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    Novanta Inc (NOVT)

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    Business Description

    Novanta Inc. is a global supplier of core technology solutions that empower medical and advanced industrial original equipment manufacturers (OEMs) with precision and performance. The company specializes in engineering components and subsystems for demanding applications, leveraging expertise in photonics, vision, and precision motion technologies. Novanta's offerings cater to critical markets such as healthcare, robotics, and advanced manufacturing.

    1. Medical Solutions - Develops and supplies medical insufflators, pumps, visualization solutions, video processing technologies, touch panel displays, and machine vision systems for minimally invasive surgery, medical imaging, and patient monitoring.

      • Sub-products: RFID technologies, barcode identification systems, thermal chart recorders, and light/color measurement devices.

    2. Precision Medicine and Manufacturing - Provides photonics-based solutions, including laser scanning systems, laser beam delivery, CO2 lasers, solid-state lasers, ultrafast lasers, and optical light engines for advanced industrial processes, medical imaging, and DNA sequencing.

    3. Robotics and Automation - Offers optical and inductive encoders, precision motors, servo drives, motion control solutions, integrated stepper motors, robotic end-of-arm technology, and air bearing spindles for robotics, automation, and microelectronics applications.

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    Executive Team

    NamePositionStart DateShort Bio
    Matthijs GlastraChair of the Board and CEOMay 13, 2021 (Chair), September 1, 2016 (CEO)Matthijs Glastra has served as Chair of the Board of Directors at Novanta since May 13, 2021 and as Chief Executive Officer and Director since September 1, 2016. He joined Novanta in 2012 as a Group President and was later appointed Chief Operating Officer in February 2015. Prior to Novanta, Mr. Glastra had an 18-year career at Philips, where he held various leadership roles in advanced industrial and medical end markets, including CEO of Philips Entertainment Lighting and COO of Philips Lumileds. He holds a Master of Science in Applied Physics from Delft University of Technology, an Advanced Engineering Degree from ESPCI in Paris, and an MBA from INSEAD in France.
    Robert J. BuckleyChief Financial OfficerMarch 31, 2011Robert J. Buckley has served as the Chief Financial Officer of Novanta Inc. since March 31, 2011. He initially joined the company in an advisory capacity earlier that year and transitioned to the CFO role on the specified date. His employment agreement includes provisions for annual reviews and adjustments to his compensation.
    Michele WelshGeneral Counsel and Corporate SecretaryJuly 11, 2022Michele D. Welsh joined Novanta as General Counsel and Corporate Secretary on July 11, 2022. She has extensive experience working with global, public companies across multiple industries. Before joining Novanta, she was Vice President, Assistant General Counsel & Legal Compliance at Carlisle Companies Incorporated from May 2018 to May 2022. Prior to that, she held various senior legal roles at Aon plc from September 2007 to April 2018. Ms. Welsh holds a B.S.B.A. from the University of North Carolina – Chapel Hill and a J.D. from Boston College Law School.
    Brian YoungChief Human Resources OfficerDecember 2016Brian S. Young joined Novanta Inc. in April 2015 as Vice President of Human Resources and was appointed Chief Human Resources Officer in December 2016. He has over 20 years of human resources leadership experience in both public and private companies, particularly in sectors such as medical devices, industrial control technologies, and advanced materials. Prior to Novanta, Mr. Young held various HR leadership roles, including Global Human Resource Leader at Hollingsworth & Vose Company and Vice President & Human Resource Officer at CIRCOR International, Inc. He holds a Bachelor of Science degree in Administration of Justice from Pennsylvania State University.
    John BurkeChief Accounting OfficerAugust 22, 2024John Burke was appointed as the Chief Accounting Officer of Novanta Inc. on August 22, 2024, succeeding Peter Chang. He has been with Novanta since 2011, holding roles such as Assistant Corporate Controller (2011–2017), Vice President of Accounting (2017–2021), and Vice President of Global Accounting (2021–2024). Prior to Novanta, he worked at MilliporeSigma as Manager of Technical Accounting and Reporting and at PricewaterhouseCoopers LLP as an audit manager. Mr. Burke is a Certified Public Accountant and holds a Bachelor of Business Administration in Accounting from the University of Massachusetts-Amherst.

    Questions to Ask Management

    1. Your precision medicine and manufacturing segment experienced a 15% sales decline in Q3, with adjusted gross margins down due to lower factory utilization ; what specific steps are you taking to mitigate the impact of this decline on overall company margins, and how confident are you in a rebound in 2025 given the current market dynamics ?

    2. Given that nearly all shipments of your DNA sequencing products originally expected in Q4 have been rescheduled to 2025 due to customer challenges , how are you addressing the risks associated with customer delays, and what assurances do you have that these delays won't extend further into 2025 ?

    3. Despite deferring approximately $25 million in revenue into 2025, your guidance for 2025 remains at up to 10% organic growth ; can you elaborate on why the deferred revenue isn't translating into a higher growth rate for 2025, and whether there are other factors offsetting this potential increase ?

    4. With the decremental gross margin in your precision medicine and manufacturing segment being almost 100% due to maintaining fixed costs despite lower volumes , what is your strategy to improve margins if volume recovery in 2025 is slower than anticipated ?

    5. You've mentioned that macroeconomic and geopolitical uncertainties are causing customers to defer purchases ; how resilient is your business model to prolonged uncertainties, and what contingency plans do you have if the anticipated market recovery in 2025 does not materialize as expected ?

    Share Repurchase Program

    Program DetailsProgram 1
    Approval DateFebruary 2020
    End Date/DurationNo specific end date; may be suspended or discontinued at any time
    Total Additional Amount$50.0 million
    Remaining Authorization$49.5 million (as of 2024-09-27)
    DetailsPurpose is to offset dilution from equity awards; repurchases are discretionary and funded through cash on hand and operations