Nordson seeing 'solid performance' for 2018

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Nordson Corp. Hilton

Nordson Corp.'s polymer processing systems business, including screws and barrels, flat dies and pelletizers, has a solid backlog, CEO Michael Hilton said in a third-quarter conference call.

"We've had pretty solid performance in the quarter across most product lines within our plastics business, and [are] building a strong backlog in that particular area to the point where we're seeing some lead-times extend a bit, not only for us but across the industry," Hilton said in response to a question from a financial analyst.

Nordson's plastics-related businesses include Xaloy screws and barrels, EDI flat dies and BKG pelletizers and melt delivery systems. Nordson is making some consolidation moves, with Xaloy production shifting into a single plant in Austintown, Ohio, while in Europe, it is building a global hub for BKG in Munster, Germany.

Hilton said Nordson expects to have the consolidation completed by the of the calendar year.

"In the long run we'll expect to see more efficiencies," he said.

The Westlake, Ohio-based company is traded on the Nasdaq. Companywide Nordson reported sales of $581 million for the third quarter, which ended July 31. That is a 1 percent decline — down 3 percent in organic sales — from the same period a year ago.

"Nordson delivered solid results despite challenging comparisons to our prior year's third quarter, where organic sales growth was 11 percent," Hilton said.

Last year, Nordson bought Vention Medical's advanced technologies business, which has extrusion for complex medical tubing and balloon catheters.

Hilton said the medical sector is going well, fueled by the fast-growing minimally invasive surgery area. "There are a lot of new products coming out of our medical business," he said, adding that Nordson's "design and development capabilities and our components fit nicely into those end markets."

Financial analysts asked Hilton the impact of tariffs on Chinese-made goods on Nordson, which makes a broad range of equipment used for precision dispensing, fluid management, test and inspection and other areas. Nordson also makes EDI and BKG products in Shanghai.

The United States has imposed tariffs on $16 billion Chinese imports, starting Aug. 23. The Trump administration has proposed tariffs on an additional $200 billion in Chinese imports. China has fired back with imports of its on exports from the United States.

"It's hard to say that we've seen any significant impact from the tariff discussions to date," Hilton said, adding that a team at Nordson is studying the issue.

But another $200 billion in tariffs "would have some broader impacts," he said. "I would say that there's some added concern if the tariffs escalate more."

Six full days of hearings on the $200 billion in tariffs began Aug. 20

"In the second set [of proposed tariffs] we don't know all the details on the codes and we don't know what the Chinese response will be. So we'll have to wait and see," Hilton said.

Hilton said it's too early to say how Nordson could mitigate the import duties, including by moving production around.

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