mir-20220930

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, 2022

☐ 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 October 28, 2022, there were 200,113,340 shares of Class A common stock, $0.0001 par value per share, and 8,040,540 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

Our public communications and SEC filings may contain 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, the Russian invasion of Ukraine, 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 and operating performance, 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, market trends and macroeconomic conditions, including supply chain challenges, the Russia-Ukraine conflict and relations between the United States and China, our competitive positioning, foreign exchange, interest rate and inflation expectations, any future mergers and acquisitions, including integration of previously completed mergers and acquisitions, and our future share capitalization. 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 the Russia-Ukraine conflict and the relationship between the United States and China;

•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 enhancement of information systems;

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•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 any synergies from acquisitions 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;

•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;

•risks associated with our limited history of operating as an independent company;

•the impact of the global COVID-19 pandemic, including the availability, acceptance and efficacy of vaccinations and laws and regulations with respect to vaccinations, on our projected results of operations, financial performance or other financial metrics, or on any of the foregoing risks; and

•other risks and uncertainties described in our Annual Report on Form 10-K for the year ended December 31, 2021 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 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 Loss			8
Unaudited Condensed Consolidated Statements of Stockholders' Equity (Deficit)			9
Unaudited Condensed Consolidated Statements of Cash Flows			11
Notes to Condensed Consolidated Financial Statements			12
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			37
ITEM 3. Quantitative and Qualitative Disclosures about Market Risk			64
ITEM 4. Controls and Procedures			64
PART II - OTHER INFORMATION			65
ITEM 1. Legal Proceedings			65
ITEM 1A. Risk Factors			65
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds			101
ITEM 3. Defaults Upon Senior Securities			101
ITEM 4. Mine Safety Disclosures			101
ITEM 5. Other Information			101
ITEM 6 . Exhibits, Financial Statement Schedules			101
SIGNATURES			103

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PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021			6
Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2022 and September 30, 2021			7
Condensed Consolidated Statements of Comprehensive Loss for the three and nine months ended September 30, 2022 and September 30, 2021			8
Condensed Consolidated Statements of Stockholders’ Equity (Deficit) for the three and nine months ended September 30, 2022 and September 30, 2021			9
Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2022 and September 30, 2021			11
Notes to Condensed Consolidated Financial Statements			12

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Mirion Technologies, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(In millions, except share data)


	Successor
	September 30, 2022		December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	58.4	$	84.0
Restricted cash	0.5		0.6
Accounts receivable, net of allowance for doubtful accounts	133.2		157.4
Costs in excess of billings on uncompleted contracts	67.8		56.3
Inventories	143.1		123.6
Prepaid expenses and other current assets	35.0		31.5
Total current assets	438.0		453.4
Property, plant, and equipment, net	120.5		124.0
Operating lease right-of-use assets	41.8		45.7
Goodwill	1,551.0		1,662.6
Intangible assets, net	668.5		806.9
Restricted cash	0.9		0.7
Other assets	14.6		24.7
Total assets	$	2,835.3	$	3,118.0
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	60.9	$	59.4
Deferred contract revenue	72.5		73.0
Notes payable to third-parties, current	5.2		3.9
Operating lease liability, current	8.6		9.3
Accrued expenses and other current liabilities	74.1		75.4
Total current liabilities	221.3		221.0
Notes payable to third-parties, non-current	802.8		806.8
Warrant liabilities	40.6		68.1
Operating lease liability, non-current	36.4		40.6
Deferred income taxes, non-current	120.7		161.0
Other liabilities	38.5		36.5
Total liabilities	1,260.3		1,334.0
Commitments and contingencies (Note 10)
Stockholders’ equity (deficit):
Class A common stock; $0.0001 par value, 500,000,000 shares authorized; 200,102,086 shares issued and outstanding at September 30, 2022; 199,523,292 shares issued and outstanding at December 31, 2021	—		—
Class B common stock; $0.0001 par value, 100,000,000 shares authorized; 8,040,540 issued and outstanding at September 30, 2022 and 8,560,540 issued and outstanding at December 31, 2021	—		—
Additional paid-in capital	1,875.4		1,845.5
Accumulated deficit	(255.0)		(131.6)
Accumulated other comprehensive loss	(119.0)		(20.7)
Mirion Technologies, Inc. (Successor) stockholders’ equity	1,501.4		1,693.2
Noncontrolling interests	73.6		90.8
Total stockholders’ equity	1,575.0		1,784.0
Total liabilities and stockholders’ equity	$	2,835.3	$	3,118.0

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)


	Successor		Predecessor		Successor		Predecessor
	Three Months Ended September 30, 2022		Three Months Ended September 30, 2021		Nine Months Ended September 30, 2022		Nine Months Ended September 30, 2021
Revenues:
Product	$	117.1	$	107.3	$	364.4	$	374.9
Service	43.8		37.0		135.5		115.6
Total revenues	160.9		144.3		499.9		490.5
Cost of revenues:
Product	67.1		64.5		215.6		231.0
Service	24.0		17.9		71.2		55.5
Total cost of revenues	91.1		82.4		286.8		286.5
Gross profit	69.8		61.9		213.1		204.0
Operating expenses:
Selling, general and administrative	89.4		62.3		271.3		189.4
Research and development	8.0		8.5		22.5		27.7
Goodwill impairment	—		—		55.2		—
Total operating expenses	97.4		70.8		349.0		217.1
Loss from operations	(27.6)		(8.9)		(135.9)		(13.1)
Other expense (income):
Third party interest expense	13.1		10.8		29.4		32.7
Related party interest expense (Note 8)	—		33.0		—		97.8
Foreign currency loss (gain), net	3.1		(1.4)		7.9		(4.3)
Increase (decrease) in fair value of warrant liabilities	12.0		—		(27.5)		—
Other expense (income), net	(0.4)		0.1		(0.5)		(0.6)
Loss before income taxes	(55.4)		(51.4)		(145.2)		(138.7)
(Benefit from) provision for income taxes	(5.0)		(4.7)		(16.5)		2.6
Net loss	(50.4)		(46.7)		(128.7)		(141.3)
Loss attributable to noncontrolling interests	(3.3)		—		(5.3)		—
Net loss attributable to Mirion Technologies, Inc. (Successor) / Mirion Technologies (TopCo), Ltd. (Predecessor) stockholders	$	(47.1)	$	(46.7)	$	(123.4)	$	(141.3)

Net loss per common share attributable to Mirion Technologies, Inc. (Successor) / Mirion Technologies (TopCo), Ltd. (Predecessor) stockholders — basic and diluted	$	(0.26)	$	(7.01)	$	(0.68)	$	(21.33)
Weighted average common shares outstanding — basic and diluted	181.333		6.665		181.058		6.623

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 Loss

(Unaudited)

(In millions)


	Successor		Predecessor		Successor		Predecessor
	Three Months Ended September 30,		Three Months Ended September 30,		Nine Months Ended September 30,		Nine Months Ended September 30,
	2022		2021		2022		2021
Net loss	$	(50.4)	$	(46.7)	$	(128.7)	$	(141.3)
Other comprehensive (loss) income, net of tax:
Foreign currency translation, net of tax	(41.9)		(11.1)		(103.3)		(23.1)
Unrecognized actuarial gain and prior service benefit, net of tax	—		0.7		0.1		1.4
Other comprehensive loss, net of tax	(41.9)		(10.4)		(103.2)		(21.7)
Comprehensive loss	(92.3)		(57.1)		(231.9)		(163.0)
Less: Comprehensive loss attributable to noncontrolling interest	(4.9)		—		(10.2)		—
Comprehensive loss attributable to Mirion Technologies, Inc. (Successor) / Mirion Technologies (TopCo), Ltd. (Predecessor) stockholders	$	(87.4)	$	(57.1)	$	(221.7)	$	(163.0)

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 (Deficit)

(Unaudited)

(In millions, except share amounts)


Predecessor	A Ordinary Shares	A Ordinary Amount		B Ordinary Shares	B Ordinary Amount		Additional Paid-In Capital		Receivable from Employees for purchase of Common Stock		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interests		Total Stockholders’ Deficit
Balance December 31, 2020	1,483,795	$	—	5,353,970	$	0.1	$	9.6	$	(2.4)	$	(793.4)	$	50.5	$	2.2	$	(733.4)
Share-based compensation expense	—	—		—	—		(0.1)		—		—		—		—		(0.1)
Receivable from employees	—	—		—	—		—		(0.1)		—		—		—		(0.1)
Net loss	—	—		—	—		—		—		(40.7)		—		—		(40.7)
Other comprehensive loss	—	—		—	—		—		—		—		(17.9)		—		(17.9)
Balance March 31, 2021	1,483,795	$	—	5,353,970	$	0.1	$	9.5	$	(2.5)	$	(834.1)	$	32.6	$	2.2	$	(792.2)
Share-based compensation expense	—	—		—	—		—		—		—		—		—		—
Receivable from employees	—	—		—	—		—		0.1		—		—		—		0.1
Net loss	—	—		—	—		—		—		(53.9)		—		(0.1)		(54.0)
Other comprehensive loss	—	—		—	—		—		—		—		6.6		—		6.6
Balance June 30, 2021	1,483,795	$	—	5,353,970	$	0.1	$	9.5	$	(2.4)	$	(888.0)	$	39.2	$	2.1	$	(839.5)
Share-based compensation expense	—	—		—	—		—		—		—		—		—		—
Impairment loss on lease adoption	—	—		—	—		—		—		(2.9)		—		—		(2.9)
Receivable from employees	—	—		—	—		—		0.5		—		—		—		0.5
Net loss	—	—		—	—		—		—		(46.7)		—		—		(46.7)
Other comprehensive loss	—	—		—	—		—		—		—		(10.4)		—		(10.4)
Balance September 30, 2021	1,483,795	$	—	5,353,970	$	0.1	$	9.5	$	(1.9)	$	(937.6)	$	28.8	$	2.1	$	(899.0)

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Successor	Class A Common Stock	Class A Common Stock Amount		Class B Common Stock	Class B Common Stock Amount		Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interests		Total Stockholders’ Equity
Balance December 31, 2021	199,523,292	$	—	8,560,540	$	—	$	1,845.5	$	(131.6)	$	(20.7)	$	90.8	$	1,784.0
Stock-based compensation expense	—	—		—	—		7.8		—		—		—		7.8
Warrant exercises	100	—		—	—		—		—		—		—		—
Stock compensation to directors in lieu of cash compensation	—	—		—	—		0.1		—		—		—		0.1
Net loss	—	—		—	—		—		(17.7)		—		(1.3)		(19.0)
Other comprehensive loss	—	—		—	—		—		—		(14.2)		(1.5)		(15.7)
Balance March 31, 2022	199,523,392	$	—	8,560,540	$	—	$	1,853.4	$	(149.3)	$	(34.9)	$	88.0	$	1,757.2
Stock-based compensation expense	—	—			—		8.4		—		—		—		8.4
Stock issued for vested restricted stock units	21,414	—		—	—		—		—		—		—		—
Stock compensation to directors in lieu of cash compensation	9,840	—		—	—		0.1		—		—		—		0.1
Conversion of shares of class B shares of common stock to class A	500,000	—		(500,000)	—		4.9		—		—		(4.9)		—
Purchase accounting adjustments to fair value of noncontrolling interests	—	—		—	—		—		—		—		(1.9)		(1.9)
Net loss	—	—		—	—		—		(58.6)		—		(0.7)		(59.3)
Other comprehensive loss	—	—		—	—		—		—		(43.8)		(1.8)		(45.6)
Balance June 30, 2022	200,054,646	$	—	8,060,540	$	—	$	1,866.8	$	(207.9)	$	(78.7)	$	78.7	$	1,658.9
Stock-based compensation expense	—	—			—		8.3		—		—		—		8.3
Stock issued for vested restricted stock units	13,488	—		—	—		—		—		—		—		—
Stock compensation to directors in lieu of cash compensation	13,952	—		—	—		0.1		—		—		—		0.1
Conversion of shares of class B common stock to class A common stock	20,000	—		(20,000)	—		0.2		—		—		(0.2)		—
Net loss	—	—		—	—		—		(47.1)		—		(3.3)		(50.4)
Other comprehensive loss	—	—		—	—		—		—		(40.3)		(1.6)		(41.9)
Balance September 30, 2022	200,102,086	$	—	8,040,540	$	—	$	1,875.4	$	(255.0)	$	(119.0)	$	73.6	$	1,575.0

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)


	Successor		Predecessor
	Nine Months Ended September 30,		Nine Months Ended September 30,
	2022		2021
OPERATING ACTIVITIES:
Net loss	$	(128.7)	$	(141.3)
Adjustments to reconcile net loss to net cash provided by operating activities:
Accrual of in-kind interest on notes payable to related parties	—		96.8
Depreciation and amortization expense	132.4		70.1
Stock-based compensation expense	24.8		(0.1)
Amortization of debt issuance costs	2.7		2.7
Provision for doubtful accounts	(0.2)		1.7
Inventory obsolescence write down	0.8		0.5
Change in deferred income taxes	(32.3)		1.9
Loss on disposal of property, plant and equipment	0.3		—
Loss (gain) on foreign currency transactions	7.9		(4.3)
Decrease in fair values of warrant liabilities	(27.5)		—
Amortization of deferred revenue step-down	—		11.7
Amortization of inventory step-up	6.3		4.7
Goodwill impairment	55.2		—
Other	0.1		3.4
Changes in operating assets and liabilities:
Accounts receivable	20.0		2.4
Costs in excess of billings on uncompleted contracts	(17.4)		(9.8)
Inventories	(35.9)		(2.3)
Prepaid expenses and other current assets	(6.2)		(5.2)
Accounts payable	(1.9)		7.2
Accrued expenses and other current liabilities	2.3		(6.3)
Deferred contract revenue	2.8		5.1
Other assets	8.2		(2.2)
Other liabilities	0.5		8.1
Net cash provided by operating activities	14.2		44.8
INVESTING ACTIVITIES:
Acquisitions of businesses, net of cash and cash equivalents acquired	(6.6)		(15.9)
Purchases of property, plant, and equipment and badges	(22.7)		(22.7)
Sales of property, plant, and equipment	0.8		—
Net cash used in investing activities	(28.5)		(38.6)
FINANCING ACTIVITIES:
Borrowings from notes payable to third-parties, net of discount and issuance costs	—		1.9
Principal repayments	(4.6)		(12.2)
Other financing	(0.4)		—
Net cash used in financing activities	(5.0)		(10.3)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(6.2)		(2.7)
Net decrease in cash, cash equivalents, and restricted cash	(25.5)		(6.8)
Cash, cash equivalents, and restricted cash at beginning of period	85.3		108.7
Cash, cash equivalents, and restricted cash at end of period	$	59.8	$	101.9

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

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

On October 20, 2021 (the “Closing Date”), the Company, consummated its previously announced business combination (the “Business Combination”) pursuant to the certain business combination agreement (the "Business Combination Agreement"). As contemplated by the Business Combination Agreement, the Company became the corporate parent of Mirion Technologies TopCo., Ltd. ("Mirion TopCo"). In order to implement a structure similar to that of an “Up-C,” the Company established a Delaware corporation, Mirion IntermediateCo, Inc. (“IntermediateCo”), as a subsidiary of the Company.

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 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, 2021, 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 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 allocable to noncontrolling interests is reported as “Income (Loss) attributable to noncontrolling interests” in the 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 19, Noncontrolling Interests.

On October 20, 2021, the Board of Directors determined to change Mirion TopCo's fiscal year end from June 30th of each year to December 31st of each year in order to align Mirion’s fiscal year end with GSAH’s fiscal year end.

Predecessor and Successor Reporting

The financial statements separate the Company’s presentation into two distinct periods. The period before the Closing Date of the Business Combination (the "Predecessor Period") depicts the financial statements of Mirion TopCo, and the period

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after the Closing (the "Successor Period") depicts the financial statements of the Company, including the consolidation of GSAH with Mirion Technologies, Inc.

The Business Combination was accounted for under Accounting Standards Codification ("ASC") 805, Business Combinations. GSAH was determined to be the accounting acquirer. Mirion Technologies, Inc. constitutes a business in accordance with ASC 805 and the business combination constitutes a change in control. Accordingly, the Business Combination is being accounted for using the acquisition method. Under this method of accounting, Mirion TopCo is treated as the “acquired” company for financial reporting purposes and the acquired net assets were stated at fair value, with goodwill or other intangible assets recorded.

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.

Segments

The Company manages its operations through two operating and reportable segments: Medical and Industrial. These segments align the Company’s products and service offerings with customer use in medical and industrial markets and are consistent with how the Company’s Chief Executive Officer, its Chief Operating Decision Maker (“CODM”), reviews and evaluates the Company’s operations. The CODM allocates resources and evaluates the financial performance of each operating segment. The Company’s segments are strategic businesses that are managed separately because each one develops, manufactures and markets distinct products and services. 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 nine months ended September 30, 2022, 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, 2021.

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 $4.9 million and $5.4 million as of September 30, 2022 and December 31, 2021, 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.

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The components of prepaid expenses and other current assets consist of the following (in millions):


	Successor
	September 30, 2022		December 31, 2021
Prepaid insurance	$	1.4	$	5.3
Short-term marketable securities	4.1		4.9
Income tax receivable and prepaid income taxes	3.6		3.9
Other current assets	25.9		17.4
	$	35.0	$	31.5

Facility and Equipment Decommissioning Liabilities

The Company has asset retirement obligations (“ARO”) consisting primarily of equipment and facility decommissioning costs. ARO liabilities totaled $2.9 million and $3.1 million at September 30, 2022 and December 31, 2021, respectively, and were included in deferred income taxes and other liabilities on the 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 3, Contracts in Progress for further details.

Remaining Performance Obligations

The remaining performance obligations for all open contracts as of September 30, 2022 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 $726.4 million and $747.5 million as of September 30, 2022 and December 31, 2021, respectively. As of September 30, 2022, the Company expects to recognize approximately 26%, 39%, 17%, and 7% of the remaining performance obligations as revenue during the fiscal years 2022, 2023, 2024 and 2025, 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 September 30, 2022, the Company had outstanding warrants to purchase up to 27,249,879 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 Condensed Consolidated Statements of Operations. The fair value of the warrants (the "Public Warrants") issued in connection with GSAH's initial public offering

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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.

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 September 30, 2022 and December 31, 2021, no customer accounted for more than 10% of the accounts receivable balance.

Recent Accounting Pronouncements

Accounting Guidance Issued But Not Yet Adopted

In March 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-04 “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting”. ASU 2020-04 provides temporary optional expedients and exceptions for applying GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from the London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate. In their October 2022 meeting, the FASB voted for an optional 2-year extension of the adoption period through December 31, 2024. The Company intends to extend the adoption, is in the process of managing the transition, and is assessing any financial impact that will be accounted for under this ASU.

2. Business Combinations and Acquisitions

On October 20, 2021, Mirion Technologies, Inc. consummated its previously announced Business Combination pursuant to the Business Combination Agreement. On December 1, 2021, the Company acquired 100% of the equity interest of CIRS.

The Company continually evaluates potential acquisitions that strategically fit with the Company’s existing portfolio. As a result, on August 1, 2022, the Company acquired the Critical Infrastructure ("CI") business of Collins Aerospace (renamed as Secure Integrated Solutions "SIS") via an Asset Purchase Agreement. The Company paid cash of $6.6 million, but due to net working capital (NWC) settlements to be settled in the future, the US GAAP consideration is $5.9 million. The SIS business joined our Industrial segment and specializes in delivering physical and cyber security systems to critical infrastructure based on a command-and-control platform that includes video surveillance, access control, intrusion detection, credential/training management, biometrics, and video analytics. The Company used carrying values as of the closing date of the CI Acquisition to value certain current and non-current assets and liabilities, as we determined that they represented the fair value of those items at such date.

All identifiable intangible assets acquired in the CI Acquisition were assigned to developed technology for accounting purposes.

Transaction costs related to the CI Acquisition were not material for the three and nine months ended September 30, 2022.

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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.

The purchases of these acquired businesses resulted in the recognition of goodwill in the Company’s Consolidated Financial Statements, which is calculated as the excess of the consideration transferred over the net assets recognized and represents the future economic benefits arising from the other assets acquired that could not be individually identified and separately recognized. The goodwill is not amortized 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.

Measurement period adjustments to the previously disclosed preliminary fair value of net assets acquired in the Business Combination and in the CIRS acquisition were recorded in the first three quarters of 2022, resulting in a $2.7 million net increase in goodwill and corresponding $3.8 million net decrease in non-current deferred tax assets and taxes payable, $1.8 million decrease in noncontrolling interest, and $0.7 million decrease in other for the nine months ended September 30, 2022. The estimated fair values of all assets acquired and liabilities assumed in the acquisitions 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 dates, including but not limited to valuation of tax accounts, property, plant and equipment and intangible assets.

3. Contracts in Progress

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


	Successor
	September 30, 2022		December 31, 2021
Costs incurred on contracts (from inception to completion)	$	231.3	$	199.4
Estimated earnings	137.8		125.5
Contracts in progress	369.1		324.9
Less: billings to date	(319.4)		(281.8)
	$	49.7	$	43.1

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The carrying amounts related to uncompleted construction-type contracts are included in the accompanying Condensed Consolidated Balance Sheets under the following captions (in millions):


	Successor
	September 30, 2022		December 31, 2021
Costs and estimated earnings in excess of billings on uncompleted contracts – current	$	67.8	$	56.3
Costs and estimated earnings in excess of billings on uncompleted contracts – non-current (1)	5.2		6.5
Billings in excess of costs and estimated earnings on uncompleted contracts – current (2)	(17.6)		(17.6)
Billings in excess of costs and estimated earnings on uncompleted contracts – non-current (3)	(5.7)		(2.1)
	$	49.7	$	43.1

(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 and nine months ended September 30, 2022 the Company has recognized revenue of $2.6 million and $8.9 million, respectively, related to the contract liabilities balance as of December 31, 2021.

4. Inventories

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


	Successor
	September 30, 2022		December 31, 2021
Raw materials	$	65.5	$	56.8
Work in progress	32.9		26.6
Finished goods	44.7		40.2
	$	143.1	$	123.6

Inventories as of December 31, 2021 include $6.3 million of fair value step-up from purchase accounting which was recognized as cost of revenues as related inventory was sold during the nine months ended September 30, 2022.

5. Property, Plant and Equipment, Net

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

Successor

Depreciable
Lives

September 30, 2022

December 31, 2021

Land, buildings, and leasehold improvements

3-39 years

44.8

45.0

Machinery and equipment

5-15 years

30.1