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

Impact-resistant window maker buys competitor for $111 million

July 31, 2014 3:07 pm ET

PGT Inc. is acquiring CGI Windows & Doors Holdings Inc. for $111 million as part of a plan to grow strategically by buying businesses with...    More

Buyer plans to sell former Hoover molding, assembly plants

July 31, 2014 2:06 pm ET

A former Hoover manufacturing plant with 150 injection machines in El Paso, Texas, and a nearby maquiladora plant in Juarez, Mexico, changed owners...    More

Private equity firm buys majority share of truck accessory maker

July 31, 2014 10:30 am ET

A majority share of Ann Arbor, Mich.-based truck accessory manufacturer Tectum Holdings Inc. has been acquired by Boston-based private equity firm TA ...    More

Image

Castle Harlan buys landscape erosion control firm Tensar

July 30, 2014 3:46 pm ET

Private equity group Castle Harlan inc. has acquired Atlanta-based Tensar Corp., with plans for the geosynthetic products maker and its subsidiaries...    More

Unipex Group buys Ferguson Chemical Innovation

July 29, 2014 1:57 pm ET

Chemical distributor Unipex Group Inc. announced July 29 that it had purchased Ferguson Chemical Innovation, a Brampton, Ontario-based supplier of che...    More

Market Reports

Pipe, Profile & Tubing Extrusion in North America 2014

U.S. demand for extruded plastics is expected to grow by 3 percent in 2014, with PVC remaining the largest segment.

Plastic pipe will post the strongest gains through 2018, continuing to take market share from competing materials in a range of markets.

Our latest market report provides in-depth analysis of current trends and their financial impact on the pipe, profile and tubing extrusion industry in North America.

Learn more

2014 Injection Molding Industry Report

GROWTH, OPPORTUNITY IN SIGHT FOR INJECTION MOLDERS IN 2014

In the wake of the economic turbulence earlier in this decade, molders today find themselves in much better shape. Molders are gaining a competitive advantage by investing in people, equipment and seeking inroads into new markets on a global scale.

Growth in the injection molding industry is going to be driven by low financing costs and a continued move to reshore some business.

Learn more

Shale Gas Market - Analysis of North American Region

This report highlights the impact of shale-based natural gas on the North American plastics market and features an in-depth analysis of production trends in the United States during 2013 and a forecast for 2014 and beyond.

Learn more

Upcoming Plastics News Events

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

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

More Events