Thank you for standing by, and welcome to the Nordson Corporation Announces Agreement to Acquire Atrion Corporation Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press the star one. Thank you. I'd now like to turn the call over to Lara Mahoney. You may begin. Thank you. Good morning. This is Lara Mahoney, Vice President of Investor Relations and Corporate Communications. I'm here today with Sundaram Nagarajan, our President and CEO; Stephen Shamrock, Chief Accounting Officer; and Stephen Lovass, Executive Vice President of the Medical and Fluid Solutions segment. Dan Hopgood, Nordson's new Executive Vice President and Chief Financial Officer, who started last week, is also on the line and listening in. We welcome you to our conference call today, May 28th, to discuss this morning's announcement of our agreement to acquire Atrion Corporation, a market leader in single-use proprietary medical infusion and niche cardiovascular technologies. A press release about the transaction was issued earlier today. You can find a copy of the release, as well as our webcast slide presentation that we will refer to during today's call, on our website at www.nordson.com/investors. This conference call is being broadcast live on our investor website and will be available there for replay. There will be a telephone replay of the conference call available until Tuesday, June 4. On today's call, as you'll see on slide two, we will discuss Atrion's complementary fit within the Nordson Medical platform, review Atrion's strong product portfolio, and discuss the details of the transaction. We will then open the call for questions. Before we begin, please refer to slide three of our presentation, where we note that certain statements regarding our future performance that are made during this call may be forward-looking based upon 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. We'll now turn to slide four, and I'll turn the call over to Naga. Thank you, Lara. Good morning, and thank you for joining us today. Over the past 15 years, Nordson has built an almost $500 million medical platform that is now part of our Medical and Fluid Solutions segment. Scaling our portfolio of precision technologies for medical end markets remains an important component of our growth strategy. The medical space is an attractive end market, supported by several secular growth drivers, including the aging population, increasing healthcare spending and procedure volumes, adoption of minimally invasive surgical techniques, and continued innovation and medical OEM outsourcing. Over time, we have successfully grown in this end market, both organically and through acquisition. As noted on slide five, Atrion's products will expand our current portfolio in medical fluid components and interventional solutions by adding a category leader in infusion fluid delivery and niche cardiovascular therapies. Atrion expands Nordson fluid components addressable market by more than 50% by adding products and solutions for infusion therapies and drug delivery. This also extends our current offering to top medical device customers and broadens Nordson's exposure to high-growth medical end markets with significant single-use consumables with recurring revenue streams. Over the past few years, we have gotten to know Atrion's management team, its products, and operations. While they have experienced post-COVID challenges to revenues and margins, they have invested over $70 million in the business over the last three years, including a significant expansion of their world-class FDA design and manufacturing facility in St. Petersburg, Florida. Leveraging our NBS Next growth framework and medical business expertise and this additional capacity, we see significant operational synergies while supporting Atrion's return to historical margin levels. Atrion will become part of our Medical Fluid Solutions segment. I will now turn the call over to the MFS segment leader, Stephen Lovass, to share more about Atrion's product portfolio and complementary fit with Nordson. Thank you, Naga. Headquartered in Allen, Texas, Atrion Corporation generated approximately $169 million in annual revenue in 2023. Established in 1944, the company supports customers globally through three specialized FDA-registered manufacturing facilities located in the United States. As you'll see on slide 6, its portfolio consists of three key business brands that will significantly expand Nordson's addressable market in infusion and cardiovascular therapies. Comprising 43% of revenue, Halkey-Roberts is a leader in infusion fluid delivery solutions, including single-use OEM medical components such as needle-free swabable valves, Luer valves, pressure relief, and check valves used in intravenous, intubation, catheter, and other fluid transfer therapies. These products are used in applications such as drug delivery, oncology, dialysis, contrast media delivery, and more. 42% of revenue is in cardiovascular solutions delivered through its Quest and Atrion Medical branded businesses. Quest Medical's highly differentiated microplegia, myocardial protection devices, and related single-use consumables deliver real-time, precise blood and cardioplegia solutions during open heart surgery. Quest Microplegia System improves patient outcomes, including faster recovery times and reduced medication costs, while also mitigating the risk, the risks of bacterial infection. Quest Medical also designs and manufactures single-use components used in cardiovascular procedures, including cardiac surgery, vacuum relief valves, silicone vessel loops for minimally invasive surgical procedures, and aortic punches for attachment of bypass vessels. Next, the Atrion Medical business is a differentiated provider of OEM inflation devices used in minimally invasive therapies for structural heart, ENT, and gastrointestinal procedures. The remaining 15% of revenue is, in other specialties, including ophthalmic applications and specialty inflation systems and valves used in marine and aviation safety products. Turning to slide seven, you'll see how the addition of Atrion's portfolio will significantly expand Nordson's addressable market. First, the Halkey-Roberts portfolio expands Nordson's fluid component addressable market by over $600 million with its infusion therapy products. Second, Atrion Medical interventional inflation devices add to Nordson's existing interventional solutions offering for global OEMs. And finally, Quest Medical will expand our solutions for cardiovascular and structural heart. Nordson Medical has long had a leading position in providing interventional solutions for minimally invasive and surgical structural heart procedures. Nordson also offers product lines in cardiopulmonary vascular cannulae, catheters, and specialized tubing for ECMO procedures. Quest Medical's microplegia myocardial protection systems and related single-use consumables will expand the applications that Nordson can serve from supportive therapies through to surgery. Turning to slide eight, you'll see additional value creation opportunities related to this transaction. Atrion has three registered facilities in Florida, Texas, and Alabama. It is a well-invested company, having undertaken over $70 million of CapEx in the last three years. This included the expansion of a world-class, FDA-registered design and manufacturing facility in Florida that Naga mentioned, with top-of-the-line clean room automation. We believe Nordson will be able to leverage the investments that Atrion has made in its facilities to support Nordson's future growth with less new capital investment. Second, Nordson has deep experience in the medical device industry and is very familiar with Atrion's injection molded fluid components business as one example. We believe there is ample opportunity to leverage this knowledge and our NBS Next growth framework to deliver operational synergies here and elsewhere in the business. Nordson has proven itself to be a strong operator, and we're confident in returning this business to its historic margin levels. Third, Atrion's businesses are supported by a strong patent portfolio of 498 active and pending patents. A good example of its innovative product portfolio is the newest generation of their Myocardial Protection System. Despite being impacted by supply chain issues in 2023, the product has received strong market acceptance. Nordson will support the successful acceleration of sales for this product, including an attractive opportunity to recapitalize its installed base. Finally, Atrion's skilled engineering and technical teams have built a strong new product pipeline. We're excited for these teams and the broader Atrion employee base to become part of our Nordson Medical team.... Moving to slide 9, I'll turn the call over to Stephen Shamrock to discuss the transaction summary. Thank you, Stephen. This all-cash transaction is valued at $460 per share, for an enterprise value of approximately $800 million. This reflects a valuation of approximately 15 times 2024 estimated EBITDA, inclusive of synergies that we expect to realize within the first two full years of ownership. Historically, Atrion has a strong financial profile that is underpinned by the details that Stephen just reviewed. Notably, leading innovation capabilities and favorable secular growth trends in the medical end market. More recently, Atrion has been negatively impacted by operational and supply chain challenges. We have developed a robust plan to achieve synergies by leveraging our NBS Next growth framework and knowledge of the medical space to improve the operational performance and better leverage the substantial assets Atrion has in place, in addition to rationalizing duplicate public company costs. The acquisition of Atrion emphasizes Nordson's disciplined capital deployment strategy, which is focused on high quality niche leaders serving attractive growth markets that are additive to Nordson's existing lines of business and support long-term shareholder value creation, achieving high single-digit return on invested capital in year five. We will finance this transaction through a combination of cash on hand and financial debt. We expect to close this transaction by the end of fiscal 2024 and exit the year with a net debt to EBITDA leverage ratio within our targeted range of 2-2.5 times. I'll now turn the call back to Naga. Thank you, Steve. We are very excited to welcome Atrion and its 700 employees to the Nordson team upon close of the transaction. All of what you just heard energizes us as we make progress on our long-term ascend strategy to deliver top-tier growth with leading margins and returns. With that, we will now open the call for questions. Thank you. We will now begin the question and answer session. If you would like to ask a question, press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. Your first question comes from the line of Jeff Hammond from KeyBank Capital Markets. Your line is open. Hey, good morning, everyone. Good morning. Good morning. Congrats on the deal. Right. Just maybe I wanna start digging a little bit better, a little bit more on this, you know, maybe some of the challenges they were having with supply chain. Looks like maybe some plant absorption and inventory correction issues. Just maybe walk through what's been going on there and where you think the opportunity is, you know, kinda where they are in fixing it and where you can kinda add value to that process. Yeah. Let me get us first started with some broad thoughts on that and have Steve add a little bit more color. As you think about it, you know, this is historically a very strong company. Through the last couple of years, they've had supply chain challenges, and we fundamentally believe through our diligence process, those supply chain problems have been resolved. So this is really related to one of their newer generation MPS system launch. The second is, Steve will walk you through a lot of the details of how we've got what we have planned. But what I would tell you, at the broadest level, we understand the medical business, we understand injection molding plastics, which is exactly what they do. And third, we have NBS Next that gives us a clear line of sight of what operational improvements that we can achieve. And with that, we have developed a pretty robust plan to restore the company's historical margin levels. Steve, you wanna add a little bit more color? Yeah, sure, Naga. So, you know, to your question, Jeff, too, I think Naga highlighted the two main challenges, and actually, Atrion touched on that in their shareholder letter, if you want to obtain more details there. But basically, you know, related to their new MPS 3 console, there were some shortages of electronic components, so that negatively impacted their sales in 2023. And then they had some inventory challenges where customers placed orders in 2022 in excess of their actual needs. So, you know, their customers needed to work through that in 2023. So that really were two of the main drivers in terms of their performance in 2023. You know, if you pivot to 2024 and going forward, you know, we touched on that, I think, in our earlier comments, just in terms of the operational synergies that we see, you know, through NBSNext, right? And it's, it's not just a simply matter—it's not based solely on volumes coming back, right? I mean, I think about some of the strategies that we've effectively executed at Nordson in terms of product simplification, you know, procurement savings that are there, leveraging the investments. You know, Stephen and Naga touched on that $70 million. That includes some automation investments as well. So again, we've demonstrated an effective ability to manage incremental and decremental margins from a Nordson standpoint. We look forward to bringing that, you know, to Atrion. It goes without saying, there's obviously public company costs that will go away and represent part of those operational synergies. Yeah, that was my next question. So it looks like there's maybe $14 million of, of synergies built in. Maybe just talk through how much of, of that is public company costs and, and maybe some of the other buckets, if you have them? Yeah, Jeff, what I would tell you of that number, about $5 million is the public company cost that will be eliminated. And then, you know, beyond that, I would tell you, it's really just a mix in terms of just, again, some of the things I mentioned earlier, automation, product simplification, procurement savings, that those type of operational, you know, synergies that we've demonstrated an ability to effectively manage on Nordson's side, so. Okay. Thanks so much, guys. Thank you. Your next question comes from the line of Michael Halloran from Baird. Your line is open. Hey, morning, everyone. Good morning. Hey, so- Morning. So, exclusive of the supply chain challenges, maybe you could just talk through what they're seeing in the fluid components pieces, the interventional pieces, cardiovascular. Just kind of go through those pieces. Similar to where what Nordson's seeing, where it's different, maybe just kind of trend line as you worked through last year, and then what the expectations are for this year. So what I would say is, there are some similarities here, and close adjacencies in the markets we operate. But they're, they are different. And I'll take it maybe piece by piece as you touched on there. If you think about, in the fluid component side, you know, we are a leader in terms of components for patient care, biopharma, and surgery. And so you have as you know, you've seen, some impacts from the biopharma destocking in that part of our business. Mm-hmm. Atrion, through its Halkey-Roberts brand, operates in the infusion therapy market, so a little bit of a, it's a very close adjacency, but a different market, that over time is typically a mid-single-digit growth rate. They have a strong position there, in terms of long track record with leading OEMs and through their innovative products and service levels. You have seen in the first quarter good recovery in that market, and but over time, we expect that to be a strong mid-single-digit market. As was touched on earlier in terms of the cardiovascular side of the business, they were impacted last year by the supply chain issues. Overall, again, that market is in the mid-single digit range, but we think there is a strong opportunity relative to the recapitalization of the installed base over time with the MPS systems. But the second part of that is the expectations for this year. Because I think their guidance is high single digits or something like that for the full year. Just curious how you think that plays out between the various pieces and kind of what the moving pieces below the hood are there? I would say overall, you know, I would follow the guidance that was issued in the first quarter. You know, we believe that they are on track to meet their guidance that has previously been given. But just the components beneath it, any context on that, right? Like, what the drivers are. I mean, is this mostly the recovery in cardiovascular against easy comps? Is it something else? Yeah, without maybe getting into too much detail there, it's, you know, it's really tracking with the market and then the recovery in terms of being able to supply the myocardial systems. I'd say I can't really share more than what we've talked about and what they have given guidance on at this stage. Got it. And then one separate question. Just when you talk about, you know, returning to peak margins, I think their margins were in the thirties, is on EBITDA a bit ago. I mean, is that what you're contemplating ultimately for where the margin profile of this company goes? Just looking for some clarification. Thanks. Yes, Mike, I would say over the period of time here. Yeah. Great. Thank you, everybody. Really appreciate it. Your next question comes from the line of Matt Somerville from D.A. Davidson. Your line is open. Yeah, thanks. A couple of quick ones. Maybe can you talk about the company's competitive positioning? Who are the main competitors to Atrion? And then, can you talk about their relative market share in the TAM as you guys see it today? I'll take that one. From a, again, I'll talk about it maybe in terms of the three, you know, buckets that we laid out. In terms of the infusion therapy side, you know, competitors would include people like CareFusion or ICU, B. Braun, Baxter, as examples. They have a strong position, you know, reflected by long-term relationships with leading OEMs. You know, engineering design expertise that's reflected in their patent portfolio and the quality of their products. In terms of that broader market, you know, I would say they are one of the leading players. In terms of the inflation devices, you know, competitors would include people like Merit Medical. Here, that's more of a niche market, but, but certainly closely aligned to our overall, interventional, balloon, catheter products. And then in relation to the, the Quest Medical business in, in cardiovascular, they-- this is a smaller niche market, that is, complementary to, the broader heart-lung machine offering, that people like, Terumo or, Getinge or, or, sorry, LivaNova, play in. But really in terms of the specific area that they operate in, which is the niche of microplegia, they are the leading provider in this market. Got it. And then just, as a follow-up, can you maybe talk about the financial opportunity associated with that installed base recap for that next generation, myocardial, machine? And then, over what time frame do you feel like that installed base gets recapitalized, and maybe kind of what inning the company's in in that regard? Yeah, I think it's too early to get into the specifics of that. You know, we see it as an opportunity. As we develop our integration plan, we'll be looking more closely at it. What I would say, though, is while we see over time, you know, opportunities in terms of revenue synergies, you know, what we're really focused on in the first two years is around the operational synergy and the improvement of the margins. Got it. Thank you. Your next question comes from the line of Christopher Glynn from Oppenheimer. Your line is open. Thanks. Good morning, and congrats on the transaction. So, you know, I think a lot of your medical is single source and high percentage consumable. Wondering if you can comment on Atrion, you know, what percent is single source consumable and rough number of OEM programs that they're actually on? Chris, thank you for the question. You know, these are a little bit more detailed than, you know, we will learn as we, you know, as we close the transaction and, you know, make it part of the company. But broadly speaking, what I will tell you is that, as Stephen mentioned, in the infusion therapy, Halkey-Roberts piece of the business, they're a leading player. And if you take a look at their patent portfolio, which is pretty extensive, and if you look at long-standing relationships they have with their customers, it feels like a pretty strong place to be. But if you think about the cardiovascular business, particularly the inflation devices, that resembles more like our interventional component business. The Quest is, you know, a console and consumables, where the consumable console is a razor-razor blade kind of situation. Okay, great. You know, you've been working on consolidation within this space for a while now, and- Yes ... some others have as well. Just curious, you know, as you go forward or now, is there a point at which the, you know, the nature of the regulatory reviews evolves and changes? You know, you talked about close adjacencies and enhanced scale here. What's the, you know, consolidation and concentration in this sector versus where it was earlier in your strategy around this sector? Yeah, I think the opportunity to continue to expand our portfolio and offerings continue to exist. You know, as you think about this deal and others, what I would tell you is that, you know, these are pretty good components that allow us to clearly solve major problems for our customers, continue to, you know, help them with their new devices. So all those opportunities to continue to innovate and continue to serve our customers, to bring on innovative therapies to market, they still exist. So, you know, think about this as that there are opportunities for us to continue to organically grow this business as well as add, expand our portfolio of offerings, and that still exists today. Okay, thanks. And then just one more broader understanding question on the sales channel. I'd be curious, actually, legacy Nordson and with Atrion, on the kind of proportion of sales into the OEM customers specifically versus into the provider care setting. ... hospitals, so to speak. Naga, I'll take that question. First off, at the higher level, the Atrion business is very similar to Nordson Medical's business in the sense that the majority of sales are direct, you know, and a very customer-centric model. If you look at the Halkey-Roberts and the Atrion Medical business, all of that is direct to OEM, similar to our business. And then, there are parts of the Quest Medical business that are also direct to OEM, and then the console, the MPS console and the related consumables, that is the piece of the business that is direct to hospitals and surgery centers. The console business, you know, it is a material, but not all of that, at 42%. Great. Thank you, guys. Thank you. That concludes our question and answer session. I will now turn the call back over to Naga for final closing remarks. Thank you for your time and attention on today's call. We look forward to welcoming Atrion's employees, market-leading product portfolio, and state-of-the-art facilities to Nordson upon the close of the deal. This is another milestone in our Ascend strategy to achieve top-tier growth with leading margins and returns. Have a great day! This concludes today's conference call. Thank you for your participation. You may now disconnect.