Financial Data and Key Metrics Changes - In Q4 2021, Novanta reported revenue of $199 million, representing a 35% year-over-year growth on a reported basis and 14% organic growth [9] - For the full year 2021, total sales reached $707 million, up 20% year-over-year on a reported basis and 10% on an organic basis [9] - Adjusted EBITDA for Q4 was $43 million, a 31% increase year-over-year, while for the full year, it was $153 million, up 26% year-over-year [10] - Adjusted diluted earnings per share (EPS) in Q4 was $0.67, a 26% increase compared to the prior year, and for the full year, adjusted EPS was $2.62, up 34% year-over-year [10][39] Business Line Data and Key Metrics Changes - The Precision Motion segment experienced a 129% year-over-year revenue growth in Q4, significantly impacted by the ATI and IMS acquisitions [41] - The Vision segment saw a 3% year-over-year revenue growth, while bookings grew 57% year-over-year [43] - The Photonics segment reported a 12% year-over-year revenue increase, with bookings up 69% year-over-year [46] Market Data and Key Metrics Changes - Sales to advanced industrial markets accounted for 51% of total sales in Q4, with a 55% year-over-year growth [16][17] - Sales to medical applications represented 52% of total sales for the full year, growing by 12% year-over-year [19] - In Q4, sales in China grew 32% year-over-year, while sales in Europe and the United States grew 22% and 45% year-over-year, respectively [21] Company Strategy and Development Direction - Novanta aims to strengthen its corporate responsibility efforts and is committed to achieving net zero emissions by 2050 [28][29] - The company plans to continue focusing on acquisitions as a primary capital deployment strategy, with a strong pipeline of opportunities in 2022 [26] - The long-term vision includes broadening exposure to medical and advanced industrial applications with secular growth trends [30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand environment despite ongoing supply chain disruptions and inflationary pressures [50][51] - The backlog reached a record $569 million, indicating strong customer demand that exceeds current supply capabilities [8][70] - Management expects revenue growth to improve as supply chain mitigation initiatives gain momentum and the new Taunton facility comes online [53] Other Important Information - The company launched 19 new products in 2021, maintaining a vitality index of over 25% of sales from new products [24] - Adjusted gross margins for Q4 were 44%, with expectations for expansion to approximately 46% for the full year 2022 [31][59] Q&A Session Summary Question: What is the significance of the backlog number? - Management indicated that the backlog is more than double pre-COVID levels, reflecting supply chain disruptions rather than a lack of customer demand [70][71] Question: Can you explain the factors affecting gross margins? - Management noted that logistics disruptions and the cost structure from the Taunton facility impacted gross margins, but they expect improvements in the second quarter [72][73] Question: What are the expectations for acquisition contributions in 2022? - Management expects the acquisitions to perform robustly throughout 2022, although specific guidance by business unit was not provided [79] Question: How is the company positioned in the semiconductor market? - Management stated that microelectronics exposure is around 10% to 12% of revenue, with a focus on structural automation and robotics markets for growth [82][96] Question: What revenue limitations are expected in Q1 due to the facility move? - Management estimated a low-single digit million revenue impact from the facility move and supply chain issues, but these are temporary and expected to improve throughout the year [89][90]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 001-35083 NOVANTA INC. (Exact name of registrant as specified in its charter) New Brunswick, Canada 98-0110412 (State or other jurisdiction of incorpor ...

Financial Data and Key Metrics Changes - In Q3 2021, Novanta reported approximately $178 million in revenue, representing a 24% year-over-year growth and 15% organic growth, marking the highest single-quarter sales in the company's history [8][10] - Adjusted EBITDA was $40 million, up 34% year-over-year, with an EBITDA margin of nearly 23%, an increase of 160 basis points year-over-year [9][10] - Adjusted diluted earnings per share increased by 79% year-over-year to $0.75 [10][35] Business Line Data and Key Metrics Changes - Medical applications accounted for 53% of total sales, growing 21% year-over-year and 7% sequentially [13][14] - Advanced industrial applications represented 47% of total sales, with a year-over-year growth of 28% and sequential growth of 5% [15] - The Photonics segment experienced a 19% year-over-year revenue increase, while the Precision Motion segment saw a 77% year-over-year growth [39][42] Market Data and Key Metrics Changes - Sales in China grew 28% year-over-year, while sales in Europe and the United States grew 20% and 27% respectively [16] - The overall book-to-bill ratio was 1.32, indicating strong demand across all segments [11] Company Strategy and Development Direction - The company closed the ATI and IMS acquisitions, which are expected to enhance its strategic positioning in high-growth markets [7][23] - Novanta's growth strategy includes expanding into new markets such as arthroscopy pumps and increasing R&D resources to capitalize on design wins [17][18] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing supply chain challenges but expressed confidence in the company's ability to meet customer demand and maintain strong performance [12][26] - The company raised its guidance for the year, indicating optimism about long-term growth in both medical and industrial applications [26][45] Other Important Information - The company experienced a significant factory disruption at its Taunton facility, which impacted production and gross margins [29][31] - Despite supply chain issues, the company reported a healthy vitality index, with new product sales accounting for over 25% of total sales [19] Q&A Session Summary Question: Impact of the Taunton facility issue on revenue - The impact on organic growth was in the mid-single-digit range, approximately 4% to 7% [63] Question: Future gross margin expectations for the Photonics segment - Gross margins in Photonics are expected to remain flat in Q4 due to higher expenses associated with production [64] Question: Growth expectations for the ATI and IMS acquisitions - The ATI business is expected to grow mid- to high single digits, while IMS is anticipated to grow at a mid-single-digit rate [69][71] Question: DNA sequencing business outlook - The DNA sequencing business is expected to catch up to pre-pandemic levels, with strong growth driven by research lab reopenings and COVID variant sequencing [78][81] Question: Surgical market recovery expectations - Customers in the surgical market expect gradual recovery, with hospitals improving their handling of COVID cases and addressing patient backlogs [85]

| --- | --- | --- | |---------------------------------------------------------------------------------------------|-------|-------| | | | | | | | | | | | | | A Trusted Technology Partner in Healthcare and Advanced Industrial Markets September 2021 | | | Safe Harbor Statement The statements in this presentation that relate to guidance, pro forma presentations, future plans, goals, business opportunities, and future events or performance are forward-looking statements that involve risks and uncertainties, inc ...

Financial Data and Key Metrics Changes - Novanta reported approximately $168 million in revenue for Q2 2021, representing a 16% year-over-year growth on a reported basis and 11% on an organic basis, marking the highest single-quarter sales in the company's history [8][9] - Adjusted EBITDA was $37 million, up 20% year-over-year, with an EBITDA margin of 22%, an increase of 80 basis points year-over-year [8][27] - Adjusted diluted earnings per share was $0.62, reflecting a 29% increase compared to 2020 [9][28] - Free cash flow performance was strong at $23 million, representing 200% of GAAP net income [9] Business Line Data and Key Metrics Changes - The photonics segment saw a revenue increase of 30% year-over-year, with bookings up 148% year-over-year and a book-to-bill ratio of 1.46 [21] - The precision motion segment also experienced 30% year-over-year revenue growth, with bookings nearly doubling year-over-year and a book-to-bill ratio of 1.6 [22] - The vision segment, primarily serving medical end markets, experienced a revenue decline of 2% year-over-year, but bookings grew 23% year-over-year with a book-to-bill of 1.15 [23][24] Market Data and Key Metrics Changes - Sales to advanced industrial applications accounted for 48% of total sales, with a year-over-year growth of 24% [10] - Sales to medical applications grew 9% year-over-year, although there was a slight sequential decline [10][11] - Strongest growth was observed in China, with sales increasing by 35% year-over-year, while sales in Europe grew double digits and sales in the United States grew 9% year-over-year [11] Company Strategy and Development Direction - The company announced two upcoming acquisitions, SEM for $115 million and ATI for $172 million, which are expected to enhance Novanta's strategic positioning in high-growth markets [14][16][17] - The vitality index, which measures revenue from new products launched in the last four years, remained healthy at above 25% of sales [12] - The company continues to invest in innovation, with a target of 25 new product launches for the full year, focusing on industrial and surgical robotics, minimally invasive surgery, and industry 4.0 [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term strategic positioning within medical and industrial applications, citing strong demand and a robust innovation pipeline [15][36] - The primary challenge remains supply chain disruptions, particularly related to electronic material shortages and logistics [29][30] - Despite these challenges, the company expects to raise its financial outlook for the third quarter and the remainder of the year [29][34] Other Important Information - Adjusted gross profit was $76.9 million, resulting in a 46% adjusted gross margin, an increase of over 340 basis points year-over-year [25] - R&D expenses were nearly $17 million, representing about 10% of sales, reflecting significant investment in innovation [26] - The company ended Q2 with gross debt of $196 million and a gross leverage ratio of 1.5x [28] Q&A Session Summary Question: Sustainability of precision motion margins - Management indicated that while there was a mix benefit in Q2, margins with a "5" in front of them are somewhat sustainable for the second half of the year [39] Question: Vision segment performance and recovery - Management attributed the decline in the vision segment to surgical market demand fluctuations, expecting a delayed impact on results [40][41] Question: Bookings strength and backlog conversion - Management noted that shipments have not filled customer stock, indicating that demand remains robust despite supply chain challenges [45][46] Question: Photonics segment order mix - The order mix in the photonics segment was balanced between industrial and medical applications, with strong performance in DNA sequencing and laser-based procedures [47] Question: Gross margin challenges and future outlook - Management confirmed that the guidance for gross margins remains around 46%, with expectations for continued expansion in the future [55]

| --- | --- | |-------|-------| | | | | | | Safe Harbor Statement The statements in this presentation that relate to guidance, pro forma presentations, future plans, goals, business opportunities, and future events or performance are forward-looking statements that involve risks and uncertainties, including risks associated with business and economic conditions, failure to achieve expected benefits of acquisitions, failure to comply with the Food and Drug Administration regulations, customer and/or supplier ...

Novanta Inc. (NASDAQ:NOVT) Q1 2021 Earnings Conference Call May 11, 2021 10:00 AM ET Corporate Participants Ray Nash - Investor Relations Matthijs Glastra - Chief Executive Officer Robert Buckley - Chief Financial Officer Conference Call Participants Lee Jagoda - CJS Securities Richard Eastman - Robert W. Baird Brian Drab - William Blair Operator Good morning everyone. My name is Jimmy and I will be your conference operator today. At this time, I would like to welcome everyone to the Novanta Incorporated Fi ...

Financial Data and Key Metrics Changes - In Q4 2020, Novanta reported approximately $147 million in revenue, an 8% year-over-year decline on a reported basis and a 10% decline on an organic basis [7][25] - For the full year 2020, revenue was $591 million, representing a 6% year-over-year decline on a reported basis and an 8% decline on an organic basis [7][25] - Adjusted EBITDA for Q4 was $32 million, or 22% of sales, expanding nearly 300 basis points versus 2019 [8][31] - Full year adjusted EBITDA was $121 million, or 20% of sales, flat versus 2019 on a dollar basis but expanding 100 basis points on lower sales [8][31] - Free cash flow for Q4 was over $43 million, up 32% year-over-year, and for the full year, it was $130 million, up 147% versus 2019 [8][33] Business Line Data and Key Metrics Changes - Vision segment revenue declined 9% year-over-year in Q4, with a book-to-bill ratio of 0.92 [19] - Precision Motion segment saw a 6% growth in revenue in Q4, with bookings growing 50% sequentially and a book-to-bill of 1.17 [22] - Photonics segment revenue was down 14% year-over-year in Q4 but up 8% sequentially, with a book-to-bill of 1.26 [23][24] Market Data and Key Metrics Changes - 56% of total sales in Q4 were to medical end markets, which experienced mid-single-digit declines for the full year due to deferrals of elective procedures [10] - Sales to advanced industrial markets accounted for 44% of total sales in Q4, showing signs of recovery across multiple applications [12] - The vitality index for new products launched in the last four years remained healthy at above 25% of sales [12] Company Strategy and Development Direction - The company plans to launch approximately 25 new products in 2021, doubling the number from 2020, focusing on industrial and surgical robotics, minimally invasive surgery, and precision medicine [13][18] - Novanta aims to transform into a learning culture with continuous improvement across all business areas, enhancing customer satisfaction and operational efficiency [16] - The company is actively pursuing M&A opportunities that fit its financial returns and strategic criteria [18] Management's Comments on Operating Environment and Future Outlook - Management noted a temporary pause in demand from large medical OEMs due to rising COVID cases and deferrals of elective procedures, but expects recovery in the second half of 2021 [11] - The company is seeing positive momentum in advanced industrial markets and anticipates strong sequential revenue improvement in Q1 2021 [9][34] - Management expressed confidence in the long-term strategic positioning and the potential for organic growth driven by new product launches [18][44] Other Important Information - The company reported a GAAP diluted earnings per share of $0.35 in Q4 2020, compared to $0.26 in Q4 2019 [32] - Operating cash flow for Q4 was $47 million, a 31% increase year-over-year [33] - The company plans to publish its first ESG report, focusing on environmental protection, product quality, and diversity [17] Q&A Session Summary Question: How should we think about new product introductions in terms of organic growth? - Management highlighted excitement for the upcoming launches, noting that significant contributions to growth will be seen in 2022 and 2023 as products ramp up [50] Question: Can you discuss the percentage of new products geared towards subsystems versus components? - Management indicated that approximately 30% of revenue is now from intelligent subsystems, up from 5% in 2016, and expects this percentage to increase [52][54] Question: What is the opportunity for gross margin expansion in the Vision segment? - Management stated that gross margin expansion will primarily come from cost actions rather than volume increases, with elective procedures expected to strengthen in the second half of the year [60][61] Question: Will all three segments improve sequentially in Q1? - Management confirmed that Precision Motion and Photonics are expected to trend upwards, while the Vision segment may face challenges due to tough year-over-year comparisons [70][72] Question: Is there still a pipeline of M&A opportunities? - Management affirmed that there is a strong pipeline of opportunities, although valuations have increased, and they remain disciplined in their approach [75]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 001-35083 NOVANTA INC. (Exact name of registrant as specified in its charter) New Brunswick, Canada 98-0110412 (State or other jurisdiction of incorpor ...

Financial Data and Key Metrics Changes - Novanta reported approximately $143 million in revenue for Q3 2020, representing a 7% year-over-year decline on a reported basis and a 9% decline on an organic basis [7][31] - Adjusted EBITDA was $30 million, or 21% of sales, expanding 100 basis points compared to 2019 [8] - Free cash flow performance reached nearly $40 million, up over eight times year-over-year, reflecting strong management of operations and working capital [9][43] - GAAP diluted earnings per share was $0.03, down from $0.25 in Q3 2019, while adjusted earnings per share was $0.42 compared to $0.52 in the prior year [42] Business Line Data and Key Metrics Changes - The Vision segment saw an 8% year-over-year revenue decline, with a book-to-bill ratio of 0.92 [21] - The Precision Motion segment experienced a 9% revenue growth, driven by demand in 5G and cloud-based infrastructure [24] - The Photonics segment's revenue was down 15%, consistent with expectations, but bookings grew double digits sequentially [26][27] Market Data and Key Metrics Changes - Elective medical procedures and diagnostic test volumes recovered to about 90% to 95% of pre-COVID levels [11] - Sales to China increased by 46% year-over-year, while sales to the U.S. and Europe were down 7% [35] - The medical end markets accounted for 54% of total sales in Q3 2020, despite low double-digit declines [31] Company Strategy and Development Direction - Novanta's long-term growth drivers include industrial and surgical robotics, minimally invasive surgery, precision medicine, and Industry 4.0 [16][30] - The company is focused on innovation investments and has launched new products, including MOVIA and Ultra IncOder, to capture market opportunities [17][18] - The company is actively pursuing acquisition opportunities that fit its financial returns and strategic criteria [30] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the immediate outlook due to uncertainty in the market and the resurgence of COVID-19 [13][44] - The company expects sequential revenue improvement in Q4 2020, driven largely by the Photonics segment [44] - Management emphasized the importance of maintaining employee safety and business continuity during the pandemic [14][15] Other Important Information - The vitality index, which measures revenue from new products launched in the last four years, remains healthy at over 25% of sales [18] - The company has implemented rigorous cost management measures to navigate the pandemic's challenges [39][40] Q&A Session Summary Question: Can you talk about customer relationships and cost-sharing due to COVID? - Management noted that there has been recognition of higher costs incurred, leading to some sharing of costs with customers to mitigate overall impact [50][52] Question: What is the market potential for new products? - Management indicated a market opportunity of about $100 million for Photonics and a similar range for minimally invasive surgery [55] Question: Will new product revenue impact Q4 and H1 2021? - Management expects more pronounced contributions from new products in 2021 and 2022, with some delays in customer launches [59][60] Question: What is the outlook for the Precision Motion segment? - Management highlighted a 9% growth in Q3 but noted that capital investments in surgical robotics are expected to be delayed until late 2021 [65][66]