Novanta Announces Financial Results for the Second Quarter 2024
Novanta Inc. (Nasdaq: NOVT) reported its Q2 2024 financial results, showing revenue growth of 2.8% to $235.9 million. The company's GAAP net income was $13.8 million, with diluted EPS of $0.38. Adjusted EBITDA reached $51.1 million, while adjusted diluted EPS was $0.73. Novanta's acquisition activities contributed 8.9% to revenue growth, offsetting a 5.3% decrease in organic revenue. The company generated strong operating cash flow of $41.1 million. For the full year 2024, Novanta expects GAAP revenue of approximately $975 million, representing over 10% growth, with adjusted EBITDA projected between $215-$222 million and adjusted diluted EPS of $3.20-$3.35.
Novanta Inc. (Nasdaq: NOVT) ha riportato i risultati finanziari del secondo trimestre 2024, evidenziando una crescita dei ricavi del 2,8% fino a 235,9 milioni di dollari. L'utile netto GAAP dell'azienda è stato di 13,8 milioni di dollari, con un utile per azione diluito di 0,38 dollari. L'EBITDA rettificato ha raggiunto 51,1 milioni di dollari, mentre l'utile per azione diluito rettificato è stato di 0,73 dollari. Le attività di acquisizione di Novanta hanno contribuito per l'8,9% alla crescita dei ricavi, compensando una diminuzione del 5,3% nei ricavi organici. L'azienda ha generato un forte flusso di cassa operativo di 41,1 milioni di dollari. Per l'intero anno 2024, Novanta prevede ricavi GAAP di circa 975 milioni di dollari, rappresentando una crescita di oltre il 10%, con un EBITDA rettificato stimato tra 215 e 222 milioni di dollari e un utile per azione diluito rettificato di 3,20-3,35 dollari.
Novanta Inc. (Nasdaq: NOVT) reportó sus resultados financieros del segundo trimestre de 2024, mostrando un crecimiento de ingresos del 2,8% hasta 235,9 millones de dólares. La ganancia neta GAAP de la empresa fue de 13,8 millones de dólares, con una EPS diluida de 0,38 dólares. El EBITDA ajustado alcanzó los 51,1 millones de dólares, mientras que la EPS diluida ajustada fue de 0,73 dólares. Las actividades de adquisición de Novanta contribuyeron con un 8,9% al crecimiento de los ingresos, compensando una disminución del 5,3% en ingresos orgánicos. La empresa generó un fuerte flujo de caja operativo de 41,1 millones de dólares. Para todo el año 2024, Novanta espera ingresos GAAP de aproximadamente 975 millones de dólares, lo que representa más del 10% de crecimiento, con un EBITDA ajustado proyectado entre 215 y 222 millones de dólares y una EPS diluida ajustada de 3,20-3,35 dólares.
노반타 Inc. (Nasdaq: NOVT)는 2024년 2분기 재무 결과를 발표하며 수익이 2.8% 증가하여 2억 3,590만 달러에 이르렀다고 보고했습니다. 회사의 GAAP 순이익은 1,380만 달러였으며, 희석 주당 순이익(EPS)은 0.38 달러입니다. 조정된 EBITDA는 5,110만 달러에 도달했으며, 조정 희석 주당 순이익은 0.73 달러였습니다. 노반타의 인수 활동은 수익 성장에 8.9% 기여하였으며, 유기적 수익의 5.3% 감소를 상쇄했습니다. 회사는 운영 현금 흐름 4,110만 달러를 생성했습니다. 2024년 전체 연간 예상 GAAP 수익은 약 9억 7,500만 달러로, 10% 이상의 성장을 나타내며, 조정된 EBITDA는 2억 1,500만~2억 2,200만 달러로 예상되며, 조정 희석 EPS는 3.20~3.35달러입니다.
Novanta Inc. (Nasdaq: NOVT) a annoncé ses résultats financiers pour le deuxième trimestre 2024, montrant une croissance des revenus de 2,8% pour atteindre 235,9 millions de dollars. Le résultat net GAAP de l'entreprise était de 13,8 millions de dollars, avec un BPA dilué de 0,38 $. L'EBITDA ajusté a atteint 51,1 millions de dollars, tandis que le BPA dilué ajusté était de 0,73 $. Les activités d'acquisition de Novanta ont contribué à hauteur de 8,9 % à la croissance des revenus, compensant une diminution de 5,3 % des revenus organiques. L'entreprise a généré un flux de trésorerie d'exploitation de 41,1 millions de dollars. Pour l'ensemble de l'année 2024, Novanta s'attend à un chiffre d'affaires GAAP d'environ 975 millions de dollars, représentant plus de 10 % de croissance, avec un EBITDA ajusté projeté entre 215 et 222 millions de dollars et un BPA dilué ajusté de 3,20 à 3,35 dollars.
Novanta Inc. (Nasdaq: NOVT) hat seine Finanzzahlen für das 2. Quartal 2024 bekannt gegeben und einen Umsatzanstieg von 2,8% auf 235,9 Millionen USD verzeichnet. Der GAAP-Nettoeinkommen des Unternehmens betrug 13,8 Millionen USD, mit einem verwässerten EPS von 0,38 USD. Das bereinigte EBITDA erreichte 51,1 Millionen USD, während das bereinigte verwässerte EPS bei 0,73 USD lag. Die Übernahmeaktivitäten von Novanta trugen 8,9% zum Umsatzwachstum bei, was einen Rückgang des organischen Umsatzes um 5,3% ausglich. Das Unternehmen erzielte einen starken Betriebscashflow von 41,1 Millionen USD. Für das gesamte Jahr 2024 erwartet Novanta einen GAAP-Umsatz von etwa 975 Millionen USD, was einem Wachstum von über 10% entspricht, mit einem bereinigten EBITDA, das zwischen 215 und 222 Millionen USD liegt, und einem bereinigten verwässerten EPS von 3,20 bis 3,35 USD.
- Revenue increased by 2.8% year-over-year to $235.9 million
- Acquisitions contributed 8.9% to revenue growth
- Operating cash flow improved to $41.1 million from $26.2 million in Q2 2023
- Full-year 2024 guidance projects over 10% revenue growth to $975 million
- Adjusted gross profit margin expected to be 46.6% to 47.0% for full-year 2024
- Organic Revenue Growth decreased by 5.3% year-over-year
- GAAP operating income decreased to $25.7 million from $32.2 million in Q2 2023
- GAAP net income declined to $13.8 million from $20.9 million in Q2 2023
- GAAP diluted EPS decreased to $0.38 from $0.58 in Q2 2023
- Adjusted Diluted EPS decreased to $0.73 from $0.80 in Q2 2023
Insights
Novanta's Q2 2024 results show a mixed picture. While revenue increased by
Despite these headwinds, Novanta maintained a strong adjusted EBITDA of
Looking ahead, Novanta's full-year 2024 guidance of
Novanta's Q2 results reflect broader market trends. The company's strength in medical device markets is offsetting weaknesses in industrial capital spending, particularly in Europe and China, as well as in life sciences and bioprocessing sectors. This diversification is proving important in maintaining overall growth.
The
Novanta's optimism for 2025, based on expected improvements in capital spending markets and accelerating growth from new products, suggests a potential turnaround. Investors should monitor the company's ability to capitalize on these opportunities while navigating current market headwinds.
Novanta's performance in Q2 2024 demonstrates resilience in a challenging tech landscape. The company's ability to maintain strong adjusted EBITDA despite organic revenue decline showcases effective operational management. The focus on innovative product launches is important for long-term competitiveness in the high-tech manufacturing sector.
The company's strength in medical device markets and anticipated growth in robotics and automation align with broader industry trends towards healthcare technology and industrial automation. These sectors are likely to see continued investment and innovation, potentially providing Novanta with growth opportunities.
However, the weakness in industrial capital spending, particularly in Europe and China, reflects broader economic uncertainties affecting the tech sector. Novanta's ability to navigate these challenges while positioning itself for an expected market improvement in 2025 will be critical. The company's strategic acquisitions and focus on new product development could provide a competitive edge in capitalizing on future market upturns.
-
Second Quarter 2024 GAAP Revenue of
$236 million -
Second Quarter 2024 GAAP Net Income of
$13.8 million -
Second Quarter 2024 GAAP Diluted Earnings Per Share of
$0.38 -
Second Quarter 2024 Adjusted Earnings Per Share of
$0.73 -
Second Quarter 2024 Adjusted EBITDA of
$51 million
Financial Highlights |
Three Months Ended |
||||||
(In millions, except per share amounts) |
June 28, |
|
June 30, |
||||
|
2024 |
|
2023 |
||||
GAAP |
|
|
|
|
|
||
Revenue |
$ |
235.9 |
|
|
$ |
229.5 |
|
Operating Income |
$ |
25.7 |
|
|
$ |
32.2 |
|
Net Income |
$ |
13.8 |
|
|
$ |
20.9 |
|
Diluted EPS |
$ |
0.38 |
|
|
$ |
0.58 |
|
Non-GAAP* |
|
|
|
|
|
||
Adjusted Operating Income |
$ |
41.3 |
|
|
$ |
42.1 |
|
Adjusted Diluted EPS |
$ |
0.73 |
|
|
$ |
0.80 |
|
Adjusted EBITDA |
$ |
51.1 |
|
|
$ |
51.7 |
|
*Reconciliations of GAAP to non-GAAP financial measures, as well as definitions for the non-GAAP financial measures included in this press release and the reasons for their use, are presented below.
“Novanta delivered another quarter of outstanding operating results,” said Matthijs Glastra, Chair and Chief Executive Officer of Novanta. “In the Second Quarter, we beat expectations for sales, profit, and cash flow. For the quarter, we had
Second Quarter
During the second quarter of 2024, Novanta generated GAAP revenue of
In the second quarter of 2024, GAAP operating income was
Adjusted Diluted EPS was
Operating cash flow for the second quarter of 2024 was
Financial Guidance
“While industrial capital spending markets, particularly in
For the full year 2024, the Company expects GAAP revenue of approximately
For the third quarter of 2024, the Company expects GAAP revenue of approximately
Novanta provides earnings guidance on a non-GAAP basis and does not provide earnings guidance on a GAAP basis, with the exception of GAAP revenue guidance. A reconciliation of the Company’s forward-looking Adjusted Gross Profit Margin, Adjusted EBITDA and Adjusted Diluted EPS guidance to the most directly comparable GAAP financial measures is not provided because of the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliations, including acquisitions and related expenses; impact of purchase price allocations for recently completed acquisitions; future changes in the fair value of contingent considerations; future restructuring expenses; foreign exchange gains/(losses); significant discrete income tax expenses (benefits); benefits or expenses associated with the completion of tax audits; divestitures and related expenses; gains and losses from sale of real estate assets; costs related to product line closures; intangible asset impairment charges and related asset write-offs; and other charges reflected in the Company’s reconciliation of historical non-GAAP financial measures, the amounts of which, based on past experience, could be material. For additional information regarding Novanta’s non-GAAP financial measures, see “Use of Non-GAAP Financial Measures” below.
Conference Call Information
The Company will host a conference call on Tuesday, August 6, 2024 at 10:00 a.m. ET to discuss these results and to provide a business update. To access the call, please dial (888) 346-3959 prior to the scheduled conference call time. Alternatively, the conference call can be accessed online via a live webcast on the Events & Presentations page of the Investors section of the Company’s website at www.novanta.com.
A replay of the audio webcast will be available approximately three hours after the conclusion of the call in the Investor Relations section of the Company’s website at www.novanta.com. The replay will remain available until Monday, September 30, 2024.
Use of Non-GAAP Financial Measures
The non-GAAP financial measures used in this press release are Organic Revenue Growth, Adjusted Gross Profit, Adjusted Gross Profit Margin, Adjusted Operating Income, Adjusted Operating Margin, Adjusted Income Before Income Taxes, Adjusted Income Tax Provision/(Benefit) and Effective Tax Rate, Adjusted Net Income, Adjusted Diluted EPS, Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow, Free Cash Flow as a Percentage of Net Income, and Net Debt.
The Company believes that these non-GAAP financial measures provide useful and supplementary information to investors regarding the operating performance of the Company. It is management’s belief that these non-GAAP financial measures would be particularly useful to investors because of the significant changes that have occurred outside of the Company’s day-to-day business in accordance with the execution of the Company’s strategy. This strategy includes streamlining the Company’s existing operations through site and functional consolidations, strategic divestitures and product line closures, expanding the Company’s business through significant internal investments, and broadening the Company’s product and service offerings through acquisitions of innovative and complementary technologies and solutions. The financial impact of certain elements of these activities, particularly acquisitions, divestitures, and site and functional restructurings, is often large relative to the Company’s overall financial performance and can adversely affect the comparability of its operating results and investors’ ability to analyze the business from period to period.
The Company’s Adjusted EBITDA, Organic Revenue Growth and Adjusted Gross Profit Margin are used by management to evaluate operating performance, communicate financial results to the Board of Directors, benchmark results against historical performance and the performance of peers, and evaluate investment opportunities, including acquisitions and divestitures. In addition, Adjusted EBITDA, Organic Revenue Growth and Adjusted Gross Profit Margin are used to determine bonus payments for senior management and employees. The Company has also used in the past, and may use in the future, Adjusted Diluted EPS and Adjusted EBITDA as performance targets for certain performance-based restricted stock units. Accordingly, the Company believes that these non-GAAP financial measures provide greater transparency and insight into management’s method of analysis.
Non-GAAP financial measures should not be considered as substitutes for, or superior to, measures of financial performance prepared in accordance with GAAP. They are limited in value because they exclude charges that have a material effect on the Company’s reported results and, therefore, should not be relied upon as the sole financial measures to evaluate the Company’s financial results. The non-GAAP financial measures are meant to supplement, and to be viewed in conjunction with, GAAP financial measures. Investors are encouraged to review the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures as provided in the tables accompanying this press release.
Safe Harbor and Forward-Looking Information
Certain statements in this release are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and are based on current expectations and assumptions that are subject to risks and uncertainties. All statements contained in this news release that do not relate to matters of historical fact should be considered forward-looking statements, and are generally identified by words such as “expect,” “intend,” “anticipate,” “estimate,” “believe,” “future,” “could,” “should,” “plan,” “aim,” and other similar expressions. These forward-looking statements include, but are not limited to, statements regarding anticipated financial performance and financial position, including our financial outlook for the full year 2024 and third quarter of 2024; expectations for our end markets and market position; our competitive position, including our positioning for long-term growth, capital spending and growth from new product launches; and other statements that are not historical facts.
These forward-looking statements are neither promises nor guarantees, but involve risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. Our actual results could differ materially from those anticipated in these forward-looking statements for many reasons, including, but not limited to, the following: economic and political conditions and the effects of these conditions on our customers’ businesses, capital expenditures and level of business activities; risks associated with epidemics, pandemics or other public health crises; our dependence upon our ability to respond to fluctuations in product demand; our ability to continuously innovate, to introduce new products in a timely manner, and to manage transitions to new product innovations effectively; customer order timing and other similar factors; disruptions or breaches in security of our or our third-party providers’ information technology systems; risks associated with our operations in foreign countries; our increased use of outsourcing in foreign countries; risks associated with increased outsourcing of components manufacturing; our exposure to increased tariffs, trade restrictions or taxes on our products; violations of our intellectual property rights and our ability to protect our intellectual property against infringement by third parties; risk of losing our competitive advantage; our failure to successfully integrate recent and future acquisitions into our business; our ability to attract and retain key personnel; our restructuring and realignment activities; product defects or problems integrating our products with other vendors’ products; disruptions in the supply of certain key components and other goods from our suppliers; our failure to accurately forecast component and raw material requirements leading to additional costs and significant delays in shipments; production difficulties and product delivery delays or disruptions; our exposure to extensive medical device regulations, which may impede or hinder the approval, certification or sale of our products and, in some cases, may ultimately result in an inability to obtain approval or certification of certain products or may result in the recall or seizure of previously approved or certified products; potential penalties for violating foreign and
Other important risk factors that could affect the outcome of the events set forth in these statements and that could affect the Company’s operating results and financial condition are discussed in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as updated by our subsequent filings with the Securities and Exchange Commission. Such statements are based on the Company’s beliefs and assumptions and on information currently available to the Company. The Company disclaims any obligation to publicly update or revise any such forward-looking statements as a result of developments occurring after the date of this document except as required by law.
About Novanta
Novanta is a leading global supplier of core technology solutions that give medical and advanced industrial original equipment manufacturers a competitive advantage. We combine deep proprietary technology expertise and competencies in precision medicine and manufacturing, medical solutions, and robotics and automation with a proven ability to solve complex technical challenges. This enables Novanta to engineer core components and sub-systems that deliver extreme precision and performance, tailored to our customers' demanding applications. The driving force behind our growth is the team of innovative professionals who share a commitment to innovation and customer success. Novanta’s common shares are quoted on Nasdaq under the ticker symbol “NOVT.”
More information about Novanta is available on the Company’s website at www.novanta.com. For additional information, please contact Novanta Investor Relations at (781) 266-5137 or InvestorRelations@novanta.com.
NOVANTA INC. |
|||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||
(In thousands of |
|||||||
(Unaudited) |
|||||||
|
Three Months Ended |
||||||
|
June 28, |
|
June 30, |
||||
|
2024 |
|
2023 |
||||
Revenue |
$ |
235,864 |
|
|
$ |
229,464 |
|
Cost of revenue |
|
132,175 |
|
|
|
125,341 |
|
Gross profit |
|
103,689 |
|
|
|
104,123 |
|
Operating expenses: |
|
|
|
|
|
||
Research and development and engineering |
|
23,731 |
|
|
|
23,380 |
|
Selling, general and administrative |
|
44,793 |
|
|
|
42,187 |
|
Amortization of purchased intangible assets |
|
6,907 |
|
|
|
5,124 |
|
Restructuring, acquisition, and related costs |
|
2,543 |
|
|
|
1,234 |
|
Total operating expenses |
|
77,974 |
|
|
|
71,925 |
|
Operating income |
|
25,715 |
|
|
|
32,198 |
|
Interest income (expense), net |
|
(8,266 |
) |
|
|
(6,810 |
) |
Foreign exchange transaction gains (losses), net |
|
(264 |
) |
|
|
74 |
|
Other income (expense), net |
|
(55 |
) |
|
|
(191 |
) |
Income before income taxes |
|
17,130 |
|
|
|
25,271 |
|
Income tax provision (benefit) |
|
3,375 |
|
|
|
4,392 |
|
Net income |
$ |
13,755 |
|
|
$ |
20,879 |
|
|
|
|
|
|
|
||
Earnings per common share: |
|
|
|
|
|
||
Basic |
$ |
0.38 |
|
|
$ |
0.58 |
|
Diluted |
$ |
0.38 |
|
|
$ |
0.58 |
|
|
|
|
|
|
|
||
Weighted average common shares outstanding—basic |
|
35,946 |
|
|
|
35,851 |
|
Weighted average common shares outstanding—diluted |
|
36,092 |
|
|
|
36,032 |
|
NOVANTA INC. |
|||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
|||||||
(In thousands of |
|||||||
(Unaudited) |
|||||||
|
June 28, |
|
December 31, |
||||
|
2024 |
|
2023 |
||||
ASSETS |
|
|
|
|
|
||
Current Assets |
|
|
|
|
|
||
Cash and cash equivalents |
$ |
98,468 |
|
|
$ |
105,051 |
|
Accounts receivable, net |
|
145,025 |
|
|
|
139,410 |
|
Inventories |
|
160,042 |
|
|
|
149,371 |
|
Prepaid expenses and other current assets |
|
21,256 |
|
|
|
21,465 |
|
Total current assets |
|
424,791 |
|
|
|
415,297 |
|
Property, plant and equipment, net |
|
114,758 |
|
|
|
109,449 |
|
Operating lease assets |
|
43,641 |
|
|
|
38,302 |
|
Intangible assets, net |
|
206,938 |
|
|
|
145,022 |
|
Goodwill |
|
587,028 |
|
|
|
484,507 |
|
Other assets |
|
21,418 |
|
|
|
33,479 |
|
Total assets |
$ |
1,398,574 |
|
|
$ |
1,226,056 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
||
Current Liabilities |
|
|
|
|
|
||
Current portion of long-term debt |
$ |
4,813 |
|
|
$ |
4,968 |
|
Accounts payable |
|
71,044 |
|
|
|
57,195 |
|
Accrued expenses and other current liabilities |
|
77,613 |
|
|
|
77,012 |
|
Total current liabilities |
|
153,470 |
|
|
|
139,175 |
|
Long-term debt |
|
477,113 |
|
|
|
349,404 |
|
Operating lease liabilities |
|
41,279 |
|
|
|
37,345 |
|
Other long-term liabilities |
|
24,720 |
|
|
|
26,672 |
|
Total liabilities |
|
696,582 |
|
|
|
552,596 |
|
Stockholders’ Equity: |
|
|
|
|
|
||
Total stockholders’ equity |
|
701,992 |
|
|
|
673,460 |
|
Total liabilities and stockholders’ equity |
$ |
1,398,574 |
|
|
$ |
1,226,056 |
|
NOVANTA INC. |
|||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||
(In thousands of |
|||||||
(Unaudited) |
|||||||
|
Three Months Ended |
||||||
|
June 28, |
|
June 30, |
||||
|
2024 |
|
2023 |
||||
Cash flows from operating activities: |
|
|
|
|
|
||
Net income |
$ |
13,755 |
|
|
$ |
20,879 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
||
Depreciation and amortization |
|
14,116 |
|
|
|
11,937 |
|
Share-based compensation |
|
6,231 |
|
|
|
5,875 |
|
Deferred income taxes |
|
(4,000 |
) |
|
|
(3,970 |
) |
Other |
|
4,869 |
|
|
|
2,085 |
|
Changes in assets and liabilities which (used)/provided cash, excluding effects from business acquisitions: |
|
|
|
|
|
||
Accounts receivable |
|
5,385 |
|
|
|
(3,644 |
) |
Inventories |
|
(2,805 |
) |
|
|
1,125 |
|
Other operating assets and liabilities |
|
3,544 |
|
|
|
(8,090 |
) |
Net cash provided by (used in) operating activities |
|
41,095 |
|
|
|
26,197 |
|
Cash flows from investing activities: |
|
|
|
|
|
||
Purchases of property, plant and equipment |
|
(4,937 |
) |
|
|
(3,326 |
) |
Net cash provided by (used in) investing activities |
|
(4,937 |
) |
|
|
(3,326 |
) |
Cash flows from financing activities: |
|
|
|
|
|
||
Repayments under term loan and revolving credit facilities |
|
(31,368 |
) |
|
|
(15,189 |
) |
Payments of withholding taxes from share-based awards |
|
(476 |
) |
|
|
(407 |
) |
Other financing activities |
|
(179 |
) |
|
|
(157 |
) |
Net cash provided by (used in) financing activities |
|
(32,023 |
) |
|
|
(15,753 |
) |
Effect of exchange rates on cash and cash equivalents |
|
813 |
|
|
|
1,536 |
|
Increase (decrease) in cash and cash equivalents |
|
4,948 |
|
|
|
8,654 |
|
Cash and cash equivalents, beginning of period |
|
93,520 |
|
|
|
82,676 |
|
Cash and cash equivalents, end of period |
$ |
98,468 |
|
|
$ |
91,330 |
|
NOVANTA INC. |
|||||||
Revenue by Reportable Segment |
|||||||
(In thousands of |
|||||||
(Unaudited) |
|||||||
|
Three Months Ended |
||||||
|
June 28, |
|
June 30, |
||||
|
2024 |
|
2023 |
||||
Revenue |
|
|
|
|
|
||
Precision Medicine and Manufacturing |
$ |
63,952 |
|
|
$ |
74,333 |
|
Medical Solutions |
|
104,525 |
|
|
|
83,322 |
|
Robotics and Automation |
|
67,387 |
|
|
|
71,809 |
|
Total |
$ |
235,864 |
|
|
$ |
229,464 |
|
NOVANTA INC. |
|||||||
Reconciliation of GAAP to Non-GAAP Financial Measures |
|||||||
(In thousands of |
|||||||
(Unaudited) |
|||||||
Adjusted Gross Profit and Adjusted Gross Profit Margin by Reportable Segment (Non-GAAP): |
|||||||
|
Three Months Ended |
||||||
|
June 28, |
|
June 30, |
||||
|
2024 |
|
2023 |
||||
Precision Medicine and Manufacturing |
|
|
|
|
|
||
Gross Profit (GAAP) |
$ |
30,580 |
|
|
$ |
36,513 |
|
Gross Profit Margin (GAAP) |
|
47.8 |
% |
|
|
49.1 |
% |
Amortization of intangible assets |
|
491 |
|
|
|
582 |
|
Inventory related charges associated with a product line closure |
|
— |
|
|
|
473 |
|
Adjusted Gross Profit (Non-GAAP) |
$ |
31,071 |
|
|
$ |
37,568 |
|
Adjusted Gross Profit Margin (Non-GAAP) |
|
48.6 |
% |
|
|
50.5 |
% |
|
|
|
|
|
|
||
Medical Solutions |
|
|
|
|
|
||
Gross Profit (GAAP) |
$ |
40,364 |
|
|
$ |
34,257 |
|
Gross Profit Margin (GAAP) |
|
38.6 |
% |
|
|
41.1 |
% |
Amortization of intangible assets |
|
1,961 |
|
|
|
1,070 |
|
Inventory related charges associated with a product line closure |
|
2,493 |
|
|
|
— |
|
Adjusted Gross Profit (Non-GAAP) |
$ |
44,818 |
|
|
$ |
35,327 |
|
Adjusted Gross Profit Margin (Non-GAAP) |
|
42.9 |
% |
|
|
42.4 |
% |
|
|
|
|
|
|
||
Robotics and Automation |
|
|
|
|
|
||
Gross Profit (GAAP) |
$ |
33,388 |
|
|
$ |
34,909 |
|
Gross Profit Margin (GAAP) |
|
49.5 |
% |
|
|
48.6 |
% |
Amortization of intangible assets |
|
1,233 |
|
|
|
1,394 |
|
Adjusted Gross Profit (Non-GAAP) |
$ |
34,621 |
|
|
$ |
36,303 |
|
Adjusted Gross Profit Margin (Non-GAAP) |
|
51.4 |
% |
|
|
50.6 |
% |
|
|
|
|
|
|
||
Unallocated Corporate and Shared Services |
|
|
|
|
|
||
Gross Profit (GAAP) |
$ |
(643 |
) |
|
$ |
(1,556 |
) |
Adjusted Gross Profit (Non-GAAP) |
$ |
(643 |
) |
|
$ |
(1,556 |
) |
|
|
|
|
|
|
||
Novanta Inc. |
|
|
|
|
|
||
Gross Profit (GAAP) |
$ |
103,689 |
|
|
$ |
104,123 |
|
Gross Profit Margin (GAAP) |
|
44.0 |
% |
|
|
45.4 |
% |
Amortization of intangible assets |
|
3,685 |
|
|
|
3,046 |
|
Inventory related charges associated with a product line closure |
|
2,493 |
|
|
|
473 |
|
Adjusted Gross Profit (Non-GAAP) |
$ |
109,867 |
|
|
$ |
107,642 |
|
Adjusted Gross Profit Margin (Non-GAAP) |
|
46.6 |
% |
|
|
46.9 |
% |
NOVANTA INC. |
|||||||||||||||||||||||||||
Reconciliation of GAAP to Non-GAAP Financial Measures |
|||||||||||||||||||||||||||
(Amounts in thousands except per share amounts) |
|||||||||||||||||||||||||||
(Unaudited) |
|||||||||||||||||||||||||||
Adjusted Operating Income and Adjusted Diluted EPS (Non-GAAP): |
|||||||||||||||||||||||||||
|
Three Months Ended June 28, 2024 |
|
|||||||||||||||||||||||||
|
Operating
|
|
Operating
|
|
Income
|
|
Income Tax
|
|
Effective Tax
|
|
Net Income |
|
Diluted EPS |
||||||||||||||
GAAP results |
$ |
25,715 |
|
|
|
10.9 |
% |
|
$ |
17,130 |
|
|
$ |
3,375 |
|
|
|
19.7 |
% |
|
$ |
13,755 |
|
|
$ |
0.38 |
|
Non-GAAP Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Amortization of intangible assets |
|
10,592 |
|
|
|
4.5 |
% |
|
|
10,592 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Restructuring costs |
|
2,523 |
|
|
|
1.1 |
% |
|
|
2,523 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Acquisition and related costs |
|
20 |
|
|
|
0.0 |
% |
|
|
20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Inventory related charges associated with a product line closure |
|
2,493 |
|
|
|
1.0 |
% |
|
|
2,493 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign exchange transaction (gains) losses, net |
|
|
|
|
|
|
|
264 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Tax effect of non-GAAP adjustments |
|
|
|
|
|
|
|
|
|
|
3,228 |
|
|
|
|
|
|
|
|
|
|
||||||
Non-GAAP tax adjustments |
|
|
|
|
|
|
|
|
|
|
(48 |
) |
|
|
|
|
|
|
|
|
|
||||||
Total non-GAAP adjustments |
|
15,628 |
|
|
|
6.6 |
% |
|
|
15,892 |
|
|
|
3,180 |
|
|
|
|
|
|
12,712 |
|
|
|
0.35 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Adjusted results (Non-GAAP) |
$ |
41,343 |
|
|
|
17.5 |
% |
|
$ |
33,022 |
|
|
$ |
6,555 |
|
|
|
19.9 |
% |
|
$ |
26,467 |
|
|
$ |
0.73 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Weighted average shares outstanding - Diluted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36,092 |
|
||||||
NOVANTA INC. |
|||||||||||||||||||||||||||
Reconciliation of GAAP to Non-GAAP Financial Measures |
|||||||||||||||||||||||||||
(Amounts in thousands except per share amounts) |
|||||||||||||||||||||||||||
(Unaudited) |
|||||||||||||||||||||||||||
Adjusted Operating Income and Adjusted Diluted EPS (Non-GAAP): |
|||||||||||||||||||||||||||
|
Three Months Ended June 30, 2023 |
|
|||||||||||||||||||||||||
|
Operating
|
|
Operating
|
|
Income
|
|
Income Tax
|
|
Effective Tax
|
|
Net Income |
|
Diluted EPS |
||||||||||||||
GAAP results |
$ |
32,198 |
|
|
|
14.0 |
% |
|
$ |
25,271 |
|
|
$ |
4,392 |
|
|
|
17.4 |
% |
|
$ |
20,879 |
|
|
$ |
0.58 |
|
Non-GAAP Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Amortization of intangible assets |
|
8,170 |
|
|
|
3.6 |
% |
|
|
8,170 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Restructuring costs |
|
1,136 |
|
|
|
0.5 |
% |
|
|
1,136 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Acquisition and related costs |
|
98 |
|
|
|
0.0 |
% |
|
|
98 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Inventory related charges associated with a product line closure |
|
473 |
|
|
|
0.2 |
% |
|
|
473 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign exchange transaction (gains) losses, net |
|
|
|
|
|
|
|
(74 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Tax effect of non-GAAP adjustments |
|
|
|
|
|
|
|
|
|
|
2,092 |
|
|
|
|
|
|
|
|
|
|
||||||
Non-GAAP tax adjustments |
|
|
|
|
|
|
|
|
|
|
(149 |
) |
|
|
|
|
|
|
|
|
|
||||||
Total non-GAAP adjustments |
|
9,877 |
|
|
|
4.3 |
% |
|
|
9,803 |
|
|
|
1,943 |
|
|
|
|
|
|
7,860 |
|
|
|
0.22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Adjusted results (Non-GAAP) |
$ |
42,075 |
|
|
|
18.3 |
% |
|
$ |
35,074 |
|
|
$ |
6,335 |
|
|
|
18.1 |
% |
|
$ |
28,739 |
|
|
$ |
0.80 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Weighted average shares outstanding - Diluted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36,032 |
|
||||||
NOVANTA INC. |
|||||||
Reconciliation of GAAP to Non-GAAP Financial Measures |
|||||||
(In thousands of |
|||||||
(Unaudited) |
|||||||
Adjusted EBITDA (Non-GAAP): |
|||||||
|
Three Months Ended |
||||||
|
June 28, |
|
June 30, |
||||
|
2024 |
|
2023 |
||||
Net Income (GAAP) |
$ |
13,755 |
|
|
$ |
20,879 |
|
Net Income Margin |
|
5.8 |
% |
|
|
9.1 |
% |
Interest (income) expense, net |
|
8,266 |
|
|
|
6,810 |
|
Income tax provision (benefit) |
|
3,375 |
|
|
|
4,392 |
|
Depreciation and amortization |
|
14,116 |
|
|
|
11,937 |
|
Share-based compensation |
|
6,231 |
|
|
|
5,875 |
|
Restructuring, acquisition and related costs |
|
2,548 |
|
|
|
1,234 |
|
Inventory related charges associated with a product line closure |
|
2,493 |
|
|
|
473 |
|
Other, net |
|
319 |
|
|
|
117 |
|
Adjusted EBITDA (Non-GAAP) |
$ |
51,103 |
|
|
$ |
51,717 |
|
Adjusted EBITDA Margin (Non-GAAP) |
|
21.7 |
% |
|
|
22.5 |
% |
Organic Revenue Growth (Non-GAAP): |
|||
|
Three Months Ended June 28, 2024 |
||
|
Compared to |
||
|
Three Months Ended June 30, 2023 |
||
Reported Revenue Growth/(Decline) (GAAP) |
|
2.8 |
% |
Less: Change attributable to acquisitions |
|
8.9 |
% |
Plus: Change due to foreign currency |
|
0.8 |
% |
Organic Revenue Growth/(Decline) (Non-GAAP) |
|
(5.3 |
)% |
Net Debt (Non-GAAP): |
|||||||
|
June 28, |
|
December 31, |
||||
|
2024 |
|
2023 |
||||
Total Debt (GAAP) |
$ |
481,926 |
|
|
$ |
354,372 |
|
Plus: Deferred financing costs |
|
3,099 |
|
|
|
3,681 |
|
Gross Debt |
|
485,025 |
|
|
|
358,053 |
|
Less: Cash and cash equivalents |
|
(98,468 |
) |
|
|
(105,051 |
) |
Net Debt (Non-GAAP) |
$ |
386,557 |
|
|
$ |
253,002 |
|
Free Cash Flow (Non-GAAP): |
|||||||
|
Three Months Ended |
||||||
|
June 28, |
|
June 30, |
||||
|
2024 |
|
2023 |
||||
Net Cash Provided by Operating Activities (GAAP) |
$ |
41,095 |
|
|
$ |
26,197 |
|
Less: Purchases of property, plant and equipment |
|
(4,937 |
) |
|
|
(3,326 |
) |
Free Cash Flow (Non-GAAP) |
$ |
36,158 |
|
|
$ |
22,871 |
|
Net Income (GAAP) |
$ |
13,755 |
|
|
$ |
20,879 |
|
Net Cash Provided by Operating Activities as a Percentage of Net Income |
|
298.8 |
% |
|
|
125.5 |
% |
Free Cash Flow as a Percentage of Net Income |
|
262.9 |
% |
|
|
109.5 |
% |
Non-GAAP Financial Measures
The following provides additional explanations for non-GAAP financial measures used by the Company, including explanations for certain non-GAAP adjustments that may not be present in the quarterly disclosures included in the current earnings release but have been used by the Company in the two most recent fiscal years. See the tables above for the calculations of the non-GAAP financial measures used in this earnings release.
Organic Revenue Growth
The Company defines the term “organic revenue” as revenue excluding the impact from business acquisitions, divestitures, product line discontinuations, and the effect of foreign currency translation. The Company uses the related term “organic revenue growth” to refer to the financial performance metric of comparing current period organic revenue with the reported revenue of the corresponding period in the prior year. The Company believes that this non-GAAP financial measure, when taken together with our GAAP financial measures, allows the Company and its investors to better measure the Company’s performance and evaluate long-term performance trends. Organic revenue growth also facilitates easier comparisons of the Company’s performance with prior and future periods and relative comparisons to its peers. The Company excludes the effect of foreign currency translation from these measures because foreign currency translation is subject to volatility and can obscure underlying business trends. The Company excludes the effect of acquisitions and divestitures because these activities can vary dramatically between reporting periods and between the Company and its peers, which the Company believes makes comparisons of long-term performance trends difficult for management and investors. Organic Revenue Growth is also used as a performance metric to determine bonus payments for senior management and employees.
Adjusted Gross Profit and Adjusted Gross Profit Margin
The calculation of Adjusted Gross Profit and Adjusted Gross Profit Margin excludes amortization of acquired intangible assets, inventory fair value adjustments related to business acquisitions, and inventory related charges associated with product line closures because: (i) the amounts are non-cash; (ii) the Company cannot influence the timing and amount of future expense recognition; and (iii) excluding such expenses provides investors and management better visibility into the underlying trends and performance of our businesses. The Company also excludes inventory related charges associated with product line closures as these costs occurred outside of the Company’s day-to-day business for the reasons described above in the introductory paragraphs of the “Use of Non-GAAP Financial Measures.”
Adjusted Operating Income and Adjusted Operating Margin
The calculation of Adjusted Operating Income and Adjusted Operating Margin excludes amortization of acquired intangible assets, amortization of inventory fair value adjustments related to business acquisitions, and inventory related charges associated with product line closures for the reasons described above for Adjusted Gross Profit and Adjusted Gross Profit Margin. The Company also excludes restructuring and acquisition-related costs due to the significant changes that have occurred outside of the Company’s day-to-day business for the reasons described above in the introductory paragraphs of the “Use of Non-GAAP Financial Measures.”
Adjusted Income Before Income Taxes
The calculation of Adjusted Income Before Income Taxes excludes amortization of acquired intangible assets, amortization of inventory fair value adjustments related to business acquisitions, inventory related charges associated with product line closures, and restructuring and acquisition-related costs for the reasons described above for Adjusted Operating Income and Adjusted Operating Margin. The Company also excludes foreign exchange transaction gains (losses) from the calculation of Adjusted Income Before Income Taxes as the Company cannot fully influence the timing and amount of foreign exchange transaction gains (losses).
Non-GAAP Income Tax Provision/(Benefit) and Effective Tax Rate
Non-GAAP Income Tax Provision/(Benefit) and Effective Tax Rate are calculated based on the Adjusted Income Before Income Taxes by jurisdiction, the applicable tax rates in effect for the respective jurisdictions and the income tax effect of non-GAAP adjustments discussed above. In addition, the Company excludes significant discrete income tax expenses (benefits) related to releases of valuation allowances and uncertain tax positions, tax audits, certain changes in tax laws, and acquisition related tax planning actions on the Company’s effective tax rate.
Adjusted Net Income
Because Income Before Income Taxes is included in determining Net Income, the calculation of Adjusted Net Income also excludes amortization of acquired intangible assets, amortization of inventory fair value adjustments related to business acquisitions, inventory related charges associated with product line closures, restructuring costs, acquisition-related costs, and foreign exchange transaction gains (losses) for the reasons described above for Adjusted Income Before Income Taxes. In addition, the Company excludes (i) significant discrete income tax expenses (benefits) related to releases of valuation allowances and uncertain tax positions, tax audits or amendments to prior year returns, certain changes in tax laws, and acquisition related tax planning actions on the Company’s effective tax rate; and (ii) the income tax effect of non-GAAP adjustments discussed above.
Adjusted Diluted EPS
Because Net Income is used in the calculation of Diluted EPS, Adjusted Diluted EPS excludes: (i) amortization of acquired intangible assets; (ii) amortization of inventory fair value adjustments related to business acquisitions; (iii) inventory related charges associated with product line closures; (iv) restructuring, acquisition and related costs; (v) foreign exchange transaction gains (losses); (vi) significant discrete income tax expenses (benefits) related to releases of valuation allowances, uncertain tax positions, tax audits or amendments to prior year returns, certain changes in tax laws, and acquisition related tax planning actions on the Company’s effective tax rate; and (vii) the income tax effect of non-GAAP adjustments for the reasons described above for Adjusted Net Income.
Adjusted EBITDA and Adjusted EBITDA Margin
The Company defines Adjusted EBITDA as income before deducting interest (income) expense, income tax provision (benefit), depreciation, amortization, non-cash share-based compensation, restructuring, acquisition and related costs, acquisition fair value adjustments, inventory related charges associated with product line closures, other non-operating (income) expense items, including foreign exchange transaction (gains) losses and net periodic pension costs of the Company’s frozen
Adjusted EBITDA Margin is defined as Adjusted EBITDA as a percentage of Revenue.
In evaluating Adjusted EBITDA and Adjusted EBITDA Margin, you should be aware that in the future the Company may incur expenses that are the same as, or similar to, some of the adjustments in this presentation.
Free Cash Flow and Free Cash Flow as a Percentage of Net Income
The Company defines Free Cash Flow as net cash provided by operating activities less cash paid for purchases of property, plant and equipment and plus cash proceeds from sales of property, plant and equipment. Free Cash Flow as a Percentage of Net Income is defined as Free Cash Flow divided by Net Income. Management believes these non-GAAP financial measures are important indicators of the Company’s liquidity as well as its ability to service its outstanding debt and to fund future growth.
Net Debt
The Company defines Net Debt as its total debt as reported on the consolidated balance sheet plus unamortized deferred financing costs and less its cash and cash equivalents as of the end of the period presented. Management uses Net Debt to monitor the Company’s outstanding debt obligations that could not be satisfied by its cash and cash equivalents on hand.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240806124276/en/
Novanta Inc.
Investor Relations Contact:
Ray Nash
(781) 266-5137
Source: Novanta Inc.
FAQ
What was Novanta's (NOVT) revenue for Q2 2024?
How did Novanta's (NOVT) GAAP diluted EPS change in Q2 2024 compared to Q2 2023?
What is Novanta's (NOVT) full-year 2024 revenue guidance?
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What was Novanta's (NOVT) operating cash flow in Q2 2024?
