Mirion ("we" or the "company") (NYSE: MIR), a global provider of radiation detection, measurement, analysis and monitoring solutions to the medical, nuclear, defense, and research end markets, today announced results for the second quarter ended June 30, 2023.
“We posted strong second quarter results, headlined by our fourth consecutive quarter of backlog expansion and solid revenue growth in both reporting segments,” stated Thomas Logan, Mirion’s Chief Executive Officer. “For the balance of the year, improving cash generation and margin expansion are my top priorities, and I believe we have the right strategy in place to improve our performance in these areas.”
“Our team delivered another solid quarter, positioning Mirion well for the second half of the year,” added Larry Kingsley, Chairman of Mirion’s Board. “We continue to see robust demand across our end markets and our order flow remains strong. The year is progressing well and we have a strong roadmap in place to deliver for our customers and our shareholders in the second half.”
Updated 2023 Outlook
“Top-line performance was very strong in the first half and we expect to see continued momentum through the remainder of the year, especially within the Technologies group,” continued Mr. Logan. “As such, we are raising and tightening our revenue growth outlook. We are also expecting Adjusted EBITDA margin improvement in the second half as mix headwinds ease, and we are working hard to improve our net working capital dynamics to drive better Adjusted Free Cash Flow conversion.”
Mirion is updating its guidance for the fiscal year and 12-month period ending December 31, 2023:
- Revenue growth of 8% - 10%, compared to 6% - 9% previously
- Organic revenue growth of 6% - 8%, compared to 4% - 7% previously
- Adjusted EBITDA of $175 million - $185 million, compared to $172 million - $182 million previously
- Adjusted EPS of $0.28 - $0.34, which is unchanged
- Adjusted free cash flow of $45 million - $75 million, compared to $58 million - $78 million previously
Inorganic revenue growth is expected to be approximately 1.0%, including benefits from the SIS acquisition, offset by the Biodex rehab divestiture, which closed early in the second quarter. Foreign exchange rates are expected to result in a positive 0.5% impact to revenue growth. The guidance for organic revenue growth excludes the impact of foreign exchange rates as well as mergers, acquisitions and divestitures.
Other modeling and guidance assumptions include the following:
- Euro to U.S. Dollar foreign exchange conversion rate of 1.09
- Net interest expense of approximately $60 million (approximately $55 million of cash interest)
- Approximately 199 million shares of Class A common stock outstanding (excludes 7.8 million shares of Class B common stock, 27.2 million warrants, 18.8 million founder shares, subject to vesting, 2.1 million restricted stock units, 0.6 million performance stock units and a further 28.7 million shares reserved for future equity awards (subject to annual automatic increases) (all numbers as of June 30, 2023))
The Company’s guidance contains forward-looking statements and actual results may differ materially as a result of known and unknown uncertainties and risks, including those set forth below under the heading “Forward-Looking Statements.” In addition, forward-looking non-GAAP financial measures are presented on a non-GAAP basis without reconciliations of such forward-looking non-GAAP measures due to the inherent difficulty in projecting and quantifying the various adjusting items necessary for such reconciliations, such as stock-based compensation expense, amortization and depreciation expense and purchase accounting adjustments, that have not yet occurred, are out of Mirion’s control, or cannot be reasonably predicted. Accordingly, reconciliations of our guidance for adjusted EBITDA, adjusted EPS, adjusted free cash flow and net leverage are not available without unreasonable effort.
Conference Call
Mirion will host a conference call today, August 2, 2023, at 12:00 p.m. ET to discuss its financial results. Participants may access the call by dialing 1-877-407-9208 or 1-201-493-6784, and requesting to join the Mirion Technologies, Inc. earnings call. A live webcast will also be available at https://ir.mirion.com/news-events.
A telephonic replay will be available shortly after the conclusion of the call and until August 16, 2023. Participants may access the replay at 1-844-512-2921, international callers may use 1-412-317-6671, and enter access code 13740107. An archived replay of the call and an accompanying presentation will also be available on the Investors section of the Mirion website at https://ir.mirion.com/.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Words such as “anticipate,” “believe,” “continue,” “could,” “estimate”, “expect”, “hope”, “intend”, “may”, “might”, “should”, “would”, “will”, “understand” and similar words are intended to identify forward looking statements. These forward-looking statements include but are not limited to, statements regarding our future operating results and financial position, our business strategy and plans, our objectives for future operations, macroeconomic trends, foreign exchange, interest rate and inflation expectations, any future mergers, acquisitions, divestitures and strategic investments, including the completion and integration of previously completed transactions, our future share capitalization and any exercise, exchange or other settlement of our outstanding warrants and other securities. There are a significant number of factors that could cause actual results to differ materially from statements made in this press release, including changes in domestic and foreign business, market, economic, financial, political and legal conditions, especially related to matters affecting Russia; 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; 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; 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; and the effects of COVID-19 or other health epidemics, pandemics and similar outbreaks may have on our business, results of operations or financial condition. Further information on risks, uncertainties and other factors that could affect our financial results are included in the filings we make with the Securities and Exchange Commission (the “SEC”) from time to time, including our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q and other periodic reports filed or to be filed with the SEC.
You should not rely on these forward-looking statements, as actual outcomes and results may differ materially from those contemplated by these forward- looking statements as a result of such risks and uncertainties. All forward-looking statements in this press release are based on information available to us as of the date hereof, and we do not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made.
Use of Non-GAAP Financial Information
We believe that the presentation of non-GAAP financial information provides important supplemental information to management and investors regarding financial and business trends relating to our financial condition and results of operations. For further information regarding these non-GAAP measures, including the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures, please refer to the financial tables below, as well as the “Reconciliation of Non-GAAP Financial Measures” section of this press release. Non-GAAP financial information is not a substitute for GAAP financial information and undue reliance should not be placed on such non-GAAP financial information. In addition, similarly titled items used by other companies may not be comparable due to variations in how they are calculated and how terms are defined.
Channels for Disclosure of Information
Mirion intends to announce material information to the public through the Mirion Investor Relations website ir.mirion.com, SEC filings, press releases, public conference calls and public webcasts. Mirion uses these channels, as well as social media, to communicate with its investors, customers, and the public about the company, its offerings, and other issues. It is possible that the information Mirion posts on social media could be deemed to be material information. As such, Mirion encourages investors, the media, and others to follow the channels listed above, including the social media channels listed on Mirion’s investor relations website, and to review the information disclosed through such channels. Any updates to the list of disclosure channels through which Mirion will announce information will be posted on the investor relations page on Mirion’s website.
About Mirion
Mirion (NYSE: MIR) is a global leader in radiation safety, science and medicine, empowering innovations that deliver vital protection while harnessing the transformative potential of ionizing radiation across a diversity of end markets. The Mirion Technologies group provides proven radiation safety technologies that operate with precision – for essential work within R&D labs, critical nuclear facilities, and on the front lines. The Mirion Medical group solutions help enhance the delivery and ensure safety in healthcare, powering the fields of Nuclear Medicine, Radiation Therapy QA, Occupational Dosimetry, and Diagnostic Imaging. Headquartered in Atlanta (GA – USA), Mirion employs approximately 2,700 people and operates in 12 countries. Learn more at mirion.com.
Mirion Technologies, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In millions, except share data)
June 30, 2023 | December 31, 2022 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 87.4 | $ | 73.5 | |||
Restricted cash | 0.6 | 0.5 | |||||
Accounts receivable, net of allowance for doubtful accounts | 139.1 | 171.2 | |||||
Costs in excess of billings on uncompleted contracts | 81.7 | 50.0 | |||||
Inventories | 161.8 | 143.3 | |||||
Prepaid expenses and other current assets | 32.5 | 33.6 | |||||
Assets held for sale | — | 8.5 | |||||
Total current assets | 503.1 | 480.6 | |||||
Property, plant, and equipment, net | 128.3 | 124.3 | |||||
Operating lease right-of-use assets | 37.1 | 40.1 | |||||
Goodwill | 1,425.2 | 1,418.0 | |||||
Intangible assets, net | 586.7 | 650.4 | |||||
Restricted cash | 1.1 | 1.0 | |||||
Other assets | 14.8 | 24.3 | |||||
Total assets | $ | 2,696.3 | $ | 2,738.7 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 61.0 | $ | 67.7 | |||
Deferred contract revenue | 74.1 | 83.0 | |||||
Notes payable to third-parties, current | 5.7 | 5.3 | |||||
Operating lease liability, current | 7.4 | 8.5 | |||||
Accrued expenses and other current liabilities | 76.3 | 79.8 | |||||
Total current liabilities | 224.5 | 244.3 | |||||
Notes payable to third-parties, non-current | 677.8 | 801.5 | |||||
Warrant liabilities | 49.6 | 30.5 | |||||
Operating lease liability, non-current | 30.3 | 34.3 | |||||
Deferred income taxes, non-current | 97.6 | 116.3 | |||||
Other liabilities | 52.0 | 44.6 | |||||
Total liabilities | 1,131.8 | 1,271.5 | |||||
Commitments and contingencies (Note 11) | |||||||
Stockholders’ equity (deficit): | |||||||
Class A common stock; $0.0001 par value, 500,000,000 shares authorized; 217,933,337 shares issued and outstanding at June 30, 2023; 200,298,834 shares issued and outstanding at December 31, 2022 | — | — | |||||
Class B common stock; $0.0001 par value, 100,000,000 shares authorized; 7,847,333 issued and outstanding at June 30, 2023 and 8,040,540 issued and outstanding at December 31, 2022 | — | — | |||||
Treasury stock, at cost; 87,647 shares at June 30, 2023 and 0 shares at December 31, 2022 | (0.7 | ) | — | ||||
Additional paid-in capital | 2,045.6 | 1,882.4 | |||||
Accumulated deficit | (478.1 | ) | (408.5 | ) | |||
Accumulated other comprehensive loss | (68.3 | ) | (75.7 | ) | |||
Mirion Technologies, Inc. stockholders’ equity | 1,498.5 | 1,398.2 | |||||
Noncontrolling interests | 66.0 | 69.0 | |||||
Total stockholders’ equity | 1,564.5 | 1,467.2 | |||||
Total liabilities and stockholders’ equity | $ | 2,696.3 | $ | 2,738.7 | |||
Mirion Technologies, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(In millions, except per share data)
Three
| Three
| Six Months
| Six Months
| ||||||||||||
Revenues: | |||||||||||||||
Product | 146.6 | 130.3 | 279.0 | $ | 247.2 | ||||||||||
Service | 50.6 | 45.5 | 100.3 | 91.8 | |||||||||||
Total revenues | 197.2 | 175.8 | 379.3 | 339.0 | |||||||||||
Cost of revenues: | |||||||||||||||
Product | 81.8 | 73.6 | 158.6 | 148.4 | |||||||||||
Service | 27.4 | 23.2 | 53.6 | 47.2 | |||||||||||
Total cost of revenues | 109.2 | 96.8 | 212.2 | 195.6 | |||||||||||
Gross profit | 88.0 | 79.0 | 167.1 | 143.4 | |||||||||||
Operating expenses: | |||||||||||||||
Selling, general and administrative | 84.0 | 91.0 | 169.1 | 181.9 | |||||||||||
Research and development | 8.4 | 7.4 | 16.0 | 14.5 | |||||||||||
Goodwill impairment | — | 55.2 | — | 55.2 | |||||||||||
Loss on disposal of business | 6.2 | — | 6.2 | — | |||||||||||
Total operating expenses | 98.6 | 153.6 | |||||||||||||
