Mirion Announces Third Quarter 2024 Financial Results and Updates Full Year Guidance
-
Revenues for the third quarter increased 8.2% to
$206.8 million, compared to$191.2 million in the same period in 2023.
-
Net loss was
$14.0 million in the third quarter, compared to a net loss of$12.9 million in the same period last year. Adjusted EBITDA was$45.7 million , a 17.8% increase from$38.8 million in the same period last year.
- Loss from operations margin was 0.8% in the third quarter, compared to 5.8% in the same period in 2023. Adjusted EBITDA margin was 22.1% in the third quarter, compared to 20.3% in the same period last year.
-
GAAP net loss per share for the third quarter was
$0.07 , compared to$0.06 in the third quarter of 2023. Adjusted earnings per share for the quarter was$0.08 , compared to$0.05 in the same period last year.
-
The company updated its full year 2024 guidance. Total and organic revenue growth rates now expected to be 6% to 7% and 5% to 6%, respectively. Adjusted free cash flow range tightened to
$65 to$75 million . Maintaining adjusted EBITDA and adjusted EPS range of between$195 to$205 million and$0.37 to$0.42 per share, respectively.
“Third quarter results were in-line with our expectations,” stated
Logan continued, “Adjusted EBITDA margin in the quarter was 22.1% - an improvement of approximately 180 basis points compared to the same period last year. This marks the fifth consecutive quarter of EBITDA margin expansion and reflects the continuous improvement of operating quality across the enterprise.”
Updated 2024 Guidance
Commenting on Mirion’s full year 2024 guidance, Logan said, “Our third quarter performance keeps us on-track for another strong year. Our expected 2024 performance represents improvements in top-line growth, adjusted EBITDA margin expansion, and further improvements to the balance sheet. We continue to focus on improving our operating efficiency and progressing towards our long-term stated objective of 30% adjusted EBITDA margins.”
-
Revenue growth of 6% to 7%, compared to 5% to 7% previously
-
Organic revenue growth of 5% to 6%, compared to 4% to 6% previously
- Medical LSD organic growth, compared to LSD+ previously
- Technologies MSD+ organic growth, which is unchanged
- Inorganic revenue growth of approximately 1.5%, primarily as a result of the ec2 acquisition
- Closure of lasers business expected to negatively impact organic revenue growth by approximately 30 basis points
-
Organic revenue growth of 5% to 6%, compared to 4% to 6% previously
-
Adjusted EBITDA of
$195 million to$205 million , which is unchanged -
Adjusted EPS of
$0.37 to$0.42 , which is unchanged -
Adjusted free cash flow of
$65 million to$75 million , compared to$65 million to$85 million previously
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:
-
Depreciation of approximately
$34 million for the year -
Net interest expense of approximately
$52 million (approximately$50 million of cash interest) - Effective tax rate between 27% and 29%
-
Capital expenditures of approximately
$45 million -
Cash taxes of approximately
$35 million -
Approximately 205 million shares of Class A common stock outstanding (excludes 6.8 million shares of Class B common stock, 18.8 million founder shares, subject to vesting, 1.7 million restricted stock units, 1.2 million performance stock units and a further 34.4 million shares reserved for future equity awards (subject to annual automatic increases)) (all numbers as of
September 30, 2024 ) -
Euro to
U.S. Dollar foreign exchange conversion rate of 1.09 -
Cash non-operating expenses of approximately
$10 million -
Stock-based compensation of approximately
$12 million
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, merger and acquisition activity 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 organic and inorganic revenue, adjusted EBITDA, adjusted EPS and adjusted free cash flow are not available without unreasonable effort.
Conference Call
A telephonic replay will be available shortly after the conclusion of the call and until
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”, “plan”, “possible”, “potential”, “predict”, “project”, “should”, “strive”, “seeks”, “plans”, “would”, “will”, “understand” and similar words are intended to identify forward looking statements, but the absence of these words does not mean that a statement is not forward looking. These forward-looking statements include but are not limited to, statements regarding our future operating results, financial position and guidance, our business strategy and plans, our objectives for future operations, our strategic partnership with EDF, the closure of our lasers business, macroeconomic trends, trends in cancer care, nuclear power and small modular reactor, foreign exchange, interest rate and inflation expectations, any future mergers, acquisitions, divestitures and strategic investments, including the completion and integration of previously completed transactions, and our future share capitalization. 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, including related to matters affecting
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
In addition to our results determined in accordance with GAAP, 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
About
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Condensed Consolidated Balance Sheets |
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(Unaudited) |
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(In millions, except share data) |
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ASSETS |
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Current assets: |
|
|
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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 |
|
|
|
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 |
|
|
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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) |
|
|
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Stockholders’ equity (deficit): |
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Class A common stock; |
|
— |
|
|
|
— |
|
Class B common stock; |
|
— |
|
|
|
— |
|
|
|
(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 |
) |
|
|
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 |
|
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Condensed Consolidated Statements of Operations |
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(Unaudited) |
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(In millions, except per share data) |
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Three Months Ended |
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Three Months Ended |
|
Nine Months Ended |
|
Nine Months Ended |
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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 |
$ |
(13.6 |
) |
|
$ |
(12.1 |
) |
|
$ |
(51.1 |
) |
|
$ |
(81.7 |
) |
|
|
|
|
|
|
|
|
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Net loss per common share attributable to |
$ |
(0.07 |
) |
|
$ |
(0.06 |
) |
|
$ |
(0.25 |
) |
|
$ |
(0.42 |
) |
Weighted average common shares outstanding — basic and diluted |
|
206.676 |
|
|
|
199.223 |
|
|
|
202.881 |
|
|
|
195.388 |
|
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Condensed Consolidated Statements of Cash Flows |
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(Unaudited) |
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(In millions) |
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|
Nine Months Ended |
|
Nine Months Ended |
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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 |
|
Share Count
Consists of 206,718,851 shares of Class A common stock outstanding as of
Reconciliation of Non-GAAP Financial Measures
In addition to our results determined in accordance with GAAP, we believe the following non-GAAP measures are useful in evaluating our operating performance. We use the following non-GAAP financial information to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that non-GAAP financial information, when taken collectively, may be helpful to investors because it provides consistency and comparability with past financial performance. However, non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool, and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. Other companies, including companies in our industry, may calculate similarly titled non-GAAP measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison.
Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures and not rely on any single financial measure to evaluate our business.
Organic revenues is defined as Revenues excluding the impact of foreign exchange rates as well as mergers, acquisitions and divestitures in the period.
Adjusted EBITDA is defined as net income before interest expense, income tax expense, depreciation and amortization adjusted to remove the impact of foreign currency gains and losses, amortization of acquired intangible assets, changes in the fair value of warrants, certain non-operating expenses (restructuring and costs to achieve operational synergies, merger, acquisition and divestiture expenses and IT project implementation expenses), stock-based compensation expense, debt extinguishment and income tax impacts of these adjustments.
Adjusted EBITDA margin is defined as Adjusted EBITDA divided by Revenue.
Adjusted net income is defined as GAAP net income adjusted for foreign currency gains and losses, amortization of acquired intangible assets, changes in the fair value of warrants, certain non-operating expenses (restructuring and costs to achieve operational synergies, merger, acquisition and divestiture expenses and IT project implementation expenses), stock-based compensation expense, debt extinguishment and income tax impacts of these adjustments.
Adjusted EPS is defined as adjusted net income divided by weighted average common shares outstanding — basic and diluted.
Adjusted free cash flow is defined as free cash flow adjusted to include the impact of cash used to fund non-operating expenses. We believe that the inclusion of supplementary adjustments to free cash flow applied in presenting adjusted free cash flow is appropriate to provide additional information to investors about our cash flows that management utilizes on an ongoing basis to assess our ability to generate cash for use in acquisitions and other investing and financing activities.
Free cash flow is defined as
Net leverage is defined as Net Debt (debt minus cash and cash equivalents) divided by Adjusted EBITDA plus contributions to Adjusted EBITDA if acquisitions made during the applicable period had been made before the start of the applicable period.
Operating Metrics
Order growth is defined as the amount of revenue earned in a given period and estimated to be earned in future periods from contracts entered into in a given period as compared with such amount for a prior period. Foreign exchange rates are based on the applicable rates as reported for the time period.
Adjusted order growth (decline) is defined as order growth (decline) adjusted to exclude large, one-time orders and the impact of acquisitions and divestitures.
The following tables present reconciliations of certain non-GAAP financial measures for the applicable periods.
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Reconciliation of Adjusted EBITDA |
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(In millions) |
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|
Three Months Ended |
||||||||
|
|
||||||||
|
|
2024 |
|
|
|
2023 |
|
||
Income from operations |
$ |
(1.6 |
) |
|
$ |
(11.1 |
) |
||
Amortization |
|
30.1 |
|
|
|
32.7 |
|
||
Depreciation - core |
|
6.8 |
|
|
|
6.3 |
|
||
Depreciation - Mirion Business Combination step-up |
|
1.6 |
|
|
|
1.6 |
|
||
Stock-based compensation |
|
4.3 |
|
|
|
6.1 |
|
||
Non-operating expenses |
|
4.1 |
|
|
|
3.6 |
|
||
Other income |
|
0.4 |
|
|
|
(0.4 |
) |
||
Adjusted EBITDA |
$ |
45.7 |
|
|
$ |
38.8 |
|
||
|
|
|
|
||||||
Income from operations margin |
|
(0.8 |
)% |
|
|
(5.8 |
)% |
||
Adjusted EBITDA margin |
|
22.1 |
% |
|
|
20.3 |
% |
|
|||||||||
Reconciliation of Adjusted Earnings per Share |
|||||||||
(In millions, except per share values) |
|||||||||
|
Three Months Ended |
||||||||
|
|
||||||||
|
|
2024 |
|
|
|
2023 |
|
||
Net loss attributable to |
$ |
(13.6 |
) |
|
$ |
(12.1 |
) |
||
Loss attributable to non-controlling interests |
|
(0.4 |
) |
|
|
(0.8 |
) |
||
GAAP net loss |
$ |
(14.0 |
) |
|
$ |
(12.9 |
) |
||
Foreign currency loss (gain), net |
|
(0.9 |
) |
|
|
1.5 |
|
||
Amortization of acquired intangibles |
|
30.1 |
|
|
|
32.7 |
|
||
Stock-based compensation |
|
4.3 |
|
|
|
6.1 |
|
||
Change in fair value of warrant liabilities |
|
— |
|
|
|
(12.8 |
) |
||
Non-operating expenses |
|
4.1 |
|
|
|
2.9 |
|
||
Tax impact of adjustments above |
|
(6.2 |
) |
|
|
(6.9 |
) |
||
Adjusted Net Income |
$ |
17.4 |
|
|
$ |
10.6 |
|
||
|
|
|
|
||||||
Weighted average common shares outstanding — basic and diluted |
|
206.676 |
|
|
|
199.223 |
|
||
Dilutive Potential Common Shares - RSUs |
|
0.796 |
|
|
|
0.201 |
|
||
Adjusted weighted average common shares — diluted |
|
207.472 |
|
|
|
199.424 |
|
||
|
|
|
|
||||||
GAAP loss per share |
$ |
(0.07 |
) |
|
$ |
(0.06 |
) |
||
Adjusted earnings per share |
$ |
0.08 |
|
|
$ |
0.05 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20241029637409/en/
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