Q1FALSE202412/310001809987P9MP1YP1YP1Yhttp://fasb.org/us-gaap/2023#OtherAssetsNoncurrenthttp://fasb.org/us-gaap/2023#OtherAssetsNoncurrenthttp://fasb.org/us-gaap/2023#AccruedLiabilitiesAndOtherLiabilitieshttp://fasb.org/us-gaap/2023#AccruedLiabilitiesAndOtherLiabilitieshttp://fasb.org/us-gaap/2023#DeferredIncomeTaxLiabilitiesNethttp://fasb.org/us-gaap/2023#DeferredIncomeTaxLiabilitiesNet33.3333.3333.3334036526700018099872024-01-012024-03-310001809987us-gaap:CommonClassAMember2024-01-012024-03-310001809987us-gaap:WarrantMember2024-01-012024-03-310001809987us-gaap:CommonClassAMember2024-04-26xbrli:shares0001809987us-gaap:CommonClassBMember2024-04-2600018099872024-03-31iso4217:USD00018099872023-12-310001809987us-gaap:CommonClassAMember2023-12-31iso4217:USDxbrli:shares0001809987us-gaap:CommonClassAMember2024-03-310001809987us-gaap:CommonClassBMember2024-03-310001809987us-gaap:CommonClassBMember2023-12-310001809987us-gaap:ProductMember2024-01-012024-03-310001809987us-gaap:ProductMember2023-01-012023-03-310001809987us-gaap:ServiceMember2024-01-012024-03-310001809987us-gaap:ServiceMember2023-01-012023-03-3100018099872023-01-012023-03-310001809987us-gaap:CommonStockMemberus-gaap:CommonClassAMember2022-12-310001809987us-gaap:CommonStockMemberus-gaap:CommonClassBMember2022-12-310001809987us-gaap:TreasuryStockCommonMember2022-12-310001809987us-gaap:AdditionalPaidInCapitalMember2022-12-310001809987us-gaap:RetainedEarningsMember2022-12-310001809987us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-310001809987us-gaap:NoncontrollingInterestMember2022-12-3100018099872022-12-310001809987us-gaap:CommonStockMemberus-gaap:CommonClassAMember2023-01-012023-03-310001809987us-gaap:AdditionalPaidInCapitalMember2023-01-012023-03-310001809987mir:ConversionOfClassBCommonStockToClassACommonStockMemberus-gaap:CommonStockMemberus-gaap:CommonClassAMember2023-01-012023-03-310001809987mir:ConversionOfClassBCommonStockToClassACommonStockMemberus-gaap:CommonStockMemberus-gaap:CommonClassBMember2023-01-012023-03-310001809987mir:ConversionOfClassBCommonStockToClassACommonStockMemberus-gaap:AdditionalPaidInCapitalMember2023-01-012023-03-310001809987mir:ConversionOfClassBCommonStockToClassACommonStockMemberus-gaap:NoncontrollingInterestMember2023-01-012023-03-310001809987mir:ConversionOfClassBCommonStockToClassACommonStockMember2023-01-012023-03-310001809987us-gaap:RetainedEarningsMember2023-01-012023-03-310001809987us-gaap:NoncontrollingInterestMember2023-01-012023-03-310001809987us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-012023-03-310001809987us-gaap:CommonStockMemberus-gaap:CommonClassAMember2023-03-310001809987us-gaap:CommonStockMemberus-gaap:CommonClassBMember2023-03-310001809987us-gaap:TreasuryStockCommonMember2023-03-310001809987us-gaap:AdditionalPaidInCapitalMember2023-03-310001809987us-gaap:RetainedEarningsMember2023-03-310001809987us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-03-310001809987us-gaap:NoncontrollingInterestMember2023-03-3100018099872023-03-310001809987us-gaap:CommonStockMemberus-gaap:CommonClassAMember2023-12-310001809987us-gaap:CommonStockMemberus-gaap:CommonClassBMember2023-12-310001809987us-gaap:TreasuryStockCommonMember2023-12-310001809987us-gaap:AdditionalPaidInCapitalMember2023-12-310001809987us-gaap:RetainedEarningsMember2023-12-310001809987us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-12-310001809987us-gaap:NoncontrollingInterestMember2023-12-310001809987us-gaap:CommonStockMemberus-gaap:CommonClassAMember2024-01-012024-03-310001809987us-gaap:AdditionalPaidInCapitalMember2024-01-012024-03-310001809987mir:ConversionOfClassBCommonStockToClassACommonStockMemberus-gaap:CommonStockMemberus-gaap:CommonClassAMember2024-01-012024-03-310001809987mir:ConversionOfClassBCommonStockToClassACommonStockMemberus-gaap:CommonStockMemberus-gaap:CommonClassBMember2024-01-012024-03-310001809987mir:ConversionOfClassBCommonStockToClassACommonStockMemberus-gaap:AdditionalPaidInCapitalMember2024-01-012024-03-310001809987mir:ConversionOfClassBCommonStockToClassACommonStockMemberus-gaap:NoncontrollingInterestMember2024-01-012024-03-310001809987mir:ConversionOfClassBCommonStockToClassACommonStockMember2024-01-012024-03-310001809987us-gaap:RetainedEarningsMember2024-01-012024-03-310001809987us-gaap:NoncontrollingInterestMember2024-01-012024-03-310001809987us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-01-012024-03-310001809987us-gaap:CommonStockMemberus-gaap:CommonClassAMember2024-03-310001809987us-gaap:CommonStockMemberus-gaap:CommonClassBMember2024-03-310001809987us-gaap:TreasuryStockCommonMember2024-03-310001809987us-gaap:AdditionalPaidInCapitalMember2024-03-310001809987us-gaap:RetainedEarningsMember2024-03-310001809987us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-03-310001809987us-gaap:NoncontrollingInterestMember2024-03-31mir:segment0001809987mir:DeferredIncomeTaxesAndOtherLiabilitiesMember2023-12-310001809987mir:DeferredIncomeTaxesAndOtherLiabilitiesMember2024-03-3100018099872024-04-012024-03-31xbrli:pure00018099872025-01-012024-03-3100018099872026-01-012024-03-3100018099872027-01-012024-03-310001809987mir:UnredeemedPublicWarrantsMembersrt:ScenarioForecastMember2024-05-200001809987mir:EC5Member2023-11-012023-11-010001809987mir:EC5Member2023-11-010001809987mir:EC5Member2024-01-012024-03-310001809987srt:MinimumMemberus-gaap:LandBuildingsAndImprovementsMember2024-03-310001809987srt:MaximumMemberus-gaap:LandBuildingsAndImprovementsMember2024-03-310001809987us-gaap:LandBuildingsAndImprovementsMember2024-03-310001809987us-gaap:LandBuildingsAndImprovementsMember2023-12-310001809987srt:MinimumMemberus-gaap:MachineryAndEquipmentMember2024-03-310001809987srt:MaximumMemberus-gaap:MachineryAndEquipmentMember2024-03-310001809987us-gaap:MachineryAndEquipmentMember2024-03-310001809987us-gaap:MachineryAndEquipmentMember2023-12-310001809987srt:MinimumMembermir:BadgesMember2024-03-310001809987mir:BadgesMembersrt:MaximumMember2024-03-310001809987mir:BadgesMember2024-03-310001809987mir:BadgesMember2023-12-310001809987srt:MinimumMembermir:FurnitureFixturesComputerEquipmentAndOtherMember2024-03-310001809987mir:FurnitureFixturesComputerEquipmentAndOtherMembersrt:MaximumMember2024-03-310001809987mir:FurnitureFixturesComputerEquipmentAndOtherMember2024-03-310001809987mir:FurnitureFixturesComputerEquipmentAndOtherMember2023-12-310001809987us-gaap:SoftwareAndSoftwareDevelopmentCostsMembersrt:MinimumMember2024-03-310001809987us-gaap:SoftwareAndSoftwareDevelopmentCostsMembersrt:MaximumMember2024-03-310001809987us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2024-03-310001809987us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2023-12-310001809987us-gaap:ConstructionInProgressMember2024-03-310001809987us-gaap:ConstructionInProgressMember2023-12-310001809987us-gaap:SoftwareDevelopmentMember2024-03-310001809987us-gaap:SoftwareDevelopmentMember2023-12-310001809987us-gaap:CostOfSalesMember2024-01-012024-03-310001809987us-gaap:CostOfSalesMember2023-01-012023-03-310001809987us-gaap:OperatingExpenseMember2024-01-012024-03-310001809987us-gaap:OperatingExpenseMember2023-01-012023-03-310001809987mir:MedicalMember2023-12-310001809987mir:IndustrialMember2023-12-310001809987mir:MedicalMember2024-01-012024-03-310001809987mir:IndustrialMember2024-01-012024-03-310001809987mir:MedicalMember2024-03-310001809987mir:IndustrialMember2024-03-310001809987srt:MinimumMemberus-gaap:CustomerRelationshipsMember2024-01-012024-03-310001809987srt:MaximumMemberus-gaap:CustomerRelationshipsMember2024-01-012024-03-310001809987us-gaap:CustomerRelationshipsMember2024-03-310001809987mir:DistributorRelationshipsMembersrt:MinimumMember2024-01-012024-03-310001809987mir:DistributorRelationshipsMembersrt:MaximumMember2024-01-012024-03-310001809987mir:DistributorRelationshipsMember2024-03-310001809987srt:MinimumMemberus-gaap:DevelopedTechnologyRightsMember2024-01-012024-03-310001809987srt:MaximumMemberus-gaap:DevelopedTechnologyRightsMember2024-01-012024-03-310001809987us-gaap:DevelopedTechnologyRightsMember2024-03-310001809987srt:MinimumMemberus-gaap:TradeNamesMember2024-01-012024-03-310001809987us-gaap:TradeNamesMembersrt:MaximumMember2024-01-012024-03-310001809987us-gaap:TradeNamesMember2024-03-310001809987srt:MinimumMembermir:BacklogAndOtherMember2024-01-012024-03-310001809987mir:BacklogAndOtherMembersrt:MaximumMember2024-01-012024-03-310001809987mir:BacklogAndOtherMember2024-03-310001809987srt:MinimumMemberus-gaap:CustomerRelationshipsMember2023-10-012023-12-310001809987srt:MaximumMemberus-gaap:CustomerRelationshipsMember2023-10-012023-12-310001809987us-gaap:CustomerRelationshipsMember2023-12-310001809987mir:DistributorRelationshipsMembersrt:MinimumMember2023-10-012023-12-310001809987mir:DistributorRelationshipsMembersrt:MaximumMember2023-10-012023-12-310001809987mir:DistributorRelationshipsMember2023-12-310001809987srt:MinimumMemberus-gaap:DevelopedTechnologyRightsMember2023-10-012023-12-310001809987srt:MaximumMemberus-gaap:DevelopedTechnologyRightsMember2023-10-012023-12-310001809987us-gaap:DevelopedTechnologyRightsMember2023-12-310001809987srt:MinimumMemberus-gaap:TradeNamesMember2023-10-012023-12-310001809987us-gaap:TradeNamesMembersrt:MaximumMember2023-10-012023-12-310001809987us-gaap:TradeNamesMember2023-12-310001809987srt:MinimumMembermir:BacklogAndOtherMember2023-10-012023-12-310001809987mir:BacklogAndOtherMembersrt:MaximumMember2023-10-012023-12-310001809987mir:BacklogAndOtherMember2023-12-310001809987mir:TwoThousandAndTwentyOneCreditAgreementMember2024-03-310001809987mir:TwoThousandAndTwentyOneCreditAgreementMember2023-12-310001809987mir:CanadianFinancialInstitutionMember2024-03-310001809987mir:CanadianFinancialInstitutionMember2023-12-310001809987us-gaap:NotesPayableOtherPayablesMember2024-03-310001809987us-gaap:NotesPayableOtherPayablesMember2023-12-310001809987mir:TwoThousandAndTwentyOneCreditAgreementMemberus-gaap:FairValueInputsLevel2Member2023-12-310001809987mir:TwoThousandAndTwentyOneCreditAgreementMemberus-gaap:FairValueInputsLevel2Member2024-03-310001809987us-gaap:SecuredDebtMembermir:TwoThousandAndTwentyOneCreditAgreementMember2021-10-200001809987us-gaap:RevolvingCreditFacilityMembermir:TwoThousandAndTwentyOneCreditAgreementMember2021-10-200001809987us-gaap:RevolvingCreditFacilityMembermir:TwoThousandAndTwentyOneCreditAgreementMember2021-10-202021-10-200001809987mir:SecuredOvernightFinancingRateSOFRMemberus-gaap:SecuredDebtMembermir:TwoThousandAndTwentyOneCreditAgreementMember2021-10-202021-10-200001809987mir:AdjustedSOFRMemberus-gaap:SecuredDebtMembermir:TwoThousandAndTwentyOneCreditAgreementMember2024-03-310001809987mir:AdjustedSOFRMemberus-gaap:SecuredDebtMembermir:TwoThousandAndTwentyOneCreditAgreementMember2023-12-310001809987us-gaap:SecuredDebtMembermir:TwoThousandAndTwentyOneCreditAgreementMember2023-01-012023-12-310001809987us-gaap:SecuredDebtMembermir:TwoThousandAndTwentyOneCreditAgreementMember2023-12-310001809987us-gaap:SecuredDebtMembermir:TwoThousandAndTwentyOneCreditAgreementMember2024-03-310001809987us-gaap:RevolvingCreditFacilityMembermir:TwoThousandAndTwentyOneCreditAgreementMember2024-03-310001809987mir:SecuredOvernightFinancingRateSOFRMemberus-gaap:RevolvingCreditFacilityMembermir:TwoThousandAndTwentyOneCreditAgreementMember2024-01-012024-03-310001809987us-gaap:RevolvingCreditFacilityMembermir:TwoThousandAndTwentyOneCreditAgreementMember2024-01-012024-03-310001809987us-gaap:LetterOfCreditMembermir:TwoThousandAndTwentyOneCreditAgreementMember2024-03-310001809987us-gaap:LetterOfCreditMembermir:TwoThousandAndTwentyOneCreditAgreementMember2023-12-310001809987us-gaap:RevolvingCreditFacilityMembermir:TwoThousandAndTwentyOneCreditAgreementMember2023-12-310001809987us-gaap:RevolvingCreditFacilityMembermir:TwoThousandAndTwentyOneCreditAgreementMember2023-01-012023-03-310001809987mir:CanadianFinancialInstitutionMember2019-05-31iso4217:CADiso4217:EUR0001809987us-gaap:LetterOfCreditMember2024-03-310001809987us-gaap:LetterOfCreditMember2023-12-310001809987us-gaap:LetterOfCreditMembersrt:MinimumMember2024-03-310001809987us-gaap:LetterOfCreditMembersrt:MaximumMember2024-03-310001809987srt:MinimumMember2024-03-310001809987srt:MaximumMember2024-03-3100018099872023-04-012023-04-3000018099872023-10-012023-10-3100018099872023-06-012023-06-300001809987us-gaap:CommonClassAMember2021-10-190001809987us-gaap:CommonClassAMember2024-01-010001809987us-gaap:RestrictedStockUnitsRSUMember2024-03-310001809987us-gaap:PerformanceSharesMember2024-03-310001809987us-gaap:RestrictedStockUnitsRSUMembersrt:MinimumMember2024-01-012024-03-310001809987us-gaap:PerformanceSharesMembersrt:MaximumMember2024-01-012024-03-310001809987us-gaap:PerformanceSharesMembermir:AdjustedEBITDAVestingConditionMember2024-01-012024-03-310001809987us-gaap:PerformanceSharesMembermir:VestingConditionAdjustedEBITDARangeOneMember2024-01-012024-03-310001809987srt:MinimumMembermir:VestingConditionAdjustedEBITDARangeTwoMemberus-gaap:PerformanceSharesMember2024-01-012024-03-310001809987mir:VestingConditionAdjustedEBITDARangeTwoMemberus-gaap:PerformanceSharesMembersrt:MaximumMember2024-01-012024-03-310001809987srt:MinimumMemberus-gaap:PerformanceSharesMembermir:VestingConditionAdjustedEBITDARangeThreeMember2024-01-012024-03-310001809987us-gaap:PerformanceSharesMembersrt:MaximumMembermir:VestingConditionAdjustedEBITDARangeThreeMember2024-01-012024-03-310001809987mir:AdjustedCashFlowMemberus-gaap:PerformanceSharesMember2024-01-012024-03-310001809987mir:VestingConditionAdjustedCashFlowRangeOneMemberus-gaap:PerformanceSharesMember2024-01-012024-03-310001809987srt:MinimumMemberus-gaap:PerformanceSharesMembermir:VestingConditionAdjustedCashFlowRangeTwoMember2024-01-012024-03-310001809987us-gaap:PerformanceSharesMembersrt:MaximumMembermir:VestingConditionAdjustedCashFlowRangeTwoMember2024-01-012024-03-310001809987mir:VestingConditionAdjustedCashFlowRangeThreeMembersrt:MinimumMemberus-gaap:PerformanceSharesMember2024-01-012024-03-310001809987mir:VestingConditionAdjustedCashFlowRangeThreeMemberus-gaap:PerformanceSharesMembersrt:MaximumMember2024-01-012024-03-310001809987mir:VestingConditionTotalShareholderReturnPercentileRangeOneMemberus-gaap:PerformanceSharesMember2024-03-310001809987us-gaap:PerformanceSharesMembermir:VestingConditionTotalShareholderReturnPercentileRangeTwoMember2024-03-310001809987srt:MinimumMemberus-gaap:PerformanceSharesMembermir:VestingConditionTotalShareholderReturnPercentileRangeTwoMember2024-03-310001809987us-gaap:PerformanceSharesMembermir:VestingConditionTotalShareholderReturnPercentileRangeTwoMembersrt:MaximumMember2024-03-310001809987us-gaap:PerformanceSharesMembermir:VestingConditionTotalShareholderReturnPercentileRangeThreeMember2024-03-310001809987srt:MinimumMemberus-gaap:PerformanceSharesMembermir:VestingConditionTotalShareholderReturnPercentileRangeThreeMember2024-03-310001809987us-gaap:PerformanceSharesMembersrt:MaximumMembermir:VestingConditionTotalShareholderReturnPercentileRangeThreeMember2024-03-310001809987us-gaap:PerformanceSharesMembermir:VestingConditionTotalShareholderReturnPercentileRangeFourMember2024-03-310001809987us-gaap:RestrictedStockUnitsRSUMember2023-03-310001809987us-gaap:PerformanceSharesMember2023-03-310001809987us-gaap:RestrictedStockUnitsRSUMembersrt:MinimumMember2023-01-012023-03-310001809987us-gaap:PerformanceSharesMembersrt:MaximumMember2023-01-012023-03-310001809987us-gaap:PerformanceSharesMembermir:TotalShareholderReturnVestingConditionMember2023-01-012023-03-310001809987mir:VestingConditionTotalShareholderReturnPercentileRangeOneMemberus-gaap:PerformanceSharesMember2023-01-012023-03-310001809987mir:VestingConditionTotalShareholderReturnPercentileRangeOneMember2023-01-012023-03-310001809987srt:MinimumMemberus-gaap:PerformanceSharesMembermir:VestingConditionTotalShareholderReturnPercentileRangeTwoMember2023-01-012023-03-310001809987us-gaap:PerformanceSharesMembermir:VestingConditionTotalShareholderReturnPercentileRangeTwoMembersrt:MaximumMember2023-01-012023-03-310001809987srt:MinimumMembermir:VestingConditionTotalShareholderReturnPercentileRangeTwoMember2023-01-012023-03-310001809987mir:VestingConditionTotalShareholderReturnPercentileRangeTwoMembersrt:MaximumMember2023-01-012023-03-310001809987srt:MinimumMemberus-gaap:PerformanceSharesMembermir:VestingConditionTotalShareholderReturnPercentileRangeThreeMember2023-01-012023-03-310001809987us-gaap:PerformanceSharesMembersrt:MaximumMembermir:VestingConditionTotalShareholderReturnPercentileRangeThreeMember2023-01-012023-03-310001809987srt:MinimumMembermir:VestingConditionTotalShareholderReturnPercentileRangeThreeMember2023-01-012023-03-310001809987srt:MaximumMembermir:VestingConditionTotalShareholderReturnPercentileRangeThreeMember2023-01-012023-03-310001809987mir:VestingConditionTotalShareholderReturnPercentileRangeFourMember2023-01-012023-03-310001809987us-gaap:PerformanceSharesMembermir:VestingConditionTotalShareholderReturnPercentileRangeFourMember2023-01-012023-03-310001809987us-gaap:PerformanceSharesMembermir:OrganicRevenueVestingConditionMember2021-06-172021-06-170001809987mir:VestingConditionOrganicRevenueGrowthRangeOneMembersrt:MinimumMemberus-gaap:PerformanceSharesMember2023-03-310001809987mir:VestingConditionOrganicRevenueGrowthRangeOneMemberus-gaap:PerformanceSharesMembersrt:MaximumMember2023-03-310001809987srt:MinimumMemberus-gaap:PerformanceSharesMembermir:VestingConditionOrganicRevenueGrowthRangeTwoMember2023-01-012023-03-310001809987mir:VestingConditionOrganicRevenueGrowthRangeTwoMembersrt:MaximumMember2023-01-012023-03-310001809987srt:MinimumMemberus-gaap:PerformanceSharesMembermir:VestingConditionOrganicRevenueGrowthRangeTwoMember2023-03-310001809987us-gaap:PerformanceSharesMembermir:VestingConditionOrganicRevenueGrowthRangeTwoMembersrt:MaximumMember2023-03-310001809987srt:MinimumMemberus-gaap:PerformanceSharesMembermir:VestingConditionOrganicRevenueGrowthRangeThreeMember2023-01-012023-03-310001809987us-gaap:PerformanceSharesMembersrt:MaximumMembermir:VestingConditionOrganicRevenueGrowthRangeThreeMember2023-01-012023-03-310001809987srt:MinimumMemberus-gaap:PerformanceSharesMembermir:VestingConditionOrganicRevenueGrowthRangeThreeMember2023-03-310001809987us-gaap:PerformanceSharesMembersrt:MaximumMembermir:VestingConditionOrganicRevenueGrowthRangeThreeMember2023-03-310001809987us-gaap:PerformanceSharesMembermir:VestingConditionOrganicRevenueGrowthRangeThreeMember2023-03-310001809987us-gaap:ShareBasedPaymentArrangementNonemployeeMember2024-01-012024-03-310001809987us-gaap:CommonClassAMember2023-01-012023-03-310001809987us-gaap:ShareBasedPaymentArrangementNonemployeeMember2023-01-012023-03-310001809987srt:DirectorMemberus-gaap:CommonClassAMember2024-01-012024-03-310001809987srt:DirectorMemberus-gaap:CommonClassAMember2023-01-012023-03-310001809987srt:BoardOfDirectorsChairmanMember2021-06-172021-06-170001809987srt:ChiefExecutiveOfficerMember2021-06-172021-06-170001809987srt:ChiefFinancialOfficerMember2021-06-172021-06-1700018099872021-06-170001809987srt:MinimumMember2021-06-172021-06-170001809987srt:MaximumMember2021-06-172021-06-170001809987mir:ProfitInterest1Member2021-06-170001809987mir:ProfitInterest2Member2021-06-170001809987mir:ProfitInterest3Member2021-06-170001809987us-gaap:ShareBasedCompensationAwardTrancheOneMemberus-gaap:RestrictedStockUnitsRSUMembersrt:MinimumMember2024-01-012024-03-310001809987us-gaap:RestrictedStockUnitsRSUMembersrt:MinimumMemberus-gaap:ShareBasedCompensationAwardTrancheTwoMember2024-01-012024-03-310001809987us-gaap:RestrictedStockUnitsRSUMembersrt:MinimumMemberus-gaap:ShareBasedCompensationAwardTrancheThreeMember2024-01-012024-03-310001809987us-gaap:CommonClassBMember2021-10-200001809987us-gaap:CommonClassAMember2021-10-200001809987mir:ProfitInterest1Member2021-10-200001809987mir:ProfitInterest2Member2021-10-200001809987mir:ProfitInterest3Member2021-10-200001809987srt:MinimumMember2021-10-202021-10-200001809987srt:MaximumMember2021-10-202021-10-200001809987us-gaap:RelatedPartyMemberus-gaap:PrivatePlacementMember2021-10-200001809987us-gaap:RelatedPartyMemberus-gaap:PrivatePlacementMember2021-10-202021-10-2000018099872021-10-202021-10-200001809987us-gaap:RelatedPartyMember2024-01-012024-03-310001809987us-gaap:RelatedPartyMember2023-01-012023-03-310001809987mir:MedicalSegmentMember2024-01-012024-03-310001809987mir:MedicalSegmentMember2023-01-012023-03-310001809987mir:TechnologiesSegmentMember2024-01-012024-03-310001809987mir:TechnologiesSegmentMember2023-01-012023-03-310001809987us-gaap:OperatingSegmentsMembermir:MedicalSegmentMember2024-01-012024-03-310001809987us-gaap:OperatingSegmentsMembermir:MedicalSegmentMember2023-01-012023-03-310001809987us-gaap:OperatingSegmentsMembermir:TechnologiesSegmentMember2024-01-012024-03-310001809987us-gaap:OperatingSegmentsMembermir:TechnologiesSegmentMember2023-01-012023-03-310001809987us-gaap:OperatingSegmentsMember2024-01-012024-03-310001809987us-gaap:OperatingSegmentsMember2023-01-012023-03-310001809987us-gaap:CorporateNonSegmentMember2024-01-012024-03-310001809987us-gaap:CorporateNonSegmentMember2023-01-012023-03-310001809987srt:NorthAmericaMembermir:MedicalSegmentMember2024-01-012024-03-310001809987srt:NorthAmericaMembermir:MedicalSegmentMember2023-01-012023-03-310001809987srt:NorthAmericaMembermir:TechnologiesSegmentMember2024-01-012024-03-310001809987srt:NorthAmericaMembermir:TechnologiesSegmentMember2023-01-012023-03-310001809987srt:NorthAmericaMember2024-01-012024-03-310001809987srt:NorthAmericaMember2023-01-012023-03-310001809987srt:EuropeMembermir:MedicalSegmentMember2024-01-012024-03-310001809987srt:EuropeMembermir:MedicalSegmentMember2023-01-012023-03-310001809987srt:EuropeMembermir:TechnologiesSegmentMember2024-01-012024-03-310001809987srt:EuropeMembermir:TechnologiesSegmentMember2023-01-012023-03-310001809987srt:EuropeMember2024-01-012024-03-310001809987srt:EuropeMember2023-01-012023-03-310001809987mir:MedicalSegmentMembersrt:AsiaPacificMember2024-01-012024-03-310001809987mir:MedicalSegmentMembersrt:AsiaPacificMember2023-01-012023-03-310001809987mir:TechnologiesSegmentMembersrt:AsiaPacificMember2024-01-012024-03-310001809987mir:TechnologiesSegmentMembersrt:AsiaPacificMember2023-01-012023-03-310001809987srt:AsiaPacificMember2024-01-012024-03-310001809987srt:AsiaPacificMember2023-01-012023-03-310001809987us-gaap:TransferredAtPointInTimeMember2024-01-012024-03-310001809987us-gaap:TransferredAtPointInTimeMember2023-01-012023-03-310001809987us-gaap:TransferredOverTimeMember2024-01-012024-03-310001809987us-gaap:TransferredOverTimeMember2023-01-012023-03-310001809987mir:MedicalMembermir:MedicalSegmentMember2024-01-012024-03-310001809987mir:MedicalMembermir:MedicalSegmentMember2023-01-012023-03-310001809987mir:ReactorSafetyAndControlSystemsMembermir:TechnologiesSegmentMember2024-01-012024-03-310001809987mir:ReactorSafetyAndControlSystemsMembermir:TechnologiesSegmentMember2023-01-012023-03-310001809987mir:RadiologicalSearchMeasurementAndAnalysisSystemsMembermir:TechnologiesSegmentMember2024-01-012024-03-310001809987mir:RadiologicalSearchMeasurementAndAnalysisSystemsMembermir:TechnologiesSegmentMember2023-01-012023-03-310001809987us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2024-03-310001809987us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2024-03-310001809987us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2024-03-310001809987us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:CrossCurrencyInterestRateContractMember2024-03-310001809987us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CrossCurrencyInterestRateContractMemberus-gaap:FairValueInputsLevel2Member2024-03-310001809987us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CrossCurrencyInterestRateContractMemberus-gaap:FairValueInputsLevel3Member2024-03-310001809987us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:InterestRateSwapMember2024-03-310001809987us-gaap:FairValueMeasurementsRecurringMemberus-gaap:InterestRateSwapMemberus-gaap:FairValueInputsLevel2Member2024-03-310001809987us-gaap:FairValueMeasurementsRecurringMemberus-gaap:InterestRateSwapMemberus-gaap:FairValueInputsLevel3Member2024-03-310001809987us-gaap:FairValueMeasurementsRecurringMembermir:PublicWarrantsMemberus-gaap:FairValueInputsLevel1Member2024-03-310001809987us-gaap:FairValueMeasurementsRecurringMembermir:PublicWarrantsMemberus-gaap:FairValueInputsLevel2Member2024-03-310001809987us-gaap:FairValueMeasurementsRecurringMembermir:PublicWarrantsMemberus-gaap:FairValueInputsLevel3Member2024-03-310001809987us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Membermir:PrivatePlacementWarrantsMember2024-03-310001809987us-gaap:FairValueMeasurementsRecurringMembermir:PrivatePlacementWarrantsMemberus-gaap:FairValueInputsLevel2Member2024-03-310001809987us-gaap:FairValueMeasurementsRecurringMembermir:PrivatePlacementWarrantsMemberus-gaap:FairValueInputsLevel3Member2024-03-310001809987us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2023-12-310001809987us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2023-12-310001809987us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2023-12-310001809987us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:CrossCurrencyInterestRateContractMember2023-12-310001809987us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CrossCurrencyInterestRateContractMemberus-gaap:FairValueInputsLevel2Member2023-12-310001809987us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CrossCurrencyInterestRateContractMemberus-gaap:FairValueInputsLevel3Member2023-12-310001809987us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:InterestRateSwapMember2023-12-310001809987us-gaap:FairValueMeasurementsRecurringMemberus-gaap:InterestRateSwapMemberus-gaap:FairValueInputsLevel2Member2023-12-310001809987us-gaap:FairValueMeasurementsRecurringMemberus-gaap:InterestRateSwapMemberus-gaap:FairValueInputsLevel3Member2023-12-310001809987us-gaap:FairValueMeasurementsRecurringMembermir:PublicWarrantsMemberus-gaap:FairValueInputsLevel1Member2023-12-310001809987us-gaap:FairValueMeasurementsRecurringMembermir:PublicWarrantsMemberus-gaap:FairValueInputsLevel2Member2023-12-310001809987us-gaap:FairValueMeasurementsRecurringMembermir:PublicWarrantsMemberus-gaap:FairValueInputsLevel3Member2023-12-310001809987us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Membermir:PrivatePlacementWarrantsMember2023-12-310001809987us-gaap:FairValueMeasurementsRecurringMembermir:PrivatePlacementWarrantsMemberus-gaap:FairValueInputsLevel2Member2023-12-310001809987us-gaap:FairValueMeasurementsRecurringMembermir:PrivatePlacementWarrantsMemberus-gaap:FairValueInputsLevel3Member2023-12-310001809987us-gaap:InterestRateSwapMember2024-03-310001809987us-gaap:CrossCurrencyInterestRateContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2024-03-310001809987us-gaap:CrossCurrencyInterestRateContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2023-12-310001809987us-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2024-03-310001809987us-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2023-12-310001809987us-gaap:DesignatedAsHedgingInstrumentMember2024-03-310001809987us-gaap:DesignatedAsHedgingInstrumentMember2023-12-310001809987us-gaap:CashFlowHedgingMember2024-01-012024-03-310001809987us-gaap:InterestRateSwapMember2024-01-012024-03-310001809987us-gaap:InterestExpenseMemberus-gaap:InterestRateSwapMember2024-01-012024-03-310001809987us-gaap:CrossCurrencyInterestRateContractMemberus-gaap:NetInvestmentHedgingMember2024-03-310001809987us-gaap:CrossCurrencyInterestRateContractMemberus-gaap:NetInvestmentHedgingMember2023-12-310001809987us-gaap:CrossCurrencyInterestRateContractMemberus-gaap:NetInvestmentHedgingMember2024-01-012024-03-310001809987us-gaap:CrossCurrencyInterestRateContractMemberus-gaap:NetInvestmentHedgingMember2023-01-012023-03-310001809987us-gaap:NetInvestmentHedgingMember2024-03-310001809987us-gaap:NetInvestmentHedgingMember2023-12-310001809987us-gaap:NetInvestmentHedgingMember2024-01-012024-03-310001809987us-gaap:NetInvestmentHedgingMember2023-01-012023-03-310001809987us-gaap:EmployeeStockOptionMember2024-01-012024-03-310001809987us-gaap:EmployeeStockOptionMember2023-01-012023-03-31mir:vote0001809987us-gaap:CommonClassBMember2024-01-012024-03-310001809987mir:PublicWarrantsMemberus-gaap:CommonClassAMember2024-03-310001809987mir:PrivatePlacementWarrantsMemberus-gaap:CommonClassAMember2024-03-31mir:tranche0001809987us-gaap:ShareBasedCompensationAwardTrancheOneMember2024-01-012024-03-310001809987us-gaap:ShareBasedCompensationAwardTrancheTwoMember2024-01-012024-03-310001809987us-gaap:ShareBasedCompensationAwardTrancheThreeMember2024-01-012024-03-310001809987srt:MinimumMember2024-01-012024-03-310001809987srt:MaximumMember2024-01-012024-03-310001809987us-gaap:SellingGeneralAndAdministrativeExpensesMember2024-01-012024-03-310001809987us-gaap:SellingGeneralAndAdministrativeExpensesMember2023-01-012023-03-310001809987mir:IntermediatecoClassBCommonStockMember2021-10-202021-10-2000018099872021-10-200001809987us-gaap:CommonClassBMember2021-10-202021-10-20mir:day0001809987mir:IntermediatecoClassACommonStockMembermir:GsahMember2021-10-200001809987mir:IntermediatecoClassBCommonStockMember2021-10-200001809987us-gaap:CommonClassBMembermir:IntermediateCoMember2021-10-202021-10-200001809987us-gaap:CommonClassBMembermir:IntermediateCoMember2024-01-012024-03-310001809987mir:IntermediatecoClassBCommonStockMember2024-03-310001809987us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember2024-03-310001809987us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember2023-12-310001809987us-gaap:AccumulatedDefinedBenefitPlansAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember2024-03-310001809987us-gaap:AccumulatedDefinedBenefitPlansAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember2023-12-310001809987us-gaap:AociDerivativeQualifyingAsHedgeExcludedComponentNoncontrollingInterestMember2024-03-310001809987us-gaap:AociDerivativeQualifyingAsHedgeExcludedComponentNoncontrollingInterestMember2023-12-310001809987us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2024-03-310001809987us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2023-12-310001809987us-gaap:AociAttributableToNoncontrollingInterestMember2024-03-310001809987us-gaap:AociAttributableToNoncontrollingInterestMember2023-12-310001809987mir:PublicWarrantsMembersrt:ScenarioForecastMember2024-05-200001809987mir:ThomasD.LoganMember2024-01-012024-03-310001809987mir:ThomasD.LoganMember2024-03-310001809987mir:BrianSchopferMember2024-01-012024-03-310001809987mir:BrianSchopferMember2024-03-310001809987mir:EmmanuelleLeeMember2024-01-012024-03-310001809987mir:EmmanuelleLeeMember2024-03-31
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2024
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File Number: 001-39352
Mirion Technologies, Inc.
(Exact name of registrant as specified in its charter)
| | | | | | | | |
Delaware | | 83-0974996 |
(State or other jurisdiction of incorporation or organization) |
| (I.R.S. Employer Identification Number) |
1218 Menlo Drive
Atlanta, Georgia 30318
(Address of Principal Executive Office)
(770) 432-2744
(Registrant's telephone number, including area code)
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, each exercisable for one share of Class A common stock at an exercise price of $11.50 | MIR WS | New York Stock Exchange |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| | | | | | | | | | | |
Large Accelerated Filer | ☒ | Accelerated Filer | ☐ |
| | | |
Non-accelerated Filer | ☐ | Smaller Reporting Company | ☐ |
| | | |
| | 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). o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ☐ No ☒
As of April 26, 2024, there were 220,159,325 shares of Class A common stock, $0.0001 par value per share, and 7,209,706 shares of Class B common stock, $0.0001 par value per share, issued and outstanding.
INTRODUCTORY NOTE
On October 20, 2021 (the "Closing" or the “Closing Date”), Mirion Technologies, Inc. (formerly known as GS Acquisition Holdings Corp II or "GSAH") consummated its business combination with GSAH (the "Business Combination") pursuant to the Business Combination Agreement dated June 17, 2021 (as amended, the “Business Combination Agreement”). On the Closing Date, GSAH was renamed Mirion Technologies, Inc.
Unless the context otherwise requires, all references in this Quarterly Report on Form 10-Q to “Mirion,” the “Company,” “we,” “us” or “our” refer to Mirion Technologies, Inc. following the Business Combination, other than certain historical information which refers to the business of Mirion Technologies (TopCo), Ltd. (“Mirion TopCo”) prior to the consummation of the Business Combination.
As a result of the Business Combination, Mirion’s financial statement presentation distinguishes Mirion TopCo as the “Predecessor” for periods prior to the closing of the Business Combination and Mirion Technologies, Inc. as the “Successor” for periods after the closing of the Business Combination. As a result of the application of the acquisition method of accounting in the Successor Period, the financial statements for the Successor Period are presented on a full step-up basis as a result of the Business Combination, and are therefore not comparable to the financial statements of the Predecessor Period that are not presented on the same full step-up basis due to the Business Combination.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the "safe-harbor" provisions of the Private Securities Litigation Reform Act of 1995 that reflect future plans, estimates, beliefs, and expected performance. All statements contained in this Quarterly Report on Form 10-Q other than statements of historical fact, including statements regarding our future operating results and financial position, our business strategy and plans, our objectives for future operations, macroeconomic trends, and our competitive positioning are forward-looking statements. This includes, without limitation, statements under Part I, Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations regarding our financial position, capitalization and capital structure, any exercise, exchange, redemption or other settlement of our outstanding warrants and other securities, indebtedness, business strategy, and the plans and objectives of management for future operations, market share and products sales, future market opportunities, future manufacturing capabilities and facilities, future sales channels and strategies, goodwill impairment, backlog, our supply chain challenges, matters affecting Russia, relations between the United States and China, conflict in the Middle East, foreign exchange, interest rate and inflation trends, any merger, acquisition,divestiture or investment activity, including integration of previously completed mergers and acquisitions, or other strategic transactions and investments, legal claims, litigation, arbitration or similar proceedings, including with respect to customer disputes, and the future or expected impact on us of any epidemic, pandemic or other crises. These statements constitute projections, forecasts and forward-looking statements, and are not guarantees of performance. When used in this Quarterly Report on Form 10-Q, words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “strive,” “seeks,” “plans,” “scheduled,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. When we discuss our strategies or plans we are making projections, forecasts or forward-looking statements. Such statements are based on the beliefs of, as well as assumptions made by and information currently available to, our management.
The forward-looking statements contained in this Quarterly Report on Form 10-Q are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, the following risks, uncertainties and other factors:
•changes in domestic and foreign business, market, economic, financial, political and legal conditions, including related to matters affecting Russia, the relationship between the United States and China, and conflict in the Middle East and risks of slowing economic growth or economic recession in the United States and globally;
•developments in the government budgets (defense and non-defense) in the United States and other countries, including budget reductions, sequestration, implementation of spending limits or changes in budgeting priorities, delays in the government budget process, a U.S. government shutdown or the U.S. government's failure to raise the debt ceiling;
•risks related to the public's perception of nuclear radiation and nuclear technologies;
•risks related to the continued growth of our end markets;
•our ability to win new customers and retain existing customers;
•our ability to realize sales expected from our backlog of orders and contracts;
•risks related to governmental contracts;
•our ability to mitigate risks associated with long-term fixed price contracts, including risks related to inflation;
•risks related to information technology disruption or security;
•risks related to the implementation and system failures or other disruptions or cybersecurity, data or other security threats;
•our ability to manage our supply chain or difficulties with third-party manufacturers;
•risks related to competition;
•our ability to manage disruptions of, or changes in, our independent sales representatives, distributors and original equipment manufacturers;
•our ability to realize the expected benefit from strategic transactions, such as acquisitions, divestitures and investments, including any synergies or internal restructuring and improvement efforts;
•our ability to issue debt, equity or equity-linked securities in the future;
•risks related to changes in tax law and ongoing tax audits;
•risks related to future legislation and regulation both in the United States and abroad;
•risks related to the costs or liabilities associated with product liability claims;
•risks related to the uncertainty of legal claims, litigation, arbitration and similar proceedings;
•our ability to attract, train, and retain key members of our leadership team and other qualified personnel;
•risks related to the adequacy of our insurance coverage;
•risks related to the global scope of our operations, including operations in international and emerging markets;
•risks related to our exposure to fluctuations in foreign currency exchange rates, interest rates and inflation, including the impact on our debt service costs;
•our ability to comply with various laws and regulations and the costs associated with legal compliance;
•risks related to the outcome of any litigation, government and regulatory proceedings, investigations and inquiries;
•risks related to our ability to protect or enforce our proprietary rights on which our business depends or third-party intellectual property infringement claims;
•liabilities associated with environmental, health, and safety matters;
•our ability to predict our future operational results;
•the effects of health epidemics, pandemics and similar outbreaks may have on our business, results of operations or financial condition; and
•other risks and uncertainties indicated in our Annual Report on Form 10-K for the year ended December 31, 2023 and this Quarterly Report on Form 10-Q, including those under the heading “Risk Factors,” and other documents filed or to be filed with the U.S. Securities and Exchange Commission ("SEC") by us.
There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements.
Forward-looking statements included in this Quarterly Report on Form 10-Q speak only as of the date of this Quarterly Report on Form 10-Q or any earlier date specified for such statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
We intend to announce material information to the public through the Mirion Investor Relations website, available at ir.mirion.com, SEC filings, press releases, public conference calls, and public webcasts. We use these channels, as well as social media, to communicate with our investors, customers and the public about our company, our offerings and other issues. It is possible that the information we post on our website or social media could be deemed to be material information. As such, we encourage investors, the media, and others to follow the channels listed above, including the social media channels listed on our investor relations website, and to review the information disclosed through such channels. Any updates to the list of disclosure channels through which we will announce information will be posted on the investor relations website.
TABLE OF CONTENTS
| | | | | |
| Page |
PART I - FINANCIAL INFORMATION | |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEX TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| | | | | |
as of March 31, 2024 and December 31, 2023 | |
for the three months ended March 31, 2024 and March 31, 2023 | |
for the three months ended March 31, 2024 and March 31, 2023 | |
for the three months ended March 31, 2024 and March 31, 2023 | |
for the three months ended March 31, 2024 and March 31, 2023 | |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
Mirion Technologies, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In millions, except share data)
| | | | | | | | | | | |
| March 31, 2024 | | December 31, 2023 |
ASSETS | | | |
Current assets: | | | |
Cash and cash equivalents | $ | 120.2 | | | $ | 128.8 | |
Restricted cash | 0.4 | | | 0.6 | |
Accounts receivable, net of allowance for doubtful accounts | 146.1 | | | 172.3 | |
Costs in excess of billings on uncompleted contracts | 62.6 | | | 48.7 | |
Inventories | 146.8 | | | 144.1 | |
Prepaid expenses and other current assets | 38.5 | | | 44.1 | |
Total current assets | 514.6 | | | 538.6 | |
Property, plant, and equipment, net | 138.3 | | | 134.5 | |
Operating lease right-of-use assets | 31.1 | | | 32.8 | |
Goodwill | 1,440.2 | | | 1,447.6 | |
Intangible assets, net | 504.3 | | | 538.8 | |
Restricted cash | 1.1 | | | 1.1 | |
Other assets | 19.1 | | | 25.1 | |
Total assets | $ | 2,648.7 | | | $ | 2,718.5 | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | |
Current liabilities: | | | |
Accounts payable | $ | 53.1 | | | $ | 58.7 | |
Deferred contract revenue | 95.8 | | | 103.4 | |
Third-party debt, current | 0.1 | | | 1.2 | |
Operating lease liability, current | 6.6 | | | 6.8 | |
Accrued expenses and other current liabilities | 79.0 | | | 95.6 | |
Total current liabilities | 234.6 | | | 265.7 | |
Third-party debt, non-current | 685.3 | | | 684.7 | |
Warrant liabilities | 61.0 | | | 55.3 | |
Operating lease liability, non-current | 26.5 | | | 28.1 | |
Deferred income taxes, non-current | 77.3 | | | 84.0 | |
Other liabilities | 46.1 | | | 50.7 | |
Total liabilities | 1,130.8 | | | 1,168.5 | |
Commitments and contingencies (Note 10) | | | |
Stockholders’ equity (deficit): | | | |
Class A common stock; $0.0001 par value, 500,000,000 shares authorized; 218,735,333 shares issued and outstanding at March 31, 2024; 218,177,832 shares issued and outstanding at December 31, 2023 | — | | | — | |
Class B common stock; $0.0001 par value, 100,000,000 shares authorized; 7,326,423 issued and outstanding at March 31, 2024; 7,787,333 issued and outstanding at December 31, 2023 | — | | | — | |
Treasury stock, at cost; 149,076 shares at March 31, 2024 and December 31, 2023 | (1.3) | | | (1.3) | |
Additional paid-in capital | 2,063.9 | | | 2,056.5 | |
Accumulated deficit | (531.2) | | | (505.4) | |
Accumulated other comprehensive loss | (74.2) | | | (65.3) | |
Mirion Technologies, Inc. stockholders’ equity | 1,457.2 | | | 1,484.5 | |
Noncontrolling interests | 60.7 | | | 65.5 | |
Total stockholders’ equity | 1,517.9 | | | 1,550.0 | |
Total liabilities and stockholders’ equity | $ | 2,648.7 | | | $ | 2,718.5 | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
Mirion Technologies, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(In millions, except per share data)
| | | | | | | | | | | |
| Three Months Ended March 31, 2024 | | Three Months Ended March 31, 2023 |
Revenues: | | | |
Product | $ | 140.0 | | | $ | 132.4 | |
Service | 52.6 | | | 49.7 | |
Total revenues | 192.6 | | | 182.1 | |
Cost of revenues: | | | |
Product | 79.0 | | | 76.8 | |
Service | 26.5 | | | 26.2 | |
Total cost of revenues | 105.5 | | | 103.0 | |
Gross profit | 87.1 | | | 79.1 | |
Operating expenses: | | | |
Selling, general and administrative | 84.1 | | | 85.1 | |
Research and development | 7.9 | | | 7.6 | |
Total operating expenses | 92.0 | | | 92.7 | |
Loss from operations | (4.9) | | | (13.6) | |
Other expense (income): | | | |
Interest expense | 15.5 | | | 16.0 | |
Interest income | (1.7) | | | (1.1) | |
Loss on debt extinguishment | — | | | 2.6 | |
Foreign currency loss (gain), net | 0.8 | | | (0.3) | |
Increase in fair value of warrant liabilities | 5.7 | | | 13.4 | |
Other expense (income), net | 0.1 | | | (0.2) | |
Loss before income taxes | (25.3) | | | (44.0) | |
Loss (benefit) from income taxes | 1.2 | | | (1.1) | |
Net loss | (26.5) | | | (42.9) | |
Loss attributable to noncontrolling interests | (0.7) | | | (1.0) | |
Net loss attributable to Mirion Technologies, Inc. | $ | (25.8) | | | $ | (41.9) | |
| | | |
Net loss per common share attributable to Mirion Technologies, Inc. — basic and diluted | $ | (0.13) | | | $ | (0.22) | |
Weighted average common shares outstanding — basic and diluted | 199.729 | | | 187.701 | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
Mirion Technologies, Inc.
Condensed Consolidated Statements of Comprehensive Loss
(Unaudited)
(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: | | | |
Foreign currency translation (loss) gain, net of tax | (14.7) | | | 10.6 | |
Unrealized gain (loss) on net investment hedges, net of tax | 4.9 | | | (2.3) | |
Unrealized gain on cash flow hedge, net of tax | 0.6 | | | — | |
Other comprehensive (loss) income, net of tax | (9.2) | | | 8.3 | |
Comprehensive loss | (35.7) | | | (34.6) | |
Less: Comprehensive loss attributable to noncontrolling interest | (1.0) | | | (0.7) | |
Comprehensive loss attributable to Mirion Technologies, Inc. | $ | (34.7) | | | $ | (33.9) | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
Mirion Technologies, Inc.
Condensed Consolidated Statements of Stockholders’ Equity
(Unaudited)
(In millions, except share amounts)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Class A Common Stock | | Class B Common Stock | | Treasury Stock | | Additional Paid-In Capital | | Accumulated Deficit | | Accumulated Other Comprehensive (Loss) Income | | Noncontrolling Interests | | Total Stockholders’ Equity |
| Shares | | Amount | | Shares | | Amount | | Shares | | Amount | | | | | |
Balance December 31, 2022 | 200,298,834 | | | $ | — | | | 8,040,540 | | | $ | — | | | — | | | $ | — | | | $ | 1,882.4 | | | $ | (408.5) | | | $ | (75.7) | | | $ | 69.0 | | | $ | 1,467.2 | |
Warrant redemptions | 100 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
Stock issued for vested restricted stock units | 40,764 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
Stock compensation to directors in lieu of cash compensation | 12,090 | | | — | | | — | | | — | | | — | | | — | | | 0.1 | | | — | | | — | | | — | | | 0.1 | |
Conversion of shares of class B common stock to class A common stock | 193,207 | | | — | | | (193,207) | | | — | | | — | | | — | | | 1.6 | | | — | | | — | | | (1.6) | | | — | |
Issuance of shares of class A common stock, net of offering costs | 17,142,857 | | | — | | | — | | | — | | | — | | | — | | | 149.8 | | | — | | | — | | | — | | | 149.8 | |
Stock-based compensation expense | — | | | — | | | — | | | — | | | — | | | — | | | 5.5 | | | — | | | — | | | — | | | 5.5 | |
Net loss | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (41.9) | | | — | | | (1.0) | | | (42.9) | |
Other comprehensive income | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 8.0 | | | 0.3 | | | 8.3 | |
Balance March 31, 2023 | 217,687,852 | | | $ | — | | | 7,847,333 | | | $ | — | | | — | | | $ | — | | | $ | 2,039.4 | | | $ | (450.4) | | | $ | (67.7) | | | $ | 66.7 | | | $ | 1,588.0 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Class A Common Stock | | Class B Common Stock | | Treasury Stock | | Additional Paid-In Capital | | Accumulated Deficit | | Accumulated Other Comprehensive (Loss) Income | | Noncontrolling Interests | | Total Stockholders’ Equity |
| Shares | | Amount | | Shares | | Amount | | Shares | | Amount | | | | | |
Balance December 31, 2023 | 218,177,832 | | | $ | — | | | 7,787,333 | | | $ | — | | | 149,076 | | | $ | (1.3) | | | $ | 2,056.5 | | | $ | (505.4) | | | $ | (65.3) | | | $ | 65.5 | | | $ | 1,550.0 | |
Stock issued for vested restricted stock units | 88,171 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
Stock compensation to directors in lieu of cash compensation | 8,420 | | | — | | | — | | | — | | | — | | | — | | | 0.1 | | | — | | | — | | | — | | | 0.1 | |
Conversion of shares of class B common stock to class A common stock | 460,910 | | | — | | | (460,910) | | | — | | | — | | | — | | | 3.8 | | | — | | | — | | | (3.8) | | | — | |
Stock-based compensation expense | — | | | — | | | — | | | — | | | — | | | — | | | 3.5 | | | — | | | — | | | — | | | 3.5 | |
Net loss | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (25.8) | | | — | | | (0.7) | | | (26.5) | |
Other comprehensive loss | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (8.9) | | | (0.3) | | | (9.2) | |
Balance March 31, 2024 | 218,735,333 | | | $ | — | | | 7,326,423 | | | $ | — | | | 149,076 | | | $ | (1.3) | | | $ | 2,063.9 | | | $ | (531.2) | | | $ | (74.2) | | | $ | 60.7 | | | $ | 1,517.9 | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
Mirion Technologies, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In millions)
| | | | | | | | | | | |
| Three Months Ended March 31, 2024 | | Three Months Ended March 31, 2023 |
OPERATING ACTIVITIES: | | | |
Net loss | $ | (26.5) | | | $ | (42.9) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | | | |
Depreciation and amortization expense | 38.8 | | | 41.3 | |
Stock-based compensation expense | 3.6 | | | 5.5 | |
Amortization of debt issuance costs | 0.7 | | | 3.5 | |
Provision for doubtful accounts | 0.8 | | | 0.8 | |
Inventory obsolescence write down | 1.2 | | | 1.0 | |
Change in deferred income taxes | (7.5) | | | (7.1) | |
Loss on disposal of property, plant and equipment | 0.3 | | | 0.8 | |
Loss (gain) on foreign currency transactions | 0.8 | | | (0.3) | |
Increase in fair values of warrant liabilities | 5.7 | | | 13.4 | |
Changes in operating assets and liabilities: | | | |
Accounts receivable | 24.2 | | | 19.1 | |
Costs in excess of billings on uncompleted contracts | (8.2) | | | (8.6) | |
Inventories | (5.6) | | | (13.9) | |
Prepaid expenses and other current assets | 4.2 | | | (0.3) | |
Accounts payable | (5.4) | | | (2.5) | |
Accrued expenses and other current liabilities | (12.3) | | | (8.5) | |
Deferred contract revenue and liabilities | (9.1) | | | (3.6) | |
Other assets | (0.2) | | | 0.4 | |
Other liabilities | 0.5 | | | (0.8) | |
Net cash provided by (used in) operating activities | 6.0 | | | (2.7) | |
INVESTING ACTIVITIES: | | | |
Acquisitions of businesses, net of cash and cash equivalents acquired | (1.0) | | | — | |
Purchases of property, plant, and equipment and badges | (12.8) | | | (7.5) | |
Proceeds from net investment hedge derivative contracts | 0.9 | | | — | |
Net cash used in investing activities | (12.9) | | | (7.5) | |
FINANCING ACTIVITIES: | | | |
Issuances of common stock | — | | | 150.0 | |
Common stock issuance costs | — | | | (0.2) | |
Principal repayments | — | | | (125.0) | |
Proceeds from net cash flow hedge derivative contracts | 0.3 | | | — | |
Other financing | (0.1) | | | (0.2) | |
Net cash provided by financing activities | 0.2 | | | 24.6 | |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | (2.1) | | | 0.7 | |
Net (decrease) increase in cash, cash equivalents, and restricted cash | (8.8) | | | 15.1 | |
Cash, cash equivalents, and restricted cash at beginning of period | 130.5 | | | 75.0 | |
Cash, cash equivalents, and restricted cash at end of period | $ | 121.7 | | | $ | 90.1 | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
Mirion Technologies, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1. Nature of Business and Summary of Significant Accounting Policies
Nature of Business
Mirion Technologies, Inc. (“Mirion,” the “Company," "we," "our," or "us" and formerly GS Acquisition Holdings Corp II ("GSAH")) is a global provider of radiation detection, measurement, analysis, and monitoring products and services to the medical, nuclear, and defense end markets. On October 20, 2021, Mirion Technologies, Inc. was formed (formerly known as GS Acquisition Holdings Corp II or "GSAH") when it consummated its business combination with GSAH (the "Business Combination") pursuant to the Business Combination Agreement dated June 17, 2021.
We provide products and services through our two operating and reportable segments; (i) Medical and (ii) Technologies. 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 Technologies 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, the Netherlands, Estonia, and Japan.
Basis of Presentation and Principles of Consolidation
The accompanying unaudited Condensed Consolidated Financial Statements and Notes to Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for financial statements and pursuant to the accounting and disclosure rules and regulations of the U.S. Securities and Exchange Commission (the "SEC") for interim financial information. The interim unaudited Condensed Consolidated Financial Statements reflect all adjustments that are of a normal recurring nature and that are considered necessary for a fair representation of the results for the periods presented and should be read in conjunction with the audited Consolidated Financial Statements and notes thereto for the period ended December 31, 2023, which include a complete set of footnote disclosures, including our significant accounting policies included in our Annual Report on Form 10-K. The results for interim periods are not necessarily indicative of the results that may be expected for a full fiscal year or for any other future period. The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned and majority-owned or controlled subsidiaries. For consolidated subsidiaries where our ownership is less than 100%, the portion of the net income or loss allocated to noncontrolling interests is reported as “Income (Loss) attributable to noncontrolling interests” in the unaudited Condensed Consolidated Statements of Operations. All intercompany accounts and transactions have been eliminated in consolidation.
The Company recognizes a noncontrolling interest for the portion of Class B common stock of IntermediateCo that is not attributable to the Company. See Note 20, Noncontrolling Interests.
Segments
The Company manages its operations through two operating and reportable segments: Medical and Technologies (formerly known as 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. Refer to Note 15, Segment Information, for further detail.
Use of Estimates
Management estimates and judgments are an integral part of financial statements prepared in accordance with GAAP. We believe that the critical accounting policies listed below address the more significant estimates required of management when preparing our consolidated financial statements in accordance with GAAP. We consider an accounting estimate critical if changes in the estimate may have a material impact on our financial condition or results of operations. We believe that the accounting estimates employed are appropriate and resulting balances are reasonable; however, actual results could differ from the original estimates, requiring adjustment to these balances in future periods. The accounting policies that reflect our more significant estimates, judgments and assumptions and which we believe are the most critical to aid in fully understanding and evaluating our reported financial results include but are not limited to: business combinations, goodwill and intangible assets; estimated progress toward completion for certain revenue contracts; uncertain tax positions and tax valuation allowances and derivative warrant liabilities.
Significant Accounting Policies
There have been no material changes in our significant accounting policies during the three months ended March 31, 2024, as compared to the significant accounting policies described in Note 1 to the audited consolidated financial statements on Form 10-K for the period ended December 31, 2023.
Accounts Receivable and Allowance for Doubtful Accounts
The allowance for doubtful accounts is based on the Company’s assessment of the collectability of customer accounts. The allowance for doubtful accounts was $8.1 million and $7.8 million as of March 31, 2024 and December 31, 2023, respectively.
Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets are primarily comprised of various prepaid assets including prepaid insurance, short-term marketable securities, and income tax receivables.
The components of prepaid expenses and other current assets consist of the following (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 | |
| $ | 38.5 | | | $ | 44.1 | |
Facility and Equipment Decommissioning Liabilities
The Company has asset retirement obligations (“ARO”) consisting primarily of equipment and facility decommissioning costs. ARO liabilities totaled $2.3 million for both periods ended March 31, 2024 and December 31, 2023, and were included in accrued expenses and other current liabilities and other liabilities on the unaudited Condensed Consolidated Balance Sheets. Accretion expense related to these liabilities was not material for any periods presented.
Revenue Recognition
The Company recognizes revenue from arrangements that include performance obligations to design, engineer, manufacture, deliver, and install products. If a performance obligation does not qualify for over-time revenue recognition, revenue is then recognized at the point-in-time in which control of the distinct good or service is transferred to the customer, typically based upon the terms of delivery.
Revenue derived from passive dosimetry and analytical services is of a subscription nature and is provided to customers on an agreed-upon recurring monthly, quarterly or annual basis. Revenue is recognized ratably over the service period as the service is continuous, and no other discernible pattern of recognition is evident.
Contract Balances
The timing of the Company's revenue recognition, invoicing, and cash collections results in accounts receivable, costs and estimated earnings in excess of billings on uncompleted contracts, and deferred contract revenue. Refer to Note 4, Contracts in Progress for further details.
Remaining Performance Obligations
The remaining performance obligations for all open contracts as of March 31, 2024 include assembly, delivery, installation, and trainings. The aggregate amount of the transaction price allocated to the remaining performance obligations for all open customer contracts was approximately $840.5 million and $857.1 million as of March 31, 2024 and December 31, 2023, respectively. As of March 31, 2024, the Company expects to recognize approximately 45%, 25%, 12%, and 10% of the remaining performance obligations as revenue during the fiscal years 2024, 2025, 2026 and 2027, respectively, and the remainder thereafter.
Disaggregation of Revenues
A disaggregation of the Company’s revenues by segment, geographic region, timing of revenue recognition and product category is provided in Note 15, Segment Information.
Warrant Liability
As of March 31, 2024, the Company had outstanding warrants to purchase up to 27,249,779 shares of Class A common stock. The Company accounts for the warrants in accordance with the guidance contained in ASC 815, “Derivatives and Hedging”, under which the warrants do not meet the criteria for equity treatment and must be recorded as derivative liabilities. Accordingly, the Company classifies the warrants as liabilities at their fair value and adjusts the warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until the warrants are exercised or expire, and any change in fair value is recognized in the Company’s unaudited Condensed Consolidated Statements of Operations. The fair value of the warrants (the "Public Warrants") issued in connection with GSAH's initial public offering has been measured based on the listed market price of such Public Warrants. As the transfer of certain warrants issued in a private placement (the "Private Placement Warrants") to GS Sponsor II LLC, the sponsor of GSAH (the "Sponsor"), to anyone who is not a permitted transferee would result in the Private Placement Warrants having substantially the same terms as the Public Warrants, we determined that the fair value of each Private Placement Warrant is equivalent to that of each Public Warrant. The determination of the fair value of the warrant liability may be subject to change as more current information becomes available and accordingly the actual results could differ significantly. Derivative warrant liabilities are classified as non-current liabilities as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities. See Note 16, Fair Value Measurements. On April 18, 2024, the Company announced that it will redeem all Public Warrants that remain outstanding at 5:00 pm New York City time on Monday, May 20, 2024, for a redemption price of $0.10 per warrant. See Note 22, Subsequent Events.
Treasury Stock
We account for treasury stock under the cost method pursuant to the provisions of ASC 505-30, Treasury Stock. Under the cost method, the gross cost of the shares reacquired is charged to a contra equity account, treasury stock. The equity accounts that were originally credited for the original share issuance, Common Stock and additional paid-in capital, remain intact.
If the treasury shares are ever reissued in the future at a price higher than its cost, the difference is recorded as a component of additional paid-in-capital in the unaudited Condensed Consolidated Balance Sheets. When treasury stock is re-issued at a price lower than its cost, the difference is recorded as a component of additional paid-in-capital to the extent that there are previously recorded gains to offset the losses. If there are no treasury stock gains in additional paid-in-capital, the losses upon re-issuance of treasury stock are recorded as a reduction of retained earnings in the unaudited Condensed Consolidated Balance Sheets. If treasury stock is reissued in the future, a cost flow assumption (e.g., FIFO, LIFO or specific identification) will be adopted to compute excesses and deficiencies upon subsequent share reissuance.
Concentrations of Risk
Financial instruments that are potentially subject to concentration of credit risk consist primarily of cash and cash equivalents and accounts receivable. The Company maintains cash in bank deposit accounts that, at times, may exceed the insured limits of the local country. The Company has not experienced any losses in such accounts.
The Company sells its products and services mainly to large, private and governmental organizations in the Americas, Europe, the Middle East and Asia Pacific regions. The Company performs ongoing evaluations of its customers’ financial condition and limits the amount of credit extended when deemed necessary. The Company generally does not require its customers to provide collateral or other security to support accounts receivable. As of March 31, 2024 and December 31, 2023, no customer accounted for more than 10% of the accounts receivable balance.
Recent Accounting Pronouncements
Accounting Guidance Issued But Not Yet Adopted
In October 2023, the FASB issued ASU 2023-06 “Disclosure Improvements”. ASU 2023-06 clarifies or improves
disclosure and presentation requirements of a variety of topics. For entities subject to the SEC’s existing disclosure requirements, the effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. For all entities, if by June 30, 2027, the SEC has not removed the applicable requirement from Regulation S-X or Regulation S-K, the pending content of the related amendment will be removed from the codification and will not become effective for any entity. The Company is currently evaluating the impact of this ASU.
In November 2023, the FASB issued ASU 2023-07 "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures". ASU 2023-07 improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. For all entities, the amendments will be effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The amendments will be applied retrospectively to all prior periods presented in the financial statements. The Company is evaluating the impact of this new standard and believes that the adoption will result in additional disclosures, but will not have any other impact on its consolidated financial statements.
In December 2023, the FASB issued ASU 2023-09 "Income Taxes (Topic 740): Improvements to Income Tax Disclosures". ASU 2023-09 enhances the existing income tax disclosures primarily related to the rate reconciliation and income taxes paid information. For public business entities, the amendments are effective for annual periods beginning after December 15, 2024, with early adoption permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments will be applied on a prospective basis, with retrospective application permitted. The Company is currently evaluating the impact of this ASU.
In March 2024, the FASB issued ASU 2024-01 "Compensation - Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards". ASU 2024-01 improves GAAP by demonstrating how an entity should apply the scope guidance to determine whether profits interest and similar awards should be accounted for in accordance with Topic 718. For public business entities, the amendments are effective for annual periods beginning after December 15, 2024, and interim periods within those annual periods. Early adoption is permitted for both interim and annual financial
statements that have not yet been issued or made available for issuance. The amendments should be applied either (1) retrospectively to all prior periods presented in the financial statements or (2) prospectively to profits interest and similar awards granted or modified on or after the date at which the entity first applies the amendments. The Company is currently evaluating the impact of this ASU.
Other Guidance Issued But Not Yet Adopted
In March 2024, the SEC issued its final climate disclosure rules, which require the disclosure of climate-related information in annual reports and registration statements. The rules require disclosure in the audited financial statements of certain effects of severe weather events and other natural conditions above certain financial thresholds, as well as amounts related to carbon offsets and renewable energy credits or certificates, if material. Disclosure requirements will begin phasing in for fiscal years beginning on or after January 1, 2025. On April 4, 2024, the SEC determined to voluntarily stay the final rules pending certain legal challenges. We are currently evaluating the impact of the new rules and considering the potential outcome of the legal challenges.
2. Business Combinations and Acquisitions
The Company continually evaluates potential acquisitions that strategically fit with the Company’s existing portfolio. On November 1, 2023, Mirion closed the acquisition of ec2 Software Solutions, LLC and NUMA LLC (collectively "ec2") with a purchase price of $31.4 million in a taxable transaction pursuant to an asset purchase agreement dated November 1, 2023 between Mirion and ec2. As part of the Mirion Medical segment, ec2 will complement the Nuclear Medicine and Molecular Imaging portfolio of Capintec. The total business enterprise value acquired for the ec2 acquisition was comprised of $14.5 million of intangible assets related to technology, trade name, and customer list, $17.4 million of goodwill and $0.5 million of liabilities mainly related to deferred revenue.
Measurement period adjustments to the previously disclosed preliminary fair value of net assets related to ec2 were recorded in 2024, resulting in a $0.6 million net increase in goodwill, primarily due to additional consideration of $1.0 million (final net working capital adjustment) and a $0.3 million net increase in intangible assets during the three months ended March 31, 2024. The estimated fair values of all assets acquired and liabilities assumed in the acquisition are provisional and may be revised as a result of additional information obtained during the measurement period of up to one year from the acquisition date, including but not limited to deferred revenue balances and the valuation of tax accounts.
Transaction costs related to ec2 were not material for the three months ended March 31, 2024.
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. 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 measurement period, as required.
Purchases of 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 but some portion may be deductible for income tax purposes. 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.
3. Contracts in Progress
Costs and billings on uncompleted construction-type contracts consist of the following (in millions):
| | | | | | | | | | | |
| March 31, 2024 | | December 31, 2023 |
Costs incurred on contracts (from inception to completion) | $ | 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) | |
| $ | 40.6 | | | $ | 21.9 | |
The carrying amounts related to uncompleted construction-type contracts are included in the accompanying unaudited Condensed Consolidated Balance Sheets under the following captions (in millions):
| | | | | | | | | | | |
| March 31, 2024 | | December 31, 2023 |
Costs and estimated earnings in excess of billings on uncompleted contracts – current | $ | 62.6 | | | $ | 48.7 | |
Costs and estimated earnings in excess of billings on uncompleted contracts – non-current (1) | 11.3 | | | 18.2 | |
Billings in excess of costs and estimated earnings on uncompleted contracts – current (2) | (31.5) | | | (41.1) | |
Billings in excess of costs and estimated earnings on uncompleted contracts – non-current (3) | (1.8) | | | (3.9) | |
| $ | 40.6 | | | $ | 21.9 | |
(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 months ended March 31, 2024 the Company has recognized revenue of $17.6 million related to the contract liabilities balance as of December 31, 2023.
4. Inventories
The components of inventories consist of the following (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 | |
| $ | 146.8 | | | $ | 144.1 | |
5. Property, Plant and Equipment, Net
Property, plant and equipment, net consist of the following (in millions):
| | | | | | | | | | | | | | | | | |
| Depreciable Lives | | March 31, 2024 | | December 31, 2023 |
Land, buildings, and leasehold improvements | 3-39 years | | $ | 49.9 | | | $ | 49.4 | |
Machinery and equipment | 5-15 years | | 39.6 | | | 38.5 | |
Badges | 3-5 years | | 44.2 | | | 41.0 | |
Furniture, fixtures, computer equipment and other | 3-10 years | | 22.9 | | | 22.9 | |
Software development costs | 3-5 years | | 11.0 | | | 10.7 | |
Construction in progress (1) | — | | 32.5 | | | 28.6 | |
| | | 200.1 | | | 191.1 | |
Less: accumulated depreciation and amortization | | | (61.8) | | | (56.6) | |
| | | $ | 138.3 | | | $ | 134.5 | |
(1) Includes $5.6 million and $4.2 million of Construction in progress for internally developed software as of March 31, 2024, and December 31, 2023, respectively.
Total depreciation expense included in costs of revenues and operating expenses was as follows (in millions):
| | | | | | | | | | | |
| Three Months Ended | | Three Months Ended |
| March 31, 2024 | | March 31, 2023 |
Depreciation expense in: | | | |
Cost of revenues | $ | 5.3 | | | $ | 4.7 | |
Operating expenses | $ | 2.0 | | | $ | 2.9 | |
6. Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consist of the following (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 | |
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. Goodwill is assigned to reporting units at the date the goodwill is initially recorded and is reallocated as necessary based on the composition of reporting units over time.
The Company assesses goodwill for impairment at the reporting unit level annually on the first day of the 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.
A quantitative test performed upon the occurrence of a triggering event compares the fair value of a reporting unit with its carrying amount. The Company determines fair values for each of the reporting units, as applicable, using the market approach, when available and appropriate, or the income approach, or a combination of both. The Company assesses the valuation methodology based upon the relevance and availability of the data at the time the Company performs the valuation. If multiple valuation methodologies are used, the results are weighted appropriately.
Valuations using the market approach are derived from metrics of publicly traded companies or historically completed transactions of comparable businesses. The selection of comparable businesses is based on the markets in which the reporting units operate giving consideration to risk profiles, size, geography, and diversity of products and services. A market approach is limited to reporting units for which there are publicly traded companies that have characteristics similar to the Company's businesses.
Under the income approach, fair value is determined based on the present value of estimated future cash flows, discounted at an appropriate risk-adjusted rate. The Company uses its internal forecasts to estimate future cash flows and include an estimate of long-term future growth rates based on our most recent views of the long-term outlook for each business. Actual results may differ from those assumed in the forecasts. The Company derives its discount rates using a capital asset pricing model and by analyzing published rates for industries relevant to its reporting units to estimate the cost of equity financing. The Company uses discount rates that are commensurate with the risks and uncertainty inherent in the respective businesses and in internally developed forecasts.
No goodwill impairment was recognized for the three months ended March 31, 2024 and March 31, 2023, respectively.
The following table shows changes in the carrying amount of goodwill by reportable segment as of March 31, 2024 and December 31, 2023 (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 | |
A portion of goodwill is deductible for income tax purposes.
Gross carrying amounts and cumulative goodwill impairment losses are as follows (in millions):
| | | | | | | | | | | | | | | | | | | | | | | |
| March 31, 2024 | | December 31, 2023 |
| Gross Carrying Amount | | Cumulative Impairment | | Gross Carrying Amount | | Cumulative Impairment |
Goodwill | $ | 1,652.0 | | | $ | (211.8) | | | $ | 1,659.4 | | | $ | (211.8) | |
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 while all other definite lived intangible assets are amortized on a straight-line basis over their estimated useful lives.
Many of our intangible assets are not deductible for income tax purposes. A summary of intangible assets useful lives, gross carrying value and related accumulated amortization is below (in millions):
| | | | | | | | | | | | | | | | | | | | | | | |
| | | March 31, 2024 |
| Original Average Life in Years | | Gross Carrying Amount | | Accumulated Amortization | | Net Book Value |
Customer relationships | 6 - 13 | | $ | 339.2 | | | $ | (155.8) | | | $ | 183.4 | |
Distributor relationships | 7 - 13 | | 60.9 | | | (17.8) | | | 43.1 | |
Developed technology | 5 - 16 | | 262.3 | | | (75.1) | | | 187.2 | |
Trade names | 3 - 10 | | 99.0 | | | (24.4) | | | 74.6 | |
Backlog and other | 1 - 4 | | 75.2 | | | (59.2) | | | 16.0 | |
Total | | | $ | 836.6 | | | $ | (332.3) | | | $ | 504.3 | |
| | | | | | | |
| | | December 31, 2023 |
| Original Average Life in Years | | Gross Carrying Amount | | Accumulated Amortization | | Net Book Value |
Customer relationships | 6 - 13 | | $ | 340.8 | | | $ | (143.1) | | | $ | 197.7 | |
Distributor relationships | 7 - 13 | | 60.9 | | | (16.0) | | | 44.9 | |
Developed technology | 5 - 16 | | 264.1 | | | (67.8) | | | 196.3 | |
Trade names | 3 - 10 | | 99.7 | | | (22.1) | | | 77.6 | |
Backlog and other | 1 - 4 | | 76.0 | | | (53.7) | | | 22.3 | |
Total | | | $ | 841.5 | | | $ | (302.7) | | | $ | 538.8 | |
Aggregate amortization expense for intangible assets included in cost of revenues and operating expenses was as follows (in millions):
| | | | | | | | | | | |
| Three Months Ended March 31, | | Three Months Ended March 31, |
| 2024 | | 2023 |
Amortization expense for intangible assets in: | | | |
Cost of revenues | $ | 6.8 | | | $ | 6.7 | |
Operating expenses | $ | 24.7 | | | $ | 26.9 | |
8. Borrowings
Third-party debt consist of the following (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 | |
As of March 31, 2024 and December 31, 2023, the fair market value of the Company's 2021 Credit Agreement (defined below) was $695.5 million. The fair market value for the 2021 Credit Agreement was 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 March 31, 2024 and December 31, 2023.
2021 Credit Agreement
In connection with the Business Combination, certain subsidiaries of the Company entered into the 2021 Credit Agreement with the lending institutions party thereto (as amended, restated, supplemented, or otherwise modified from time to time, the "2021 Credit Agreement").
The 2021 Credit Agreement refinanced and replaced the credit agreement from March 2019, by and between, among others, Mirion Technologies (HoldingRep), Ltd., its subsidiaries and Morgan Stanley Senior Funding Inc., as administrative agent, certain other revolving lenders and a syndicate of institutional lenders (the “2019 Credit Facility”).
The 2021 Credit Agreement provides for an $830.0 million senior secured first lien term loan facility and a $90.0 million senior secured revolving facility (collectively, the “Credit Facilities”). Funds from the Credit Facilities are permitted to be used in connection with the Business Combination and related transactions to refinance the 2019 Credit Facility referred to above and for general corporate purposes. The term loan facility is scheduled to mature on October 20, 2028 and the revolving facility is scheduled to expire and mature on October 20, 2026. The agreement requires the payment of a commitment fee of 0.50% per annum for unused revolving commitments, subject to stepdowns to 0.375% per annum and 0.25% per annum upon the achievement of specified leverage ratios. Any outstanding letters of credit issued under the 2021 Credit Agreement reduce the availability under the revolving line of credit.
The 2021 Credit Agreement is secured by a first priority lien on the equity interests of the Parent Borrower owned by Holdings and substantially all of the assets (subject to customary exceptions) of the borrowers and the other guarantors thereunder. Interest with respect to the facilities is based on, at the option of the borrowers, (i) a customary base rate formula for borrowings in U.S. dollars or (ii) a floating rate formula based on LIBOR (with customary fallback provisions) for borrowings in U.S. dollars, a floating rate formula based on Euro Interbank Offered Rate ("EURIBOR") for borrowings in Euro or a floating rate formula based on SONIA for borrowings in Pounds Sterling, each as described in the 2021 Credit Agreement with respect to the applicable type of borrowing. The 2021 Credit Agreement includes fallback language that seeks to either facilitate an agreement with the Company's lenders on a replacement rate for LIBOR in the event of its discontinuance or that automatically replaces LIBOR with benchmark rates based upon the Secured Overnight Financing Rate ("SOFR") or other benchmark replacement rates upon certain triggering events.
On June 23, 2023, the 2021 Credit Agreement was amended to replace the interest rate based on the London interbank offered rate (“LIBOR”) and related LIBOR-based mechanics applicable to U.S. Dollar borrowings under the Existing Credit Agreement with an interest rate based on SOFR and related SOFR-based mechanics. On December 30, 2023, certain subsidiaries of Mirion Technologies, Inc. and Citibank, N.A., as administrative agent and collateral agent, entered into a Holdings Assumption Agreement (the “Holdings Assumption Agreement”) and related collateral and guarantee joinder documents that supplemented and modified the 2021 Credit Agreement. Pursuant to the terms of the Holdings Assumption Agreement, Mirion Technologies (HoldingSub2), Ltd., a limited liability company incorporated in England and Wales (“HoldingSub2”), assigned to Mirion IntermediateCo, Inc., a Delaware corporation (“IntermediateCo”) and a subsidiary of the Company, all of its rights, obligations and liabilities in and under the 2021 Credit Agreement, including its obligations to guarantee certain obligations of the borrowers under the 2021 Credit Agreement and to pledge certain assets. After giving effect to the Holdings Assumption Agreement, HoldingSub2 was released from all of its obligations and liabilities as “Holdings” under the Existing Credit Agreement and the other credit documents, and IntermediateCo became party as “Holdings” to the Existing Credit Agreement and the other credit documents to which HoldingSub2 was a party as “Holdings” for all purposes.
The 2021 Credit Agreement contains customary representations and warranties as well as customary affirmative and negative covenants and events of default. The negative covenants include, among others and in each case subject to certain thresholds and exceptions, limitations on incurrence of liens, limitations on incurrence of indebtedness, limitations on making dividends and other distributions, limitations on engaging in asset sales, limitations on making investments, and a financial covenant that the “First Lien Net Leverage Ratio” (as defined in the 2021 Credit Agreement) as of the end of any fiscal quarter is not greater than 7.00 to 1.00 if on the last day of such fiscal quarter certain borrowings outstanding under the revolving credit facility exceed 40% of the total revolving credit commitments at such time. The covenants also contain limitations on the activities of Mirion IntermediateCo, Inc. as the “passive” holding company. If any of the events of default occur and are not cured or waived, any unpaid amounts under the 2021 Credit Agreement may be declared immediately due and payable, the revolving credit commitments may be terminated and remedies against the collateral may be exercised. Mirion IntermediateCo, Inc. were in compliance with all debt covenants on March 31, 2024 and December 31, 2023.
Term Loan - The term loan has a seven-year term (expiring October 2028) and bears interest at the greater of LIBOR (through June 30, 2023) / SOFR (subsequent to June 30, 2023) or 0.50%, plus 2.75%. No further principal payments are due until the expiration of the term. The interest rate was 8.36% and 8.40% (including spread rate based upon rate term) as of March 31, 2024 and December 31, 2023, respectively. The Company paid no principal payments and $127.1 million for the three months ended March 31, 2024 and for year ended December 31, 2023, respectively, yielding an outstanding balance of approximately $694.6 million for both periods ending March 31, 2024 and December 31, 2023.
During the three months ended March 31, 2023, the Company used $125.0 million of proceeds received from a direct registered equity offering to pay down early outstanding amounts on the term loan. This payment satisfied the quarterly principal repayment requirement (0.25% of the original principal balance) such that no additional principal repayments are necessary until the expiration of the term loan.
Revolving Line of Credit - The revolving line of credit arrangement has a five year term and bears interest at the greater of LIBOR (through June 30, 2023) / SOFR (subsequent to June 30, 2023) or 0%, plus 2.75%. The agreement requires the payment of a commitment fee of 0.25% per annum for unused commitments. The revolving line of credit matures in October 2026, at which time all outstanding revolving facility loans and accrued and unpaid interest are due. Any outstanding letters of credit reduce the availability of the revolving line of credit. There was no outstanding balance under the arrangement as of March 31, 2024 and December 31, 2023. Additionally, the Company has standby letters of credit issued under its 2021 Credit Agreement that reduce the availability under the revolver of $16.4 million for both period ended March 31, 2024 and December 31, 2023, respectively. The amount available on the revolver as of March 31, 2024 and December 31, 2023 was approximately $73.6 million.
Deferred Financing Costs
In connection with the issuance of the 2021 Credit Agreement term loan, we incurred debt issuance costs of $21.7 million on date of issuance. 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 the unaudited Condensed Consolidated Balance Sheets.
In connection with the issuance of the 2021 Credit Agreement revolving line of credit, we incurred debt issuance costs of $1.8 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 in the unaudited Condensed Consolidated Balance Sheets. We amortize all debt issuance costs over the life of the related indebtedness.
For the three months ended March 31, 2024 and March 31, 2023, we incurred approximately $0.7 million and $3.5 million (including a $2.6 million loss on debt extinguishment for the $125.0 million early debt repayment) of amortization expense of the deferred financing costs, respectively.
Canadian Financial Institution - In May 2019, the Company entered into a credit agreement for C$1.7 million ($1.3 million) with a Canadian financial institution that matures in April 2039. The note bears annual interest at 4.69%. The credit agreement is secured by the facility acquired using the funds obtained.
Overdraft Facilities
The Company has overdraft facilities with certain German and French financial institutions. As of March 31, 2024 and December 31, 2023, there were no outstanding amounts under these arrangements.
Accounts Receivable Sales Agreement
We are party to agreements to sell short-term receivables from certain qualified customer trade accounts to an unaffiliated French financial institution and an unaffiliated Finnish financial institution without recourse. Under these agreements, the Company can sell up to €7.6 million ($8.2 million) and €12.3 million ($13.6 million) as of March 31, 2024 and December 31, 2023, respectively, of eligible accounts receivables. The accounts receivable under these agreements are sold at face value and are excluded from the consolidated balance if revenue has been recognized on the related receivable. When the related revenue has not been recognized on the receivable the Company considers the accounts receivable to be collateral for short-term borrowings. As of March 31, 2024 and December 31, 2023, there was no amount and approximately $1.0 million, respectively, outstanding under these arrangements included as Other in the Borrowings table above.
Total costs associated with this arrangement were immaterial for all periods presented and are included in selling, general and administrative expense in the Condensed Consolidated Statements of Operations.
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 €77.1 million ($83.2 million) and €71.8 million ($79.3 million), as of March 31, 2024 and December 31, 2023, respectively, subject to certain local restrictions. As of March 31, 2024 and December 31, 2023, there were €54.9 million ($59.3 million) and €54.7 million ($60.4 million), respectively, of the lines that had been utilized to guarantee documentary and standby letters of credit, with interest rates ranging from 0.5% to 2.0%. 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 $1.5 million and $1.7 million as of March 31, 2024 and December 31, 2023, respectively.
At March 31, 2024, contractual principal payments of total third-party borrowings are as follows (in millions):
| | | | | |
Remainder of 2024 | $ | 0.1 | |
Fiscal year ending December 31: | |
2025 | 0.1 | |
2026 | 1.7 | |
2027 | 0.1 | |
2028 | 694.7 | |
Thereafter | 0.6 | |
Gross Payments | 697.3 | |
Unamortized debt issuance costs | (11.8) | |
Total third-party borrowings, net of debt issuance costs | $ | 685.5 | |
9. Leased Assets
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 table below presents the locations of the operating lease assets and liabilities in the unaudited Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023, respectively (in millions):
| | | | | | | | | | | | | | | | | |
| Balance Sheet Line Item | | March 31, 2024 | | December 31, 2023 |
Operating lease assets | Operating lease right-of-use assets | | $ | 31.1 | | | $ | 32.8 | |
Financing lease assets | Other assets | | $ | 0.1 | | | $ | 0.1 | |
| | | | | |
Operating lease liabilities: | | | | | |
Current operating lease liabilities | Current operating lease liabilities | | $ | 6.6 | | | $ | 6.8 | |
Non-current operating lease liabilities | Operating lease liability, non-current | | 26.5 | | | 28.1 | |
Total operating lease liabilities: | | | $ | 33.1 | | | $ | 34.9 | |
| | | | | |
Financing lease liabilities: | | | | | |
Current financing lease liabilities | Accrued expenses and other current liabilities | | $ | 0.1 | | | $ | 0.1 | |
Non-current financing lease liabilities | Deferred income taxes and other long-term liabilities | | 0.1 | | | 0.1 | |
Total financing lease liabilities: | | | $ | 0.2 | | | $ | 0.2 | |
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 March 31, 2024 and December 31, 2023, respectively, are:
| | | | | | | | | | | | | | |
| | March 31, 2024 | | December 31, 2023 |
Operating leases | | | | |
Weighted average remaining lease term (in years) | | 6.5 | | 6.6 |
Weighted average discount rate | | 4.32 | % | | 4.32 | % |
The table below reconciles the undiscounted future minimum lease payments (displayed by year and in the aggregate) under non-cancelable operating leases with terms of more than one year to the total lease liabilities recognized in the unaudited Condensed Consolidated Balance Sheets as of March 31, 2024 (in millions):
| | | | | |
Fiscal year ending December 31: | |
2024 | $ | 5.9 | |
2025 | 6.9 | |
2026 | 5.9 | |
2027 | 5.1 | |
2028 | 3.9 | |
2029 and thereafter | 10.2 | |
Total undiscounted future minimum lease payments | 37.9 | |
Less: Imputed interest | (4.8) | |
Total operating lease liabilities | $ | 33.1 | |
| |
For the three months ended March 31, 2024 and three months ended March 31, 2023, operating lease costs (as defined under ASU 2016-02) were $2.7 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.
Cash paid for amounts included in the measurement of operating lease liabilities was $2.1 million and $2.6 million for the three months ended March 31, 2024 and March 31, 2023, respectively, and these amounts are included in operating activities in the unaudited Condensed Consolidated Statements of Cash Flows. Operating lease assets obtained in exchange for new operating lease liabilities were zero and $0.2 million for the three months ended March 31, 2024 and March 31, 2023, respectively.
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 March 31, 2024, unconditional purchase obligations were as follows (in millions):
| | | | | |
Fiscal year ending December 31: | |
2024 | $ | 45.6 | |
2025 | 9.5 | |
2026 | 1.1 | |
2027 | 0.6 | |
2028 and thereafter | — | |
Total | $ | 56.8 | |
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 the Company 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.
In April 2023, one of our Russian customers made a claim against the Company, including liquidated damages for certain delays under the terms of an active project, in the amount of $19.3 million, and sent an updated claim statement in October 2023 totaling $21 million ($18 million of which accrue daily penalties), subject to a $14 million contractual cap (all amounts converted from Euros to U.S. Dollars). In June 2023, the same customer made a demand against the Company for the return of all payments received by the Company ($10.2 million) related to a Finland nuclear power plant project cancelled in May 2022. No legal actions have been taken to date by the customer on any of these matters, and management disputes these claims, believes that the Company has substantial defenses and expects to vigorously defend against these claims. However, uncertainty exists as to the resolutions of these matters, including any impact from potential modifications of the underlying active contract and/or settlement of claims for the cancelled Finland project.
As previously disclosed in our 2023 annual report, a lawsuit was filed against the Company in the fourth quarter of 2023 by a vendor alleging copyright infringement and breach of contract involving use of certain software licenses. On March 30, 2024 a settlement agreement was reached with the counterparty with no material impact to our March 31, 2024 financial statements.
11. Income Taxes
The effective income tax rate was (4.7)% for the three months ended March 31, 2024, and 2.5% for the three months ended March 31, 2023. The difference in effective tax rate between the periods was primarily attributable to mix of earnings and the impact of valuation allowances.
The effective income tax rate differs from the U.S. statutory rate of 21% due primarily to U.S. federal permanent differences and the impact of valuation allowances.
12. Supplemental Disclosures to Condensed Consolidated Statements of Cash Flows
Supplemental cash flow information and schedules of non-cash investing and financing activities (in millions):
| | | | | | | | | | | |
| Three Months Ended March 31, | | Three Months Ended March 31, |
| 2024 | | 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 | |
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the unaudited Condensed Consolidated Balances Sheets that sum to the total of the same such amounts shown in the unaudited Condensed Consolidated Statements of Cash Flows (in millions).
| | | | | | | | | | | |
| March 31, | | December 31, |
| 2024 | | 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 cash, cash equivalents, and restricted cash | $ | 121.7 | | | $ | 130.5 | |
Amounts included in restricted cash represent funds with various financial institutions to support performance bonds with irrevocable letters of credit for contractual obligations to certain customers.
13. Stock-Based Compensation
Stock-based compensation is awarded to employees and directors of the Company and accounted for in accordance with ASC 718, "Compensation—Stock Compensation". Stock-based compensation expense is recognized for equity awards over the vesting period based on their grant-date fair value. Stock-based compensation expense is included within the same financial statement caption where the recipient’s other compensation is reported. The Company accounts for forfeitures as they occur. The Company uses various forms of long-term incentives including, but not limited to restricted stock units ("RSUs") and performance-based restricted units ("PSUs"), provided that the granting of such equity awards is in accordance with the Company's 2021 Omnibus Incentive Plan (the "2021 Plan") as filed on Form S-8 with the SEC on December 27, 2021.
2021 Omnibus Incentive Plan
We adopted and obtained stockholder approval at the special meeting of the stockholders on October 19, 2021 of the 2021 Plan. We initially reserved 19,952,329 shares of our Class A common stock for issuance pursuant to awards under the 2021 Plan. The total number of shares of our Class A common stock available for issuance under the 2021 Plan will be increased on the first day of each fiscal year following the date on which the 2021 Plan was adopted in an amount equal to the least of (i) three percent (3%) of the outstanding shares of Class A common stock on the last day of the immediately preceding fiscal year, (ii) 9,976,164 shares of Class A common stock and (iii) such number of shares of Class A common stock as determined by the Committee (as defined and designated under the 2021 Plan) in its discretion. Pursuant to these automatic increase provisions, the number of shares of our Class A common stock reserved for issuance pursuant to awards under the 2021 Plan increased to 38,492,328 shares at January 1, 2024. Any employee, director or consultant of the Company or any of its subsidiaries or affiliates is eligible to receive an award under the 2021 Plan, to the extent that an offer of such award is permitted by applicable law, stock market or exchange rules, and regulations or accounting or tax rules and regulations. The 2021 Plan provides for the grant of stock options (including incentive stock options and non-qualified stock options), stock appreciation rights, restricted stock, RSUs, PSUs, other stock-based awards, or any combination thereof. Each award will be set forth in a separate grant notice or agreement and will indicate the type and terms and conditions of the award.
The purpose of the 2021 Plan is to motivate and reward employees and other individuals to perform at their highest level and contribute significantly to the success of the Company. During the three months ended March 31, 2024, the Company granted 548,939 RSUs and 453,560 PSUs to certain employees. The RSUs granted to employees are subject to service vesting conditions such that all awards are fully vested after three (3) years with equal annual installments vesting on the anniversary of the grant date. The expense will be recognized on a straight-line basis over the related service period for each tranche of awards. The PSUs are subject to service, performance, and market vesting conditions and allow a maximum issuance of shares of our Class A common stock of up to 200% of the granted PSUs based on the Company meeting certain established thresholds. The recipient will generally forfeit all of the awards if the recipient is no longer providing services to the Company before the end of the performance measurement period on December 31, 2026. Fifty percent (50%) of the PSU awards shall vest based on performance condition determined by the Company's adjusted EBITDA as measured from January 1, 2026 to December 31, 2026 with interpolated achievement levels of (i) 0% if the adjusted EBITDA is less than $250.0 million, (ii) between 50% and 100% if the adjusted EBITDA is at least $250.0 million and up to $265.0 million and (iii) between 100% and 200% if the adjusted EBITDA is at least $265.0 million and up to $280.0 million. The remaining fifty percent (50%) of the PSU awards shall vest based on performance condition determined by the Company's cumulative Management adjusted free cash flow ("adjusted cash flow") as measured from January 1, 2024 to December 31, 2026 with interpolated achievement levels of (i) 0% if the adjusted cash flow is less than $525.0 million, (ii) between 50% and 100% if the adjusted cash flow is at least $525.0 million and up to $575.0 million and (iii) between 100% and 200% if the adjusted cash flow is at least $575.0 million and up to $625.0 million. The overall payout result per the performance conditions shall be adjusted based on a market condition modifier determined by the Company's relative total shareholder return (TSR) during the performance period of January 1, 2024 to December 31, 2026, measured as a comparative percentile to the Company’s peers in the Russell 2000 Industrials index with achievement levels of: (i) -10% if the TSR percentile is below the 30th percentile level, (ii) 0% if the TSR percentile is at least at the 30th percentile level and up to the 55th percentile level and (iii) 10% if the TSR percentile is at least at the 56th percentile level and up to the 80th percentile level (or above the 80th percentile level with 10% being the maximum). The total payout is capped at 200% of the granted PSUs.
During the three months ended March 31, 2023, the Company granted 695,351 RSUs and 233,165 PSUs to certain members of the Company's employees. The RSUs are subject to service vesting conditions with one-third of each award vesting on the anniversary of the grant date such that all awards are fully vested after three (3) years. The expense will be recognized on a straight-line basis over the related service period for each tranche of awards. . The PSUs are subject to service and performance/market vesting conditions and allow a maximum issuance of shares of our Class A common stock of up to 200% of the granted PSUs based on the Company meeting certain established thresholds. The recipient will generally forfeit all of the awards if the recipient is no longer providing services to the Company before the end of the performance measurement period on December 31, 2025. Fifty percent (50%) of the PSU awards shall vest based on a market condition determined by the Company’s relative total shareholder return (TSR) during the performance period of January 1, 2023 to December 31, 2025, measured as a comparative percentile to the Company’s peers in the Russell 2000 Industrials index with interpolated achievement levels of: (i) 0% if the TSR percentile is below the 30th percentile level, (ii) between 50% and 100% if the TSR percentile is at least at the 30th percentile level and up to the 55th percentile level and (iii) between 100% and 200% if the TSR percentile is at least at the 56th percentile level and up to the 80th percentile level (or above the 80th percentile level with 200% being the maximum). The remaining fifty percent (50%) of the PSU awards shall vest based on performance condition determined by the Company’s organic revenue growth percentage as measured from January 1, 2025 to December 31, 2025 as compared with January 1, 2023 to December 31, 2023 with interpolated achievement levels of (i) 0% if the organic growth revenue percentage is less than 3.0%, (ii) between 50% and 100% if the organic revenue growth percentage is at least 3.0% and up to 5.0% and (iii) between 100% and 200% if the organic revenue growth percentage is at least 5.0% and up to 7.0% (or above 7.0% but with 200% being the maximum).
During the three months ended March 31, 2024, $2.6 million of stock-based compensation expense was recorded, of which $0.2 million was related to non-employee directors. During the three months ended March 31, 2023, $1.6 million of stock-based compensation expense was recorded, of which $0.2 million, respectively was related to non-employee directors.
In addition, during the three months ended March 31, 2024, certain members of the Company's Directors elected to receive their quarterly retainer fees in the form of shares of Class A common stock. As such, the Company recorded related stock-based compensation expense for $0.1 million in the same periods. During the three months ended March 31, 2023, the Company recorded related stock-based compensation expense for $0.1 million, for the director payments in lieu of cash.
Profits Interests
In conjunction with entering into the Business Combination Agreement, on June 17, 2021 the Sponsor issued 4,200,000 Profits Interests to Lawrence Kingsley, the current Chairman of the Board of Directors of the Company, 3,200,000 Profits Interests to Thomas Logan, the Chief Executive Officer of Mirion, and 700,000 Profits Interests to Brian Schopfer, the Chief Financial Officer of Mirion. The Profits Interests are intended to be treated as profits interests for U.S. income tax purposes, pursuant to which Messrs. Logan, Schopfer and Kingsley will have an indirect interest in the founder shares held by the Sponsor.
The Profits Interests are subject to service vesting conditions and market vesting conditions. Fifty percent (50%) of the Profits Interests granted to each of Messrs. Logan and Schopfer service-vest on each of the second and third anniversaries of the Closing, and fifty percent (50%) of the Profits Interests granted to Mr. Kingsley service-vest on each of the first and second anniversaries of the Closing, subject in each case to the continuous service of the grantee on such date. The market vesting conditions require that the price per share of Mirion's Class A common stock must meet or exceed certain established thresholds for 20 out of 30 trading days before the fifth anniversary of the Closing Date. The expense will be recognized on a straight-line basis over the related service period for each tranche of awards.
Of the Profits Interests, 3.2 million have a market vesting threshold price of $12 per share of Mirion Class A common stock, 2.0 million have a threshold price of $14 per share of Mirion Class A common stock, and 3.0 million have a threshold price of $16 per share of Mirion Class A common stock.
During the three months ended March 31, 2024, $0.9 million of stock-based compensation expense was recorded and no new Profit Interests were issued. During the three months ended March 31, 2023, $4.0 million of stock-based compensation expense was recorded and no new Profit Interests were issued.
14. Related-Party Transactions
Founder Shares
As of the closing of the Business Combination, the Sponsor owned 18,750,000 shares of Class B common stock the ("Founder Shares") which automatically converted into 18,750,000 shares of Class A common stock at the closing of the Business Combination. The Founder Shares, are subject to certain vesting and forfeiture conditions and transfer restrictions, including performance vesting conditions under which the price per share of Mirion's Class A common stock must meet or exceed certain established thresholds of $12, $14, or $16 per share for 20 out of 30 trading days before the fifth anniversary of the Closing Date of the Business Combination. The Founder Shares will be forfeited to the Company for no consideration if they fail to vest before October 20, 2026.
Private Placement Warrants
The Sponsor purchased an aggregate of 8,500,000 private placement warrants (the "Private Placement Warrants") at a price of $2.00 per whole warrant ($17.0 million in the aggregate) in a private placement (the “Private Placement”) that closed concurrently with the closing of GSAH's initial public offering (the "IPO"). Each Private Placement Warrant is exercisable for one whole share of Class A common stock at a price of $11.50 per share, subject to adjustment in certain circumstances, including upon the occurrence of certain reorganization events. The Private Placement Warrants are non-redeemable and exercisable on a cashless basis so long as they are held by the Sponsor or its permitted transferees.
The Private Placement Warrants are accounted for as liabilities as they contain terms and features that do not qualify for equity classification under ASC 815. See Note 16, Fair Value Measurements, for the fair value of the Private Placement Warrants at March 31, 2024.
Profits Interests
In connection with the Business Combination Agreement, the Sponsor issued 8,100,000 Profits Interests to certain individuals affiliated with or expected to be affiliated with Mirion after the Business Combination. The holders of the Profits Interests will have an indirect interest in the Founder Shares held by the Sponsor. The Profits Interests are subject to service and performance vesting conditions, including the occurrence of the Closing, and do not fully vest until all of the applicable conditions are satisfied. In addition, the Profits Interests are subject to certain forfeiture conditions. See Note 13, Stock-Based Compensation, for further detail regarding the Profits Interests.
Registration Rights
The holders of the Founder Shares and Private Placement Warrants are entitled to registration rights to require the Company to register the resale of any the Founder Shares and the shares underlying the Private Placement Warrants upon exercise pursuant to the Amended and Restated Registration Rights Agreement dated October 20, 2021 (the "RRA"). These holders are also entitled to certain piggyback registration rights. The RRA also includes customary indemnification and confidentiality provisions. The Company will bear the expenses incurred in connection with the filing of any registration statements filed pursuant to the terms of the RRA, including those expenses incurred in connection with the shelf-registration statement on Form S-1 filed on October 27, 2021 and declared effective on November 2, 2021.
Charterhouse Capital Partners LLP
The Company had entered into agreements with its primary pre-Business Combination investor, Charterhouse Capital Partners LLP ("CCP"), which obligated the Company to pay certain expenses in support of any secondary market offerings of its remaining shares owned after the Business Combination. During the three months ended March 31, 2024 and March 31, 2023, no expenses and $0.6 million of expenses were recorded, respectively. As of July 2023, CCP no longer owns shares in the Company.
15. Segment Information
During the three months ended June 30, 2023, the Company renamed its Industrial segment as "Technologies."
The following table summarizes select operating results for each reportable segment (in millions).
| | | | | | | | | | | |
| Three Months Ended March 31, | | Three Months Ended March 31, |
| 2024 | | 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) | |
The Company’s assets by reportable segment were not included, as this information is not reviewed by, nor otherwise provided to, the chief operating decision maker to make operating decisions or allocate resources.
The following details revenues by geographic region. Revenues generated from external customers are attributed to geographic regions through sales from site locations (i.e., point of origin) (in millions).
| | | | | | | | | | | |
| Revenues |
| Three Months Ended March 31, | | Three Months Ended March 31, |
| 2024 | | 2023 |
North America | | | |
Medical | $ | 60.4 | | | $ | 60.7 | |
Technologies | 58.6 | | | 55.2 | |
Total North America | 119.0 | | | 115.9 | |
Europe | | | |
Medical | 6.4 | | | 5.7 | |
Technologies | 61.4 | | | 53.1 | |
Total Europe | 67.8 | | | 58.8 | |
Asia Pacific | | | |
Medical | — | | | — | |
Technologies | 5.8 | | | 7.4 | |
Total Asia Pacific | 5.8 | | | 7.4 | |
Total revenues | $ | 192.6 | | | $ | 182.1 | |
The following details revenues by timing of recognition (in millions):
| | | | | | | | | | | |
| Revenues |
| Three Months Ended March 31, | | Three Months Ended March 31, |
| 2024 | | 2023 |
Point in time | $ | 126.9 | | | $ | 118.3 | |
Over time | 65.7 | | | 63.8 | |
Total revenues | $ | 192.6 | | | $ | 182.1 | |
The following details revenues by product category (in millions):