Mirion Technologies(MIR) - 2024 Q1 - Quarterly Report

Introduction This section introduces financial reporting distinctions and a cautionary note on forward-looking statements Introductory Note Mirion Technologies completed its Business Combination, establishing 'Predecessor' and 'Successor' financial periods - Mirion Technologies, Inc. completed its Business Combination on October 20, 2021, leading to a distinction in financial reporting between 'Predecessor' and 'Successor' periods[6][7][8] - Successor Period financial statements are presented on a full step-up basis due to the acquisition method of accounting, making them not comparable to Predecessor Period statements[8] Cautionary Note Regarding Forward-Looking Statements This section warns of forward-looking statements subject to risks and uncertainties, not guaranteed to be updated - The report contains forward-looking statements based on current expectations, beliefs, and assumptions, which are not guarantees of future performance[10][11] - Key risks and uncertainties include changes in domestic and foreign business conditions, government budgets, international conflicts (Russia-Ukraine, Middle East), public perception of nuclear technologies, and supply chain challenges[11][12][17] - The company uses its investor relations website, SEC filings, press releases, and social media to communicate material information[16] PART I - FINANCIAL INFORMATION This part presents unaudited financial statements, management's discussion, and market risk disclosures ITEM 1. Financial Statements (Unaudited) This section presents Mirion's unaudited condensed consolidated financial statements, including core financial statements Unaudited Condensed Consolidated Balance Sheets This section provides a snapshot of the company's assets, liabilities, and equity at specific dates | Metric (in millions) | March 31, 2024 | December 31, 2023 | | :------------------- | :------------- | :---------------- | | Total current assets | $514.6 | $538.6 | | Total assets | $2,648.7 | $2,718.5 | | Total current liabilities | $234.6 | $265.7 | | Total liabilities | $1,130.8 | $1,168.5 | | Total stockholders' equity | $1,517.9 | $1,550.0 | - Total assets decreased by $69.8 million, and total liabilities decreased by $37.7 million from December 31, 2023, to March 31, 2024[23] Unaudited Condensed Consolidated Statements of Operations This section details the company's revenues, expenses, and net loss over specific reporting periods | Metric (in millions, except per share data) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | | Total revenues | $192.6 | $182.1 | | Gross profit | $87.1 | $79.1 | | Loss from operations | $(4.9) | $(13.6) | | Net loss | $(26.5) | $(42.9) | | Net loss attributable to Mirion Technologies, Inc. | $(25.8) | $(41.9) | | Net loss per common share (basic and diluted) | $(0.13) | $(0.22) | - Total revenues increased by $10.5 million (5.8%) year-over-year, while net loss decreased by $16.4 million (38.2%) for the three months ended March 31, 2024[25] Unaudited Condensed Consolidated Statements of Comprehensive Loss This section presents net loss and other comprehensive income or loss components for reporting periods | Metric (in millions) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :------------------- | :-------------------------------- | :-------------------------------- | | Net loss | $(26.5) | $(42.9) | | Other comprehensive (loss) income, net of tax | $(9.2) | $8.3 | | Comprehensive loss | $(35.7) | $(34.6) | | Comprehensive loss attributable to Mirion Technologies, Inc. | $(34.7) | $(33.9) | - Other comprehensive loss, net of tax, shifted from a gain of $8.3 million in Q1 2023 to a loss of $9.2 million in Q1 2024, primarily due to foreign currency translation loss[27] Unaudited Condensed Consolidated Statements of Stockholders' Equity This section outlines changes in the company's equity accounts, including net loss and comprehensive loss | Metric (in millions) | Balance December 31, 2023 | Balance March 31, 2024 | | :------------------- | :------------------------ | :--------------------- | | Additional paid-in capital | $2,056.5 | $2,063.9 | | Accumulated deficit | $(505.4) | $(531.2) | | Accumulated other comprehensive loss | $(65.3) | $(74.2) | | Total stockholders' equity | $1,550.0 | $1,517.9 | - Total stockholders' equity decreased by $32.1 million from December 31, 2023, to March 31, 2024, mainly due to net loss and increased accumulated other comprehensive loss[30] Unaudited Condensed Consolidated Statements of Cash Flows This section summarizes cash inflows and outflows from operating, investing, and financing activities | Metric (in millions) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :------------------- | :-------------------------------- | :-------------------------------- | | Net cash provided by (used in) operating activities | $6.0 | $(2.7) | | Net cash used in investing activities | $(12.9) | $(7.5) | | Net cash provided by financing activities | $0.2 | $24.6 | | Net (decrease) increase in cash, cash equivalents, and restricted cash | $(8.8) | $15.1 | - Operating activities generated $6.0 million in cash in Q1 2024, a significant improvement from a $2.7 million cash usage in Q1 2023[33] - Investing activities used more cash in Q1 2024 ($12.9 million) compared to Q1 2023 ($7.5 million), primarily due to increased purchases of property, plant, and equipment[33] Notes to Condensed Consolidated Financial Statements (Unaudited) This section provides detailed disclosures for financial statements, covering business, policies, and specific items Note 1. Nature of Business and Summary of Significant Accounting Policies This note describes Mirion's business operations and outlines its significant accounting policies - Mirion Technologies, Inc. is a global provider of radiation detection, measurement, analysis, and monitoring products and services for medical, nuclear, and defense markets[36] - The company operates through two reportable segments: Medical (radiation oncology QA, dosimetry, radionuclide therapy) and Technologies (personal radiation detection, nuclear power plant tools)[37][41] - No material changes occurred in significant accounting policies during the three months ended March 31, 2024, compared to the prior fiscal year[43] Prepaid Expenses and Other Current Assets (in millions) | Prepaid Expenses and Other Current Assets (in millions) | March 31, 2024 | December 31, 2023 | | :-------------------------------------- | :------------- | :---------------- | | Prepaid insurance | $2.3 | $1.0 | | Prepaid vendor deposits | $7.3 | $7.6 | | Prepaid software licenses | $3.9 | $3.5 | | Short-term marketable securities | $5.4 | $5.3 | | Income tax receivable and prepaid income taxes | $1.0 | $8.0 | | Other tax receivables | $1.4 | $1.4 | | Other current assets | $17.2 | $17.3 | | Total | $38.5 | $44.1 | Note 2. Business Combinations and Acquisitions This note details the company's recent business combinations and acquisition activities - On November 1, 2023, Mirion acquired ec2 Software Solutions, LLC and NUMA LLC for $31.4 million, integrating them into the Medical segment to expand software offerings[65] - Measurement period adjustments in Q1 2024 resulted in a $0.6 million net increase in goodwill and a $0.3 million net increase in intangible assets related to the ec2 acquisition[65] Note 3. Contracts in Progress This note provides information on the company's contracts in progress and related revenue recognition Contracts in Progress (in millions) | Contracts in Progress (in millions) | March 31, 2024 | December 31, 2023 | | :---------------------------------- | :------------- | :---------------- | | Costs incurred on contracts | $353.1 | $324.5 | | Estimated earnings | $211.8 | $208.7 | | Contracts in progress | $564.9 | $533.2 | | Less: billings to date | $(524.3) | $(511.3) | | Net contracts in progress | $40.6 | $21.9 | - The net balance of contracts in progress increased from $21.9 million at December 31, 2023, to $40.6 million at March 31, 2024[69] - The Company recognized $17.6 million in revenue related to contract liabilities from December 31, 2023, during the three months ended March 31, 2024[70] Note 4. Inventories This note details the composition and changes in the company's inventory balances Inventory Components (in millions) | Inventory Components (in millions) | March 31, 2024 | December 31, 2023 | | :--------------------------------- | :------------- | :---------------- | | Raw materials | $66.5 | $67.2 | | Work in progress | $36.7 | $35.3 | | Finished goods | $43.6 | $41.6 | | Total inventories | $146.8 | $144.1 | - Total inventories increased by $2.7 million from December 31, 2023, to March 31, 2024, driven by increases in work in progress and finished goods[71] Note 5. Property, Plant and Equipment, Net This note provides details on the company's property, plant, and equipment, including depreciation Property, Plant and Equipment, Net (in millions) | Property, Plant and Equipment, Net (in millions) | March 31, 2024 | December 31, 2023 | | :----------------------------------------------- | :------------- | :---------------- | | Land, buildings, and leasehold improvements | $49.9 | $49.4 | | Machinery and equipment | $39.6 | $38.5 | | Badges | $44.2 | $41.0 | | Furniture, fixtures, computer equipment and other | $22.9 | $22.9 | | Software development costs | $11.0 | $10.7 | | Construction in progress | $32.5 | $28.6 | | Total gross PPE | $200.1 | $191.1 | | Less: accumulated depreciation and amortization | $(61.8) | $(56.6) | | Net PPE | $138.3 | $134.5 | - Net property, plant, and equipment increased by $3.8 million from December 31, 2023, to March 31, 2024, primarily due to an increase in construction in progress and badges[72] Depreciation Expense (in millions) | Depreciation Expense (in millions) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--------------------------------- | :-------------------------------- | :-------------------------------- | | Cost of revenues | $5.3 | $4.7 | | Operating expenses | $2.0 | $2.9 | Note 6. Accrued Expenses and Other Current Liabilities This note outlines the components of accrued expenses and other current liabilities Accrued Expenses and Other Current Liabilities (in millions) | Accrued Expenses and Other Current Liabilities (in millions) | March 31, 2024 | December 31, 2023 | | :----------------------------------------------------------- | :------------- | :---------------- | | Compensation and related benefit costs | $34.7 | $41.8 | | Customer deposits | $8.0 | $8.5 | | Accrued commissions | $0.3 | $0.3 | | Accrued warranty costs | $4.9 | $4.5 | | Non-income taxes payable | $9.2 | $11.8 | | Pension and other post-retirement obligations | $0.3 | $0.3 | | Income taxes payable | $2.7 | $4.2 | | Derivative liability | $7.7 | $10.7 | | Other accrued expenses | $11.2 | $13.5 | | Total | $79.0 | $95.6 | - Total accrued expenses and other current liabilities decreased by $16.6 million from December 31, 2023, to March 31, 2024, primarily due to decreases in compensation and related benefit costs, non-income taxes payable, and derivative liability[74] Note 7. Goodwill and Intangible Assets This note details the company's goodwill and intangible assets, including impairment assessments - Goodwill is assessed for impairment annually and upon triggering events; no impairment was recognized for the three months ended March 31, 2024 or 2023[76][80] Goodwill (in millions) | Goodwill (in millions) | Medical | Technologies | Consolidated | | :--------------------- | :------ | :----------- | :----------- | | Balance—December 31, 2023 | $633.4 | $814.2 | $1,447.6 | | Measurement period adjustment | $0.6 | — | $0.6 | | Translation adjustment | — | $(8.0) | $(8.0) | | Balance—March 31, 2024 | $634.0 | $806.2 | $1,440.2 | Intangible Assets (Net Book Value in millions) | Intangible Assets (Net Book Value in millions) | March 31, 2024 | December 31, 2023 | | :--------------------------------------------- | :------------- | :---------------- | | Customer relationships | $183.4 | $197.7 | | Distributor relationships | $43.1 | $44.9 | | Developed technology | $187.2 | $196.3 | | Trade names | $74.6 | $77.6 | | Backlog and other | $16.0 | $22.3 | | Total | $504.3 | $538.8 | - Total intangible assets, net, decreased by $34.5 million from December 31, 2023, to March 31, 2024, primarily due to amortization[83] Note 8. Borrowings This note provides information on the company's debt obligations and borrowing arrangements Third-Party Debt (in millions) | Third-Party Debt (in millions) | March 31, 2024 | December 31, 2023 | | :----------------------------- | :------------- | :---------------- | | 2021 Credit Agreement | $694.6 | $694.6 | | Canadian Financial Institution | $1.0 | $1.0 | | Other | $1.7 | $2.8 | | Total third-party debt | $697.3 | $698.4 | | Less: third-party debt, current | $(0.1) | $(1.2) | | Less: deferred financing costs | $(11.8) | $(12.5) | | Third-party debt, non-current | $685.4 | $684.7 | - The 2021 Credit Agreement includes an $830.0 million senior secured first lien term loan (maturing October 2028) and a $90.0 million senior secured revolving facility (expiring October 2026)[87] - The term loan interest rate was 8.36% as of March 31, 2024, and 8.40% as of December 31, 2023. No principal payments are due on the term loan until expiration, following a $125.0 million early repayment in Q1 2023[92][93] Contractual Principal Payments (in millions) | Contractual Principal Payments (in millions) | Amount | | :------------------------------------------- | :----- | | Remainder of 2024 | $0.1 | | Fiscal year ending December 31, 2025 | $0.1 | | Fiscal year ending December 31, 2026 | $1.7 | | Fiscal year ending December 31, 2027 | $0.1 | | Fiscal year ending December 31, 2028 | $694.7 | | Thereafter | $0.6 | | Gross Payments | $697.3 | | Unamortized debt issuance costs | $(11.8)| | Total third-party borrowings, net | $685.5 | Note 9. Leased Assets This note details the company's operating lease assets and liabilities Lease Assets and Liabilities (in millions) | Lease Assets and Liabilities (in millions) | March 31, 2024 | December 31, 2023 | | :----------------------------------------- | :------------- | :---------------- | | Operating lease right-of-use assets | $31.1 | $32.8 | | Total operating lease liabilities | $33.1 | $34.9 | - The weighted average remaining lease term for operating leases was 6.5 years, and the weighted average discount rate was 4.32% as of March 31, 2024[108] - Cash paid for operating lease liabilities was $2.1 million for the three months ended March 31, 2024, down from $2.6 million in the prior year period[109] Note 10. Commitments and Contingencies This note outlines the company's contractual commitments and potential contingent liabilities Unconditional Purchase Obligations (in millions) | Unconditional Purchase Obligations (in millions) | Amount | | :----------------------------------------------- | :----- | | Fiscal year ending December 31, 2024 | $45.6 | | Fiscal year ending December 31, 2025 | $9.5 | | Fiscal year ending December 31, 2026 | $1.1 | | Fiscal year ending December 31, 2027 | $0.6 | | Total | $56.8 | - A Russian customer made claims totaling $21 million (subject to a $14 million contractual cap) for project delays and demanded the return of $10.2 million for a cancelled Finland project; management disputes these claims[113] - A lawsuit alleging copyright infringement and breach of contract by a vendor was settled on March 30, 2024, with no material impact on Q1 2024 financial statements[114] Note 11. Income Taxes This note provides details on the company's income tax provisions and effective tax rates Effective Income Tax Rate | Effective Income Tax Rate | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :------------------------ | :-------------------------------- | :-------------------------------- | | Effective tax rate | (4.7)% | 2.5% | - The effective income tax rate for Q1 2024 was (4.7)%, a decrease from 2.5% in Q1 2023, primarily due to the mix of earnings and the impact of valuation allowances[115] Note 12. Supplemental Disclosures to Condensed Consolidated Statements of Cash Flows This note offers additional details on cash flow activities, including non-cash transactions Supplemental Cash Flow Information (in millions) | Supplemental Cash Flow Information (in millions) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :----------------------------------------------- | :-------------------------------- | :-------------------------------- | | Cash Paid For: | | | | Cash paid for interest | $14.8 | $13.9 | | Cash paid for income taxes | $2.8 | $2.8 | | Non-Cash Investing and Financing Activities: | | | | Property, plant, and equipment purchases in accrued expense and other liabilities | $1.9 | $0.2 | | Property, plant, and equipment purchases in accounts payable | $1.3 | $1.6 | Cash, Cash Equivalents, and Restricted Cash (in millions) | Cash, Cash Equivalents, and Restricted Cash (in millions) | March 31, 2024 | December 31, 2023 | | :-------------------------------------------------------- | :------------- | :---------------- | | Cash and cash equivalents | $120.2 | $128.8 | | Restricted cash—current | $0.4 | $0.6 | | Restricted cash—non-current | $1.1 | $1.1 | | Total | $121.7 | $130.5 | Note 13. Stock-Based Compensation This note describes the company's stock-based compensation plans and related expenses - The 2021 Omnibus Incentive Plan reserved 38,492,328 shares of Class A common stock for awards as of January 1, 2024[120] - In Q1 2024, the Company granted 548,939 RSUs and 453,560 PSUs to employees, with PSUs subject to service, performance (adjusted EBITDA, adjusted cash flow), and market (relative TSR) vesting conditions[121] Stock-Based Compensation Expense (in millions) | Stock-Based Compensation Expense (in millions) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--------------------------------------------- | :-------------------------------- | :-------------------------------- | | Total stock-based compensation expense | $3.6 | $5.6 | | Profits Interests expense | $0.9 | $4.0 | Note 14. Related-Party Transactions This note discloses transactions and relationships with related parties - Founder Shares (18,750,000 Class B common stock) converted to Class A common stock at Business Combination closing, subject to vesting conditions based on Class A common stock price thresholds ($12, $14, $16) before October 20, 2026[130] - The Sponsor purchased 8,500,000 Private Placement Warrants at $2.00 each, exercisable for Class A common stock at $11.50 per share, and are accounted for as derivative liabilities[131][132] - Profits Interests (8,100,000) were issued to certain individuals, subject to service and performance vesting conditions, including Class A common stock price thresholds[133] - Expenses related to secondary offerings by Charterhouse Capital Partners (former majority stockholder) decreased from $0.6 million in Q1 2023 to $0 in Q1 2024, as CCP no longer owns shares[135] Note 15. Segment Information This note provides financial data broken down by the company's operating segments and geographic regions - The Industrial segment was renamed 'Technologies' during Q2 2023[136] Segment Operating Results (in millions) | Segment Operating Results (in millions) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :-------------------------------------- | :-------------------------------- | :-------------------------------- | | Revenues: | | | | Medical | $66.8 | $66.4 | | Technologies | $125.8 | $115.7 | | Consolidated revenues | $192.6 | $182.1 | | Segment Income (Loss) from Operations: | | | | Medical | $1.4 | $0.7 | | Technologies | $12.6 | $5.5 | | Total segment income from operations | $14.0 | $6.2 | | Corporate and other | $(18.9) | $(19.8) | | Consolidated loss from operations | $(4.9) | $(13.6) | Revenues by Geographic Region (in millions) | Revenues by Geographic Region (in millions) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | | North America | $119.0 | $115.9 | | Europe | $67.8 | $58.8 | | Asia Pacific | $5.8 | $7.4 | | Total revenues | $192.6 | $182.1 | Revenues by Timing of Recognition (in millions) | Revenues by Timing of Recognition (in millions) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :---------------------------------------------- | :-------------------------------- | :-------------------------------- | | Point in time | $126.9 | $118.3 | | Over time | $65.7 | $63.8 | | Total revenues | $192.6 | $182.1 | Note 16. Fair Value Measurements This note details the fair value measurements of financial instruments Fair Value Measurements (in millions) | Fair Value Measurements (in millions) | March 31, 2024 (Level 1) | March 31, 2024 (Level 2) | December 31, 2023 (Level 1) | December 31, 2023 (Level 2) | | :------------------------------------ | :----------------------- | :----------------------- | :-------------------------- | :-------------------------- | | Public warrants | $42.0 | — | $38.1 | — | | Private placement warrants | — | $19.0 | — | $17.3 | | Cross-currency rate swaps | — | $17.1 | — | $23.3 | - The fair value of Public Warrants is measured based on listed market price (Level 1), while Private Placement Warrants are valued equivalently to Public Warrants (Level 2)[144][145] - An unrealized loss of $5.7 million was recognized in Q1 2024 due to an increase in the fair value of warrant liabilities, a reduction from the $13.4 million loss in Q1 2023[146] Note 17. Derivatives and Hedging This note describes the company's use of derivative instruments for risk management - Mirion uses cross-currency rate swaps (CCRS) to manage currency risks for EUR-denominated operations and an interest rate swap to mitigate interest rate fluctuations on Credit Facilities[147] Derivative Instruments (Fair Value in millions) | Derivative Instruments (Fair Value in millions) | March 31, 2024 | December 31, 2023 | | :---------------------------------------------- | :------------- | :---------------- | | Assets: | | | | Accrued Interest Receivable on Cross-Currency Rate Swaps | $0.1 | $0.1 | | Interest Rate Swap | $0.9 | $0.1 | | Total assets | $1.0 | $0.2 | | Liabilities: | | | | Cross-Currency Rate Swaps (current) | $7.7 | $10.7 | | Cross-Currency Rate Swaps (non-current) | $9.5 | $12.6 | | Total liabilities | $17.2 | $23.3 | Net Investment Hedges (Notional Amount in millions) | Net Investment Hedges (Notional Amount in millions) | March 31, 2024 | December 31, 2023 | Gain (Loss) Recognized in AOCL (Q1 2024) | Gain (Loss) Recognized in AOCL (Q1 2023) | | :-------------------------------------------------- | :------------- | :---------------- | :--------------------------------------- | :--------------------------------------- | | Cross-currency rate swaps | €238.8 | €238.8 | $6.2 | $(2.9) | Note 18. Loss Per Share This note presents the calculation of basic and diluted loss per share Loss Per Share (in millions, except per share amounts) | Loss Per Share (in millions, except per share amounts) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :----------------------------------------------------- | :-------------------------------- | :-------------------------------- | | Net loss attributable to Mirion Technologies, Inc. shareholders | $(25.8) | $(41.9) | | Weighted average common shares outstanding – basic and diluted | 199.729 | 187.701 | | Net loss per common share – basic and diluted | $(0.13) | $(0.22) | - Potentially dilutive common shares (warrants, founder shares, stock-based awards) were excluded from diluted EPS calculations for Q1 2024 and Q1 2023 because their inclusion would be anti-dilutive due to net losses[154][160][162] - Class B common stock has voting rights but no economic interest and is excluded from EPS calculations[159] Note 19. Restructuring This note provides information on restructuring activities and associated expenses - No restructuring expenses were incurred for the three months ended March 31, 2024, compared to $1.4 million in Q1 2023[165] Restructuring Expenses (in millions) | Restructuring Expenses (in millions) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Medical | $— | $0.3 | | Technologies | $— | $0.1 | | Corporate and other | $— | $1.0 | | Total | $— | $1.4 | Note 20. Noncontrolling Interests This note explains the nature and amount of noncontrolling interests in the company - Noncontrolling interests represent the portion of IntermediateCo Class B shares not attributable to Mirion Technologies, Inc[167][169] - As of March 31, 2024, noncontrolling interests were $60.7 million, representing 7,326,423 shares (3.2%) of non-voting Class B shares of IntermediateCo, down from 8,560,540 shares (4%) at the Closing Date[169][170] Note 21. Accumulated Other Comprehensive Loss This note details the components of accumulated other comprehensive loss Components of AOCL (in millions) | Components of AOCL (in millions) | March 31, 2024 | December 31, 2023 | | :------------------------------- | :------------- | :---------------- | | Cumulative foreign currency translation adjustment, net of tax | $(67.0) | $(52.4) | | Unrealized gain on pension and postretirement benefit plans, net of tax | $2.0 | $2.0 | | Unrealized loss on net investment hedges, net of tax | $(13.1) | $(17.9) | | Unrealized gain on cash flow hedges, net of tax | $0.7 | $0.1 | | Less: cumulative loss attributable to noncontrolling interests | $(3.2) | $(2.9) | | Accumulated other comprehensive loss | $(74.2) | $(65.3) | - Accumulated other comprehensive loss increased by $8.9 million from December 31, 2023, to March 31, 2024, primarily due to a higher cumulative foreign currency translation adjustment loss[171] Note 22. Subsequent Events This note discloses significant events that occurred after the balance sheet date - On April 18, 2024, Mirion announced the redemption of all Public Warrants, effective May 20, 2024, at $0.10 per warrant if not exercised[172] - Public Warrant holders can exercise for $11.50 cash per warrant or on a 'cashless' basis, receiving 0.220 shares of Class A Common Stock per warrant[172] ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Mirion's financial condition, operational results, key performance factors, and liquidity Overview (MD&A) This overview describes Mirion's business and key factors influencing its financial performance - Mirion is a global provider of radiation detection, measurement, analysis, and monitoring products and services for medical, nuclear, and defense markets[175][176] - Key factors affecting performance include international conflicts (Russia-Ukraine, Middle East), inflation and interest rates, tariffs/sanctions, medical end market trends, strategic transactions, environmental objectives, government budgets, nuclear new build projects, research and development, and global risks[178][180] Revenue Contribution by Segment | Revenue Contribution by Segment | Q1 2024 | Q1 2023 | | :------------------------------ | :------ | :------ | | Medical segment | 34.7% | 36.5% | | Technologies segment | 65.3% | 63.5% | Backlog (in millions) | Backlog (in millions) | March 31, 2024 | December 31, 2023 | | :-------------------- | :------------- | :---------------- | | Total backlog | $840.5 | $857.1 | Non-GAAP Financial Measures This section defines and reconciles non-GAAP financial measures used by management to assess performance - Management uses non-GAAP measures like EBITA, EBITDA, and Adjusted EBITDA to assess performance and make operational decisions[181][182] Non-GAAP Financial Measures (in millions) | Non-GAAP Financial Measures (in millions) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :---------------------------------------- | :-------------------------------- | :-------------------------------- | | Net loss | $(26.5) | $(42.9) | | EBITA | $20.0 | $4.5 | | EBITDA | $27.3 | $12.3 | | Adjusted EBITDA | $39.5 | $36.6 | - Adjusted EBITDA increased by $2.9 million (7.9%) year-over-year, reaching $39.5 million in Q1 2024[184] Adjusted EBITDA by Segment (in millions) | Adjusted EBITDA by Segment (in millions) | Medical (Q1 2024) | Technologies (Q1 2024) | Corporate & Other (Q1 2024) | Consolidated (Q1 2024) | | :--------------------------------------- | :---------------- | :--------------------- | :-------------------------- | :----------------------- | | Adjusted EBITDA | $20.5 | $33.1 | $(14.1) | $39.5 | | Adjusted EBITDA by Segment (in millions) | Medical (Q1 2023) | Technologies (Q1 2023) | Corporate & Other (Q1 2023) | Consolidated (Q1 2023) | | :--------------------------------------- | :---------------- | :--------------------- | :-------------------------- | :----------------------- | | Adjusted EBITDA | $20.4 | $28.5 | $(12.3) | $36.6 | Our Business Segments This section describes the company's Medical and Technologies operating segments - The Medical segment provides radiation therapy and personal dosimetry solutions, including quality assurance, monitoring, and nuclear medicine products[189] - The Technologies segment offers products and services for defense, nuclear energy, laboratories, and industrial markets, including Reactor Safety and Control Systems and Radiological Search, Measurement and Analysis Systems[190] Recent Developments This section highlights recent events impacting the company's operations and financial position - The Russia-Ukraine conflict continues to impact the Technologies segment, with $0.7 million in net contract assets and accounts receivable for Russian customers and $153.7 million in remaining performance obligations for Russian-related projects[190] - Interest rates on the 2021 Credit Agreement term loan increased to 8.36% as of March 31, 2024, from 7.48% as of March 31, 2023, due to central bank rate hikes[193] - The Biodex Rehabilitation business was sold on April 3, 2023, impacting year-over-year comparisons for the Medical segment[194] - Mirion acquired ec2 Software Solutions LLC and NUMA LLC on November 1, 2023, for $33 million, enhancing its Medical segment's software offerings[195] - The company announced the redemption of all Public Warrants on April 18, 2024, effective May 20, 2024, at $0.10 per warrant if unexercised[196] Results of Operations This section analyzes the company's revenues, expenses, and net loss for the reporting periods Results of Operations (in millions) | Results of Operations (in millions) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :---------------------------------- | :-------------------------------- | :-------------------------------- | | Revenues | $192.6 | $182.1 | | Cost of revenues | $105.5 | $103.0 | | Gross profit | $87.1 | $79.1 | | Selling, general and administrative expenses | $84.1 | $85.1 | | Research and development | $7.9 | $7.6 | | Loss from operations | $(4.9) | $(13.6) | | Net loss | $(26.5) | $(42.9) | - Total revenues increased by $10.5 million (5.8%) year-over-year, driven by price increases, organic volume growth, and the ec2 acquisition in Medical, and price increases, organic volume growth, and better product mix in Technologies[201][202][203] - Net loss decreased by $16.4 million, primarily due to increased revenues in the Technologies segment, lower net interest expense, decreased amortization, reduced stock-based compensation, and a smaller increase in warrant liabilities' fair value[200] - Selling, general and administrative (SG&A) expenses decreased by $1.0 million, mainly due to a net decrease in stock-based compensation expense, partially offset by inflation and acquisition-related costs[206][207][208] - Interest expense, net, decreased by $1.1 million due to a $125.0 million early debt repayment and interest from derivatives, partially offset by higher interest rates[212] - The change in fair value of warrant liabilities resulted in a $5.7 million unrealized loss in Q1 2024, a $7.7 million reduction in loss compared to Q1 2023[214] Business segments (MD&A detail) This section provides a detailed analysis of the financial performance of each business segment Medical Segment Performance (in millions) | Medical Segment Performance (in millions) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :---------------------------------------- | :-------------------------------- | :-------------------------------- | | Revenues | $66.8 | $66.4 | | Income from operations | $1.4 | $0.7 | | Income from operations as a % of revenues | 2.1% | 1.1% | - Medical segment revenues increased by $0.4 million, driven by price increases, organic growth, and the ec2 acquisition, partially offset by the disposal of the Rehab business and ERP system implementation delays[218] Technologies Segment Performance (in millions) | Technologies Segment Performance (in millions) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--------------------------------------------- | :-------------------------------- | :-------------------------------- | | Revenues | $125.8 | $115.7 | | Income from operations | $12.6 | $5.5 | | Income from operations as a % of revenues | 10.0% | 4.8% | - Technologies segment revenues increased by $10.1 million, primarily due to price increases, organic growth, and a better product mix, partially offset by project execution delays[219] Corporate and other (MD&A detail) This section details corporate-level expenses and other unallocated costs Corporate and Other Costs (in millions) | Corporate and Other Costs (in millions) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :-------------------------------------- | :-------------------------------- | :-------------------------------- | | Corporate and other costs | $18.9 | $19.8 | - Corporate and other costs decreased by $0.9 million, mainly due to a net decrease in stock-based compensation expense, partially offset by increased compensation costs[222] Liquidity and Capital Resources This section discusses the company's cash position, debt, and ability to meet financial obligations - Mirion believes net cash from operating activities, augmented by long-term debt, will provide adequate liquidity for the next 12 months[224] Cash and Cash Equivalents (in millions) | Cash and Cash Equivalents (in millions) | March 31, 2024 | December 31, 2023 | | :-------------------------------------- | :------------- | :---------------- | | Cash and cash equivalents | $120.2 | $128.8 | | Non-U.S. cash | $95.4 | $105.4 | - The 2021 Credit Agreement provides for a $90.0 million revolving facility, with $73.6 million available as of March 31, 2024[94][228] Cash Flows (in millions) | Cash Flows (in millions) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :----------------------- | :-------------------------------- | :-------------------------------- | | Operating activities | $6.0 | $(2.7) | | Investing activities | $(12.9) | $(7.5) | | Financing activities | $0.2 | $24.6 | - Net cash provided by operating activities increased by $8.7 million, primarily due to improvements in changes in operating assets and liabilities[233] - Net cash used in investing activities increased by $5.4 million, mainly due to higher purchases of property, plant, equipment, and badges[234] - Net cash provided by financing activities decreased by $24.4 million, primarily due to $150.0 million gross proceeds from a direct investment in the prior year, partially offset by $125.0 million in debt repayments[235] Critical Accounting Policies and Estimates This section outlines the significant accounting policies and estimates requiring management judgment - No material changes occurred in critical accounting policies and estimates during the three months ended March 31, 2024, from those described in the 2023 Annual Report on Form 10-K[237] Recent Accounting Pronouncements (MD&A) This section refers to disclosures on recently adopted or issued accounting pronouncements - Refer to Note 1 for information on recent accounting pronouncements[238] ITEM 3. Quantitative and Qualitative Disclosures about Market Risk This section reports no material changes to market risk disclosures from the prior annual report - No material changes to market risk disclosures for the three months ended March 31, 2024, compared to the Annual Report on Form 10-K for 2023[239] ITEM 4. Controls and Procedures Management confirms effective disclosure controls and procedures, with no material internal control changes - The CEO and CFO concluded that disclosure controls and procedures were effective as of March 31, 2024[241] - No material changes occurred in internal control over financial reporting during the quarter ended March 31, 2024[243] PART II - OTHER INFORMATION This part includes legal proceedings, risk factors, equity sales, and other miscellaneous disclosures ITEM 1. Legal Proceedings This section refers to Note 10 for legal proceedings, noting no material expected impact - Refer to Note 10 for details on legal proceedings and claims[246] - The disposition of pending or threatened legal actions is not expected to materially affect the company's business, results of operations, or financial condition, but outcomes are uncertain[246] ITEM 1A. Risk Factors This section reports no material changes to previously disclosed risk factors or new undisclosed risks - No material changes to risk factors previously disclosed in the 2023 Annual Report on Form 10-K[248] - No previously undisclosed risks that could materially adversely affect the business and financial results have been identified[248] ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds This item is not applicable, indicating no unregistered equity sales or use of proceeds for the period - This item is not applicable for the reporting period[249] ITEM 3. Defaults Upon Senior Securities This item reports no defaults upon senior securities during the reporting period - No defaults upon senior securities occurred during the reporting period[251] ITEM 4. Mine Safety Disclosures This item is not applicable, indicating no mine safety disclosures are required for the period - This item is not applicable for the reporting period[253] ITEM 5. Other Information This section discloses officers' adoption of Rule 10b5-1 trading arrangements for company securities Officer Rule 10b5-1 Trading Arrangements | Name and Title | Action | Applicable Date | Duration of Trading Arrangement | Rule 10b5-1 Trading Arrangement? (Y/N) | Aggregate Number of Securities Subject to Trading Arrangement | | :--------------- | :----- | :-------------- | :------------------------------ | :------------------------------------- | :---------------------------------------------------------- | | Thomas D. Logan, Chief Executive Officer | Adopt | February 27, 2024 | May 25, 2024 - April 30, 2025 | Y | 90,000 | | Brian Schopfer, Chief Financial Officer | Adopt | February 26, 2024 | June 11, 2024 - June 11, 2025 | Y | 182,195 | | Emmanuelle Lee, Chief Legal Officer, Chief Compliance Officer and Corporate Secretary | Adopt | March 7, 2024 | June 6, 2024 - February 28, 2025 | Y | 50,000 | - Brian Schopfer intends to terminate his Rule 10b5-1 trading plan when the Company trading window opens during the second quarter of 2024[258] ITEM 6. Exhibits This section lists all exhibits filed or incorporated by reference in the Quarterly Report on Form 10-Q - The exhibit index includes organizational documents, employment agreements, stock unit forms, and certifications[264] - Certifications furnished in Exhibits 32.1 and 32.2 are deemed to accompany the report but are not 'filed' for Section 18 purposes of the Securities Exchange Act of 1934[265] SIGNATURES This section contains duly authorized signatures of Mirion Technologies' principal executive and financial officers Authorized Signatures | Name | Title | Date | | :-------------- | :-------------------------- | :--------- | | Thomas D. Logan | Chief Executive Officer and Director | May 1, 2024 | | Brian Schopfer | Chief Financial Officer | May 1, 2024 | | Christopher Moore | Chief Accounting Officer | May 1, 2024 |