Good day ladies and gentlemen and welcome to the Nordson Corporation Webcast for Second Quarter Fiscal 2014 Conference Call. At this time all participants are in a listen-only mode. Later we will conduct the question-and-answer session and instructions will follow at that time. (Operator Instructions). As a reminder this conference is being recorded. I would now like to introduce your host Mr. Jim Jaye, Director of Investor Relations. Sir, you may begin.

Thank you, Amanda and good morning to all who are listening. I am here with Mike Hilton, our President and Chief Executive Officer; and Greg Thaxton, our Senior Vice President and Chief Financial Officer. We would like to welcome you to our conference call today, Friday May 23, 2014 on Nordson’s second quarter results. Our conference call is being broadcast live on our webpage at www.nordson.com/investors and will be available there for 14 days. There will be a telephone replay of our conference call available until June 6th by calling 404-537-3406. You will need to reference ID number 41277438. 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. I'd now like to turn the call over to Mike Hilton for an overview of our second quarter 2014 results and a bit about our 2014 third quarter outlook. Please go ahead, Mike.

Thank you, Jim and good morning everyone. And thank you for attending Nordson's second quarter 2014 conference call. Nordson delivered strong performance in the quarter with sales at the top end of our guidance and earnings per share a few cents above our top end. I want to thank our global team for delivering both the top line and bottom line while continuing to execute on strategic initiatives, continuous improvement projects, acquisition integration and targeted cost reductions. Given the soft macroeconomic environment I am pleased with the solid organic growth of 4% in the quarter. This growth was broad-based and included the majority of our product lines and regions. On a sequential basis sales increased by 16% over the first quarter which we leveraged to generate incremental operating margin of 67% in the second quarter. We also executed on our strategy of returning value to our shareholders by investing $53 million for the repurchase of shares and by distributing approximately $12 million in dividends during the quarter. Looking ahead, based on our current backlog, order rates and customer projects we are anticipating continued strong performance in our third quarter. In a few moments I’ll share additional comments about current business trends and our near term outlook. But first I’ll turn the call over to Greg Thaxton, our Chief Financial Officer who will provide more detail commentary on our second quarter financial results and our third quarter guidance. Greg?

Thank you and good morning to everyone. Sales in the second quarter were $417 million, an increase of 9% over the prior year second quarter. The sales improvement included a 4% increase in organic volume and a 5% increase related to the first year effect of acquisitions. The effect of currency translation compared to the same period a year ago was not material. Looking at sales performance for the quarter by segment; Adhesive Dispensing sales volume increased 18% as compared to the prior year second quarter. Organic growth was 8% and the first year effect of the Kreyenborg acquisition added growth of 10%. Organic growth was driven by rigid packaging, general product assembly, disposable hygiene and polymer processing end markets. And we saw strength in every geography with the exception of Japan. Sales volume in the Advanced Technology segment decreased 3% from the prior year second quarter. Solid organic growth in products for electronics, test and inspection, fluid management and surface treatment end markets was offset by softness in demand for automated dispensing equipment and selected mobile electronic device end markets. As noted in our press release we have begun to see an increase in orders and projects for these automated systems in recent weeks which we'll benefit the second half of the year. Geographically organic growth in the U.S. and Europe during the second quarter was offset by softness in other regions. Industrial Coating Systems sales volume increased 4% compared to the second quarter a year ago. This organic growth was driven by demand in consumer durable and industrial end markets, food and beverage end markets and UV curing systems for industrial and electronics end markets. The growth was broad-based with increases in all regions except the Americas as compared to the same period a year ago. Overall gross…

Thank you, Greg. Before taking your questions I like to provide some additional comments on our recent performance and outlook. And again I want to thank the global team for the value they provide our customers at a high level of execution. The midpoint of our sales guidance represents organic growth of 5% over the prior year third quarter and 7% for sales growth over the second quarter of 2014. And we expect to leverage this growth with both a year-over-year and sequential improvement in operating margin and strong growth in earnings per share. As we mentioned in our last conference call swings in the external environment can and do occur from quarter-to-quarter. At the same time we do not intent to alter our basic objective and we remain confident that the Nordson business model is intact and will continue to create value over the long term. The model rests on a global team that can be counted on to continue executing at a high level and a passion for providing our customers with differentiated technology and superior global support. In the near term the team will remain focused on driving top line growth from targeted initiatives, continuing the integration activities of recent acquisitions and using continuous improvement initiatives to enhance operating performance. At this time let’s turn to your questions.

(Operator Instructions). Our first question comes from the line of Christopher Glynn with Oppenheimer. Your line is open.

Thanks, good morning.

Good morning.

I was just looking for some non-initial color on how you are seeing the engagement by customers around your Suzhou efforts, how that’s going?

Yeah, so we are just in the process of continuing to transfer products there. So we don’t have everything transferred yet, but we’ve sort of completed our first round of development on sort of mid-tier product and will be launching that very shortly in the market place. We’ve had some interesting engagement with a number of the mobile players in the Chinese market and had some [referral] sales come through. So at this point we are trying to assess their needs to sort of fine tune our offerings there out of the Suzhou facility. But we still have a little work to do to transfer some other capability there.

Okay, and then on the polymer processing markets would you characterize that as largely over the hump of capacity absorption or still little ambiguity hanging around?

I would say it's not too much different than what we’ve said last quarter. You will recall it's really been the extrusion part of that market and the biaxial film that has the over-capacity and we expected to see orders come in towards the tail end of this year as OEM projects evolve and so we expect that really tail end of this year to see some orders come through and a step up in the next couple of orders and that’s still what we expect. In the interim as we mentioned last time we’ve been pursuing other markets like [Guangzhou, biax] film and have had some good success with our new offerings in those spaces. And we’ve gotten some traction as we’ve build out our facilities in Asia and approved lead times in a number of our product lines there. So I’d say it's encouraging based on what we see today but the capacity issue in the biax film is not cleared yet and we kind of expect that as something that starts to clear up at the tail end of this year.

Great, thanks for the help.

Our next question comes from the line of John Franzreb with Sidoti & Company. Your line is open.

Good morning Mike and Greg.

Good morning, John.

I wonder if you could talk a little bit about AT, on the order rebound you saw in the quarter you mentioned that you're seeing some traction in the mobile side of the market how much of that year-over-year rebound can you attribute to the mobile side coming back?

Well if you go back to some of our comments last quarter and they continue here, when we look across the whole technology space so far this year medical has been very strong; our general fluid management markets have been solid; our other electronic areas like the surface treatment and test business have been solid and it really was the more sophisticated dispense piece that was struggling a little bit out of the gate. And as we said last quarter typically we see orders come in second quarter, third quarter, may be even into the fourth quarter. And I would say what we're seeing here is really the tail end of the second quarter significant orders start to come through and we expect that to continue in the third quarter. So a significant improvement in the step up on the order trend as it has come from the high end high speed dispense in the mobile space.

And what's the sustainability of that kind of an order trend Mike do you think it's just one or two quarter trend, do you think it's a couple of years of being down it might have a little bit more legs to it?

Yeah, so what I tried to paint a picture of last time was what we see as sort of the long term situation here in the mobile space. One, the penetration of smartphone in general has moved from a relatively lower number I think we threw out 15%-20% if you went back number of years so pretty high number, say 80%. So we see that trend slowing a bit and moving ultimately more towards just smartphone overall growth. But by the same token we see some players today who are upgrading their capability and moving from say less smartphones to the smartphone space and we saw an opportunity for our mid-tier products which is what we're really trying to do out of Suzhou. That hasn't changed. So the question really is what's the timing of those two things and do they match up and line up? And not 100% clear yet. I mentioned a minute ago that we've got some orders now with some of these folks and we're trying to feel out both the sophistication of their end product and the processes that they'll use. So we have to see how that plays out over time. I would say there would be continued growth. It might be a little lumpy from time to time. And then I would say within the year we clearly have a seasonal pattern within the year where things start to pick up in the second quarter and third quarter and slowdown in the fourth and are pretty soft in the first. As that varies from time to time this year it seems to be fairly concentrated.

Okay, and the expansion in the medical side can you give us a little bit more color what business line that is what's driving the expansion?

Yeah we're seeing very good growth both in the Value Plastics business that we bought, sustained double-digit growth in that business as well as solid growth in the dispense syringe-related business of Micromedics. We had a product line last year in the [stop cap] arena that is also growing. So that business is growing nicely and as we continue to expand the product line both organically and with sort of these tuck-in acquisitions we see really good growth opportunity there. We also took a holistic look at all of our fluid management facilities and we do think we can serve some of their expansion needs as well through this investment. So sort of an overall supply chain look beyond just a medical piece to support growth over say the next three to five years in those areas as well.

One last question, in Europe orders are flat year-over-year, lot of lumpiness in the order patterns if you look backwards. Electronics had good orders can you kind of reconcile what's going on in Europe that we are having good orders in electronics but flat in overall book in Europe as a region?

Yeah so I think Europe kind off parallels the general what you see growing in the economy. If you think back last year we were still in a recession in Europe over the last couple of quarters things have gotten considerably better but by the same token if you look at the latest data coming out of Europe it's stepped backwards again. And so we’ve seeing a little bit of that fits and starts, I think overall from an order perspective particularly for the larger engineered systems that tend to be capital related. And then with electronic specifically it really is linked into what’s going on in the auto industry and the penetration in the auto industry more than anything else in Europe and so that what we are seeing continued penetration there which is an encouraging sign. And then I would say our sort of core adhesives business is finally coming back in Europe and that looks encouraging. Even though orders in this quarter are softer we do have good prospect list there. I think it really comes down to what’s the macro-environment that we see and with continued mixed signals that we could be up and down a little bit here just depending on how the economy plays out.

Okay, thank you, Mike. That's nice of you.

Our next question comes from the line of Kevin Maczka with BB&T Capital Markets. Your line is now open.

Thanks good morning.

Good morning Kevin.

Mike did adhesives order rates accelerate as the quarter progressed or even beyond the quarter as well and this may be kind of an apples and oranges comparison. But we are seeing better organic growth there and to the extent to that’s the pent up demand finally being released, it sounds like your demand was fairly broad-based but lots of other industrials are just not seeing that or seeing continue push outs and delays. So I am just trying to understand may be where you are different and if it’s may be a function of you being shorter cycle and seeing acceleration more recently?

Yeah, so if you look at the business, Kevin I think the consumer non-durable related piece is what has been strongest; so the packaging side of business in particular and nonwovens as well. I’d say the product assembly which tends to be more durable construction-related has been up but not nearly to the same extent as the other two. And as you recall we had kind of as you kind of alluded to here we had a kind of softer here last year in the sort of consumer nondurable and I think we are seeing that pent-up demand come through and we are trying to drive new opportunities through technology and applications and we are seeing some traction there. And I’d say the one that’s not as robust is the product assembly piece that goes into those two areas of construction and durable good although was up.

How much of the strength in the order book there is related to new products like the Freedom product versus just the demand, the tone of demand in the end markets being better?

It's primarily driven by the end markets. I’d say we are on track with where we thought we would be on Freedom and in fact we just introduced in May next a year down version of Freedom we call Liberty to address a little bit broader aspect of the market. I think as you know we mentioned we target Freedom at the high end and the customers that are at the high end really appreciate that but where there are some opportunity for some sort of pairing structure we’ve come out with another offering there. So I’d say we are generally on track with the new initiatives, but the biggest drivers really are pick up in the market and quite frankly us winning in the market place and taking advantage of that. And we also as you know have a large installed base. So we are continuing to push using technology to help improve and update our customers' capability.

Okay, and just finally from me. We had a small restructuring charge this quarter, now you’ve got the tech expansion coming in Colorado. I think in terms of your footprint you are usually able to slight go up and down pretty easily given the assembly nature you have. How are we doing in terms of capacity elsewhere? Should we expect other additions will be required here as we go forward and grow?

Now we are in pretty good shape elsewhere. I think we’ve talked over the last couple of years about the first the physical expansion in places like Suzhou and the build out of the product line there, with some of the acquisitions we've got additional capability in China and Thailand and it would build up capability there. Here we had a leased facility that we quite frankly we just outgrew given the significant growth we had in that business and in some of the discussions we had around some of the newer facilities and capability that have come with acquisitions there’s some opportunity to optimize. So I'd say we are in pretty good shape here. This was something that from day one we knew if we get the growth rate targets in the middle of this we would need to expand and as Greg said wherever we can prefer to own the manufacturing facilities as opposed to lease it, particularly for businesses where we see the long term future looking bright.

Okay, thank you.

All right.

Our next question comes from the line of Charlie Brady with BMO Capital Markets. Your line is open.

Hey, thanks, good morning guys.

Good morning, Charles.

Can you just give us the breakdown of the parts percentage by individual segments and particular ease of dispensing of the order?

Yes, overall I think the parts we’re just looking for a number here Charlie; in the quarter overall parts were about 41%. Adhesives generally tends to be higher than that but I think with the significant step up in systems orders that we have seen really in that business all year it’s not too different from that 41% and that’s really true across the segment. They are not too far off from that total company average, clearly more system sales in the second quarter versus first quarter. So it makes us move a couple or three points from the first quarter.

All right and can you discuss were there any large nonwovens big large systems, lumpy stuff in the quarter?

No, I think we've had a steady inflow of new orders in the nonwovens side. I would say nothing that we would call out in that regard. Typically in the adhesives segment the product assembly is the area where we could have some also, some bigger systems and in the first quarter we had some comparisons that were tough versus last year because we had some big solo orders last year that didn’t recur yet this year, that may well come later in the year. So I would say nothing that we would point out significantly, just a nice steady improvement in the packaging area which tends to be smaller systems and improvement nicely in the nonwovens that tend to be bigger systems but nothing that I would call out as a notable difference.

All right, okay. And just if you look at the value of plastics business for a second can you just give us maybe an update on the non-medical part of that business? It's a small piece obviously but that was an area I think when you bought that company you thought that maybe you could leverage that up and accelerate that because it was kind of under invested by the prior owner.

Yeah I would say that an area probably that hasn’t grown as fast as we would have expected. We had some additional traction on the industrial space. We segmented it into certain markets we think are most attractive to the level of sophistication in the components but that’s not moving as fast as we would have anticipated. On the other hand the broadening of the product line organically and taking advantage of geographic penetrations probably move faster than we thought. So overall I think we are probably on track. But the industrial piece is not growing as fast as we would have anticipated and the segments that are high end are doing better than some of the others that maybe don't buy the sophistication that we have to offer there. So that scenario we are not as good as we would have thought.

All right, wonderful, one more from me then. Any update on the LED market, any acceleration kind of investment activity going into that space for you guys?

We haven’t really seen that step up in a big way. As I mentioned last quarter we started to see orders increase in that space from a lighting perspective but nothing that would say hey the way this is hit and I think that’s still where we are at.

Great, thanks a lot.

Our next question comes from the line of Jason Ursaner with CJS Securities. Your line is open.

Good morning. Congrats on a strong quarter.

Thank you.

Just following up some of the questions you got for the tech segment. One of the big challenges you talked about in mobile had been the issue of form factor and that there really hasn't been any change with some of the major flagship models for some time. We are obviously seeing a lot written about changes coming in terms of form factor. Do you think that’s driving some of the strength in mobile or is it simply the industry working through the installed capacity for the high speed -- high dispenser and the [inaudible] put in to your supplier?

Yeah, I would say a little bit of both. So you know the element that tends to be consistent and steady are sort of components. So things like camera modules, speakers, microphones, gyroscopes, [inaudible] those kinds of things and everybody kind of does that the same way, and tends to use the same set of vendors that we are well positioned. Beyond that it's the sort of features of the phone. So one manufacturer came out last year with the here is an example of the sort of fingerprint sensor. Others are following suit. That is an example of sort of features that tend to drive new applications. So I would say what we are starting to see here is kind of work through maybe some sluggishness in the first quarter around the supply versus capacity and then some additional features coming through and still some potential for form factor changes it's not just things like screen size, fitness is also something that plays a part here and helps with the level of sophisticated needing -- certification needed.

Okay. I appreciate that commentary. And then margin in adhesives, it’s back to 27% just I guess when you know at the polymer and plastics businesses are those starting to pull up closer to kind of segment average and how big a gap do you see still relative to the traditional core packaging in adhesive dispensing modules?

Yeah, they are improving but not where we need them to be at this point. As we said that it is going to take us a while three to five years to get to that sort of mid-20s kind of margin and we are on that path and the big item that we need obviously is more robust revenue to start in the short-term, are starting to see that improve. I think when the biax piece comes out, comes back we will see that improved significantly. We have got good improvement from continuous improvement standpoint but there are some things around supply chain optimization that will take a little bit longer-term to optimize. So I think we are on the right path but we are not where we need to be yet.

Okay, and is incremental margin on kind of the overall business for polymers is that good enough to kind you get there or you really need biax yield to start coming back, is that higher margin part of it?

No, so, the incremental margin is good in that business like it is in all of the businesses. We just need the revenue to come back at reasonable levels and it’s not where we anticipated and quite frankly as we mentioned last year it fell off instead of moving up because of the biax piece. And today it’s just the leverage, the volume leverage that you typically get on the infrastructure combined with what we are doing from a continued improvement standpoint, a lot of which, a lot of the benefits of which we’ll see when the volumes comes back through. So you will see incremental margins improve as a result of that -- on that incremental volume. So it's sort of a double whammy there as the volume come back. In the short-term you don’t see some of the improvements that we have made because the volume has not been as strong as we’d like.

Okay. And just last question for me. Looking at the part sales how high a market share of the aftermarket spend of your customers do you think you are capturing? Obviously I know you guys are doing a good job there but just wondering is there sort of a big opportunity to increase share, not necessarily in H2 but next year and beyond in addition to just natural growth on the installed base?

Yeah, so, I think we have said in the past we don’t have a 100% of the aftermarket parts for the business, particularly because we have got a huge installed base out there and many of the items have been out there for a long time and so part of our focus from a technology standpoint has been to upgrade the technology and retrofit and the retrofit can take a number of approaches. So we talked in the past about things like our many blue and [surbeat] dispense offerings in adhesives which are relatively simple upgrades for customers that give them more efficient use in the adhesive dispense but also the potential for friction bat. There is more extensive things that from an upgrade standpoint which will be things like the new Liberty product line or the new Freedom product line that's an example in adhesives. So I would say there is opportunity there we're focused on that. It's not like we've got a huge opportunity in the short term there but we think it's a nice complement. And we're trying to reintroduce where we can on these older systems, proprietary technology that give our customers the performance benefit but also have intellectual property protection as well as challenges in the manufacturing that limit the ability to copy.

Okay, great. Appreciate all that, thanks.

Our next question comes from the line of Walter Liptak with Global Hunter. Your line is open.

Hi, thanks. Good morning everyone and nice quarter.

Thanks Walt.

I think you started answering this question or maybe I just didn't get it but the -- just the trend in orders throughout the quarter your orders are up 9% but your revenue guidance is a little bit higher than that, was your exit rate for orders stronger as the end of the quarter?

It certainly picked up. If you look at sort of our normal pattern I would say it's inline in general with our normal pattern which tends to grow from sort of the late January standpoint and continues to grow to peak sometime in the third or may be early fourth quarter. So we saw it mirror the trend. I would say in a couple of areas and particularly the mobile space we saw more of the orders come in towards the tail end of the quarter. And I think as we said last quarter we weren't sure how much would come through in the second quarter versus the third quarter and we saw orders step up significantly there. So certainly in that space it was towards the tail end and the rest I would say followed pretty closely our normal pattern.

Okay, I guess what I am trying to get to and may be everybody else is too is just the orders have been pretty choppy for the last year. We saw a pick up and then they slowed again. And so is this something where we think that kind of a lot of your end markets are beginning to improve and the regions are improving. We get to more sustainable less volatile order trends.

Yeah and I would say if you look at it there is not necessarily a common theme across each business and each region and so some of the volatility that we've seen is a function of one particular business or one particular region. And the good news when you aggregate it all up it's generally less volatile than if we were focused just on one segment and one region. But I think part of it comes back to what you see from a macro-economic perspective. I think we've always said that we'll outperform the macro economy but we're not immune to it. So we kind of float on top of that, and I think if you look at the last couple of years you have seen a lot of variability in the macro economy and in the macro -- kind of relative to expectations. And even this year as you look to where we are right now you will hear two pieces of good news and one piece of bad news. Everybody expects the second half of the year to be stronger than what we've seen so far in the first half of the year but the most recent data in the major areas around the globe has not been particularly strong. So I think where that impacts us the most we talked about a little bit earlier here is in the bigger investments to bigger systems orders, the things that are more construction and consumer durable related where people step back when they see this kind of uncertainty. So we can have I think to sum it up hopefully it's just a function of what's going on in the global economy right now.

Okay.

And I would say in each of our businesses the markets are a little bit different. So last year the consumer non-durable part and our adhesives business the overall consumption in that marketplace was pretty weak. And this year it's improved nicely and we're seeing the benefit of that. We're very well positioned everywhere to take advantage of it when we ought.

Okay, great thanks for the answer, and along those lines you mentioned again that the polymers business should get a pick-up in the fourth quarter. Was it your fiscal quarter or the December year and why was that -- why is that expected to pick up then?

Yeah. So I would say we are seeing some improvements in orders now based on introducing new technology based on building out facilities in emerging markets. So we’ve got enhanced capability and lead time. What we are particularly referring to is the biggest impact on that business as in what they call it biaxially oriented film and so think about that as the multi-layer film that is used in all of these plastic packages that you see in the grocery store for everything from drink through detergents and motor oil. And that’s an area where there were substantial investment in 2011 and 2012, I think based on a projection of a more robust economy at that time globally and there we shot the mark. And we really expect to see that business be strong in the next couple of years. We’ll start to see some orders this year. And we are basing that on what we are hearing from the OEM channel which tends to give us some insight into orders that would come to us based on projects that they are starting to work on. So that’s really what’s given us some encouragement. Overall consumption on the plastic side has remained in sort of the 5%, 6% even in the up and down short term macro environment and the projections from the folks in the industry that follow this are for pretty robust 15% and 16%. And so that’s why we are making the commentary and I’d say our customer base would support that.

Okay got it. Okay thank you.

Our next question comes from the line of Greg Halter with Great Lakes Review. Your line is open.

Thank you and good morning.

Good morning.

I wondered if you could discuss the current M&A environment and what you guys may be looking at there, if it’s more focused on the dividend and the share repurchase, or if you are still looking for additional companies?

Yeah. So I would say we always want to have a robust pipeline and we do. And I would say we have a goal to have a significant amount of that activity be proprietary and we are working on a number of things that fall into that category. As we said through the last quarter and coming into the year we kind of expected this year to be a year focused on completing the integration of the latest acquisitions, delivering on the synergies, getting ourselves positioned to take advantage of this growth we expect coming back as I just mentioned in the plastics space, and that we would probably looking at more sort of bolt-on kinds of things like we did with the product line addition in the medical space left towards the tail end of last year. But we have a robust pipeline. So from a priority standpoint in the near term it's more likely to be share repurchase which we talked about in this quarter and we indicated last quarter that we expected to this year to be largely through our Board commitment which was around $200 million and so I think we still have about a $140 million left on that but we are active through the whole quarter in the second quarter. And then we have a strong dividend policy. We’ve mentioned in the past that we like to get that payout ratio up into the low to mid 20s and we are probably hovering around the high teens and so we except going forward to continue to see strong dividend increases like we’ve done the last three years. So I’d say the priority in the short term is probably more around obviously number one to support our organic growth of our business but it’ll be more around probably the share repurchase of dividend and the M&A activity is likely to be more bolt-ons in the short term.

All right. And of that $53 million spent on the repurchase, how many shares were bought and what’s the -- do you have the share count at the end of the quarter?

The share repurchase activity I believe was about 700,000, and in terms of the share count at the end of the quarter we’ve got average shares and common share equivalents at the end of the second quarter of just under of about $64.5 million and that compares to close to $65 million at the end of the second quarter of the prior year.

All right. Then relative to the four larger acquisitions, Kreyenborg Xaloy, EDi and Value Plastics I wonder if you could run through each of those in regards to where you think you are in the integration of those companies?

Yeah, so, if you look at Value Plastics is done and we are running that in accordance with the strategy that we developed to round the product line, globalize the business, add some tuck-ins to it and as we mentioned earlier we need to expand capacity to support the growth in that business. In the sort of polymer processing or plastics area we in a sort of period of 18 months we made four significant acquisitions, the latest of which was the Kreyenborg BKG acquisition and I would say we are through all of the critical sort of integration steps from a back office standpoint from a run the business standpoint to make them part of Nordson. I’d say we still, as we talked about in the past, there is some things that are longer term. So optimizing our sales channels, we prefer to go direct as much as we can. Some of those companies had direct in certain places and agents or distributors in others and we are going through a thoughtful process of doing that. We also want to optimize the total offerings that we have now across that full melt stream concept and that take some time because we have to cross train or align engineering organizations, things like that. And then on the supply chain, optimizing supply chain I think we are making good progress on things like our sourcing initiatives. But there is other things that we need to do further optimize that and it will take some time as well. So I’d say we are good with all the sort of critical run the business kind of activities and done with the formal integration with the latest acquisition and eventually moving that total capability to the vision that we had when we made these four acquisitions and that’s a multi-year activity that we have talked about in the past.

Great, thank you very much.

Our next question comes from the line of Liam Burke with Janney Capital Markets. Your line is open.

Thank you. Good morning Mike, good morning Greg.

Good morning, Liam.

Good morning.

Mike can you give us a profit profile of both as you introduce -- as the Freedom and Liberty products ramp-up do you anticipate having profit margins similar to what the traditional adhesive products were?

We do. I think our overall strategy as we have talked about in that business is continue to be the technology leader to introduce the latest, greatest best capability and to price that in a way that we get paid for the capability but at the same time are conscious of the position we have in the industry. So yes we would expect those products to be equally profitable or maybe a little more profitable than our current product line based on the fact that they are newest greatest technology with the most to offer.

Okay, and on staying with adhesives the numbers are strong on the revenue side, orders were healthy. Are you seeing any change in the competitive front there?

No, not really. I mean we have got good competitors in that space and I think as you know it kind of varies, the packaging's a little bit different than nonwovens, a little bit different in product assembly, and it varies by geography. But we haven’t seen any significant change in the competitive landscape. We have got good competitors and you know our goal is to continue to enhance our business model which means both investing in technology but also trying to be the best out there from applications, sales and support and service offering. I think we do a very good job and our team does a great job of that. So we are conscious that we have got good competitors and we want to stay ahead of them.

Great, thank you Mike.

Okay.

Our next question comes from the line of Matt Summerville with KeyBanc. Your line is open.

Hi, good morning, guys. This is Joe Radigan in for Matt.

Hi, Joe.

Hi, good morning. Maybe can you give us some more color on what you are seeing in China? You have called out softness there in recent quarters, orders rebounded in Asia Pacific pretty nicely although that was against a weak comp so may be what are your folks on the ground saying there about the tone of project activity and visibility because I know it's been pretty choppy?

Yeah I would say it's not too different than what we been saying in the last couple of quarters. We do see a good activity I’d say in certain businesses. Those things have come through. So we are seeing nice business come through on the adhesives front, particularly in packaging and nonwovens. I’d say with the step up in the mobile thing we’ve seen orders come through on the technology space. I’d say in some of the consumer durable side it's a little softer and I think that’s just a function of trying to understand where the government's going within China what level of support they will provide or won’t provide, the availability of credit. So I still think there is a fair bit of uncertainty there. We have a good robust project list. I think the bigger ticket items are little slower to come through from an investment standpoint but we still expect it to be a solid year in China. I'd say it is choppy still.

Okay, and then may be one more on the mobile piece of the business in advance tech more of a clarification really. The last product cycle in 2012 you saw very strong double digit order and revenue growth for a couple of quarters. Based on what you talked about and seeing this pick up of momentum here very recently, could you see a similar type of ramp based on that? Or is this more of a steady improvement given some of the saturation and other stuff you talked about?

Yeah I would say in the longer term it's more a steady improvement. I’d say it's seems like we are sort of getting orders concentrated into a more narrow period of time then maybe we have in the past. So it may be that these sort of cycles are when product offerings are coming out are coinciding a little bit more. But I’d say it's more of a steady improvement along the lines of the comments that I made earlier around what we see as long term trends. But it does appear to get more concentrated from an order perspective in terms of timing within a year.

Okay. Thanks Mike, I appreciate it.

Okay.

Our next question comes from the line of Mark Douglass with Longbow Research. Your line is open.

Hi good morning, gentlemen.

Morning Mark.

Can you discuss the dilutive impact of Kreyenborg EDS margins, just give better idea of how the legacy business was doing year-over-year on the incremental margins?

Yeah, I’d say overall what we said is most of the businesses that we brought in that space had sort of mid-teen or so EBITDA margins and we really needed to get those to sort of operating margins in mid-20’s and that was going to take some time. And I think Kreyenborg is in a similar place. They are having a good year. We are ahead of where we thought we would be when we brought them. So that’s certainly encouraging. But we have the opportunity over time to improve them just in a way that we have with other businesses by introducing the things that we are good and have continuous improvement. Some of the discipline around the marketing and product management and pricing, and then really using them as a nice fit in the portfolio in terms of product capability to leverage the melt stream piece. So end of the day they have the impact like the other businesses did and over time our goal is to get them to that sort of mid-20 sort of corporate average as we go forward.

Okay, and in tech, why the restructuring charge in tech? What are you doing there? And you invested more in tech last year.

We did and in different places, okay. So what we are really trying to do is a couple of things. So respond to the cycles more quickly and figure out how to do that in a better way. And two as we optimize our overall global footprint in terms of building up places like Suzhou to support sort of the tier restructure there we need to look at our global organization and optimize where we have resources and capability and so that’s part of what we’ve been doing.

And then finally in the tech ecosystem I could see good growth in your test platform and plasma that looks like it's pretty stable for a while, should be pretty firm for multiple quarters?

I would say the test piece has come back particularly as we talked about last time with bond test as a good indicator, that continues to be solid and [extra inspection] we are in a good position in terms of the capability that we have there. So our expectation is for that business to be solid. We haven't yet seen a big step up in some of the more traditional applications although some of the things that we're seeing in the test side would give us some encouragement to that. So we're hopeful that's going to continue to improve. There are some new applications on the surface treatment that we're engaged and that are helping drive that and we've got a nice set of product offerings there that support that.

Okay, thank you.

Amanda we have time maybe for one last question.

I am showing we have a follow up question from the line of John Franzreb with Sidoti & Company. Your line is open.

Yeah just in industrial coatings we haven't touched on much. It seems to me that the margin profile was substantially stronger than a year ago at similar revenue levels. Is there something in a mix or structurally different that drove that margin gains year-over-year?

Yeah Charlie this is Greg there was -- I am sorry John. This is Greg. There was -- it is a mix story within industrial coating, not particularly significant difference in parts versus systems but the types of systems were more of a standard system if you will than a fully engineered system. So product mix was a big driver there. But I would say as we continue to improve the profitability of the business so we've got a very robust effort in the many fronts in that business and we've made really good progress today but our goal is for further improvement there.

Great guys, thanks for the color.

Okay.

So that's going to wrap up our Q&A period for now. This is Jim, I'll be around the rest of the day if you want to email me or call me we can get some time together if you have follow-ups. Thanks for listening in and everyone have a good holiday weekend. Thank you. Bye-bye.

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