Stacks of bound annual reports are prominently displayed on glass end tables in the reception area of Nordson Corp.'s Westlake, Ohio, headquarters -- seemingly a symbol of pride for this adhesives and coatings dispensing equipment manufacturer founded in 1954.
The cover title on the report: "Our First Billion... and Beyond." The theme refers to Nordson breaking the $1 billion revenue mark for the first time in company history. To be exact, the company's revenue reached $1.12 billion, qualifying it for another first -- a spot on the IW 500. Nordson enters the list at No. 490, with revenue increasing 13% over 2007 and profit rising nearly 30% to $117.5 million.
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In a letter to shareholders, Nordson President and CEO Edward Campbell said the company is "not content" with its milestone and that it has room for growth. Indeed, complacency would be foolish given the turbulent economy that percolated over the first nine months of 2008 and began boiling over by the fourth quarter.
For Nordson, the tough economy translated into sales dropping 24% in first-quarter 2009 and profit falling 47.7% to $11 million from the year-earlier period. Nordson responded to the downturn just as many other companies had by freezing wages and laying off employees. But even with the economic maelstrom the company entered in 2009, Campbell says Nordson remains focused on expanding its market base.
Campbell, 59, will be responsible for leading his company during what he refers to as the "most challenging year" in his business career, and he will do so with just seven months left before he retires. Positioning the company for growth after he departs does not mean abandoning investment opportunities, says Campbell, who took the helm as CEO 12 years ago and announced his intent to retire April 29.
Nordson CEO Edward Campbell will retire in 2010, but not before he completes what he says will be the "most challenging year" in his business career. His company is making its first appearance on the IW 500.
"It's important to manage the fundamental relationships between revenue and cost, and we have taken actions to reduce cost, but we do so with the mindset that that goal [of growth] hasn't changed," Campbell explains. "What we want to do in terms of end-market growth and developing new customers underpins the specific actions that we take, so there are areas in which we think we must reduce the scope of our investment, but there are other areas where we've recognized its importance."
Campbell points to developments by company subsidiary EFD Inc. in the area of disposable plastic syringes used to dispense materials in a wide range of markets, including lubricants and adhesives for the electronics industry. Campbell also is optimistic about continuing innovation around high-speed dispensers that can release droplets measured in nanoliters for the type of precision required to produce electronic devices such as cell phones, personal computers and MP3 players.
Nordson's growth strategy reaches far beyond a single market. In fact, the United States is the company's second-largest region by sales next to Europe. "As the global manufacturing footprint has grown in areas outside of the United States, we've been able to capitalize on a long-standing strategy to build a global team of direct sales and service organizations and strong partner distribution companies to ensure we've got the capability to support not only existing customers but prospective new customers in those fast-growing places in the manufacturing world -- places like China," says Campbell.
As an example of its global reach, in March EFD introduced a Russian-language Web site for Russia's growing manufacturing base to provide the country's customers with complete access to the latest EFD product information and technical data.
Part of the company's growth strategy also centers on lean manufacturing, an initiative Nordson embarked on in 2003. Campbell cites the company's Swainsboro, Ga., plant, an IndustryWeek Best Plants winner in 2008, as a model for lean production. Previously, the workers manufactured products in various subassemblies throughout work cells in the plant before transporting them to an interim location where the material would remain in inventory until final assembly needed the product.
Pictured is a high-speed dispenser produced by Nordson releasing material onto a printed circuit board. Nordson CEO Edward Campbell sees great growth potential for the product.
"Now we have much more automatic mechanisms," Campbell explains. "We've linked the subassembly work cells into a continuous-production process, and the speed at which an order can flow through the plant is tremendous."
The key to reaching this stage was employee input, Campbell says. "The architecture of those work cells themselves and the linkage of them together into a continuous-production process has been designed based on the assemblers' own observations of what will work and what will not, and that engagement is what's really driving that design of using those tools and getting great results."
With 2009 off to a rocky start, it's anyone's guess whether Nordson will generate enough revenues by year's end to make a follow-up appearance on the IW 500. But even with his looming departure, Campbell seems confident that the company can rebound.
"I think change is part of what makes any organization great, and I think that there is much benefit that Nordson will see with a fresh set of eyes and hands on the rudder guiding this organization going forward," says Campbell, who will assist in choosing a successor.