Research Presentation Operator
During this conference call forward-looking statement maybe made regarding our future performance based on Nordson’s current expectations. These statements may involve a number of risks, uncertainties, and other factors as discussed in the company’s filings with the Securities and Exchange Commission that could cause actual results to differ. After our remarks we will have a question-and-answer session.I’d now like to turn the call over to Mike for an overview of our 2012 third quarter results and a bit about Nordson’s future outlook. Please go ahead, Mike. Mike Hilton Thank you, Jim, and good morning, everyone. And thank you for attending Nordson’s third quarter 2012 conference call. In addition to our comments on the third quarter, we will also provide some perspective on our outlook for the fourth quarter of fiscal 2012. Let me begin by thanking Nordson’s global team for continuing to serve our customers at the highest level and for delivering an outstanding quarter. Third quarter sales, operating profit, net income and diluted earnings per share were records levels for any quarter in Nordson’s history, where strong organic sales volume at all segments and geographies help drive this record performance. Our customers continue to respond to our value proposition of best-in-class technology, applications expertise and global support. Acquisitions did add 10 percentage points of growth in the quarter. These acquisitions include Verbruggen and Value Plastics, both completed in fiscal year 2011, and the EDI and Xaloy acquisitions completed during this year’s third quarter. These two recent acquisitions along with Verbruggen provide Nordson’s with a very strong platform in global plastics processing, a space we think has good growth and profitability characteristics. Integration efforts are on track and we are very excited about the opportunities for these businesses going forward and the new team members that have come with them.
I would also like to add a few comments regarding Sealant Equipment acquisition, which we completed on August 1st. Sealant Equipment is a leader in the engineering and manufacturing of meter, mix and dispense equipment and valves which apply 1-part, 2-part and 3-part adhesive, sealant and lubricating materials.This acquisition provides us with broader presence in cold materials equipment market, especially in the general industry applications. It’s an excellent complement to what we already do in this space and we see significant opportunities to leverage Nordson’s global infrastructure to grow the business beyond its current largely North American footprint. I’ll share some comments about current business trends but before that let me turn the call over to Greg Thaxton, our Chief Financial Officer, who will provide more detailed commentary on our third quarter financial results, as well as some comments on our guidance for the fourth quarter of 2012. Greg? Greg Thaxton Thank you, Mike, and good morning to everyone. As Mike noted, our financial results for the third quarter were outstanding. Sales in the quarter were $380 million, an increase of 22% over the prior year’s third quarter. This growth included a 16% increase in organic volume and as Mike noted, a 10% increase related to the first year effective acquisitions. This total sales volume growth of 26% over the prior year’s third quarter is offset by a negative 4% impact from the effects of currency translation related primarily to the euro again as compared to the prior year. Looking at segment performance, Adhesive Dispensing sales volume increased 21% as compared to the prior year’s third quarter. Organic volume increased by 4% while the first year effective acquisitions accounted for the remainder. The organic volume growth was driven by those product lines serving consumer non-durable end markets offsetting the softness in general assembly product lines serving consumer durable end markets. This was also the case for our European adhesives business highlighting the general stability of the consumer non-durable end markets.
Organic sales volume in the Advanced Technology Segments was up 33% over the prior year’s third quarter and the first year effective acquisitions added 6% to sales growth. Strong demand for dispensing and test and inspection equipment serving electronics end markets, especially mobile device applications along with continued penetration of a variety of niche markets drove the increase.Read the rest of this transcript for free on seekingalpha.com