Item 5. Market for Registrant’s Common Equity
Item 5. Market for Registrant’s Common Shares, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information
The Company’s common shares, no par value, are traded on the Nasdaq Global Select Market under the ticker symbol “NOVT”.
Holders
As of the close of business on February 22, 2021, there were approximately 33 holders of record of the Company’s common shares. Since many of the common shares are registered in “nominee” or “street” names, the Company believes that the total number of beneficial owners is considerably higher.
Dividend Policy
The Company has never declared or paid cash dividends on its common shares and does not anticipate paying any cash dividends in the foreseeable future.
Purchases of Equity Securities by the Issuer and Affiliated Purchaser
In October 2018, the Company’s Board of Directors authorized a share repurchase plan (the “2018 Repurchase Plan”) for the repurchase of up to an aggregate of $25.0 million of the Company’s common shares. The 2018 Repurchase Plan does not obligate the Company to acquire any particular amount of our common shares. No time limit was set for the completion of the 2018 Repurchase Plan, and the plan may be suspended or discontinued at any time. Since the adoption of the 2018 Repurchase Plan, the Company has repurchased 185 thousand shares for an aggregate purchase price of $15.5 million at an average price of $83.97 per share. We had $9.5 million available for share repurchases under the 2018 Repurchase Plan as of December 31, 2020.
In February 2020, the Company’s Board of Directors authorized a new share repurchase plan for the repurchase of up to an additional $50.0 million of the Company’s common shares (the “2020 Repurchase Plan”), to be commenced following the completion of the 2018 Repurchase Plan. While the 2020 Repurchase Plan is intended to generally offset dilution from equity awards to the Company’s employees and directors, the plan does not obligate the Company to acquire any particular amount of our common shares. No time limit was set for the completion of the 2020 Repurchase Plan, and the plan may be suspended or discontinued at any time.
In an effort to preserve cash in light of the economic slowdown caused by the COVID-19 pandemic, we have temporarily suspended repurchases under our share repurchase plans since April 2020.
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Performance Graph
The following graph compares the cumulative total return on the Company’s common shares with the cumulative total return on the Nasdaq Composite Index and the Russell 2000 Index for the period from December 31, 2015 through December 31, 2020. The comparison assumes an investment of $100 was made on December 31, 2015 in the Company’s common shares and in each of the indices and, in the case of the indices, it also assumes reinvestment of all dividends. The performance shown is not necessarily indicative of future performance.
December 31, 2015
December 31, 2016
December 31, 2017
December 31, 2018
December 31, 2019
December 31, 2020
Novanta Inc.
$
100.00
$
154.19
$
367.11
$
462.56
$
649.34
$
867.99
Nasdaq Composite Index
$
100.00
$
108.87
$
141.13
$
137.12
$
191.91
$
271.64
Russell 2000 Index (1)
$
100.00
$
121.31
$
139.12
$
123.76
$
155.35
$
186.36
(1)
Copyright © Russell Investments 2020. All rights reserved.
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Item 6. Selected Financial Data
The selected financial data set forth below is not necessarily indicative of results of future operations, and should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 and the consolidated financial statements and related notes thereto in Item 8 of this Annual Report on Form 10-K to fully understand factors that may affect the comparability of the information presented below. The selected consolidated financial data in this section is not intended to replace the consolidated financial statements.
The consolidated statement of operations data for the years ended December 31, 2020, 2019 and 2018 and the consolidated balance sheet data as of December 31, 2020 and 2019 are derived from our audited consolidated financial statements included in this Annual Report on Form 10-K. The consolidated statement of operations data for the years ended December 31, 2017 and 2016 and the consolidated balance sheet data as of December 31, 2018, 2017 and 2016 are derived from our audited consolidated financial statements that are not included in this Annual Report on Form 10-K.
Year Ended December 31,
2020
2019
2018
2017 (1)
2016
(In thousands, except per share data)
Consolidated Statement of Operations Data:
Revenue
$
590,623
$
626,099
$
614,337
$
521,290
$
384,758
Gross profit
244,517
262,085
261,528
220,531
162,452
Operating expenses
188,629
206,803
190,515
162,965
129,497
Operating income
55,888
55,282
71,013
57,566
32,955
Income before income taxes (2)
48,403
45,766
61,302
76,134
32,522
Income tax provision
3,882
4,993
10,207
13,827
10,519
Consolidated net income
44,521
40,773
51,095
62,307
22,003
Less: Net income attributable to noncontrolling interest
—
—
(1,986
)
(2,256
)
—
Net income attributable to Novanta Inc.
$
44,521
$
40,773
$
49,109
$
60,051
$
22,003
Earnings per common share attributable to Novanta Inc. (3) :
Basic
$
1.27
$
1.16
$
1.46
$
1.14
$
0.63
Diluted
$
1.25
$
1.15
$
1.43
$
1.13
$
0.63
Weighted average common shares outstanding—basic
35,144
35,030
34,913
34,817
34,694
Weighted average common shares outstanding—diluted
35,654
35,546
35,473
35,280
34,914
(1)
In 2017, the Company completed the acquisitions of WOM, Laser Quantum and ThingMagic businesses, which contributed a total of $102.7 million in revenue for the year ended December 31, 2017. The operating results of these businesses have been included in the consolidated statement of operations since their respective acquisition dates.
(2)
In 2017, the Company acquired an additional approximately 35% of the outstanding shares of Laser Quantum and recorded a non-taxable gain of $26.4 million, representing the excess of the fair value of the Company’s previously-held equity interest in Laser Quantum over its carrying value upon gaining control.
(3)
In the computation of earnings per common share attributable to Novanta Inc., net income attributable to Novanta Inc. included $1.8 million and ($20.2) million of redeemable noncontrolling interest redemption value adjustment for the years ended December 31, 2018 and 2017, respectively.
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December 31,
2020
2019
2018
2017 (2)
2016
(in thousands)
Consolidated Balance Sheet Data:
Cash and cash equivalents
$
125,054
$
78,944
$
82,043
$
100,057
$
68,108
Total assets (1)
865,179
869,736
719,576
726,703
425,637
Debt, current portion of long-term debt
5,508
5,031
4,535
9,119
7,366
Debt, long-term
194,927
215,334
202,843
225,500
70,554
Long-term liabilities, excluding debt (1)
79,214
102,384
44,282
44,567
25,717
Redeemable noncontrolling interest (3)
—
—
—
46,923
—
Total stockholders’ equity
476,809
417,172
368,255
311,545
258,870
(1)
In 2019, the Company adopted ASU 2016-02, “Leases (Topic 842),” using the modified retrospective approach. ASU 2016-02 requires a lessee to recognize on the balance sheet a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term for both finance and operating leases. The Company reported operating lease right-of-use (“ROU”) assets and operating lease liabilities of approximately $35.2 million and $39.2 million, respectively, as of December 31, 2019.
(2)
In 2017, the Company completed the acquisitions of WOM, Laser Quantum and ThingMagic businesses. Total assets acquired amounted to $284.4 million as of the acquisition date. The acquisitions were financed with borrowings under the revolving credit facility in the aggregate amount of $176.8 million.
(3)
In 2017, the Company acquired an additional approximately 35% of the outstanding shares of Laser Quantum, which increased our ownership position in Laser Quantum from approximately 41% to approximately 76%. The noncontrolling interest was considered a redeemable equity instrument and was presented as temporary equity on the consolidated balance sheet at the greater of the carrying value or the estimated redemption value of the noncontrolling interest. In 2018, the Company acquired the remaining approximately 24% of the outstanding shares of Laser Quantum from the noncontrolling interest shareholders.
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