Mirion Technologies, Inc.

fourth quarter and full year 2023 earnings conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Alex Gaddy, Senior Vice President, Strategy and Investor Relations. Thank you, Mr. Gatti. You may begin.

Good morning, everyone, and thank you for joining Marion's fourth quarter and full year 2020 earnings call. A reminder, the comments made during this presentation will include forward-looking statements, and actual results may differ materially from those projected in the forward-looking statements. The factors that could cause actual results to differ are discussed in our annual report, on Form 10-K and quarterly reports on Form 10-Q that we file from time to time with the SEC under the caption risk factors and in Marion's other filings with the SEC. Quarterly references within today's discussion are related to the fourth quarter ended December 31st, 2023. The comments made during this call will also include certain financial measures that were not prepared in accordance with generally accepted accounting principles. Reconciliation of those non-GAAP financial measures to the most directly comparable GAAP financial measures can be found in the appendix of this presentation accompanying the call today. All earnings materials can be found on Merion's IR website at ir.merion.com. Joining me on the call today are Tom Logan, Chief Executive Officer, and Brian Shopfer, Chief Financial Officer. Now, I will turn it over to our CEO, Tom Logan.

Tom? Thank you, Alex, and good morning, everyone. Thank you all for dialing in today and for your continued support of Mirion. To kick off my commentary today, first I'd like to congratulate and thank my Mirion colleagues for helping to put together a great 2023. We delivered a record year for the company, and I'm proud of the progress we've made as a team while continuing to build a great business. Looking at the fourth quarter and the full year, there are a few things I'd like to start with. First, we closed out 2023 with record backlog generated by fourth quarter organic order growth of 30%. This is our sixth consecutive quarter backlog expansion reflecting growth of 15% compared to year end 2022. Our vertical markets are healthy and I'm encouraged by our top line coverage heading into 2024. Second, we delivered organic revenue growth of 5% in Q4, yielding $801 million of total company revenue for the year. The medical segment led the way with organic growth just under 10%. Adjusted EBITDA on the quarter was a record $61 million, contributing to a full year result of a record $181 million. Third, we generated $62 million of adjusted free cash flow in the fourth quarter, resulting in net leverage finishing the year at 3.0 times EBITDA, beating expectations. I'm extremely proud of the team's execution against the cash and leverage targets we laid out early in 2023. And this performance bolsters our confidence and sustained momentum in this area in 2024. Finally, we've initiated financial guidance for 2024. For the full year, we're expecting organic revenue growth of 4% to 6%, adjusted EBITDA of $193 to $203 million, and adjusted free cash flow of $65 to $85 million. Moving on to panel four, I'd like to address 2023 orders performance and our end market conditions in greater detail. Beginning with the medical segment and specifically our radiation therapy business, we remain encouraged by the positive momentum we've generated in the European market by bolstering our sales and support capabilities in the region. In the U.S., our sales reps have reported some nominal improvements in overall market conditions, reversing some of the negative trends we saw through much of 22 and 23, triggered by widespread post-pandemic financial pressures in the U.S. healthcare system. Our digital and new product portfolios remain key areas of focus for growth, and we expect a strong 2024 in radiation therapy. Within occupational dosimetry, the business remains well positioned as we commercialize the next generation of insta-dose technology this year. Core services and hardware demand remain well supported heading into the new year. Lastly, recent trends in the nuclear medicine market continue to support our belief that that this segment will be a strong growth engine for us. Early results from the EC squared acquisition are encouraging and the integration is proceeding on pace. Our early experience confirms the view that EC squared will meaningfully improve Miriam's position to meet the growing demand stemming from Theranostic applications for cancer care. This revolution in nuclear medicine is enhancing the ability for physicians, to more accurately image, diagnose, and treat cancer, yielding improved patient outcomes and reduced treatment costs. EC2 accelerates our commitment to digitizing the medical portfolio, supporting higher levels of recurring revenue and expansion into adjacent niches within the nuclear medicine value chain. As a final note, our medical exposure, inclusive of technology's products being sold into medical channels, now constitutes 38% of total company revenue and 44% of total company EBITDA. Moving on to the technology segment and beginning with nuclear power, 2023 order growth was extremely robust supported by the large orders we reported in Q3. The installed base remains a strong driver and an important focal point of sustained and defensible growth for Marion going forward. We are encouraged by the global pipeline of new build opportunities and expect to take advantage of the growing and accelerated commitment to utility-scale nuclear power. Popular and political support continues to improve, and we've seen governments across the globe declare nuclear power as a green energy source, something we strongly believe in and support. This is perhaps best exemplified by the commitment made at the UN COP28 Climate Change Conference to triple net nuclear operating capacity by the year 2050. Not withstanding the extraordinary magnitude of this goal, this commitment underscores the positive overall momentum we are seeing across the globe. Moving on to the labs and research end markets, the dynamics are constructive. More than 60% of our business in this segment is driven by DOE funding, where we anticipate continued support. Workforce retention dynamics are tight within the national lab system, creating an opportunity for us to sell more value added services. We are seeing favorable growth in Asia, new big science projects, and an increased opportunity in crossover radiopharmaceutical capital equipment. In defense, momentum is supported by the booking of approximately $20 million in nontraditional defense orders in Europe in 2023. And in addition, we see a strong pipeline for the global military and defense markets in 2024. Before I pass the mic over to Brian, there are a few areas of focus that I'd like to highlight for 2024. First, we expect to release more than 40 new product introductions and enhancements this year. That represents a substantial increase of the 10 new product launches we saw in 2023. This reflects our commitment to be the innovation leader in our space with an increasingly digital flavor. Second, as we exit a year of solid financial performance, we're keeping the pedal down, focusing on margin expansion and enhanced free cash flow conversions. As we've said in the past, our five-year goal is for 30% adjusted EBITDA margins for the enterprise. We're increasingly confident in our ability to deliver upon that goal within our planning horizon and expect to take a meaningful step forward in 2024. Finally, we are committed to capital efficiency coupled with smart, opportunistic M&A. The M&A pipeline is robust, and we will continue to evaluate opportunities on a highly selective basis. 2023 was a big step forward where we continue to be active in M&A while reducing leverage from 4.4 times at the start of the year to 3.0 times at the end of 2023. With that, I'll now pass the call over to our Chief Financial Officer, Brian Schoffer. Brian?