Good day, ladies and gentlemen. And welcome to the Nordson Corporation's Webcast for the Third Quarter Fiscal Year 2017. At this time, all participants are in a listen-only mode. Later, we’ll conduct a question-and-answer session, and instructions will be given at that time. [Operator Instructions] As a reminder, today's conference is being recorded. I would now like to turn the call over to Mr. Jim Jaye, Senior Director of Investor Relations. Please go ahead, sir.

Thank you and good morning. I’m here with Mike Hilton, our President and CEO; and Greg Thaxton, Senior Vice President and CFO. We welcome you to our conference call today, Tuesday, August 22, 2017, to report Nordson’s FY 2017 third quarter results and our FY 2017 fourth 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 September 5, 2017, which can be accessed by dialing 404-537-3406. You will need to reference ID number 62150013. During this conference call, forward-looking statements may be made regarding our future performance based on Nordson’s current expectation. 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 on the quarter, we’ll be happy to take your questions. And with that, I’ll turn the call over to Mike.

Thank you, Jim. Good morning, everyone. I am pleased to report that Nordson delivered record results for revenue, operating profit, diluted EPS and EBITDA in the third quarter of fiscal 2017. These results speak of the strong underlying performance across our base business, our focus on continuous improvement. I'll provide some highlights on our financial performance and let Greg provide more detail. We delivered 11% organic sales growth in the quarter compared to the prior year, with contributions from all segments and nearly all geographies. Acquisitions added another [audio break] to the top line and we continued to be pleased with how all of our news businesses are performing. Operating profit in the quarter improved 24% over the prior year and operating margin improved 1 percentage point compared to the same period a year ago. Adjusted diluted EPS increased 21% compared to the same period a year ago. These results include $6 million, or $0.07 per share diluted share of intangible asset amortization expense associated with four acquisitions we've completed in fiscal year-to-date. Given these increased non cash expenses in the quarter and our expectation for continued acquisition activity going forward, we believe additional focus on EBITDA measures better reflects our core operating results and offers greater transparency for investors. Looking at the current quarter, EBITDA, EBITDA margin and EBITDA per share all improved compared to the same period a year ago. Free cash flow before dividend in the quarter also improved compared to the prior year. And after the quarter closed, our Board approved an increase to our dividend, marking the 54th consecutive year we've increased our annual dividend. We are one of only 14 public companies to have increased their dividend for at least that number of years. Looking ahead our fourth quarter guidance reflects our backlog current 12 week order rate and challenging comparison to the same period a year ago where we generated 13% organic growth. At the low end of our fourth quarter guidance, we are on pace to deliver record full year performance across most metrics, including revenue, earnings and EBITDA. I feel very good about our 2017 performance both organic and acquisitive; we are well positioned for the future. I'll speak more about our outlook in a few minutes but first I'll turn the call over to Greg to provide more detailed commentary.

Thank you, Mike. And good morning to everyone. Third quarter sales were $589 million, an increase of 20% from the prior year’s third quarter. This change in sales included an 11% increase in organic volume, a 10% increase related to the first year effect of acquisition, and a less than 1% decrease related to the unfavorable effects of currency translation compared to the prior year’s third quarter. Organic growth exceeded the high-end of our guidance driven by the strength across our all segments and nearly all geographies. Organic sales volume in the Adhesive Dispensing segment increased 6%, as compared to the prior year third quarter, where organic growth was also strong at 4%. This is the ninth consecutive quarter of organic growth in this segment. Our Packaging, nonwovens and polymer product lines drove the growth in the current quarter and all regions were positive with the exception of Europe. Sales volume in the Advanced Technology segment increased 42% from the prior year third quarter, inclusive of 18% organic volume growth and 24% growth related to the first year effect of acquisition. Customer demand for automated dispensing, test and inspection and surface treatment systems were robust across electronics end markets. With additional strength coming from demand in our medical end markets. All regions delivered strong organic growth compared to the prior year most by double digit. Segments acquisitive growth includes the first year effect of the LinkTech, ACE, Interselect, Plas-Pak and Vention acquisitions. Organic sales volume in the Industrial Coatings segment increased 3% compared to the third quarter a year ago. Cold material, liquid painting and UV curing product lines drove the growth with the Americas and Asia -Pacific being the strongest geography. Gross margin for the total company in the quarter was 55% or 56% and equal to the prior year when excluding $1.7 million of one-time purchase accounting charges with the step up of acquired inventory in the current fiscal quarter. These charges are now behind us. Operating profit for the total company in the quarter improved 24% to $153 million and reported operating margin improved 1 percentage point to 26%, both compared to the prior year's third quarter. Adjusted operating margin was 28% in the quarter excluding the one time charges called out in the EPS reconciliation in our financial exhibit and also excluding the $6 million of intangible asset amortization expense related to current year acquisition. Within the Adhesive Dispensing segment, reported operating margin was 28% in the quarter, an improvement of 1 percentage point compared to the prior year's period and inclusive of approximately $700,000 in restructuring charges related to facility consolidation. Operating margin for the segment was 29% without this charge. Within the Advanced Technologies segment, reported operating margin was 30% in the third quarter, or 33% when excluded purchase accounting charges of approximately $1.7 million for the step up and value of acquired inventory and the $6 million of intangible asset amortization expense related to the current year acquisitions. Within the Industrial Coatings segment, reported operating margin was 20% in the quarter, an improvement of 3 percentage points compared to the same period a year ago related to improved product mix. This is continued strong operating margin performance by all three segments and reflects our ongoing continuous improvement efforts. For the company, net income for the quarter was $101 million, and GAAP diluted earnings per share were $1.74. Adjusted diluted EPS in the current quarter was $1.78; a 21% increase over the prior year adjusted diluted EPS. We have included an earnings per share reconciliation schedule in our press release to reconcile between GAAP earnings and adjusted earnings per share. Third quarter EBITDA increased 29% to $179 million. EBITDA margin improved 2 percentage points to 30% and EBITDA per diluted share increased 27% to $3.08, all compared to the prior year's third quarter. Adjusted EBITDA in the quarter was $182 million, or $3.12 per diluted share, a 29% increase over the prior year. Cash flow from operations increased 13% compared to the prior year's third quarter to $77 million and free cash flow before dividend increased 14% compared to the prior year to $55 million. All of these measures highlight the strong cash generation of the overall business. We've included tables with our press release reconciling net income to EBITDA, adjusted EBITDA and free cash flow before dividends. From a balance sheet perspective, net debt-to- trailing 12 months EBITDA inclusive of acquired EBITDA was 2.7x at the end of the third quarter, down from 3x at the end of the second quarter. This level is well below our most restricted debt covenants leaving us with additional debt capacity. And at the end of the quarter, we had approximately $368 million of combined cash and availability on a revolver. As we’ve demonstrated, our strong cash generation enables us to deliver quickly, which remains our intent in the near-term. I’ll now move on to comments regarding our outlook for the fourth quarter of FY2017. 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 August 13, 2017, order rates are down 2%, as compared to the same 12 weeks in the prior year. This is a challenging comparison to the same period to the prior year ago where order rates were up 16%. Within the Adhesive Dispensing segment, the latest 12-week orders are down 1% compared to the same period a year ago. Strength in packaging and nonwovens product lines was offset by softness in general product assembly and polymer product lines. Strength in Europe and Asia- Pacific was offset by other region. In the Advanced Technology segment, order rates for the latest 12 weeks are down 3%, as compared to the prior year, where order rates were up 29%. Some electronics project activity occurred earlier in the year as compared to last year, benefiting our third quarter sales and our ability to respond to these shifts remains a competitive advantage. Within our current order rates, strength in our test and inspection product lines serving electronic end markets was offset by softness in other product lines mostly electronics related due to project timing and challenging prior year comparisons. Within the Industrial Coating segment, the latest 12-week order rates are down 4% as compared to the prior year where order rates were up 36%. Strength in powder, liquid and container product lines was offset by softness in cold material product lines. Europe was the strongest regionally. Backlog at July 31, 2017 was approximately $372 million, an increase of 10% compared to the prior year, and inclusive of 13% acquisitive growth, offset by a 3% decline in organic business. Backlog amounts are calculated at July 31, 2017 exchange rates. Let me now turn to the outlook for the fourth quarter of fiscal 2017. We’re forecasting sales to increase in the range of 4% to 8%, as compared to the fourth quarter a year ago. This growth includes organic volume of down 3% to down 7%, 10% growth from the first year effect of acquisitions and a positive currency effect of 1% based on the current exchange rate environment. At the midpoint of this outlook, we expect fourth quarter gross margin to be approximately 54% and operating margin to be approximately 21%. This margin performance includes $6 million of intangible asset amortization expense related to current year acquisitions. We’re estimating fourth quarter interest expense of about $10 million, deprecation and amortization expense of about $25 million and an effective tax rate of approximately 29%, resulting in fourth quarter forecasted GAAP diluted earnings per share in the range of $1.18 to $1.32 per diluted share. We expect EBITDA to be in the range of $133 million to $144 million, or $2.27 per share to $2.46 per diluted share. And finally we are forecasting fourth quarter capital spending to be similar to the year-to-date run rate.

Thank you. Greg. I want to thank our team for delivering another outstanding quarter. Revenue, operating profit, diluted EPS and EBITDA were records for any Nordson quarter. In terms of our fourth quarter, our guidance reflects a very challenging comparison to the same period a year ago where we generated 13% organic growth. We are on pace to deliver record full year performance on most metrics. At the midpoint of this guidance, full year organic sales growth is 6%. So the excellent performance and it's on top of our robust 7% organic sales growth we delivered in fiscal 2016. Full year adjusted diluted earnings per share at midpoint is $5.24, an increase of 12% compared to fiscal 2016. Again, I'll point that fiscal 2017 adjusted diluted EPS per share includes intangible asset amortization expense related to this year's four acquisitions or approximately $15 million, or $0.18 per diluted share. As I mentioned in my opening remarks, we believe additional focus on EBITDA measures which exclude these non cash expenses better reflect our core operating results and offers greater transparency for investors. At the midpoint of our fourth quarter guidance, fiscal 2017 EBITDA increases to 16% to $535 million. EBITDA margin increases 1 percentage point to 26% and EBITDA per diluted share increases 15% to $9.19, all compared to the prior fiscal year. This is very strong performance. Our continued ability to generate high levels of cash provides us with the ability to fund multiple initiatives. In the near term, de-leveraging is likely to remain our priority for capital deployment. But we've also have capacity to execute on execution target in our pipeline if and when they become available. Overall, we are well positioned across the diverse end market we serve. Our global team remains focused on creating shareholder value by offering customers innovative technology solutions and outstanding support. Again, 2017 will be a strong year on a top of a very strong 2016. With that we'll be happy to take your questions.

[Operator Instructions] Thank you. And our first question comes from the line of Matt Summerville with Alembic Global Advisors. Your line is open.

Thanks. Good morning. Just in terms of the organic guidance for fiscal Q4, down 3% to down 7% orders down too, are we to read from that that as the 12 week period progressed you saw further weakening on a year-over-year basis in order to get that guidance. I clearly recognize you are up against very tough comparisons but just a little more granularity on the sequencing of orders as you progress to this latest 12 week period please.

Yes. I wouldn't necessarily say that, that's what we’re seeing. What I would say if you look at our typical annual pattern of orders I think as you know well, they decline in the fourth quarter to a low point sort of in January and they peak somewhere in the third or fourth quarter. I'd say what we are seeing is a strong peak that’s come through in the third quarter and seasonally trailing off whereas last year we had the strongest peak in the early part of the fourth quarter and that's what you are seeing here is a little bit across there just based on the timing of the peak in the year. And I wouldn't say that we are seeing orders necessarily slow down in the last - in the 12 weeks. It's really more about the year-on-year comparison.

And then just a follow up. I clearly I recognize it's early it's only August. You guys are going to be up against a pretty tough organic comparison at least through the first three fiscal quarters of 2018 as you look at the key organic drivers across the businesses, the underlying momentum you see today what's your level of conviction that you are able to grow organically looking out over a little bit of longer period of time. Again bearing in mind you still have some tough comp to digest beyond what you are digesting today. Thank you.

Okay. Yes, so what I would say is a couple of things. I think we said at the beginning of this year we saw global economy grow at 2% to 2.5% and we would grow at a multiple of that on an organic basis and certainly we've -- we are in a position to do that for this year. I think as you look forward we expect over the long run that's the kind of growth rate that we are going to see because we have some quarters where we are off a little bit, and other quarters we are stronger just like the third and fourth quarter you are seeing here. Yes, but the fundamentals are strong in our business. We are well positioned across all of our end markets from a competitive standpoint. We see nice growth driven by new product innovation. We are continuing to adjust our portfolio to provide higher growth parts of the business like the medical additions that we are doing but also support high margins and help with cyclicality in our business. And we still have strong part of our business that's related to consumer non durable products. So as I look at it we feel good about our growth prospects for the business and the mix that we currently have in the business is improving with the acquisitions that we've made this year.

Thank you. And our next question comes from the line of Jeffrey Hammond with KeyBanc. Your line is open.

Hey, good morning, guys. I understand kind of the order decline in Advanced Tech and Industrial Coatings just given the comps, but little surprised by the order decline in adhesive and maybe you could just speak more to that. Was there any kind of noise or lumpiness that would have impacted that and maybe just talk about forward visibility in adhesive?

Yes. If I look at [indiscernible] adhesive business, we do have a couple elements of the business that are project orient like our product assembly business and some of our polymer related businesses. And so I think there you got some quarter-on-quarter comparison just when those projects have come through. If you look at sort of our core packaging nonwovens kind of businesses the ones that are focused on the consumer non durable space, they are doing well year-on-year and the momentum is continuing there. So I think what we are seeing is just a little bit of lumpiness year-on-year on some of those more project oriented product lines within the business.

Okay. And then in advanced tech I think you cited on order front, certainly the comps but then some project timing within electronics, can you maybe speak to a little more clarification what you are seeing on that project timing?

Yes. So what we saw and it's reflected somewhat in the third quarter is customers ask us to pull forward deliveries to meet their needs and that's probably impacted our overall performance by a couple of percentage points in the quarter. So that's good for the third quarter probably pulled out in the fourth quarter but one of the competitive advantages that we have in addition to be in the strongest technology player out there is our ability to flex to meet the customers' demand and so what we really did is work hard to sync with the delivery schedule that they were looking for. I'd say under the -- on the underlying part of the business a lot of positives to think about there. We are doing well in the mobile segment and continuing to diversify into the Chinese mobile players. We are doing well in new applications like the semiconductor side. Our whole new platform in test and inspection area with new products is doing very well. So I'd say underlying business is very solid and our positions are strong. We do have the seasonality in the business and can vary quarter-to-quarter, year-on-year and that's more of what we are seeing right now. So we feel good about how we are positioned in that business. And then of course the other part of this advanced tech business which is equal in size now will be larger next year is non electronics which is delivering very solid and consistent performance with strong growth and good margin.

And Mike is there a way to quantify maybe on EPS or revenue basis how much of that -- how much of a pull forward you saw? Because it looks like you kind of came in $0.10 ahead of consensus and maybe similarly like on 4Q. Thanks.

Yes. I'd say probably on the revenue side it might be a couple of percentage points so that will translate down to more on the earnings, I am not sure it all $0.10 but it's probably pretty close to that. So our view we knew we had a strong second half year of comp and I think if you look at collectively third and fourth quarter we feel pretty good about where we are at.

Yes, this is Greg. I'd just echo Mike's comments there and put a little bit of context around that where we exceeded even the top end of the guidance for our quarterly revenue growth, much of that is related to the volume that we are talking about.

Thank you. And our next question comes from the line of Allison Poliniak with Wells Fargo. Your line is open.

Hi, guys, good morning. Could you touch on progress in Vention? Is it -- how is it proceeding as expectations, above, below, any color there?

Yes. So we are very pleased with Vention business. I'd say it's right on plan for our top line and bottom line expectations. The pipeline of new projects looks very healthy in that business and we like the business model that's come with that in terms of the ability to provide upfront design through final solutions there. So we feel very good about that. And the integration is going just as planned and we feel really great about the team that's come with that business and the capabilities that they bring.

And Allison just to remind everybody, an attractive part of this now about 20% of total Nordson portfolio on a go forward basis is strong operating margin and accretive on the EBITDA margin to our base business. So we expect to continue to see the growth that we've experienced traditionally in those medical end markets and now that’s a kind of $300 million size portion of the business will be a good platform and portfolio.

That's great. And then ultimately look at across the businesses in Q4, outside of seasonality; are there any mix issues to be mindful of in terms of EBIT margin?

No. I don't think any significant mix. I mean obviously when volumes goes down we have an impact on margin in the short term year-over-year. But I'd say no significant mix effects in that.

No. And just again to elaborate there as you think about our fourth quarter at that what we have in our outlook is well first off that there is about a percentage point related to these incremental non cash charges related to the acquisitions. And then in a period where we are forecasting negative organic that's going to have a margin impact as Mike noted.

Thank you. And our next question comes from the line of Charles Brady with SunTrust Robinson Humphrey. Your line is open.

Hey, thanks. Good morning, guys. Just on the advanced tech and medical business, you obviously decide that up for us, how much -- can you break how much that business grew the medical piece, life science piece in the quarter?

Well, overall we expect that business to grow double digits and it did that in the quarter and I think our view long term of medical is the market itself is probably only 5%, there were some of the other trends like the outsourcing to drive to plastic some of the minimally invasive procedures that Vention has get us into now, we expect double digit growth in the long run and that came in with double digit kind of growth.

Great. And just that on your comment on use of capital focusing on de-leveraging I mean you are not super over there right now you are under 3x, I am just wondering is there a level you want to take that to or is it a more function of how the M&A pipeline looks and kind of timing of that pipeline and it just didn't actionable item to close so focus on the de-leveraging instead?

Well our primary -- if you look at our priorities at capital deployment they haven't really changed if you go back. Number one, support organic growth. We are going to continue to do that. Number two, the dividends piece that we mentioned here. Number three is offsetting any kind of comp dilution which is marginal. But number four is we like to do M&A transactions, number one you can't always predict the timing although we've got some interesting things so we think are in the pipeline and related to that as you want to have the capacity of some more sizeable opportunities come forward. And so in the short term our focus is really around creating the capacity for more sizeable opportunities.

Okay. So, yes so just to clarify then the M&A focus or the M&A desire hasn't shifted at all, it's still kind of what it was before and this kind of positioning -- [Multiple Speakers]

It's just -- obviously we can't control the timing but what we can control is being prepared appropriately and as you've seen in the past if things are little slow on the M&A front and there is an opportunistic moment with the variability in the market to buyback shares we've done that too. Right now our primary focus is on de-leveraging to create capacity for us to do more acquisitions that make sense in our strategic areas of focus.

Can you talk about from a margin standpoint of the impact of the acquisitions you had, purchase accounting aside, the opportunity you have once you are folding these businesses in to really leverage some of that up and push the margins higher on a kind of go forward basis over the next 24 months or so.

Yes. I think we've certainly commented on the medical acquisition but the other acquisitions, particularly one that added to EFD or similar kind of margins to the company and EBITDA margin accretive and so we also feel as we continue to grow and scale those businesses we will be able to improve margins through continuous improvement activities for those businesses. So we feel good about the opportunity like we do at all our businesses to grow and expand with already as a good starting point.

Thank you. And our next question comes from the line of Christopher Glynn with Oppenheimer. Your line is open.

Thank you. Good morning. Hey, I am just wondered if we could do a little deeper dive, stating on some of the new market penetration dynamics and the China Tier 2 trajectory maybe an inning engage or something like that some of the other initiatives that have been developing.

Okay. Let me just make a couple, we'll start there with the mobile side. I mean obviously we are well positioned with the sort of global leaders there and this is turned out to be pretty strong year in that regard. With the mobile players we've seen them significantly increased their adoption of automation from something that was almost non existence probably two years ago to a nice first step next year to significantly stepping up this year. Still not to the kinds of levels of automation -- sort of the global leaders but making really good progress so there is more to go on an inning basis that probably less than halfway they are compared to these global leaders. And it's not clear whether they will go all the way or not but clearly they are seeing the benefits of automation in terms of quality and throughput and overall cost benefit associated with that. In addition, in the electronics areas we've talked about doing more on the front end and dispensing on wafer and test inspection on wafer and we are seeing some progress there. We've also seen some progress in terms of revitalization of our total test inspection product line that really has seen a nice uptick as the semiconductor industry in general front end and back end is having pretty solid year. So those new products are really getting traction. If you look at then non electronics part of our advanced tech business in the medical space it's all about broadening capabilities, new products getting plugged into the front end and we've got both good prospects and good traction there and in the non electronics non medical piece, we've introduced some new products in terms of refreshing our total valve of portfolio and some of our mixing technology which is also getting good traction. If you look at our sort of core adhesive business, I mentioned earlier we are doing well in the packaging, nonwovens areas as an example but we continue to make good progress on tiering. We've introduced yet another new tiering sort of applications in our core adhesive dispensing that's really opened up a yet a whole new set of customers to us which we will see ultimately up to a higher level. And then in our coatings business, we are doing a lot of work in the sort of cold material side which is opening up aerospace for example to us as an opportunity as the industry looks to find ways to basically get more plane out the door, and they look for automation there as an opportunity and we are making good progress there. So I feel good about the new products, new market opportunities that we have in the business and we will continue to grow over the next few years.

Thanks. And just follow on up on the mobile, wondering if you could comment on the relative contribution of the adoption in China versus the global leaders in the quarter you reported. And if you see a dynamic where following all the really dramatic innovation and the global leaders this year if that pretends particular ramp in the secondary players.

Well, we've seen solid step up here maybe look at the global statistics, certainly the shares of the top three Chinese players have probably grown, lot of that in China, some of that starting to be outside China, this is a pretty robust year and as I said there is more opportunity for automation. I think the overall supply chain in the electronics area given the growth in the sort of established players and the new players are pretty stretched. I mean we are in a good position to supply all over the opportunity but in other areas maybe little stretched in the short term. So I think is opportunity as we go forward for that to loosen up a little bit and some opportunities for further growth.

Thank you. And our next question comes from the line of Walter Liptak with Seaport Global. Your line is now open.

Hi. Thanks, good morning. I want to just ask a follow on the adhesive segment. Maybe to ask this way the comp didn't look that tough because the 12-week orders last year were up two and now you are down one. And in your answer you called out that there was some -- wasn't sure I understood with polymers or product assembly, what's going on, is it -- are you saying that order will pull forward or that they were just orders in the pipeline that you are still waiting to book.

Well, any one quarter we can have -- they tend to first of all be bigger individual quarters so any 12-week period of time you can have something it looks like a little bit of anomaly because you got a big project last year, you don't have that in this 12- week order this year. So that's really all I was trying to talk about that. I think underlying fundamentals are pretty solid. And if you think about our sort of adhesive business through, it will be in the fourth year in a row where we are seeing nice growth and it will be soft macro economy for well established businesses. So I feel good about look what the team is delivering there. Just quarter-to-quarter you can in a 12-week comparison you could have a big project last year that's not in this 12-week order and two weeks from now it is reversed. Okay, so I don't feel like any significant turnaround the underlying performance of those markets, it's really just the quarter-- the 12-week comparison.

And Walter just to add a couple of comments, this is Greg. As we've talked about the pull forward that was specifically related to advanced technology so not really in adhesive and as we've mentioned earlier if you take some of the product line that we would consider kind of more run rate product lines that are more heavily tied to non consumer non durable of packaging for example, the nonwovens, those were pretty robust those order rates. So it's -- as well as some of the product lines within polymer. It's the more system project related product line that Mike mentioned you are going to get from time to time some comparison that are just related to the timing of those projects not necessarily indicative of a competitive position or general underlying condition.

Okay, right. So the systems are related to product assembly, is it correct?

Yes and probably one or two product lines in the polymer area. So but again I think what Greg is trying to say is in that case we have bigger projects and they can swing the 12 week order rate if one year has big projects and the next year you don't. And two weeks later it could reverse.

If you look at some prior quarters of going into the quarter what the order pattern was, it wouldn't be uncommon to see order growth rate having end of the quarter, I think last quarter was up one and we delivered 6% organic growth. So it's the run rate business with those orders can continue to flow through the quarter. And then as that project activity comes, its timing related issue.

Okay, all right. So the way that you are describing it sounds like there are still more product assembly systems, polymer systems in the pipeline which will result in decent growth kind of going forward. Is that correct?

Yes, there is no concern on the long-term basis. Quarter-to-quarter you can some anomaly as a result of timing of projects that's all we are saying.

Okay, all right, great. And then I think last quarter you guys talked about the 200 basis points program running up that you had nice successful period of margin improvement and some consolidation and other things. How should we think about new projects the next two years of projects? Can you get another 200 basis points for example a margin improvement?

Yes. So we haven't said we stop there. We will continue to drive our continuous improvement effort. We will see some further benefit when we get through the line of consolidations on our polymer business next year. And we have some other longer term things that we are looking at and I'd say probably not ready for prime time in addition to our normal drive. I think 200 basis points with no volume growth in the near term is probably a stretch, but we are continuing to drive the programs that we do have and we've got very robust program. So I feel good about where we are at. I feel good about where we have in the pipeline not ready to commit a couple hundred basis points with no volume like we did the last time at this point yet.

Thank you. And our next question comes from the line of Liam Burke with FBR Capital. Your line is open.

Thank you. Good morning, Mike. Good morning, Greg. Mike on the adhesive front you mentioned polymer being contributor to growth. In terms of operating margin how have -- as the polymer business progressed? Are at the levels that you are satisfied with their level of profitability at that part of the business?

So the margins are improving. No, we are not satisfied yet. We are still in the middle of this last phase of restructuring. So in the short term you are seeing the hit in terms of the restructuring cost and not yet the benefit of having consolidated and upgraded the equipment. So I think next year we will be in a more normalized role and beyond that we finished final relocation in the early part of next year maybe first calendar quarter or so and then after that we should see the full benefits. So we are not there yet.

Okay. And on the medical front you are seeing health growth. It's been a priority on the acquisition front. How are you sized for capacity?

So I would say we continue to expand. For example, we built the new facility in Colorado for our components business. We've expanded once double the size of Mexico now we are expanding again in Mexico. With Vention acquisition we've added five or six new facilities that have some capacity in that but given the growth rates that we have down the road we will expect the need to expand further. And that's in our plan.

Thank you. Our next question comes from the line of David Stratton with Great Lakes Review. Your line is open.

Good morning. Thank you for taking the question. Just a follow up only a few questions left really for me and mainly regarding Vention, was that accretive in the quarter? And if so by how much?

We said it's probably accretive in the quarter after the second quarter and we expected for the year to be in that sort of $0.05 to $0.10 and I think we are on track with that. So we feel that's the acquisition is right where we expected it to be.

Got you. And then geographically speaking it seems like every region is doing pretty well with the exception of maybe Europe and adhesive, and if you talk about that a little bit I'll appreciate it.

Yes. So I'd say Europe is actually doing reasonably well for us. There is a couple areas where given the large OEM base you can see some swings quarter-to-quarter and I think if you look at this quarter was probably off a little bit in terms of actual performance but that's really function of some of the things we were talking about earlier with the larger project activity. I think in our order a rate that's encouraging. So I'd say underlying this year Europe is playing out reasonably well. But again you can some anomalies project to project so in this quarter is probably little bit off but the order rates look encouraging for the next quarter, year-on-year I think it will be solid year for Europe.

Thank you. And our next question comes from the line of Matthew Trusz with Gabelli & Company. Your line is open.

Good morning. Thank you for taking the questions. Just a follow up on the Europe order rates question. If we turn to The United States, down 6% might be surprising even considering comp last year. Can you provide some additional color and what you are seeing geographically there? And whether that's project noise or something fundamental going on?

Yes. I would say it's mainly project related activity. I'd say one area that we haven't talked about yet that was particularly strong last year that's a little soft year the whole auto space and not generally -- because the production levels are high and there is a lot of work for us in the body shop piece and the electronic side but we had some larger platform orders last year and platform orders mean model changes, significant model changes. And that's not repeated itself and that's one of the things affecting the US.

Yes, this is Greg. I'll just add additional color there. We are up against the pretty challenging comp to last year where we were up 9% total in the US and that cold material or auto focus that Mike mentioned is part of an answer. And then again you kind of go back to in the current quarter as we talked at the total portfolio level, the kind of the timing of some of those systems orders and as that would have affect adhesive as well. So where the US was impacted it was primarily in the industrial coating segment and adhesive and that has to do with those, the timing of the system orders.

Great. Thank you for the color. And then secondly just following up on the M&A discussion. Can you talk about the interplay between the availability you are seeing in medical and other attractive assets versus what the valuation like in the marketplace? And where you are identifying interesting opportunities outside of medical?

Yes. So if you look at medical space, the one good thing is it's still fairly fragmented. There is an opportunity to have differentiated positions through technology and support and service. The business is generally tended to have good profitability and high growth rates and so you need to pay a premium price to get them and that hasn't changed in the last year or so. We still see quite a few opportunities there and I'd say it is probably their primary focus is in the short term. Beyond that we have sort of three other areas that we've identified as interest to us. In the cold material space, we think about as atmospheric dispensing of adhesive and coating and sealants. There are a lot of smaller players there that we have interest in. They are just -- none of them have come to market yet other than the acquisitions we've made a couple of years ago in sealant and equipment and engineering. I'd say we still have some inspection areas of interest, electronics and closely adjacent market and I'd say we are pretty good on the polymer area. We are also in the process of longer term identifying what are the next couples of areas that we have interest in and we've got work ongoing but we are not ready for prime time on that yet.

Thank you. And we have a follow up question from the line of Walter Liptak with Seaport Global. Your line is open.

Hi, yes, thanks for taking my follow up. I kind of along the lines with geographic, the Contra Cup is in Japan and in Asia Pac and so I was wondered you kind of addressed already the visibility and they kind of fundamental robust this year end market but I wondered if you could talk specifically about Asia and Japan and kind of what you are seeing from those economies and kind of new order pipeline?

Yes. I'd say Asia in general has been pretty solid. China had their kind of new normal 6%-7% has been solid for us. Asia outside of China and Japan has been solid. Underlying Japan has been reasonable. We are just seeing in the fourth quarter just timing largely driven by the electronics market when you think about most of the final assembly and packaging folks are in China and Taiwan and lesser extent to Korea and then a lot of the components suppliers that would go into the mobile and other electronics business are in Japan. So when you think about camera module and speakers and things like that. But I think what you are really seeing is a lot of that activity being earlier in the year particularly late second and third quarter. And last year trended more into the fourth quarter at least probably half way through the fourth quarter. So that's really what you are seeing here underlying economies, Japan has been solid, China has been solid, outside those two in Asia good year so again kind of the new normal for China you need to take into account but solid year in general.

Thank you. And I am showing no further questions at this time.

Well, I just want to thank everyone for participating this morning. I think I want to leave you with just one message that we have a very strong year that we are expecting to deliver here. We are very well positioned with the changes that we've made to the portfolio through the acquisitions to both add to our growth, support our high level of performance from a margin perspective and reduce cyclicality in the overall business. So I feel good about how we are positioned going forward. I just want to thank our team for delivering another stellar quarter. Thank you.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program. And you may all disconnect. Everyone have a great day.