October 30, 2024 - 10-Q: Quarterly report pursuant to Section 13 or 15(d)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024

☐ 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

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 October 25, 2024, there were 225,500,094 shares of Class A common stock, $0.0001 par value per share, and 6,763,290 shares of Class B common stock, $0.0001 par value per share, issued and outstanding.

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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, macro trends in nuclear power and cancer care, 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, 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, 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;

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•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;

•risks related to the use of artificial intelligence and machine learning in our operations

•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.

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TABLE OF CONTENTS


			Page
PART I - FINANCIAL INFORMATION			5
ITEM 1. Financial Statements (Unaudited)			5
Unaudited Condensed Consolidated Balance Sheets			6
Unaudited Condensed Consolidated Statements of Operations			7
Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss)			8
Unaudited Condensed Consolidated Statements of Stockholders' Equity			9
Unaudited Condensed Consolidated Statements of Cash Flows			11
Notes to Condensed Consolidated Financial Statements (Unaudited)			12
Note 1. Nature of Business and Summary of Significant Accounting Policies			12
Note 2. Business Combinations and Acquisitions			17
Note 3. Contracts in Progress			18
Note 4. Inventories			18
Note 5. Property, Plant and Equipment, Net			19
Note 6. Accrued Expenses and Other Current Liabilities			19
Note 7. Goodwill and Intangible Assets			20
Note 8. Borrowings			21
Note 9. Leased Assets			24
Note 10. Commitments and Contingencies			26
Note 11. Income Taxes			27
Note 12. Supplemental Disclosures to Condensed Consolidated Statements of Cash Flows			27
Note 13. Stock Based Compensation			27
Note 14. Related-Party Transactions			29
Note 15. Segment Information			30
Note 16. Fair Value Measurements			32
Note 17. Derivatives and Hedging			33
Note 18. Loss Per Share			34
Note 19. Restructuring			36
Note 20. Noncontrolling Interests			37
Note 21. Accumulated Other Comprehensive Loss			38
Note 22. Subsequent Events			38
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			39
ITEM 3. Quantitative and Qualitative Disclosures about Market Risk			56
ITEM 4. Controls and Procedures			57
PART II - OTHER INFORMATION			57
ITEM 1. Legal Proceedings			58
ITEM 1A. Risk Factors			58
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds			58
ITEM 3. Defaults Upon Senior Securities			58
ITEM 4. Mine Safety Disclosures			58
ITEM 5. Other Information			58
ITEM 6. Exhibits			58
SIGNATURES			60

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PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


Unaudited Condensed Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023			6
Unaudited Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2024 and September 30, 2023			7
Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2024 and September 30, 2023			8
Unaudited Condensed Consolidated Statements of Stockholders’ Equity for the three and nine months ended September 30, 2024 and September 30, 2023			9
Unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2024 and September 30, 2023			11
Notes to Condensed Consolidated Financial Statements (Unaudited)			12
Note 1. Nature of Business and Summary of Significant Accounting Policies			12
Note 2. Business Combinations and Acquisitions			17
Note 3. Contracts in Progress			18
Note 4. Inventories			18
Note 5. Property, Plant and Equipment, Net			19
Note 6. Accrued Expenses and Other Current Liabilities			19
Note 7. Goodwill and Intangible Assets			20
Note 8. Borrowings			21
Note 9. Leased Assets			24
Note 10. Commitments and Contingencies			26
Note 11. Income Taxes			27
Note 12. Supplemental Disclosures to Condensed Consolidated Statements of Cash Flows			27
Note 13. Stock-Based Compensation			27
Note 14. Related-Party Transactions			29
Note 15. Segment Information			30
Note 16. Fair Value Measurements			32
Note 17. Derivatives and Hedging			33
Note 18. Loss Per Share			34
Note 19. Restructuring			36
Note 20. Noncontrolling Interests			37
Note 21. Accumulated Other Comprehensive Loss			38
Note 22. Subsequent Events			38

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Mirion Technologies, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(In millions, except share data)


	September 30, 2024		December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	133.3	$	128.8
Restricted cash	0.3		0.6
Accounts receivable, net of allowance for doubtful accounts	148.6		172.3
Costs in excess of billings on uncompleted contracts	70.3		48.7
Inventories	154.0		144.1
Prepaid expenses and other current assets	38.8		44.1
Assets held for sale	1.2		—
Total current assets	546.5		538.6
Property, plant, and equipment, net	146.3		134.5
Operating lease right-of-use assets	32.1		32.8
Goodwill	1,452.6		1,447.6
Intangible assets, net	447.3		538.8
Restricted cash	0.1		1.1
Other assets	29.0		25.1
Total assets	$	2,653.9	$	2,718.5
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	53.1	$	58.7
Deferred contract revenue	88.8		103.4
Third-party debt, current	0.6		1.2
Operating lease liability, current	6.7		6.8
Accrued expenses and other current liabilities	103.4		95.6
Total current liabilities	252.6		265.7
Third-party debt, non-current	684.5		684.7
Warrant liabilities	—		55.3
Operating lease liability, non-current	28.5		28.1
Deferred income taxes, non-current	64.1		84.0
Other liabilities	49.3		50.7
Total liabilities	1,079.0		1,168.5
Commitments and contingencies (Note 10)
Stockholders’ equity (deficit):
Class A common stock; $0.0001 par value, 500,000,000 shares authorized; 225,468,851 shares issued and outstanding at September 30, 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; 6,790,790 shares issued and outstanding at September 30, 2024; 7,787,333 shares issued and outstanding at December 31, 2023	—		—
Treasury stock, at cost; 232,842 shares at September 30, 2024 and 149,076 shares December 31, 2023	(2.2)		(1.3)
Additional paid-in capital	2,137.2		2,056.5
Accumulated deficit	(556.5)		(505.4)
Accumulated other comprehensive loss	(59.6)		(65.3)
Mirion Technologies, Inc. stockholders’ equity	1,518.9		1,484.5
Noncontrolling interests	56.0		65.5
Total stockholders’ equity	1,574.9		1,550.0
Total liabilities and stockholders’ equity	$	2,653.9	$	2,718.5

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

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Mirion Technologies, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

(In millions, except per share data)


	Three Months Ended September 30, 2024		Three Months Ended September 30, 2023		Nine Months Ended September 30, 2024		Nine Months Ended September 30, 2023
Revenues:
Product	$	153.2	$	142.6	$	447.3	$	421.6
Service	53.6		48.6		159.2		148.9
Total revenues	206.8		191.2		606.5		570.5
Cost of revenues:
Product	85.8		84.8		247.0		243.4
Service	28.1		25.6		82.1		79.2
Total cost of revenues	113.9		110.4		329.1		322.6
Gross profit	92.9		80.8		277.4		247.9
Operating expenses:
Selling, general and administrative	84.3		83.7		255.9		252.8
Research and development	10.2		7.9		26.9		23.9
(Gain) loss on disposal of business	—		0.3		(1.2)		6.5
Total operating expenses	94.5		91.9		281.6		283.2
Loss from operations	(1.6)		(11.1)		(4.2)		(35.3)
Other expense (income):
Interest expense	14.1		15.5		44.7		46.1
Interest income	(1.4)		(1.3)		(5.1)		(3.4)
Loss on debt extinguishment	—		—		—		2.6
Foreign currency (gain) loss, net	(0.9)		1.5		0.2		1.0
Increase (decrease) in fair value of warrant liabilities	—		(12.8)		5.3		6.3
Other (income) expense, net	(0.4)		(0.3)		0.3		(0.6)
Loss before income taxes	(13.0)		(13.7)		(49.6)		(87.3)
Loss (benefit) from income taxes	1.0		(0.8)		2.9		(3.1)
Net loss	(14.0)		(12.9)		(52.5)		(84.2)
Loss attributable to noncontrolling interests	(0.4)		(0.8)		(1.4)		(2.5)
Net loss attributable to Mirion Technologies, Inc.	$	(13.6)	$	(12.1)	$	(51.1)	$	(81.7)

Net loss per common share attributable to Mirion Technologies, Inc. — basic and diluted	$	(0.07)	$	(0.06)	$	(0.25)	$	(0.42)
Weighted average common shares outstanding — basic and diluted	206.676		199.223		202.881		195.388

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

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Mirion Technologies, Inc.

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)

(In millions)


	Three Months Ended September 30, 2024		Three Months Ended September 30, 2023		Nine Months Ended September 30, 2024		Nine Months Ended September 30, 2023
Net loss	$	(14.0)	$	(12.9)	$	(52.5)	$	(84.2)
Other comprehensive income (loss), net of tax:
Foreign currency translation gain (loss), net of tax	29.5		(20.3)		7.7		(9.1)
Unrealized (loss) gain on net investment hedges, net of tax	(7.9)		5.3		(1.5)		0.9
Unrealized (loss) gain on cash flow hedge, net of tax	(1.1)		0.4		(0.4)		1.3
Other comprehensive income (loss), net of tax	20.5		(14.6)		5.8		(6.9)
Comprehensive income (loss)	6.5		(27.5)		(46.7)		(91.1)
Less: Comprehensive income (loss) attributable to noncontrolling interest	0.2		(1.3)		(1.3)		(2.7)
Comprehensive income (loss) attributable to Mirion Technologies, Inc.	$	6.3	$	(26.2)	$	(45.4)	$	(88.4)

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

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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
Stock issued for vested restricted stock units	323,350	—		—	—		—			—		—		—		—		—
Stock repurchased to satisfy tax withholding for vesting restricted stock units	(87,647)	—		—	—		87,647	(0.7)		—		—		—		—		(0.7)
Stock compensation to directors in lieu of cash compensation	9,782	—		—	—		—	—		0.1		—		—		—		0.1
Stock-based compensation expense	—	—		—	—		—	—		6.1		—		—		—		6.1
Net loss	—	—		—	—		—	—		—		(27.7)		—		(0.7)		(28.4)
Other comprehensive loss	—	—		—	—		—	—		—		—		(0.6)		—		(0.6)
Balance June 30, 2023	217,933,337	$	—	7,847,333	$	—	87,647	$	(0.7)	$	2,045.6	$	(478.1)	$	(68.3)	$	66.0	$	1,564.5
Stock issued for vested restricted stock units	2,204	—		—	—		—	—		—		—		—		—		—
Stock compensation to directors in lieu of cash compensation	9,972	—		—	—		—	—		0.1		—		—		—		0.1
Conversion of shares of class B common stock to class A common stock	15,000	—		(15,000)	—		—	—		0.1		—		—		(0.1)		—
Stock-based compensation expense	—	—		—	—		—	—		6.2		—		—		—		6.2
Net loss	—	—		—	—		—	—		—		(12.1)		—		(0.8)		(12.9)
Other comprehensive loss	—	—		—	—		—	—		—		—		(14.1)		(0.5)		(14.6)
Balance September 30, 2023	217,960,513	$	—	7,832,333	$	—	87,647	$	(0.7)	$	2,052.0	$	(490.2)	$	(82.4)	$	64.6	$	1,543.3

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	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
Public warrants exercises	3,978,418	—		—	—		—	—		42.3		—		—		—		42.3
Private warrants exchange	1,768,000	—		—	—		—	—		18.3		—		—		—		18.3
Stock issued for vested restricted stock units	485,972	—		—	—		—	—		—		—		—		—		—
Shares repurchased to satisfy tax withholdings for vesting restricted stock units	(83,766)	—		—	—		83,766	(0.9)		—		—		—		—		(0.9)
Stock compensation to directors in lieu of cash compensation	7,702	—		—	—		—	—		0.1		—		—		—		0.1
Conversion of shares of class B common stock to class A common stock	468,133	—		(468,133)	—		—	—		3.9		—		—		(3.9)		—
Stock-based compensation expense	—	—		—	—		—	—		3.9		—		—		—		3.9
Net loss	—	—		—	—		—	—		—		(11.7)		—		(0.3)		(12.0)
Other comprehensive loss	—	—		—	—		—	—		—		—		(5.3)		(0.2)		(5.5)
Balance June 30, 2024	225,359,792	$	—	6,858,290	$	—	232,842	$	(2.2)	$	2,132.4	$	(542.9)	$	(79.5)	$	56.3	$	1,564.1
Stock issued for vested restricted stock units	33,367	—		—	—		—	—				—		—		—		—
Stock compensation to directors in lieu of cash compensation	8,192	—		—	—		—	—		0.1		—		—		—		0.1
Conversion of shares of class B common stock to class A common stock	67,500	—		(67,500)	—		—	—		0.5		—		—		(0.5)		—
Stock-based compensation expense	—	—		—	—		—	—		4.2		—		—		—		4.2
Net loss	—	—		—	—		—	—		—		(13.6)		—		(0.4)		(14.0)
Other comprehensive income	—	—		—	—		—	—		—		—		19.9		0.6		20.5
Balance September 30, 2024	225,468,851	$	—	6,790,790	$	—	232,842	$	(2.2)	$	2,137.2	$	(556.5)	$	(59.6)	$	56.0	$	1,574.9

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

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Mirion Technologies, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In millions)


	Nine Months Ended September 30, 2024		Nine Months Ended September 30, 2023
OPERATING ACTIVITIES:
Net loss	$	(52.5)	$	(84.2)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization expense	115.8		122.8
Stock-based compensation expense	11.9		17.7
Amortization of debt issuance costs	2.3		5.0
Provision for doubtful accounts	2.3		1.5
Inventory obsolescence write down	3.7		1.7
Change in deferred income taxes	(19.9)		(27.3)
Loss on disposal of property, plant and equipment	0.1		0.3
Loss on foreign currency transactions	0.3		1.0
Increase in fair values of warrant liabilities	5.3		6.3
(Gain) loss on disposal of business	(1.2)		6.5
Other	1.4		(0.6)
Changes in operating assets and liabilities:
Accounts receivable	21.6		15.3
Costs in excess of billings on uncompleted contracts	(24.9)		(16.4)
Inventories	(12.1)		(14.8)
Prepaid expenses and other current assets	6.7		(0.8)
Accounts payable	(4.6)		(15.3)
Accrued expenses and other current liabilities	2.6		(0.7)
Deferred contract revenue and liabilities	(19.4)		7.7
Other assets	(0.5)		1.2
Other liabilities	(0.6)		1.3
Net cash provided by operating activities	38.3		28.2
INVESTING ACTIVITIES:
Acquisitions of businesses, net of cash and cash equivalents acquired	(1.0)		—
Proceeds from business disposal	1.2		1.0
Purchases of property, plant, and equipment and badges	(37.1)		(25.2)
Proceeds from net investment hedge derivative contracts	2.8		2.9
Other investing	—		(1.0)
Net cash used in investing activities	(34.1)		(22.3)
FINANCING ACTIVITIES:
Issuances of common stock	—		150.0
Common stock issuance costs	—		(0.2)
Stock repurchased to satisfy tax withholding for vesting restricted stock units	(1.0)		(0.4)
Deferred financing costs	(1.3)		—
Principal repayments	—		(127.3)
Proceeds from cash flow hedge derivative contracts	0.9		0.3
Other financing	(0.6)		(0.4)
Net cash (used in) provided by financing activities	(2.0)		22.0
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	1.0		(0.8)
Net increase in cash, cash equivalents, and restricted cash	3.2		27.1
Cash, cash equivalents, and restricted cash at beginning of period	130.5		75.0
Cash, cash equivalents, and restricted cash at end of period	$	133.7	$	102.1

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

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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, and medical imaging furniture. 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 Mirion IntermediateCo, Inc., a Delaware corporation direct subsidiary of the Company ("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. 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.

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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 nine months ended September 30, 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 $7.6 million and $7.8 million as of September 30, 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):


	September 30, 2024		December 31, 2023
Prepaid insurance	$	0.6	$	1.0
Prepaid vendor deposits	8.4		7.6
Prepaid software expenses	7.9		3.5
Short-term marketable securities	5.8		5.3
Income tax receivable and prepaid income taxes	1.4		8.0
Other tax receivables	—		1.4
Other current assets	14.7		17.3
	$	38.8	$	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 September 30, 2024 and December 31, 2023, and were included in other accrued expenses and other long-term liabilities on the unaudited Condensed Consolidated Balance Sheet. Accretion expense related to these liabilities was not material for any periods presented.

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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 3, Contracts in Progress for further details.

Remaining Performance Obligations

The remaining performance obligations for all open contracts as of September 30, 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 $814.9 million and $857.1 million as of September 30, 2024 and December 31, 2023, respectively. As of September 30, 2024, the Company expects to recognize approximately 25%, 38%, 17%, and 9% of the remaining performance obligations as revenue during 2024, 2025, 2026 and 2027, respectively, and the remainder thereafter.

During the three months ended September 30, 2024, a contract in our Technologies segment was modified such that a portion of the future consideration in the contract became contingent on future actions under the control of the customer. As a result, the remaining performance obligation of $21.0 million was removed from our total remaining performance obligations. The impact of this modification was immaterial to our unaudited Condensed Consolidated Financial Statements for the period ended September 30, 2024.

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 December 31, 2023, 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" and, together with the Public Warrants, the "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.

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On April 18, 2024, the Company called the Public Warrants for redemption per the Company's rights under the warrant agreement. After April 18, 2024 and prior to 5:00 pm New York City time on Monday, May 20, 2024 (the "Redemption Date"), Public Warrant holders were entitled to exercise (i) in cash, at an exercise price of $11.50 per share of Class A common stock, or (ii) on a cashless basis in which the exercising holder was entitled to receive 0.22 shares of Class A common stock per Warrant. The number of shares provided to the warrant holder was determined in accordance with the terms of the warrant agreement, whereby the number of shares received in a cashless exercise was based upon the Redemption Date and the average last reported sale price of Class A common stock for the ten trading days ending on the third trading day prior to the notice of Redemption Date. The Public Warrants were valued using the listed trading price as of close on the trading day prior to the relevant settlement date of exercise. Any Warrants not exercised by the Redemption Date were automatically redeemed by the Company at a price of $0.10 per Warrant. In connection with the Redemption, approximately 18,076,416 Public Warrants were exercised, representing approximately 96% of the outstanding Public Warrants, and 3,978,418 shares of Class A common stock were issued upon exercise of such Warrants. Total cash proceeds generated from exercises of the Public Warrants were immaterial, and the Company made an immaterial redemption payment to the holders of the 673,363 redeemed Public Warrants. Following the Redemption Date, the Public Warrants stopped trading on NYSE and were delisted. No Public Warrants were outstanding as of September 30, 2024.

On June 4, 2024, the Company exchanged 1,768,000 shares of the Company's Class A common stock for 8,500,000 Private Placement Warrants via a warrant exchange agreement. The number of shares of Class A common stock to be exchanged on a cashless basis was determined using the same methodology applied to the Public Warrants. The Company valued the Private Placement Warrants on the settlement date of exercise, using the fair market value of the Company's Class A common stock as of close on a trading day prior to the settlement date multiplied by the number of shares of Class A common stock to be issued per Warrant, which was determined in accordance with the terms of the warrant exchange agreement. No Private Placement Warrants were outstanding as of September 30, 2024.

During the nine months ended September 30, 2024, the Company recognized a $5.3 million loss resulting from the change in fair value of warrant liabilities through the date of exercise or redemption within the unaudited Condensed Consolidated Statements of Operations. Additionally, the fair value of the warrant liabilities of $60.6 million was reclassified to additional paid-in capital.

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, 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 September 30, 2024 and December 31, 2023, no customer accounted for more than 10% of the accounts receivable balance.

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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 and believes that the ASU will not have a material effect on the Company's financial statements.

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.

Other Guidance Approved But Not Yet Issued

In June 2024, the FASB approved to effectively finalize a proposed ASU on income statement expense disaggregation. The proposed ASU will improve the decision usefulness for investors by requiring public business entities to disclose more detailed information about their expenses such as (a) inventory and manufacturing expense, (b) employee compensation, (c) depreciation, (d) intangible asset amortization, and etc. The final ASU is expected to be published in Q4 2024. For all entities, the amendments will be effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The amendments will be applied prospectively with an option for a retrospective application. 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.

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2. Business Combinations, Acquisitions, and Business Disposals

Asset Purchase ec2

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 $1.4 million net increase in goodwill, primarily due to additional consideration of $1.0 million (final net working capital adjustment) a $0.3 million net increase in intangible assets and a $0.6 million net increase in liabilities during the nine months ended September 30, 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 and nine months ended September 30, 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.

Biodex Rehabilitation Sale to Salona Global

In the fourth quarter of the year ended December 31, 2022, the Biodex Rehabilitation ("Rehab") business was deemed as held for sale. On April 3, 2023, the Company closed the sale of Rehab to Salona Global Medical Device Corporation ("Salona") for $1.0 million in cash at closing and an additional $7.0 million in deferred cash payments through January 1, 2024. Subsequent to the closing and during the nine months ended September 30, 2023, a significant negative event occurred which impacted the Company's ability to collect the remaining $7.0 million of cash payments. Salona disclosed substantial doubt existed as to its ability to continue as a going concern. The Company applied ASC 450 Contingencies to determine the loss on the business disposal since remaining payments are contingent upon Salona's financial situation. Management determined it was not probable that the $7.0 million of cash payments would be collected and recorded a loss on sale of business of $6.5 million in the Consolidated Statement of Operations during the nine months ended September 30, 2023.

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During the nine months ended September 30, 2024, the Company received an additional $1.2 million from Salona, which has been reflected as a gain on business disposal in the unaudited Condensed Consolidated Statements of Operations.

3. Contracts in Progress

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


	September 30, 2024		December 31, 2023
Costs incurred on contracts (from inception to completion)	$	405.1	$	324.5
Estimated earnings	244.4		208.7
Contracts in progress	649.5		533.2
Less: billings to date	(586.2)		(511.3)
	$	63.3	$	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):


	September 30, 2024		December 31, 2023
Costs and estimated earnings in excess of billings on uncompleted contracts – current	$	70.3	$	48.7
Costs and estimated earnings in excess of billings on uncompleted contracts – non-current (1)	22.4		18.2
Billings in excess of costs and estimated earnings on uncompleted contracts – current (2)	(28.6)		(41.1)
Billings in excess of costs and estimated earnings on uncompleted contracts – non-current (3)	(0.8)		(3.9)
	$	63.3	$	21.9

(1)Included in other assets within the unaudited Condensed Consolidated Balance Sheets.

(2)Included in deferred contract revenue – current within the unaudited Condensed Consolidated Balance Sheets.

(3)Included in other liabilities within the unaudited Condensed Consolidated Balance Sheets.

For the three and nine months ended September 30, 2024 the Company has recognized revenue of $4.2 million and $28.5 million, respectively, related to the contract liabilities balance as of December 31, 2023.

4. Inventories

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


	September 30, 2024		December 31, 2023
Raw materials	$	71.2	$	67.2
Work in progress	41.8		35.3
Finished goods	41.0		41.6
	$	154.0	$	144.1

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5. Property, Plant and Equipment, Net

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


	Depreciable Lives	September 30, 2024		December 31, 2023
Land, buildings, and leasehold improvements	3 - 39 years	$	52.5	$	49.4
Machinery and equipment	5 - 15 years	49.7		38.5
Badges	3 - 5 years

Form: 10-Q

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