Demand in electronics, medical driving growth at Nordson

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Plastics News photo by Caroline Seidel The BKG Hilon R-Type Recycling filter from Nordson, shown at Fakuma 2017. The company reported "record-setting financial performance" for the year.

Nordson Corp. reported "record-setting financial performance" for fiscal 2017 during a Dec. 14 conference call with analysts.

The Westlake, Ohio, company had fourth quarter sales of $574 million, a 13 percent increase over the previous year's fourth quarter.

"Overall, our fourth quarter performance was solid, ending what again was a very strong year for Nordson," President and CEO Michael Hilton said.

Full-year sales reached $2.1 billion for 2017. The company reported a net profit of $296 million, a nearly 8 percent gain from 2016.

Nordson manufactures various products used for dispensing adhesives, coatings, sealants, biomaterials and other materials, serving customers in the packaging, electronics, medical and appliance end markets, among others. The company owns Xaloy screws and barrels, EDI flat dies and BKG melt delivery products.

In September last year, Plastics News reported that Nordson was moving all of its screw and barrel production into a 200,000-square-foot manufacturing facility in Austintown, Ohio. The move includes a relocation of its screw and barrel production from a facility in Youngstown, Ohio, and nearby New Castle, Pa., to the Austintown building.

James Jaye, former senior director of communications and investor relations at Nordson, told Plastics News that the company expects to employ 260 people at the consolidated location, which covers most of the jobs at all three locations.

Nordson also announced last year it was moving its melt delivery systems business that had been acquired from the Kreyenborg Group into an existing facility in Münster, Germany, where its BKG pelletizer business is located.

Both consolidation projects will be completed in 2018, Hilton said.

"For the first part of [2018], we're still running multiple facilities as we transition equipment and build out the new facilities," he said.

2017 also marked a year of acquisitions for the company. Under the advanced technology systems segment, which had sales of nearly $252 million in the fourth quarter of 2017, the company purchased ACE Production Technologies Inc., InterSelect GmbH, Plas-Pak Industries Inc. and Vention Medical. The segment also includes Nordson's 2016 acquisition of LinkTech Quick Coupling Inc.

"The first-year effect of acquisitions added 7 percent sales growth, and we continue to be pleased with the performance of these acquisitions," Gregory Thaxton, senior vice president and chief financial officer, said during the call.

Sales volume in the advanced technology systems segment increased 29 percent from the previous year's fourth quarter.

"Strong demand from electronics and medical end markets drove the current quarter's growth," Thaxton said.

Nordson's adhesive dispensing systems sales increased 6 percent over last year in the same period, reporting nearly $248 million in sales. The company said fourth quarter results in this segment include the "nonrecurring restructuring charges" of approximately $1 million related to facility consolidation efforts.

In the industrial coating systems segment, sales decreased 8 percent. Sales for the fourth quarter were $74.3 million.

"This segment was also up against a very challenging comparison to the fourth quarter a year ago, where the organic volume growth was 12 percent," Thaxton said.

Hilton said he sees "good opportunities" for growth in 2018 for Nordson's coatings business, citing trends in aerospace as end customers and Tier 1 suppliers pursue more automation as well as battery development for electric vehicles in automotive.

The company is forecasting sales to increase between 30-34 percent for the first quarter of 2018 compared to last year.

"The mood is encouraging," Hilton said. "The U.S. is probably going to end the year a little better than we thought."

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