Thank you for standing by. My name is Eric, and I will be your conference operator today. At this time, I would like to welcome everyone to the Nordson Corporation second quarter fiscal year 2024 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'd like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Lara Mahoney. Please go ahead. Thank you. Good morning. This is Lara Mahoney, Vice President of Investor Relations and Corporate Communications. I'm here with Sundaram Nagarajan, our President and CEO, and Stephen Shamrock, Chief Accounting Officer. We welcome you to our conference call today, Tuesday, May 21st, to report Nordson's fiscal 2024 second quarter results. You can find both our press 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 30 days. There will be a telephone replay of the conference call available until Tuesday, May 28th, 2024. During this conference call, we will make references to non-GAAP financial metrics. We've provided a reconciliation of these metrics to the most comparable GAAP metrics in the press release issued yesterday. Before we begin, please refer to slide 2 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 materially differ. Moving to today's agenda on slide 3, Naga will discuss second quarter highlights. He will then turn the call over to Steve to review sales and earnings performance for the total company and the 3 business segments. Steve will also discuss the balance sheet and cash flow. Naga will then share a high-level commentary about our end markets and provide an update on the fiscal 2024 full year and third quarter guidance. We will then be happy to take your questions. With that, I'll turn the call over to Naga. Good morning, everyone. Thank you for joining Nordson's fiscal 2024 second quarter conference call. Before we begin, I would like to welcome Dan Hopgood, our new Executive Vice President and Chief Financial Officer, to Nordson. Dan started with us yesterday. He brings more than 25 years of financial and operational expertise to the CFO role. Prior to joining Nordson, he held roles of increasing responsibility at Eaton Corporation, a $23 billion multinational power management company. Most recently, he served as Eaton's Controller and Chief Accounting Officer. As I got to know Dan, I was impressed with his robust financial experience, his time as an operational leader, and his passion for developing talent. Today, he will be listening in, and we look forward to introducing him to all of you in the coming months, starting at the KeyBanc Industrials and Basic Materials Conference in Boston next week. Now, let's shift into our second quarter earnings results on Slide 5. At the outset, I would like to recognize the dedicated Nordson team, who have leveraged the NBS Next Growth Framework to deliver solid second quarter results. Sales of $651 million were within our second quarter guidance range. Growth was driven by the ARAG acquisition, as well as strong performance in our industrial coatings and fluid solutions product lines, which offset continued weakness in our electronics product lines. In addition, our focus on top customers and differentiated products improved product mix. This focus and strategically adjusting costs led to improvements in gross margins and top quartile EBITDA margin of 31%. In the quarter, we delivered adjusted earnings per share of $2.34, which was at the top end of our EPS guidance for the quarter. Finally, I'd like to highlight our second quarter free cash flow of $108 million, which was 92% of net income. We continue to convert earnings into cash flow and use this cash flow to retire nearly $100 million of debt within the quarter. I'll speak more about the enterprise performance in a few moments, but first, I'll turn the call over to Steve to provide a detailed perspective on our financial results for the quarter. ... Thank you, Naga, and good morning to everyone. On slide number 6, you'll see second quarter fiscal 2024 sales were $651 million, a slight increase to the prior year's second quarter sales of $650 million. This was driven by a favorable 5% benefit from the ARAG acquisition, partially offset by an organic sales decrease of 4% and an unfavorable foreign exchange impact of 1%. As Naga referenced, strength in our industrial coating systems and fluid solutions product lines were offset by an ongoing weakness in our electronics product lines. Gross profit performance was strong in the second quarter. We delivered gross profit margins in excess of 56% and approximately 200 basis point improvement over the prior year. Deploying our NBS Next growth framework, we are focusing on top products, driving a favorable product mix, and product simplification efforts to improve manufacturing efficiency. We also remain disciplined on managing our cost structure and taking actions where necessary. EBITDA, adjusted for special items in both periods, totaled $203 million, or 31% of sales, which was consistent with the prior year. Improved gross margins were offset by higher selling and administrative costs, attributable primarily to the addition of ARAG. Looking at non-operating expenses, net interest expense increased $9 million, associated with higher debt levels and increased interest rates. Other expenses net decreased $1 million, primarily related to lower foreign exchange losses compared to the prior year. Tax expense was $31 million, for an effective tax rate of 21% in the quarter, which is in line with the prior year rate and our guidance range for 2024. Net income in the quarter totaled $118 million, or $2.05 per share. Adjusted earnings per share, excluding $2 million of non-recurring cost reduction actions and amortization of acquisition-related intangibles of $19 million, totaled $2.34 per share, a 4% decrease from the prior year adjusted earnings per share amount of $2.45. The decrease in earnings was driven primarily by higher interest expense due to the ARAG acquisition. Now, let's turn to slides 7 through 9 to review the second quarter of 2024 segment performance. Industrial Precision Solutions sales of $367 million increased 9% compared to the prior year's second quarter, driven by the ARAG acquisition, as well as increased sales in our industrial coating systems and packaging product lines. Organic sales increased 2% over the prior year's second quarter, continuing to build upon a record fiscal 2023 for the segment, partially offset by an unfavorable foreign exchange impact of 1%. This segment has now delivered organic growth in 12 of the last 14 quarters. EBITDA was $132 million in the second quarter, or 36% of sales, an increase of 11% compared to the prior year EBITDA of $119 million. The increase in EBITDA was driven primarily by the ARAG acquisition, plus organic sales growth and gross margin improvement in the base business. It's also worth highlighting that this quarter marks 13 out of 14 consecutive quarters of EBITDA growth. On slide 8, you'll see Medical and Fluid Solutions sales of $169 million increased 2% compared to the prior year's second quarter, driven by modest growth in fluid and medical interventional solutions product lines. This was partially offset by lower sales in our medical fluid components product lines versus last year. Despite the year-over-year decrease, we did see a modest increase in the medical fluid components sales sequentially. Second quarter EBITDA was $63 million, or 37% of sales, which was flat to the prior year EBITDA of $63 million, which excluded $1.5 million of special items for cost reduction actions. This segment has now delivered EBITDA margins greater than 35% in 13 of the last 14 quarters. Turning to slide nine, you'll see Advanced Technology Solutions sales were $115 million, a 22% decrease compared to the prior year's second quarter. The decrease in sales was driven by continued weakness across the segment, primarily related to products serving electronics end markets. Second quarter EBITDA was $24 million, or 21% of sales, which trailed the prior year's second quarter EBITDA of $32 million, which excluded special items of $2 million related to cost reduction actions in both periods. While the reduction in EBITDA was tied to the overall decrease in volume, favorable mix and cost reduction actions contributed to 22% decremental margins. This is well ahead of our decremental target of approximately 55%. Finally, turning to the balance sheet and cash flow on slide ten. At the end of the second quarter, we had cash of $125 million, and net debt was $1.4 billion, resulting in a leverage ratio of 1.7 times based on the trailing 12 months EBITDA. We continue to have significant available borrowing capacity to pursue organic and inorganic growth opportunities. Free cash flow was $108 million, or a 92% conversion rate on net income. We strategically deployed this strong cash flow in the quarter. We repaid $100 million of revolver debt and paid $39 million in dividends during the quarter. For modeling purposes, for the full fiscal year, assume an estimated effective tax rate of 20%-22%, capital expenditures of approximately $40 million-$50 million, and net interest expense of $74 million-$77 million. In summary, we delivered another strong financial performance in the second quarter, in line with our expectations. We'll now move to slide 11, and I'll turn the call back to Naga. Thanks, Steve. I also want to commend the business for delivering strong operating performance under a challenging demand environment in some of our segments. This is a testament to how NBS Next is becoming the way we run our business. I want to spend a few minutes talking about our end markets and the changes we are seeing as we move into the second half of fiscal 2024. Starting with Industrial Precision Solutions segment, we continue to see steadiness in industrial and consumer non-durable end markets. After two years of record growth, our full year guidance implies IPS, excluding ARAG, is about flat to slightly up versus prior year. While the ARAG integration continues to go well, we cannot ignore the impact of weakening agricultural end market conditions. Despite the weakening of this particular agricultural cycle, which is causing customers to pause spending and work through inventory, we are undeterred in our belief that precision agriculture is a high growth end market, and this cycle is temporary in nature. Based on the past nine months of integration, we remain excited about ARAG's differentiated technology and value proposition that will help customers boost crop yields while sustainably reducing the expensive usage of fertilizers and chemicals. Within our Medical and Fluid Solutions segment, we are continuing to see modest order entry pickup in our fluid components business, which is returning to growth following last year's biopharma destocking. Similarly, our fluid solutions product lines, which have exposure to the electronic cycle, are turning positive. Our medical interventional solutions product lines, which grew double digits in fiscal 2023, driven by the trends in minimally invasive therapies and the aging of population, we have tough comparisons in the second half of the year. In the ATS segment, we continue to see positive early indicators of the electronics cycle inflection, but we're not seeing order entry pickup that would support the implied ramp in our prior second half guidance. Keeping in mind the semiconductor sub-segment, Nordson applications are largely positioned at the back end of the manufacturing process, with a focus on advanced packaging of semiconductor chips. Currently, investments are being made in the front end of the semiconductor manufacturing process related to fabrication and processing of silicon wafers. As production shifts towards converting the wafers to individual chips and advanced packaging of these chips, customers will invest in Nordson Electronics dispense and test and inspection technology. Overall, we will benefit from the increasing demand for chips in support of AI, automotive electronics, onshoring, CHIPS Act, and more. While our test and inspection businesses are positioned to improve the yields and ensure quality of these critical and expensive chips, our X-ray business, which experienced double-digit growth in fiscal 2023, is dealing with challenging comparisons in the second half of the year. Our ATS leaders continue to do an excellent job of implementing the NBS Next growth framework and positioning themselves for future growth. This includes positioning operations closer to the customer, introducing differentiated new products, and making strategic cost adjustments. ATS ability to outperform their decremental targets again this quarter is a testament to this work. Turning now to our outlook on Slide 12, we enter the third quarter with approximately $700 million in backlog. This backlog remains concentrated in our systems businesses, while customer order entry patterns have returned to historical norms in the rest of the businesses. Based on the current visibility I just shared and order entry trends, we are updating our previously issued full-year revenue guidance in the range of flat to up 2% over record fiscal 2023. Full-year fiscal 2024 earnings are forecasted to be in the range of down -5% to -1% per diluted share. This full-year guidance assumes a neutral impact from FX rates and the ARAG acquisition, contributing approximately 3.5% growth at the midpoint of our guidance. Investors should keep in mind that we anniversary the acquisitive growth impact of ARAG in the fiscal fourth quarter. For the third quarter of fiscal 2024, sales are forecasted to be in the range of $645 million-$670 million, with adjusted earnings in the range of $2.25-$2.40 per diluted share. Third quarter guidance considers weaker electronics and agriculture end markets. Even as we face more challenging market conditions, Nordson's core strengths remain: a diversified portfolio, close to the customer business model, high level of recurring revenue, NBS Next growth framework, and a commitment to innovation. All of this positions Nordson well to deliver long-term Ascend Strategy goals. As always, I want to thank our customers, shareholders, and the Nordson team for your continued support. With that, we will pause, and Steve and I will take your questions. At this time, I would like to remind everyone, in order to ask a question, please press star followed by the number one on your telephone keypad. Your first question comes from the line of Mike Halloran with Baird. Please go ahead. Hey, good morning, everyone. Good morning. Morning, Mike. Couple questions here. You know, Naga, maybe you could just talk to what's assumed in guidance as you work through the year from an end market recovery. You know, I certainly understand the electronics piece and the ag piece. You know, you look at the implied fourth quarter ramp, it's still probably a little above seasonality. So wondering if you still have some of those systems and projects hitting in the fourth quarter, or if that's been pushed to next year. And thoughts about any sustainability of the packaging piece and how you think the biopharma is going to recover. So basically, just maybe lay out how you think the end markets track as we work through the remainder of the year and what's assumed in guidance. Yeah, let's get started with IPS. You know, the guidance really, you know, maybe start with the first two big hits, and then we'll go through the end markets, Mike. So the first, the two factors, which you highlighted, is that we're not seeing the pickup in orders for electronic systems that we had expected with the implied second half ramp. So that's number 1. Number 2 is the agriculture cycle is having a greater impact on ARAG than our own expectation. So timing is just, there is not enough time here to achieve the ramp we had originally expected. In terms of end markets, if you think about IPS, non-ARAG, our expectation is going to be flat to slight growth following record two years. In terms of ARAG continues to contribute to the growth of the business. In terms of ATS, you know, certainly the growths are below our long-term growth rates. We're not seeing the pickup, as we talked about. In terms of medical fluid solutions, you know, our expectation is that our fluid components business will be slightly up. Our fluid solutions business would also be slightly up, offset by tough comps on the interventional components. So in summary, you're gonna have IPS flat to slightly up, ATS down, MFS returning to growth slightly. So, thanks for that. And following up on that then, are you assuming any sort of pickup in some of those stress markets when we or any sort of backlog let out in any of those stress markets in the fourth quarter? In other words, just trying to understand how de-risked some of those stress points are in the guidance as we work through the rest of the year. Yeah, excuse me. What I'll tell you is that if you think about our fourth quarter, does not expect, you know, does not require electronics to come back, does not expect ARAG to come back. So if you think about those two stress markets, but what is expected though is sequential continued improvement in both these markets. So we saw that in second quarter. Both electronics, you know, ATS is sequentially up, and so that's our expectation, so. So in other words, the sequentials from here are relatively stable versus a normal sequential pattern in your mind in those markets? Yeah. What- Mike- What we're seeing is order entry. Yeah, go ahead, Steve. Maybe provide some more- No, I, I was gonna say, Mike, that, that I think you're spot on there, because if you also look at sequential growth, we had 11% growth last year from Q3 to Q4, and our midpoint basically implies around 8% growth this year. So, you know, Q4 is, is usually seasonally our strongest quarter, so I think that aligns with how we're thinking about it. Great. Really appreciate that. Thank you. The next question comes from the line of Sari Boroditsky with Jefferies. Please go ahead. Good morning. This is James on for Sari. Thanks for taking questions. I just wanted to kind of follow up on the ag. So can you kind of provide more color on kind of increased pressure? Because I know you guys said that you guys have a high recurring revenue here. And kind of when do you expect to see an inflection point in the ag markets? Thank you. In general, this market is expected to be down this year. You know, we expect this turnaround sometime in 2025, but we're not really giving any guidance on 2025, so difficult to tell you exactly when that'll happen. But our guidance does not imply any pickup in ag, agriculture markets this year. Got it. And kind of wanted to follow up on the, like, the strong gross margin performance here, like, despite, like, flat revenue growth. So how should we think about the, like, gross margin for the remainder of the year? Thank you. Yes. Yeah, no, so what I would tell you, and, that really kind of ties back to our, what I would call very strong Q2 performance, right? Basically, you know, from a sales standpoint, with Q2, we came in really where we expected from a sales standpoint. You know, we came in with $651 million of sales in Q2, and that was, when we gave the guidance for Q2, we assumed currency neutral. So if you add back about a $5 million unfavorable impact of FX, we basically came in spot on, near the midpoint of our guidance. And we actually, were at the high end of our guidance in Q2 because of gross margin performance that you referenced there. The way I would think about that is we really had a strong performance in margins for a number of factors in Q2, right? We had a very strong mix, I would tell you, in Q2, whether it was, you know, parts versus sales, that was very strong. We had good customer mix, and even mix within product lines. And also had, you know, we referenced in our earlier comments, manufacturing efficiencies and cost controls. How I would think about, you know, gross margins going forward, you know, I think I mentioned this on a previous call, we're not focused on gross margin expansion. You know, our long-term focus is really to maintain the gross margins that we have. So I do think what you saw in Q2 was a mix than normal. So, you know, that's how I would think about that going forward. I wouldn't expect as favorable of a mix in, you know, the balance of the year, so. Got it. Thanks for taking questions. The next question comes from the line of Matt Summerville with D.A. Davidson. Please go ahead. Thanks. Just a question on ARAG. I remember back to when you did the call, is it related to the acquisition? You seemed pretty convinced that this business would be less impacted by a down ARAG cycle, and clearly, that's not the case here. So what, I guess, have you learned over the last couple of quarters about ARAG and how tied indeed to the cycle that business seemingly is? And to that point, you mentioned inventory destocking. I assume that's at the OEM level, but correct me if I'm wrong. How long do you think that destock lasts? Yeah. You know, you're right, Matt, in that, you know, our expectations that this business would have been less muted because of the precision ag exposure, certainly did not play out the way our expectations were. But look, what is really important to remember is we still like the technology, we like the people we have added to the organization. Certainly a very interesting end market. You know, if you look at expectations of some of the OEMs, the precision ag itself is down or expected to be down 20%-25%. So even if you think about, you know, our expectations with precision ag was going to continue to grow through the cycle, that has not worked out the way it is. In terms of inventory destocking, remember, 40% of this business is aftermarket parts, and those aftermarket parts go through distribution. They're not direct sale. So they don't go through the OEM, they go through a distributor, and there is some level of inventory destocking that is going on in ARAG. ... Got it. With respect to, you know, you mentioned kind of last conference call, the, the canary businesses, and I mean that in a positive light, with respect to electronics- Yeah - showing some signs of life. Are you- Yeah concerned that maybe those are no longer good leading indicators for a broader upturn in the electronic side? And could you maybe just put a finer point on how those businesses, those canary- Yeah businesses, if you will, performed in the second quarter, and how inbound order activity has been looking there? Thank you. Yeah. Yes. Both the businesses continued to strengthen in the trends that we mentioned in our first quarter. So we remain convinced both those are very good leading indicators, and the reason I'll tell you is those are two separate indicators. For example, the one we talked about was the UV lamp business. It's a niche product line in one of our businesses. That is in the front end of the semiconductor process, where we sell to large, machine builders. That continues to strengthen, the forecasts have actually increased. That lines up with what you see front-end semiconductors growing nicely, so you see that. But you also see on finished electronic products, you're continuing to see greater usage of existing lines. So this is the consumables from EFD. Those continue to strengthen. So both those are still strong. I think what it is not getting translated is that you would immediately see a system business pick up, and that's the translation that is getting delayed. We're not concerned that this is... You know, this doesn't indicate that the cycle is going to turn. It is more an uncertainty in this CapEx spend in electronics that we are seeing. So it is more related to the CapEx investment, rather than does the cycle has not turned or not. So hopefully that helps you. Got it. Appreciate it. Thanks, Dan. Yeah. Your next question comes from the line of Christopher Glynn with Oppenheimer. Please go ahead. Yep, thanks. Good morning. Good morning. Wanted to- Morning. We wanted to follow up on a little different cross section for the electronic cycle. I'm curious if you could speak directly to the differences you're seeing in electronics processing versus T and I broadly, and then if any interesting nuances in the different test and inspection modalities? Okay. All right. I think, if you-- Let's just first start with EPS and T and I. EPS systems continue to be, in the quarter, continue to be, lower in line with the ATS levels, right? So down 20% or so. And in the T and I business, I'll remind you that last year we had some significant growth in those businesses, so what we're facing on our X-ray business is a tough comp. Among the other T and I business, on our optical business, we have our sensors that go into the front end of the market, which is called a WaferSense product line. That is continuing to grow nicely. It is a small part of the business, but it is growing nicely. The acoustic test and inspection part of the business is also growing, which is more on the front end and on some new memory applications. The optical side, the parts are fine, the systems are behind. So, you know, we fundamentally still believe the test and inspection business will be lower declines when compared to our dispense business. You know, what you've got mixed in there is some tough comps in our X-ray business. In all of these cases, the teams are doing an incredible job doing three things. One, they are certainly strengthening their delivery and quality performances. They're moving manufacturing closer to our customers, so we have got a new manufacturing and distribution location coming up in India to support our electronic customers who are shifting focus into India. Third, we have very exciting new products that are being released by our Test and Inspection business. Our new MXi line of products are well received in the marketplace. We've got a new updated software for our AXI business that is hitting the market. And in our dispense business, you certainly see our Vantage product as well as a new coating product lines, again, all hitting the market. So we're using this time to really position the business for growth. Great, thanks. And then a similar one in IPS, wondering if you could go into the, you know, phasing of demand and comparisons for the polymer and adhesives general assembly pieces. I think coating stood out as maybe the strongest piece in the quarter for- Yeah ... non-ARAG IPS. Yeah. Our coatings business is doing an incredible market demand and really delivering on the growth opportunities. So we're very happy about the performance there. If you think about our adhesive business in general, you know, 12 out of 13 quarters or 12 out of 14 quarters, we have been growing. So pretty strong growth. Our expectation is still, as we finish the year, we would be flat to slightly up. So that is in a good spot. Particularly, our packaging part of our business is doing incredibly well. If you think about our plastics business, again, you've had record growth in those businesses for the last 2 years, and this year they would face some tough comp, and so that would be slightly lower. You know, we don't talk about sales by individual divisions, but generally speaking, what I will tell you is our plastic business is slightly lower, slightly lower than their record last two years, right? So hopefully that gives you enough color around the different businesses. Yeah, terrific. Thank you, Naga. One last thing I would add in our adhesive business, certainly parts are significantly up when compared to our system businesses. This is some of the, you know, this is one of the reasons when we talk, when Steve talks about, sales mix, certainly this was very helpful. Yeah, you're saying less system sales in the quarter was sort of, sort of neutralized by really strong recurring revenue growth? Yes. Recurring revenue growth. As a reminder, if you would like to ask a question, please press star followed by the 1 on your telephone keypad. Your next question comes from the line of Chris Dankert with Loop Capital. Please go ahead. Hey, morning. Thanks for taking the question. I guess just returning to ARAG, just, just returning to ARAG for a moment. You know, given that agriculture markets kind of come off peak here, is there any risk around the expected synergies for that deal? Or maybe just how do we think about the cost structure of that business in the context of the current slowdown here? Yeah. I think there are, you know—if you remember, when we acquired ARAG, this is a complete new division for the company, hence, there were no cost synergies baked into our valuation model. It was mostly based on our ability to continue to grow with the market. You know, clearly, you know, with the market being down and our own expectations that it wouldn't follow the market, not panning out the way we had expected, certainly puts the sales part of our plan behind. But I'd still remind you, great technology, great end market with precision agriculture, long-term solid growth opportunities for us as a company. Market leader in Europe, market leader in South America, two big geographies. You know, certainly we have opportunities, you know, as we think about North America. You know, we fully acknowledge there are existing competitors who do a nice job in North America, but we do believe that is an opportunity for us to continue to think about it. I think that was just kind of the crux of my question. You know, when you brought it on board- Yeah ... there was no real expectation of a slowdown. There was no cost side to the- Yeah economics there. I guess, has that... It doesn't sound like that has changed. It sounds like we're just gonna kind of- No manage through here. We're not contemplating any sort of- No adjustment to the incrementals on that business. No. This, if you think about this business, even with the reduction in revenue, their profit margins are north of the company's margins. Got it. Got it. Perfect. Thank you so much for the color there. And I think just, you know, for my follow-up, you know, on the electronics side of the business, particularly, you know, the electronics processing within ATS, the shorthand, at least for me, has always kind of been, that's the handset cycle. Is there anything else that's kind of weighing down that business right now beyond handsets, or is that still kind of the main driver there? Yeah. Chris, I mean, over the last four or five years, we certainly have moved away from the handset as an important driver in that business. Handset is still a small part of the business, but really, Semiconductor Advanced Packaging is where this business is growing, and in components such as camera modules and things like that. Automotive electronics also has become a bigger part of the business. So it's no longer just a handset business, it is semiconductor, automotive electronics, and a small handset presence still. Got it. Yeah, well, thanks so much for the color, Naga. Thank you. Your next question comes from the line of Walter Liptak with Seaport Research. Please go ahead. Hi, thanks for taking my question. Yeah, I just wanna try a couple of follow-ups on ARAG. You know, you talked about the market in Europe, Latin America. Are all the markets getting hit the same way by the cycle? Yes. If you, you know, if you look at some of the market reports that are out there, pretty much, across the world, the market cycle seems to be in that down 20%-25%, and that is North America, that is Europe, that is South America, and even Precision Ag, which was typically a growth engine, so. Okay, thanks for that. And the follow-up is the precision ag market, you know, what's different about this cycle? Yeah. The precision ag is slowing. Yeah, I- Is it related to, like, destocking or something? Yeah, I think there is some amount of destocking, but there is also, you know, we are, you know, I tell you, our knowledge of agriculture when compared to our knowledge of electronics or industrial non-durable is sort of, you know, obviously, we've been in this business for a short period of time. So our knowledge is not as deep as we would have in other end markets, but our understanding is that there is some amount of destocking, but there is certainly some hesitancy in investing in large implements even, you know. And so that is what you're seeing, is that reduction in OEM. And this is unique, because as we looked at this business and evaluated it, you know, one of the things we did a lot of work around is to understand the relationship between cycle and this business's performance. And, you know, this seems a little bit unique when compared to their prior performance. So, you know, we're still figuring it out, but I will tell you that it is impacting us more than we had expected, and it is impacting us, and that's what our current situation is. And, you know, we still like the products, we still like the people. We're still working on, you know, continuing to integrate the business, which is, you know, going really well. I think that's kind of where we are at with ag. Okay, great. Thank you for that color. And just as the, you know, obviously, follow-up question is, the electronics part of the business, you know, you mentioned that there's a timing issue between the front end and the back end. Yeah. Can you help educate us just how long is that? Is it, is it measured in months or years? How, how should we think of that? Yeah, yeah, you know, we don't by now, right, look, based on our expectations in the first quarter, we had expected that this would follow quickly or thereafter. That has not happened. So our guidance doesn't imply a significant pickup in the electronics market for the rest of the year. And as we approach 2025, we'll be in a better place to provide you more color as to when it might actually pick up. But I think what is important to remember is that we have de-risked our outlook for electronics for the rest of the year. Okay, that sounds great. Thank you. Next question comes from the line of Andrew Buscaglia with BNP Paribas. Please go ahead. Hey, guys. Hello. Hey. I wanted to go back to, you know, the ATS segment. Just given, you know, the nature of Nordson having, you know, a more direct sales model, you know, it gives investors a lot of confidence in what you guys are saying. But what is it that these customers are saying to you that's, you know, making it so difficult to predict when the spend is gonna move forward? Yeah. I think it's a great question, Andrew. What I will tell you is that none of the projects we are working on with our customers, that somebody has come to us and said, "Look, this is all off the table. It is canceled." That is not the case. We continue to work with our customers on projects and opportunities as they bring on new technologies for AI, as they bring on more technologies for much smaller, much more complicated chips than we have. So that work, the project work, continues, but what it has not translated is from that project work into system orders. It is not translated yet, nor have people completely canceled projects either, right? So we are sort of in this middle time, you know, call it uncertainty, you know, I can only talk to you about what we're seeing in terms of customer sort of actions rather than, you know, what is the broader trend here. There seems to be a reluctance in translating work that they're doing into systems sales or systems orders, right? We continue to do well on our parts, but there seems to be some reluctance, and I'm, you know, not exactly understand the core reasons as to why our customers have reluctance, but there is reluctance. Maybe to dig in a little bit deeper is, you know, regionally, is there something unusual going on? Like, is one region worse than the other? And I'm thinking China here. Yeah. I don't know. Just, you know, what are you seeing, you know, by geography, I guess? Yeah. We're not seeing significantly different behavior from geography to geography. We still... You know, we work with all of the major, you know, major semiconductor manufacturers. You know, there are, you know, there are. It's not like, you know, obviously, we continue to sequentially grow, and sequentially, we have better order entry, so it is not like we're continuing to decline or we have not. We're just flat in the bottom. We're starting to come out. It is just not as fast as we had hoped. I think that is probably what we need to take away, is that our reduction in guidance is mainly because... We had a far steeper implied ramp in our second half. That's not happening, and that is not happening because the orders we are getting are not at the same rate as we had hoped. It is at a, you know, little flatter rate than we had hoped for. And- Mm ... we don't see a whole lot of difference in regions. You know, clearly, when compared to last year, activity in Asia has picked up. That we can tell you, right? Certainly, Southeast Asia is better than China for us, and that's just for us. Certainly, you know, our automotive, electronics customers in Mexico are significantly better for us. Europe is okay. So that's, you know, broad, broadly, that's how we think about the ATS business. Okay. Thanks, Naga. Thank you. Your next question comes from the line of Jeff Hammond with KeyBanc Capital Markets. Please go ahead. Hey, good morning, everyone. Good morning, Jeff. Yep. Hey, so just if we step back, and think about, you know, capital allocation, I think you guys have kinda been on the wrong side of cycle timing around CyberOptics and ARAG now, and I'm just wondering how you think about, you know, cyclicality and timing, you know, as you kinda look at deals going forward? Yeah. I think it's a fair question, and we have spent time thinking about this. We certainly need to put that into part of our equation as we think about acquisitions and deals. But, you know, having said that, I would tell you, the technology behind each of these deals are spot on for us as a company to continue to expand our portfolio of position technologies. We certainly have short-term pressure because of the market conditions, but we believe that the long-term drivers in both these spaces are pretty sound, and we like the technologies we have and the people we've added. You know, finally, what I'll tell you, it's not offered as an excuse, if you so will, right? But it is, we really don't control when high-quality assets come to market. You know, we continue to remain focused on our strategy of building strong precision technology portfolio, continue to deploy NBS Next, and we believe the long-term strategic fit of these businesses. I know as we get past these market conditions, we're going to be incredibly happy that these are part of Nordson portfolio. So I think, you know, I think it's a fair question you asked, but, you know, that's what we're working on. Okay. Appreciate the color there, Naga. Sure. So just on decremental margins in the second half, I mean, you guys have done a pretty good job with, with NBS Next, kinda limiting the decrementals, but I think at least in our model, initially, you know, we have pretty severe decrementals. So just maybe how you're thinking about. Yeah ...decrementals and holding the line. Yeah. If you think about decrementals, I think we think about decrementals inside the company, mostly for our core businesses. That is probably the best, you know, best apples-to-apples comparison. And if you look at our core business, apples-to-apples decrementals were pretty, pretty strong in the quarter. But if you look at the total company, given ARAG performance, where you have lower sales, yet you have the full load of SG&A, you know, your decrementals at the total company level will look skewed. But without ARAG, we had some pretty strong decrementals. And if you're looking for a number- You're looking for a number... Sorry, Steve, you want to go ahead, add? Yeah, no, no, I was just gonna say, Jeff, I, what I'd also focus on, too, is just our EBITDA margins as well, right? I mean, we—I think we've been very successful in terms of generating, you know, strong EBITDA margins. I mean, even Q2 was the fifth quarter in a row where we had EBITDA margins, 31% or higher. And, you know, the last three years, we've delivered, 30% or more EBITDA margins, and I think we're, you know, obviously well on our way to do that again here in 2024, so. In the core businesses, Jeff, if you were asking for a, what is a target decremental, it is about 50%-55%. I would use 55%, just, just sort of in line with our gross margins, because we wanna stay invested in our precision technology innovation. We want to stay invested in our direct customer model. You know, that is what we have done in the past, and that's what we'll continue to do. But if you really put all of this in perspective, right? If you look at our full year, we're still, our midpoint is, you know, essentially implies a 1% growth over a record 2023. We're still expecting that we will deliver 31%+ EBITDA margins. We will still convert pretty strong on net income to free cash flow. In the quarter, we converted about 92%. So, you know, from an operational perspective, yes, the teams are dealing with some market conditions, but the operational performance of the company is in a pretty good place, and we continue to do that in this environment. Okay, great. I'll leave it there. Thanks. Thank you. I will now turn the call back over to Naga for your closing remarks. Please go ahead. Our solid second quarter operating performance reflects the strength of our diversified markets, close to the customer model, differentiated precision technologies, and rigorous implementation of NBS Next growth framework. We remain focused on the deployment of the Ascend Strategy that positions us well for long-term profitable growth. With that in mind, we are excited to announce that we will be hosting an Investor Day in New York on Thursday, October third, 2024. We'll be sharing more information about the details of the event this summer, but please save the date on your calendars for the afternoon of October third. Again, I wanna thank Nordson's employees for their commitment, which makes these results possible. Thank you for your time and attention on today's call. Have a great day. Ladies and gentlemen, that concludes today's call. Thank you all for joining, and you may now disconnect.