Financial Data and Key Metrics Changes - The company reported a record total revenue of $801 million for the year, with organic revenue growth of 5% in Q4 and 9.3% for the full year [9][26] - Adjusted EBITDA for Q4 was $61 million, contributing to a full year adjusted EBITDA of $181 million, marking a record performance [9][10] - Adjusted free cash flow in Q4 was $62 million, with net leverage finishing the year at 3.0 times EBITDA, beating expectations [10][33] Business Line Data and Key Metrics Changes - The Medical segment achieved organic growth of just under 10% in Q4, with total revenue growth of 6.8% [9][27] - Technologies segment revenue grew by 5.1% in Q4, with organic growth of 3% [37] - Medical adjusted EBITDA margins expanded by over 500 basis points to 38.5% in Q4, while Technologies adjusted EBITDA margins contracted by 70 basis points to 29.5% [28][30] Market Data and Key Metrics Changes - The company experienced a 30% organic order growth in Q4, leading to a record backlog and a 15% increase compared to year-end 2022 [8] - The Nuclear Medicine market is expected to be a strong growth engine, supported by the ec2 acquisition [15][16] - The company noted robust order activities in the nuclear power sector, with political support for nuclear energy improving globally [18][19] Company Strategy and Development Direction - The company plans to release over 40 new product introductions in 2024, significantly increasing from 10 in 2023 [20] - Focus areas for 2024 include margin expansion, enhanced free cash flow conversion, and opportunistic M&A [22][23] - The company aims for a five-year goal of achieving 30% adjusted EBITDA margins [22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustained momentum and growth, supported by a healthy backlog and market conditions [8][47] - The company anticipates organic revenue growth of 4% to 6% for 2024, with adjusted EBITDA guidance of $193 million to $203 million [11][34] - Management highlighted the importance of operational execution and cash flow conversion as key focuses for 2024 [45][99] Other Important Information - The Medical segment now constitutes 38% of total company revenue and 44% of total company EBITDA [16] - The company is committed to capital efficiency and selective M&A, with a robust pipeline for potential acquisitions [23][41] Q&A Session Summary Question: Thoughts on new product introductions and revenue growth - Management emphasized their commitment to innovation and the expectation that new products will drive predictable, recurring revenue growth [56] Question: Margin expansion opportunities in Technologies - Management acknowledged challenges in the French market but expressed confidence in corrective actions and improvements for 2024 [60][61] Question: Insights on order growth and revenue translation - Management noted that order growth is longer cycle in nature, providing visibility for future revenue [63] Question: Expectations for pricing and cost in 2024 - Management indicated a focus on ensuring price-cost is rate-positive while doubling down on cost management initiatives [84] Question: Headwinds in the healthcare industry and their impact - Management discussed the impact of Medicare reimbursement changes but remained optimistic about growth driven by global demand and aging demographics [89] Question: Radiopharmaceutical market trends and expectations - Management expressed bullishness on the radiopharmaceutical market, particularly in theranostic applications, and highlighted the importance of recent acquisitions [91] Question: 2024 guidance context and growth expectations - Management provided context for the 5% to 7% growth guidance, citing strong order growth and historical performance as supportive factors [94]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File Number: 001-39352 Mirion Technologies, Inc. (Exact name of registrant as specified in its charter) Delaware 83-0974996 (Stat ...

Mirion Technologies, Inc. (NYSE:MIR) Q3 2023 Results Conference Call November 2, 2023 12:00 PM ET Company Participants Alex Gaddy - SVP, Strategy Larry Kingsley - Chairman Tom Logan - CEO Brian Schopfer - CFO Conference Call Participants Joe Ritchie - Goldman Sachs Andy Kaplowitz - Citi Group Chris Moore - CJS Securities Operator Greetings, and welcome to the Mirion Third Quarter 2023 Earnings Conference Call. [Operator Instructions]. As a reminder, this conference is being recorded. It is now my pleasure ...

PART I - FINANCIAL INFORMATION [Financial Statements (Unaudited)](index=5&type=section&id=ITEM%201.%20Financial%20Statements%20(Unaudited)) Mirion's total revenues increased by 11.9% to $379.3 million, with net loss narrowing to $71.3 million, primarily due to the absence of a goodwill impairment charge [Condensed Consolidated Balance Sheets](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) Total assets slightly decreased to $2.70 billion, while total liabilities decreased to $1.13 billion, and stockholders' equity increased to $1.56 billion Condensed Consolidated Balance Sheet Highlights | Account | June 30, 2023 (in millions) | December 31, 2022 (in millions) | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $87.4 | $73.5 | | Goodwill | $1,425.2 | $1,418.0 | | Intangible assets, net | $586.7 | $650.4 | | Total assets | $2,696.3 | $2,738.7 | | **Liabilities & Equity** | | | | Notes payable to third-parties, non-current | $677.8 | $801.5 | | Warrant liabilities | $49.6 | $30.5 | | Total liabilities | $1,131.8 | $1,271.5 | | Total stockholders' equity | $1,564.5 | $1,467.2 | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2023 revenues increased 12.2% to $197.2 million, with net loss significantly improving to $28.4 million due to the absence of goodwill impairment Key Operating Results | Metric | Q2 2023 (in millions) | Q2 2022 (in millions) | YTD 2023 (in millions) | YTD 2022 (in millions) | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $197.2 | $175.8 | $379.3 | $339.0 | | Gross profit | $88.0 | $79.0 | $167.1 | $143.4 | | Loss from operations | $(10.6) | $(74.6) | $(24.2) | $(108.2) | | Goodwill impairment | $0.0 | $55.2 | $0.0 | $55.2 | | Net loss | $(28.4) | $(59.3) | $(71.3) | $(78.3) | | Net loss per share | $(0.14) | $(0.32) | $(0.36) | $(0.42) | [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations decreased to $4.4 million, while financing activities provided $21.8 million, largely from a $150 million stock issuance used for debt repayment Cash Flow Summary | Activity | Six Months Ended June 30, 2023 (in millions) | Six Months Ended June 30, 2022 (in millions) | | :--- | :--- | :--- | | Net cash provided by operating activities | $4.4 | $28.0 | | Net cash used in investing activities | $(12.9) | $(14.5) | | Net cash provided by (used in) financing activities | $21.8 | $(2.4) | | **Net increase in cash** | **$14.1** | **$6.7** | [Note 3: Disposal of Business](index=16&type=section&id=Note%203.%20Disposal%20of%20Business) The company sold its Biodex Rehabilitation business, recording a $6.2 million loss on sale due to uncollectible deferred payments - The company sold its Rehab business for **$1.0 million** in cash and **$7.0 million** in deferred payments[66](index=66&type=chunk) - A loss of **$6.2 million** was recorded on the sale in Q2 2023, as the collection of the **$7.0 million** deferred payment was deemed not probable due to the buyer's financial instability[66](index=66&type=chunk) [Note 8: Goodwill and Intangible Assets](index=18&type=section&id=Note%208.%20Goodwill%20and%20Intangible%20Assets) No goodwill impairment was recognized in 2023, contrasting with a $55.2 million impairment in 2022 due to the Russia-Ukraine conflict - No goodwill impairment was recognized for the six months ended June 30, 2023[81](index=81&type=chunk) - In the prior year period (six months ended June 30, 2022), a **$55.2 million** non-cash goodwill impairment loss was recognized in the Technologies segment's RMS reporting unit[80](index=80&type=chunk) - The 2022 impairment was triggered by the Russia-Ukraine conflict and the resulting termination of a contract for a nuclear power plant in Finland, which had a remaining performance obligation of approximately **$67 million**[79](index=79&type=chunk) [Note 16: Segment Information](index=30&type=section&id=Note%2016.%20Segment%20Information) Technologies segment revenue grew 18.5% to $129.2 million, swinging to a $12.8 million operating income, while Medical segment revenue grew 1.8% to $68.0 million Segment Revenues | Segment | Q2 2023 (in millions) | Q2 2022 (in millions) | YTD 2023 (in millions) | YTD 2022 (in millions) | | :--- | :--- | :--- | :--- | :--- | | Medical | $68.0 | $66.8 | $134.4 | $126.9 | | Technologies | $129.2 | $109.0 | $244.9 | $212.1 | | **Total** | **$197.2** | **$175.8** | **$379.3** | **$339.0** | Segment (Loss) Income from Operations | Segment | Q2 2023 (in millions) | Q2 2022 (in millions) | YTD 2023 (in millions) | YTD 2022 (in millions) | | :--- | :--- | :--- | :--- | :--- | | Medical | $(3.1) | $(2.2) | $(2.4) | $(8.9) | | Technologies | $12.8 | $(46.5) | $18.3 | $(49.0) | | **Total Segment** | **$9.7** | **$(48.7)** | **$15.9** | **$(57.9)** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=39&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Q2 2023 revenues increased 12.2% to $197.2 million, with net loss improving to $28.4 million, and Adjusted EBITDA reaching $44.3 million [Results of Operations](index=46&type=section&id=Results%20of%20Operations) Q2 2023 revenues grew 12.2% to $197.2 million, with operating loss significantly narrowing due to the absence of goodwill impairment and lower SG&A expenses - **Q2 2023 vs Q2 2022:** - **Revenues:** Increased by **$21.4 million** (12.2%) to **$197.2 million**[210](index=210&type=chunk) - **Operating Loss:** Improved to **$(10.6) million** from **$(74.6) million**, mainly due to the absence of a **$55.2 million** goodwill impairment in 2023[213](index=213&type=chunk) - **SG&A:** Decreased by **$7.0 million** to **$84.0 million**, driven by lower stock-based compensation and professional fees[220](index=220&type=chunk) - **YTD 2023 vs YTD 2022:** - **Revenues:** Increased by **$40.3 million** (11.9%) to **$379.3 million**[240](index=240&type=chunk) - **Operating Loss:** Improved to **$(24.2) million** from **$(108.2) million**[244](index=244&type=chunk) - **SG&A:** Decreased by **$12.8 million** to **$169.1 million**[250](index=250&type=chunk) [Non-GAAP Financial Measures](index=41&type=section&id=Non-GAAP%20Financial%20Measures) Adjusted EBITDA for Q2 2023 increased to $44.3 million, with YTD 2023 Adjusted EBITDA reaching $80.9 million, reflecting various non-GAAP adjustments Reconciliation of Net Loss to Adjusted EBITDA | Metric | Q2 2023 (in millions) | Q2 2022 (in millions) | YTD 2023 (in millions) | YTD 2022 (in millions) | | :--- | :--- | :--- | :--- | :--- | | Net loss | $(28.4) | $(59.3) | $(71.3) | $(78.3) | | Adjustments (Interest, Tax, D&A, etc.) | $55.6 | $23.4 | $95.8 | $81.4 | | EBITDA | $24.8 | $(13.5) | $37.1 | $16.3 | | Further Adjustments (Stock Comp, Warrants, etc.) | $19.5 | $56.1 | $43.8 | $61.2 | | **Adjusted EBITDA** | **$44.3** | **$42.6** | **$80.9** | **$77.5** | [Liquidity and Capital Resources](index=56&type=section&id=Liquidity%20and%20Capital%20Resources) Cash and cash equivalents were $87.4 million, with operating cash flow at $4.4 million, and financing activities providing $21.8 million from a $150 million equity issuance - Cash and cash equivalents stood at **$87.4 million** as of June 30, 2023[282](index=282&type=chunk) - Net cash provided by operating activities decreased to **$4.4 million** for YTD 2023 from **$28.0 million** for YTD 2022[289](index=289&type=chunk) - In Q1 2023, the company raised **$150.0 million** from a direct stock offering and used approximately **$127 million** to repay outstanding debt, resulting in a **$2.6 million** loss on debt extinguishment[204](index=204&type=chunk)[291](index=291&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=58&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) No material changes were reported regarding the company's market risk disclosures, including interest rate, foreign currency, and commodity price risks - There were no material changes to the company's disclosures regarding market risk during the quarter[295](index=295&type=chunk) [Controls and Procedures](index=59&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were deemed ineffective due to a material weakness in general IT controls at the French division, with remediation efforts ongoing - The CEO and CFO concluded that disclosure controls and procedures were not effective as of June 30, 2023[297](index=297&type=chunk) - A material weakness persists related to general IT controls (GITCs) at the company's division in France, specifically concerning program change-management and user access[299](index=299&type=chunk) - Remediation plans are in progress, including educating IT control owners, enhancing controls, and adding manual business process controls to mitigate risks[302](index=302&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=60&type=section&id=ITEM%201.%20Legal%20Proceedings) The company faces legal proceedings, including a $19.3 million claim for liquidated damages and a $10.5 million demand from a Russian customer, which management deems without merit - In April 2023, a Russian customer made a claim for **$19.3 million** in liquidated damages for project delays[114](index=114&type=chunk) - In June 2023, the same customer demanded the return of **$10.5 million** in payments related to a cancelled nuclear power plant project in Finland[114](index=114&type=chunk) - Management views both the claim and the demand as without merit and intends to defend against them vigorously[114](index=114&type=chunk) [Risk Factors](index=60&type=section&id=ITEM%201A.%20Risk%20Factors) The Russia-Ukraine conflict continues to pose significant risks, including a $10.5 million demand and a $19.3 million claim from a Russian entity, with uncertain resolution under Russian law - The Russia-Ukraine conflict continues to pose a significant risk, causing project delays, cancellations, and supply chain disruptions[308](index=308&type=chunk) - A Russian state-owned entity has demanded the return of approximately **$10.5 million** for a cancelled Finnish project and claimed **$19.3 million** in penalties for delays on an active Hungarian project[308](index=308&type=chunk) - The company views the claims as without merit but acknowledges uncertainty in their resolution, as the contract is governed by Russian law[308](index=308&type=chunk)

Financial Data and Key Metrics Changes - The company reported organic revenue growth of nearly 8.5% compared to the same period last year, with total revenue growing by 12.2% in the second quarter [46][48] - Adjusted EBITDA was up 4%, with quarterly revenue reaching $197.2 million and adjusted EBITDA margins contracting 170 basis points to 22.5% [50][46] - Free cash flow was $2.3 million in the second quarter, consistent with expectations, but challenged by higher interest expenses and net working capital dynamics [46][67] Business Line Data and Key Metrics Changes - The Medical segment saw revenue up 1.8% with organic growth of 6.9%, driven by strength in radiation therapy quality assurance [51][48] - The Technologies segment experienced revenue growth of 18.5% with organic growth of 9.3%, supported by strong performance in labs and research as well as nuclear power [52][48] - Order growth in the first half was 6%, with notable contributions from labs and research, defense, and diversified industrials [47] Market Data and Key Metrics Changes - The company noted strong demand in the nuclear markets, with a healthy installed base and increasing engagement [14][61] - The defense sector showed significant growth, with first half order growth of 28%, reflecting increased demand due to geopolitical factors [28][61] - The company anticipates easing unfavorable geographic and product mix impacts in the third and fourth quarters [44] Company Strategy and Development Direction - The company is focused on improving operational excellence, particularly in free cash flow and margins, with a goal to enhance inventory turns [62][49] - There is a commitment to reducing leverage to 3.1x or lower by the end of the year while remaining active in M&A opportunities [19][40] - The integration of the SIS acquisition is progressing well, with expectations for it to be margin neutral within the planning horizon [63][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the market dynamics and order intake, indicating a favorable demand environment for the second half of the year [39][61] - The company is optimistic about the nuclear market's potential and expects continued strength in new build activities [6][28] - There is a focus on mitigating supply chain risks and improving working capital efficiency to enhance cash flow generation [22][67] Other Important Information - The company has updated its financial guidance for 2023, expecting revenue growth of 8% to 10% and adjusted free cash flow guidance of $45 million to $75 million [53][60] - The divestiture of the Biodex physical rehab business impacted reported revenue by over 5% in the quarter [66] Q&A Session Summary Question: Update on M&A pipeline and potential - The M&A pipeline remains vigorous, with a commitment to reducing leverage while exploring smaller potential deals [19] Question: Insights on Technologies segment strength - The Technologies segment is experiencing strong order intake and backlog coverage, with a positive outlook for year-over-year dynamics [11][12] Question: Pricing dynamics and potential wildcards - The company expects improvements in pricing as the year progresses, with a 4% price contribution noted in the quarter [65][36] Question: Integration of SIS and margin impact - The integration of SIS is going well, with expectations for it to contribute positively to margins in the future [30][33] Question: Visibility on dosimetry orders and Instadose technology - While not providing specific guidance for 2024, the company anticipates that the commercialization of the third generation of Instadose technology will positively impact growth [37] Question: Progress in new nuclear plant construction - Management noted that engagement in new build activities is picking up, indicating progress compared to the previous year [38]

Mirion Technologies, Inc. (NYSE:MIR) Q1 2023 Earnings Conference Call May 3, 2023 12:00 PM ET Company Participants Alex Gaddy - Vice President, Finance Larry Kingsley - Chairman Tom Logan - Chief Executive Officer Brian Schopfer - Chief Financial Officer Conference Call Participants Chris Moore - CJS Securities Andy Kaplowitz - Citigroup Joe Ritchie - Goldman Sachs Operator Greetings and welcome to the Mirion First Quarter 2023 Earnings Call. [Operator Instructions] As a reminder, this conference is being r ...

Non-GAAP Reconciliations Reconciliation of Non-GAAP Financial Measures Adjusted Gross Profit as % of Adjusted Revenue 50.0 % 50.6 % | --- | --- | --- | --- | |----------------------------------------------------------------|-------------------------|------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- ...

PART I - FINANCIAL INFORMATION [ITEM 1. Financial Statements (Unaudited)](index=5&type=section&id=ITEM%201.%20Financial%20Statements%20(Unaudited)) This section presents Mirion Technologies, Inc.'s unaudited condensed consolidated financial statements for the quarter ended March 31, 2023, including balance sheets, statements of operations, comprehensive loss, stockholders' equity, and cash flows, along with detailed notes explaining significant accounting policies, acquisitions, debt, equity, and other financial components [Unaudited Condensed Consolidated Balance Sheets](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheet Highlights (in millions) | Item | March 31, 2023 | December 31, 2022 | | :-------------------------------- | :------------- | :---------------- | | Total Assets | $2,734.8 | $2,738.7 | | Total Liabilities | $1,146.8 | $1,271.5 | | Total Stockholders' Equity | $1,588.0 | $1,467.2 | - Cash and cash equivalents increased from **$73.5 million** at December 31, 2022, to **$88.3 million** at March 31, 2023[22](index=22&type=chunk) - Notes payable to third-parties (non-current) significantly decreased from **$801.5 million** to **$679.3 million**, reflecting debt repayments[22](index=22&type=chunk) [Unaudited Condensed Consolidated Statements of Operations](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) Condensed Consolidated Statements of Operations Highlights (Three Months Ended March 31, in millions, except per share data) | Item | 2023 | 2022 | | :------------------------------------------ | :----- | :----- | | Total Revenues | $182.1 | $163.2 | | Gross Profit | $79.1 | $64.4 | | Loss from Operations | $(13.6) | $(33.6) | | Net Loss | $(42.9) | $(19.0) | | Net Loss Attributable to Mirion Technologies, Inc. | $(41.9) | $(17.7) | | Net Loss Per Common Share (Basic and Diluted) | $(0.22) | $(0.10) | - Total revenues increased by **$18.9 million (11.6%)** year-over-year, driven by both product and service revenue growth[24](index=24&type=chunk) - Net loss increased significantly from **$(19.0) million** in Q1 2022 to **$(42.9) million** in Q1 2023, primarily due to higher interest expense and an increase in the fair value of warrant liabilities[24](index=24&type=chunk) [Unaudited Condensed Consolidated Statements of Comprehensive Loss](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) Condensed Consolidated Statements of Comprehensive Loss Highlights (Three Months Ended March 31, in millions) | Item | 2023 | 2022 | | :------------------------------------------ | :----- | :----- | | Net Loss | $(42.9) | $(19.0) | | Other Comprehensive Income (Loss), net of tax | $8.3 | $(15.7) | | Comprehensive Loss | $(34.6) | $(34.7) | | Comprehensive Loss Attributable to Mirion Technologies, Inc. | $(33.9) | $(31.9) | - Other comprehensive income (loss) improved from a **$(15.7) million** loss in Q1 2022 to an **$8.3 million** income in Q1 2023, mainly due to foreign currency translation gains[26](index=26&type=chunk) [Unaudited Condensed Consolidated Statements of Stockholders' Equity (Deficit)](index=9&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity%20(Deficit)) Condensed Consolidated Statements of Stockholders' Equity (Deficit) Highlights (in millions) | Item | Balance Dec 31, 2022 | Balance Mar 31, 2023 | | :-------------------------------- | :------------------- | :------------------- | | Additional Paid-In Capital | $1,882.4 | $2,039.4 | | Accumulated Deficit | $(408.5) | $(450.4) | | Accumulated Other Comprehensive Loss | $(75.7) | $(67.7) | | Total Stockholders' Equity | $1,467.2 | $1,588.0 | - Additional paid-in capital increased by **$157.0 million**, primarily due to the issuance of Class A common stock under a direct registered offering[29](index=29&type=chunk) - Accumulated deficit increased by **$41.9 million**, reflecting the net loss attributable to Mirion Technologies, Inc. for the quarter[29](index=29&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows Highlights (Three Months Ended March 31, in millions) | Activity | 2023 | 2022 | | :------------------------------------------ | :----- | :----- | | Net Cash (Used in) Provided by Operating Activities | $(2.7) | $11.4 | | Net Cash Used in Investing Activities | $(7.5) | $(7.9) | | Net Cash Provided by (Used in) Financing Activities | $24.6 | $(0.6) | | Net Increase in Cash, Cash Equivalents, and Restricted Cash | $15.1 | $1.9 | - Operating activities shifted from providing **$11.4 million** in cash in Q1 2022 to using **$2.7 million** in Q1 2023, primarily due to changes in working capital and net loss[32](index=32&type=chunk) - Financing activities provided **$24.6 million** in Q1 2023, a significant increase from using **$0.6 million** in Q1 2022, driven by common stock issuance proceeds partially offset by term loan repayments[32](index=32&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [Note 1, Nature of Business and Summary of Significant Accounting Policies](index=11&type=section&id=Note%201,%20Nature%20of%20Business%20and%20Summary%20of%20Significant%20Accounting%20Policies) - Mirion Technologies, Inc. is a global provider of radiation detection, measurement, analysis, and monitoring products and services across Medical and Industrial segments[34](index=34&type=chunk) - The Medical segment focuses on radiation oncology quality assurance, dosimetry, radiation therapy QA, and radionuclide therapy products[34](index=34&type=chunk) - The Industrial segment provides personal radiation detection, analysis tools for power plants, labs, research, and defense applications[34](index=34&type=chunk) [Note 2, Acquisitions](index=14&type=section&id=Note%202,%20Acquisitions) - On August 1, 2022, Mirion acquired the Critical Infrastructure (CI) business of Collins Aerospace (renamed Secure Integrated Solutions 'SIS') for **$6.6 million** cash, integrating it into the Industrial segment[56](index=56&type=chunk) - Measurement period adjustments in Q1 2023 resulted in a **$0.9 million** net increase in goodwill related to the CI Acquisition[58](index=58&type=chunk) [Note 3, Assets and Liabilities Held for Sale](index=14&type=section&id=Note%203,%20Assets%20and%20Liabilities%20Held%20for%20Sale) - The Biodex Rehabilitation ('Rehab') business was classified as held for sale in Q4 2022[61](index=61&type=chunk) Assets and Liabilities Held for Sale (in millions) | Item | March 31, 2023 | December 31, 2022 | | :-------------------------------- | :------------- | :---------------- | | Assets held for sale | $10.1 | $8.5 | | Liabilities held for sale | $1.4 | $0.8 | [Note 4, Contracts in Progress](index=15&type=section&id=Note%204,%20Contracts%20in%20Progress) Contracts in Progress Balances (in millions) | Item | March 31, 2023 | December 31, 2022 | | :------------------------------------------ | :------------- | :---------------- | | Costs and estimated earnings in excess of billings (current) | $67.2 | $50.0 | | Billings in excess of costs and estimated earnings (current) | $(18.5) | $(25.5) | | Total Contracts in Progress | $55.9 | $40.9 | - The aggregate transaction price allocated to remaining performance obligations for open contracts was approximately **$740.8 million** as of March 31, 2023, with **50%** expected to be recognized in fiscal year 2023[49](index=49&type=chunk) [Note 5, Inventories](index=16&type=section&id=Note%205,%20Inventories) Inventory Components (in millions) | Item | March 31, 2023 | December 31, 2022 | | :-------------------------------- | :------------- | :---------------- | | Raw materials | $71.3 | $69.7 | | Work in progress | $34.8 | $28.2 | | Finished goods | $51.4 | $45.4 | | Total Inventories | $157.5 | $143.3 | [Note 6, Property, Plant and Equipment, Net](index=16&type=section&id=Note%206,%20Property,%20Plant%20and%20Equipment,%20Net) Property, Plant and Equipment, Net (in millions) | Item | March 31, 2023 | December 31, 2022 | | :-------------------------------- | :------------- | :---------------- | | Gross PP&E | $164.1 | $155.2 | | Accumulated Depreciation and Amortization | $(38.1) | $(30.9) | | Net PP&E | $126.0 | $124.3 | - Construction in progress increased from **$15.9 million** to **$21.4 million**, indicating ongoing capital investments[66](index=66&type=chunk) [Note 7, Accrued Expenses and Other Current Liabilities](index=17&type=section&id=Note%207,%20Accrued%20Expenses%20and%20Other%20Current%20Liabilities) Accrued Expenses and Other Current Liabilities (in millions) | Item | March 31, 2023 | December 31, 2022 | | :-------------------------------- | :------------- | :---------------- | | Compensation and related benefit costs | $30.9 | $37.6 | | Income taxes payable | $6.8 | $5.5 | | Restructuring | $2.3 | $1.5 | | Total | $74.9 | $79.8 | - Compensation and related benefit costs decreased by **$6.7 million**, while income taxes payable increased by **$1.3 million**[67](index=67&type=chunk) [Note 8, Goodwill and Intangible Assets](index=17&type=section&id=Note%208,%20Goodwill%20and%20Intangible%20Assets) Goodwill by Reportable Segment (in millions) | Segment | December 31, 2022 | March 31, 2023 | | :-------------------------------- | :------------------ | :--------------- | | Medical | $616.0 | $616.0 | | Industrial | $802.0 | $808.9 | | Consolidated | $1,418.0 | $1,424.9 | - Goodwill increased by **$6.9 million**, primarily due to measurement period adjustments from business combinations and translation adjustments in the Industrial segment[70](index=70&type=chunk) Intangible Assets, Net (in millions) | Item | December 31, 2022 | March 31, 2023 | | :-------------------------------- | :------------------ | :--------------- | | Customer relationships | $253.7 | $239.0 | | Developed technology | $212.6 | $206.2 | | Total Net Book Value | $650.4 | $619.8 | [Note 9, Borrowings](index=18&type=section&id=Note%209,%20Borrowings) Third-Party Notes Payable (in millions) | Item | March 31, 2023 | December 31, 2022 | | :-------------------------------- | :------------- | :---------------- | | 2021 Credit Agreement | $696.7 | $821.7 | | Total Third-Party Borrowings | $699.6 | $824.7 | | Notes Payable to Third-Parties, Non-Current | $679.3 | $801.5 | - The Company repaid **$125.0 million** of its term loan in Q1 2023 using proceeds from a direct registered equity offering, reducing the outstanding balance to **$696.7 million**[80](index=80&type=chunk)[81](index=81&type=chunk) - The interest rate for the term loan increased to **7.48%** as of March 31, 2023, from **3.25%** as of March 31, 2022, due to rising LIBOR[80](index=80&type=chunk)[194](index=194&type=chunk) [Note 10, Leased Assets](index=21&type=section&id=Note%2010,%20Leased%20Assets) Operating Lease Assets and Liabilities (in millions) | Item | March 31, 2023 | December 31, 2022 | | :-------------------------------- | :------------- | :---------------- | | Operating lease right-of-use assets | $38.7 | $40.1 | | Total operating lease liabilities | $41.6 | $43.3 | - The weighted average remaining lease term for operating leases was **6.7 years**, with a weighted average discount rate of **4.15%** as of March 31, 2023[97](index=97&type=chunk) [Note 11, Commitments and Contingencies](index=22&type=section&id=Note%2011,%20Commitments%20and%20Contingencies) Unconditional Purchase Obligations (in millions) | Fiscal Year Ending December 31 | Amount | | :------------------------------- | :----- | | 2023 (Remainder) | $30.6 | | 2024 | $11.6 | | 2025 | $1.2 | | 2026 | $1.1 | | Total | $44.5 | - A Russian customer made a claim for liquidated damages in April 2023 for project delays, which management views as without merit, but the resolution's impact on future cash flows is uncertain[102](index=102&type=chunk) [Note 12, Income Taxes](index=23&type=section&id=Note%2012,%20Income%20Taxes) Effective Income Tax Rate | Period | Effective Tax Rate | | :-------------------------------- | :----------------- | | Three Months Ended March 31, 2023 | 2.5% | | Three Months Ended March 31, 2022 | 17.7% | - The significant decrease in the effective income tax rate was primarily due to the mix of earnings and the impact of valuation allowances in the current period[103](index=103&type=chunk) [Note 13, Supplemental Disclosures to Consolidated Statements of Cash Flows](index=24&type=section&id=Note%2013,%20Supplemental%20Disclosures%20to%20Consolidated%20Statements%20of%20Cash%20Flows) Supplemental Cash Flow Information (Three Months Ended March 31, in millions) | Item | 2023 | 2022 | | :-------------------------------- | :----- | :----- | | Cash Paid For Interest, Net | $13.9 | $6.9 | | Cash Paid For Income Taxes | $2.8 | $2.4 | - Total cash, cash equivalents, and restricted cash increased from **$75.0 million** at December 31, 2022, to **$90.1 million** at March 31, 2023[106](index=106&type=chunk) [Note 14, Stock-Based Compensation](index=24&type=section&id=Note%2014,%20Stock-Based%20Compensation) Stock-Based Compensation Expense (Three Months Ended March 31, in millions) | Item | 2023 | 2022 | | :-------------------------------- | :----- | :----- | | Total Stock-Based Compensation Expense | $5.5 | $7.9 | - The 2021 Omnibus Incentive Plan reserved **31,946,993 shares** of Class A common stock for issuance as of January 1, 2023[108](index=108&type=chunk) - In Q1 2023, the Company granted **695,351 RSUs** and **233,165 PSUs**, with PSUs subject to market (relative TSR) and performance (organic revenue growth) vesting conditions[109](index=109&type=chunk)[110](index=110&type=chunk) [Note 15, Related-Party Transactions](index=25&type=section&id=Note%2015,%20Related-Party%20Transactions) - Founder Shares (**18,750,000 Class B common stock**) are subject to vesting conditions based on Class A common stock price thresholds (**$12, $14, $16**) before October 20, 2026[117](index=117&type=chunk)[118](index=118&type=chunk) - The Sponsor purchased **8,500,000 Private Placement Warrants** at **$2.00** each, exercisable for Class A common stock at **$11.50** per share[119](index=119&type=chunk) - The Company incurred **$0.6 million** in Q1 2023 for expenses supporting secondary market offerings by Charterhouse Capital Partners LLP, a former majority stockholder[123](index=123&type=chunk) [Note 16, Segment Information](index=27&type=section&id=Note%2016,%20Segment%20Information) Revenues by Segment (Three Months Ended March 31, in millions) | Segment | 2023 | 2022 | | :-------------------------------- | :----- | :----- | | Medical | $66.4 | $60.1 | | Industrial | $115.7 | $103.1 | | Consolidated Revenues | $182.1 | $163.2 | Segment Income (Loss) from Operations (Three Months Ended March 31, in millions) | Segment | 2023 | 2022 | | :-------------------------------- | :----- | :----- | | Medical | $0.7 | $(6.7) | | Industrial | $5.5 | $(2.5) | | Total Segment Income (Loss) | $6.2 | $(9.2) | - North America generated the highest revenue at **$115.9 million** in Q1 2023, followed by Europe (**$58.8 million**) and Asia Pacific (**$7.4 million**)[128](index=128&type=chunk) [Note 17, Fair Value Measurements](index=28&type=section&id=Note%2017,%20Fair%20Value%20Measurements) Fair Value of Warrant Liabilities (in millions) | Item | March 31, 2023 | December 31, 2022 | | :-------------------------------- | :------------- | :---------------- | | Public warrants (Level 1) | $30.2 | $21.0 | | Private placement warrants (Level 2) | $13.7 | $9.5 | | Total Warrant Liabilities | $43.9 | $30.5 | - The Company recognized an unrealized loss of **$13.4 million** in Q1 2023 due to an increase in the fair value of warrant liabilities[137](index=137&type=chunk) [Note 18, Derivatives and Hedging](index=30&type=section&id=Note%2018,%20Derivatives%20and%20Hedging) - Mirion uses fixed-to-fixed cross-currency rate swaps (CCRS) to manage currency risks for its EUR-denominated operations, with a notional amount of **€238.8 million** as of March 31, 2023[139](index=139&type=chunk)[143](index=143&type=chunk) - Changes in the fair values of these derivative instruments are recognized in accumulated other comprehensive loss (AOCL)[142](index=142&type=chunk) [Note 19, Loss Per Share](index=31&type=section&id=Note%2019,%20Loss%20Per%20Share) Loss Per Share Calculation (Three Months Ended March 31, in millions, except per share amounts) | Item | 2023 | 2022 | | :------------------------------------------ | :----- | :----- | | Net Loss Attributable to Mirion Technologies, Inc. Shareholders | $(41.9) | $(17.7) | | Weighted Average Common Shares Outstanding | 187.701 | 180.774 | | Net Loss Per Common Share (Basic and Diluted) | $(0.22) | $(0.10) | - Potentially dilutive securities, including warrants and founder shares, were excluded from diluted EPS calculations for both periods as their effect would be anti-dilutive due to net losses[145](index=145&type=chunk)[151](index=151&type=chunk)[153](index=153&type=chunk) [Note 20, Restructuring](index=32&type=section&id=Note%2020,%20Restructuring) Restructuring Expenses (Three Months Ended March 31, in millions) | Item | 2023 | 2022 | | :-------------------------------- | :----- | :----- | | Severance and employee costs | $1.2 | $1.0 | | Other | $0.2 | $1.0 | | Total Restructuring Expenses | $1.4 | $2.0 | - The Company expects additional restructuring charges of approximately **$1.1 million**, primarily in the next **12 months**, allocated across Medical (**$0.6M**), Industrial (**$0.4M**), and Corporate (**$0.1M**)[155](index=155&type=chunk)[156](index=156&type=chunk) [Note 21, Noncontrolling Interest](index=33&type=section&id=Note%2021,%20Noncontrolling%20Interest) - Mirion Technologies, Inc. recognized noncontrolling interests for **7,847,333 shares (3.5%)** of IntermediateCo Class B common stock not attributable to the Company as of March 31, 2023[165](index=165&type=chunk) - Noncontrolling interests totaled **$66.7 million** in stockholders' equity as of March 31, 2023[166](index=166&type=chunk) [Note 22, Accumulated Other Comprehensive Loss/Income](index=34&type=section&id=Note%2022,%20Accumulated%20Other%20Comprehensive%20Loss%2FIncome) Components of Accumulated Other Comprehensive Loss (in millions) | Item | March 31, 2023 | December 31, 2022 | | :------------------------------------------ | :------------- | :---------------- | | Cumulative foreign currency translation adjustment, net of tax | $(60.6) | $(71.2) | | Unrealized loss on net investment hedges, net of tax | $(12.2) | $(9.9) | | Accumulated other comprehensive (loss) income | $(67.7) | $(75.7) | - Accumulated other comprehensive loss improved from **$(75.7) million** to **$(67.7) million**, primarily due to a positive cumulative foreign currency translation adjustment[167](index=167&type=chunk) [Note 23, Subsequent Events](index=34&type=section&id=Note%2023,%20Subsequent%20Events) - On April 3, 2023, the Company sold the physical medicine assets of Biodex Medical Systems, Inc. for **$1.0 million** cash at closing, with up to an additional **$7.0 million** in deferred cash payments contingent on business performance[168](index=168&type=chunk) [ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on Mirion's financial condition and results of operations for the three months ended March 31, 2023, compared to the prior year, covering key factors affecting performance, recent developments, segment results, and liquidity, highlighting revenue growth, increased net loss due to financial factors, and ongoing operational challenges [Overview](index=35&type=section&id=Overview) - Mirion is a global provider of radiation detection, measurement, analysis, and monitoring products and services for medical, nuclear, and defense markets[171](index=171&type=chunk) - The company operates in two business segments: Medical and Industrial, with the Industrial segment rebranded as Mirion Technologies on May 1, 2023[173](index=173&type=chunk)[174](index=174&type=chunk) Revenue Contribution by Segment (Three Months Ended March 31) | Segment | 2023 | 2022 | | :-------------------------------- | :----- | :----- | | Medical | 36.5% | 36.8% | | Industrial | 63.5% | 63.2% | [Key Factors Affecting Our Performance](index=35&type=section&id=Key%20Factors%20Affecting%20Our%20Performance) - The Russia-Ukraine conflict continues to impact Mirion through increased inflation, supply chain disruptions, and potential delays or cancellations of customer projects[175](index=175&type=chunk) - Rising interest rates have increased debt service costs, a trend expected to continue if rates further increase[175](index=175&type=chunk) - Growth in the Medical segment is influenced by global regulatory standards, healthcare safety focus, and demographics, while the Industrial segment is impacted by governmental environmental policies and nuclear new build projects[177](index=177&type=chunk) [Non-GAAP Financial Measures](index=37&type=section&id=Non-GAAP%20Financial%20Measures) - Mirion uses non-GAAP financial measures such as EBITA, EBITDA, and Adjusted EBITDA to provide additional insights into ongoing performance and for internal decision-making[179](index=179&type=chunk)[180](index=180&type=chunk) Adjusted EBITDA Reconciliation (Three Months Ended March 31, in millions) | Item | 2023 | 2022 | | :------------------------------------------ | :----- | :----- | | Net loss | $(42.9) | $(19.0) | | Interest expense, net | $14.9 | $7.9 | | Income tax (benefit) provision | $(1.1) | $(4.1) | | Amortization | $33.6 | $38.8 | | EBITA | $4.5 | $23.6 | | Depreciation | $7.8 | $6.2 | | EBITDA | $12.3 | $29.8 | | Stock-based compensation expense | $5.6 | $7.8 | | Increase (decrease) in fair value of warrant liabilities | $13.4 | $(19.9) | | Debt extinguishment | $2.6 | — | | Foreign currency (gain) loss, net | $(0.3) | $1.5 | | Cost of revenues impact from inventory valuation purchase accounting | — | $6.3 | | Non-operating expenses | $3.0 | $9.4 | | Adjusted EBITDA | $36.6 | $34.9 | [Our Business Segments](index=38&type=section&id=Our%20Business%20Segments) - The Medical segment offers solutions for radiation therapy, personal dosimetry, and nuclear medicine applications[187](index=187&type=chunk) - The Industrial segment provides Reactor Safety and Control Systems and Radiological Search, Measurement, and Analysis Systems for defense, nuclear energy, and research markets[188](index=188&type=chunk) - The acquisition of the Critical Infrastructure (CI) business in August 2022 impacts the Industrial segment's results for Q1 2023 compared to Q1 2022[188](index=188&type=chunk) [Recent Developments](index=38&type=section&id=Recent%20Developments) - The Russia-Ukraine conflict continues to cause delays in project revenue recognition, with **$98.4 million** in backlog for Russian-related projects as of March 31, 2023[190](index=190&type=chunk) - T. Rowe Price funds acquired **17,142,857 shares** of Class A common stock for **$8.75** per share, with **$127 million** of proceeds used to pay down outstanding debt, resulting in a **$2.6 million** loss on debt extinguishment[192](index=192&type=chunk) - Supply chain disruptions persist, causing delays in sourcing key components and increased material and freight costs, partially mitigated by price increases[193](index=193&type=chunk) [Results of Operations](index=40&type=section&id=Results%20of%20Operations) Key Financial Results (Three Months Ended March 31, in millions) | Item | 2023 | 2022 | Change | | :------------------------------------------ | :----- | :----- | :----- | | Revenues | $182.1 | $163.2 | +$18.9 | | Cost of Revenues | $103.0 | $98.8 | +$4.2 | | Gross Profit | $79.1 | $64.4 | +$14.7 | | Selling, General and Administrative Expenses | $85.1 | $90.9 | -$5.8 | | Research and Development | $7.6 | $7.1 | +$0.5 | | Loss from Operations | $(13.6) | $(33.6) | +$20.0 | | Interest Expense, Net | $14.9 | $7.9 | +$7.0 | | Loss on Debt Extinguishment | $2.6 | — | +$2.6 | | Foreign Currency (Gain) Loss, Net | $(0.3) | $1.5 | -$1.8 | | Increase (Decrease) in Fair Value of Warrant Liabilities | $13.4 | $(19.9) | +$33.3 | | Net Loss | $(42.9) | $(19.0) | +$23.9 | - Medical segment revenues increased by **$6.3 million** due to price increases and organic volume growth, while Industrial segment revenues increased by **$12.6 million** from volume, price, and the SIS acquisition[200](index=200&type=chunk)[201](index=201&type=chunk) - SG&A expenses decreased by **$5.8 million**, driven by lower stock-based compensation and reduced public company expenses, partially offset by SIS acquisition impact and increased bad debt reserves for a Russian partner[204](index=204&type=chunk)[205](index=205&type=chunk)[206](index=206&type=chunk) [Liquidity and Capital Resources](index=45&type=section&id=Liquidity%20and%20Capital%20Resources) - Mirion believes net cash from operating activities, supplemented by long-term debt, will provide adequate liquidity for the next **12 months**[231](index=231&type=chunk) - Cash and cash equivalents increased to **$88.3 million** at March 31, 2023, from **$73.5 million** at December 31, 2022, with approximately **$48.8 million** held by non-U.S. entities[233](index=233&type=chunk) - Net cash used in operating activities was **$2.7 million** in Q1 2023, a **$14.1 million** decrease from Q1 2022, primarily due to a higher net loss and changes in working capital, including a **$13.0 million** increase in inventories[239](index=239&type=chunk)[240](index=240&type=chunk) [Critical Accounting Policies and Estimates](index=47&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - There were no material changes to the Company's critical accounting policies and estimates during the three months ended March 31, 2023, as compared to those described in the Annual Report on Form 10-K[244](index=244&type=chunk) [Recent Accounting Pronouncements](index=48&type=section&id=Recent%20Accounting%20Pronouncements) - The Company refers to Note 1 for information on recent accounting pronouncements, specifically ASU 2020-04 regarding Reference Rate Reform (LIBOR transition), for which it intends to extend adoption through December 31, 2024[55](index=55&type=chunk)[245](index=245&type=chunk) [ITEM 3. Quantitative and Qualitative Disclosures about Market Risk](index=48&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section states that there have been no material changes to the Company's disclosures regarding quantitative and qualitative market risk from those provided in its Annual Report on Form 10-K for the periods ended March 31, 2023, and December 31, 2022 - No material changes to market risk disclosures were reported for the periods ended March 31, 2023, and December 31, 2022[246](index=246&type=chunk) [ITEM 4. Controls and Procedures](index=48&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Mirion's management concluded that its disclosure controls and procedures were not effective as of March 31, 2023, due to material weaknesses in general information technology controls (GITCs) at its French division; despite these weaknesses, the financial statements are fairly presented, and remediation efforts are underway, focusing on IT control training and enhanced monitoring - Disclosure controls and procedures were deemed not effective as of March 31, 2023, due to material weaknesses in general information technology controls (GITCs) at the Company's French division[248](index=248&type=chunk)[250](index=250&type=chunk) - The material weaknesses relate to program change-management and user access in IT systems supporting financial reporting processes, stemming from a lack of IT personnel training[250](index=250&type=chunk) - Remediation plans include educating IT control owners, developing enhanced controls for program changes and user access, and adding manual business process controls[252](index=252&type=chunk) PART II - OTHER INFORMATION [ITEM 1. Legal Proceedings](index=49&type=section&id=ITEM%201.%20Legal%20Proceedings) Mirion is subject to various legal proceedings in the ordinary course of business; while the ultimate outcomes are uncertain, management does not expect these matters to materially affect financial results, but litigation can incur defense costs and divert management resources - The Company is involved in legal proceedings and claims arising from its ordinary course of business[255](index=255&type=chunk) - Management believes the resolution of these matters will not have a material effect on results of operations, financial condition, or cash flows, but litigation can still adversely impact the business[255](index=255&type=chunk) [ITEM 1A. Risk Factors](index=49&type=section&id=ITEM%201A.%20Risk%20Factors) This section updates and supplements the risk factors previously disclosed in the Annual Report on Form 10-K, with a particular focus on the adverse impacts of the military conflict between Russia and Ukraine, including sanctions, supply chain disruptions, and potential legal claims - The military conflict between Russia and Ukraine and associated sanctions have adversely affected Mirion's business, including fluctuating demand, project delays, and difficulties in supply/sourcing[258](index=258&type=chunk)[259](index=259&type=chunk) - A Russian customer's claim for **$18 million** in penalties for project delays in April 2023 introduces uncertainty, despite management viewing it as without merit[259](index=259&type=chunk) - The conflict has heightened risks such as increased inflation, limited commodity availability, supply chain disruption, and potential damage to reputation from continued sales of medical equipment to Russia[259](index=259&type=chunk) [ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=50&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section states that there is no applicable information to report regarding unregistered sales of equity securities and use of proceeds for the period - Not applicable for this reporting period[260](index=260&type=chunk) [ITEM 3. Defaults Upon Senior Securities](index=50&type=section&id=ITEM%203.%20Defaults%20Upon%20Senior%20Securities) This section indicates that there are no defaults upon senior securities to report for the period - None to report for this period[262](index=262&type=chunk) [ITEM 4. Mine Safety Disclosures](index=50&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures) This section states that there is no applicable information to report regarding mine safety disclosures for the period - Not applicable for this reporting period[264](index=264&type=chunk) [ITEM 5. Other Information](index=50&type=section&id=ITEM%205.%20Other%20Information) This section indicates that there is no other information to report for the period - Not applicable for this reporting period[266](index=266&type=chunk) [ITEM 6. Exhibits, Financial Statement Schedules](index=50&type=section&id=ITEM%206.%20Exhibits,%20Financial%20Statement%20Schedules) This section lists the exhibits filed or incorporated by reference as part of this Quarterly Report, including the Amended and Restated Bylaws, certifications from executive officers, and XBRL taxonomy documents - Exhibits include Amended and Restated Bylaws, certifications of principal executive and financial officers (31.1, 31.2, 32.1, 32.2), and XBRL Instance and Taxonomy Extension Documents[271](index=271&type=chunk)

Part I [Business](index=7&type=section&id=Item%201.%20Business) Mirion Technologies provides specialized products, services, and software for harnessing ionizing radiation, serving critical applications in the medical, nuclear energy, defense, and research markets - Mirion operates through two primary business segments: Medical and Industrial[28](index=28&type=chunk) - The company's solutions are applied in medical diagnostics, cancer treatment, nuclear energy, defense, scientific research, and space exploration[26](index=26&type=chunk) - Mirion has a global footprint with facilities in **12 countries** and serves customers in over **130 countries**[27](index=27&type=chunk)[30](index=30&type=chunk) - As of December 31, 2022, the company's engineering and R&D organization consisted of **411 scientists, engineers, and technicians**, representing about **14% of the workforce**[30](index=30&type=chunk) [Industry Overview](index=10&type=section&id=Industry%20Overview) The industry overview details the key markets Mirion serves, including medical, laboratories, nuclear, and defense, highlighting growth drivers like increasing radioisotope use and demand for carbon-free energy - The use of radiopharmaceuticals in medical diagnosis is growing at over **10% per year**[40](index=40&type=chunk) - As of January 2023, there were **58 nuclear reactors under construction** and **445 planned or proposed globally**, indicating strong growth in the new build market[53](index=53&type=chunk)[74](index=74&type=chunk) - The global small modular reactor (SMR) market is projected to grow from **$3.5 billion in 2020 to $18.8 billion by 2030**[54](index=54&type=chunk) - Global defense spending is increasing due to geopolitical instability, with a focus on protecting personnel and infrastructure from radiological threats[55](index=55&type=chunk)[56](index=56&type=chunk)[57](index=57&type=chunk) [Our Segments](index=17&type=section&id=Our%20Segments) Mirion's operations are divided into Medical and Industrial segments, providing solutions for cancer diagnostics, nuclear medicine, dosimetry, reactor safety, and radiological measurement systems - The Medical segment offers products in four main categories: Cancer Diagnostics and Therapeutics Quality & Safety, Nuclear Medicine and Medical Imaging, Dosimetry Services, and Rehabilitation[93](index=93&type=chunk)[94](index=94&type=chunk) - The Industrial segment's offerings include Reactor Safety and Control Systems and Radiological Search, Measurement and Analysis Systems, which encompass a wide range of products from dosimeters and monitors to imaging and waste measurement systems[96](index=96&type=chunk)[97](index=97&type=chunk)[98](index=98&type=chunk) [Backlog and Deferred Contract Revenue](index=19&type=section&id=Backlog%20and%20Deferred%20Contract%20Revenue) The company's total backlog was $737.4 million as of December 31, 2022, with deferred contract revenue at $83.0 million, and approximately 57% of backlog expected to be recognized in 2023 Backlog and Deferred Contract Revenue (in millions) | | Dec 31, 2022 (Successor) | Dec 31, 2021 (Successor) | June 30, 2021 (Predecessor) | | :--- | :--- | :--- | :--- | | **Backlog** | $737.4 | $747.5 | $715.8 | | **Deferred contract revenue** | $83.0 | $73.0 | $50.4 | - Approximately **57% of the backlog** as of December 31, 2022, is expected to be recognized as revenue in calendar year 2023[102](index=102&type=chunk) - An estimated **10%-15% of the backlog** at any given time is related to unfunded contracts that may be at risk for cancellation if funding is not appropriated[100](index=100&type=chunk) [Human Capital Resources](index=21&type=section&id=Human%20Capital%20Resources) As of December 31, 2022, Mirion employed 2,872 full-time and part-time employees globally, emphasizing an inclusive culture, employee development, and robust health and safety programs - As of December 31, 2022, the company had **2,872 employees**, with **1,410 in the U.S.** and **1,462 outside the U.S.**[119](index=119&type=chunk) - Approximately **1.3% of the workforce** is covered by collective bargaining agreements with **3 active unions** in the United States[119](index=119&type=chunk) [Regulation](index=24&type=section&id=Regulation) Mirion's operations are subject to extensive regulations from bodies like the NRC and FDA, covering radioactive materials, export controls, economic sanctions, anti-corruption, and medical devices - The company is subject to regulations from the Nuclear Regulatory Commission (NRC) and state authorities for the receipt, possession, use, and transfer of radioactive materials[141](index=141&type=chunk) - Products and technologies are subject to U.S. export controls under the Department of Energy, Commerce Department (EAR), and State Department (ITAR)[153](index=153&type=chunk) - Operations must comply with anti-corruption laws such as the U.S. Foreign Corrupt Practices Act (FCPA) and the U.K. Bribery Act (UKBA)[158](index=158&type=chunk) - Medical device products are regulated by the U.S. Food and Drug Administration (FDA) under the Food, Drug, and Cosmetic Act (FDCA), requiring adherence to Current Good Manufacturing Practices and post-market surveillance[163](index=163&type=chunk)[166](index=166&type=chunk) [Risk Factors](index=28&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including operating losses, geopolitical impacts, supply chain disruptions, intense competition, long sales cycles, and vulnerabilities in IT security and internal controls - The company has a history of operating losses, with a net loss of **$288.4 million** for the year ended December 31, 2022, and an accumulated deficit of **$408.5 million**[187](index=187&type=chunk) - The military conflict between Russia and Ukraine has adversely affected business, leading to contract terminations (e.g., a nuclear power plant project in Finland) and potential delays in revenue and payments[192](index=192&type=chunk) - The company is experiencing supply shortages, particularly for semiconductors, and rising costs for labor, materials, and freight, which could adversely affect operating margins[199](index=199&type=chunk)[201](index=201&type=chunk) - A failure or breach of IT and data security infrastructure poses a significant risk, as evidenced by a ransomware attack in February 2021 where certain personal and proprietary information was misappropriated[248](index=248&type=chunk)[250](index=250&type=chunk) - A material weakness was identified in internal control over financial reporting as of December 31, 2022, related to general information technology controls at its division in France[271](index=271&type=chunk) [Properties](index=63&type=section&id=Item%202.%20Properties) Mirion's principal executive offices are leased in Atlanta, Georgia, supplemented by various owned and leased administrative, engineering, production, and warehouse facilities globally - The company's headquarters are leased in Atlanta, Georgia, through 2031[374](index=374&type=chunk) - Mirion owns facilities in Belgium, France, Canada, and the United States, and leases additional space in these and other countries including Germany, the UK, Finland, China, and Japan[374](index=374&type=chunk) [Legal Proceedings](index=63&type=section&id=Item%203.%20Legal%20Proceedings) Mirion is involved in various legal actions arising in the ordinary course of business, with management not expecting a material effect on its financial condition or operations - The company is involved in legal actions arising from the ordinary course of business[376](index=376&type=chunk) - Management does not anticipate that current legal proceedings will have a material impact on the company's financial condition[376](index=376&type=chunk) Part II [Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities](index=64&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Shareholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Mirion's Class A common stock and warrants are listed on the NYSE, with 217.5 million Class A and 8.0 million Class B shares outstanding as of February 2023, and no cash dividends paid to date - The company's Class A common stock and warrants trade on the NYSE under the symbols **"MIR"** and **"MIR WS"**[381](index=381&type=chunk) - As of February 26, 2023, there were **217,470,076 Class A** and **8,040,540 Class B shares** of common stock outstanding[382](index=382&type=chunk) - The company has not paid any cash dividends on its common stock and is restricted from doing so by its credit facilities[383](index=383&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=66&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis) This section analyzes Mirion's financial condition and results, highlighting the impact of the 2021 business combination, with 2022 revenues of $717.8 million and a net loss of $288.4 million, primarily due to goodwill impairment - The Business Combination on October 20, 2021, resulted in a change of control and the application of acquisition accounting, making financial statements for the "Successor" period not directly comparable to the "Predecessor" period[395](index=395&type=chunk)[397](index=397&type=chunk) Key Financial Results Overview (Year Ended Dec 31, 2022) | Metric | Value (in millions) | | :--- | :--- | | **Revenues** | $717.8 | | **Net Loss** | $(288.4) | | **Adjusted EBITDA** | $164.7 | | **Backlog (as of Dec 31, 2022)** | $737.4 | - The Russia-Ukraine conflict led to a contract termination for a nuclear power plant in Finland, resulting in a **$55.2 million goodwill impairment charge** in Q2 2022[416](index=416&type=chunk)[422](index=422&type=chunk) - Total goodwill impairment charges for the year ended December 31, 2022, amounted to **$211.8 million**, impacting both the Medical and Industrial segments[422](index=422&type=chunk)[423](index=423&type=chunk) [Results of Operations](index=76&type=section&id=Results%20of%20Operations) For 2022, Mirion reported $717.8 million in revenues and a $288.4 million net loss, significantly impacted by a $211.8 million goodwill impairment and increased public company costs, with segment performance affected by acquisitions and geopolitical events Consolidated Results of Operations (in millions) | | Year Ended Dec 31, 2022 (Successor) | Combined 12 Months 2021 (Successor/Predecessor) | | :--- | :--- | :--- | | **Revenues** | $717.8 | $668.3 | | **Gross Profit** | $310.1 | $266.3 | | **Loss from Operations** | $(297.8) | $(68.7) | | **Net Loss** | $(288.4) | $(223.4) | - The net loss for the year ended Dec 31, 2022, was primarily driven by a **$211.8 million goodwill impairment charge**, increased amortization and depreciation from purchase accounting, and higher SG&A costs associated with being a public company[433](index=433&type=chunk) - Medical segment revenues increased by **$58.6 million** year-over-year, driven by the CIRS acquisition, price increases, and organic growth[459](index=459&type=chunk) - Industrial segment revenues decreased by **$9.1 million** year-over-year, primarily due to project execution delays related to supply chain issues and the Russia-Ukraine conflict, as well as adverse foreign exchange impacts[461](index=461&type=chunk) [Liquidity and Capital Resources](index=91&type=section&id=Liquidity%20and%20Capital%20Resources) As of December 31, 2022, Mirion had $73.5 million in cash and access to a $90.0 million revolving credit facility, with a primary debt of $821.7 million, and generated $39.4 million in operating cash flow Cash and Debt Summary (as of Dec 31, 2022, in millions) | Metric | Value | | :--- | :--- | | **Cash and cash equivalents** | $73.5 | | **Total Debt (Principal)** | $821.7 | | **Revolving Facility Availability** | $80.6 | Cash Flow Summary (Year Ended Dec 31, 2022, in millions) | Cash Flow Category | Value | | :--- | :--- | | **Net cash from operating activities** | $39.4 | | **Net cash used in investing activities** | $(39.5) | | **Net cash used in financing activities** | $(7.0) | - The company's 2021 Credit Agreement includes an **$830.0 million term loan facility** (maturing 2028) and a **$90.0 million revolving facility** (maturing 2026)[520](index=520&type=chunk) - The interest rate on the term loan increased to **7.48%** as of December 31, 2022, up from **3.25%** at the end of 2021, due to rising LIBOR rates[426](index=426&type=chunk)[770](index=770&type=chunk) [Critical Accounting Policies and Estimates](index=95&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Management identifies critical accounting policies requiring significant judgment, including business combinations, goodwill impairment testing, revenue recognition for long-term contracts, income taxes, and derivative warrant liabilities - Business combinations are accounted for using the acquisition method (ASC 805), requiring fair value assessment of acquired assets and liabilities, which involves significant judgment[543](index=543&type=chunk) - Goodwill is tested for impairment annually or when triggering events occur. The test compares the reporting unit's carrying amount to its fair value, which is determined using discounted cash flow models and market approaches[546](index=546&type=chunk)[550](index=550&type=chunk) - Revenue for certain contracts is recognized over time based on costs incurred relative to total estimated costs, requiring significant estimation. A significant change in an estimate could materially affect financial results[554](index=554&type=chunk) - Derivative warrant liabilities are re-measured to fair value at each reporting period, with changes recognized in the statement of operations[562](index=562&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=96&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Mirion is exposed to foreign currency, interest rate, and inflation risks, with a 10% currency fluctuation impacting 2022 revenues by $34.3 million and a 100 basis point interest rate increase raising annual expense by $8.4 million - A hypothetical **10% change in foreign currency exchange rates** against the U.S. dollar would have impacted revenues by approximately **$34.3 million** in the fiscal year ended December 31, 2022[571](index=571&type=chunk) - Based on floating-rate debt levels at December 31, 2022, a **100 basis point (1%) increase** in market interest rates would increase annual interest expense by approximately **$8.4 million**[573](index=573&type=chunk) - The company is experiencing significant inflationary pressure on operating costs, including skilled labor, commodities, energy, and freight, which may adversely affect financial results if not offset by price increases[574](index=574&type=chunk) [Financial Statements and Supplementary Data](index=98&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents Mirion's audited consolidated financial statements for 2022, including the auditor's unqualified opinion on financials but an adverse opinion on internal controls due to a material weakness - The independent auditor, Deloitte & Touche LLP, issued an **unqualified opinion** on the financial statements but an **adverse opinion** on the company's internal control over financial reporting as of December 31, 2022, due to a material weakness[581](index=581&type=chunk)[932](index=932&type=chunk) Consolidated Balance Sheet Highlights (in millions) | | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | **Total Assets** | $2,738.7 | $3,118.0 | | **Total Liabilities** | $1,271.5 | $1,334.0 | | **Total Stockholders' Equity** | $1,467.2 | $1,784.0 | Consolidated Statement of Operations Highlights (in millions) | | Year Ended Dec 31, 2022 | | :--- | :--- | | **Total Revenues** | $717.8 | | **Gross Profit** | $310.1 | | **Goodwill Impairment** | $211.8 | | **Net Loss** | $(288.4) | [Notes to Consolidated Financial Statements](index=108&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail accounting policies and financial data, including the 2021 business combination, 2022 goodwill impairment of $211.8 million, the $821.7 million term loan, income taxes, and stock-based compensation - The October 2021 Business Combination was accounted for as an acquisition by GSAH, with total consideration of approximately **$2.6 billion**, resulting in **$1.64 billion of goodwill**[710](index=710&type=chunk)[712](index=712&type=chunk)[715](index=715&type=chunk) - Goodwill impairment charges totaling **$211.8 million** were recorded in the year ended December 31, 2022, triggered by the Russia-Ukraine conflict's impact on a contract and declines in market valuations[753](index=753&type=chunk)[754](index=754&type=chunk)[757](index=757&type=chunk) - As of December 31, 2022, the company had an **$821.7 million outstanding balance** on its 2021 Credit Agreement term loan, with an interest rate of **7.48%**[764](index=764&type=chunk)[770](index=770&type=chunk) - The company adopted ASC 842 for leases on July 1, 2021, recognizing operating lease right-of-use assets of **$40.1 million** and total operating lease liabilities of **$43.3 million** as of December 31, 2022[631](index=631&type=chunk)[801](index=801&type=chunk) [Controls and Procedures](index=164&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were not effective as of December 31, 2022, due to a material weakness in internal control over financial reporting, with a remediation plan underway - A **material weakness** was identified in internal control over financial reporting as of December 31, 2022[923](index=923&type=chunk) - The weakness relates to deficiencies in general information technology controls (GITCs) at the company's division in France, specifically concerning program change-management and user access[925](index=925&type=chunk) - The material weakness did not result in any identified misstatements to the financial statements for the year ended December 31, 2022[926](index=926&type=chunk) - A remediation plan is being implemented, which includes educating IT control owners, developing enhanced controls and reviews, and adding manual business process controls[928](index=928&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=169&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) This section lists key executive officers and confirms the adoption of a Code of Ethics and Business Conduct, with further details incorporated by reference from the 2023 proxy statement - The company's key executive officers include Thomas D. Logan (Founder and CEO), Brian Schopfer (CFO), Christopher Moore (CAO), Loic Eloy (President, Industrial), and Michael Rossi (President, Medical)[946](index=946&type=chunk) - A Code of Ethics and Business Conduct has been adopted and applies to all employees, officers, and directors[952](index=952&type=chunk) [Executive Compensation](index=170&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the company's forthcoming definitive proxy statement for its 2023 annual meeting of stockholders - Details on executive compensation are incorporated by reference from the forthcoming 2023 proxy statement[955](index=955&type=chunk) [Security Ownership of Certain Beneficial Owner and Management and Related Stockholder Matters](index=170&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owner%20and%20Management%20and%20Related%20Stockholder%20Matters) Information on security ownership of beneficial owners and management is incorporated by reference from the company's forthcoming definitive proxy statement for its 2023 annual meeting of stockholders - Information on security ownership is incorporated by reference from the forthcoming 2023 proxy statement[956](index=956&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=170&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Details on certain relationships, related transactions, and director independence are incorporated by reference from the company's forthcoming definitive proxy statement for its 2023 annual meeting of stockholders - Details on related party transactions and director independence are incorporated by reference from the forthcoming 2023 proxy statement[957](index=957&type=chunk) [Principal Accounting Fees and Services](index=170&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information regarding principal accounting fees and services is incorporated by reference from the company's forthcoming definitive proxy statement for its 2023 annual meeting of stockholders - Information on principal accounting fees and services is incorporated by reference from the forthcoming 2023 proxy statement[959](index=959&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=171&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the financial statements, financial statement schedules, and comprehensive exhibits filed as part of the Annual Report on Form 10-K - This section includes the index to consolidated financial statements, financial statement schedules, and a list of all exhibits filed with the report[963](index=963&type=chunk)[964](index=964&type=chunk)[965](index=965&type=chunk)

Mirion Technologies, Inc. (NYSE:MIR) Q4 2022 Earnings Conference Call February 14, 2023 10:00 AM ET Company Participants Alex Gaddy - Vice President, Head, Strategy and Corporate Development Larry Kingsley - Chairman of the Board Tom Logan - Chief Executive Officer Brian Schopfer - Chief Financial Officer Conference Call Participants Andy Kaplowitz - Citigroup Joe Ritchie - Goldman Sachs Chris Moore - CJS Securities Operator Greetings. And welcome to Mirion Technologies Fourth Quarter 2022 Earnings Conferen ...