Exhibit 99.1

FOR IMMEDIATE RELEASE
February 28, 2018

 

Novanta Announces Financial Results
for the Fourth Quarter and Full Year 2017

 

Fourth Quarter 2017 GAAP Revenue of $146.9 million, up 49% year over year

 

Full Year 2017 GAAP Revenue of $521 million

 

Full Year 2017 GAAP Net Income of $60 million

 

Full Year 2017 GAAP Diluted Earnings Per Share of $1.13

 

Full Year 2017 Adjusted Earnings Per Share of $1.60

 

Full Year 2017 Adjusted EBITDA of $106 million

 

BEDFORD, Mass., February 28, 2018 -- Novanta Inc. (Nasdaq: NOVT) (the “Company”), a trusted technology partner to medical and advanced technology equipment manufacturers, today reported financial results for the fourth quarter and full year 2017. 

 

Financial Highlights

Three Months Ended December 31,

 

 

Year Ended December 31,

 

(In millions, except per share amounts)

2017

 

 

2016

 

 

2017

 

 

2016

 

GAAP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

$

146.9

 

 

$

98.9

 

 

$

521.3

 

 

$

384.8

 

Operating Income from Continuing Operations

$

19.1

 

 

$

11.3

 

 

$

57.2

 

 

$

32.6

 

Net Income Attributable to Novanta Inc.

$

8.9

 

 

$

7.8

 

 

$

60.1

 

 

$

22.0

 

Diluted EPS from Continuing Operations

$

(0.00

)

 

$

0.22

 

 

$

1.13

 

 

$

0.63

 

Non-GAAP*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Operating Income from Continuing Operations

$

25.8

 

 

$

16.6

 

 

$

90.4

 

 

$

55.8

 

Adjusted Diluted EPS

$

0.44

 

 

$

0.35

 

 

$

1.60

 

 

$

1.09

 

Adjusted EBITDA

$

30.0

 

 

$

19.4

 

 

$

105.7

 

 

$

68.0

 

*Reconciliations of GAAP to non-GAAP financial measures, as well as definitions for the non-GAAP financial measures in this press release and the reasons for their use, are presented below.

 

“2017 was a defining year for Novanta with strong execution and financial results,” said Matthijs Glastra, Chief Executive Officer of Novanta Inc. “We executed well on our strategic priorities and 2020 Strategic Direction. We accelerated organic revenue growth to 8% versus 2016 and made three acquisitions, namely, World of Medicine, Laser Quantum, and ThingMagic. These acquisitions have expanded our positions in growing medical markets and technologies, and are performing ahead of our expectations. Our performance in 2017 gives us confidence to reach our 2020 strategic goals. I am proud of our team of dedicated employees and the culture we have created, and I continue to feel excited about our future.”

 

Fourth Quarter

 

During the fourth quarter of 2017, Novanta generated GAAP revenue of $146.9 million, an increase of $48.0 million, or 48.6%, versus the fourth quarter of 2016. The net effect of the Company’s acquisition activities resulted in an increase in revenue of $39.1 million, or 39.5%, compared to the fourth quarter of 2016.  Foreign currency exchange rates favorably impacted our revenue by $0.8 million, or 0.8%, during the fourth quarter of 2017.  Our Organic Revenue Growth, which excludes the net impact of acquisitions


 

 

and foreign currency exchange rates, increased 8.3%, versus the fourth quarter of 2016 (see “Organic Revenue Growth” in the non-GAAP reconciliation below).        

 

In the fourth quarter of 2017, GAAP operating income from continuing operations was $19.1 million, compared to $11.3 million in the fourth quarter of 2016. GAAP net income attributable to Novanta Inc. was $8.9 million in the fourth quarter of 2017, compared to $7.8 million in the fourth quarter of 2016.  GAAP diluted earnings (loss) per share (“EPS”) from continuing operations was $(0.00) in the fourth quarter of 2017, compared to $0.22 in the fourth quarter of 2016.  

 

In the fourth quarter of 2017, the Company increased the carrying amount of the redeemable noncontrolling interest in Laser Quantum by $8.9 million to reflect the estimated redemption value as of December 31, 2017. This nontaxable adjustment was recognized in retained earnings instead of net income, but resulted in a net ($0.25) reduction in EPS under U.S. GAAP accounting rules.  In addition, the Company’s GAAP net income and EPS for the fourth quarter of 2017 were negatively impacted by a $2.8 million tax provision recorded to reflect the estimated income tax effect as a result of the enactment of the U.S. Tax Cuts and Jobs Act, primarily from the revaluation of our deferred tax assets and liabilities to the new 21% U.S. federal corporate income tax rate that became effective as of January 1, 2018. Adjusted Diluted EPS was $0.44 in the fourth quarter of 2017, compared to $0.35 in the fourth quarter of 2016.  The Company ended the fourth quarter of 2017 with 34.8 million weighted average shares outstanding.  Adjusted EBITDA was $30.0 million in the fourth quarter of 2017, compared to $19.4 million in the fourth quarter of 2016.

 

Operating cash flow from continuing operations for the fourth quarter of 2017 was $22.1 million, compared to $13.1 million for the fourth quarter of 2016.

 

Full Year

 

For the full year 2017, Novanta generated GAAP revenue of $521.3 million, an increase of $136.5 million, or 35.5%, versus the full year 2016. The net effect of the Company’s acquisitions in 2017 resulted in an increase in revenue of $105.8 million, or 27.5%.  Foreign currency exchange rates adversely impacted our revenue by $1.9 million, or 0.5%, in 2017.  Our Organic Revenue Growth, which excludes the net impact of acquisitions, divestitures, and foreign currency exchange rates, increased 8.5%, versus full year 2016 (see “Organic Revenue Growth” in the non-GAAP reconciliation below).        

 

For the full year 2017, GAAP operating income from continuing operations was $57.2 million, compared to $32.6 million in 2016. GAAP net income attributable to Novanta Inc. was $60.1 million for the full year 2017, compared to $22.0 million in 2016.  GAAP diluted EPS from continuing operations was $1.13 for the full year 2017, compared to $0.63 in 2016.  

 

For the full year 2017, the Company increased the carrying amount of the redeemable noncontrolling interest in Laser Quantum by $20.2 million to reflect the estimated redemption value as of December 31, 2017. This nontaxable adjustment was recognized in retained earnings instead of net income attributable to Novanta Inc., but resulted in a net ($0.57) reduction in EPS under U.S. GAAP accounting rules.  Adjusted Diluted EPS was $1.60 for the full year 2017, compared to $1.09 in 2016.  The Company ended the full year 2017 with 35.3 million weighted average shares outstanding.  Adjusted EBITDA was $105.7 million for the full year 2017, compared to $68.0 million in 2016.  

 

Operating cash flow from continuing operations for the full year 2017 was $63.4 million, compared to $47.8 million in 2016. The Company finished 2017 with approximately $237.8 million of Gross Debt, and $137.7 million of Net Debt, as defined in the non-GAAP reconciliation below.

 

Financial Outlook

 

For the full year 2018, the Company expects GAAP revenue of approximately $585 million to $600 million.  The Company expects Adjusted Diluted EPS to be in the range of $1.85 to $1.96, including the


 

 

impact of the recently enacted U.S. tax law changes, and Adjusted EBITDA to be approximately $117 million to $122 million.  The Company’s Adjusted Diluted EPS and EBITDA guidance assumes no significant foreign exchange gains or losses.  

 

For the first quarter of 2018, the Company expects GAAP revenue of approximately $138 million to $142 million.  This represents reported growth in the range of 27% to 30%, and organic growth in the range of 7.5% to 8.5% year over year. The Company expects Adjusted Diluted EPS to be in the range of $0.40 to $0.43, including the impact of the recently enacted U.S. tax law changes, and Adjusted EBITDA to be approximately $25 million to $27 million.  The Company’s Adjusted Diluted EPS and EBITDA guidance assumes no significant foreign exchange gains or losses.  

 

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 EBITDA and Adjusted 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 adjustments that could be made for noncontrolling interest redemption value adjustments; significant discrete income tax expenses (benefits); divestiture related expenses; acquisition-related expenses; impact of purchase price allocations for recently completed acquisitions; gains and losses from sale of real estate assets; costs related to product line closures; future changes in the fair value of contingent considerations; intangible asset impairment charges and related asset write-offs; future restructuring expenses; foreign exchange gains/(losses) on proceeds from divestitures; benefits or expenses associated with the completion of tax audits; and other charges reflected in our 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 Wednesday, February 28, 2018 at 10:00 a.m. ET to discuss these results. To access the call, please dial (877) 870-4263 prior to the scheduled conference call time. The conference ID number is 10113487. Alternatively, the conference call can be accessed online via a live webcast on the Investor Relations section of the Company’s website at www.novanta.com.

 

A playback of this conference call will be available beginning 12:00 p.m. ET, Wednesday, February 28, 2018. The playback phone number is (877) 344-7529 and the code number is 10113487. The playback will remain available until 11:00 p.m. ET, Wednesday, March 21, 2018.

 

A replay of the audio webcast will be available approximately three hours after the conclusion of the call on the Investor Relations section of the Company's website at www.novanta.com.

 

 

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 from Continuing Operations and Operating Margin, Adjusted Income from Continuing Operations before Income Taxes, Adjusted Income Tax Provision (Benefit) and Effective Tax Rate, Adjusted Net Income Attributable to Novanta Inc., Net of Tax, Adjusted Diluted EPS, Adjusted EBITDA, Adjusted EBITDA Margin, 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 acquisition 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 and Organic Revenue Growth 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 and Organic Revenue Growth are used to determine bonus payments for senior management and employees. The Company also uses Adjusted Diluted EPS as a measurement for performance shares issued to certain executives. Accordingly, the Company believes that these non-GAAP 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 reaching our 2020 strategic goals; executing our strategy; anticipated financial performance, including our updated financial outlook for the first quarter 2018; expectations regarding market conditions; expectations regarding the Company’s future; 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 and level of business activity; our significant dependence upon our customers’ capital expenditures, which are subject to cyclical market fluctuations; our dependence upon our ability to respond to fluctuations in product demand; our ability to continually innovate and successfully commercialize our innovations; failure to introduce new products in a timely manner; customer order timing and other similar factors beyond our control; disruptions or breaches in security of our information technology systems; changes in interest rates, credit ratings or foreign currency exchange rates; risks associated with our operations in foreign countries; risks associated with increased outsourcing of components manufacturing; our failure to comply with local import and export regulations in the jurisdictions in which we operate; negative effects on global economic conditions, financial markets and our business as a result of the United Kingdom’s impending withdrawal from the European Union and the actions of the current U.S. government; 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 businesses; our ability to attract and retain key personnel; our restructuring and realignment activities and disruptions to our operations as a result of consolidation of our operations; product defects or problems integrating our products with other vendors’ products; disruptions in the supply of certain key components or other goods from our suppliers; failure to accurately forecast component and raw material requirements for our products; production difficulties and product delivery delays or disruptions; our compliance, or our failure to comply, with various federal, state and foreign regulations including rules and regulations issued by the U.S. Food and Drug Administration and similar international agencies; changes in governmental regulation of our businesses or products; our failure to comply with environmental regulations; our failure to implement new information technology systems and software successfully; our failure to realize the full value of our intangible assets; our exposure to the credit risk of some of our customers and in weakened markets; our reliance on third party distribution channels; being subject to U.S. federal income taxation even though we are a non-U.S. corporation; tax audits by tax authorities; changes in tax laws, and fluctuations in our effective tax rates; anticipated impact from the recently enacted Tax Cuts and Jobs Act in the U.S.; any need for additional capital to adequately respond to business challenges or opportunities and repay or refinance our existing indebtedness, which may not be available on acceptable terms or at all; our existing indebtedness limiting our ability to engage in certain activities; volatility in the market price for our common shares; our ability to access cash and other assets of our subsidiaries; provisions of our articles of incorporation may delay or prevent a change in control; and our failure to maintain appropriate internal controls in the future.

 

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 Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2016, our subsequent filings with the Securities and Exchange Commission (“SEC”), and in our future filings with the SEC. 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 update any 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 healthcare and advanced industrial original equipment manufacturers (“OEMs”) a competitive advantage. We combine deep proprietary technology expertise in photonics, vision, and precision motion 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 Inc. Investor Relations at (781) 266-5137 or InvestorRelations@novanta.com.

 

Novanta Inc.

Investor Relations Contact:

Robert J. Buckley

(781) 266-5137

 



 

 

NOVANTA INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands of U.S. dollars or shares, except per share amounts)

(Unaudited)

 

 

Three Months Ended December 31,

 

 

Year Ended December 31,

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

Revenue

$

146,918

 

 

$

98,879

 

 

$

521,290

 

 

$

384,758

 

Cost of revenue

 

84,677

 

 

 

56,027

 

 

 

300,759

 

 

 

222,306

 

Gross profit

 

62,241

 

 

 

42,852

 

 

 

220,531

 

 

 

162,452

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development and engineering

 

11,795

 

 

 

7,973

 

 

 

41,673

 

 

 

32,002

 

Selling, general and administrative

 

27,359

 

 

 

19,334

 

 

 

102,025

 

 

 

81,691

 

Amortization of purchased intangible assets

 

2,683

 

 

 

2,098

 

 

 

12,096

 

 

 

8,251

 

Restructuring, acquisition and divestiture related costs

 

1,310

 

 

 

2,117

 

 

 

7,542

 

 

 

7,945

 

Total operating expenses

 

43,147

 

 

 

31,522

 

 

 

163,336

 

 

 

129,889

 

Operating income from continuing operations

 

19,094

 

 

 

11,330

 

 

 

57,195

 

 

 

32,563

 

Interest income (expense), net

 

(2,291

)

 

 

(1,088

)

 

 

(7,165

)

 

 

(4,559

)

Foreign exchange transaction gains (losses), net

 

(271

)

 

 

1,339

 

 

 

(447

)

 

 

2,317

 

Other income (expense), net

 

38

 

 

 

502

 

 

 

142

 

 

 

2,201

 

Gain on acquisition of business

 

 

 

 

 

 

 

26,409

 

 

 

 

Income from continuing operations before income taxes

 

16,570

 

 

 

12,083

 

 

 

76,134

 

 

 

32,522

 

Income tax provision

 

6,893

 

 

 

4,327

 

 

 

13,827

 

 

 

10,519

 

Income from continuing operations

 

9,677

 

 

 

7,756

 

 

 

62,307

 

 

 

22,003

 

Loss from discontinued operations, net of tax

 

 

 

 

 

 

 

 

 

 

 

Consolidated net income

 

9,677

 

 

 

7,756

 

 

 

62,307

 

 

 

22,003

 

Less: Net income attributable to noncontrolling interest

 

(812

)

 

 

 

 

 

(2,256

)

 

 

 

Net income attributable to Novanta Inc.

$

8,865

 

 

$

7,756

 

 

$

60,051

 

 

$

22,003

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per common share from continuing operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

(0.00

)

 

$

0.22

 

 

$

1.14

 

 

$

0.63

 

Diluted

$

(0.00

)

 

$

0.22

 

 

$

1.13

 

 

$

0.63

 

Loss per common share from discontinued operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

 

 

$

 

 

$

 

 

$

 

Diluted

$

 

 

$

 

 

$

 

 

$

 

Earnings (loss) per common share attributable to Novanta Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

(0.00

)

 

$

0.22

 

 

$

1.14

 

 

$

0.63

 

Diluted

$

(0.00

)

 

$

0.22

 

 

$

1.13

 

 

$

0.63

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding—basic

 

34,842

 

 

 

34,706

 

 

 

34,817

 

 

 

34,694

 

Weighted average common shares outstanding—diluted

 

34,842

 

 

 

34,987

 

 

 

35,280

 

 

 

34,914

 

 

 



 

 

NOVANTA INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands of U.S. dollars)

(Unaudited)

 

 

December 31,

 

 

December 31,

 

 

2017

 

 

2016

 

ASSETS

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

 

Cash and cash equivalents

$

100,057

 

 

$

68,108

 

Accounts receivable, net

 

81,482

 

 

 

63,769

 

Inventories

 

91,278

 

 

 

59,745

 

Other current assets

 

15,062

 

 

 

7,628

 

Total current assets

 

287,879

 

 

 

199,250

 

Property, plant and equipment, net

 

61,718

 

 

 

35,421

 

Intangible assets, net

 

155,048

 

 

 

61,743

 

Goodwill

 

210,988

 

 

 

108,128

 

Other assets

 

11,070

 

 

 

21,095

 

Total assets

$

726,703

 

 

$

425,637

 

LIABILITIES, NONCONTROLLING INTEREST AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

Current portion of long-term debt

$

9,119

 

 

$

7,366

 

Accounts payable

 

39,793

 

 

 

32,213

 

Accrued expenses and other current liabilities

 

49,256

 

 

 

30,917

 

Total current liabilities

 

98,168

 

 

 

70,496

 

Long-term debt

 

225,500

 

 

 

70,554

 

Other long-term liabilities

 

44,567

 

 

 

25,717

 

Total liabilities

 

368,235

 

 

 

166,767

 

Redeemable noncontrolling interest

 

46,923

 

 

 

 

Stockholders’ Equity:

 

 

 

 

 

 

 

Total stockholders’ equity

 

311,545

 

 

 

258,870

 

Total liabilities, noncontrolling interest and stockholders’ equity

$

726,703

 

 

$

425,637

 

 



 

 

NOVANTA INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands of U.S. dollars)

(Unaudited)

 

 

Three Months Ended December 31,

 

 

Year Ended December 31,

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated net income

$

9,677

 

 

$

7,756

 

 

$

62,307

 

 

$

22,003

 

Less: Loss from discontinued operations, net of tax

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

9,677

 

 

 

7,756

 

 

 

62,307

 

 

 

22,003

 

Adjustments to reconcile income from continuing operations to

   net cash provided by operating activities of continuing operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

8,318

 

 

 

5,040

 

 

 

30,758

 

 

 

20,357

 

Share-based compensation

 

1,270

 

 

 

908

 

 

 

5,493

 

 

 

4,293

 

Gain on acquisition of business

 

 

 

 

 

 

 

(26,409

)

 

 

 

Deferred income taxes

 

353

 

 

 

(1,928

)

 

 

(2,560

)

 

 

(1,766

)

Earnings from equity-method investment

 

 

 

 

(493

)

 

 

(104

)

 

 

(2,191

)

Dividend from equity-method investment

 

 

 

 

 

 

 

 

 

 

2,341

 

Inventory acquisition fair value adjustments

 

 

 

 

 

 

 

4,754

 

 

 

173

 

Other non-cash items

 

(144

)

 

 

851

 

 

 

2,990

 

 

 

4,346

 

Changes in assets and liabilities which provided (used) cash,

excluding effects from businesses purchased or classified as held for sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable

 

1,782

 

 

 

(2,711

)

 

 

(2,077

)

 

 

(6,394

)

Inventories

 

(1,781

)

 

 

(1,447

)

 

 

(13,587

)

 

 

(2,917

)

Other operating assets and liabilities

 

2,616

 

 

 

5,105

 

 

 

1,813

 

 

 

7,543

 

Net cash provided by operating activities of continuing operations

 

22,091

 

 

 

13,081

 

 

 

63,378

 

 

 

47,788

 

Net cash provided by operating activities of discontinued operations

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by operating activities

 

22,091

 

 

 

13,081

 

 

 

63,378

 

 

 

47,788

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchases of property, plant and equipment

 

(2,592

)

 

 

(1,457

)

 

 

(9,094

)

 

 

(8,462

)

Acquisition of businesses, net of cash acquired and working capital adjustments

 

 

 

 

(6

)

 

 

(168,332

)

 

 

(8,958

)

Acquisition of intangible assets

 

 

 

 

(3,980

)

 

 

 

 

 

(3,980

)

Proceeds from sale of property, plant and equipment

 

2

 

 

 

 

 

 

46

 

 

 

7,037

 

Net cash used in investing activities of continuing operations

 

(2,590

)

 

 

(5,443

)

 

 

(177,380

)

 

 

(14,363

)

Net cash provided by investing activities of discontinued operations

 

 

 

 

 

 

 

 

 

 

1,498

 

Net cash used in investing activities

 

(2,590

)

 

 

(5,443

)

 

 

(177,380

)

 

 

(12,865

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Borrowings under revolving credit facility

 

 

 

 

 

 

 

176,769

 

 

 

 

Repayments of long-term debt and revolving credit facility

 

(11,300

)

 

 

(1,875

)

 

 

(26,925

)

 

 

(16,250

)

Other financing activities

 

(468

)

 

 

(184

)

 

 

(6,514

)

 

 

(6,939

)

Net cash provided by (used in) financing activities of continuing operations

 

(11,768

)

 

 

(2,059

)

 

 

143,330

 

 

 

(23,189

)

Net cash provided by (used in) financing activities of discontinued operations

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by (used in) financing activities

 

(11,768

)

 

 

(2,059

)

 

 

143,330

 

 

 

(23,189

)

Effect of exchange rates on cash and cash equivalents

 

175

 

 

 

(2,210

)

 

 

2,621

 

 

 

(3,585

)

Increase in cash and cash equivalents

 

7,908

 

 

 

3,369

 

 

 

31,949

 

 

 

8,149

 

Cash and cash equivalents, beginning of period

 

92,149

 

 

 

64,739

 

 

 

68,108

 

 

 

59,959

 

Cash and cash equivalents, end of period

$

100,057

 

 

$

68,108

 

 

$

100,057

 

 

$

68,108

 


 

 

NOVANTA INC.

Revenue by Reportable Segment

(In thousands of U.S. dollars)

(Unaudited)

 

 


 

Three Months Ended December 31,

 

 

Year Ended December 31,

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Photonics

$

61,856

 

 

$

44,251

 

 

$

232,359

 

 

$

174,158

 

Vision

 

58,131

 

 

 

33,482

 

 

 

183,074

 

 

 

122,250

 

Precision Motion

 

26,931

 

 

 

21,146

 

 

 

105,857

 

 

 

88,350

 

Total

$

146,918

 

 

$

98,879

 

 

$

521,290

 

 

$

384,758

 

 



 

 

NOVANTA INC.

Reconciliation of GAAP to Non-GAAP Financial Measures

(In thousands of U.S. dollars)

(Unaudited)

 

 

Adjusted Gross Profit and Adjusted Gross Profit Margin by Segment (Non-GAAP):

 

 

Three Months Ended December 31,

 

 

Year Ended December 31,

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

Photonics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit (GAAP)

$

28,694

 

 

$

19,235

 

 

$

106,117

 

 

$

76,696

 

Gross Profit Margin (GAAP)

 

46.4

%

 

 

43.5

%

 

 

45.7

%

 

 

44.0

%

Amortization of intangible assets

 

1,020

 

 

 

383

 

 

 

4,005

 

 

 

1,535

 

Acquisition fair value adjustments

 

 

 

 

 

 

 

699

 

 

 

 

Adjusted Gross Profit (Non-GAAP)

$

29,714

 

 

$

19,618

 

 

$

110,821

 

 

$

78,231

 

Adjusted Gross Profit Margin (Non-GAAP)

 

48.0

%

 

 

44.3

%

 

 

47.7

%

 

 

44.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vision

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit (GAAP)

$

21,871

 

 

$

14,735

 

 

$

69,249

 

 

$

47,181

 

Gross Profit Margin (GAAP)

 

37.6

%

 

 

44.0

%

 

 

37.8

%

 

 

38.6

%

Inventory related charges for discontinuation of Radiology products

 

 

 

 

 

 

 

 

 

 

1,370

 

Amortization of intangible assets

 

1,636

 

 

 

515

 

 

 

4,460

 

 

 

2,222

 

Acquisition fair value adjustments

 

 

 

 

 

 

 

4,055

 

 

 

205

 

Adjusted Gross Profit (Non-GAAP)

$

23,507

 

 

$

15,250

 

 

$

77,764

 

 

$

50,978

 

Adjusted Gross Profit Margin (Non-GAAP)

 

40.4

%

 

 

45.5

%

 

 

42.5

%

 

 

41.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Precision Motion

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit (GAAP)

$

12,006

 

 

$

9,287

 

 

$

46,564

 

 

$

40,044

 

Gross Profit Margin (GAAP)

 

44.6

%

 

 

43.9

%

 

 

44.0

%

 

 

45.3

%

Amortization of intangible assets

 

90

 

 

 

102

 

 

 

359

 

 

 

407

 

Acquisition fair value adjustments

 

 

 

 

 

 

 

 

 

 

 

Adjusted Gross Profit (Non-GAAP)

$

12,096

 

 

$

9,389

 

 

$

46,923

 

 

$

40,451

 

Adjusted Gross Profit Margin (Non-GAAP)

 

44.9

%

 

 

44.4

%

 

 

44.3

%

 

 

45.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unallocated Corporate and Shared Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit (GAAP)

$

(330

)

 

$

(405

)

 

$

(1,399

)

 

$

(1,469

)

Amortization of intangible assets

 

 

 

 

 

 

 

 

 

 

 

Acquisition fair value adjustments

 

 

 

 

 

 

 

 

 

 

 

Adjusted Gross Profit (Non-GAAP)

$

(330

)

 

$

(405

)

 

$

(1,399

)

 

$

(1,469

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Novanta Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit (GAAP)

$

62,241

 

 

$

42,852

 

 

$

220,531

 

 

$

162,452

 

Gross Profit Margin (GAAP)

 

42.4

%

 

 

43.3

%

 

 

42.3

%

 

 

42.2

%

Inventory related charges for discontinuation of Radiology products

 

 

 

 

 

 

 

 

 

 

1,370

 

Amortization of intangible assets

 

2,746

 

 

 

1,000

 

 

 

8,824

 

 

 

4,164

 

Acquisition fair value adjustments

 

 

 

 

 

 

 

4,754

 

 

 

205

 

Adjusted Gross Profit (Non-GAAP)

$

64,987

 

 

$

43,852

 

 

$

234,109

 

 

$

168,191

 

Adjusted Gross Profit Margin (Non-GAAP)

 

44.2

%

 

 

44.3

%

 

 

44.9

%

 

 

43.7

%

 


 

 

NOVANTA INC.

Reconciliation of GAAP to Non-GAAP Financial Measures

(In thousands of U.S. dollars except per share amounts)

(Unaudited)

 

 

Adjusted Operating Income from Continuing Operations and Adjusted EPS (Non-GAAP):

 

 

Three Months Ended December 31, 2017

 

 

Operating Income from Continuing Operations

 

 

Operating Margin

 

 

Income from Continuing Operations before Income Taxes

 

 

Income Tax Provision

 

 

Effective Tax Rate

 

 

Net Income Attributable to Novanta Inc., Net of Tax

 

 

Diluted EPS

 

GAAP results

$

19,094

 

 

 

13.0

%

 

$

16,570

 

 

$

6,893

 

 

 

41.6

%

 

$

8,865

 

 

 

 

 

Less: Adjustment of redeemable noncontrolling interest to estimated redemption value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(8,941

)

 

 

 

 

Net income (loss) attributable to Novanta Inc. after adjustment of redeemable noncontrolling interest to estimated redemption value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

(76

)

 

$

(0.00

)

Adjustment of redeemable noncontrolling interest to estimated redemption value