About Novanta
Novanta Inc. and its subsidiaries operate as a global supplier of core technology solutions to medical and advanced industrial original equipment manufacturers (OEMs). Strategy The company’s strategy is to drive sustainable, profitable growth through short-term and long-term initiatives, including disciplined focus on its diversified business model of providing components and sub-systems to long life-cycle OEM customer platforms in attractive medical and advanced industrial niche markets; improving its business mix to increase medical sales as a percentage of total revenue(by introducing new products aimed at attractive medical applications, such as minimally invasive and robotic surgery, ophthalmology, patient monitoring, drug delivery, clinical laboratory testing and life science equipment; deepening its key account management relationships with and driving cross selling of its product offerings to leading medical equipment manufacturers; and pursuing complementary medical technology acquisitions); increasing its penetration of high growth advanced industrial applications, such as laser materials processing, intelligent end-of-arm robotic technology solutions, robotics, laser additive manufacturing, automation and metrology, by working closely with OEM customers to launch application specific products that closely match the requirements of each application; broadening its portfolio of enabling proprietary technologies and capabilities through increased investment in new product development, and investments in application development to further penetrate existing customers, while expanding the applicability of its solutions to new markets; broadening its product and service offerings through the acquisition of innovative and complementary technologies and solutions in medical and advanced industrial technology applications; expanding sales and marketing channels to reach new target customers; and improving its existing operations to expand customer satisfaction by implementing lean manufacturing principles, strategic sourcing across its major production sites, and optimizing and limiting the growth. Acquisition of Motion Solutions On January 2, 2024, the company completed the acquisition of Motion Solutions Parent Corp. (Motion Solutions), an Irvine, California-based provider of highly engineered integrated solutions, specializing in proprietary precision motion and advanced motion control solutions. Motion Solutions acquisition will be included in the company’s Medical Solutions reportable segment. Segments The company operates through three segments: Precision Medicine and Manufacturing; Medical Solutions; and Robotics and Automation. Precision Medicine and Manufacturing The Precision Medicine and Manufacturing segment designs, manufactures and markets photonics-based solutions, including laser scanning, laser beam delivery, CO2 laser, solid state laser, ultrafast laser, and optical light engine products to customers worldwide. The segment serves highly demanding photonics-based applications for advanced industrial processes, medical and life science imaging, DNA sequencing, and medical laser procedures, particularly ophthalmology applications. The vast majority of the segment’s product offerings are sold to OEM customers. The segment sells the majority of these products directly, utilizing a highly technical sales force, and also sells some indirectly, through resellers and distributors. The Precision Medicine and Manufacturing segment consists of the following four product lines: Laser Beam Delivery Components: Galvanometer and polygon optical scanning components. These products provide precise control and delivery of laser beams through motorized manipulation of mirrors and optical elements and are integrated by OEM manufacturers with their controlling hardware and software. Advanced industrial applications include additive manufacturing, packaging converting, laser marking, micromachining and metrology. Medical applications include optical coherence tomography imaging, microscopy, and laser-based vision correction. The company’s key End markets include advanced industrial and medical. Its brand name is Cambridge Technology. Laser Beam Delivery Solutions: Galvanometer and polygon optical scan heads that provide precise control and delivery of laser beams through motorized manipulation of mirrors and optical elements in multi-axis scan heads, highly integrated scanning subsystems, and controlling hardware and software. Optical light engine products that integrate lasers into light engines with full beam parameter control. Advanced industrial applications include additive manufacturing, packaging converting, laser marking, micromachining and metrology. Medical applications include DNA sequencing, optical coherence tomography imaging, microscopy, super-resolution imaging, and laser-based vision correction. The company’s key end markets include advanced industrial and medical. Its brand names include Cambridge Technology, Synrad, and Laser Quantum. CO2 Lasers: Continuous and pulsed CO2 lasers with power ranges from 5 to 400 watts. Applications include coding, marking, engraving, cutting and trimming of non-metals, fine materials processing, additive manufacturing, packaging converting, and medical applications in dental and dermatology. The company’s key end markets include advanced industrial. Its brand name is Synrad. Solid State and Ultrafast Lasers: Diode-pumped solid-state lasers and ultrafast lasers in the visible to near-infrared. Applications include DNA sequencing, microscopy, micromachining and super-resolution imaging. The company’s key end markets include Medical and Advanced Industrial. Its brand name is Laser Quantum. Medical Solutions The Medical Solutions segment designs, manufactures and markets a range of medical grade technologies, including medical insufflators, pumps and related disposables; visualization solutions; wireless technologies, video recorders, and video integration technologies for operating room integrations; optical data collection and machine vision technologies; radio frequency identification (RFID) technologies; thermal chart recorders; spectrometry technologies, and embedded touch screen solutions. The vast majority of the segment’s product offerings are sold to OEM customers. The segment sells the majority of these products directly, utilizing a highly technical sales force, and also sells some indirectly, through resellers and distributors. Medical Insufflators, Pumps and Accessories: Insufflators, pumps, light sources and video couplers, gamma probes and related accessories and consumables for minimally invasive surgery. Its key end market is medical. Its brand name is WOM. Visualization Solutions: High definition, 4K and 4K 3D visualization solutions for minimally invasive surgery. Its key end market is medical. Its brand name is NDS. Video Processing, Streaming and Capture: Imaging management for visual information, including real-time distribution, documentation, control, recording, and streaming for multiple imaging modalities for surgical applications. High definition wireless transmission of video signals in minimally invasive surgical equipment. Its key end market is medical. Its brand names are NDS and Med X Change. Touch Panel Displays: Embedded capacitive and resistive touch panel technology that delivers high-performance solutions. Its key end markets are medical and advanced industrial. Its brand name is Reach Technology. Machine Vision: Camera-based machine vision products and solutions used for image analysis within medical devices and advanced industrial applications. Its key end markets are medical and advanced industrial. Its brand name is JADAK. RFID Technologies: RFID technologies via High-Frequency (HF) and Ultra-High Frequency (UHF) readers, writers and antennas for applications such as surgical part tracking and counterfeit detection. Its key end markets are medical and advanced industrial. Its brand names are JADAK and ThingMagic. Barcode Identification: Embedded and handheld data collection products for barcode identification. Its key end markets are medical and advanced industrial. Its brand name is JADAK. Thermal Chart Recorders: Rugged thermal chart recorders for patient monitoring, defibrillator equipment, blood gas analyzers, and pulse oximeters. Its market is Medical. Its brand name is JADAK. Light and Color Measurement: Light and color measurement devices, including spectroradiometers, photometers, and color characterization software, used in research and development and quality control testing. Its market is Advanced Industrial. Its brand name is Photo Research. Robotics and Automation The Robotics and Automation segment designs, manufactures and markets optical and inductive encoders, precision motors, servo drives and motion control solutions, integrated stepper motors, intelligent robotic end-of-arm technology solutions, and air bearing spindles to customers worldwide. The vast majority of the segment’s product offerings are sold to OEM customers. The segment sells the majority of these products directly, utilizing a highly technical sales force, and also sells some indirectly, through resellers and distributors. Optical Encoders: Optical encoders for precision motion control and sensing in semiconductor and electronics manufacturing, industrial and medical robotics, metrology, satellite communications, medical devices, and laboratory and diagnostics equipment. Its key end markets are advanced industrial and medical. Its brand is Celera Motion. Inductive Encoders: Inductive encoders for precision motion control and sensing in satellite communications, medical devices, industrial and medical robotics, autonomous vehicles, and laboratory and diagnostics equipment. Its key end markets are advanced industrial and medical. Its brand is Celera Motion and Zettlex. Precision Motors: Direct drive motor components and integrated motion sub-assemblies for precision motion control in semiconductor and electronics manufacturing, industrial and medical robotics, autonomous vehicles, metrology, satellite communications, medical devices, and laboratory and diagnostics equipment. Its key end markets are advanced industrial and medical. Its brands are Celera Motion, Applimotion, and IMS. Servo Drives and Motion Control Solutions: Precision motion servo drives and control software used in industrial robotics, medical robotics, autonomous vehicles, satellite communications, and medical equipment. Its key end markets are Advanced Industrial and Medical. Its brand is Celera Motion. Integrated Stepper Motors: Integrated motion control solutions and electronic controls for automation equipment, agricultural robotics, industrial robotics, medical and life science applications. Its key end markets are advanced industrial and medical. Its brand is IMS. Intelligent Robotic End-Of-Arm Technology Solutions: Robotic accessories and end-of-arm tooling, including tool changers, multi-axis force torque sensors, utility couplers, material removal tools, collision sensors, and compliance devices. Applications include advanced industrial and medical robotics. Its key end markets are advanced industrial and medical. Its brand is ATI. Air Bearing Spindles: High-speed and precision air bearings and air bearing spindles. Applications include printed circuit board (PCB) manufacturing, automotive coating, and semiconductor manufacturing equipment. Its key end market is advanced industrial. Its brand is Westwind. End Markets The company primarily operates in two end markets: the medical market and the advanced industrial market. Medical Market For the year ended December 31, 2023, the medical market accounted for approximately 54% of the company’s revenue. Revenue from the company’s products sold to the medical market is generally affected by hospital and other healthcare provider capital spending, growth rates of surgical procedures, changes in regulatory requirements and laws, aggregation of purchasing by healthcare networks, changes in technology requirements, timing of OEM customers’ product development and new product launches, changes in customer or patient preferences, and general demographic trends. Advanced Industrial Market For the year ended December 31, 2023, the advanced industrial market accounted for approximately 46% of the company’s revenue. Revenue from the company’s products sold to the advanced industrial market is affected by a number of factors, including changing technology requirements and preferences of its customers, productivity or quality investments in a manufacturing environment, the financial condition of its customers, changes in regulatory requirements and laws, and general economic conditions. Customers The company has a diverse group of customers that includes companies that are global leaders in the medical and advanced industrial markets. Many of the company’s customers participate in several market industries. During the year ended December 31, 2023, revenue from an OEM customer primarily in the medical end market accounted for approximately 10% of its consolidated revenue. The company’s customers include many OEMs who integrate its products into their systems for sale to end users. A typical OEM customer will usually evaluate the company’s products and its ability to provide application knowledge and expertise, post-sales application support and services, supply chain management over long durations, manufacturing capabilities, product quality, global presence, and product customization before deciding to incorporate its products into their products or systems. Customers generally choose suppliers based on several factors, including product performance, reliability, application support, price, breadth of the supplier’s product offerings, the financial condition of the supplier, and the geographical coverage offered by the supplier. Seasonality While the company’s revenues are not highly seasonal on a consolidated basis, sales from some of its individual product lines are impacted in the first quarter (year ended December 31, 2023) by the lower seasonal spending patterns of its customers due to their annual capital budgeting cycles. Marketing, Sales and Distribution The company sells its products globally, primarily through its direct sales force. The company also uses distributors, including manufacturers’ representatives, to either augment its selling effort or serve a local market where it has no direct sales force. The company’s local sales, applications, and service teams and its distributors work closely with its customers to ensure customer satisfaction with its products. The company has sales and service centers located in the United States, Europe and Asia. To support its sales efforts, the company maintains and continues to invest in a number of application centers around the world, where its application experts work closely with customers on integrating and using its solutions in their equipment. The company maintains service and application centers in the United States, Europe and Asia. Patents and Intellectual Property The company relies upon a combination of copyrights, patents, trademarks, trade secret laws and restrictions on disclosure to protect its intellectual property rights. The company holds several registered and pending patents in the United States and other countries. In addition, the company has trademarks registered in the United States and other countries. The company’s brand and trade names include Cambridge Technology, Synrad, Laser Quantum, ARGES, WOM, NDS, Med X Change, Reach Technology, JADAK, ThingMagic, Photo Research, General Scanning, ATI Industrial Automation, Celera Motion, IMS, MicroE, Applimotion, Zettlex, Ingenia and Westwind. Government Regulation Certain products manufactured by the company are integrated into systems by its customers that are subject to regulation by the Federal Food and Drug Administration (the FDA) and foreign regulatory authorities. The company’s manufacturing processes are required to comply with the applicable portions of the Quality System Regulation (QSR), which cover the methods and the facilities and controls for the design, manufacture, testing, production, processes, controls, quality assurance, labeling, packaging, distribution, installation and servicing of finished devices intended for human use. The company’s certificates have been granted and renewed under the Council Directive 93/42/EEC (EU Medical Devices Directive). The company is also subject to certain medical device regulations. Medical devices are subject to extensive and rigorous regulation by the United States Food and Drug Administration (FDA0 and other federal, state, local and foreign authorities, as well as notified bodies. Research and Development and Engineering The company’s research and development and engineering expenses were $91.7 million in 2023. History The company was founded in 1968. It was incorporated in Massachusetts in 1968. The company was formerly known as GSI Lumonics Inc. and changed its name to GSI Group Inc. in 2005. Further, the company changed its name to Novanta Inc. in 2016.