Q4 2023 Nordson Corporation Earnings Call

Good morning, my name is Dennis, and I will be your co-conspirator today. At this time, I would like to welcome everyone to the Norton Corporation, fourth quarter and fiscal year, 2023 conference call. All lines have been placed on mute to prevent any background noise. After the speakers remarks, there will be a question and answer session.

Good morning, My name is Dennis and I will be your conference operator today at this time I would like to welcome everyone to the Nordson Corporation fourth quarter and fiscal year 2023 conference call.

All lines have been placed on mute to prevent any background noise.

After the Speakers' remarks, there will be a question and answer session.

If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. To withdraw your question, press star one again.

If you would like to ask a question. During this time simply press Star then the number one onto a telephone keypad to withdraw your question Press Star one again.

I would now like to turn the conference over to Laura Mahoney. Please go ahead.

I would now like to turn the conference over to Lara Mahoney. Please go ahead. Thank.

Thank you. Good morning. This is Laura Mahoney, Vice President of Investor Relations and Corporate Communication.

Lara Mahoney: Thank you good morning.

Lara Mahoney: This is Lara Mahoney, Vice President of Investor Relations and corporate communications.

We welcome you to our conference call today, Thursday, December 14th, 2023, to report Northland fiscal year 2023, fourth quarter and full year results.

Lara Mahoney: Welcome you to our conference call today Thursday December 14th 2023 to report Nordson in fiscal year, 2023 fourth quarter and full year results.

I'm here with Sundaram Nagarajan, our president and CEO , Joseph Kelly, executive vice president, and Steven Shamrock, interim chief financial officer.

Lara Mahoney: I'm here with soon to Ron <unk>, our President and CEO, Joseph Kelly Executive Vice President and Stephen Shamrock interim Chief Financial Officer.

While Joe recently took a new role as executive vice president industrial precision solution segment, he was the FO for the entirety of fiscal 2023 and will represent that viewpoint in today's call.

Lara Mahoney: Well, Joe recently took a new role as executive Vice President Industrial precision solutions segment. He was CFO for the entirety of fiscal 2023 and will represent that viewpoint in todays call.

You can find both our press release as well as our webcast slide presentation that we will refer to during today's call on our website at nordzend.com forward slash in the

Lara Mahoney: You can find both our press release as well as our webcast slide presentation that we will refer to during today's call on our website at nordson dotcom forward slash investors.

This conference call is being broadcast live on our investor website and will be available there for 14 days.

Lara Mahoney: This conference call is being broadcast live on our Investor website and will be available there for 14 days.

There will be a telephone replay of the conference call available until December 21, 2023.

There will be a telephone replay of the conference call available until December 'twenty, one 'twenty two 'twenty three.

During this conference call, references to non- GAAP financial metrics will be made. A complete reconciliation of new metrics to the most comparable GAP metric has been provided in the press release issue yesterday. Before we begin, please refer to slide two of our presentations where we note that certain statements regarding our future performance that are made during this call may be forward looking based upon the Nordic current expectations.

Lara Mahoney: During this conference call references to non-GAAP financial metrics will be made.

Lara Mahoney: A complete reconciliation of these metrics to the most comparable GAAP metric has been provided in the press release issued yesterday.

Lara Mahoney: Before we begin please refer to slide two of our presentation, where we note that certain statements regarding our future performance that are made during this call maybe forward looking based upon ignored since current expectations.

These statements may involve a number of risks, uncertainties, and other factors as discussed in the company's filing with the Securities and Exchange Commission that could cause actual results to differ.

Lara Mahoney: These statements may involve a number of risks uncertainties and other factors as discussed in the company's filings with the Securities and Exchange Commission that could cause actual results to differ.

Moving to today's agenda on slide three, Naga will discuss fourth quarter and full year highlights.

Speaker Change: Moving to today's agenda on slide three Naga will discuss fourth quarter and full year highlights.

He will then turn the call over to Joe to review sales and earnings performance for the total company and the three business segments.

Speaker Change: He will then turn the call over to Joe to review sales and earnings performance for the total company and the three business segments.

So also we'll talk about the year-end balance sheet and cash flow. NASA will conclude with high-level commentary about our enterprise performance, including an update on the SNS strategy, as well as our fiscal 2024 first quarter and full year guidance. We will then be...

Speaker Change: Also we'll talk about the year end balance sheet and cash flow now.

Speaker Change: <unk> will conclude with high level commentary about our enterprise performance, including an update on D. S N strategy as well as our fiscal 'twenty 'twenty, four first quarter and full year guidance.

Speaker Change: We will then be happy to take your questions.

With that, I'll turn to slide four and hand the call over to none.

Speaker Change: With that I'll turn to slide four and hand, the call over to Naga.

Good morning, everyone. Thank you for joining Norton's fiscal, 2023 fourth quarter and full-year conference call.

Naga: Good morning, everyone.

Naga: Thank you for joining nordson fiscal 'twenty to 'twenty, three fourth quarter and full year conference call.

In 2021, Norton launched its offense strategy to achieve top-tier growth with leading margins and returns.

Naga: In 2021, Nordson launched its a same strategy to achieve top tier growth with leading margins and returns.

We set a goal to deliver $3 billion in sales and greater than 30% EBITDA margins by 2025.

Naga: We set a goal to deliver $3 billion in sales and greater than 30% EBITDA margins by 2025.

As we complete the third year of our strategy, we are on track toward achieving these objectives.

Naga: As we complete the third year of our strategy, we are on track toward achieving these objectives.

This is a testament to our employees who have in the last three years.

Naga: This is a testament to our employees who have in the last three years.

developed and deployed the SN strategy and tackle dynamic macroeconomic conditions, including a pandemic, global supply chain pressure, labor challenges, and rising interest rates to name a few.

Naga: Developed and deployed DSM strategy and tackle dynamic macroeconomic conditions, including pandemic global supply chain pressure labor challenges.

Naga: Rising interest rates to name a few.

In 2023, we also managed the unique period of biopharmate destocking, as well as the cyclical, electronics, and markets.

Naga: In 'twenty to 'twenty three we also manage the unique period.

Naga: Format, Destocking as well as the cyclical electronics end markets.

The core elements of our business model has enabled us to deliver profitable growth throughout these challenges.

Naga: The core elements of our business model has enabled us to deliver profitable growth throughout these challenges.

This includes a fundamental focus on our customers, commitment to it.

Naga: This includes a fundamental focus on our customers.

Commitment to innovation.

diversified geographic and end-market exposures.

Naga: Diversified geography and end market exposure.

and a high level of recurring revenue through aftermarket parts and consumables.

Naga: At a high level of recurring revenue through aftermarket parts and consumables.

Since launching the SM strategy, we've added new capabilities to our model, including the NBS-NX growth framework and a division led structure, which has empowered our teams to respond rapidly to changing market conditions.

Naga: Since launching the DSM strategy, we've added new capabilities to our model, including the NBS next growth framework and a division that structure.

Naga: Chess empower our teams to respond.

Naga: Rapid lead to changing market conditions.

This led to solid financial performance in the quarter and the year.

Naga: This led to solid financial performance in the quarter and the year.

exceeding our targeted incremental and decremental profit targets in all three segments.

Exceeding our targeted incremental and decremental profit targets in all three segments.

Combining all of these factors.

with our Capital Deployment Strategy to strengthen our position technology portfolio. We delivered record sales 30...

Naga: With our capital deployment strategy to strengthen our position technology portfolio.

Naga: We delivered.

Naga: Record sales.

Naga: 31% EBITDA margin.

and record cash loan in fiscal 2023.

And record cash flow in fiscal 2023.

I'll speak more to this in a few moments, but I'll now turn the call over to Joe to provide more detailed perspective on our financial results for the fourth quarter and fiscal 2023. Thank you, Naga.

Naga: I'll speak more to this in a few moments.

Naga: I'll now turn the call over to Joe to provide more detailed perspective on our financial results for the fourth quarter and fiscal 2023.

Joe: Thank you Diego and good morning to everyone.

And slide number five, you'll see fourth quarter, 2,023 sales were $719 million. An increase of 5% compared to the prior year's fourth quarter sales of $684 million.

Joe: Slide number five you'll see fourth quarter 2023 sales were $719 million, an increase of 5% compared to the prior year's fourth quarter sales of $684 million.

The increase included 7% growth from acquisitions of air egg and cyber optics.

Joe: The increase included 7% growth from acquisitions of <unk> and fiber optics.

and favorable currency translation of 1% offset by an organic sales decrease of 3%.

Joe: And favorable currency translation of 1%.

Joe: Offset by an organic sales decrease of 3%.

The organic sales decrease was primarily volume offset by price.

Joe: The organic sales decrease was primarily volume offset by price as we continue to pass through year over year cost inflation.

as we continue to pass through year over year cost inflation.

Joe: In line with our expectations. The volume decline was concentrated in the electronics this beds and our biopharma businesses.

The volume decline was concentrated in the electronics, dispense, and our bio-farm up business.

This pressure was largely offset by double-digit growth in medical interventional solutions, industrial coatings, and polymer processing product lines compared to the prior year.

Joe: This pressure was largely offset by double digit growth in medical interventional solutions and <unk>.

Joe: <unk> coatings and polymer processing product lines compared to the prior year.

Gross profit excluding the non-recurring amortization of acquired inventory total $389 million or 54% of sale. $44.54% of sale tyskt söz

Joe: Gross profit.

Excluding the nonrecurring amortization of acquired inventory totaled $389 million or 54% of sales.

A 7% increase over the prior year fourth quarter of $363 million or 53% of sales.

Joe: A 7% increase over the prior year fourth quarter of $363 million or 53% of sales.

The gross profit dollar increase was driven by sales.

Joe: The gross profit dollar increase was driven by sales growth.

And the gross margin expansion of 100 basis points was driven primarily by improvement in factory efficiency.

Joe: And the gross margin expansion of 100 basis points was driven primarily by improvements in factory efficiency.

Joe: SG&A in the fourth quarter increased to $199 million versus $186 million in the prior year fourth quarter.

FGNA in the fourth quarter increased to $199 million versus $186 million in the prior year fourth quarter.

excluding $6 million in non-recurring transaction fees related to the ARAG acquisition.

Joe: Excluding $6 million in nonrecurring transaction fees related to the <unk> acquisition.

S-GNA increased 4% over the prior year, representing 27% of sales consistent with the prior year.

SG&A increased 4% over the prior year, representing 27% of sales consistent with the prior year.

Adjusted operating profit, excluding $11 million in non-recurring acquisition costs and step up inventory amortization.

Joe: Adjusted operating profit, excluding $11 million in nonrecurring acquisition costs and step up inventory amortization.

was $196 million in the quarter, a 10% increase from the prior year.

Joe: It was $196 million in the quarter.

Joe: 10% increase from the prior year.

We generated very strong incremental operating profit margins of 51% on the 5% sales growth.

Joe: We generated very strong incremental operating profit margins of 51% on the 5% sales growth.

which can be attributed to our team's continued dedication to executing the NBS Next Growth Framework and their related ability to rapidly respond to changing market conditions.

Joe: Which can be attributed to our team's continued dedication to executing the NBS next growth framework and their related ability to rapidly respond to changing market conditions.

EBITDA for the fourth quarter increased 12% over the prior year to a record 227 million dollars or 32% of sales.

Joe: EBITDA for the fourth quarter increased 12% over the prior year to a record $227 million or 32% of sales.

which is 200 basis points above our long term profitability target. As we articulated,

Joe: Which is 200 basis points above our long term profitability targets.

Joe: As we articulated in our strategy.

This compares to $202 million or 30% of sales in the prior year fourth quarter.

This compares to $202 million or 30% of sales in the prior year fourth quarter.

As we continue to execute the Ascend strategy and scale through acquisition.

Joe: As we continue to execute the <unk> strategy and scale through acquisitions.

EBIDA will be a key metric for profitability and cash flow generation. Looking.

Joe: EBITDA will be a key metric for profitability and cash flow generation.

Joe: Looking at nonoperating income and expense.

I am happy to report that in September , we successfully accessed the public bond market with our inaugural issuance of investment-grade rated debt.

Joe: I am happy to report that in September we successfully access the public bond market with our inaugural issuance of investment grade rated debt.

We raised $850 million in five and 10 year bonds to repay the short-term borrowings used to finance the area acquisition.

We raised $850 million in five and 10 year bonds.

Joe: Repay the short term borrowings used to finance the <unk> acquisition.

with the balance of the funds coming from our revolve.

Joe: With the balance of the funds coming from our revolver.

Interest expense in the quarter total 26 million dollars.

Joe: Interest expense in the quarter totaled $26 million.

an increase of $21 million over the prior year court.

Joe: An increase of $21 million over the prior year quarter.

$7 million of the increase is non-recurring financing costs associated with the repayment of the short-term borrowing.

Joe: $7 million of the increase is nonrecurring financing costs associated with the repayment of the short term borrowings.

The remaining 14 million increase is a result of higher debt levels and increased interest rates.

Joe: The remaining $14 million increase is a result of higher debt levels and increased interest rates.

Other net income decreased $3 million due to significant currency fluctuations that generated a $4 million currency exchange gain in the prior year that did not repeat in the current.

Joe: Other net income decreased $3 million due to significant currency fluctuations that generated a $4 million currency exchange gain in the prior year.

Joe: That did not repeat in the current year.

Tactics expense was $33 million for an effective tax rate of 20% in the quarter, slightly below the full year and within our guidance range.

Joe: Tax expense was $33 million for an effective tax rate of 20% in the quarter.

Joe: Lately below the full year and within our guidance range.

Joe: Net income totaled $128 million or.

Net income totaled $128 million or $2.22 cents per share.

Joe: Or $2 22 per share.

adjusted earnings per share, excluding non-recurring acquisition related expense.

Joe: Adjusted earnings per share, excluding nonrecurring acquisition related expenses totaled $2.46 per share.

Total $2.46 per share. A 1% increase over the prior year.

Joe: A 1% increase over the prior year.

This improvement despite the increase in interest expense is reflective of consistent application of the NBS next growth framework, which leads to steady profitable growth with attractive incremental mark.

This improvement despite the increase in interest expense is reflective of consistent application of the NBS next growth framework, which leads to steady profitable growth with attractive incremental margins.

Turning to slide number six, allow share a few comments on our full year results.

Joe: Turning to slide number six I will now share a few comments on our full year results.

Sales for the fiscal year 2023 were a record $2.6 billion, an increase of 2% compared to the prior years, previous record sales results.

Joe: <unk> for the fiscal year 2023 were a record $2 6 billion, an increase of 2% compared to the prior year's previous record sales results.

This increase was driven 4% from the cyber optics and airing acquisitions offset by an organic decrease of 1% and an unfavorable currency impact of 1%.

Joe: This increase was driven 4% from the fiber optics, and Eric acquisitions, offset by an organic decrease of 1% and an unfavorable currency impact of 1%.

Adjusted operating profit was $707 million or 27% of sales, which was comparable.

Joe: Adjusted operating profit was $707 million or 27% of sales.

Joe: Which was comparable to the prior year.

and a constant currency basis, adjusted operating profit grew year over year one.

Joe: On a constant currency basis, adjusted operating profit grew year over year, 1%.

EBITDA for the full year increased 1% to a record $819 million or 31% of sales.

Joe: EBITDA for the full year increased 1% to a record $819 million or 31% of sales.

This marks the third consecutive year of the Ascend Strategy Delivering EBIDA Growth.

Joe: This marks the third consecutive year of the <unk> strategy delivering EBITDA growth.

Adjusted diluted earnings per share were $9.03, a 4% decrease from the prior year.

Joe: Adjusted diluted earnings per share were $9 three.

Joe: A 4% decrease from the prior year.

The decrease in adjusted earnings is primarily a result of higher adjusted interest expense.

Joe: The decrease in adjusted earnings is primarily a result of higher adjusted interest expense of.

of $30 million associated with both the cyber optics and the array acquisitions and higher borrowing rates.

Joe: $30 million associated with both the fiber optics, and the era of acquisitions and higher borrowing rates.

Overall, the company's performance remains strong, and in line, or ahead of, targets established as part of the Ascend Strategy.

Joe: Overall, the company's performance remained strong and in line or ahead of target established as part of the strategy.

Now let's turn to slide 7 through 9 to review the fourth quarter of 2023 segment performance.

Joe: Now, let's turn to slide seven through nine to review the fourth quarter 2023 segment performance.

Industrial precision solutions sales of $405 million increased 14% compared to the prior year

Joe: Industrial precision solutions sales of $405 million increased 14% compared to the prior year fourth quarter.

Organic growth in the corner was 4% with the area acquisition adding 7%.

Joe: Organic growth in the quarter was 4% with the Erg acquisition, adding 7%.

and a favorable currency impact of 2%.

And a favorable currency impact of 2%.

It is noteworthy that the 4% organic growth is over a very strong fourth quarter of 2022 and represents an all-time quarterly sales record for the segment.

Joe: It is noteworthy that the 4% organic growth is over a very strong fourth quarter of 2022.

Joe: And represents an all time quarterly sales record for the segment excluding Eric.

robust demand in the polymer processing, industrial coatings, and packaging product lines combined with the execution of the ascend strategy, drove this quarter's result.

Joe: Robust demand in the polymer processing industrial coatings and packaging product lines combined with the execution of the ascend strategy drove this quarter's results.

Geographically growth was strong in the Americas and Asia Pacific region.

Geographically growth was strong in the Americas and Asia Pacific regions.

EBITDA for the quarter was $148 million or 37% of sales, which is an increase of 26% compared to the prior year EBITDA of $118 million.

Joe: EBITDA for the quarter was $148 million or 37% of sales, which is an increase of 26% compared to the prior year EBITDA of $118 million.

This growth was driven primarily by leveraging organic sales growth at incremental margins well in excess of our target. Plus, the benefit of the area acquisition.

Joe: This growth was driven primarily by leveraging organic sales growth and incremental margins well in excess of our target.

Joe: The benefit of the ARINC acquisition.

Joe: Medical and fluid solutions sales of $169 million decreased 7% compared to the prior year's fourth quarter.

Medical and fluid solution sales of $169 million decreased 7% compared to the prior years, fourth quarter.

This change was primarily driven by a decrease in organic sales volume of 8% offset by a modest 1% currency benefit.

Joe: This change was primarily driven by a decrease in organic sales volume of 8%.

Joe: Offset by a modest 1% currency benefit.

The volume declines were the result of continued softness in medical fluid components related to the biofarm and mark.

Joe: The volume declines were the result of continued softness in medical fluid components related to the Biopharma end markets as well as the fluid solutions product lines.

as well as the Fluid Solutions product line.

Offset by double digit growth in our medical interventional solutions product life.

Joe: Offset by double digit growth in our medical interventional solutions product lines.

Fourth quarter, EBIDA was $62 million or 37% of sales, which is a decrease of 4% compared to the prior year EBIDA of $64 million.

Joe: Fourth quarter, EBITDA was $62 million or 37% of sales, which is a decrease of 4% compared to the prior year EBITDA of $64 million.

EBITDA margins continue to be negatively impacted by the sales mix changes within the medical product lines, but improved factory efficiency within the fluid solutions division enabled profit margin expansion.

Joe: EBITDA margins continue to be negatively impacted by the sales mix changes within the medical product lines, but improved factory efficiencies within the fluid solutions Division enabled profit margin expansion.

Turning to slide nine, you'll see advanced technology solutions sales of $145 million decreased 1% compared to the prior years for the court.

Joe: Turning to slide nine Youll see advanced technology solutions sales of $145 million decreased 1% compared to the prior year's fourth quarter.

This change included a decrease in organic sales volume of 16%, offset by the cyberoptic acquisition, which contributes

This change included a decrease in organic sales volumes of 16%.

Joe: All set by the cyber optics acquisition.

Which contributed 15%.

The highest quarterly sales to date under Nords and Owners.

Joe: Highest quarterly sales to date under nordson ownership.

Joe: The organic sales decline was primarily driven by continued softness in our electronics defense product lines that serve the cyclical semiconductor end market.

The organic sales decline was primarily driven by continued softness in our electronics dispense product lines that serve the cyclical semiconductor and mark.

and by way of reference, had a difficult comparison as the prior year fourth quarter had 28% organic growth.

Joe: And by way of referenced had a difficult comparison as the prior year fourth quarter had 28% organic growth.

Joe: Based on customer conversations and historic trends, we continue to expect demand in the semiconductor market to anniversary in the second quarter of fiscal 2024 and begin to recover in the back half of <unk>.

Based on customer conversations and historic trends, we continue to expect demand in the semiconductor market to anniversary in the second quarter of fiscal 2024 and begin to recover in the back half of calendar 24.

Joe: Under 24.

Fourth quarter, EBITDA was $35 million or 24% of sales. A decrease of $5 million from the prior year fourth quarter.

Joe: Fourth quarter, EBITDA was $35 million or 24% of sales a decrease of $5 million from the prior year fourth quarter.

Noteworthy, however, for this segment is the increased profitability level in the down part of the cycle. When you compare the 24% EBITDA margin to the 14% EBITDA margin in fiscal 2020.

Joe: Noteworthy however for this segment is the increased profitability level in the down part of the cycle. When you compare the 24% EBITDA margin to the 14% EBITDA margin in fiscal 2020.

Finally, turning to the balance sheet and cash flow on slide.

Joe: Finally, turning to the balance sheet and cash flow on slide 10.

We had another very strong cash flow quarter generating $153 million in free cash flow at a cash conversion rate of 120% on that in

Joe: We had another very strong cash flow quarter, generating a $153 million and free cash flow.

Joe: At a cash conversion rate of 120% on net income.

For the full year 2023, Norton generated a record free cash flow of $607 million at a cash conversion rate of 124%.

Joe: For the full year 2023, nordson generated a record free cash flow of $607 million and a cash conversion rate of 124%.

With our record free cash flow, we were able to repay approximately $425 million of debt and return capital to our shareholders.

Joe: With our record free cash flow, we were able to repay approximately $425 million of debt and return capital to our shareholders.

dividend payments for $39 million in the quarter reflective of the 5% increase in the annual dividend.

Joe: Dividend payments were $39 million in the quarter reflective of the 5% increase in the annual dividend.

In addition, we purchased $10 million of shares at an average price of $216 per share.

Joe: In addition, we purchased $10 million a.

Joe: Our shares at an average price of $216 per share.

Through our strategic capital deployment, we ended the year with a strong balance.

Joe: Through our strategic capital deployment, we ended the year with a strong balance sheet.

Our cash balance was $116 million, and net debt was $1.6 billion. Resulting an leverage ratio of two times based on the trailing 12 months even death. Well within our targeted rate.

Joe: Our cash balance was $116 million and net debt was $1 $6 billion, resulting in a leverage ratio of two times based on the trailing 12 months EBITDA.

Joe: Well within our targeted range.

for modeling purposes in fiscal 24.

Joe: For modeling purposes in fiscal 'twenty four.

Assume an estimated effective tax rate of 20 to 22%. Capital expenditures of approximately 40 to $50 million and interest expense of approximately $75 to $80 million.

Joe: Assume an estimated effective tax rate of 20% to 22% capital expenditures of approximately $40 million to $50 million.

Joe: Interest expense of approximately $75 million to $80 million.

Joe: In summary.

Our segments effectively responded to dynamic conditions throughout fiscal 2023 by using the data driven NBS next growth framework.

Joe: Our segments effectively responded to dynamic conditions throughout fiscal 2023 by using the data driven NBS next growth framework.

This led to segment financial performance exceeding our targeted incremental and decriminal profit target.

Joe: This led this segment financial performance exceeding our targeted incremental and decremental profit targets.

We are also seeing nice contributions from our recent acquisitions, which is indicative of the strength of our capital deployment strategy and the differentiation we are adding to our precision technology portfolio.

We are also seeing nice contributions from our recent acquisitions, which is indicative of the strength of our capital deployment strategy and the differentiation, we are adding to our precision technology portfolio.

I want to congratulate the team on achieving record sales and EBITDA as well as the record cash flow performance this year. I'll now turn to call.

Joe: I want to congratulate the team on achieving record sales and EBITDA as well as the record cash flow performance this year.

Speaker Change: I'll now turn the call back to Naga.

Thank you, Joe, during last year's conference calls.

Naga: Thank you Joe during last year's conference call.

As we set the stage for fiscal 2023, I noted that Norton was well positioned to perform during periods of economic uncertainty.

Naga: As we set the stage for fiscal 2023.

Naga: Notice that nordson was well positioned to perform during periods of economic uncertainty.

It's certainly proved true for all the reasons I listed earlier in the call.

It's certainly proved true for all the reasons I listed earlier in the call. Fundamental focus on our customers.

Naga: Fundamental focus on our customers.

Naga: Our commitment to innovation.

diversify geographic and end-market exposure in a high level of recurring revenues.

Diversified geographic and end market exposure and a high level of recurring revenue.

And a sin strategy has added to these core strengths.

Naga: Our same strategy has added to these core strengths.

Our NBS next road framework is becoming a competitive advantage as it is deployed holistically across the company.

Naga: Our NBS next growth framework is becoming a competitive advantage as it is deployed.

Naga: <unk> across the company.

But simply, NDS Next is a data driven segmentation framework that drives choices, focus, and simplification.

Naga: Simply NBS next is a data driven segmentation framework that drives choices focus and simplification.

In fiscal year 2022, we have two divisions that achieved market leading business performance.

Naga: In fiscal year 2022 we have two divisions.

Naga: Cheap market leading business performance.

That number expanded in 2023 with all divisions making tremendous progress.

Naga: That number expanded in 2023 with all divisions, making tremendous progress.

They're using the framework to guide their focus on best growth opportunities and deliver on time quality products, winning business and growing.

Naga: They are using the framework to guide their focus on best growth opportunities and deliver on time quality products, winning business and growing market share.

our medical interventional solutions business.

Our medical Interventional solutions business successfully deployed this framework to achieve double digit sales growth throughout 2023 by focusing on its best growth opportunities and simplifying elsewhere.

Successfully deployed this framework to achieve double digit sales growth throughout 2023 by focusing on its best growth opportunities and simplifying elsewhere.

Our electronics processing division leveraged this period of weaker end market demand to carefully curate its product portfolio based on the best growth opportunity.

Naga: Our electronics processing division leverage this period of weaker end market demand to carefully curate its product portfolio based on the best growth opportunities.

The team recognized through segmentation analysis.

Naga: The team recognized through segmentation analysis that.

that the extreme customization we offered created complexity and resulted in longer lead times. Applying NBS.

Naga: The extreme customization, we offered created complexity and resulted in longer lead times.

Naga: Applying NBS next methodology.

with our deep voice of customer research, the team reduced complexity, improved lead times, and is gaining market share.

Naga: With our deep voice of customer research the team reduced complexity.

Improved lead times and is gaining market share.

Naga: The electronics Division.

has used the downside of the cycle to implement NBS next, achieving its target decremental margins in the second half of fiscal 2023. Their well-position for the incremental earnings growth that will come when the semiconductor end market starts to recover in the second half of calendar 2024.

Naga: Has to use the downside of the cycle to implement NBS next achieving its target decremental margins in the second half of fiscal 2023, they are well positioned for the incremental earnings growth that will come in the semiconductor and.

Naga: Market start to recover in the second half of calendar 2024.

In 2023, we also made progress on the acquisition front of our SEM strategy, which is a key priority of our strategic capital deploying.

Naga: In 2023, we also made progress on the acquisition front of our ascend strategy.

Naga: Which is a key priority of our strategic capital deployment.

We close the Eric acquisition on August 24, 2023. The integration is going well.

Naga: We closed the <unk> acquisition on August 24, 2023.

Naga: The integration is going well.

Naga: And we are impressed by Eric's precision agriculture technology.

by ARAG's Precision Agricultural Technology and the energy excellence our new employees bring to naught.

Naga: And the energy excellence, our new employees bring to nordson.

Since the launch of the Ascent Strategy, we have acquired approximately 400 million in revenue and are 80% of the way toward our acquisitive revenue target.

Naga: Since the launch of the <unk> strategy, we have.

Naga: <unk> acquired approximately $400 million in revenue.

Naga: And our 80% of the way toward our acquisition revenue target.

We see ample opportunity in the pipeline to achieve this target.

We see ample opportunity in the pipeline to achieve this target.

particularly in the medical and test and inspection platform.

Naga: Particularly in the medical and test and inspection platforms.

That said, we will remain focused to acquire differentiated position technologies that meet our strategic and financial These technologies are unique for many others.

Naga: That said, we will remain focus to acquire differentiated position technologies that meets our strategic and financial criteria.

To enable acquisitive growth, we went to the public markets this summer.

Naga: To enable <unk> growth, we went to the public markets. This summer.

As a first time issuer, we achieved investment-grade ratings from both mooties.

Naga: As a first time issuer.

Naga: We achieved investment grade ratings.

Naga: From both Moody's and S&P.

Both ratings agencies cited Norton's strong cash flow.

Naga: Both ratings agencies.

Sided nordson strong cash flow.

and healthy financial profile as key reasons for the strong ratings debuts.

Naga: And healthy financial profile as key reasons for the strong ratings debut.

We appreciate the flexibility that public debt will afford us as we continue executing on the acquisition and capital deployment portion of our strategy.

Naga: We appreciate the flexibility that public debt will afford us as we continue executing on the acquisition and capital deployment portion of our strategy.

In summary, I'm very pleased with the progress of our strategy and believe we are well positioned entering fiscal 2024.

In summary, I am very pleased with the progress of our sense strategy and believe we are well-positioned entering fiscal 2020.

I'm also pleased that we have made this progress while sustaining our culture and value.

Naga: Im also pleased that we have made this progress while sustaining our culture and values.

For example, in fiscal 2023, our employees, company, and the NOTS Incorporation Foundation donated over $13 million into the communities.

Naga: For example in fiscal 2023, our employees company and then Nordson Corporation Foundation.

Naga: <unk> over $13 million into the communities.

that our employees live and work to support education.

Naga: Where our employees live and work to support education.

Human welfare services and other charitable activities.

Naga: Human welfare services and other charitable activities.

Naga: Turning now to the outlook on slide 12.

Turning now to the Outlook on slide 12.

We enter fiscal 2024 with approximately $800 million in backlog.

We enter fiscal 2024 with approximately $800 million in.

Naga: In backlog.

The sequential backlog reduction is reflective of strong system sales in the fourth quarter, as well as a paste return to normalized levels.

Naga: The sequential backlog reduction is reflective of strong system sales in the fourth quarter.

Naga: As well as a paced return to normalized levels.

Based on the combination of order entry, backlog, customer delivery timing requests.

Naga: Based on the combination of order and three backlog.

Naga: Customer delivery timing requests and current foreign exchange rates.

and current for an exchange rate.

We anticipate delivering sales growth in the range of 4 to 9% above fiscal 2023 sales.

Naga: We anticipate delivering sales growth in the range of 4% to 9% above fiscal 2023 sales.

Fullyer fiscal 2024 earnings are forecasted to be in the range of 1-8% growth for developed by business tofie.

Naga: Full year fiscal 2020 for earnings.

Naga: Our forecasted to be in the range of 1% to 8% growth.

Naga: Per diluted share.

Please note that we are updating our definition of adjusted earnings.

Naga: Please note that we are updating our definition of adjusted earnings.

starting in fiscal 2024 to exclude acquisition related amortization.

Naga: Starting in fiscal 2024 two.

Naga: To exclude acquisition related amortization.

As acquisitions will continue to be a critical part of our strategy.

Naga: Acquisitions will continue to be a critical part of our strategy.

We believe this is prudent and more reflective of how we and investors think about our business in terms of earnings and cash flow growth performance.

Naga: We believe this is prudent and more reflective of how we and investors think about our business in terms of earnings and cash flow growth performance. This.

This fully a guidance assumes a neutral impact from foreign exchange rates.

Naga: Full year guidance assumes a neutral impact from foreign exchange rates.

A recovery of semiconductor end marks.

Recovery of semiconductor end markets in the second half of calendar 2024.

in the second half of calendar 2024.

Naga: And the ARINC acquisition contributing approximately 5% growth at the midpoint of our guidance.

and the air reg acquisition contributing approximately 5% growth at the midpoint of our guidance.

Naga: As you will see on slide 13.

First quarter fiscal 2024 sales are forecasted in the range of 615 to 640 million.

Naga: First quarter fiscal 2024 sales are forecasted in the range of 615.

Naga: $640 million.

and adjusted earnings in the range of $2 to $2.10 for the alluded share. Before we open it for questions, I'm.

Naga: Adjusted earnings in the range of $2 to $2.10.

Naga: Per diluted share.

Naga: Before we open it for questions.

Naga: I wanted to take a moment to thank Joe.

for his leadership as fearful over the past three plus years. Joe. Always!

Naga: For his leadership as CFO.

Naga: Over the past three plus years.

Naga: Joe.

Naga: I've appreciated your partnership.

And we're all excited to see you develop your career as the new leader of our IPS segment.

Naga: And we're all excited to see you develop your career as the new leader of our Ips segment.

As we move forward into fiscal 2020 for Steve.

As we move forward into fiscal 2024,

Steve Shamra will take over as interim CFO while we conduct our search for a success.

Steve Shamrock.

Naga: Will take over as interim CFO, while we conduct our search for a successor.

Naga: Yeah.

Jealous move and Steve seamlessly stepping in during the transition are examples of Norton focusing on developing winning teams, an important success factor in building a scalable high quality growth in

Naga: Joe's move and Steve seamlessly stepping in during the transition.

Naga: Examples of nordson, focusing on developing winning teams and important success factor in building a scalable high quality growth engine.

Naga: Yeah.

Again, I want to thank our employees, customers, and shareholders for your continued support. We will now open the phone.

Naga: Again, I want to thank our employees customers and shareholders for your continued support.

Naga: We will now open the phone lines for questions.

At this time I would like to remind everyone in order to ask a question simply press star then the number one on your telephone keypad. We'll pause for a moment to compile the Q&A roster.

Naga: At this time I would like to remind everyone in order to ask a question simply press Star then the number one on your telephone keypad.

Naga: Pause for a moment to compile the Q&A roster.

And our first question comes from the line of Alicin Polyniac with Wells Fargo. Please go ahead.

Naga: And our first question comes from the line of Allison <unk> with Wells Fargo. Please go ahead.

Hi, good morning. Good morning, Allison. Nadie, you touched on the EBITDA margin that you posted in 2023. Certainly strong and will ahead of your target. How do we think of that EBITDA margin from here as, you know, how does it evolve over in the next two to three years?

Allison <unk>: Hi, good morning.

Speaker Change: Good morning Allison.

Speaker Change: <unk> you touched on the EBITDA margin that you <unk>.

We posted in 2023.

Speaker Change: Really strong and well ahead of your target how do we think about EBITDA margin from here how does it evolve over the next say two to three years.

Yeah, elephants, as we launched the essence strategy, our target was to have 50% of our growth come from organic and 50% from aquas.

Speaker Change: Yes.

Speaker Change: As we.

Speaker Change: Launched DSM strategy, our target was to have 50% of our growth come from organic.

Speaker Change: And 50% from acquisitions and we also.

you know, set the stage for our organic growth obviously comes at a higher incremental margins when compared to our acquisitions. So as we move forward, we fundamentally believe this 31% is a sustainable level at which we are operating. Depending on the mix of organic and acquisition, you know, this is a sustainable level that we are able to make.

Speaker Change: Set the stage for our organic growth obviously it comes at a higher incremental margins when compared to our acquisitions. So as we move forward. We fundamentally believe this 31% is a sustainable level at which we are operating.

Speaker Change: Depending on the mix of organic and acquisition.

Speaker Change: This is a sustainable level that we were able to maintain.

Got it. And then could you touch on, you know, the bio farmer market, just sort of the cadence of recovery, just how you're thinking about that specific market in 24 just given the challenges that had in 23 around the inventory size.

Speaker Change: Got it and then could you touch on the Biopharma market, just sort of a cadence of recovery just how youre thinking about that specific market in 'twenty four and just given the challenges it had in 2030 around the inventory side.

Speaker Change: Yes.

You know, we start to, by the end of the first quarter, we start to anniversary the decline in biopharmal due to D-star.

Speaker Change: We start to by the end of the first quarter, we start to anniversary the decline in Biopharma due to Destocking.

Longer term, we fundamentally believe that this is a great marketplace for Norton and will return to the high single-digit now.

Speaker Change: Longer term, we fundamentally believe that this is a great marketplace for nordson.

Speaker Change: <unk> will return to the high single digit number.

In the interim though, you know, we are taking a conservative.

Speaker Change: In the interim though we are taking a conservative and definitely a realistic view of saying that recovery is going to be slower.

Definitely a realistic view of saying that recovery is going to be slower.

Speaker Change:

Okay, but I guess that I think you just touched on it though. There's no real structural impediment for that market in your view to not reach that sort of high single digit growth rate that it historically is.

Speaker Change: Okay.

Speaker Change: I think he's a testament that there's no real structural and how demand for that market and your meeting.

Speaker Change: Not reached that sort of high single digit growth rate that has historically achieved.

Absolutely not. Right. If you think about this, you know, one of the key areas of focus for us is the use of single use.

Speaker Change: Absolutely not right.

Speaker Change: If you think about this one.

Speaker Change: One of the key areas of focus for US is the use of single use.

single use plastics, which essentially go to replace the stainless steel vectors in stainless steel four lines. And that transition is still.

Speaker Change: Single use plastics, which essentially go to replace the stainless steel connectors in stainless steel full lines and that transition is still.

you know, in its early stages. So we fundamentally believe that there is nothing here that is impaired. It's a matter of timing, and it's certainly a matter of recovery, certainly, you know. So long term, no issues. We expect we will probably get to high single digits. Perfect. Thank you, Anne.

Speaker Change: In its early stages. So we fundamentally believe that there is nothing here that is impaired.

Speaker Change: A matter of timing and it's certainly a matter of recovery suddenly so long term no issues. We expect we will probably get to high single digits.

Speaker Change: Perfect. Thank you and congrats Joe on the roof.

Joe: Thank you Allison.

Your next questions from the line of my Cala Run with Baird. Please go ahead.

Speaker Change: Your next question is from the line of Mike Halloran with Baird. Please go ahead.

Morning everyone. Morning Mike. Morning Mike. So just want to help me understand a couple questions on guidance here. First, what's the organic assumption embedded in the growth rate? And I know you gave the the.

Mike Halloran: Morning, everyone.

Speaker Change: Good morning, Mike.

Mike Halloran: Help me understand a couple of questions on guidance here first what's the organic assumption embedded in the growth rate.

And I know you gave the.

FX at already, but maybe just some help on what you're assuming for organic growth.

Mike Halloran: FX had already but maybe just some help on what you're assuming for organic growth.

Steve.

Yeah, this is being so for the full year guidance, you know, is not appointed out. We're forecasting growth of 6% and our rag is at 5%. So that would imply organic growth about 1% because we would say based on current rates were effects neutral. So that's how we're thinking about the overall growth rate of 6%.

Mike Halloran: This is yes. This is Steve so for the full year guidance as Niall pointed out we're forecasting growth of 6%.

Mike Halloran: Iraq is is at 5% so.

Mike Halloran: That would imply organic growth of about 1% because we would we would say based on current rates FX neutral. So that's how we're thinking about the overall growth rate of 6%.

Thanks for that. And then on the electronic assumptions, you mentioned back half recovery. What informs that? It sounds like part of its comparisons, part of its historical recovery curves. Is there anything customers are saying, or build rate forecasts, or anything else that you would point to?

Speaker Change: Thanks for that and then on the electronics assumptions, you mentioned back half recovery what informs that.

Speaker Change: Certainly it sounds like part of it is comparisons part of its historical recovery curves is there anything customers are saying or build rate forecast or anything else that you would point to.

Speaker Change: But I would tell you is the two things that you already acknowledged which is really historical trends.

What I would tell you is the two things that you already acknowledge, which is really historical trends.

Certainly, we have a direct sales model, and our teams are spending a lot of time with our customers understanding what their requirements are and when they would show up. If you were to point to anything, you would say the pipeline of opportunities continue to be to point towards that timeline of lookup.

Speaker Change: We have a direct sales model and our teams are.

Speaker Change: Spending a lot of time with our customers understanding what their requirements are and when they would show up.

Speaker Change: If you were to point to anything you would say the pipeline of opportunities continues to be to point towards that timeline of recovery.

And then last one, just on the IPS side, are you assuming relatively normal sequential patterns from here? Any thoughts on how you're looking at the end market, cadencing, man level, things like that? I mean, packaging was strong in this quarter, which felt quite surprising. So any context on that would also be helpful. Yes, sure, Mike. You know, IPS has been running after about our long-term growth rates here now for...

Speaker Change: And then last one just on the Ips side.

Speaker Change: Are you assuming relatively normal sequential patterns from here any thoughts on how youre looking at the end market cadence in.

Speaker Change: Demand levels things like that I mean packaging was strong this quarter, which felt surprising so any context on that would also be helpful.

Speaker Change: Yes sure Mike.

Speaker Change: Ips has been running at or above our long term growth rates here now for.

two, three years now. And what our expectation is that we don't see anything in the order entry that gives us a pause. Good backlog and good order entry that we expect to sustain growth in the coming years. A significant contribution on IPS growth for the coming year would be through the error acquisition.

Speaker Change: Two three years now.

Speaker Change: And what.

Speaker Change: What our expectation is that we don't see anything in the order entry that gives us a pause.

Speaker Change: Good backlog and good order entry that we expect to sustained growth in the coming years, a significant contribution on Ips growth for the coming year would be through the <unk> acquisition.

Really appreciate it. Thank you for your time.

Speaker Change: Yes.

Speaker Change: Got it really appreciate it thank you for your time.

Speaker Change: Sure.

Your next questions from a line of Jeff Hammond with Keybank Capital Markets. Please go ahead. A good morning everyone.

Speaker Change: Your next question is from the line of Jeff Hammond with Keybanc capital markets. Please go ahead.

Jeff Hammond: Hey, good morning, everyone.

Speaker Change: Good morning, Good morning, Jeff Alright.

So maybe go back to the organic, it looks like the range is kind of minus four to plus one. Do you see all the segments, you know, at the midpoint growing, or there's some segments that clearly have growth and others that are maybe down.

Speaker Change: So maybe go back to the organic it looks like the range is kind of minus four to plus one do you.

Speaker Change: Do you see all the segments.

At the midpoint growing or are there some segments that clearly have growth and others that are maybe maybe down.

Yeah, but let's, you know, we just, just talked about IPS, you know, IPS today at...

Speaker Change: Yes.

Just.

Speaker Change: Just talked about Ips.

Speaker Change: Ips today.

Adderabour long-term growth rates continue to sustain modest growth in the year coming up.

Speaker Change: At or above our long term growth rates continue to sustain modest growth in the year coming up.

ATS is going to be flatish in that what I would tell you is that first step we're going to be continuing down second half continues to improve. And so that will be flatish to slight growth. NFS though, we have medical interventional components continuing to be pretty strong growth for us.

Speaker Change: Ats is going to be flattish in that what I would tell you is that first half we're going to be continued down second half continues to improve.

Speaker Change: So that would be flattish to slight growth.

Speaker Change: MFS, though.

Speaker Change: We have medical interventional components, continuing to be pretty strong growth for us.

are by a farmer business.

Speaker Change: Our biopharma business Anniversarying itself and not being a drag and then improvement in our fluid solutions towards the back half of the year overall, our expectation is that MFS returns to a pretty nice growth next year modest growth.

anniversary itself and not being a drag and then Improvement in our fluid solutions towards the back half of the year overall our expectation is that MFS returns to a pretty nice growth next year Modest growth for that

Speaker Change: That segment.

Speaker Change: Okay.

Okay, great, thanks for that color, Naga. Just Eric, there's been a lot of commentary about ag, slowing, I'm just wondering if Eric is seeing that pressure, it seems like the math maybe suggests a little bit lower revenue contribution than maybe when you first bought it, just speak to what you're seeing there real time.

Speaker Change: Okay, great. Thanks for that color and I guess just Eric.

Speaker Change: There's been a lot of commentary about a slowing.

Speaker Change: Slowing I'm just wondering if if Eric has seen that pressure it seems like the math, maybe suggests a little bit lower revenue contribution then.

Speaker Change: And then maybe when you when you first bought it just speak to to what Youre seeing there are real time.

Yeah, let me start it and then Joe in his new role can suddenly give you some color on air, I guess, well.

Speaker Change: Yeah, Let me start it and then.

Speaker Change: Joe in his new role can suddenly give you some color on Aero I guess well.

What we see, you know, remember, 45% of our air-ag revenues are recurring revenue and that typically products are short-life replacement cycles, so mostly nozzles and things like that. So we will benefit from that and that is not going to see the pressure you're going to see. The other thing, what I would tell you is that air-ag components, much like Norton, is critical low-cost component for the customer.

Speaker Change: What we see.

Speaker Change: Remember, 45% of our revenues are recurring revenue.

Speaker Change: And that typically products that are short life replacement cycles, so mostly nozzles and things like that so we will benefit from that and that is not going to see the pressure youre going to see the other thing what I would tell you is that <unk> components much like nordson is critical low cost.

Speaker Change: Component for the customers and also components that drive efficiency reduce waste and so typically what our expectation is that the.

and also components that drive efficiency reduced waste. And so typically what our expectation is that the...

that you're going to see limited impact from that. And so...

Speaker Change: That youre going to see limited impact from that and.

Speaker Change: So.

Let me maybe have Joe talk about where we finished the year for Iraq in North San Francisco year and then talk a little bit about our expectation for.

Let me maybe have Joe talked about.

Joe: Where we finished the year four Arad in Nordson fiscal year, and then talk a little bit about our expectation for next year.

Yeah. So Jeff, you think about Arag, they finished the Norton, what I'll call calendar fiscal 2023 delivering $155 million in.

Speaker Change: Yeah, So Jeff you think about Eric.

Speaker Change: They finished the nordson, what I'll call calendar or fiscal 2023, delivering $155 billion in sales and the midpoint of our guidance suggests that Eric sales grow in 2024.

And the midpoint of our guidance suggests that air-egg sales grow in 2024. And so despite some of the news that you're hearing in the ag space when you look at the components that they provide.

Speaker Change: And so despite some of the news that you're hearing in the AG space. When you look at the components that they provide.

the 45% that's run rate parts and consumables that Naga mentioned. We have it moderated the growth rate from what was previously articulated but it's still growing when you look at it on a Euro.

Speaker Change: 45%, that's run rate parts and consumables that Naga mentioned.

We have it.

Speaker Change: Moderated the growth rate from what was previously articulated but it is still growing.

Speaker Change: When you look at it on a year over year.

Speaker Change: Okay.

Okay, then just just a housekeeping, amortization in 24, is it 20 million, a quarter, 80 million? Is that kind of the right run rate or how should we think about that? Yeah, I would tell you the guidance on amortization is in the range of 74 to 78 million for the full year and about 19 million in Q1. Big, bigly by, I became to become a chief in the range now and have

Speaker Change: Okay and then just.

Speaker Change: Housekeeping amortization in 'twenty four.

Speaker Change: It is it $20 million a quarter $80 million is that kind of the right run rate or how should we think about that.

Yes, I would tell you the guidance on amortization is in the range of <unk> $74 million to $78 million for the full year and about $19 million in Q1. So.

Speaker Change: Okay. Thanks, so much.

Your next question is from a line of Matt Somerville with DA Davidson. Please go ahead.

Speaker Change: Your next question is from the line of Matt Summerville with D. A Davidson. Please go ahead.

I was hoping maybe you gave a little bit more granular detail on expectations for MFS. I was hoping you could kind of talk through the same thing for IPS, how you're thinking about rigid, flexible packaging, nonwoven product assembly, coatings as we move into 20.

I guess I was hoping maybe you gave a little bit more granular detail on that.

Expectations for MFS I was hoping you could kind of talk through the same thing for Ips, how youre thinking about rigid flexible packaging nonwovens product Assembly coatings as we move into 'twenty four.

Yeah, hey, you know, let's generally we don't

Speaker Change: Okay.

Speaker Change: Generally we don't do.

Speaker Change: Jim.

you know, guidance around the segment, but I will certainly give you some, what we are seeing in the marketplace, and hopefully that will answer the question, Matt. So let's start with packaging, right? Packaging is doing fairly well. It is a, the order entry rates and things like that suggest that the backlogs have returned to normal. The parts part of the business is doing. Looking for a new. Minimum

Speaker Change: Guidance around the segment, but I will certainly give you some what we're seeing in the marketplace and hopefully that will answer the question Matt.

Speaker Change: So let's start with packaging right packaging is doing fairly well at this stage.

Speaker Change: The order entry rates and things like that suggests that the backlogs have returned to normal the parts part of the business is doing.

fairly well and so we expect packaging to continue to be steady as we have experienced thus far. So that is packaging. As you think about system businesses like coatings or polymers.

Speaker Change: Early well and so we expect packaging to continue to be.

Speaker Change: Steady as we have experienced thus far so that is packaging.

As you think about system businesses like coatings polymers as we enter the year, we entered the year with some pretty strong backlog and so we fundamentally believe that that is one that will help us in the growth there.

As we enter the year, we enter the year with some pretty

strong backlog. And so we fundamentally believe that that is one that'll help us in the growth there.

Non-Rovans is being a business that continues to, you know, has not declined any further. We'll continue to.

Speaker Change: Nonwovens is been a business that continues to.

Speaker Change: It has not declined any further.

Speaker Change: We will continue to you know.

you know, continue to be tracking in the same place where we are. We certainly have a number of product applications. This is sort of application such as battery, think about applications in e-commerce.

Speaker Change: It continued to be tracking in the same place where we are we certainly have a number of product applications. This is sort of applications such as battery.

Speaker Change: Think about applications and e-commerce.

fabric bonding and many other miscellaneous applications. This is the part of the business where...

Speaker Change: <unk> bonding and many other miscellaneous application. This is the part of the business we're.

It is application by application and this one is doing well as.

Speaker Change: It is application by application and this one is doing wellness as well.

Hopefully that gives you a little bit more color and hopefully answers the question you're asking Matt.

Speaker Change: Hopefully that gives you a little bit more color and hopefully answers. The question you are asking Matt.

Yeah, I appreciate the detail there. Maybe just over to ATS, two quick things. Yeah. Are you actually seen in inflection in fiber optics business pointing out, you know, the fact that you had the strongest quarter for that business since the acquisition. And then if you can comment a little further on how you're thinking about tested inspection for 20.

Yes, I appreciate the detail there.

Speaker Change: Maybe just over to Ats to quickly, yes are you actually seeing an inflection in fiber optics business pointing out the <unk>.

You had the strongest quarter for that business since the acquisition and then if you can comment a little further on how youre thinking about test and inspection for 24.

As you think about testing inspection, we've had strong, strong years here now going, even last year when our dispense business was down a bit, you also found them to be doing fairly well. But as you go into next year, we expect that we would have challenging comes for our X-ray.

Yeah.

Speaker Change: Think about test and inspection, we've had strong strong years here now going.

Speaker Change: Even last year, when our dispense business was.

Speaker Change: A bit you you also have found them to be doing fairly well.

But as you go into next year, we expect that we would have challenging comps for our X Ray business.

We certainly expect that our optical business and our acoustic business, which is, we've not talked about in the past, is an area that we feel there is some strength. And in a too early disavvy of recent inflection point, but certainly telling you that this is an area that that we are well positioned to...

Speaker Change: We certainly expect that our <unk>.

Speaker Change: Optical business and and our acoustic business, which is we've not talked about it in the past is an area that we feel there is some strength.

Speaker Change: And.

Speaker Change: Too early to say, we have reached an inflection point.

Speaker Change: But suddenly telling you that this is an area that we.

Speaker Change: That we have.

Speaker Change: Well positioned to.

take advantage of any market movement. You know, customer conversation, pipeline activity, all still indicating second half of the year, calendar year that we have a good recovery. But I think we feel good about where we are, particularly on cyber optics. We've had now a year of experience with

Speaker Change: Take advantage of any market movement.

Speaker Change: Customer conversation pipeline activity, all still indicating second half of the year calendar year that we have a good recovery but.

Speaker Change: But I think we feel good about where we are.

Speaker Change: Particularly on cyber optics, you know we've had now a year of experience with this type of optics is exactly what we thought was incredibly fantastic technology.

Cyber optics is exactly what we thought was incredibly fantastic technology that has added to the portfolio. So our pieces around expanding our position technology portfolio with cyber optics is certainly strong. And you know our expectations are that we continue to be able to solve more problems for our customers and continue to benefit on this.

Speaker Change: As added to the portfolio.

Speaker Change: So our thesis around expanding our position technology portfolio with cyber optics is certainly strong and our expectations are that we continue to be able to solve more problems for our customers and continue to benefit on this.

Speaker Change: <unk>.

you know, investment in semiconductors that is expected to come.

Speaker Change: Investment in semiconductor because that is expected to come.

Speaker Change: Yeah.

Speaker Change: Thank you.

Okay.

Once again ladies and gentlemen, if you would like to ask a question, simply press star then the number one on your telephone key pass.

Speaker Change: Once again, ladies and gentlemen, if you would like to ask a question simply press Star then the number one on your telephone keypad.

For next question, it's from the line of Christopher Glenn with Oppenheimer. Please go ahead. Thanks. Good morning.

Next question is from the line of Christopher Glynn with Oppenheimer. Please go ahead.

Christopher Glynn: Good morning.

I'm just curious about the ATS foreground spending another moment on that. You know, you said your team's very engaged, talking to customers, so that sounds like...

Was just curious about the Ats for ground spend another moment on that.

Christopher Glynn: You said your team is very engaged talking to customers so that sounds like.

you know everyone's on the same page in terms of expecting a recovery are you just seeing like materialization of uh... you know pre-RFP activity activity is is there like improving bread month to month just curious how the cadence is

Everyone's on the same page in terms of expecting a recovery or are you just seeing like materialized Asian of PAH.

Christopher Glynn: Pre RFP Act Act.

Christopher Glynn: Activity is there like improving breath month to month, just curious how the cadence is there.

Yeah, I would go back to what we were talking about, which is really great customer conversation.

Yes.

Christopher Glynn: I would go back to what we were talking about which is really.

Great customer conversations.

You know, historical trends all pointing towards second half of calendar 2024. You know, clearly our pipeline activity continues to be pretty good.

Christopher Glynn: Historical trends all pointing towards second half of calendar 2024.

Christopher Glynn: Clearly our pipeline activity continues to be pretty good.

Christopher Glynn: Okay.

You know, and our expectation is that that translates into order entry and translates into shipment.

Christopher Glynn: And our expectation is that that translates into order entry and translates into shipment.

Christopher Glynn: Sure.

you know, beyond that, I, you know, our expectation for the ATS is it's going to be flat, but first have down, second half up.

Christopher Glynn: Yeah.

Christopher Glynn: Beyond that.

Christopher Glynn: Our expectation for the Ats as it's going to be flat first half down second half up.

And if you look historically, that has been a fairly good indicator.

Christopher Glynn: And if you look historically that is.

Christopher Glynn: Being a fairly good indicator.

And we believe that, you know, so our guidance is based on APS being flat, not significant growth. So yep, yep, I understand the timing. Thanks for that. And then a quick one on MFS, the kind of non medical fluid solutions portion. I think you talked about some significant manufacturing and productivity benefits there from cost actions and MBS next.

Christopher Glynn: And we believe that.

Christopher Glynn: So our guidance is based on <unk>.

Being flat.

Christopher Glynn: Not significant growth.

Yes, I understand the timing thanks for that and then a quick one on MFS the kind of non medical fluid solutions portion I think you talked about some significant manufacturing and productivity.

Christopher Glynn: Benefits there from.

Christopher Glynn: Cost actions in NBS next.

Get curious how that industrial fluid solution

Christopher Glynn: Curious how that industrial fluid solutions.

business. I think it's short cycle oriented. How's that little more detail on how that's behaving please?

Christopher Glynn: <unk> I think it's short cycle oriented.

Speaker Change: A little more detail on how that's behaving please.

Yeah, that is going fairly well. I would say early times here, we are very pleased with the improvements that teams have made in manufacturing and the business starting to return to where it typically operates. A significant pick up in this business is going to be tied to the...

Christopher Glynn: Yes.

Christopher Glynn: That is going fairly well I would say early early times here. We are very pleased with the improvements that teams have made in manufacturing.

Christopher Glynn: The business starting to return to where it typically operates.

Christopher Glynn: Got it.

Christopher Glynn: Significant pick up in this business is going to be tied to the electronic.

electronic customers in Asia as well, right? And so this is a business that has some electronic exposure and that they will benefit from that as the second have picks up for them. But overall, on the industrial side, it seems to be steady. And so this is a business that has some electronic exposure and that they will benefit from that as the third have picks up for them.

Christopher Glynn: Customers in the Asia.

Christopher Glynn: As well right and so this is a business that has some electronic exposure and that they will benefit from that as the second half picks up program, but overall on the industrial side it seems to be steady.

Speaker Change: Thank you thanks Vivek yeah.

Speaker Change: Youre welcome.

Your next questions from a line of Walt Littak with Seaport Research. Please go ahead.

Speaker Change: Your next question is from the line of Walter Liptak with Seaport Research. Please go ahead.

Walter Liptak: Hi, Thanks, good morning.

Hi, thanks. Good morning. One minute ask. Good morning. You guys haven't talked too much about pricing yet. And you know, there's still some inflation out there, even though it's come down. You know, how are you thinking about systems pricing and component pricing as you start going into the new year?

Speaker Change: At one point.

Speaker Change: Good morning, you guys haven't talked too much about pricing yet.

Speaker Change: And there's still some inflation out there even though it's come down how are you thinking about.

Speaker Change: Systems' pricing in component pricing as you start going into the new year.

Steve is something that you want to touch on. Yeah. Yeah. Yeah, I'd answer that question what I would say is, again, just to remind you and everyone that really, when we talk about pricing, I mean, we're selling the value of our products or our customers.

Steve is something that you want to touch on.

Steve: Yeah, I'll answer that question, what I would say again, just to remind remind you and everyone that really when we talk about pricing I mean, we're selling the value of our products for our customers.

So, you know, we've not passed through large inflationary price increases as a result of that. I mean, again, our focus is maintaining our very strong gross margins from that perspective. So, you know,

Steve: So we've not pass through large inflationary price increases as a result of that I mean again, our focus is maintaining our very strong gross margins from that perspective. So.

As I mentioned earlier with the organic growth guidance, the 1% for FY24, I would think that that organic growth would be balanced in terms of a little bit coming from volume at price, but again, it's not something that we're really focused on from that perspective. Again, our focus is on maintaining those gross margins.

As I mentioned earlier with the organic growth guidance of 1% for FY 'twenty four.

Steve: I would think that that organic growth will be balanced in terms of a lot of that coming from volume and price, but again, it's not it's not something that we're really focused on from that perspective again, our focus is on maintaining those gross margins.

Speaker Change: Okay great.

You know, what wonderful you talk a little bit about the the ag markets and just the, you know, regionally, you know, Eric is pretty international in Europe and South America. I wonder if you could talk a little bit, you know, give us some insight on

Speaker Change: I Wonder if we could talk a little bit about that.

Speaker Change: The AG markets and just regionally.

Speaker Change: Regionally, Eric is pretty international in Europe and South.

Speaker Change: Erika I'm wondering if you could talk a little bit give us some insight on how.

how those markets are trending. And we probably have a better view on the US. But so maybe the second part of the question is, you guys are looking at kind of a new opportunity in the US for market share. Can you grow the US part of the business?

Speaker Change: Those markets are trending and we probably have a better view on the U S. But.

Speaker Change: So maybe the second part of the question is you guys are looking at kind of a new opportunity in the U S grew market share can you grow the U S part of the business next year.

Yeah, let me start and then joke and add a little bit more color to the business. As you think about AIRAG, what we acquired is a European...

Speaker Change: Yes.

Speaker Change: Let me start and then Joe can add a little bit more color color to the business as you think about era right.

Speaker Change: What we acquired is a European.

Joe: Market leader.

great technology, strong position in South America, in an end market that is growing. So our models and our expectations are that we deliver on that promise around continuing to grow the European business and continue to grow the South American business. We certainly recognize that we have an opportunity in North America.

Joe: Great technology.

Joe: Strong position in Europe strong position in South America in an end market that is growing right. So our models and our expectations are that we deliver on.

Joe: On that promise around continuing to grow the European business and continue to grow the South American business. We certainly recognize that we have an opportunity in North America, where we.

But we also understand the market dynamics in North America. Any wins and any expansion here will be at least additional icing on the cake if you so will to our model.

Joe: Also understand the market dynamics in North America.

Joe: Any wins and any expansion here will be at least additional icing on the can't give you. So we'll do our model and so.

And so, you know, we'd like the technology, we'd like the market position, and the market structure in Europe is uniquely different from North America and maybe less Joe ad color to the work that they're doing in Europe and, you know, our technology.

Joe: We liked the technology, we'd like the market position and the market structure in Europe is uniquely different.

Joe: From North America, and maybe let Joe add color to the work that they're doing.

Joe: Europe in general.

Joe: Our technology.

Joe, yeah, well, you think about just the level set on Eric and their

Joe: Joe.

Joe: If you think about just to level set on Eric.

precision dispensing fluid components that are predominantly components sold to implement manufacturers, spray manufacturers, and when you look, it's again, predominantly a European business.

Joe: Precision dispensing fluid components that are predominantly components sold to implement manufacturer's spray manufacturers and when you look it's got predominantly a European business.

a very broad footprint throughout Europe and through their distribution models and selling to implement manufacturers.

Joe: A very broad footprint throughout Europe through their distribution model and selling to implement manufacturers.

And so that market, again, is, I would tell you, the main driver of our forecast, when you think about the ARIG business and the growth that we're forecasting for 2000 and 24. The US and other geographies outside of Europe and South America where ARIG has a strong footprint represents opportunity. And when you think about Norton and our...

So that market again is I would tell you the main driver of our forecast.

Joe: When you think about the <unk> business and the growth that we're forecasting.

Joe: For 2024.

Joe: <unk> and other geographies outside of Europe, and South America, where Eric has a strong footprint represents opportunity and when you think about nordson and our broad geographic footprint our ability.

geographic footprint, our ability to, you know, I would say realize some of those opportunities. I think is enhanced as opposed to a standalone Eric.

Two I would say realize some of those opportunities.

<unk> is enhanced as opposed to the Standalone <unk> business and so when you think about that we're starting to see in the integration. Some of these opportunities start to fill in the pipeline and so again, we're optimistic that that long term we can make this.

And so when you think about that, we're starting to see in the integration some of the opportunities start to fill in in the pipeline. And so again, we're optimistic that long-term, we can make this a global division within Norton with the broad geographic foot.

Joe: As a global division within Nordson with a broad geographic footprint.

Okay. All right. Yeah. Thanks for that, that answer. And you know, if I could just try one, one more on the IPS segment for Joe.

Speaker Change: Okay, alright, thanks for that that answer and if I can just try one one more on the Ips segment.

Speaker Change: For Joe.

You know, I wonder if you could just get, you know, help us, you know, characterize how you're looking at, you know, kind of the general industrial system spending for next year with the final looks like and maybe some of the bigger sub segments like around automotive or consumer. You know, consumer good.

Speaker Change: Yes, I wonder if you could just help.

Speaker Change: Help us characterize how you are looking at.

Speaker Change: Kind of a general industrial.

Speaker Change: System spending for next year, what the funnel looks like and maybe some of the bigger.

Speaker Change: Sub segments like around automotive for a consumer.

Speaker Change: Yeah.

Consumer goods.

Speaker Change: Yes, so just to level set the Ips.

So, you know, just to level set, the ITS segment is coming off. Now, I would say two very strong years. If you look back at 22, they delivered a 7% organic growth. And 23, it grew 3% organically.

Speaker Change: Segment is coming off now I would say two very strong years. If you look back at 2002, they delivered a 7% organic growth in 'twenty three it grew 3% organically and so as we head into 'twenty four we're looking to really maintain that from them.

And so as we head into 24, we're looking to really maintain that from the level where we are. What drove it, if you go back to 22, was a lot of large systems and the liquid coatings. And then in 23, it turned, there was heavy automotive, actually growth and automotive on the coating side. And then on the plastic processing side in the recycling.

Speaker Change: The level of where we are what drove it. If you go back to 22 was a lot of the large systems in the liquid coatings.

Speaker Change: And then in 'twenty three of turn there was heavy automotive actually growth in automotive.

Speaker Change: On the coding side and then on the plastic processing side in the recycling that was strong in the back half of 'twenty, two and continued to be strong in 'twenty three and so those large systems businesses within IPF. They do carry a nice backlog into 2024.

That was strong in the back half of 22 and continued to be stronger than in 23.

And so those large systems businesses within IPF, they do carry a nice backlog into 2024. That being said, the remaining portion of the IPF business, backlog there has moderated. So when you see the backlog come down to 800, I would tell you that's the elevated backlog, moderating back to historical terms for the remainder of that business.

Speaker Change: That being said the remaining portion of the Ips business backlog there has moderated so when you see the backlog come down to $800 I would tell you. That's the elevated backlog moderating back to historical terms for the remainder of that business that being said the order entry there remained steady in the <unk>.

That being said, the order entry there remains steady in the support of our forecast. So, you know, you're familiar with the business particularly on the package inside what systems come down due to investment, parts typically help offset that in terms of growth of parts. So it's really a nice mix and I would tell you, we've benefited from automotive liquid coatings and then the polymer processing last couple years on the system side.

Speaker Change: <unk> of our forecast so.

Speaker Change: Well you know you are familiar with the business, particularly on the packaging side, what systems come down due to investment parts typically help offset that.

Speaker Change: In terms of growth of parts and so it's really a nice mix and I would tell you we benefited from automotive liquid coatings and then the polymer processing last couple of years on the system side.

Speaker Change: But the remaining broadband.

It remains steady.

Speaker Change: Okay, great. Okay. Thank you.

Right? I mean, you know, one thing that I would add, Walt, is really, in general, the company is a recession resilient company. And a portfolio that

Speaker Change: Alright.

Speaker Change: One thing that I would add Walt is really key.

Speaker Change: In general the company is recession resilient company.

Speaker Change: And a portfolio of that.

Speaker Change: <unk>.

get through uncertain economic environments or downturns in specific end markets, right? That's what you saw happened in 23. As we think about 24, really what we are, our expectation is IPSA study, ATS is sladdish to slight growth and MFS returns.

Get through uncertain economic environments are downturns in specific end markets right. That's what you saw happen in 'twenty three as we think about 'twenty for really what we're our expectation is IBSA study.

Speaker Change: <unk> is flattish to slight growth in MFS returns to pretty modest growth and that's kind of how I would think about it in a pretty strong EBITDA margin.

pretty modest growth. And that's kind of how I would think about it. And a pretty strong EBITDA margin in last year and we'll continue to expect to see the same next year.

Speaker Change: In last year and will continue to expect to see the same next year.

Speaker Change: Yes.

Speaker Change: Your next question is from the line of Andrew Buscaglia with BNP Paribas. Please go ahead.

Your next questions from the line of Andrew Biscaglia with BNP Powerieba please go ahead.

Andrew Buscaglia: Hey, good morning, guys.

Speaker Change: Good morning, good morning.

Just one last clarification on your guide and so the low end, you know, if you look at the organic cells growth, the low end of that guidance, you know that if you're mild that out doesn't really assume much of recovery at all is that correct. And then how much of the recovery is really easy comp versus demand actually picking up.

Speaker Change: Just wanted to ask a clarification on your guidance. So the low end if you look at the organic sales growth.

Speaker Change: Low end of that guidance.

Speaker Change: If you model that out it doesn't really assume much of recovery at all is that correct and then how much of the recovery is really easy comps versus demand actually picking up.

Speaker Change: Yeah, Yeah, so what I would tell you in but from a general guidance perspective.

Speaker Change: At the low end.

Speaker Change: Of our sales guidance, we're talking about 4% basically from that perspective, so obviously.

Speaker Change: There what would get us towards the lower end there is obviously.

There is the recovery on the Ats side for example is slower than what we would expect.

Speaker Change: FX rates go against us those types of things.

And I think we talked earlier, I'm not going to mention it as well, just from a constant point, with some of the businesses that we were talking about, whether...

And I think you've talked earlier Naga mentioned, it as well just from a comp standpoint with some of the businesses that we're talking about right whether it was.

fluid solutions or, I mean, electronic side with an APF.

Speaker Change: Fluid solutions or on the.

Speaker Change: The electronic side within Ats.

Okay.

Okay, and then what about the easy comes first, first demand picking up is that?

Speaker Change: Okay, and then how and then what about the easy comps versus versus demand picking out the debt.

to get to the midpoint, do we need to man to come back?

Speaker Change: To get to the midpoint, we need demand to come back.

I'm the man. I mean, sorry. Good.

Speaker Change: Hi.

Speaker Change: Yes, yes, sorry.

No, what I was going to say is, I mean, just, you know, from a midpoint perspective, again, I mean, that assumes, you know, 1% organic growth overall. So, you know, again, there would be some volume embedded in there. So we would expect it to pick up right. I mean, just kind of given the, you know, by segment, we talked earlier.

Speaker Change: No what I was going to say, let me just from a midpoint perspective again that assumes 1% organic growth overall so.

Speaker Change: Again, there would be some volume embedded in there. So we would expect it to pick up right I mean, just kind of given the.

Speaker Change: By segment, we talked earlier.

you know, from that perspective, ATS, again, we'd expect some second half pick up there in the end of Q2 or Q3 and Q4. We talked about, you know, the fluid components earlier and even fluid solutions, I know Naga referenced that as well, you know, electronic assembly picking up in the back half of the year as well. So.

Speaker Change: From that perspective, Ats again, we'd expect some second half pick up there and at the end of Q2 or Q3 and Q4.

Speaker Change: We talked about.

Speaker Change: The fluid components earlier, and even fluid solutions I know Naga referenced that as well electronic assembly picking up.

Speaker Change: In the back half of the year as well so.

Speaker Change: Okay.

Okay, Andrew, you know, it's candidate. I would just add, if I could, the way I think about it is full year, our guidance says we're going to grow seven or six percent at the midpoint, roughly speaking. And Q1 is growth of 3%.

Speaker Change: Okay Andrea.

Speaker Change: And I would just add if I could the way I think about it as full year, where our guidance says we're going to grow seven or 6% at the midpoint roughly speaking and Q1 is growth of 3%. So basically it implies that the growth rate picks up past Q1 and part of that.

So basically it implies that the growth rate picks up past Q1 and part of that, as you mentioned, is the comps get easier in Q2 and Q3 particularly because that's when the ATS and the biopharma pullback really occurred. And so the growth rate is, let's just say 3% in Q1 and then picks up to 7% in the remaining three quarters.

Speaker Change: As you mentioned as the comps get easier in Q2, and Q3, particularly because thats when the Ats and the Biopharma pullback really occurred and so the growth rate is lets just say, 3% in Q1, and then picks up to 7% and the remaining three.

Speaker Change: Quarters with it being the heaviest in Q2 and Q3, because the comps are easier.

with it being the heaviest in Q2 and Q3 because the comps are easier.

Yeah, okay. And in HES, margins kind of move around quite a bit historically, so it's hard to gauge a pattern. But but...

Speaker Change: Yes, okay.

Speaker Change: Sure.

Speaker Change: Yes.

Speaker Change: Margins kind of move around quite a bit historically, so it's hard to gauge a pattern.

Speaker Change:

Is the main driver here for ATF long-term volumes just picking back up or are there cost-caving?

Speaker Change: Is the main driver here for ATF long term volumes, just picking back up or are there cost savings.

potential in that segment to get those up to coaster to a corporate average margin.

Potential in that in that segment.

Speaker Change: To get those up to closer to corporate average margin.

I, you know, let me just maybe give you a broad view of how we're thinking about ATS. And then, you know, maybe Joe or Stevie guys could add more color to it. What I would say is ATS at 24% need the DA.

Speaker Change: Hi.

Let me just maybe give you a broad view of how we're thinking about eight D. S. And then maybe Joe or Steve you guys could add more color to it.

Speaker Change: I would say is ats at 24% EBITDA.

And you compare them to their competitors in the markets that they're playing. It's pretty strong. And one of the reasons is that...

Speaker Change: And you compare them to their competitors in the markets that they play in is pretty strong and one of the reasons is that.

Look, the R&D load here is much higher than some of our other businesses. So, you know, expectation shouldn't be that ATS gets to the total company average numbers. You know, you're always going to find that you have 14% SGNA cost here in the, in our business in APS, when compared to IPS, which is a much smaller number.

Speaker Change: Look the R&D load here is much higher than some of our other businesses. So.

Speaker Change: Expectations shouldn't be that Ats.

Speaker Change: Gets to the total company average numbers.

Speaker Change: You're always going to find that you have 14% SG&A cost here in the.

Speaker Change: Yes.

Speaker Change: Our business in Aps, when compared to Ips, which is a much smaller number so.

So that's the only level setting I want to do is make sure that you're not your expectations for ATS should be in line with ATS not in line with the total company.

Speaker Change: The only level setting I wanted to do is make sure that youre not extra your expectation for <unk> should be in line with the Aps not in line with the total company average.

Yeah, and the comment down the full year, we're quite pleased with what we've done to improve the profitability of that business. And here we are at the low point in the cycle and we're delivering this 24 23 even down margins. And so we're well positioned to participate in the recovery, but that doesn't mean you should expect it to get to Norton's. The other segments levels of profitability.

Speaker Change: Yes, the comment you down the full year, we're quite pleased with what we've done to improve the profitability of that business and here. We are at the low point in the cycle and we are delivering this $24 23.

Speaker Change: EBITDA margins and so we're well positioned to participate in the recovery, but that doesn't mean, you should expect it to get to north since the other.

Speaker Change: The other segments levels of profitability.

Okay. Yeah, I think you're good. Yeah, I was gonna say maybe the only other point I would add there too is we've done a nice job in that segment as well, Andrew, just in terms of our decarimental margins being very favorable to our targets, right? So we're really managing cost appropriately based on volume. So.

Speaker Change: Okay.

Speaker Change: Okay. Thank you guys.

Andrew Buscaglia: And the only other point I would add there too is we've done a nice job in that segment as well Andrew just in terms of our decremental margins being very favorable to our targets right. So we're really managing cost appropriately based on volume so.

Andrew Buscaglia: Okay. Thank.

Speaker Change: Thank you.

And at the time, there appear to be no further questions. I will turn the call back over to Nagga for any closing remarks.

And at this time there appear to be no further questions I will turn the call back over to Naga for any closing remarks.

Naga: Thank you for your time and attention on today's call, we're making great progress on DSM strategy, we are well positioned for profitable growth in fiscal 2024.

Thank you for your time and attention on today's call. We're making great progress on the SM strategy. We're well positioned for profitable growth in fiscal 2024. We remain focused on achieving our long term objective of delivering top tier revenue growth with leading margin-fender returns. I wish all of you a happy...

We remain focused on achieving our long term objective of delivering top tier revenue growth with leading margins and returns.

Naga: I wish all of you a happy holiday season.

Naga: Okay.

This does include the Norton Corporation 4th Quarter and Fiscal Year 2023 Conference Call. We thank you for your participation. You may now disconnect.

Naga: This does conclude the Nordson Corporation fourth quarter and fiscal year 2023 conference call. We thank you for your participation you may now disconnect.

Naga: Yeah.

Naga: Yeah.

Naga:

Naga: [music].

Naga: