Q2 2022 Nordson Corp Earnings Call
I will conclude with a high level commentary about our enterprise performance as well as our updated fiscal 2022 full year and third quarter guidance.
We will then be happy to take your questions.
With that I'll turn to slide four and hand, the call over to know about.
Good morning, everyone.
Thank you for joining nordson fiscal 2022 second quarter conference call.
Once again, the nordson team successfully navigated a dynamic macro environment and delivered strong sales and earnings growth. Despite continued supply chain constrained and inflationary pressures as well as newer challenges from the COVID-19, Lockdowns in China.
And the increasing foreign currency headwinds.
I'm very thankful for and proud of our employees, who are staying safe and deploying the NBS next growth framework.
Meet the strong broad based demand from our customers.
Our company culture is deeper than our financial results.
And during the quarter.
Was humbled to see our employees right.
To send care packages to our colleagues impacted by the Covid related Lockdowns in China, and also raised money for family and friends impacted by the situation in the Ukraine.
This is the nordson impact and it is a very special part of who we are as a company.
I'll speak more about the business in few moments, but first I'll turn the call over to Joe to provide a detailed perspective on our financial results for the quarter.
Thank you Naga and good morning to everyone.
On slide number five you'll see second quarter fiscal 2022 sales were $635 million, an increase of 8% compared to the prior year's second quarter sales of $590 million.
The increase was primarily related to 7% organic volume growth and 4% from the MDC acquisition offset by currency headwinds, particularly the weakening of the euro.
The organic growth was broad based across most end markets and geographies, except for Japan and China.
China Covid related lockdowns negatively impacted second quarter sales by approximately $20 million as.
As our Shanghai facility was unable to ship products for five weeks and many of our customers and freight forwarders, we're unable to receive or ship products.
We clearly view this impact to be temporary.
And it is beginning to resolve itself as the lockdown restrictions start to ease gross profit.
For the second quarter of fiscal 2022 totaled $358 million or 56% of sales, a 6% increase compared to the $338 million or.
Or 57% of sales in the prior year second quarter.
The team continues to actively manage the price cost dynamic and these inflationary periods and benefited from improved price realization compared sequentially to the first quarter of fiscal 2022.
Looking at the year over year margin decrease of 100 basis points. This resulted largely from a change in sales mix at the segment level as the Ats delivered double digit organic growth compared to the low single digit organic growth of IPF.
Plus the system sales growth exceeded parts growth.
Operating profit was $184 million in the quarter or 29% of sales and 11% increase from the prior year.
Sales volume leverage and controlled spending contributed to the incremental operating profit margins of 38% in the quarter.
Organic only incremental operating profit margins were 70% <unk>.
Well ahead of our long term target of 40% to 45%.
The NBS next growth framework is clearly delivering tangible results.
The strategic disciplined element of the framework, which is a database view of the best opportunities in terms of customers products and end markets et cetera.
This is driving improved sales mix within many of our divisions, resulting in strong growth and favorable incremental profit.
EBITDA for the second quarter was $209 million or 33% of sales.
Well ahead of our long term target of 30%.
Looking at non operating expenses.
The increase in other net expenses of $36 million includes the $41 million, one time noncash pension settlement charge.
As we referenced in the first quarter call, we successfully our new <unk> <unk>.
Portion of our U S defined benefit pension liability associated with retirees and payment status during the second quarter.
This transaction settled an estimated $178 million pension liability and exchange for plan assets totaling only 96% of the projected liability leave.
Leaving the remaining pension liability over 100% funded.
This transaction not only removed significant risk from the company for the long term, but also reduced our future pension cash funding obligations.
The remaining $5 million year over year benefit included in other net expenses primarily reflects.
Foreign currency exchange gains.
An ongoing non operating pension benefits associated with plan assumptions and a reduction in amortization of actuarial losses.
Tax expense was $30 million for an effective tax rate of 21% in the quarter, which is slightly higher than the prior year second quarter, but in line with our forecasted full year rate for 2022.
Net income in the quarter totaled $110 million or $1 88 per share.
Adjusted earnings per share, excluding the non cash pension a new activation charge totaled $2 43 per share a 15% increase from the prior year.
This improvement is reflective of the year over year increase in sales and more importantly, the consistent application of the NBS next growth framework, which leads to steady profitable growth with attractive incremental margins.
Now, let's turn to slide six and seven to review the second quarter 2020 to segment performance.
Industrial precision solutions sales of $316 million, an increase of 6% compared to the prior year second quarter.
Organic volume growth in the quarter was 3%.
Plus another 7% from the MVC acquisition.
This was offset by unfavorable currency of 4%.
Ips's organic growth was driven by robust demand for polymer processing product line.
Steady broad based growth in.
In consumer non durable end markets for hot melt adhesive dispensing.
In all geographies, except China.
Covid related lockdowns in Shanghai negatively impacted this segment's second quarter sales by approximately $15 million.
Operating profit for the quarter was $102 million or 32% of sales, which is a decrease of 2% compared to the prior year operating profit of $104 million.
Favorable sales volume deleverage in the quarter was offset by unfavorable mix compared to the prior year second quarter as the majority of the growth was from polymer processing systems and the NBC acquisition.
Moving now to advanced technologies and solutions.
Sales were $319 million, a 10% increase compared to the prior year second quarter, which is a new quarterly record for this segment.
This change included an increase in organic sales volume up 11% offset by unfavorable currency impacts.
Growth was across most major product lines.
Particularly strong in the electronics defense.
Test and inspection and Biopharma fluid component product lines.
All geographies with the exception of China contributed to this quarter's growth with particular strength in the international regions.
Second quarter operating profit was $98 million.
Or 31% of sales.
The 29% increase over the prior year operating profit of $77 million.
It was driven by sales volume leverage and the realization of benefits from cost control measures taken in fiscal 2020 and early 2021.
This segment continues to deliver impressive sales growth at very attractive incremental margins.
And the 31% operating profit in the quarter reflects a new record level performance for Ats.
Deployment of our MBS next growth framework continues to be a key element in the success of this segment delivering profitable growth.
Finally, turning to the balance sheet and cash flow on slide eight.
Through our disciplined approach to capital deployment and strong operating profit growth. We ended the quarter with a healthy balance sheet and abundant borrowing capacity cash totaled $121 million and net debt was $670 million, resulting in <unk>.
Zero nine times leverage ratio based on the trailing 12 months EBITDA.
Free cash flow in the quarter was $84 million.
Our conversion rate on net income of 77%.
Our strategic investments are being made in inventory to address portions of the current supply chain constraints and support the growing backlog.
During the second quarter, we paid $30 million in dividends and spent $105 million on repurchasing approximately 478000 shares of company stock through our <unk> one repurchase plan.
For modeling purposes in fiscal 2020 to assume an estimated effective tax rate of 21% and capital expenditures of approximately $45 million.
I will now turn the call back to Naga.
Thank you, Joe, let's turn to slide nine.
Again, thank you to the nordson team for delivering this outstanding performance I am very proud of how our employees are navigating this dynamic environment.
I continue to spend a lot of time in our facilities and I am excited by the caliber of talent and the dedication of our employees to meet our customer commitments.
Despite the constraints of the supply chain.
They are actively deploying NBS next to choose the best growth opportunities and focus their time and resources appropriately.
Strategically we have continued to make progress on the advancement of the NBS next growth framework.
Heart of our strategy.
NBS next boils down to three words choices.
Focus and simplify.
Expanding beyond our pilot sites, we now have.
<unk> strong business examples of driving profitable growth in different divisions.
With this in mind, we launched a four month NBS next accelerator training program, which has its first in person session in April .
In the program Nordson participants learned through hen, some exercise with real nordson data.
As well as in past discussions.
More importantly.
Each participant left with a better understanding.
And a thoughtful action plan that will accelerate.
The deployment of the NBS next growth framework across the company.
As practical application of NBS next gets embedded deeply in our organization.
There are more aligned and skilled VR asset team to deliver top tier revenue growth with leading margins and returns.
This is an important investment in our people and company.
I'm grateful for the Nordson team for all that is being done to mitigate risks due to supply chain inflation labor and COVID-19 challenges.
In this dynamic environment I'm equally energized.
By the secular growth drivers in key end markets, leading to strong ongoing demand from our customers.
As Joe noted.
Our Ats segment delivered record sales and profits.
It is driven by <unk> ability to deliver an exciting trends in the electronics, including investments in both capacity and onshoring.
New product innovation, and the continued demand for semiconductors and Pcbs.
Both our electronics defense and P&I product lines will continue to benefit from these trends.
The medical end market also continues to grow while we have talked at length about the growth in our Biopharma fluid components were also experiencing the recovery of our intervention solutions product lines.
Which are fueled by the aging population.
<unk> towards outpatient procedures and medical OEM outsourcing.
The diversity of nonsense and markets.
Geographic exposure.
As well as high recurring revenue content.
Positions us well to deliver consistent profitable growth through the economic cycle.
Now, let's turn to our updated fiscal 2022 outlook on slides 10 and 11.
Order entry remained strong throughout the second quarter with a favorable book to bill ratio growing backlog to over $1 billion.
This growth in backlog is partially related to the ongoing extended shipment request dates.
For large customer orders.
Electronics, industrial and medical end markets.
Looking specifically at the third quarter of fiscal 2022.
Revenue and adjusted earnings are forecasted to be comparable to the prior year results.
The prior year third quarter was strong this quarter of fiscal 2021.
For the full year fiscal 2022.
We are guiding to a revenue growth of <unk>.
Two 9%.
And we are increasing the previously issued.
Earnings guidance to the range of.
18% to 21% over fiscal 2021.
This is approximately 20% earnings growth.
Following a record 2021 financial performance.
It is a testament to the solid execution of the <unk> strategy.
Our financial results and expectations for growth.
Flecked differentiated precision technology.
Customer centric model and.
In diversified end markets.
Additionally, the ongoing implementation of NBS next.
Is making sure we have a crystal clear view on priorities in this dynamic environment.
As always I want to thank our customers shareholders and the nordson team for your continued support.
With that we will pause and take your questions.
As a reminder, if you'd like to ask a question. Please press Star then one on your telephone keypad.
Our first question today is from Matt Summerville with D. A Davidson your line is open.
Thanks.
Couple of questions. Obviously, the second quarter was impacted by about $20 million related to the mandated COVID-19 related lockdowns in China, what sort of net impact do you expect in Q3 and fiscal Q3, meaning are you still seeing top line impact today, but on a net basis given.
$20 million effectively push do you think that is.
Net positive to your Q3, I guess I'm trying to understand how that dynamic plays into the go forward views here.
Yes, Matt. Thank you for that question as it relates to our forecast and our guidance for Q3 and the Lockdowns in the Shanghai region of China, We anticipate those to start to subside.
We've had no shipments for five weeks in Q2.
And so we're starting to things are starting to open up there we're starting to get people back in the factory, we are starting to be able to ship, we're not yet at a 100%.
But we anticipate being about a 100% roughly by mid June .
And so that is what's included in our assumption.
And then you had very strong quarter on quarter and year over year Incrementals in Ats part of that attributable to some actions that you've taken on the cost side also.
<unk> discipline.
Go forward, how should we be thinking about maybe the forward looking margin cadence.
Specifically thank you.
Yeah.
So when you think about Etfs, any given quarter or theres, a handful of mix that will impact <unk>.
<unk>, so I don't want to take one given quarter and say annualize it but I encourage us to look at the trend in Etfs and what you see going on over the last several quarters is consistently improving the profitability of that segment and it's kind of like the top of the driver there Matt is the comment that I said in the script.
In terms of NBS next does that segment not only does the cost control, which you referenced but from a gross margin and a profitability standpoint, and the strong incrementals is really coming from improving mix within each of the divisions in that segment and so if you think about NBS next and strategic discipline, which is a database framework to say what are my bad.
Growth opportunities as those individual divisions are focusing on those best growth opportunities. They generally are the higher margin.
Opportunities and so as we outgrow in those high margin product lines regions.
End markets, it's improving the mix within those divisions and so that's what's contributing to.
Those favorable incremental margins.
And we're quite proud of that trend.
I don't know that I can say, hey, <unk> is now the ongoing run rate, but directionally, that's what youll continue to see.
Understood. Thanks, Joe.
Thank you.
Okay.
Our next question is from Jeff Hammond with Keybanc capital markets. Your line is open.
Hey, good morning, everyone.
Good morning, Jeff just on the <unk>.
Can you just talk about the durability of the growth Youre seeing in electronics and test and inspection, we've heard kind of.
Kind of a line of tough comps and the consumer star.
Starting to slow here around mobility, Pcs et cetera, and just wanted to get what you are seeing on a go forward basis.
Yes.
Thank you for the question Jeff.
Chronic business, what I, what we see is <unk>.
<unk> of our customers.
Customers and applications that we have undertaken over the last number of years that you'll begin to see the business do incredibly well in.
Couple of different areas one of the areas, it's really semiconductor and what we find is the ongoing capacity additions onshoring to mitigate some of the risks that all of us see in the industry, but in addition to that.
Digital technology and digital way of doing business.
Spurred this new secular growth that we see our customers continued to benefit for some time to come.
And so.
From from what we see in our businesses.
Our order rates are pretty strong our shipments are pretty strong in the electronics area. So now just as a reminder, we have electronics defense as well as test and inspection both benefiting from it so in the quarter, both the divisions had double digit double digit growth.
Certainly that our comp issues, but we feel really good about <unk>.
Prospects for these divisions and their contribution to growth for us.
We do have lesser exposure.
A broad based.
Supply chain, we participated in an electronic so.
It is less sort of correlated to one particular consumer products. The other that used to be where we were a number of years ago and we've talked to you about.
How we are diversified out applications, and so think of nonsense electronic business participating in the entire electronic chain electronic supply chain and that diversity is really helping us participate in a good way.
Okay, Great. That's helpful and then I just.
Wanted to come back on this dynamic around.
The timing of the backlog and customers.
Saying they want.
Things a little bit later, because it seems like most of my other industrial companies have.
Big backlogs and it's more a function of we can't get stuff out the door.
The order rates are just outpacing what we can deliver in years, just seems a little bit different and I just wanted to understand.
Kind of why why is it that way.
Jeff Thats a great question.
In terms of our backlog I wouldn't say, we don't have.
The issue that you are talking about orders ahead of shipments we do have some of that right. We are limited by the supply chain, meaning how.
How much our suppliers can provide us in terms of component, especially for our systems business to be able to ship. So that is still a factor in our backlog.
The second factor, though is we are seeing clearly and we have pretty good line of sight to understand that we have customers, placing orders are ahead of where they normally have and we see that would be now mostly in our system business now we are seeing in <unk>.
<unk>.
Our component business medical interventional component business as well. So so if you think if you look at our backlog and majority of our backlog is from systems businesses.
And <unk>.
Medical businesses, and partly driven by this long David customer request dates.
Okay. Thanks, so much.
Our next question is from Allison <unk> with Wells Fargo. Your line is open.
Hi, good morning.
Just wanted to stick on that backlog team is I know there is certainly an extended backlog here is there a way to better understand.
Extended that extension, meaning is it two weeks extended is it month quarter.
Any color there and then just any thoughts on risk of cancellation that backlog or double ordering which I know is a concern of folks just any thoughts there. Thanks.
Yes.
Thank you Allison.
So let.
Let me take the cancellation for US and then we'll talk a little bit about what we're seeing in terms of customer long data request. So.
On cancellation, that's something that we monitor very closely in the business.
Given our direct customer business model allows us much more insight into customer thoughts sentiment and behavior right.
In general we have not had issues around cancellation and so from our perspective, that's not manifesting itself in the business today. The second thing I would tell you is also remember we more than 50% of our business is very system oriented engineered systems.
So this is not like.
You could buy it in a couple of different places once you place a system.
Order that is very customized your own application.
That is a benefit for us right. So so from a cancellation perspective, we've not seen it in the business now.
Second question around long data customer request.
I'll give you a couple of anecdotal.
Things that we see in the business as you know sort of indicators of what we are experiencing one in a couple of our system businesses, we have orders now.
That data to be shipped in second quarter of next year.
<unk>.
In the past the norm was you would get.
Three six months out.
Quest dates and now we're starting to see three four quarters out so that's one.
Second is in our medical businesses medical interventional business, we typically get blanket orders and those blanket orders cover us for a quarter or two.
But now we're getting about us for a longer period of time, so those would be to sort of.
Anecdotal evidence is that sort of indicates what we're seeing in our business. Joe you want to talk a little bit about customer prepayments that might give an indication of what we're seeing in the.
Yes.
So Allison we also track and I've just cancellations in our looking out for that but also our customer prepayments and as the majority of the backlog is comprised of systems and medical orders as Tiger mentioned those systems orders come with customer prepayments and those are up and down north of $90 million and so prepare.
<unk> two our systems backlog, but prepayments have also grown so we view the systems backlog piece.
Very solid.
As it relates to.
Future shipments and the visibility is out now several quarters, whereas our traditional I'll call. It non systems heavy business parks business, we see a modest uptick in the backlog, but that is a much more book and ship within a couple of weeks and so that one is not out nearly as far.
Great. Thanks, that's helpful. And then just pace of innovation that I think you had mentioned sequentially improved are you in a more favorable price cost situation today and are you still comfortable with that for the SEC.
<unk> has been a net positive for <unk> going forward.
Yes Allison.
When you look at our performance going Q1 to Q2 actually our price realization was a little bit better than what we had anticipated going into Q2 and is forecasted to continue to improve here in Q3 again as we work through the repricing in the Avalon backlog so it.
It was favorable in dollar terms in Q2, and <unk> forecasted to slightly improve as we head into Q3. So we feel pretty good about that I will tell you, it's a very dynamic situation.
With all the different cost components.
And then the inflationary pressures.
Great. Thank you.
Okay.
Again, if you'd like to ask a question Thats Star one on your telephone keypad. Our next question is from Chris Dankert with loop capital. Your line is open.
Hey, good morning.
Again, just to kind of keep pulling the thread on backlog a bit here your guidance commentary implies most of the year over year growth that is expected in the back half kind of shows up in the fourth quarter. I guess can you give us a sense for just how confident you are in that cadence and just what's the risk that we could see a piece of that fall into fiscal 'twenty. Three is there any kind of.
Sense for how fluid some of those orders are versus your confidence in kind of seeing the growth in the fourth quarter here.
You bet, Chris Yeah, Let me, let me comment if I could just on the quarterly split of our guidance here in the back half. So if you think about our guidance midpoint. The back half is going to be up roughly 6% over the prior year I will remind you in the prior year Q3 was our strongest quarter.
There was about $25 million worth of sales that we were able to get out in the electronics space in Q3 that was pulled forward based on our customer request.
From Q4 scheduled delivery into Q3. So Q3 was strong Q4 was sequentially softer last year and so what you see this year.
I would tell you.
6% growth over the second half, but youre right. It implies a fourth quarter is going to be stronger than the.
Third quarter and so what you see there is heavy again visibility on the system side and so a high degree of confidence on the system forecasting and also as I mentioned in the first call question, the China, Lockdown and as that starts to moderate here and still impact us a little bit in Q3.
That will be a challenge in Q3 so.
Q4 stronger than Q3, I wouldn't get carried away with the quarter year over year growth rates and think about it more of a 6% growth in the back half.
And if you think about that broken down I would tell you FX is about a three 5% to 4% headwind acquisitions is about a three and four.
A 4% tailwind and so it's really roughly 6% to 7% organic growth is what we're forecasting in the second half and good visibility on the systems side. Your question about supply chain constraints and look it is a dynamic environment that requires us to get the material and be able to ship it.
But we've been quite successful I think in delivering growth over the past five quarters.
Averaging greater than double digit organic growth. So I'm optimistic that we won't be able to deliver that here in Q4.
One thing, Chris I would add to us.
Given our organizational structure right over the last.
24 months, we have gone to an owner mindset division let structure. This allows our divisions to forecasting a fairly close way.
We have a direct customer business model so each of our divisions have fairly good visibility and.
Our forecast is really based on our divisions forecast. So this is not something that Joe and I decide.
As much as we do.
This is zane.
Some of all of our divisions views of where the market is that in their own supply chain. So we feel good good good about where we are because I think it does give us.
A better clarity into where we are expecting our customers to perform division by division.
Got it got it. Thank you both that's incredibly helpful color.
And then not to pin you down, but im going to try and pin you down a bit here.
Circling back to the Ats margin question I guess in the past mid Twenty's, what's kind of the EBIT margin target. There is it fair to say that hey, we've at least moved into.
Youre high Twenty's target kind of cross cycle here.
Or am I kind of overstepping on that.
No.
What I meant by the trajectory is what we're looking at and in the long term gain if you look at that business. It went from operating the EBIT margins.
The 'twenty.
Last year stepped up to the mid <unk> mid to low Twenty's and this year we're running.
And the high Twenty's on average for the first half and so I think that trajectory is the way to think about this business.
In terms of.
Running the NBS next playbook.
Now you wanted to add something.
Yes.
Hey, Chris sorry to interrupt you, but where we did take them put it down.
One add little bit color, there just to make sure we have materially improved our cost position and structural position in this business. So we feel really good about those gains.
Only caution I would have for you.
Two things one is.
As Joe mentioned this is one quarter.
And secondly, also say is that we have.
We're doing really well on the electronics business, which as you know.
As you know.
Amplitude of the cycle is muted because of our diversity.
Diversification work, we have done but it is still mid cycle. So so we're we're in a good part of the cycle.
We have taken cost out materially improve the position of the business well, we have mixed up in that so there are a number of contributing factors. So.
My caution would be let's give it a couple of quarters here before we lock in our run rate.
Totally fair somewhat for go ahead, yes.
It simply there is a lot of things going on here one of them up with the top line growth. I mean, this is a record sales quarter for this segment and so as you think about driving that growth you get that natural leverage as well and so.
Not just the profitability. It's also the growth that thats delivering I mean I'll let.
Percent organic growth in the quarter. Despite all these challenges.
To that end I assume.
Facility utilization has got to be at or near our record now.
Yeah.
Yes, what you see on the Capex side in this business, we are making investments.
To expand capacity where needed to support this growth.
Particularly in the electronic space and in the medical space.
Which we've highlighted as the high growth areas you see we spent.
Although it's a small number of percentage of this meeting, but it is an increase and $24 million on capex.
Year to date and so.
We've continued to add capacity where needed although it continues to be capital light.
Chris on the capacity side.
On our assembly business think of that as capacity, we have but more constrained by the supply chain on our ability to get components to fully support the demand.
That's one capacity that genetics.
Integration beyond our own.
The ability to add something in the backlog. So that's one on the pricing side, which is sort of what Joe has mentioned.
Capacity.
Where there is a physical capacity within the company but.
We are excited about the capacity as we are making in businesses that have very strong growth really really great investments for the company and our investors.
Understood well. Thank you both so much for the color much appreciated.
Thank you.
The next question is from Walter Liptak with Seaport. Your line is open.
Hi, Thanks, good morning, everyone.
Good morning.
Wanted to ask a follow on.
As we're thinking about the second half.
If theyre going to be more systems shipped in the fourth quarter does that have any impact on the fourth quarter gross margin my recollection is that.
Some parts might be higher margin than systems might be lower I wonder if you could talk a little bit about that.
Yes, I would.
You are correct.
High level.
Although I would tell you the disparity between parts and systems.
It is not that great, but you are correct at a high level I would tell you theres a couple of things offsetting that.
Perhaps as we go into Q4 or do you think about Q4, one is the sales volume leverage.
And then two is that the price cost realization I think that will improve sequentially from our Q2. So as we think about going from Q1 to Q2 improved Q2 to the back half that should also improve and then I would also tell you what.
Within the systems business, that's a big bucket there is opportunities for mix within that.
And when you think about the mix within the systems business. There is opportunity for that to be favorable so I wouldn't necessarily think about mortgage.
Degradation as we go into Q4.
Okay, great and if I can try one on the Ips segment.
The 3% organic I wonder if you could parse out what the price was versus units and are you seeing unit growth.
Okay.
Yes.
I'd tell you price it was a component of that 3%, but there was also unit growth as well it wasn't simply price price wasn't a full 3%.
And also Joe This is the segment, we have more currency headwind too right.
Correct, so the curve.
Currency headwind in this segment was 4% and that was greater than that in the Ats segment due to the large European business that we have here.
But specifically looking at the organic piece.
I would tell you there was volume growth in there thats not just oil price.
Okay, Alright, great and then.
Just last one thinking about China and the reopening.
Ah.
I guess is your is your employees get back to work.
I wonder.
Is this something where you think it will ramp quickly or do you think China is going to have its own supply chain and this will be a slower ramp.
How long do you think it will take to get China back to normal.
Yes.
So let me.
Our bed bug.
Go ahead Michael.
So yes.
We have got.
Slowly bringing people back as as.
As the government allows us to.
And we believe it'll be a smaller.
Lower ramp, but we also believe that we would be fully operational at normal run rates.
Hopefully in the next four to six weeks.
So mid June that Joe mentioned in his earlier com.
Comments, that's our expectation.
But while business in.
Yeah.
A dynamic environment that none of us really control.
Our teams are doing one incredible job.
Dealing with where we are and we are so proud of how our leadership and our teams have worked together.
And really and teams around the rest of the world who have to sort of work around this issue in China. So it is not only that we have our China factory shipments in China, but we also have customers who pulled from our other factories. So.
All in all very proud of the work our teams are doing in some very incredibly difficult situation. So.
Spectation.
Things are doing well.
Things are coming back, but surely expect the slower ramp with an expectation that another four to six weeks, we get back to normal normal shipping rates for us.
I cant emphasize is more safety of our people is our number one priority and everything else will work out.
But we're just so proud of the team there and proud of everybody around the world.
It will be working to sort of overcome that.
The challenges, we have had China in the quarter and as we get into third quarter. So a big shout out to the nordson team nice job.
Okay that sounds great. Good luck.
That ramp in China.
We will talk to you soon thanks.
Thank you Paul.
We have no further questions at this time I'll turn it over to <unk> for any closing remarks.
Thank you.
Our continued performance reflects the strength of our differentiated position technology customer centric business model and diversified end markets. The.
The continued deployment of NBS next.
<unk> strategy will ensure we remain well positioned in this dynamic environment.
Thank you for your time and attention today on today's call have a great day.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.
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