Nordson Corp.'s investments and plant consolidations at Xaloy screw and barrel production in the United States and BKG pelletizers and melt delivery systems in Germany will create a more efficient manufacturing environment and give the polymer processing systems business more production capacity, Nordson CEO Michael Hilton said in a second-quarter conference call.
Both plastics processing-related businesses — along with flat-die maker EDI — are part of Nordson's Adhesive Dispensing Systems segment.
In the May 22 conference call with financial analysts, Nordson officials addressed added costs from the consolidations, but said that the moves will pay off in the long run. Nordson is investing in new manufacturing technology to boost efficiency, and the consolidations should be finished in calendar year 2018, Hilton said.
The Westlake, Ohio-based industrial company's fiscal year ends Oct. 31. Nordson is traded on the Nasdaq stock exchange. The maker of equipment for dispensing adhesives and lubricants, industrial coatings and semiconductor technologies has assembled a platform in plastics processing technology during the past six years.
Nordson is moving all Xaloy screw and barrel production into a single, 194,000-square-foot manufacturing center in Austintown, Ohio, relocating the operations from nearby Youngstown, Ohio and New Castle, Pa., as well as barrel production from Pulaski, Va., into Austintown.
In Europe, Nordson is building a global hub for BKG pelletizers and melt-delivery components like screen changers and melt filters in Münster, Germany, consolidating two German plants into one.
Companywide, Nordson reported $554 million in sales for the second quarter, ended April 30. It was a 12 percent gain vs. the prior year's quarter, but only 1 percent of the increase came from organic sales. Seven percent came from first-year acquisitions, and favorable currency translation generated an increase of 5 percent, over the year-ago quarter.
Nordson reported net profit of $91.2 million in the second quarter, an increase of 41.4 percent from $64.5 million in the year-earlier second quarter. Operating profit grew by 22 percent.
Hilton told financial analysts that sales comparisons from a year ago will be "very challenging" because of very strong organic growth last year. Organic growth was 9 percent in the second quarter of fiscal 2017, he said. And third-quarter sales a year ago increased 11 percent.
Nordson officials expect full-year 2018 organic sales to grow in the low single digits.
Nordson also continues to increase its medical business. Last year, the company bought Vention Medical's advanced technologies business boosting its capabilities in extrusion and making complex medical tubing and medical balloon products. In response to an analyst's question, Hilton said the "is meeting our expectations."
