Mirion Technologies(US:MIR)2024-08-02 20:13PART I - FINANCIAL INFORMATION Financial Statements (Unaudited) Unaudited Q2 2024 financial statements show increased revenue and gross profit, a reduced net loss of $12.0 million, and improved operating cash flow, despite a slight decrease in total assets Unaudited Condensed Consolidated Balance Sheets Total assets decreased to $2.63 billion by June 30, 2024, primarily due to lower intangible assets, while total liabilities decreased to $1.06 billion with warrant liability elimination Condensed Consolidated Balance Sheet Highlights (in millions) | Account | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $122.2 | $128.8 | | Total current assets | $515.4 | $538.6 | | Goodwill | $1,436.4 | $1,447.6 | | Intangible assets, net | $471.9 | $538.8 | | Total assets | $2,627.3 | $2,718.5 | | Total current liabilities | $236.2 | $265.7 | | Third-party debt, non-current | $684.0 | $684.7 | | Warrant liabilities | $0.0 | $55.3 | | Total liabilities | $1,063.2 | $1,168.5 | | Total stockholders' equity | $1,564.1 | $1,550.0 | Unaudited Condensed Consolidated Statements of Operations Q2 2024 saw total revenues of $207.1 million and a gross profit of $97.4 million, resulting in an income from operations of $2.3 million and a reduced net loss of $11.7 million Consolidated Statements of Operations Summary (in millions, except per share data) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $207.1 | $197.2 | $399.7 | $379.3 | | Gross profit | $97.4 | $88.0 | $184.5 | $167.1 | | Income (loss) from operations | $2.3 | $(10.6) | $(2.6) | $(24.2) | | Net loss attributable to Mirion | $(11.7) | $(27.7) | $(37.5) | $(69.6) | | Net loss per share (basic & diluted) | $(0.06) | $(0.14) | $(0.19) | $(0.36) | Unaudited Condensed Consolidated Statements of Cash Flows Net cash from operating activities significantly improved to $21.2 million for H1 2024, while investing activities used $21.8 million and financing activities used $2.8 million Consolidated Cash Flow Summary (in millions) | Cash Flow Activity | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $21.2 | $4.4 | | Net cash used in investing activities | $(21.8) | $(12.9) | | Net cash (used in) provided by financing activities | $(2.8) | $21.8 | | Net (decrease) increase in cash | $(6.7) | $14.1 | Notes to Condensed Consolidated Financial Statements (Unaudited) Notes detail accounting policies, business segments, acquisitions, debt structure, warrant redemption, and ongoing litigation with a Russian customer - The company operates through two reportable segments: Medical (radiation oncology QA, dosimetry) and Technologies (defense, nuclear power, labs)2933 - All public and private warrants were exercised, exchanged, or redeemed during Q2 2024, with no warrants outstanding as of June 30, 2024, and the $60.6 million warrant liability was reclassified to additional paid-in capital444546 - The company is involved in a dispute with a Russian customer who has made claims totaling approximately $21 million for project delays and demanded the return of $10.2 million for a cancelled project109 - On May 22, 2024, the company amended its credit agreement, reducing the applicable margin rate on term loans from 2.75% to 2.25%87 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q2 2024 financial performance, noting a 5.0% revenue increase to $207.1 million, Adjusted EBITDA of $48.8 million, and solid liquidity with $123.8 million in cash Results of Operations Q2 2024 revenues increased by $9.9 million, with gross profit up by $9.4 million, and net loss significantly narrowed to $12.0 million due to revenue growth and strategic gains Revenue by Segment (in millions) | Segment | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | Medical | $73.2 | $68.0 | $140.0 | $134.4 | | Technologies | $133.9 | $129.2 | $259.7 | $244.9 | | Total | $207.1 | $197.2 | $399.7 | $379.3 | Income (Loss) from Operations by Segment (in millions) | Segment | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | Medical | $5.0 | $(3.1) | $6.4 | $(2.4) | | Technologies | $18.5 | $12.8 | $31.1 | $18.3 | | Corporate & Other | $(21.2) | $(20.3) | $(40.1) | $(40.1) | | Total | $2.3 | $(10.6) | $(2.6) | $(24.2) | - The decrease in net loss for Q2 2024 was primarily driven by increased revenues, favorable margins, a $1.2 million gain on the disposal of the Rehab business (compared to a $6.2 million loss in Q2 2023), and a favorable change in the fair value of warrant liabilities209214 Non-GAAP Financial Measures Adjusted EBITDA for Q2 2024 increased to $48.8 million, reflecting improved performance, while the six-month Adjusted EBITDA reached $88.3 million Reconciliation of Net Loss to Adjusted EBITDA (in millions) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | Net loss | $(12.0) | $(28.4) | $(38.5) | $(71.3) | | Interest expense, net | $13.1 | $13.6 | $26.9 | $28.5 | | Income tax (benefit) loss | $0.7 | $(1.2) | $1.9 | $(2.3) | | Amortization & Depreciation | $38.5 | $40.8 | $77.3 | $82.2 | | EBITDA | $40.3 | $24.8 | $67.6 | $37.1 | | Adjustments | $8.5 | $19.5 | $20.7 | $43.8 | | Adjusted EBITDA | $48.8 | $44.3 | $88.3 | $80.9 | Liquidity and Capital Resources As of June 30, 2024, the company maintained $123.8 million in cash and $72.2 million available on its revolver, with sufficient liquidity for the next 12 months - The company holds $123.8 million in cash and cash equivalents as of June 30, 2024, with $101.8 million held by entities outside the U.S249 - The 2021 Credit Agreement includes a term loan facility maturing in October 2028 and a $90.0 million revolving facility maturing in October 2026, with $72.2 million available as of June 30, 2024249252 Quantitative and Qualitative Disclosures about Market Risk No material changes to market risk disclosures have occurred since the 2023 Annual Report on Form 10-K - There are no material changes to the disclosures regarding market risk compared to the 2023 Form 10-K266 Controls and Procedures Management concluded that disclosure controls and procedures were effective as of June 30, 2024, with no material changes to internal control over financial reporting - The CEO and CFO concluded that as of June 30, 2024, the company's disclosure controls and procedures were effective269 - No changes occurred during the quarter ended June 30, 2024, that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting270 PART II - OTHER INFORMATION Legal Proceedings The company is involved in various legal proceedings, with details in Note 10, and expects no material financial impact from current matters - For details on legal proceedings, the report refers to Note 10 of the financial statements, which discusses claims from a Russian customer272 Risk Factors No material changes to risk factors have been identified since the 2023 Annual Report on Form 10-K - No material changes to risk factors have been identified since the 2023 Annual Report273 Other Information CFO Brian Schopfer terminated a Rule 10b5-1 trading plan on May 2, 2024 - CFO Brian Schopfer terminated a Rule 10b5-1 trading arrangement on May 2, 2024274275 Exhibits This section lists exhibits filed with the Form 10-Q, including CEO/CFO certifications and XBRL data files