Atrion Acquisition Impact
Q: What's the expected margin profile for Atrion and steps to improve it?
A: Atrion's margins have declined due to supply chain issues over the last couple of years. Historically, Atrion achieved EBITDA margins in line with Nordson's. Management is confident they can return Atrion to those margins over time, aiming to resolve issues within the next two years using NBS Next, their business system, and expect Atrion to reach Nordson-like margins by 2026.

Medical Segment Slowdown
Q: How long will the medical interventional destocking persist?
A: Last year, the interventional business grew by 15-16%, above its typical 6-8% growth rate. The current slowdown is an adjustment from that exceptional growth, with customers being more cautious about inventory levels. While it's difficult to predict exactly when conditions will normalize, management believes the long-term growth drivers remain strong as procedure volumes are up and project activity continues.

Outlook for Key Segments
Q: How has your outlook for IPS, ATS, and MFS progressed?
A: The year is unfolding as expected for the fourth quarter, with the base business holding steady. In the Industrial Precision Solutions (IPS) segment, they anticipate slight growth to flattish performance after two record years. Advanced Technology Solutions (ATS) is showing signs of recovery with order entry picking up, though management remains cautious. In Medical and Fluid Solutions (MFS), they face tough comparisons due to significant growth last year and see weakness in order entry as customers adjust inventory levels.

Leverage and M&A Plans
Q: How are you managing leverage after the Atrion deal, and what's in the M&A pipeline?
A: After acquiring Atrion, leverage will be at the higher end of their 2 to 2.5x target but is expected to decrease quickly due to strong free cash flow. The M&A pipeline remains healthy, and they are committed to balanced growth through both organic initiatives and disciplined acquisitions that meet their strategic and financial criteria.

ARAG Performance Amid Weakness
Q: How is ARAG performing amid lower sales volumes?
A: Despite market softness, ARAG is delivering Nordson-like EBITDA margins. Integration is nearly complete, and the team is focusing on new product development and preparing for market recovery. Management is pleased with the technology, market presence in Europe, and precision agriculture components ARAG provides.

Geographic Market Trends
Q: Can you comment on trends in Asian and European markets?
A: U.S. markets remain the strongest. In Asia-Pacific, electronics businesses are recovering, with encouraging order entries from Asian electronics customers . Nonwoven OEM customers in China also contribute to strength in that region. Europe shows weaker organic growth, with good parts revenues but softer system revenues.

Backlog Normalization
Q: How do you view current backlog levels and trends?
A: Historically, backlog was around $400 million to $450 million, but it has increased to $640 million to $650 million, still weighted toward system businesses. Changes in customer order patterns, like fewer large blanket orders and improved delivery performance, have affected backlog composition. Regular book-and-ship businesses have returned to normal order entry and backlog levels.

EFD Business Performance
Q: How is the fluid components side, particularly EFD, performing?
A: The EFD business is doing well with encouraging order entries. There are early indicators of increased orders from electronics customers, especially in Asia, signaling positive trends in this segment.

CFO's Focus on Growth
Q: What areas do you see as opportunities for further improvement?
A: The primary opportunity lies in continuing to grow organically. With very healthy margins and cash flow, management believes focusing on organic and inorganic growth is more beneficial than further margin expansion efforts.