Nordson executives say Xaloy, EDI hit soft patch

By Bill Bregar
Senior Staff Reporter

Published: February 25, 2013 12:23 pm ET
Updated: February 25, 2013 12:27 pm ET

Related to this story

Topics Mergers & Acquisitions, Molds/Tooling, Dies

WESTLAKE, OHIO -- A slower global economy has impacted the Xaloy and EDI screw and barrel and flat die businesses, according to Nordson Corp. executives, but they expect sales to improve.

"We expect to see really improvement throughout the year," said Michael Hilton, president and CEO.

Nordson bought Xaloy and EDI in mid-2012 in a major play to invest into the broad plastics industry. They came up in Nordson's Feb. 22 first-quarter 2013 conference call to financial analysts. The quarter ended Jan. 31.

Gregory Thaxton, chief financial officer, reported softness in plastics processing and consumer durable goods end-markets. Citing a seasonal impact, he said the first quarter tends to be the weakest at Xaloy and EDI, as well as Nordson's existing, legacy businesses.

"But more specific to market trends, we are seeing softness in demand related to a slower global economy and a near-term mismatch in capacity relative to demand. The combination of these two factors resulted in weaker operating performance in the plastic processing area relative to expectations," Thaxton said. "We remain optimistic that our growth strategy within this plastics processing product line, including the development of new applications, will drive both near- and long-term sales growth."

Nordson Xaloy and Nordson EDI are included in the Westlake, Ohio-based company's adhesive dispensing systems segment. First-quarter sales for that segment increased by 33 percent, to $183.3 million, from $139.1 million in the first quarter of 2012. Segment operating margin was 24 percent, including the anticipated dilutive effect of the EDI and Xaloy acquisitions.

Hilton said Nordson has moved to "rationalize some sites in Europe" for the units. He thinks the plastics businesses should see higher volumes, thanks to growing orders new applications.

"We're experiencing a short-term supply-demand mismatch in certain applications within the plastics processing space," Hilton said. "However, we continue to be excited about the growth prospects for EDI and Xaloy, and the synergy potential."

"We expect a solid year from both of these businesses," he said.

Companywide, Nordson generated first quarter sales of $347 million, a 26 percent increase over the prior year's first quarter sales of $275.8 million. The sales improvement included an 8 percent increase in organic volume and an 18 percent increase related to the first-year effect year of acquisitions. Net income grew 9.6 percent, to $42 million, from $38.3 million in the earlier first quarter.

Nordson will hold its annual shareholders meeting Feb. 26 in Cleveland.


Comments

Nordson executives say Xaloy, EDI hit soft patch

By Bill Bregar
Senior Staff Reporter

Published: February 25, 2013 12:23 pm ET
Updated: February 25, 2013 12:27 pm ET

Post Your Comments


Back to story


More stories

Image

China's biggest fuel tank maker getting a US foothold

April 23, 2014 4:41 pm ET

The majority owner of China's biggest fuel tank maker is expanding its global automotive footprint with the acquisition of the fuel tank unit of...    More

Image

How CEO Santi is changing ITW

April 23, 2014 2:48 pm ET

Scott Santi is showing he can do more than just cut costs at Illinois Tool Works Inc.    More

Image

China's mold making sector plodding forward

April 23, 2014 1:25 pm ET

With the Dow Jones Industrial Average reaching new highs, China's similar indexes are still hovering at a low level. What does the economic barometer ...    More

Quality Vision buys ShapeGrabber

April 23, 2014 10:19 am ET

Quality Vision International Inc. of Rochester, N.Y., has purchased ShapeGrabber Inc., a maker of automated three-dimensional scanners, in a deal...    More

Image

HRS adding more North American production for hot runners

April 22, 2014 12:57 pm ET

An Italian tooling component supplier is set to open a new production plant in Grand Rapids, Mich. The HRS Flow Division of San Polo di Piace-headquar...    More

Market Reports

Market Data Book - Rankings & Lists

A one-stop download of Plastic News' exclusive annual lists and processor rankings containing essential data including sales, employees, end markets, materials and more.
EXCLUSIVE EXCEL FEATURE: full mailing address details for available plant locations.

Learn more

Thermoformed Packaging 2014 Market Review & Outlook North America

This in-depth report provides analysis and discussions of economic and political conditions, market trends, legislative/regulatory activity impacting supply and demand, business opportunities and threats, materials pricing, manufacturing technology, as well as strategies being implemented by thermoformed packaging companies. In addition, there are reviews of 25 leading thermoformers in the packaging segment, assessing their growth initiatives and performance metrics over 10 years.

Learn more

Mold Making and Tooling Review and Outlook 2014 North America

This report provides in-depth analysis of the mold and toolmaking market for North America, including discussions of trends, opportunities, threats, the latest developments in production and labor and equipment trends impacting moldmakers.

Learn more

Upcoming Plastics News Events

May 6, 2014 - May 8, 2014Plastics in Medical Devices 2014

May 12, 2014 - May 12, 2014Plastics News Brazil Pharma Summit

September 10, 2014 - September 12, 2014Plastics Caps & Closures 2014

February 3, 2015 - February 7, 2015Plastics News Executive Forum 2015

More Events