BEDFORD, Mass.--(BUSINESS WIRE)--Novanta Inc. (Nasdaq: NOVT), a trusted technology partner to medical and advanced technology equipment manufacturers, today reported financial results for the second quarter 2020.
Second Quarter
“I am proud of the performance of Novanta in the face of extraordinary circumstances caused by the COVID-19 pandemic,” said Matthijs Glastra, Chief Executive Officer of Novanta. “In the second quarter, we delivered above our expectations for revenue. And we are very pleased with our profit and cash flows in the second quarter in these circumstances. The diversification of our portfolio is serving us well, and we continue to stay vigilant and highly disciplined in protecting our employees, our customers, and our operations, all while maintaining a strong financial position to be well-positioned for the global economy recovery.”
During the second quarter of 2020, Novanta generated GAAP revenue of $144.7 million, a decrease of $10.4 million, or 6.7%, versus the second quarter of 2019. The Company’s acquisition activities resulted in an increase in revenue of $1.7 million, or 1.1%, compared to the second quarter of 2019. Changes in foreign currency exchange rates year over year adversely impacted our revenue by $1.3 million, or 0.9%, during the second quarter of 2020. Our year-over-year Organic Revenue Growth, which excludes the net impact of acquisitions and changes in foreign currency exchange rates, was a decrease of 6.9% for the second quarter of 2020 (see “Organic Revenue Growth” in the non-GAAP reconciliations below).
In the second quarter of 2020, GAAP operating income was $13.7 million, compared to $15.1 million in the second quarter of 2019. GAAP net income was $11.7 million in the second quarter of 2020, compared to $10.4 million in the second quarter of 2019. GAAP diluted earnings per share (“EPS”) was $0.33 in the second quarter of 2020, compared to $0.29 in the second quarter of 2019.
Adjusted Diluted EPS was $0.48 in the second quarter of 2020, compared to $0.54 in the second quarter of 2019. The Company ended the second quarter of 2020 with 35.6 million diluted weighted average shares outstanding. Adjusted EBITDA was $30.8 million in the second quarter of 2020, compared to $31.0 million in the second quarter of 2019.
Operating cash flow for the second quarter of 2020 was $33.8 million, compared to $15.4 million in the second quarter of 2019. The Company completed the second quarter of 2020 with approximately $217.0 million of total debt and $97.5 million of total cash. Net Debt, as defined in the non-GAAP reconciliation below, was $124.5 million.
Financial Guidance
“The year is continuing to trend as we expected. We saw weaker bookings in the second quarter, as customers felt a significant impact from the economic slowdown caused by the pandemic,” said Matthijs Glastra. “Based on this, we continue to expect third quarter shipments to be lower than our second quarter. However, despite these near-term challenges, we remain confident in our strategy, and we continue to invest into the headwinds to capture new opportunities.”
For the third quarter of 2020, the Company expects GAAP revenue of approximately $135 million to $142 million, and Adjusted EBITDA in the range of $25 million to $29 million. The Company’s Adjusted EBITDA guidance assumes no significant changes in foreign exchange rates.
Due to the impact of the COVID-19 pandemic, the uncertain duration and scope of the pandemic, and the uncertain timing of the global public health and economic recovery, the Company is not able at this time to reliably estimate the future impact on its operations and other financial results for the full year 2020.
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 guidance to the most directly comparable GAAP financial measure is not provided because of the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliations, including future changes in the fair value of contingent considerations; divestiture related expenses; acquisition and 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; goodwill and intangible asset impairment charges and related asset write-offs; future restructuring expenses; foreign exchange transaction gains/(losses); 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.
About Novanta
Novanta is a leading global supplier of core technology solutions that give medical and advanced industrial original equipment manufacturers (“OEMs”) a competitive advantage. We combine deep proprietary technology expertise and competencies 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 Investor Relations at (781) 266-5137 or InvestorRelations@novanta.com.
