Nordson Corporation (NASDAQ:NDSN) recently reported its second quarter earnings and discussed the following topics in its earnings conference call.
Core Business Softness
Kevin Maczka – BB&T Capital Markets: Mike, I guess, first qu...
Nordson Corporation (NASDAQ:NDSN) recently reported its second quarter earnings and discussed the following topics in its earnings conference call.
Core Business Softness
Kevin Maczka – BB&T Capital Markets: Mike, I guess, first question – and I appreciate the color you just gave on the 2012 acquisitions, but if you go back to the two big ones, EDI and Xaloy, I thought originally, we were thinking in terms of fiscal ’13 that we’d see maybe $0.25 or even $0.30 of accretion from those deals and it looks like earnings are pretty flat, as you look at the first three quarters of the year. So, can you just comment a little bit more about, relative to your own internal expectations, how they’re doing or is it just some softness elsewhere against very difficult comps that’s in the core business, that’s kind of driving these flatter earnings?
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Michael F. Hilton – President and CEO: Yeah, I’d say in the short-term, most of what we’re seeing is really some softness in the core business, combined with conscious decisions to step up spending in certain areas. So, I’d say most of what you’re seeing here in the short-term is a little bit of softness in the core business. I’d say, as it relates to the acquisitions, we made some comments, the last quarter we were a bit behind in terms of a couple of specific end markets and I’d say we’re still a little bit behind where we’d like to be, probably a couple of quarters behind where we’d like to be in particular, specific end markets. We are encouraged by new applications, particularly in the dies business that we’re getting some traction on, but we’re probably a couple of quarters behind. In the long run, consumption is still strong even in this little softer short-term environment we’re looking at 6%, 7% plastics growth. So, in the long run when supply and demand are balanced out, we feel pretty good about where those businesses are going and we’re working on new product development opportunities to continue to drive growth beyond that. So, we’re encouraged. I’d say in the short-term though it’s more of the softer macro affecting our core business.
Kevin Maczka – BB&T Capital Markets: Then maybe one for Greg, you mentioned the strong sequential incremental margins in the quarter and again what you’re expecting next quarter. When we get out into Q4 and beyond and we’ve anniversaried these big deals and you’ve got some planned higher spending in Tech. I’m just wondering if you can kind of frame what we ought to be thinking about in terms of incrementals on a year-over-year basis, once things normalize here, and we’ve anniversaried the deals.
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Gregory A. Thaxton – SVP and CFO: Yes. I think to a large extent Kevin some of that depends on what kind of growth we expect to see in those out periods. If you exclude the acquisitions as we have shown historically, if we are driving that top line growth more at a higher rate than what you might expect the inflationary impact on your spending to be, those incremental margins are very strong. The same will be true in these acquired properties as well, if we are looking at sequential growth over what they are delivering, although the leverage is not as strong, there is still – on a full year basis pretty strong performing businesses. So, same concept there for generating incremental revenue, that is going to translate into pretty strong incremental margins. Again some of that – the response is a bit of – it depends what – to a certain extent what that macroeconomic view or outlook is going to be in that out quarter…
Kevin Maczka