Novanta (US:NOVT)2022-03-01 21:37Financial 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]