Filed Pursuant to Rule 424(b)(3)

Registration No. 333-260528

Prospectus Supplement No. 2

(to prospectus dated November 4, 2021)

 

Mirion Technologies, Inc.

Up to 8,560,540 Shares of our Class A Common Stock Issuable upon

Redemption of Shares of IntermediateCo Class B Common Stock

Up to 27,249,979 Shares of our Class A Common Stock Issuable upon

Exercise of Warrants

152,157,565 Shares of our Class A Common Stock for Resale by the

Selling Holders

This prospectus supplement is being filed to update and supplement the information contained in the prospectus dated November 4, 2021 (the “Prospectus”), which forms part of our registration statement on Form S-1 (No. 333-260528) with the information contained in our Current Report on Form 8-K, filed with the Securities and Exchange Commission (the “SEC”) on October 25, 2021 (the “Current Report”). Accordingly, we have attached the Current Report to this prospectus supplement.

The Prospectus and this prospectus supplement relate to: (1) the issuance by us of up to an aggregate of 35,810,519 shares of Class A common stock, par value $0.0001 per share (“Class A common stock”), of Mirion Technologies, Inc. (the “Company”) that may be issued upon (i) the exercise of 27,249,979 warrants to purchase Class A common stock at an exercise price of $11.50 per share of Class A common stock, including the public warrants and the private placement warrants (each as defined in the Prospectus), and (ii) the redemption of up to 8,560,540 shares of Class B common stock, par value $0.0001 per share (the “IntermediateCo Class B common stock”), of Mirion IntermediateCo, Inc. (“IntermediateCo”); and (2) the offer and sale, from time to time, by the selling holders identified in the Prospectus (the “Selling Holders”), or their permitted transferees, of up to 152,157,565 shares of Class A common stock.

This prospectus supplement updates and supplements the information in the Prospectus and is not complete without, and may not be delivered or utilized except in combination with, the Prospectus, including any amendments or supplements thereto. This prospectus supplement should be read in conjunction with the Prospectus and if there is any inconsistency between the information in the Prospectus and this prospectus supplement, you should rely on the information in this prospectus supplement. Terms used in this prospectus supplement but not defined herein shall have the meanings given to such terms in the Prospectus.

We are an “emerging growth company” as defined in Section 2(a) of the Securities Act and are subject to reduced public company reporting requirements. We expect that we will cease to be an emerging growth company as of December 31, 2021.

You should read the Prospectus, this prospectus supplement and any additional prospectus supplement or amendment carefully before you invest in our securities. Our Class A common stock and public warrants are listed on The New York Stock Exchange under the symbols “MIR” and “MIR.WS,” respectively. On November 11, 2021, the closing price of our Class A common stock was $11.45 per share and the closing price for our public warrants was $3.06.

Investing in our Class A common stock and warrants involves a high degree of risk. See the section titled “Risk Factors” beginning on page 10 of the Prospectus and in any applicable prospectus supplement.

Neither the SEC nor any other state securities commission has approved or disapproved of these securities or passed on the adequacy or accuracy of the Prospectus or this prospectus supplement. Any representation to the contrary is a criminal offense.

November 12, 2021

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K/A

(Amendment No. 2)

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (date of earliest event reported): October 19, 2021

 

 

Mirion Technologies, Inc.

(Exact Name of Registrant as Specified in Its Charter)

 

 

 

Delaware		001-39352		83-0974996
(State or Incorporation)		(Commission File Number)		(I.R.S. Employer Identification Number)

 

1218 Menlo Drive Atlanta, Georgia 30318
(Address of Principal Executive Offices)

(770) 432-2744

(Registrant’s telephone number, including area code)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Class A common stock, $0.0001 par value per share		MIR		New York Stock Exchange
Redeemable warrants to purchase Class A common stock		MIRW		New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

Introductory Note

This Amendment No. 2 on Form 8-K/A (“Amendment No. 2”) amends Item 2.01 and Item 9.01 of the Current Report on Form 8-K filed on October 25, 2021, which was previously amended by Amendment No. 1 on Form 8-K/A filed on October 25, 2021 (as so amended, the “Original Report”) in which Mirion Technologies, Inc. (the “Company”), reported, among other events, the completion of the Transactions.

This Amendment No. 2 is being filed in order to include (i) under Item 9.01(a) of the Original Report, the unaudited interim condensed consolidated financial statements of Mirion Technologies (TopCo), Ltd. (“Mirion TopCo”) as of September 30, 2021 and for the three months ended September 30, 2021 and 2020 and (ii) under Item 2.01 of the Original Report, the Management’s Discussion and Analysis of Financial Condition and Results of Operations of Mirion TopCo for the three months ended September 30, 2021 and 2020.

This Amendment No. 2 does not amend any other item of the Original Report or purport to provide an update or a discussion of any developments at the Company or its subsidiaries, including Mirion TopCo, subsequent to the filing date of the Original Report. The information previously reported in or filed with the Original Report is hereby incorporated by reference to this Amendment No. 2.

Capitalized terms used herein but not defined herein have the meanings given to such terms in the Original Report.

Item 9.01 Financial Statements and Exhibits.

(a) Financial Statements of Businesses Acquired

The unaudited interim condensed consolidated financial statements of Mirion TopCo and its subsidiaries as of September 30, 2021 and for the three months ended September 30, 2021 and 2020, and the related notes thereto are attached as Exhibit 99.1 and are incorporated herein by reference. Also included as Exhibit 99.2 and incorporated herein by reference is the Management’s Discussion and Analysis of Financial Condition and Results of Operations of Mirion TopCo for the three months ended September 30, 2021 and 2020.

(d)    Exhibits

EXHIBIT INDEX

 

Exhibit Number		Description
99.1*		Unaudited Interim Condensed Consolidated Financial Statements of Mirion Technologies (TopCo), Ltd. and its subsidiaries as of September 30, 2021 and for the three months ended September 30, 2021 and 2020.
99.2*		Management’s Discussion and Analysis of Financial Condition and Results of Operations of Mirion Technologies (TopCo), Ltd. for the three months ended September 30, 2021 and 2020.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

*	Filed herewith.

 

2

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: November 12, 2021

 

Exhibit 99.1

UNAUDITED INTERIM CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS

Mirion Technologies (TopCo), Ltd.

As of September 30, 2021 and June 30, 2021 and for the three

months ended September 30, 2021 and 2020

 

Mirion Technologies (TopCo), Ltd.

Unaudited Interim Condensed Consolidated Financial Statements

As of September 30, 2021 and June 30, 2021 and

for the three months ended September 30, 2021 and 2020

Contents

Unaudited Interim Condensed Consolidated Financial Statements

 

Unaudited Interim Condensed Consolidated Balance Sheets			1
Unaudited Interim Condensed Consolidated Statements of Operations			2
Unaudited Interim Condensed Consolidated Statements of Comprehensive Loss			3
Unaudited Interim Condensed Consolidated Statements of Stockholders’ Deficit			4
Unaudited Interim Condensed Consolidated Statements of Cash Flows			5
Notes to Unaudited Interim Condensed Consolidated Financial Statements			6

 

Mirion Technologies (TopCo), Ltd.

Unaudited Interim Condensed Consolidated Balance Sheets

(In millions, except share data)

 

		September 30, 2021				June 30, 2021
ASSETS
Current assets:
Cash and cash equivalents		$	100.6			$	101.1
Restricted cash			0.8				0.8
Accounts receivable, net of allowance for doubtful accounts of $6.0 and $6.1, respectively			117.6				133.3
Costs in excess of billings on uncompleted contracts			61.4				57.2
Inventories			116.6				113.2
Deferred cost of revenue			0.7				0.3
Prepaid expenses and other currents assets			30.2				28.0
Total current assets			427.9				433.9
Property, plant, and equipment, net			90.5				88.8
Operating ROU assets			43.3				—
Goodwill			675.3				681.5
Intangible assets, net			308.8				326.3
Restricted cash			0.5				0.5
Other assets			17.1				16.2
Total assets		$	1,563.4			$	1,547.2
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable		$	47.4			$	47.1
Deferred contract revenue			59.0				50.4
Notes payable to third-parties, current			5.6				6.4
Operating lease liability, current			9.3				—
Accrued expenses and other current liabilities			78.7				84.3
Total current liabilities			200.0				188.2
Notes payable to related parties, non-current			1,170.4				1,170.5
Notes payable to third-parties, non-current			882.8				885.7
Interest accrued on notes payable to related parties			97.7				64.8
Operating lease liability, non-current			38.9				—
Deferred income taxes and other liabilities			72.6				77.5
Total liabilities			2,462.4				2,386.7
Commitments and contingencies (Note 9)
Stockholders’ deficit:
A Ordinary shares, $0.01 nominal value, 3,000,000 shares authorized, 1,483,795 issued and outstanding at both September 30, 2021 and June 30, 2021			—				—
B Ordinary shares, $0.01 nominal value, 7,000,000 shares authorized, 5,353,970 issued and outstanding at both September 30, 2021 and June 30, 2021			0.1				0.1
Additional paid-in capital			9.5				9.5
Receivable from Employees for purchase of Common Stock			(1.9	)			(2.4	)
Accumulated deficit			(937.6	)			(888.0	)
Accumulated other comprehensive income			28.8				39.2
Mirion Technologies (TopCo), Ltd. stockholders’ deficit			(901.1	)			(841.6	)
Noncontrolling interests			2.1				2.1
Total stockholders’ deficit			(899.0	)			(839.5	)
Total liabilities and stockholders’ deficit		$	1,563.4			$	1,547.2

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

 

1

Mirion Technologies (TopCo), Ltd.

Unaudited Interim Condensed Consolidated Statements of Operations

(In millions, except per share data)

 

		Three months ended September 30,
		2021				2020
Revenues:
Product		$	107.3			$	80.9
Service			37.0				33.7
Total revenues			144.3				114.6
Cost of revenues:
Product			64.5				49.9
Service			17.9				18.0
Total cost of revenues			82.4				67.9
Gross profit			61.9				46.7
Operating expenses:
Selling, general and administrative			62.3				37.6
Research and development			8.5				4.5
Total operating expenses			70.8				42.1
Income (loss) from operations			(8.9	)			4.6
Other expense (income):
Third party interest expense			10.8				10.0
Related party interest expense			33.0				27.9
Foreign currency (gain) loss, net			(1.4	)			8.1
Other expense, net			0.1				—
Loss before provision (benefit) from income taxes			(51.4	)			(41.4	)
Benefit from income taxes			(4.7	)			(1.0	)
Net loss			(46.7	)			(40.4	)
Loss attributable to noncontrolling interests			—				—
Net loss attributable to Mirion Technologies (TopCo), Ltd. stockholders		$	(46.7	)		$	(40.4	)
Basic and Diluted loss per share:
Loss per common share attributable to Mirion Technologies (TopCo), Ltd stockholders – basic and diluted		$	(7.01	)		$	(6.24	)
Weighted average common shares outstanding – basic and diluted			6.665				6.478

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

 

2

Mirion Technologies (TopCo), Ltd.

Unaudited Interim Condensed Consolidated Statements of Comprehensive Loss

(In millions)

 

		Three months ended September 30,
		2021				2020
Net loss		$	(46.7	)		$	(40.4	)
Other comprehensive income (loss), net of tax:
Foreign currency translation gain (loss), net of tax of $0 and $0, respectively			(11.1	)			21.4
Unrecognized actuarial gain and prior service benefit, net of tax of $0 and $0, respectively			0.7				—
Other comprehensive income (loss), net of tax			(10.4	)			21.4
Comprehensive loss			(57.1	)			(19.0	)
Less: Comprehensive income (loss) attributable to noncontrolling interest			—				—
Comprehensive loss attributable to Mirion Technologies (TopCo), Ltd. stockholders		$	(57.1	)		$	(19.0	)

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

 

3

Mirion Technologies (TopCo), Ltd.

Unaudited Interim Condensed Consolidated Statements of Stockholders’ Deficit

(In millions, except share amounts)

 

		Three months ended September 30, 2021
		A Ordinary Shares				A Ordinary Amount				B Ordinary Shares				B Ordinary Amount				Additional Paid-In Capital				Receivable from Employees for purchase of Common Stock				Accumulated Deficit				Accumulated Other Comprehensive Income (Loss)				Noncontrolling Interests				Total Stockholders’ Deficit
Balance June 30, 2021			1,483,795			$	—				5,353,970			$	0.1			$	9.5			$	(2.4	)		$	(888.0	)		$	39.2			$	2.1			$	(839.5	)
Receivable from Employees			—				—				—				—				—				0.5				—				—				—				0.5
Net loss			—				—				—				—				—				—				(46.7	)			—				—				(46.7	)
Impairment loss on lease adoption			—				—				—				—				—				—				(2.9	)			—				—				(2.9	)
Other comprehensive loss			—				—				—				—				—				—				—				(10.4	)			—				(10.4	)
Balance September 30, 2021			1,483,795			$	—				5,353,970			$	0.1			$	9.5			$	(1.9	)		$	(937.6	)		$	28.8			$	2.1			$	(899.0	)

 

		Three months ended September 30, 2020
		A Ordinary Shares				A Ordinary Amount				B Ordinary Shares				B Ordinary Amount				Additional Paid-In Capital				Receivable from Employees for purchase of Common Stock				Accumulated Deficit				Accumulated Other Comprehensive Income (Loss)				Noncontrolling Interests				Total Stockholders’ Deficit
Balance June 30, 2020			1,483,795			$	—				5,353,970			$	0.1			$	9.5			$	(2.7)			$	(729.7)			$	4.1			$	2.2			$	(716.5)
Receivable from Employees			—				—				—				—				—				0.3				—				—				—				0.3
Net loss			—				—				—				—				—				—				(40.4	)							—				(40.4	)
Other comprehensive income			—				—				—				—				—				—				—				21.4				—				21.4
Balance September 30, 2020			1,483,795			$	—				5,353,970			$	0.1			$	9.5			$	(2.4	)		$	(770.1	)		$	25.5			$	2.2			$	(735.2	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

4

Mirion Technologies (TopCo), Ltd.

Unaudited Interim Condensed Consolidated Statements of Cash Flows

(In millions)

 

		Three months ended September 30,
		2021				2020
OPERATING ACTIVITIES:
Net loss		$	(46.7	)		$	(40.4	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Accrual of in-kind interest on notes payable to related parties			32.8				28.4
Depreciation and amortization expense			21.1				16.6
Share-based compensation expense			—				0.1
Amortization of debt issuance costs			0.9				0.6
Provision for doubtful accounts			0.3				—
Inventory obsolescence write down			—				1.1
Change in deferred income taxes			(2.9	)			(0.1	)
Loss on disposal of property, plant and equipment			0.1				0.1
Loss (Gain) on foreign currency transactions			(1.4	)			6.1
Other			1.8				0.2
Changes in operating assets and liabilities:
Accounts receivable			14.2				7.1
Costs in excess of billings on uncompleted contracts			(4.6	)			(7.5	)
Inventories			(4.8	)			(7.2	)
Deferred cost of revenue			(0.4	)			0.1
Prepaid expenses and other current assets			(1.9	)			(0.6	)
Accounts payable			0.9				(4.3	)
Accrued expenses and other current liabilities			(6.9	)			(2.8	)
Deferred contract revenue			10.0				(4.2	)
Other assets			0.7				0.1
Other liabilities			(2.1	)			0.1
Net cash provided by (used in) operating activities			11.1				(6.5	)
INVESTING ACTIVITIES:
Acquisitions of businesses, net of cash and cash equivalents acquired			(0.9	)			(27.2	)
Purchases of property, plant, and equipment and badges			(8.8	)			(5.1	)
Net cash used in investing activities			(9.7	)			(32.3	)
FINANCING ACTIVITIES:
Borrowings from notes payable to third-parties, net of discount and issuance costs			1.9				—
Principal repayments			(2.3	)			(2.2	)
Payment on revolving term loan			—				(35.0	)
Net cash used in financing activities			(0.4	)			(37.2	)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash			(1.5	)			1.4
Net decrease in cash, cash equivalents, and restricted cash			(0.5	)			(74.6	)
Cash, cash equivalents, and restricted cash at beginning of period			102.4				120.0
Cash, cash equivalents, and restricted cash at end of period		$	101.9			$	45.4

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

5

Mirion Technologies (TopCo), Ltd.

Notes to Unaudited Interim Condensed Consolidated Financial Statements

1. Nature of Business and Summary of Significant Accounting Policies

Nature of Business

Mirion Technologies (TopCo), Ltd. (“Mirion TopCo” or “the Company” or “us”) is a global provider of radiation detection, measurement, analysis, and monitoring products and services to the nuclear, defense, and medical end markets. We provide products and services through our two operating and reportable segments; (i) Medical, and (ii) Industrial. The Medical segment provides radiation oncology quality assurance, delivering patient safety solutions for diagnostic imaging and radiation therapy centers around the world, dosimetry solutions for monitoring the total amount of radiation medical staff members are exposed to over time, radiation therapy quality assurance solutions for calibrating and verifying imaging and treatment accuracy, and radionuclide therapy products for nuclear medicine applications such as shielding, product handling, medical imaging furniture, and rehabilitation products. The Industrial segment provides robust, field ready personal radiation detection and identification equipment for defense applications and radiation detection and analysis tools for power plants, labs, and research applications. Nuclear power plant product offerings are used for the full nuclear power plant lifecycle including core detectors and essential measurement devices for new build, maintenance, decontamination and decommission equipment for monitoring and control during fuel dismantling and remote environmental monitoring.

The Company is headquartered in Atlanta, Georgia, and has operations in the United States, Canada, the United Kingdom, France, Germany, Finland, China, Belgium, Netherlands, Estonia, and Japan.

Basis of Presentation and Principles of Consolidation

The unaudited interim condensed consolidated financial statements were prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) for interim financial information; therefore, as permitted under these rules, certain footnotes and other financial information included in audited financial statements were condensed or omitted. The interim financial statements presented include all adjustments, which are of a normal and recurring nature, necessary for a fair presentation of the results for such periods. Results for these interim periods are not necessarily indicative of full year results.

The unaudited interim condensed consolidated financial statements should be read in conjunction with the audited financial statements of Mirion TopCo as of and for the year ended June 30, 2021, and the notes related thereto. The unaudited interim condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

 

6

Related-Party Transactions

On October 20, 2021 (the “Closing Date”), the Company consummated its previously announced business combination (the “Business Combination”) pursuant to the business combination agreement dated June 17, 2021 (as amended, the “Business Combination Agreement”) with GS Acquisition Holdings Corp II (“GSAH”). In connection with the Business Combination, GSAH changed its name to Mirion Technologies, Inc.

See Note 15 for subsequent events disclosure.

Prior to October 20, 2021, the Company entered into agreements with its historical primary investor, Charterhouse Capital Partners LLP (“CCP”), which obligated the Company to pay quarterly management fees of $0.1 million in total per year. In return, CCP provided various investment banking services relating to financing arrangements, mergers and acquisitions and other services. There were no material fees or expense reimbursements made to CCP during the three-month periods ended September 30, 2021, and September 30, 2020.

See Note 8 for notes payable to related parties.

Restructuring Costs

The Company periodically initiates restructuring activities in connection with certain acquisitions. The costs associated with restructuring actions are recorded in accordance with ASC 420, Exit or Disposal Cost Obligations, and include property, plant and equipment costs, severance and employee costs, professional fees, and other costs. Liabilities for costs associated with an exit or disposal activity are recognized in the period in which the liability is incurred. Restructuring liabilities are included in accrued expenses and other current liabilities in the Company’s Consolidated Balance Sheet. Charges associated with restructuring actions are recorded in Cost of Revenue and Selling, General, and Administrative Expenses in the Company’s Condensed Consolidated Statement of Operations and are accounted for separate from acquisition costs.

Recent Accounting Pronouncements

Accounting Guidance Issued But Not Yet Adopted

In March 2020, the FASB issued ASU 2020-04 “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting”. ASU 2020-04 provides temporary optional expedients and exceptions for applying GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from the LIBOR and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate. For all entities, ASU 2020-04 can be adopted after its issuance date through December 31, 2022. The Company is currently evaluating the impact of this ASU.

 

7

Recently Adopted Accounting Guidance

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). ASU 2018-13 eliminates, adds and modifies certain disclosure requirements for fair value measurements as part of the FASB’s disclosure framework project. For all entities, ASU 2018-13 is effective for annual and interim reporting periods beginning after December 15, 2019. Certain amendments must be applied prospectively while others are to be applied on a retrospective basis to all periods presented. The Company adopted this guidance as of July 1, 2020, and it did not have a material impact on our consolidated financial statements or related disclosures.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which replaced the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. For trade and other receivables, loans, and other financial instruments, we will be required to use a forward-looking expected loss model rather than the incurred loss model for recognizing credit losses which reflects losses that are probable. Credit losses relating to available-for-sale debt securities will also be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. Application of the amendments is through a cumulative-effect adjustment to retained earnings as of the effective date. The Company adopted this guidance as of July 1, 2021, prospectively, which did not have a material impact on our consolidated financial statements.

In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other – Internal Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract, which amend the accounting for implementation, setup and other upfront costs for entities that are a customer in a hosting arrangement that is a service contract. ASU 2018-15 was effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. For all other entities, including emerging growth companies, the amendments are effective for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. Early adoption is permitted, including adoption in any interim period for which financial statements have not been issued. Application of the amendments can be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company adopted this guidance as of July 1, 2021, prospectively, which did not have a material impact on our consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which, among other things, requires an entity to recognize a right-of-use asset and a lease liability on the balance for substantially all leases, including operating leases. Expanded disclosures with additional qualitative and quantitative information are also required. ASC 2016-02 and its related amendments were effective for public companies with interim and annual reporting periods beginning after December 15, 2018, and for non-public companies, including emerging growth companies, with interim and annual reporting periods beginning after December 15, 2021. Early adoption was permitted.

The Company adopted ASU 2016-02 and its amendments as of July 1, 2021, using the modified retrospective method and under such method no recast of prior-period financial statements was presented. The Company elected the package of practical expedients permitted under the transition guidance, which allowed the Company to carryforward its historical assessments of: (1) whether contracts are or contain leases, (2) lease classification and (3) initial direct costs. In addition, the Company did not elect the hindsight practical expedient to determine the reasonably certain lease term for existing leases. The Company elected a policy of not applying the recognition requirements to leases with a term of less than twelve months. The Company elected to account for lease and non-lease components as a combined single lease component.

 

8

The Company’s adoption of the standard resulted in a cumulative-effect adjustment to decrease retained earnings by $2.9 million, net of taxes, as of July 1, 2021. The standard did not materially impact the Company’s consolidated net income or liquidity and did not have an impact on debt-covenant compliance under the Company’s current debt agreements.

2. Acquisitions

The Company continually evaluates potential acquisitions that strategically fit with the Company’s existing portfolio and as a result, the Company completed one acquisition during the three months ended September 30, 2021 and one acquisition during the three months ended September 30, 2020.

All acquisitions are accounted for under the acquisition method of accounting, and the related assets acquired, and liabilities assumed are recorded at fair value. The Company makes an initial allocation of the purchase price at the date of acquisition based upon its understanding of the fair value of the acquired assets and assumed liabilities. The Company obtains the information used for the purchase price allocation during due diligence and through other sources. In the months after closing, as the Company obtains additional information about the acquired assets and liabilities, including through tangible and intangible asset appraisals, and learns more about the newly acquired business, it is able to refine the estimates of fair value and more accurately allocate the purchase price. The fair values of acquired intangibles are determined based on estimates and assumptions that are deemed reasonable by the Company. Significant assumptions include the discount rates and certain assumptions that form the basis of the forecasted results of the acquired business including revenue, earnings before interest, taxes, depreciation and amortization (“EBITDA”), and growth rates. These assumptions are forward looking and could be affected by future economic and market conditions. The Company engages third-party valuation specialists who review the Company’s critical assumptions and calculations of the fair value of acquired intangible assets in connection with material acquisitions. Only facts and circumstances that existed as of the acquisition date are considered for subsequent adjustment. The Company will make appropriate adjustments to the purchase price allocation prior to completion of the one-year measurement period, as required.

The purchase of these acquired businesses resulted in the recognition of goodwill in the Company’s consolidated financial statements, which is calculated as the excess of the consideration transferred over the net assets recognized and represents the future economic benefits arising from the other assets acquired that could not be individually identified and separately recognized. The goodwill is not amortized; goodwill is not deductible for income tax purposes for Biodex but is deductible for Dosimetry Badge. This goodwill recorded includes the following:

 

•

The expected synergies and other benefits that we believe will result from combining the operations of the acquired business with the operations of Mirion;

 

•

Any intangible assets that did not qualify for separate recognition, as well as future, yet unidentified projects and products;

 

•

The value of the existing business as an assembled collection of net assets versus if the Company had acquired all of the net assets separately.

 

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The following briefly describes the Company’s acquisition activity for the three-month periods ended September 30, 2021 and September 30, 2020.

 

Three Months Ended September 30,		Company Name		Description of the Business		Description of the Acquisition
2021		Dosimetry Badge		Dosimetry Badge is a US-based provider of dosimetry services which will increases the stateside footprint of Mirion’s industry-leading dosimetry product offerings.		On September 1, 2021, the Company acquired 100% of the assets for approximately $1.7 million of purchase consideration.
2020		Biodex		Biodex is a manufacturer and distributor of medical devices and related replacement parts for physical and nuclear medicine, as well as medical imaging applications located in the United States.		On September 1, 2020, the Company acquired 100% of the equity interest for approximately $26.9 million of purchase consideration, net of cash acquired.

The following table presents the fair value of the assets acquired and liabilities assumed for the material Biodex acquisition during the 3-months ended September 30, 2020 (in millions):

 

		Biodex
Date of acquisition Segment			September 1, 2020 Medical
Goodwill		$	11.1
Customer relationships (1)			2.3
Tradenames (2)			1.4
Non-Compete Agreements (3)			0.3
Developed Technology (4)			2.6
Amortizable intangible assets		$	6.6
Cash			4.1
Accounts receivable			4.0
Inventory			6.4
Property, Plant and Equipment			1.0
Other current and non-current assets			0.6
Current liabilities			(2.6	)
Deferred contract revenue			(0.2	)
Other long-term liabilities			—
Net tangible assets acquired		$	13.3
Purchase consideration (5)			31.0
Less: cash acquired			(4.1	)
Purchase consideration, net of cash acquired		$	26.9
Acquiree revenue post-acquisition through the period ended September 30, 2020		$	3.4
Acquiree income from operations post-acquisition through the period ended September 30, 2020		$	0.3

 

(1)	The useful life for customer relationships is 10 years.

(2)	The useful life for tradenames is 7 years.

(3)	The useful life for non-compete agreements is 3 years.

(4)	The useful life for developed technology is 7 years.

(5)	Biodex purchase consideration consisted of cash.

 

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3. Contracts in Progress

Costs and billings on uncompleted construction-type contracts consist of the following (in millions):

 

		September 30, 2021				June 30, 2021
Costs incurred on contracts (from inception to completion)		$	198.1			$	185.8
Estimated earnings			130.2				133.2
Contracts in progress			328.3				319.0
Less: billings to date			(277.4	)			(261.9	)
Less: write-offs			—				(2.7	)
		$	50.9			$	54.4

Included in the accompanying balance sheets under the following captions:

 

		September 30, 2021				June 30, 2021
Costs and estimated earnings in excess of billings on uncompleted contracts – current		$	61.4			$	57.2
Costs and estimated earnings in excess of billings on uncompleted contracts – noncurrent (1)			7.4				8.1
Billings in excess of costs and estimated earnings on uncompleted contracts – current (2)			(14.1	)			(8.0	)
Billings in excess of costs and estimated earnings on uncompleted contracts – noncurrent (3)			(3.8	)			(2.9	)
		$	50.9			$	54.4

 

(1)	Included in other assets within the condensed consolidated balance sheets.

(2)	Included in deferred contract revenue – current within the condensed consolidated balance sheets.

(3)	Included in other liabilities within the condensed consolidated balance sheets.

For the three-month period ended September 30, 2021, the Company has recognized revenue of $2.9 million related to the contract liabilities balance as of June 30, 2021.

Remaining Performance Obligations

The remaining performance obligations for all open contracts as of September 30, 2021 include assembly, delivery, installation, and trainings. The aggregate amount of the transaction price allocated to the remaining performance obligations for all open customer contracts as of September 30, 2021 was approximately $702.9 million. The Company expects to recognize approximately 41.3% of the remaining performance obligations as of September 30, 2021 as revenue through the remaining fiscal year ending June 30, 2022 and 19.0% and 15.7% for the fiscal years ending June 30, 2023 and 2024, respectively.

 

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4. Inventories

The components of inventories consist of the following (in millions):

 

		September 30, 2021				June 30, 2021
Raw materials		$	51.4			$	50.9
Work in progress			29.9				26.8
Finished goods			35.3				35.5
		$	116.6			$	113.2

5. Property, Plant, and Equipment, Net

Property and equipment, net consist of the following (in millions):

 

		Depreciable Lives				September 30, 2021				June 30, 2021
Land, buildings, and leasehold improvements			3-39 years			$	46.5			$	44.4
Machinery and equipment			5-15 years				46.8				49.6
Badges			3-5 years				38.6				38.9
Furniture, fixtures, computer equipment and other			3-10 years				27.3				33.6
Construction in progress			—				16.9				13.6
							176.2				180.1
Less: accumulated depreciation and amortization							(85.6	)			(91.3	)
						$	90.5			$	88.8

Total depreciation expense included in cost of revenue was $3.3 million and $3.2 million for the three-months ended September 30, 2021 and 2020, respectively. Total depreciation expense included in operating expenses was $1.7 million and $1.2 million for the three-months ended September 30, 2021 and 2020, respectively. Construction in progress includes capitalized internal use software costs totaling $1.0 million and $3.5 million as of September 30, 2021 and June 30, 2021, respectively.

 

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6. Accrued Expenses and Other Current Liabilities, and Deferred Income Taxes and Other Long-Term Liabilities

Accrued expenses and other current liabilities consist of the following (in millions):

 

		September 30, 2021				June 30, 2021
Compensation and related benefit costs		$	34.2			$	38.9
Customer deposits			8.0				8.1
Accrued commissions			1.1				1.1
Accrued warranty costs			5.6				6.3
Non-income taxes payable			4.3				5.0
Pension and other post-retirement obligations			0.5				0.5
Income taxes payable			1.6				3.1
Restructuring			2.3				3.1
Accrued public company costs			10.6				8.3
Other accrued expenses			10.5				9.9
		$	78.7			$	84.3

Deferred income taxes and other long-term liabilities consist of the following (in millions):

 

		September 30, 2021				June 30, 2021
Deferred income taxes		$	36.1			$	40.1
Pension and other post-retirement obligations, non-current			11.6				12.5
Other long-term liabilities			24.9				24.9
		$	72.6			$	77.5

7. Goodwill and Intangible Assets

Goodwill

Goodwill is calculated as the excess of consideration transferred over the net assets recognized for acquired businesses and represents future economic benefits arising from the other assets acquired that could not be individually identified and separately recognized. The Company assesses goodwill for impairment at the reporting unit level annually during the fiscal fourth quarter and upon the occurrence of a triggering event or change in circumstance that would more likely than not reduce the fair value of a reporting unit below its carrying amount.

No goodwill impairment was recognized for the three-months ended September 30, 2021 and 2020.

The following table shows changes in the carrying amount of goodwill by reportable segment for the three-month period ended September 30, 2021 (in millions):

 

		Medical				Industrial				Consolidated
Balance—June 30, 2021		$	249.5			$	432.0			$	681.5
Acquisition of Dosimetry Badge			0.8				—				0.8
Translation adjustment			(0.4	)			(6.6	)			(7.0	)
Balance – September 30, 2021		$	249.9			$	425.4			$	675.3

 

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We do not expect most goodwill to be deductible for income tax purposes.

Intangible Assets

Intangible assets consist of our developed technology, customer relationships, backlog, trade names, and non-compete agreements at the time of acquisition through business combinations. The customer relationships definite lived intangible assets are amortized using the double declining balance method with estimated useful lives ranging from 6 to 17 years, while all other definite lived intangible assets are amortized on a straight-line basis over their estimated useful lives, ranging from 1 to 7 years.

Many of our intangible assets are not deductible for income tax purposes. A summary of intangible assets and related accumulated amortization (in millions) is below:

 

				September 30, 2021
		Original Average Life in Years		Gross Carrying Amount				Accumulated Amortization				Net Book Value
Customer relationships		6-17		$	417.4			$	(211.3	)		$	206.1
Developed technology		3-16			182.9				(108.8	)			74.1
Trade names		5-9			46.9				(30.1	)			16.8
Backlog and other		1-9			40.3				(28.5	)			11.8
Total				$	687.5			$	(378.7	)		$	308.8

 

				June 30, 2021
		Original Average Life in Years		Gross Carrying Amount				Accumulated Amortization				Net Book Value
Customer relationships		6-17		$	420.4			$	(205.6	)		$	214.8
Developed technology		3-16			184.5				(104.7	)			79.8
Trade names		5-9			47.4				(29.5	)			17.9
Backlog and other		1-9			40.6				(26.8	)			13.8
Total				$	692.9			$	(366.6	)		$	326.3

Aggregate amortization expense for intangible assets included in cost of revenue was $5.4 million and $4.6 million for the three-months ended September 30, 2021 and 2020, respectively. Aggregate amortization expense for intangible assets included in operating expenses was $10.7 million and $7.6 million for the three-months ended September 30, 2021 and 2020, respectively.

As of September 30, 2021, estimated future annual amortization expense is as follows (in millions):

 

Fiscal year ending June 30:
Remainder of 2022		$	47.6
2023			47.4
2024			39.6
2025			35.5
2026			34.4
2027 and thereafter			104.3
Total		$	308.8

 

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8. Borrowings

Third-party notes payable consist of the following (in millions):

 

		September 30, 2021				June 30, 2021
2019 Credit Facility – first lien term loan		$	900.6			$	906.4
Canadian Financial Institution			1.2				1.2
JLG Note Payable			0.3				0.3
Other			1.9				0.8
Draw on revolving line of credit			—				—
Total third-party borrowings			904.0				908.7
Less: notes payable to third-parties, current			(5.6	)			(6.4	)
Less: deferred financing costs			(15.6	)			(16.6	)
Notes payable to third-parties, non-current		$	882.8			$	885.7

As of September 30, 2021 and June 30, 2021, the fair market value of the Company’s 2019 Credit Facility – first lien term loan was $900.6 million and $906.4 million, respectively. The fair market value for the credit facility were estimated using primarily level 2 inputs, including borrowing rates available to the Company at the respective period ends. The fair market value for the Company’s remaining third-party debt approximates the respective carrying amounts as of September 30, 2021 and June 30, 2021.

2019 Credit Facility

In March 2019, Mirion Technologies (HoldingRep), Ltd., a wholly owned subsidiary of the Company, and subsidiaries entered into a credit agreement with an intermediary and a syndicate of institutional lenders (“2019 Credit Facility”). The 2019 Credit Facility provided for financing of a $450.0 million senior secured term loan facility and a €125 million term loan facility, as well as a $90.0 million revolving line of credit. The 2019 Credit Facility was amended to provide an additional $225.0 million, $34.0 million and $66.0 million in gross proceeds from the USD term loan in December 2020, July 2019 and December 2019, respectively.

USD term loan – The term loan had a seven-year term (expiring March 2026), bearing interest at the greater of Adjusted London Interbank Offered Rate (“LIBOR”) or 0%, plus 4.00% and had quarterly principal repayments of 0.25% of the original principal balance. The interest rate was 4.08% and 4.15% at September 30, 2021 and June 30, 2021, respectively. The Company repaid $1.9 million and $1.4 million for the three-months ended September 30, 2021 and 2020, respectively.

Euro term loan—The Euro portion of the term loan had a seven-year term (expiring March 2026), bearing interest at the greater of European union interbank market (“Euribor”) or 0%, plus 4.25% and has quarterly principal repayments of 0.25% of the original principal balance. As of September 30, 2021 and June 30, 2021, the interest rate was 4.25%. The Company repaid $0.4 million during both the three-months ended September 30, 2021 and 2020.

Revolving Line of Credit—The revolving line of credit arrangement had a five-year term and bore interest at the greater of LIBOR or 0%, plus 4.00%. The agreement required the payment of a commitment fee of 0.50% per annum for unused commitments. The revolving line of credit had a maturity date in March 2024, at which time all outstanding revolving facility loans and accrued and unpaid interest were due. Any outstanding letters of credit reduce the availability of the revolving

 

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line of credit. There was no outstanding balance under the arrangement as of September 31, 2021 and June 30, 2021. Additionally, the Company had standby letters of credit issued under its Credit Facility that reduced the availability under the revolver of $7.8 million and $8.7 million at September 30, 2021 and June 30, 2021, respectively; the amount available on the revolver was approximately $82.2 million and $81.3 million, respectively, for the same periods.

Deferred Financing Costs

In connection with the issuance of the 2019 Credit Facility, we incurred debt issuance costs of $16.3 million on date of issuance, with an additional $6.2 million and $1.2 million of costs for incremental proceeds in fiscal year 2021 and 2020, respectively. In accordance with accounting for debt issuance costs, we recognize, and present deferred finance costs associated with non-revolving debt and financing obligations as a reduction from the face amount of related indebtedness in our consolidated balance sheet.

In connection with the issuance of the 2019 Credit Facility revolving line of credit, we incurred debt issuance costs of $0.9 million. We recognize and present debt issuance costs associated with revolving debt arrangements as an asset and include the deferred finance costs within other assets on our consolidated balance sheet. We amortize all debt issuance costs over the life of the related indebtedness.

During the three-months ended September 30, 2021 and 2020, we incurred approximately $0.9 million and $0.6 million, respectively, of amortization expense of the deferred finance costs.

The 2019 Credit Facility was secured by a first priority lien on substantially all of Mirion HoldingRep and subsidiaries’ assets in the United States, certain assets of guarantor subsidiaries in Germany, United Kingdom, Canada, France, Belgium and Luxembourg, and two-thirds of assets in non-guarantors and other countries. Loan fees recorded as debt discounts are amortized using the effective interest method. The 2019 Credit Facility contained customary restrictive covenants, as well as financial covenants that required Mirion HoldingRep and subsidiaries to maintain in certain circumstances a total level of debt-to-income ratio and interest coverage ratio, each as defined in the 2019 Credit Facility, as well as non-financial affirmative and negative covenants. The negative covenants, subject to certain exceptions, generally limit the ability of Mirion HoldingRep and subsidiaries to incur additional debt, create liens, make fundamental changes, make certain investments, pay dividends, purchase or retire equity interests, or prepay or retire certain debt. Mirion HoldingRep and subsidiaries were in compliance with all debt covenants at both September 30, 2021 and June 30, 2021.

The 2019 Credit Facility was refinanced subsequent to September 30, 2021, in connection with the Closing; see Note 15 subsequent events disclosure.

Canadian Financial Institution—In May 2019, the Company entered into a credit agreement for C$1.7M ($1.3 million) with a Canadian financial institution that matures in April 2039. The note bears annual interest at 4.15%. The credit agreement is secured by the facility acquired using the funds obtained.

 

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JLG Note Payable—In May 2019, the Company entered into a note payable for $0.2 million with an individual that has left the organization, which is due upon a change in control of Mirion Technologies (Global), Ltd, a wholly owned subsidiary of the Company. The note bears annual interest at 6.00%.

Performance Bonds and Other Credit Facilities

The Company has entered into various line of credit arrangements with local banks in France and Germany. These arrangements provide for the issuance of documentary and standby letters of credit of up to €67.3 million ($77.9 million) and €67.3 million ($79.9 million) as of September 30, 2021 and June 30, 2021, respectively, subject to certain local restrictions. As September 30, 2021 and June 30, 2021, €37.6 million ($43.6 million) and €24.7 million ($29.3 million), respectively, of the lines had been utilized to guarantee documentary and standby letters of credit, with interest rates ranging from 0.5% to 2.00%. In addition, the Company posts performance bonds with irrevocable letters of credit to support certain contractual obligations to customers for equipment delivery. These letters of credit are supported by restricted cash accounts, which totaled $1.0 million as of both September 30, 2021 and June 30, 2021.

At September 30, 2021 contractual principal payments of total third-party borrowings are as follows (in millions):

 

For the year ending June 30:
Remainder of 2022		$	6.9
2023			9.1
2024			9.0
2025			8.9
2026			867.4
Thereafter			2.7
Gross Payments			904.0
Unamortized debt issuance costs			(15.6	)
Total third-party borrowings, net of debt issuance costs		$	888.4

Notes payable to related parties consists of the following (in millions):

 

		September 30, 2021				June 30, 2021
Shareholder Notes		$	1,166.7			$	1,166.8
Management Notes			3.7				3.7
Notes payable to related parties		$	1,170.4			$	1,170.5

The estimated fair value of the Company’s related party debt was approximately $1,170.4 million and $1,170.5 million as of September 30, 2021 and June 30, 2021, respectively. The fair value of this instrument approximates book value due to the reasonable possibility of redemption prior to the term date.

Shareholder and Management Notes – Mirion Technologies (HoldingSub1), Ltd., is authorized to issue $900 million (plus accrued paid in-kind interest) of notes to shareholders (“Shareholder Notes”) and up to $5.0 million (plus paid in-kind cash and interest) of notes to certain members of management (“Management Notes”). The notes rank pari passu between each other and other unsecured obligations of the Company. The notes can be prepaid without penalty at the Company’s option and are subordinate in right of payment to any indebtedness of the Company to banks or to other financial institutions (either currently existing or to occur in the future). Certain of the Shareholder and Management Notes have been admitted to trading and are on the official listing of The International Stock Exchange (TISE).

 

17

For the fiscal year ended June 30, 2021, an additional $181.5 million in Shareholder Notes were admitted to trading and are on the official listing of TISE. No new Shareholder Notes were admitted to trading during the three months ended September 30, 2021. At September 30, 2021 and June 30, 2021, there were $1,158.4 million in Shareholder Notes issued and outstanding, respectively, as listed on TISE. Of the amount available for trading, $683.9 million relates to principal balance and $474.5 million relates to accrued interest as of September 30, 2021. There was no trading activity related to Shareholder and Management Notes during the three months ended September 30, 2021. As of September 30, 2021 and June 30, 2021 there were $3.6 million in Management Notes issued and outstanding, respectively, as listed on TISE.

The notes bear simple annual interest at 11.5% except for $70.0 million of Shareholder Notes added in fiscal year 2021 that bear a simple annual interest rate of 6.0% until October 1, 2021, when the interest rate will convert to a simple annual interest rate of 11.5%. For the Shareholder Notes, the interest is added to the principal outstanding on December 31 of each year until 2025 and is referred to as Shareholder Funding Bonds on TISE. For the Management Notes, half of the interest is added to the principal outstanding on December 31 of each year until 2025 and is referred to as Management Funding Bonds on TISE, while the remaining half is payable in cash annually. The listing on the Exchange for Shareholder and Management Funding Bonds is an optional election and certain shareholders have elected to opt-out of listing their Shareholder Funding Bonds. All other shareholders and management have elected to list their funding bonds on the Exchange. The notes are due when the Company completes a public offering, a winding-up, a sale, or on March 30, 2026, whichever occurs first. The redemption price is equal to the outstanding principal plus all accrued and unpaid interest then outstanding.

At September 30, 2021 and June 30, 2021, interest of $97.5 million and $64.6 million was accrued on the Shareholder Notes principal outstanding, respectively, and $0.2 million and $0.2 million was accrued on the Management Notes principal outstanding, respectively. As of December 31, 2020, accrued interest of $113.6 million was added to the principal of the Shareholder Notes and $0.2 million was added to the principal of the Management Notes.

Subsequent to September 30, 2021, the Shareholder Notes and Management Notes were extinguished at the Closing; see Note 15 for subsequent events disclosure.

9. Leased Properties

The Company primarily leases certain logistics, office, and manufacturing facilities, as well as vehicles, copiers, and other equipment. These operating leases generally have remaining lease terms between 1 month and 30 years, and some include options to extend (generally 1 to 10 years). The exercise of lease renewal options is at the Company’s discretion. The Company evaluates renewal options at lease inception and on an ongoing basis and includes renewal options that it is reasonably certain to exercise in its expected lease terms when classifying leases and measuring lease liabilities. Lease agreements generally do not require material variable lease payments, residual value guarantees or restrictive covenants. The Company’s financing lease arrangements are not material.

 

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The table below presents the locations of the operating and financing lease assets and liabilities in the consolidated balance sheet as of September 30, 2021 (in millions):

 

		Balance Sheet Line Item		September 30, 2021
Operating lease assets		Operating lease assets		$	43.3
Financing lease assets		Other assets			1.1
Operating lease liabilities:
Current operating lease liabilities		Current operating lease liabilities		$	9.3
Noncurrent operating lease liabilities		Noncurrent operating lease liabilities			38.9
Total operating lease liabilities				$	48.2
Financing lease liabilities:
Current financing lease liabilities		Accrued expenses and other current liabilities		$	0.6
Noncurrent financing lease liabilities		Deferred income taxes and other long-term liabilities			0.5
Total financing lease liabilities				$	1.1

The depreciable lives are limited by the expected lease term for operating lease assets and by shorter of either the expected lease term or economic useful life for financing lease assets.

The Company’s leases generally do not provide an implicit rate, and therefore the Company uses its incremental borrowing rate as the discount rate when measuring the lease liabilities. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of the lease within a particular currency environment. The Company used incremental borrowing rates as of July 1, 2021 for leases that commenced prior to that date.

The Company’s weighted average remaining lease term and weighted average discount rate for operating leases as of September 30, 2021 are:

 

		September 30, 2021
Operating leases:
Weighted average remaining lease term (in years)			7.6
Weighted average discount rate			4.27	%

 

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The table below reconciles the undiscounted future minimum lease payments (displayed by year and in the aggregate) under noncancelable operating lease with terms of more than one year to the total lease liabilities recognized on the consolidated balance sheets as of September 30, 2021 (in millions):

 

Fiscal year ending June 30:
2022		$	8.3
2023			9.4
2024			8.0
2025			6.8
2026			4.6
2027 and thereafter			19.5
Total undiscounted future minimum lease payments			56.6
Less: Imputed interest			(8.4	)
Total lease liabilities		$	48.2

For the 3-month period ending September 30, 2021, operating lease costs (as defined under ASU 2016-02) were $2.8 million. Operating lease costs are included within costs of goods sold, selling, general and administrative, and research and development expenses on the consolidated statements of income and comprehensive income. Short-term lease costs, variable lease costs and sublease income were not material for the periods presented.

Rental expense for operating leases (as defined prior to the adoption of ASU 2016-02) was approximately $2.0 million for the three months ending September 30, 2020.

Cash paid for amounts included in the measurement of operating lease liabilities was $2.9 million for the three months ended September 30, 2021, and this amount is included in operating activities in the consolidated statements of cash flows. Operating lease assets obtained in exchange for new operating lease liabilities were $0.2 million for the three months ended September 30, 2021.

10. Commitments and Contingencies

Unconditional Purchase Obligations

The Company has entered into certain long-term unconditional purchase obligations with suppliers. These agreements are non-cancellable and specify terms, including fixed or minimum quantities to be purchased, fixed or variable price provisions, and the approximate timing of payment. As of September 30, 2021, unconditional purchase obligations were $20.7 million and $8.1 million for the fiscal years ending June 30, 2022 and 2023.

Litigation

The Company is subject to various legal proceedings, claims, litigation, investigations and contingencies arising out of the ordinary course of business. While the ultimate results of such suits or other proceedings against us cannot be predicted with certainty, we believe the resolution of these matters will not have a material effect on our results of operations, financial condition, or cash flows. If we believe the likelihood of an adverse legal outcome is probable and the amount is reasonably estimable, we accrue a liability in accordance with accounting guidance for contingencies. We consult with legal counsel on matters related to litigation and seek input both within and outside the Company.

 

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11. Income Taxes

The effective income tax rate for the three-months ended September 30, 2021 and September 30, 2020 was 9% and 2%, respectively. The difference in effective income tax rates and tax expense is primarily due to valuation allowances on losses incurred in the U.S. for the period ended September 30, 2020, as well as changes in the mix of earnings and jurisdictions. The Company’s effective income tax rates for the periods differ from the U.K. statutory rate of 19% primarily as a result of valuation allowances on certain UK losses.

12. Segment Information

The Company manages its operations through two operating and reportable segments: Medical and Industrial. These segments align the Company’s products and service offerings with customer use in Medical and Industrial markets and are consistent with how the Company’s Chief Executive Officer, its Chief Operating Decision Maker (“CODM”), reviews and evaluates the Company’s operations. The CODM allocates resources and evaluates the financial performance of each operating segment. The Company’s segments are strategic businesses that are managed separately because each one develops, manufactures and markets distinct products and services. Prior period information herein has been conformed to the current reportable segment structure.

Description of Segments

The Medical segment provides radiation oncology quality assurance, delivering patient safety solutions for diagnostic imaging and radiation therapy centers around the world, dosimetry solutions for monitoring the total amount of radiation medical staff members are exposed to over time, radiation therapy quality assurance solutions for calibrating and verifying imaging and treatment accuracy, and radionuclide therapy products for nuclear medicine applications such as shielding, product handling, medical imaging furniture, and rehabilitation products.

The Industrial segment provides robust, field ready personal radiation detection and identification equipment for defense applications and radiation detection and analysis tools for power plants, labs, and research applications. Nuclear power plant product offerings are used for the full nuclear power plant lifecycle including core detectors and essential measurement devices for new build, maintenance, decontamination and decommission equipment for monitoring and control during fuel dismantling and remote environmental monitoring.

The following table summarizes select operating results for each reportable segment. The CODM evaluates operating results and allocates capital resources among segments, in part, based on segment income from operations, which includes revenues of the segment less expenses that are directly related to those revenues, including purchase accounting impacts to revenue and cost of revenues, but before certain charges to cost of revenues and selling, general and administrative expenses predominantly related to corporate costs, shared overhead and other non-operational costs related to restructuring activities and costs to achieve operational initiatives, which are included in Corporate and Other in the table below. Interest expense, loss on debt extinguishment, foreign currency loss (gain), net, and other expense (income), net are not allocated to segments.

 

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		For the three months ended September 30,
(In millions)		2021				2020
Revenues
Medical		$	52.0			$	20.4
Industrial			92.3				94.2
Consolidated revenues		$	144.3			$	114.6
Segment Income from Operations
Medical			2.6				4.0
Industrial			12.5				11.4
Total segment Income from Operations		$	15.1			$	15.5
Corporate & Other			(24.0	)			(10.8	)
Consolidated Income from Operations		$	(8.9	)		$	4.6

The Company’s total assets are not presented for each reportable segment as they are not reviewed by, nor otherwise provided to, the chief operating decision maker to make operating decisions or allocate resources.

The following details revenue by geographic region. Revenues from external customers are attributed to geographic regions through sales from site locations.

 

		Revenues for the three months ended September 30,
(In millions)		2021				2020
North America
Medical		$	47.3			$	16.9
Industrial			47.3				46.0
Total North America			94.6				62.8
Europe
Medical			4.7				3.5
Industrial			43.5				46.9
Total Europe			48.2				50.4
Asia Pacific
Medical			—				—
Industrial			1.5				1.4
Total Asia Pacific			1.5				1.4
Consolidated Total		$	144.3			$	114.6

Revenues in the United States were $87.5 million and $56.6 million for the three months ended September 30, 2021 and 2020, respectively, while revenues in France were $28.7 million and $29.8 million, respectively.

 

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The following details revenue by timing of recognition (in millions):

 

		Revenues for the three months ended September 30,
		2021				2020
Point in time		$	103.0			$	70.3
Over time			41.3				44.3
Total revenues		$	144.3			$	114.6

The following details revenues by product category:

 

		Revenues for the three months ended September 30,
(In millions)		2021				2020
Medical segment:
Medical		$	52.0			$	20.4
Industrial segment:
Reactor Safety and Control Systems			29.4				28.5
Radiological Search, Measurement, and Analysis Systems			62.9				65.8
Total revenues		$	144.3			$	114.6

13. Loss Per Share

A reconciliation of the numerator and denominator used in the calculation of basic and diluted loss per common share is as follows:

 

		For the three months ended September 30,
(In millions, except per share amounts)		2021				2020
Net loss attributable to Mirion Technologies (TopCo), Ltd. stockholders		$	(46.7	)		$	(40.4	)
Weighted average common shares outstanding – basic and diluted			6.665				6.478
Loss per share attributable to Mirion Technologies (TopCo), Ltd. stockholders – basic and diluted		$	(7.01	)		$	(6.24	)
Anti-dilutive employee share-based awards, excluded			0.2				0.3

Potentially dilutive unvested stock awards using the treasury stock method or the if-converted method, as applicable, are included when calculating diluted net income earnings (loss) per share attributable to Mirion Technologies (TopCo), Ltd. when their effect is dilutive. Because the Company incurred a net loss for the three-month periods ended September 30, 2021 and 2020, respectively, none of the potentially dilutive common shares were included in the diluted share calculations for those periods as they would have been anti-dilutive.

14. Restructuring

The Company incurs costs associated with restructuring initiatives intended to improve operating performance, profitability, and working capital levels. Actions associated with these initiatives may include improving productivity, workforce reductions, and the consolidation of facilities.

As of September 30, 2021, the Company has identified restructuring actions will result in additional charges of approximately $9.3 million, primarily in fiscal years 2022 and 2023.

 

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The Company’s restructuring expense for the three months ended September 30, 2021 is comprised of the following:

 

		For the three months ended September 30, 2021
(In millions)		Cost of revenue				Selling, general and administrative				Total
Severance and employee costs		$	—			$	1.0			$	1.0
Other (1)			0.1				0.4				0.5
Total		$	0.1			$	1.4			$	1.5

 

(1)	Includes facilities, outside services, and IT costs.

The Company does not allocate restructuring charges to segment income, instead these costs are included in Corporate & Other. Restructuring activity and expenses for the three months ended September 30, 2020 were not material.

The following table summarizes the changes in the Company’s accrued restructuring balance, which are included in Accrued expenses and other current liabilities in the accompanying balance sheet (in millions).

 

Balance at June 30, 2021		$	3.1
Restructuring charges			1.5
Payments			(2.1	)
Adjustments			(0.2	)
Balance at September 30, 2021		$	2.3

15. Subsequent Events

Business Combination and Extinguishment of Debt

On June 17, 2021, Mirion entered into a business combination agreement with GSAH, a special purpose acquisition company. On the Closing Date of October 20, 2021, Mirion consummated the Business Combination pursuant to the agreement, combining with a subsidiary of GSAH upon closing, for total consideration of approximately $2.6 billion. Existing Mirion stockholders received cash consideration of approximately $1.3 billion and 30,401,902 shares of class A and 8,560,540 shares of class B GSAH common stock valued at approximately $0.4 billion on the date of closing (based upon an average $10.45 per GSAH share of common stock on the date of close). The Shareholder Notes and Management Notes were acquired by GSAH at the Closing for a price equal to the full outstanding principal amount together with all accrued but unpaid interest up to but excluding the Closing Date using a portion of the Business Combination consideration. In connection with the Closing, GSAH contributed the Shareholder Notes and the Management Notes to Mirion Topco, and then the Shareholder Notes and Management Notes were extinguished in full. Borrowings under the 2019 Credit Facility as of the closing date were paid in full through the cash consideration and new financing obtained through the credit agreement described below.

 

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Credit Agreement

In connection with the closing of the Business Combination, Mirion Technologies (HoldingSub2) Ltd., a subsidiary of Mirion TopCo, and certain of its subsidiaries entered into a credit agreement (the “Credit Agreement”) with Citibank, N.A. (as the Administrative Agent) and certain financial institutions as lenders. The Credit Agreement provides for an $830 million senior secured first lien term loan facility (the “Term Loan”) and a $90 million senior secured revolving facility (the “Revolving Facility”). The Term Loan matures on October 20, 2028 and will amortize in equal quarterly installments in an aggregate annual amount equal to 1% of the initial principal amount of the Term Loan. The Revolving Facility matures on October 20, 2026.

CIRS Acquisition

On November 10, 2021, Mirion signed an agreement to acquire Computerized Imaging Reference Systems, Inc. (“CIRS”) for approximately $54 million of cash consideration. CIRS is a United States-based developer of tissue simulation and medical phantom technology for radiation therapy and diagnostic imaging. The acquisition will be included in the Medical segment and is expected to close in the fourth quarter of calendar 2021, subject to certain customary closing conditions.

 

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Exhibit 99.2

MIRION’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of Mirion Technologies (TopCo), Ltd.’s (“Mirion TopCo”) financial condition and results of operations should be read together with the unaudited interim condensed consolidated financial statements and related notes of Mirion TopCo that are attached as Exhibit 99.1 to this Amendment No. 2 to our Current Report on Form 8-K of which this discussion and analysis forms a part (this “Report”) and the consolidated financial statements and notes of Mirion TopCo as of June 30, 2021 and 2020 and for the fiscal years ended June 30, 2021, 2020 and 2019 contained in the prospectus dated November 4, 2021 filed with the U.S. Securities and Exchange Commission as part of our registration statement on Form S-1 (File No. 333-260528). This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. Mirion’s actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under the section entitled “Risk Factors” in Mirion Technologies, Inc.’s (formerly known as GS Acquisition Holdings Corp II) Quarterly Report on Form 10-Q for the quarter ending September 30, 2021. Please also see the section entitled “Cautionary Note Regarding Forward-Looking Statements.”

Unless the context otherwise requires, all references in this section to “Mirion”, “Mirion TopCo”, the “Company,” “we,” “us” or “our” refer to Mirion Technologies (TopCo), Ltd. and its consolidated subsidiaries prior to the consummation of the Business Combination. References to “New Mirion” refer to GS Acquisition Holdings Corp II (“GSAH”) after the consummation of the Business Combination.

Unless the context otherwise requires or unless otherwise specified, all dollar amounts in this section are in millions.

Overview

Mirion is a global provider of products, services, and software that allow our customers to safely leverage the power of ionizing radiation for the greater good of humanity through critical applications in the medical, nuclear and defense markets, as well as laboratories, scientific research, analysis, and exploration.

Mirion provides dosimetry solutions for monitoring the total amount of radiation medical staff members are exposed to over time, radiation therapy quality assurance solutions for calibrating and verifying imaging and treatment accuracy, and radionuclide therapy products for nuclear medicine applications such as shielding, product handling, medical imaging furniture, and rehabilitation products. Mirion provides robust, field-ready personal radiation detection and identification equipment for defense applications and radiation detection and analysis tools for power plants, labs, and research applications. Nuclear power plant product offerings are used for the full nuclear power plant lifecycle including core detectors, essential measurement devices for new build, maintenance, decontamination and decommission, and equipment for monitoring and control during fuel dismantling and remote environmental monitoring.

Mirion manages and reports results of operations in two business segments: Medical and Industrial.

 

•

For the three months ended September 30, 2021, Mirion’s revenues were $144.3 million, of which 36.0% was generated in the Medical segment and 64.0% was generated in the Industrial segment, as compared with revenues for the three months ended September 30, 2020 of $114.6 million with 17.8% and 82.2% generated in the Medical and Industrial segments, respectively.

 

•

Backlog (representing committed but undelivered contracts and purchase orders, including funded and unfunded government contracts) was $702.9 million and $715.8 million as of September 30, 2021, and June 30, 2021, respectively.

Key Factors Affecting Our Performance

We believe that the business and results of operations may be impacted in the future by various trends and conditions, including the following:

 

•

Medical end market trends – Growth and operating results in our Medical segment are impacted by:

 

•

Increased or changes to global regulatory standards;

 

•

Increased focus on healthcare safety;

 

•

Changes to healthcare reimbursement;

 

•

Potential budget constraints in hospitals and other healthcare providers;

 

1

•

Medical/lab dosimetry growth supported by growing and aging demographics, increased number of healthcare professionals, and penetration of radiation therapy/diagnostics; and

 

•

Medical radiation therapy quality assurance (“RT QA”) growth driven by growing and aging population demographics, low penetration of RT QA technology in emerging markets, and increased adoption of advanced software and hardware solutions for improved outcomes and administrative and labor efficiencies.

 

•

Business combinations – A large driver of our growth has been the acquisition and integration of related businesses. Our ability to integrate, restructure, and leverage synergies of these businesses will impact our operating results over time.

 

•

Environmental objectives of governments – Growth and operating results in our Industrial segment are impacted by environmental policy decisions made by governments in the countries where we operate. Our nuclear power customers may benefit from decarbonization efforts given the relatively low carbon footprint of nuclear power to other existing energy sources. In addition, decisions by governments to build new power plants or decommission existing plants can positively and negatively impact our customer base.

 

•

Government budgets – While we believe that we are poised for growth from governmental customers in both of our segments, our revenues and cash flows from government customers are influenced, particularly in the short-term, by budgetary cycles. This impact can be either positive or negative.

 

•

Nuclear new build projects – A portion of our backlog is driven by contracts associated with the construction of new nuclear power plants. These contracts can be long-term in nature and provide us with a strong pipeline for the recognition of future revenues in our Industrial segment.

 

•

Research and development – A portion of our operating expenses is associated with research and development activities associated with the design of new products, which provide opportunities for future revenue growth. Given the specific design and application of certain of these products, there is some risk that these costs will not result in successful products in the market. Further, the timing of these products can move and be challenging to predict.

 

•

Supply chain – We source certain raw materials, parts, and components used in our products from third-party suppliers. The availability and prices for these inputs may be subject to curtailment or change due to, among other things, suppliers’ allocation to other purchasers, interruptions in supplier production and shipping, and prevailing pricing levels. Shortages in raw materials, parts, and components sourced from suppliers or price increases could therefore affect the prices we charge, our operating costs, and our competitive position, which could adversely affect our operations, financial condition, results, and cash flows.

 

•

COVID-19 – COVID-19 may affect revenue growth in certain of our businesses, primarily those serving our medical end markets, and it is uncertain how materially COVID-19 will affect our global operations generally if these impacts were to persist or worsen over an extended period of time. The extent and duration of the impacts are uncertain and dependent in part on customers returning to work and economic activity ramping up. The impact of COVID-19 on our customers has affected our sales operations in certain ways, including increased customer disputes regarding orders, delayed customer notices to proceed with production, delayed payment from customers and, on rare occasions, customers have refused to pay for their orders entirely. Further, access to customer sites for sales was limited in some cases.

Non-GAAP Financial Measures

We report our financial results in accordance with generally accepted accounting principles in the U.S. (“GAAP”). However, management believes certain non-GAAP financial measures provide investors and other users with additional meaningful information that should be considered when assessing our ongoing performance. Management also uses these non-GAAP financial measures in making financial, operating, and planning decisions, and in evaluating our performance. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, our GAAP results. The non-GAAP financial measures we present may differ from similarly captioned measures presented by other companies.

We use the non-GAAP financial measures “Adjusted revenues,” “Adjusted net (loss) income,” “EBITA,” “EBITDA”, “Adjusted EBITDA, “Free Cash Flow,” and “Adjusted Free Cash Flow.” See the “Quarterly Results of Operations” and “Cash flows” sections below for definitions of our non-GAAP financial measures and reconciliation to their most directly comparable GAAP measures.

 

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The following tables present a reconciliation of certain non-GAAP financial measures for the three-month periods ended September 30, 2021 and September 30, 2020.

 

		Three Months Ended September 30, 2021								Three Months Ended September 30, 2020
($ in millions)		Revenues				Net Loss				Revenues				Net Loss
Total GAAP		$	144.3			$	(46.7	)		$	114.6			$	(40.4	)
Revenue reduction from purchase accounting			3.7				3.7				—				—
Foreign currency (gain) loss, net			—				(1.4	)			—				8.1
Amortization of acquired intangibles			—				16.1				—				12.2
Non-operating expenses(1)(2)			—				15.0				—				2.9
Tax impact of adjustments above			—				(6.8	)			—				(3.7	)
Adjusted		$	148.0			$	(20.1	)		$	114.6			$	(20.9	)

 

($ in millions)		Three Months Ended September 30, 2021				Three Months Ended September 30, 2020
Net loss		$	(46.7	)		$	(40.4	)
Interest expense, net			43.8				37.9
Income tax (benefit) provision			(4.7	)			(1.0	)
Amortization			16.1				12.2
EBITA		$	8.5			$	8.7
Depreciation			5.1				4.3
EBITDA		$	13.6			$	13.0
Foreign currency (gain) loss, net			(1.4	)			8.1
Revenue reduction from purchase accounting			3.7				—
Non-operating expenses(1)(2)			15.0				2.9
Adjusted EBITDA		$	30.9			$	24.0

 

(1)

Pre-tax non-operating expenses of $15.0 million for the three months ended September 30, 2021 includes $8.7 million of Business Combination and public company transition costs, $3.6 million in costs to achieve operational synergies, $1.5 million of restructuring costs, and $1.2 million of costs to achieve information technology system integration and efficiency.

(2)

Pre-tax non-operating expenses of $2.9 million for the three months ended September 30, 2020 includes $1.2 million in costs to achieve operational synergies, $0.9 million of mergers and acquisition expenses, and $0.8 million of costs to achieve information technology system integration and efficiency.

The following tables present a reconciliation of non-GAAP Adjusted Revenue and Adjusted EBITDA by segment for the three-month periods ended September 30, 2021 and September 30, 2020.

 

		For the Three Months Ended September 30, 2021
($ in millions)		Medical				Industrial				Corporate & Other				Consolidated
Revenues		$	52.0			$	92.3			$	—			$	144.3
Revenue reduction from purchase accounting			3.7				—				—				3.7
Adjusted Revenues		$	55.7			$	92.3			$	—			$	148.0
Income from operations		$	2.6			$	12.5			$	(24.0	)		$	(8.9	)
Amortization			8.0				8.1				—				16.1
Depreciation			2.8				2.1				0.2				5.1
Revenue reduction from purchase accounting			3.7				—				—				3.7
Non-operating expenses(1)			—				—				14.9				14.9
Adjusted EBITDA		$	17.1			$	22.7			$	(8.9	)		$	30.9

 

(1)	Non-operating expenses above exclude $0.1 million recorded to Other (income) expense, net in the unaudited interim condensed consolidated statement of operations.

 

		For the Three Months Ended September 30, 2020
($ in millions)		Medical				Industrial				Corporate & Other				Consolidated
Revenues		$	20.4			$	94.2			$	—			$	114.6
Revenue reduction from purchase accounting			—				—				—				—
Adjusted Revenues		$	20.4			$	94.2			$	—			$	114.6

 

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