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, Dies, Molds/Tooling

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

Ferro sells another piece of its plastics business

December 19, 2014 3:33 pm ET

Ferro Corp. has sold its North American polymer additives business to a private equity firm for $154 million in cash.    More

Image

Alex Brands buys iconic Shrinky Dinks toys

December 19, 2014 3:15 pm ET

First Slinky, now Shrinky Dinks. What will toy and games investment firm Alex Brands buy next?    More

Image

Thailand's SCG Chemicals buying Norwegian chemical firm Norner

December 19, 2014 9:11 am ET

Thailand's SCG Chemicals Co. Ltd. has announced it has acquired 51 percent of the shares in the independent petrochemical company Norner Holding AS...    More

Image

BASF to sell its share in Singapore JV

December 19, 2014 8:37 am ET

BASF SE has announced that it has reached an agreement for it to sell its share in the 50-50 joint venture ELLBA Eastern, at Jurong Island, Singapore ...    More

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

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 in Brazil - State of the Industry Report

This in-depth report examines the Brazilian plastics industry from a historical and geographical context. Our analysts provide insight on economic trends and forecasts, growing manufacturing sectors that utilize plastics, private investment opportunities, market environment challenges, and innovations in R&D.

Data tables and charts on producer prices, trade, plastics production and end market indicators is also included.

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

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