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

Amcor buys Chinese flexible packaging plant

December 18, 2014 1:47 pm ET

Australian-based global packaging company Amcor Ltd. is buying a Chinese flexible packaging business for 211 million RMB (US$31.4 million).    More

Image

Indian auto parts maker set to buy assets in Germany, Mexico

December 18, 2014 10:35 am ET

Indian auto parts maker Samvardhana Motherson Gropup is buying the assets of insolvent German plastics car parts producer Scherer & Trier (S&T).    More

Image

Sweden's Indutrade buys Belgian packaging firm Verbeek

December 18, 2014 9:42 am ET

Sweden's Indutrade AB has purchased all the shares in Belgium's Verbeeck Packaging Group.    More

Image

Röchling buys two UK firms

December 18, 2014 9:24 am ET

Germany's Röchling Engineering Plastics SE & Co. KG has expanded its presence in the high-performance plastics market by acquiring two British firms...    More

Image

Quick-Start manifolds designed to complement Rheo-Pro hot runners.

December 17, 2014 6:00 am ET

MHS Mold Hotrunner Solutions of Georgetown, Ontario, has introduced the pre-engineered Quick-Start line of hot runner manifolds, designed to complemen...    More

Market Reports

Flexible Packaging Trends in North America

Our latest RESEARCH report examines trends in FLEXIBLE PACKAGING impacting the North American market including a review of economic conditions, key drivers of growth, materials pricing, M&A activity, sustainability challenges and the outlook for 2015.

Learn more

Plastics Recycling Trends in North America

This report is a review and analysis of the North American Plastics Recycling Industry, including key trends and statistics based on 2013 performance. We examine market environment factors, regulatory issues, industry challenges, key drivers and emerging trends in post-consumer and post-industrial recycling.

Learn more

Plastics in Mexico - State of the Industry Report

This report analyzes the $20 billion plastics industry in Mexico including sales of machinery & equipment, resins and finished products.

Our analysts provide insight on business trends, foreign investment, top end markets and plastics processing activity. The report also provides important data on exports, production, employment and value of plastics products manufactured.

Learn more

Upcoming Plastics News Events

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

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

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 16, 2015 - September 18, 2015Plastics Caps & Closures - September 2015

October 27, 2015 - October 29, 2015Plastics Financial Summit - New York - 2015

More Events