Good day, ladies and gentlemen, and welcome to the Nordson Fourth Quarter and Fiscal Year 2011 webcast and conference call. 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 this conference call is being recorded. I would now like to turn the conference over to your host Jim Jaye, Director of Investor Relations. Sir, you may begin.

Thank you, Shannon. This is Jim Jaye and I’m here with Mike Hilton, our President and Chief Executive Officer; and Greg Thaxton, our Senior Vice President and Chief Financial Officer. We’d like to welcome you to our conference call today, Thursday, December 15, 2011 on Nordson’s fourth quarter and full fiscal year 2011 results. Our conference call is being broadcast live on our webpage at www.nordson.com/investors and will be available for 14 days. There will be a telephone replay of our conference call available until midnight Thursday, December 22, by calling 855-859-2056. You will need to reference ID number 33011535. Our attorneys have requested we open this call with a cautionary statement under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. 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'll have a question-and-answer session. I would now like to turn the call over to Mike for an overview of our fourth quarter and fiscal year 2011 results and a bit about Nordson’s future outlook. Go ahead, Mike.

Thank you, Jim, and good morning, everyone. And thank you for attending Nordson’s fourth quarter 2011 conference call. We delivered strong performance in the fourth quarter to conclude what was truly an outstanding year for Nordson. I want to thank our customers for their business and our entire global team for continuing to execute at an extremely high level. In addition to our comments on the quarter and full year today, we will also provide some perspective relative to our outlook for the first quarter of fiscal 2012. Let me begin by offering some highlights on the fourth quarter. Our success continues to be driven by focusing on what we do best: delivering value to our customers. We continue to meet their needs better than anyone else through innovative technology, applications expertise, a highly effective direct and sales and service model and our global capability. Sales grew by 14% in the quarter over the previous year with double-digit improvement in all three segments and every geography. We matched this strong top line growth with continued emphasis on operating efficiency to deliver operating margins at 25% in the quarter excluding non-recurring items. Sales, operating profit, net income and diluted earnings per share all exceeded the levels of the fourth quarter a year ago and all records for any fourth quarter. Other highlights in the quarter included the increase of our dividend for the 48th consecutive year, a continuation of our share repurchase program, and the acquisition of Value Plastics, a high-performing company that is an ideal addition to the Nordson portfolio. On a full-year basis, sales grew to 1.2 billion, an increase of 18% over 2010. We leveraged the increased of sales with more efficient global organization, deliver operating margins of 26%, a full 300 basis points higher than the very strong levels a year ago. Overall sales, operating profit, net income and diluted earnings per share all exceeded our previous full-year records. In terms of our outlook, organic order trends over the last 12 weeks were off slightly, down about 3% from a very strong period of recovery in the same 12-week period a year ago. Clearly, some end markets and geographies have been impacted by the near-term economic uncertainty resulting in a slower start to our fiscal year than we would normally would expect. Still, the fundamentals of our business are strong, and we anticipate better year-over-year performance as the year progresses for several reasons which I’ll describe later in the call. But before that, let me turn the call over to Greg Thaxton, our Chief Financial Officer who’ll provide more detailed commentary on our fourth quarter and full year 2011 financial results as well as some comments on our guidance for the first quarter of 2012. Greg?

Thank you, Mike, and good morning to everyone. As Mike noted, our financial results for the fourth quarter were very strong. With sales in the quarter up 14% over the prior year, including an 8% increase in organic volume and a 3% increase from acquisitions with the remainder coming from positive currency translation effects. The adhesive dispensing segment delivered sales volume improvement of 10% over the prior year’s fourth quarter, inclusive of 2% acquisitive growth, with growth in most all product lines and most pronounced in packaging and non-woven end markets. We experienced robust organic sales volume growth in all geographies except the US which was impacted by the timing of some larger dollar system sales in prior year comparisons. Sales volume in the Advanced Technology segment was up 14%, inclusive of 7% acquisitive growth in the fourth quarter over the prior year. Growth was strongest in our automated and manual dispensing product lines and was positive in all geographies. We also delivered significant growth in our Industrial Coating segment where sales volume improved by 10% over the prior year’s fourth quarter. This growth was strongest in our automotive and powder coating product lines and by region, was strongest in the US, Asia Pacific and the Americas. Moving down the income statement, gross margin in the quarter was 59.3% in line with our guidance, and 60 basis points over the prior year due to a lower cost structure and better absorption. From an operating perspective, we continued to perform at a very high level and delivered reported operating margin of 24% in the quarter or 25%, excluding onetime charges for short-term purchase accounting and restructuring charges recorded in the fourth quarter. Operating profit increased to $79 million from $73 million in the prior year. Excluding one-time charges in both years,…

Thanks, Greg. Before moving on to your questions, I would like to provide some additional comments on our recent order trends and outlook. While recent orders are not as strong as we would hope to see, there are some positive takeaways. First, our recent order trends put us at a full year run rate of approximately $1.2 billion or $1.1 billion excluding recent acquisitions, which is not far off the $1.2 billion (inaudible) we experienced one quarter ago. At this time of the year, it’s generally our soft as from an order’s perspective due to the impact of holidays on plan operation and the end of the capital cycle for many of our customers. And at the same time, the macroeconomic picture is certainly impacting the current behavior of our customers. Europe’s debt crisis has yet to be resolved, unemployment remains stubbornly high and emerging regions continue to struggle with how to best manage growth. This ongoing uncertainty has caused some customers to take a cautious approach in the near-term. However, most economists still expect global GDP in 2012 to grow at or slightly ahead of 2011 rates reflecting the impact of monitored growth in developed markets and continued strong growth in emerging markets. This macroeconomic outlook for 2012, combined with Nordson’s level of participation in emerging markets, niche applications and some still recovering end markets provides encouragement that as the year progresses; we may see more favorable comparisons to the prior year than our outlook for the first quarter. In Advanced Technology for example, our solutions are critical to niches like smartphones, tablets, notebook, PCs, flat panel televisions, where strong growth is being forecast. Technology trends like flip chips and more complex wafer packaging architectures play to our strength. Growth is also forecast in areas such as LEDs and…

(Operator Instructions). Our first question comes from Liam Burke with Janney Market Capital. You may begin.

Greg, you mentioned in first quarter guidance 20% operating margins. Normally, that looks like about the pre-recession levels. You have been running comfortably at a 25% plus range. Could you help us what that delta is?

Yeah, Liam. Again, there are some one-time costs in there that are suppressing that margin slightly. And I think the other aspect of it is, as we talked about, we’ve had some strategic investments that we’ve undertaken. Some of that in support of the growth in emerging markets, some of that in support of technology. We’ve got some investments that we’re making along the lines of continuous improvement that are going to provide some benefit in the out quarters. So, generally, I’d say, what we’re seeing is some increase in the base spending. We’ve got a merit increase, of course, finding its way in there, and a fairly soft top line at this point.

You know, Liam, I’d say it’s consistent with what we’ve said last year that in the second half of the year, we would pick up our spending to support strategic initiatives. You know one key one for example is moving to center gravity of our technology capability more towards Asia. So, we’re opening some additional centers of excellence, we’re expanding our manufacturing capability and what comes with that is engineering support to customize and service our customers including some of our tiering initiatives. So, these are sort of strategic imperatives that we’re investing in, kind of in line with what we’ve seen step up in the second half of the year as far as any additional increases in the first quarter. We’ve been very prudent about that, but this is really in support of strategic initiatives.

Well, at the risk of asking you to go beyond the first quarter, is it’s still your stated goal to keep those margins above 25%, or is there any way we can look at that?

Yeah, so if you look at what we’ve said is, and this goes back to the beginning of last year, that we felt we had an opportunity structurally, if they had a couple points to the margin and then we still feel that we can do that. Some of the things that we’re doing through our continuous improvement effort are continuing to structurally change the business. We’ve said that the adhesive space will start to play out in the second half of this year from our supply chain optimization. And what we’re doing in the technology piece probably plays out in 2013. But we have a number of things that we feel on an annualized basis will continue to be in those high levels. So, we don’t see this as any kind of a structural shift at all. We are seeing here is first quarter typically, is a softer quarter. Last year was a pretty strong quarter, but we had subsequently decided to make some of these strategic investments that we talked about, and we still feel that we will have margins in excess of that. We expect the top line to come back. So, this is in line with our longer-term plans, and that we don’t see any reason to believe that we in the long run, will be below the kind of margins.

Liam, might I add to the point Mike touched on there, if you think about the seasonality in our business, the first quarter is laden with a lot of holiday period and of course, that affects both our customers’ capital cycle as well as our spare parts revenue trends. So, typically for us, the first quarter is the softest and it builds through the year and that allows us to then capture some of that volume leverage in the margin.

Great. And just quickly on orders. Europe was pretty understandable. Asia Pacific was down 11% year-over-year. Were there any large orders or any one time that occurred a year ago to affect that number?

No, not really. Let me make a couple of comments. One thing that we are hearing from I’d say the broad base of customers in Asia is given that Chinese New Year has moved up a couple of weeks and falls before the end of January. A number of our customers, particularly the OEM customers that would build some of the bigger systems, basically said they are kind of delaying some of their orders to oppose that. So, you have kind of the US western holiday piece and a much earlier Chinese New Year, so there is a timing effect that some of our customers are talking to us about. But secondly from a technology perspective, on the electronics side, there is a softening on the back-end packaging and test area and most of those folks are located in Asia. And I think they’re waiting to see how the first few months of the New Year play out with the uncertainty there. And that said, the things that where we have a significant niche exposure to we’re still very encouraged about like smartphones, tablets, ultra books, those kinds of things. And I’d say the other thing in the short term is with the things going on in Europe in particular but the slower growth in the short term in the US the export business from Asia has softened a bit. You see it in the trade numbers and that’s affecting some of our broad base customers. So, the biggest impact is in technology. The next biggest impact is around sort of the timing of the Chinese New Year. But then there is some export impact we would say coming in there that’s not typical.

Thank you. Our next question comes from Mark Douglass with Longbow Research. You may begin.

Can we talk about the restructuring you’re taking in EDS right now. You touched on it briefly, but what can we expect as far as savings? Are you going to start generating some of the cost savings there in 2012 or is it going to take a little longer for those that come in? And have you quantify those yet at all?

So, let me just give you an idea Mark, of what we’re doing. In the US, at a high level, we’re moving from four manufacturing facilities to two. So, we’re expanding the two and shutting down two. And we’re realigning our business with products that need more engineering support in one location to the ones that are more standard than another location. And we’re doing some other things to optimize supply chain. And we’re making some smaller moves in Europe. Some of that helped by the acquisition of the Verbruggen business that we bought. The UST should all be wrapped up in the June timeframe. So, post June, we should start to see the benefits that come about by an approved and a lower supply chain cost there. The European piece is probably later in the year. Similarly, we’re doing some things in our technology business where we’re expanding our Suzhou facility fairly significantly. The benefits there are likely to be more of a 2013 timeframe. But these are significant enough that you’ll be able to notice them in the context of the improvement that we see. We haven’t specifically quantified the benefits out there but they all have very, very good paybacks. And that’s just one element of a much broader continuous improvement activity we have underway. We’re doing some things in segmentation. We’re looking at our logistics cost. We’re amplifying our low cost sourcing initiatives in a variety of ways. We’re doing something it’s around new product developments. So, we have a whole slew of things that we’re working on that’ll play out over the next two, three, four years which is why we feel confident we can continue on a long run basis to move margins up.

Can you kind of give us order magnitude? Are we talking tens of bps or hundreds of bps?

Yeah, what we said is that we hoped to get at least 200 basis points of improvement in the margin through these activities. And we continue to find new ones so we’ll continue to challenge ourselves to push that beyond that, but we hope to get at least, on ongoing basis, 200 basis points of expansion.

But that’s up for a couple of years, right?

Yes. It’s going to phase in. We’re going to see each of these things phase in as we continue to do it. And we’re not stopping there. We’re looking for other opportunities. We’re, I wanted to say, turbo charging our lean Six Sigma activity to drive the improvement culture that’s already strong at Nordson even further.

Okay. And then, again kind of looking past 1Q, do you feel pretty confident that keeping gross margins above 60%, assuming there’s not huge drop off in…

Yeah, we think we’re at a good level there and yeah, we feel pretty confident in that kind of gross margin performance. And I think, as Greg said, as the volume ramps up, we’ll floss at the strategic spend at the technology and emerging market sales resource level to leverage that to the bottom line.

And where are you at now with the parts replacements as a percentage of sales?

Yeah. The total in the quarter was about 43%. That’s trending about 1 percentage point higher than the third quarter. Some of that is associated with the volume from acquisition. So, if I took the recent acquisition of Value Plastics out, it was about 42%. It’s 43% with that partial quarter end.

Thank you. Our next question comes from Charlie Brady with BMO Capital Markets. You may begin.

Just going back to the Asia Pacific region, can you talk about what if any impact that Thailand flooding is having on the impact in this quarter and into what’s your seeing going into Q1 and Q2?

It’s not really have a big impact in this quarter. There may be some modest upside on some replacement units that might play out over the next quarter or two, but it really hasn’t had a big impact. Customers have been pretty adapted moving production out of places and we’ve participated in that.

Yeah. And then just going back on the parts mix question, can you split it out just to the Adhesive Dispensing business?

I think we’ve said in the past, Charlie, that’s been pretty consistent with the overall number, maybe slightly higher than the overall number. I’m not sure. Greg is looking to see if he has something here. We typically haven’t disclosed the individual piece.

Yeah.

Typically, it’s slightly higher.

It is. It’s slightly higher. There isn’t a broad range really between the three segments. But Adhesive tends to track up slightly above the corporate average.

Did you not have some large systems going through shipping this quarter and in the next quarter that would have altered that mix? So, I’m wondering if the mix is still at an average or fully above-average level despite large systems going through this quarter.

No, it’s a pretty consistent average in that segment, Charlie.

Okay. Any update on LED market and the LCD market?

I would say from an LED perspective, we went through a period of, on the TV side, kind of absorbing excess capacity. I think we’re starting to see a bit of the early phase of penetration on the lighting side. So, we’re encouraged, particularly that the lighting side is going to pick up in the next several years. And I think, as we’ve talked about in the past, we’ve got equipment out to all the major suppliers there and we’re working with them on some technology investment. Second was on the LCD?

Yeah.

On the flat panel, I think we’ve gone through a fairly tough period this year and we think we’re going to get back to kind of more normalized growth going forward into next year. Obviously, the consumer spending in the West has an impact on that, and so Europe continues to be soft. There may be some impact there. I’d say one area that’s really kind of taking off as a bright spot for us is in the MEMS area, where we’ve got particularly a lot of sensor technology that goes into the mobile devices, accelerometers, drivers, scopes those kinds of things that with the push on and not only tablets, smartphones, but now the sort of whole line of ultrabooks that are starting to come out that should be encouraging for us.

All right. I wondered if you could just speak to the M&A strategy. It sounds as though over the past 12 months, maybe it’s become a bit more focused that it sounds as though you’ve got some pretty specific ideas of where you want to go, how you want to proceed on the M&A relative to maybe historically what the direction of the company has been?

Yes. I think that’s fair, Charlie. We, historically I would say, have been kind of opportunistic and episodic and that’s not a criticism, that’s just saying we do a couple of acquisitions and then digest them and five years later we do a couple more. And they generally, we’re in areas that made sense for us, but we’ve gone back and looked at sort of four areas that we thought were good areas for us to focus on because they were close to what we do today, that we think we understand the markets and we think there is a good technology position, we think there is leadership opportunities and in some cases we think it’s fragmented where there potentially could be opportunities for organic share growth. So, those areas and adjunct for Adhesives, as in the flexible packaging space, that’s plastic packaging, and that’s where Verbruggen fits in. But there is some other things that we’ll look at there. In our technology space, we’ve talked about medical and that’s around dispensing and that’s around the components and some selected areas of manufacturing. In the electronic space, we’re still interested in broadening our footprint in the test inspection area and there are some things that are kind of clear adjuncts to what we do today. And then in the Coating segment, there is an area that kind of bridges Coatings and Adhesives around cold material dispensing. You think about that as silicones in one or two component mixtures. And those are kind of the four areas at the moment that we have interest in and we’re trying to build up sort of the proprietary deal flow there and we’re looking at a number of opportunities say, with the noise in the marketplace from an macro-economic standpoint in the last few months, some folks that might have been interested in moving on or pulling back a little bit and so we could go through a period here of a couple of quarters where people are waiting to see how the economy plays out because they’re worried about valuations or they’re worried about what happens to their earnings or whatever and we’re looking at that closely, as well.

All right. A couple of points I think I missed it. Can you just give me again the volume growth ex acquisitions for Adhesive Dispensing and Advanced Tech? And also in your guidance, are you embedding about $600,000 of restructuring in the first quarter in Adhesives?

Correct. On the latter point, Charlie and so you’re talking about fourth quarter?

Yes, fourth quarter organic growth ex acquisitions for Adhesives and Advanced Tech?

Yes, so let me go back to that. So, Adhesives had volume improvement of 10%, and that included about 2% acquisitive growth. Advanced Technology, sales volume was 14% and that included about 7% acquisitive growth.

Thank you. Our next question comes from Kevin Maczka with BB&T Capital Markets. You may begin.

Greg, I may have missed it, but did you quantify on the strategic investment you’re making in Q1? Did you quantify that at all or could you? And can you talk about the timing? Did you say that that’s mostly done after Q1 or is that something that continues throughout the year to fund your continuous improvement and other initiatives?

Yes. Kevin, so the comment there is on SG&A, right? And so, what we’ve said there is a couple of components. If you look at SG&A levels as compared to our fourth quarter and our third quarter, they’re less than quarter four, primarily because quarter four has some kind of year-end volume-related accruals that hit SG&A. If you look at the spend as to where we were trending in in Q3 of 2011, it’s pretty much in line. So, what we’re saying there is during 2011 is when we made some of these investments. Some of it is R&D-related. Some of it is investment in growing out our operations in emerging markets. It’s people-related. So, I think that spending is in the P&L. We’ll continue to make some of those decisions going forward. But I wouldn’t suggest that you’d expect to see a big step-up from where we are now.

And it is a step-up from last year’s first quarter for several reasons, Kevin. One is the merit increases for the first quarter and then in the second half of the year, as we kind of telegraph all the way along, we were going to support some step-up in some strategic initiatives. So, this is not back office. This is focused commercial resource just to drive emerging market growth at some specific technology investments to introduce the next levels of technology across our businesses. And then it is to support some of the sort of supply chain restructuring and other things that we’re doing from a continuous improvement that we’ll benefit over the next several years. So, there is some rough fund investment there. But that’s really been in the P&L since the second half of last year. It looks a little more historic here on a year-on-year comparison because it wasn’t in Q1 last year and didn’t have merit increases in Q1.

Well, we’ve got the entities that we’ve acquired that were not in Q1. There is some FX increase in spending quarter-over-quarter and then, of course, the restructuring charges in the quarter.

Right, so, in terms of run rate, what we said is the spending for those key strategic initiatives were in. There is some other things that we’d like to do this year but we made the decision in Q1, we’re not doing them in Q1. We want to see how the year plays out and if the year proves like we hoped that it will, then there is certain selected others that will look to add some resources. But we’ll also see the top line that comes with that, they will be leveraged significantly to the bottom line. So, we’re being prudent.

Okay. So, I think if I understood all that right, you’re saying some of these investments you’re making, you’ve already made in the (inaudible) in there, they continue into Q1 but they don’t step up dramatically from what we’ve seen in Q3 and Q4.

Correct.

But that is the key driver, if you will, of the step down in margin to 21%.

Yes, that’s about it, Yes, that’s correct. Yes. It’s fast, and then when you flow through some merit increase and again, we’re looking at what generally is our softest quarter, so with that volume spend increase that’s suppressing the margins.

Yes and quite frankly, we were hoping for more top line growth and what’s going on in Europe is not helping that in the short term. And the U.S. hasn’t helped that in the short term. So, we haven’t quite got as much top line as we hoped but we’re more optimistic as the year goes on.

Got it and I didn’t hear you really point to mix as a driver of any even short-term margin compression. Is there anything going on with mix that might weigh on that Q1 margin as well?

No. You look at gross margins there pretty strong and in line with the prior year, in fact, ahead of prior year, even inclusive of the short-term purchase accounting that’s in the quarter. So, gross margins are pretty strong. It’s really an element of the trended SG&A and a softer first quarter top line.

Got it and then, coming back to the order commentary, you pointed the macro uncertainty there that’s fairly obvious, we’ve got a softer seasonal period right now. Is the macro uncertainty presumably will stay with us for a while, but is your message on orders that we ought to see them accelerate from here as we come out of this seasonal softer period or that we ought to continue to see some negative numbers here given what’s going on in the world?

So, I’ll only make a couple of comments there. What I would say is in most regions, the bid activity is still pretty strong. What we’ve mentioned last quarter is we started to see particularly in the bigger systems orders like coatings and our product assembly and Adhesives, customers delaying to commit to make that investment. We saw that continue in this quarter and if things remain soft, we could see that continuing going forward. But our teams are encouraged by a couple of things. There is level of bid activity that we see in most areas and some of these niche opportunities that we play in. I think one of the things we are seeing this year though combined with that macro piece is the early Chinese New Year in Asia in particular. Our customers have notably pointed out to us that they’re just waiting to get through that early Chinese New Year and not really stepping up their buys till after that, so that is a timing issue particularly in Asia. And then, further to your comment, Kevin, there is just a natural the holiday impact in our order rates. When we think about seasonality, this tends to be the soft quarter.

Right. Okay and then finally from me, I think your pricing is normally fairly stable and strong. Is that still the case as you’ve seen some negative numbers on orders here or has anything changed in that front at all?

No, pricing is solid.

Thank you. Our next question comes from Matt Summerville with KeyBanc. You may begin.

First, with regards to your business in Europe, are you seeing any issues at the customer level in their ability to get financing at this point? Have they brought that up to you as a reason to maybe they’re pushing stuff off or is that not really hit the radar screen as of yet?

No, I would say that’s a good comment, Matt. I would say the smaller and medium size customers are bringing that up. It could be that that’s a real issue or it could be that you’re just talking about that in context of general uncertainty, but the small and medium customers particularly the ones that would buy some of the bigger systems are bringing that up as a concern in the short-term.

And then, if you look at your order rates being down 3%, can you maybe comment on the linearity of that rate or the volatility maybe that you’ve seen? Is there a tremendous amount of up and down from week to week there, given what’s going on in the environment that orders start out the 12-week period at a better year-over-year rate and ended at a not as good year-over-year rate? Can you help fill in those blanks?

Yes, I would say that each week is a little different. So, there is not necessarily a direct pattern there because it can be influenced by a big system shift in one week and not in another. But I wouldn’t say that we saw something that started out strong and a steady decline. We are anticipating a softer, kind of tail end of January in Asia because of that early Chinese New Year that we wouldn’t have expected last year. But I would say, no, we don’t have a pattern that we would point to here. What we would say is the areas where we have the, sort of, bigger cost items, so product assembly and adhesives, some of the powder coating systems areas, those are areas where we’ve typically would slow towards the end of the year as the capital from the prior year on a calendar basis is being spent. We’re seeing that, but we’re also seeing people delay, making the buy decision and I think that’s a function of the economic uncertainty.

And then, as we think about, kind of your comments in the press release about things improving on a year-over-year basis, comps getting positive again as the year goes on, that sorts of gets back to a previous question, I guess. As you’re talking to your customers and you’re looking at some stuff maybe pushing out, you look at the Chinese New Year dynamic as you mentioned, I guess when, it sounds to me like it’ll probably be a little tough to see volume and earnings growth in the second quarter. And I don’t want to put words in your mouth, Mike but is it more that you guys are looking for those comps to begin to turn positive in the back half of your fiscal year? And then if we can work into that which adds another sort of dimension of complicates it a little bit, FX has been very volatile. How much of a hit could that be for you guys this year if current rates would be maintained?

Okay. So, I’ll let Greg talk about that second one in a minute. The way we kind of look at things, if you step back and we’ve done some look at sort of global GDP and what do we think we should expect from global GDP going forward. In the European region, we’re talking like a point plus or minus. In the U.S., it’s probably one-and-a-half to two. In the broader emerging market, it’s probably four to five and in China, it’s probably eight to nine. When you add that all up, you get kind of two-and-a-half or three global basis which is not too different from what we saw this year. But when you think about this global GDP forecast and if they’re right, they’d strengthen as you go through the year. I say, if you look at our sort of order patterns, people get their budgets in place for our Coatings business sort of in the first fiscal quarter, so we start to see the orders get strong second and third quarter and into the fourth quarter. We see the second tail end of the second and third quarter being a strong quarter. It’s typically on the tech side and we tend to be more steady in the Adhesive space other than that sort of general product assembly which probably follows more along the lines of what we see from a Coatings perspective. So, our typical pattern as we would expect for things to get stronger throughout the year, but we don’t have a good feel for is how long is the overhang, for example, of Europe and the debt situation there are going to impact the year. If the sort of macro forecasters are right, we should have a similar year to the last year in terms of the macro environment which probably means that it’s stronger in the second half than it is in the first half.

Matt, just a comment on currency. As you know, we benefit from a weak dollar and certainly had some tailwind in 2011. We’ve guided to some slightly favorable tailwind in our first quarter of 2012. We’ve got a month-and-a-half or so behind us now, and so what we’re doing is looking at where rates are as of just a couple of days ago and saying if they hold for the balance of our quarter that gives us the expectation for that slight tailwind. But nevertheless, where our rates go and how they react for the balance of the year will have an impact. For 2011, the euro average rate for us across the year was about 139. So, clearly if rates stayed where they are today, we’d have a headwind in euro. We’d have a tailwind still in the yen where the full year average was about 81, so we’ve got a tailwind there in the yen. The way things model out for us is that for every, let’s say, 1% change in sales due to the translation effect of currency, it’s about 2.5 times impact on the change in earnings per share.

Thank you. Our next question comes from Jason Ursaner with CJS Securities. You may begin.

Realized the call is getting is a little longer at this point, but just two questions.

Okay.

You both spoke about the normal seasonal pattern for a soft first quarter, and if I go back look at the revenue contraction for fiscal Q4 to Q1 in the tiers before the downturn and then the tiers after the downturn, and the tiers before, you saw 16%ish sequential decline, and then only about 7% sequential decline in the tiers after the downturn. So, from looking at the 17% sort of midpoint sequential decline you’re implying, how much of this would you characterize really as slowdown versus how much would you more characterize just to reversion to a more normal seasonal pattern after two years of very difficult comps?

Yes, so it’s a good point, Jason. What I would say is in the last two years, we still have sort of recovery from that strong downturn and so, I think it muted the seasonal translation that you’d normally see. I’d say this is moving more towards a more typical kind of a seasonal pattern but it is probably a little bit worse just given what’s going on in Europe and, to a lesser extent, the U.S. So, there is some clearer impact from the uncertainty that’s there in the last few months that I wouldn’t consider to be normal. So, it’s probably a little worse than we would expect to see in a normal back to kind of fully recovered environment, whereas in the last two years in the first two quarters you still have strong recovery. Two years ago was technology-led, I think that last year was broad-based.

Okay. And normally, Q2 to Q1, you normally see sort of this mid-teens sequential increases as customers get their budgets approved. Would you not expect to necessarily see that, if you are seeing this uncertainty in weakness?

So, hold that question for a second. I think we’ve got a pretty good track record on what the normal seasonal pattern is. We don’t have any better crystal ball than you do, though, on what the overhang is going to be and that was my previous comment. I’d say, what’s encouraging is lots of activity in the niche areas that we’re focused in that should step up and still bid activity in many of these areas as very encouraging. But there clearly is an overhang and we just don’t know how long that overhang is going last.

Okay. And then looking at orders, obviously, the softest area is in the tech segment and it looks to be coming out of Asia in part. You mentioned weakness in the device testing and package equipment market and that’s going to be driven by the fab utilization coming down. And then you also mentioned customers holding off timing-wise with the Lunar New Year. Do you also think though that you saw any impact in October, November from tightness in the credit markets there? And have you seen it open up at all since the country lowered reserve requirements on the 1st of December?

Yes. So, I would say, not a big deal from our credit requirements, particularly on the tech side. I’d say, generally speaking though, more broad-based in Asia, China specifically, with the move to start to loosen things a little bit again, that’s viewed as very encouraging by the folks on the ground, sort of the smaller customers and even some of the OEMs, so not tech-specific, but more broad-based. There was a tightening impact from that and people are more encouraged now. There is an argument about whether it’s enough. But certainly, directionally, the move is encouraging for the folks on the ground.

Thank you. Our next question comes from Walt Liptak with Barrington Research. You may begin.

I want to ask about the Value Plastics. If I backed into this right, it’s about $7 million in revenue this quarter. Is it about right?

Well, in acquisitions for the year, you have both Value Plastics. You have MICROMEDICS that affects the Advanced Technology segment, and then Verbruggen in the Adhesive segment.

Okay. So, it was a little bit...

And if you recall, Value Plastics was not in the quarter for a full quarter.

Okay. My first question is, the level of run rate in revenue for the quarter, I wonder if we can separate MICROMEDICS from Value Plastics.

Yes, I’d say Value Plastics is when we made the announcement, we had sort of the last 12 months, kind of run rate was around 20...

High 20s.

$26 million, $27 million. We’re on track with that kind of run rate and we have expectations, obviously, for that to step up as the year goes on, in part based on growth in the market, but in part because of the other things that we’ve talked about in terms of diversifying globally, taking the industrial product line out, that’s probably further on in the year. But we’re basically on track with that acquisition where we thought after the first couple of months.

Okay. And with the purchase accounting charges of about $3 million, Value Plastics was dilutive during the quarter?

Yes, they were.

Okay. And then the first quarter, is it going to be dilutive again with that $2 million charge?

No, we’re not expecting it to be dilutive in the first quarter.

Neutral then?

Yes, in that range.

Okay.

Because we will have another about equal-size impact on the short-term purchase accounting, but they’ll be in for a full quarter.

Okay. And then I wanted to ask about the tax rate for the full year 2012, I’m sorry, not tax rate, interest expense. I’ve got my estimate, but I wonder if you could just help by providing a number for your estimate of interest?

Well, we entered into a new credit facility, if anybody caught that. It was announced on Monday, and I’m pleased with the facility we have and I want to congratulate our team on a great job of negotiating that facility. It expands our revolver from what was a $400 million to a $500 million revolver. It’s a five-year deal. And it’s about at our current pricing grid. The margin spread is about 50 basis points over our prior facility. So, we were borrowing at about 28 basis points over LIBOR, it’s now close to 77 basis points. So, whatever our outstanding debt is for the year, it’s going to be slightly more expensive, but again, I’m very pleased with the terms that we were able to negotiate.

Okay, got it. And then in the prepared commentary, you talked about manual dispensing in Advanced Tech being able a little bit weaker. And I presume that’s the EFT business?

No. I think what we said was that those spaces, the manual and automated, were holding up fairly well.

So, they were holding up. Okay.

Yes.

Okay, that makes more sense. And then just as a final question, you’d talked about $1.2 billion in revenue for next year. Are you expecting yes, and that’s with the acquisitions.

No, just to be clear, all, what we said is the current run rate, if you take the orders and annualize them, that’s what you would get. We didn’t necessarily project that that was the number for the year. Just like we do each quarter, we kind of annualize the then current run rate.

Okay, all right. Let me just take a shot at this one then. For 2012, as you look at your EBITDA or EPS, are you expecting it to be a flat year, up? Do you expect that the company is going to be able to grow, considering the headwinds?

Yes. I mean, as you know, we only guide a quarter out because that’s the best clarity that we have.

Yes. I guess I was hoping just to get some...

I guess what I would...

Trajectory.

What I would say is if we have an economic environment where the overall sort of GDP and industrial production growth is similar to this year, then we would expect that to be a year where there is growth.

Okay.

And so the question is, whether you believe that or not? I mean, our view when we use this in some of our modeling efforts is we feel most comfortable with the Global Insight IHS forecast. But their forecast is not dramatically different from others. So, if you believe that, that’s going to come through at a 2.5% to 3% sort of global growth, then we should see a positive year there. But our crystal ball doesn’t go out that far. And so, if that’s not right, then we’ll either be more or less, depending on what actually plays out.

Shannon, we have time for maybe about one more question.

We have a follow-up question from Mark Douglass with Longbow Research. You may begin.

Hi, just real quickly. I think there is some confusion. Your guidance right now includes the $0.03 of non-recurring charges?

Correct.

So, ex the charges, we’re looking at $0.57 to $0.64.

That’s correct.

Thank you. I would now like to turn the conference back over to Jim Jaye.

Thank you, Shannon. And just to wrap this up, thank you all for attending the call. We wish you all happy holidays, and thanks for your interest in Nordson. I’ll be around today if you have additional questions. Thank you.

Ladies and gentlemen, this concludes today’s conference. Thank you for your participation, and have a wonderful day.