Welcome to the Nordson Corporation webcast for Fourth Quarter and FY '15. [Operator Instructions]. I will now turn the call over to your host, Jim Jaye. Please go ahead.

Thank you, Stephanie. Happy Holidays to everybody listening. This is Jim Jaye, Nordson's Director of Investor Relations. I'm here with Mike Hilton, our President and CEO and Greg Thaxton our Senior Vice President and CFO. We would like to welcome you to our conference call today, Friday, December 11, 2015 on Nordson's FY '15 fourth quarter results and our FY '16 first quarter outlook. Our conference call is being broadcast live on our webpage at Nordson.com/investors and will be available there for 14 days. There will be a telephone replay of our conference call available until December 18, 2015 which can be accessed by calling 404-537-3406. You will need to reference ID number 86534278. During this conference call forward-looking statements may be made regarding our future performance based on Nordson's current expectations. 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. After our remarks we will have a question-and-answer session. Now I will turn the call over to Mike Hilton for an overview of our FY '15 fourth quarter results and a bit about our first quarter outlook. Mike, please go ahead.

Thank you, Jim. Good morning, everyone. Thank you for joining Nordson's fourth quarter conference call. Nordson delivered fourth quarter sales that were within our range of guidance. On a year-over-year basis sales were impacted by negative currency translation and a challenging comparison to the 13% organic growth we delivered in the fourth quarter a year ago. During the quarter we did see a very strong organic growth in our Adhesives Dispensing segment as well as solid organic growth in the Industrial Coatings segment. Within Advanced Technology segment organic growth within fluid management product lines was offset by the cyclical effects in select electronics end markets impacting the electronics systems product lines within the segment. On a full-year basis we delivered organic volume growth of more than 3%. This is solid performance given the very weak economic environment that we've been operating in throughout the year. Operating margin and earnings per share in the quarter were impacted by unfavorable currency comparisons to the prior year and one-time charges related to short term purchase accounting for acquired inventory and restructuring charges for previously announced margin improvement initiatives. Excluding one-time charges of negative currency impact, operating margin in the quarter was about 21%, a solid level given flat organic volume and the quarter's product mix. During the quarter we continued to execute on all phases of our capital deployment strategy. This included closing on the WAFO Production and MatriX Technology acquisitions and distributing $210 million to shareholders through share repurchases and dividends. Our first quarter 2016 forecast reflects our current backlog, current 12-week order rates and typical seasonality within the business. As we begin 2016, we will continue to target organic growth that exceeds global GDP driven by the strength of our end markets and the initiatives we have in place to drive top line. Our current assumption, however, is that global GDP will continue to be challenging and likely not much different than 2015. We remain committed to driving our margin enhancement initiative discussed in our last earnings call and we're focused on delivering the 200 basis point improvement in normalized operating margin by 2017. I will speak more about our outlook and current business trends in a few moments but first I'll turn the call over to Greg Thaxton, our Chief Financial Officer, who will provide more detailed commentary on our current results and our first quarter guidance. Greg?

Thank you, and good morning to everyone. I'll first provide some comments on our fourth quarter and full-year results before moving on to our outlook for the first quarter of FY '16. Sales in the fourth quarter were $446 million, a 5% decrease from the prior year's fourth quarter. This change in sales included organic volume that was flat, a 2% increase related to the first-year effect of acquisitions and a 7% decrease related to the unfavorable effects of currency translation. Looking at sales performance for the quarter by segment, Adhesive Dispensing segment sales volume increased 8% as compared to the prior year fourth quarter, inclusive of 7% organic growth and 1% growth from the first-year effect of the WAFO acquisition. The volume growth was offset by a 10% decrease related to negative currency translation. The 7% organic growth is an outstanding rebel in the current macroeconomic environment and reflects the resilience of the consumer non-durable end markets served by this segment. Organic growth was strong in nonwoven, rigid packaging, injection molding and pelletizing product lines and in most geographies. Sales volume in the Advanced Technology segment decreased 7% from the prior-year fourth quarter, inclusive of an 11% decrease in organic volume offset by a 4% increase related to the first-year effect of the Liquidyn and MatriX acquisitions. Sales were also negatively impacted by approximately 3% related to unfavorable currency translation. I'll remind you that current results in this segment are challenged in comparison to the prior-year fourth quarter where we delivered organic growth of 21%. In the current quarter organic growth in fluid management product lines was solid, led by strong demand from medical end markets. This growth was offset by softness in automated dispensing and test and inspection product lines serving select electronics end markets. As we have seen over time, these electronic end markets provide excellent organic growth opportunities for Nordson, though they do tend to be more cyclical in nature. Geographically, positive organic growth in the U.S. and Europe in this segment was offset by slower demand in other regions. Organic sales volume in the Industrial Coatings segment increased 2% compared to the fourth quarter a year ago, offset by a 6% decrease related to unfavorable currency translation. This is solid organic growth given the macroeconomic backdrop and comes in comparison to a very robust fourth quarter a year ago where we generated organic growth of 16%. The current quarter's growth was driven by demand for our powder, liquid and cold material dispensing product lines in durable goods end markets. Solid demand in the Americas, Asia Pacific and Europe in this segment was offset by softness in other regions. Gross margin for the total Company in the fourth quarter was 53% inclusive of a negative currency impact of approximately 1 percentage point as compared to the prior year. As part of our margin enhancement initiative discussed during our third quarter earnings call, we incurred one-time costs during the fourth quarter of approximately $9.1 million, mostly related to severance costs as we further integrate the polymer product lines and look to enhance margin performance across all segments. We also incurred approximately $1.3 million of short term purchase accounting charges in the quarter related to acquired inventory. Operating profit in the quarter including these one-time charges was $76 million and operating margin was 17%. Normalized operating margin to exclude these one-time charges was 19%. Excluding both the one-time charges and the estimated negative currency translation effect as compared to the prior year, operating margin was 21%. Looking at operating performance on a segment basis, Adhesive Dispensing delivered operating margin of 21% in the fourth quarter, inclusive of approximately $8 million related to restructuring charges and $100,000 related to short term purchase accounting charges for acquired inventory. Normalized operating margin within this segment to exclude these one-time charges was 24%. Adhesive segment operating margin was 27% in the quarter excluding these one-time items and the estimated effect of currency translation as compared to the prior year. Within the Advanced Technology segment, reported operating margin was 17% in the fourth quarter or 18% on a normalized basis, excluding $1.2 million of short term purchase accounting adjustments for acquired inventory and $700,000 of one-time restructuring charges related to margin enhancement initiatives. Segment operating margin was also impacted by negative volume leverage and product mix within the electronics systems product lines. The estimated effects of currency as compared to the prior year were negligible within this segment given the percentage of sales that are U.S. dollar denominated. The Industrial Coatings segment delivered operating margin of 19% in the fourth quarter or 20% on a normalized basis, excluding approximately $400,000 of one-time charges for restructuring related to our margin enhancement initiative. Industrial Coatings segment operating margin was 22% in the quarter excluding these one-time items and the estimated effects of negative currency translation as compared to the prior year. This is continued outstanding performance for this segment and reflects our ongoing efforts to drive profitability. Net income for the quarter was $50 million and GAAP diluted earnings per share were $0.84 or $0.95 excluding one-time items. We have included an earnings per share reconciliation schedule in our press release to reconcile between GAAP earnings and normalized earnings per share to exclude certain one-time items. Unfavorable currency translation compared to the prior year impacted fourth quarter earnings per share by approximately $0.15. The fourth quarter's EBITDA was $93 million and cash flow from operations was also $93 million. Free cash flow before dividends was $80 million, reflecting strong cash conversion of 161% of net income as we have trended back to our typical working capital metrics. We have included a table with our press release reconciling net income to free cash flow before dividends. During the quarter we continued our approach of returning capital to shareholders by distributing approximately $14 million in dividends and investing $196 million for the repurchase of 2.9 million shares. As of the end of our fourth quarter we had approximately $151 million available under our current repurchase authorization. During the quarter we also continued to execute on our acquisition strategy with two previously announced purchases. WAFO is a small addition to our polymer processing product line within the Adhesive Dispensing segment and MatriX Technologies is an ideal extension of our test and inspection product line in the Advanced Technology segment. Both of these acquisitions are performing as expected and we welcome the WAFO and MatriX teams to the Nordson family. From a balance sheet perspective, we remain liquid with net debt to EBITDA at 2.8 times trailing 12-month EBITDA as of the end of the fourth quarter. Net debt levels reflect acquisitions and opportunistic investments for repurchasing shares. I'll now provide a few comments on our full-year results. Sales for FY '15 were $1.69 billion. As Mike previously mentioned organic growth for the year was more than 3% compared to the prior year. This is solid growth given the low growth macroeconomic environment throughout 2015 and against a very challenging comparison where organic growth in 2014 was in excess of 6%. Unfavorable currency translation as compared to the prior year impacted 2015 sales by $115 million or negative 7%. Full-year gross margin as reported was 54%. Excluding the effects of negative currency translation, gross margin for the year was approximately 55%. Full-year operating profit in FY '15 was $318 million and reported operating margin was 19%. Excluding one-time items and the approximate effects of unfavorable currency translation compared to the prior year, total Company operating margin was 21% for the year. Net income for the full year was $211 million and GAAP diluted earnings per share were $3.45 inclusive of a $0.12 per share charge related to one-time items. Unfavorable currency translation impacted full-year earnings per share by approximately $0.54 or 14%. Full-year EBITDA was $384 million and free cash before dividends was $200 million or 95% of net income, again reflective of strong cash conversion. Excluding the investment in our new fluid management facility in Colorado, adjusted cash conversion was 104%. Dividends paid in FY '15 were $55 million and shares repurchased under the repurchase program totaled approximately 5.4 million or 8.6% of shares outstanding at the end of FY '14, totaling $382 million. I'll now move on to comments regarding our outlook for the first quarter of FY '16. As we typically do, we provided our most recent order data both on a segment and geographic basis with our press release. These orders are for the latest 12 weeks as compared to the same 12 weeks of the prior year on a currency-neutral basis and with acquisitions included in both years. For the 12 weeks ending December 6, 2015 order rates are down 5% as compared to the same 12 weeks in the prior year. We're facing challenging comparisons where total Company order rates were up 10% at this time last year. Within the Adhesive Dispensing segment, the latest 12-week orders were up 7% as compared to the same period in the prior year. Orders were up in most product lines and were led by nonwovens, melt delivery, extrusion dies, general product assembly and rigid packaging. Orders increased in all geographies except Japan. In the Advanced Technology segment order rates for the latest 12 weeks are down 16% against the prior year. Strength in medical fluid management components was offset by cyclical softness in select electronics end markets. Strength in Europe and Japan was offset by other regions. Within the Industrial Coatings segment the latest 12 week order rates are down 14%. Growth in liquid and container product lines was offset by softness in other product lines. Strength in Asia Pacific, Japan and the Americas was offset by softness in the U.S. and Europe. Backlog at October 31, 2015 was approximately $229 million, an increase of 8% compared to the prior year and inclusive of 5% organic growth and 3% growth due to acquisitions. Backlog amounts are calculated at October 31, 2015 exchange rates. Let me now turn to the outlook for the first quarter of FY '16. We're forecasting sales to be in the range of down 1% to down 5% as compared to the first quarter a year ago. This range is inclusive of organic volumes down 3% to up 1%, 3% growth from the first-year effective acquisitions and currency headwind of 5% based on current exchange rates. And the midpoint of our sales forecast we expect first quarter gross margin to be about 54% and operating margin to be approximately 13%. This outlook includes short term purchase accounting charges of $1.6 million and estimated restructuring charges of $1.3 million. Excluding these one-time charges, normalized operating margin is estimated to be 14%. Unfavorable currency rates as compared to the prior year are estimated to impact gross margin and operating margin by about 1 percentage point. We're estimating first quarter interest expense of about $5 million and an effective tax rate of approximately 30.5%, resulting in first quarter forecasted GAAP diluted earnings per share in the range of $0.47 to $0.57 per share inclusive of a $0.03 per share charge related to non-recurring items. In addition to this first quarter outlook, the following FY '16 full-year data points may be helpful for modeling purposes. For our effective tax rate we're forecasting the full-year rate to be about 30.5% based on current tax law. For capital spending in 2016, we're forecasting normal maintenance capital spending to be approximately $50 million. In addition, we do expect to incur additional one-time costs associated with our margin enhancement initiative, primarily associated with integration activities within the adhesive segment. Although difficult to estimate at this time we do not expect the one-time costs in FY '16 to exceed those incurred in FY '15. In summary, we delivered fourth quarter revenue within our range of guidance, resulting in full-year organic growth of more than 3%. Organic growth was solid in the majority of the business with the exception of softness in more cyclical electronics end markets, supported by portions of the Advanced Technology segment. We continued to execute on our balanced capital deployment strategy during the quarter and also continued taking actions which will lead to normalized margin improvement over the next two years. With that, I will turn the call back over to you, Mike.

Thank you, Greg. Before taking your questions I'd like to provide some additional comments on our recent performance and outlook. First I want to thank our global team for their hard work in 2015. Our employees delivered a solid year in a challenging environment. Negative currency translation was a significant headwind through 2015 and masked what otherwise would have been a record year on several measures. I'm pleased with the more than 3% organic growth we delivered for the year which reflects the technology, application expertise and support we bring to our customers in the diverse end markets we serve. I'm also pleased with the progress we're making on the initiatives that we expect will improve normalized operating margins over the next two years. As we previously reported, we began these actions in our third quarter in our fluid management product lines within Advanced Technology segment. In the fourth quarter the Adhesive Dispensing segment began consolidation of four facilities supporting our extrusion die product line into a single center of excellence and we continued rationalization of product lines based on profitability. Additional actions related to workforce optimization and efficiency initiatives are also underway in all three segments. We expect these actions to improve normalized operating margins with some of the benefits to be realized during 2016. We're providing additional detail on these activities in the coming quarters as they unfold. Our first quarter 2016 forecast reflects our backlog, current 12-week order rates, typical seasonality and challenging comparisons to the same period a year ago. As we begin 2016, the global economy remains weak. However, we continue to target organic growth in 2016 that exceeds global GDP, given our ongoing initiatives around new products, new applications, penetration of emerging markets and recapitalization of our installed base. The diverse set of end markets we serve are all expected to grow over the long term and we're well-positioned to meet customer needs with direct sales and service everywhere in the world. Although we cannot actively predict movement in the exchange rates, if exchange rates remain where they are today, the impact of currency effects on both sales and earnings would be minor in future quarters. The fundamentals of our business are intact, our global team is committed to providing a best-in-class experience to our customers and delivering solid long term returns to our shareholders. We also remain focused on driving continuous improvement throughout the organization through the tools and practices in our Nordson business system. At this time let me turn over the call to you for questions.

[Operator Instructions]. Our first question comes from [Patrick Wu] [ph] with SunTrust Robinson. Your line is open.

In regards to the Advanced Tech portion of the business, what is driving the decline in margin? Is it a simple function of low volume or is it mix? Also, in terms of the acquisitions recently, aside from accounting items are these acquisitions additive to segment margins or are they subtractive, if you will?

You were breaking up just a hair there but let me try and answer the first question. If you look at margins for the year in the Advanced Tech area, your comparison, they're off about 5 percentage points. About 1 point of that relates to currency, a couple points relate to really just lower organic volume relative to last year and an increase in the spending and then about a couple points relate to mix where we had actually a significant decline in our automated dispense area that was offset by our surface treatment products, both of which have good margins but the surface treatment product margins have more bought-in items, less high value-added mix as part of it and so they have a considerably different margin. If you think about it, currency, the margin mix and then some lower organic growth in the segment relative to typical spending increases that we would see, nothing fundamental there in terms of pricing or anything else. As it relates to the acquisitions, the acquisitions that we added were tuck-in acquisitions, one on the polymer side. And then in the Advanced Tech it was really a automated x-ray product that has similar margins to the margins we see in the test and inspection business. So, it really comes down to currency and mix, largely and then some lower volume. Nothing fundamental.

And obviously the lead times for the segment are generally pretty short. When you guys are talking to customers in Advanced Tech, most specifically, what are you guys hearing in terms of CapEx looking out into 2016 and beyond? Has it been down materially or has it just really been down marginally? And how does that compare to your expectations going into next year?

Let me make a couple of comments. First, if you look at the fluid management part of our business, we continue to see strength in the medical business going forward. We see solid gains of strength in what I call general industry applications in our EFD type products. I would say year on year we saw some softness, particularly in the wearables space, come the end of the year. We think that's more timing than anything else. In the automated systems business, this past year for the wireless business, was not one in terms of a significant degree of change in terms of the product offerings and there are some changes in end customer market share, particularly in China. The one bright spot was really in the auto electronics segment. But when we talk to customers right now -- and this is the time of the year where we're doing a lot of project development work with key customers -- there are a lot of different new product and application activities that we're working on and we're hopeful that they are going to translate into significant growth this year. Obviously that will play out in the second and third quarters as these prospects and development projects turn into orders. But we're hopeful in that regard that we will see an uptick, particularly on the dispense side this year. We're getting some traction now, as well, with the Chinese manufactures that are on the low-end tiered product scale of the automated dispense systems.

One more quick one before I hop back in the queue. What was the mix from parts and consumable in Adhesive Dispensing for the quarter?

Can you repeat your question? Your connection is not so good so I didn't hear that at all.

What was the mix from parts and consumables in Adhesive Dispensing for the quarter?

Total Company was about 42% which trends out to be a pretty consistent percentage for all of the quarters and full year. It's very near that range. And if you look at the various segments, they all trend very near that total Company. I'd say in the quarter we probably had slightly higher than normal within Advanced Tech given this volume shortfall in system dispensing. But adhesives as well as the other segments tend to fall very near that Total Company of 42%.

Our next question comes from Allison Poliniak with Wells Fargo. Your line is open.

Just touching on that first question a little differently, I'm trying to be an optimist here, do you get a sense that people are just -- 2015 was a bad year, let's punt these capital decisions into 2016 where maybe you're getting a sense just from talking to your customers that we could see a little acceleration here as people have delayed those decisions into 2016? Any thoughts?

Allison, are you talking about across the portfolio or specific to the electronics part of the discussion?

If you want to touch on electronics, but I guess just across the portfolio. I understand that 2015 in this quarter across the industrials was fairly difficult just given some of these capital decisions getting delayed. Just trying to get a sense if maybe they are getting delayed but you're still talking and maybe we feel --?

So, maybe just talk a little bit across the businesses on prospects and what we're hearing from customers. If you look at the Adhesives segment, in our traditional Adhesives segment, largely driven by the consumer non-durable space, activity has been strong even through Q4 and as we look at it from an order perspective now, it's very solid. In the polymer product lines we're seeing improvements from an order perspective, starting to see some orders come in on the dye business. A lot of that, fluid coating, some specialty film dye, but the solid melt stream components. And our pelletizing was strong in the quarter but that tends to be big project related. So, I'd say encouraging activity there. When we look at the Industrial Coatings business it's been on a strong uptick the last three years. We've got some tough comps in this particular quarter but that feels a lot to us like just timing of larger products, particularly on the auto side. If you look at what remains strong, the auto platform work remains strong and we have some significant project activity there that we expect to come in in the future. The general powder coating environment has been pretty solid, so a lot of prospects. Even when you look across places like Europe, we're seeing solid prospect activity there. And then if you go to the Advanced Tech space, as I said, medical activity looks strong. The general fluid management activity talking to customers looked good from a prospect standpoint. We actually are encouraged that this could be a more significant year from a change perspective in the wireless area, including the wearable piece. And we've gotten some good traction with the local Chinese in terms of new products with our tiered product offering that came from the DIMA acquisition we made in China. So, I'd say we're encouraged on the prospect side of this. I think the areas that appear to be soft geographically, Japan is an area that's soft and we're clearly seeing some investment being pushed off there. China is more of a mixed bag but the areas that are strong, like auto, continued to be strong. And then on the electronics side, obviously that's where a large bit of the uptick would come this year. So, I would say the prospect discussions are good. We need to translate these new developments into orders and that will play out over the next couple of quarters.

And then just turning to leverage, 2.8 times, can you just maybe talk about your comfort with that level in this environment, what range you'd be comfortable in here from a leverage perspective?

Yes, Allison, this is Greg. You support that with the strong cash generation that this business generates. We're certainly not uncomfortable in this range where we're under our current credit facilities, we have about $200 million available. We certainly have much more than that from a capacity under our covenants perspective. So, we're comfortable in this range and think we still have some dry powder for other strategic initiatives. So, it's not a level that we're not comfortable with in this environment.

I would just make two comments. Assuming we see GDP in that 2%, low 2% range, we would expect to outgrow that, number one. And, number two, we're on track with the initiatives we have in place to improve our margins which we're seeing some charges this year but will position us well to generate even more cash going forward.

Okay. And then just one last thing, just touching on that outgrowth relative to GDP, are you including acquisitions in that thought or is that just purely organic basis?

No, just organic. We should be able to do that. We're not looking at numbers, we're looking at 3% or 4%, if you look at 2% GDP not 7% or 8%. But we should be able to grow that. And, quite frankly, it's largely the focus around our initiatives. We have a number of specific growth initiatives that are focused on new products, new applications, larger penetration in emerging markets, particularly globalizing some of the acquisitions that we've acquired over the last couple of years. So, we see good plans in place that we can execute on to help mitigate a little softer economic environment.

Our next question comes from Matt McConnell with RBC Capital Markets. Your line is open.

Just to follow up on the prior question, because that 2.8 leverage is a bit higher than you've carried historically. The decision to go there, was that you saw something opportunistic and you wanted to bump up the buybacks? Or any change in philosophy on the leverage that you're comfortable with? And then maybe you could also talk about M&A capacity and what the M&A pipeline looks like right now.

Yes, this is Greg. I'll handle the first part of that question. Clearly with some of the data we've provided, we did believe it was an opportunity from a share repurchase perspective and that's what drove that activity. I wouldn't say at a high level it's a change in our perspective going forward. It was, we felt, an opportunistic time.

And then just a comment with regard to M&A, we did say this year that our M&A activity would likely be focused on drop-ins and plug-ins. And if you look at the three things we did -- the Liquidyn acquisition was a product line plug-in for our EFD business. The WAFO addition was a make-buy decision given its European capability that we've since gone in and been able to significantly expand the furnace capability there which will help us in our plastics area. And then the MatriX Technology was a way to upgrade our capability from an automated platform and integrate it with our advanced x-ray technology. So, all good plug-ins. I tell you we see more of the same in terms of that smaller drop-in activity. The one area where there are some larger potential opportunities are in the medical device space that's been growing strong double digits for us over the last three years with the acquisitions that we did make.

And if you saw something, one of those somewhat larger deals on the medical device side, you feel you have the capacity to go after acquisitions in that space right now with the current balance sheet?

Yes, we think we could do it for the right property.

Our next question comes from John Franzreb with Sidoti. Your line is open.

Just a little bit about the margin enhancement program. Could you touch on what you think the normalized operating margin for the Firm is and what the 200 basis points would add to it? Would you expect the operating margin to end that at the end of the program, firstly? And, secondly, in first quarter guidance, how much margin enhancement do you think you've realized from the program?

Yes, so just a couple of comments. I'd say we're right on track with our plans in terms of the actions we're taking for the margin enhancements. In the third quarter, our margin enhancements were largely the result of exiting an EFD facility in Europe and consolidating our Minnesota manufacturing into Colorado and Mexico. Those were part of the Advanced Tech segments. A lot of the activity here in this quarter was around improving effectiveness and efficiency across segments, as well as I mentioned we're going to consolidate three U.S. facilities in our dye business to one. We're going to exit one in Belgium and we have some follow on activities to consolidate two facilities in Germany and some other thoughts that we're working on. So, that will play out throughout the year. So, we're right on track in terms of the actions that we're taking according to plan to get us to deliver that 200 basis points in 2017. And on a normalized basis we'll see a portion of that this year. It will be masked by the costs associated with getting there that will show up as a one-time recurring costs but we're right on track there. As far as the overall operating margin, we would see some normalized improvement. It may not be a percent this year but on our way towards a percent and right on track for the 2% next year in a volume-neutral basis. If our volume goes up we should see some leverage on top of that.

Just on the comment about and do we think we can continue to expand those beyond once we get to that 200. And I'd say yes. We have our continuous improvement wrapped into our Nordson business system that allows us to continue to look to enhance performance. Again, even outside of that volume leverage, I wouldn't say that we stop after these initiatives. We think we can continue to widen those margins.

Okay, great. But what is the baseline corporate operating margin you're using, because there's been a lot of noise in acquisitions and currency? So, what is the baseline number? It's been very high in the past couple of years, so I just want to get a sense of what the starting point is.

This year's normalized number, as we look at it for the Company, is around 21%. And that's with what's been going on underlying in the Advanced Tech segment.

So, it was a 15% number if we excluded the one-time. We're saying from this 15% number on a go-forward basis over the next year and then in 2017 we expect to widen from there.

On a volume-neutral basis. So, then the additional volume on top of that should provide some additional leverage.

Our next question comes from Kevin Maczka with BB&T Capital markets. Your line is open.

Just to be clear on the margin, in Q1 you're expecting to be down about 300 basis points year over year, but you still think with the cost actions you have in place normalized, when you exclude the one-time cost associated with achieving those and currency-neutral, you still think there will be 100 or so basis points of margin lift? That's a reasonable expectation for full-year 2016?

I think if we split it into two phases, if you look at the structural program I'd say we're right on track with what we're looking to do and exclude one-time we'll see improvement. Whether it's a full 100% points there, not clear, but directionally it'll be moving towards that. And then what we're saying from a volume standpoint, if the year plays out as we expect and the GDP is a couple of percent or so and we outgrow that, we should see some additional volume leverage on that.

And, Kevin, the point there, too, is, yes, we're off here on the first quarter but we don't get too concerned about one particular quarter. And this happens to be a quarter that for us, as you know, is a softer quarter. It's a softer quarter for many of our customers in their capital cycle. We've got the holidays, et cetera. As you suggest, we're starting off in a bit of a hole here in the first quarter, but as we look at the project list, as we look at activity within the businesses, we're still targeting that on a full-year basis we'll hit our sales growth targets.

On tech, if I could shift over to that one, you mentioned a couple times about the cyclical downturn in some of the electronics markets you saw this quarter. And we know those cycles don't always coincide with macro cycles. But if you're looking for maybe a better year this year on the wireless side, with changeovers, with the wearable that you mentioned, any sense, any view you have on how that cycle bottoms? And do we start to see, will we still be talking about a cyclical downturn the next couple quarters, is the question there?

If you look at a typical electronics seasonal pattern, first quarter is always soft. That's the quarter where, as I mentioned, we're typically working with customers on development projects that they then would enact in the second and third quarter and the typical commitment and ramp up is generally in that second and third quarter. If you look at last year, we had a particularly strong fourth quarter and a particularly strong first quarter and a lot of that had to do with everybody pushing for wearable opportunities to go out and test the new market segment there. We should expect to see this play out in the second and third quarter. If you look at our typical seasonal data for this business, it declines pretty sharply from the end of the third quarter in through, say, the beginning of January and the peak periods tend to be in the second and third quarter, peaking somewhere in the third quarter typically. That's what we would expect based on the conversations we have now. Now, these new developments which are new product and applications related, need to translate into orders. But we'd expect to see the pickup in the second quarter and a peak in the third quarter, would be typical.

Okay. And then just finally from me, we're likely looking at another sluggish year overall in terms of the macro picture. You always have this goal to outpace global GDP. And some of the ways you get there -- new products, emerging markets, installed base -- can you point to something there that would be many needle moving, if you will, that can give some comfort that this could be a year where, in fact, we do exceed global GDP even in a soft market?

I would say a couple things. If you look at the last two years on an organic basis we've exceeded the global GDP. 2014 was a little more robust at about 6%. This year is a little over 3% with a tougher electronics market. I would say in some of our core adhesives area, both on the packaging side and the nonwoven side, in particular, we would see recap as a driver this year. We had good traction last year and that's continuing into this year. So, in other words, looking at upgrades and improvements and recapitalization of some of our installed base there and we see a lot of customer activity on that front. We're working on some new applications in the product assembly area that relates to some furniture applications and flooring applications that are starting to take off with improvement in the construction industry. I'd say in the polymer area, we're seeing good growth in the fluid coating part of the dies business and some uptick in some specialty dies, getting some traction on our melt stream and some good projects on the polymer pelletizing side of things, particularly in Asia. And that's related to our spherical underwater pelletizing capability. When you look at Industrial Coatings, we think this year is going to be another solid year in the auto platform and we've been pretty successful there. We've got continued upgrades to technology on the powder side and some improvement in the general metal contracting area that we see some traction on. And then if we look at the medical space, there's just a whole slew of new products that we've introduced. We're getting good traction on new products from the Avalon acquisition last year, the value plastics components. We've broadened the product line in a number of ways and we're getting good traction on that. And also we're starting to see some globalization of those businesses. In our cold materials space we've got some new applications going into aerospace. These are not home runs. These are all singles. But with new applications going into the aerospace area they are starting to get some traction. And then I would say our tiering approach is helping us to get some traction with the Chinese wireless companies. We're in with all of them and starting to get some reasonable orders in that area. Again, that's one where we're not quite sure what the pace of conversion will be from manual to automated but the tiering approach is really helping meet their needs there. So, so I would say this year has been a good year in terms of introducing new products. Next year is the area we want to commercialize and take advantage of that and we think we're in pretty good position. A lot of our expectation is these initiatives over and above the float of GDP is whatever is going to drive our growth for next year.

Our next question comes from Walter Liptak with Seaport Global. Your line is open.

I wanted to just dig into the first quarter margin guidance, the 14% adjusted, again and just get an understanding of where you think the Advanced Tech margin might be, like what's the assumption in Advanced Tech. And I'm wondering if it could be single digit. As I look back in the model it looks like in 2014 you started out like that, too, where you had a really weak first quarter margin and then it improved throughout the rest of the year. And I wonder if that's the kind of year you're thinking about again in 2016?

Certainly if you look at where we're at from an order perspective the whole adhesive has been the one that's been most solid right now. We've been a little softer on the coatings, but that's off a strong comparison and a little bit softer on the Advanced Tech. Those margins in the first quarter typically go down anyway and they would on a year-on-year basis be off just given the volume leverage. So, it's that mix that we're looking at.

Okay. Is your assumption, though, to be single digit in advanced tech?

Walt, this is Greg. We typically in our guidance don't go to the segment and we certainly don't take it down. We just don't work it down to the product line level. So, what I'd suggest is similar to what Mike was saying. We look at where the order rates are. Certainly volume is going to have an impact on what those reported margins will be.

But we don't see it necessarily as an atypical quarter for us just relative to last year a softer quarter in those areas.

Okay. And if in the second and third quarters some of these new products, the wearables, etcetera, come through, those would impact the automated assembly which tends to be higher margin -- is that correct?

Most of the wireless activity falls into the automated assembly space. There are some things that we sell for manual and modest tabletop automation, too, that go into some customers. If you recall, we have a range of customers. The ones that are just stepping out of doing things manually might go to simple tabletop automation which would fall into our EFD segment. But most of it typically falls into the automated segment particularly now that we have the first-level tiered automated product to offer, that we would expect to see growth across that range.

And both of those dispensing are good for us. Those tend to be our higher-margin products. So, if we see that demand that plays out within the business that's good from a margin perspective.

And just as a last one, the variance from your guidance, what changed during the quarter that you weren't expecting, if you had higher guidance for EPS heading in? Was it the mix in Advance Tech?

Yes, Walt, that is the gap in guidance. When you look at where the revenue shook out it's the mix issue and the impact on margins within Advanced Tech and specifically in the electronic systems portion of the product line.

Our next question comes from Joe Radigan with KeyBanc. Your line is open.

A couple questions on the polymer businesses. On the ejection molding side, some of the equipment OEMs, I think have cautioned that industry growth could slow there next year following a couple pretty robust years. How are you thinking about the growth in that business? Would you expect to be in line with industry trends there or is there another share gain catalyst or something else there?

I think our expectation is continued growth in that segment. A lot of it will be, I think, driven by the fact that we're improving our capability in that area in Asia and, to some extent, in Europe and the fact that the WAFO acquisition we made will help us from a capability standpoint in Europe for those component products. And it largely will impact mostly our screw and barrel business. And we do have some new applications that we're working on, particularly for twin barrels and some coating applications. And then we're seeing some good growth getting beyond the injection molding piece, both in our melt stream applications with new products and in our fluid coating business on the die side. And we're starting to see for the first time some uptick in general orders in the die business. I think certainly the things that have been driving the injection molding have been things like auto, medical and, to a lesser extent, some of the consumer product conversions going on.

Okay. And then maybe just to follow up on your comment on the die business, Mike, are you seeing industry capacity there finally normalize to where there could be some expansion? Or is this more specialized type one-off items on the higher-end buy X stuff?

I would say it's more special items at the moment, although we're starting to see some requests and activities on the buy X side. And we like to see a little bit more traction on that to conclude that we finally turned the corner there. But on some specialty applications we're seeing some uptick. So, I'd say no, not yet. We would like to get a little bit more traction there but maybe some early indications that things are improving.

Okay. And then maybe lastly, more broadly, in adhesives, is there a risk at all that low oil prices impacts the customer decision to upgrade, meaning, maybe with the rationalization, that lower feedstock costs make the value proposition of more efficient equipment less compelling? Is that a concern at all?

We're not really seeing that so much. If you think about the drivers for upgrading, certainly that's one of the drivers. But speed is another driver, so getting effective capacity out that reduces unit costs. And then we're seeing feature function changes. For example, in the nonwoven space, our customers are moving towards more clothing-like diapers and adult incontinence products which drive change there and require some recapitalization. So, I would say from an efficiency and therefore cost of the adhesives products, it might be a modestly lower driver, but for some of the other things we're still seeing interest in recapitalization.

Our next question comes from Matt Summerville with Alembic Global Advisors. Your line is open.

Just two quick things, first Greg, do you have an idea of the magnitude of FX headwind that you'd be facing for the full year if rates stay where they're at today? And even if you're able to do it, on a more granular basis by quarter? I know you indicated Q1 is going to be a head wind but how do you think the year progresses from an FX standpoint?

Matt, if you look at where the euro, yen and the pound, the three bigger currencies for us, once we get through the first quarter here, we pretty much lap the currency effect where, for each of those quarters two, three and four, where rates are today are pretty much right in line with where they were prior year in those quarters. So, we'll have this currency impact this quarter. If rates stay where they are it will be minimal in the future quarters.

Got it. And then maybe just one for Mike, can you talk about the magnitude of order weakness you saw in the U.S., what the drivers were there? Did it surprise you? I think the number was down 12, I don't have it in front of me. But just what's driving the softness you're seeing in the U.S.? And should that be a broader concern? If you look at the U.S., a big driver of the short term has been in our Industrial Coatings business. And that's really linked to year-over-year timing of bigger projects, particularly auto platform projects. As we look at it and the prospects out there, there are still a lot of prospects for new auto platforms we're working on now and we think it's more of a timing issue. And, similarly, from a powder coating business perspective, there is some larger projects in the first quarter last year that we see perhaps playing out later in the year this year. And I think that's the most significant piece that we see there, but when we talk to the customers, look at the prospect list and bidding activity, I'd say at the moment we're encouraged by what we see there in those areas.

And, Matt, just to add to that, particularly with those two product lines, they tend to be larger dollars, so timing can really have an impact. Whatever your cutoff point is for your comparison, the timing of those orders can have a big swing, create a big swing.

Our final question comes from Chris Glynn with Oppenheimer. Your line is open.

I did get bumped off accidentally at the beginning of the Q&A so sorry if I repeat some covered ground. Just looking at the ATS margin progression through the year as opposed to year over year, I think the mix in FX, they were tough throughout. So, if we look at a lower adjusted margin in the first quarter compared to the first quarter and the second quarter margins down despite seasonally higher volumes and again assuming mix and FX were a little challenging throughout, what's that tail off here at fiscal year end?

Within the Advanced Tech segment the tail off is largely mix.

So, to be clear, our dispense business was down pretty significantly year over year and our surface treatment business was up. That's the mix effect we're talking about.

We were commenting earlier that where we have application demand that drives the need for automated dispensing, we generate higher margins there than we do in other portions of that product line. Now, the positive side is we offset that dispensing revenue with some new application revenue within that Advanced Tech space. It just comes at lower gross margins than our dispense platform does.

Okay. So, the mix issue is actually much more acute in the fourth quarter than it was in some of the prior quarters of FY '15 that also had some mix challenges?

Right. And it's really a function of when the products were delivered.

Okay. These things created a step function down. Does that set the table for a step function up rather than a normal incremental margin analysis if mix normalizes or should we think more of this as a reset in the ATS margins?

No, I wouldn't say it's a reset. If you look at the year-on-year comparison we talked about earlier, currency was about a 1% impact. The mix was a couple percent or so impact. Then volume relative to spend was very modest in total, so we lost some incremental volume leverage there. In all of our businesses, we've talked about actions we're taking to improve effectiveness and efficiency, including that segment. So, we think as we get back to a more normal mix and without further currency impacts we should bump back up in that business. So, no, there's not a permanent change, there's not a pricing change, there's not a competitive change, but there is pretty substantial mix. And as Greg was saying, if you look at the composition of what we sell in, say, dispense versus surface treatment, we buy much less in that product line, so we're selling essentially only all of the high value-added product and that's why we've got a difference.

Right, that makes sense. A little bit of a similar framework for ADS -- the margin on adjusted basis, 24% in the quarter, a step back from prior couple quarters despite seasonally higher volumes and better organic growth. Is this another instance where we just say mix is this one quarter and something else in another quarter?

Yes, Chris, as you mentioned, normalized would have been 24%. And currency also was a big impact here, that if you excluded currency we would have been 27%. So, it would have actually been slightly accretive to where we were prior year.

The biggest segment was the currency impact.

Right, but it wasn't any worse than the prior couple quarters, was it?

Slightly larger in the fourth quarter given the volume.

Okay, that's all I have. Thanks a lot.

That does conclude the Q&A session. I will now turn the call back over to Jim Jaye for closing remarks.

Thank you, everybody, for attending the call. I am around today. I do have some calls scheduled. I'm also around next week for follow-ups, anybody listening. Thank you again and appreciate your interest and attention in Nordson. Thank you.

Thank you.

Thank you, ladies and gentlemen. That does conclude today's conference. You may all disconnect and everyone have a great day.