Mirion Technologies, Inc.

and Chairman, greetings and welcome to the Medion Technologies first quarter 2025 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 call, please signal the operator by pressing star and zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Eric Lin, VP of Investor Relations. Please go ahead.

Thank you, Ryan, and good morning, and welcome to Mirion's first quarter 2025 earnings conference call. Joining me this morning are Mirion's Chairman and CEO, Tom Logan, and Mirion's CFO, Brian Shopper. Before we begin today's prepared remarks, allow me to remind you that comments made during this call We'll 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 reports on Form 10-K, quarterly reports on Form 10-Q, and in Miriam's other SEC filings under the captioned risk factors. Quarterly references within today's discussion are related to the first quarter ended March 31st, 2025, unless otherwise noted. 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 the presentation accompanying today's call. All earnings materials can be found in the investor relations section of our website at www.merion.com. With that, let me turn the call to Tom, who will begin on slide three.

Eric, thank you, and thank you to everyone on today's call for joining us. And most importantly, thank you to my nearly 3,000 Marion colleagues for delivering a big quarter. We're off to a great start in 2025. We're hitting our marks both financially and operationally. This is most clearly reflected in our first quarter adjusted free cash flow and order growth. We delivered $29 million of adjusted free cash flow, a 62% conversion of adjusted EBITDA. In addition, first quarter orders grew 11.5%, driven largely by nuclear power orders. This is our best first quarter performance since going public, and I'll share more details with you momentarily. As you may have seen in this morning's press release, we acquired a small software business called Oncospace. Oncospace is a cloud-native data analytics platform that enables clinicians to confidently design an optimal patient plan for radiation oncology, consistently promote best practice behavior, and share peer-to-peer expertise. This software is a great addition to our cancer care portfolio and is expected to enhance our go-to-market strategy. This acquisition is small but significant. Small in initial revenue and adjusted EBITDA contribution, but significant in its potential to catalyze the growth in our radiation therapy software business. I'm excited to welcome the Oncospace team to Merriam. Beyond this transaction, the M&A deal pipeline remains attractive, but as you'd expect, today's uncertain market dynamics have clouded valuations and executability. As a result, we are remaining disciplined with a patient view of likely activity by year end. Let's get into the details now, beginning with first quarter performance on slide four. First quarter organic revenue grew 6% versus the same period last year, aided by double-digit revenue growth from the nuclear power end market. First quarter adjusted EBITDA totaled $47 million, or 18.2% higher than last year's first quarter. Margins also increased 260 basis points to 23.1%. The improvement reflects strong operating leverage and procurement savings, key components of our pathway to 30-point adjusted EBITDA margins by 2028, as committed to at our December investor day. We also repurchased 1.2 million shares in the quarter for 18.6 million as part of our capital deployment strategy outlined in December. Adjusted EPS in the quarter was 10 cents per share compared to 6 cents per share in the first quarter 2024, a 67% increase. As mentioned in my opening comments, the two standout elements for the quarter were adjusted free cash flow and orders. Q1 orders are particularly encouraging given that this is typically our lightest volume quarter. Importantly, this orders number does not account for any of the $300 million to $400 million of large one-time opportunities that are currently in the pipeline. While global government budget dynamics have likely lengthened bidding cycles, we remain optimistic about our prospects for these contracts. And as mentioned last quarter, we think the $300 million to $400 million sizing may be conservative. It is worth noting we've not lost any of these projects. The strong orders of nuclear power are just another proof point of the momentum building in this market. Seemingly on a weekly basis, we see and hear affirmation that nuclear is a critically important component of the solution to the growing supply, demand, and balance in the global electricity market. This view is increasingly reflected in the public consciousness. The 2024 National Nuclear Energy Public Opinion Survey shows that more than 75% of Americans support the use of nuclear energy a record level for the fourth consecutive year. I've personally seen growing bipartisan political support for nuclear energy in the U.S. Last month, I visited Washington, D.C. for a lobbying trip. During the trip, I spent time with legislators and regulators overseeing the nuclear industry. I can confidently say that support for nuclear power is the highest I've seen in my career, and my sense of optimism strongly correlates to that dynamic. Now, zooming out a bit to talk about Marion's resilient business model on slide five. Given today's uncertain economic backdrop, it's important to remind investors why we believe we are well-positioned to traverse the unpredictable road that lies ahead. First, it begins with the customer. Marion is a trusted partner to a global customer base. In most instances, our safety-critical solutions are compulsory for customers. We are a leader in 17 of the 19 major product categories we serve and define ourselves as a category of one, the leading player in the detection, measurement, and analysis of ionizing radiation. This is all that we do, and we're better at this than anybody in the world. We've also proven the resilience of our financial performance by consistently delivering organic growth and consistently outperforming our peer set on a through cycle base More than 70% of our revenue is recurring or repeat in nature. Also, approximately 80% of our nuclear power-based revenue is tied to the installed base. This was evident in our first quarter orders, where 79% of the year-over-year nuclear power order growth came from the existing nuclear fleet. Importantly, structural tailwinds from nuclear power and cancer care have us better positioned today versus previous cycles. We are highly levered to two generational trends. that should be robust. Beyond structural tailwinds, our path to future value creation is predicated on established self-help initiatives, including operating leverage, procurement savings, and our proven Mirion business system. Our business system has been central to our operating activities for more than 15 years and informs everything we do, from the C-suite to the shop floor. One of the factors helping to mitigate potential tariff impacts is the regionalized supply chain we've established. This is table stakes for us, and our local-for-local business model has us well positioned in today's macroeconomic environment. The benefits of this regional supply chain are better illustrated on slide six, where we detail the expected tariff exposure based upon what we know today. As mentioned, we believe we are well positioned to weather the tariff storm impact. More broadly, we have a deep stack of mitigating actions to diffuse our modest net exposures. Not surprisingly, China accounts for the largest exposure, between a $7 to $9 million headwind for 2025. This is largely attributable to medical segment products that have historically been produced in the U.S. and sold into China. Note the majority of nuclear and safety segment goods that we sell into China originate from Europe and therefore are not subject to today's retaliatory tariffs placed on U.S. goods. Outside of China, the 2025 exposure is minimal at a $3 to $4 million headwind. We are currently evaluating ways to reduce this exposure moving forward. Of note, we've learned in the last 24 hours that a plurality, potentially a majority of our product set may be exempt from the higher Chinese retaliatory tariffs. If true, this would position us at the upper end of our mitigating strategy range. I caution here that the situation is extraordinarily dynamic and is likely to take some time to stabilize. Mitigating actions totaling $5 to $8 million include alternative sourcing strategies, production shifts, price increases, and cost management. Lastly, prevailing foreign exchange represents an additional tailwind, upwards of $5 million at current rates, to help offset the potential impact from tariffs. Taken together, our net impact of 2025 adjusted EBITDA from today's known tariff rates plus offsets from mitigating actions and FX is between a $3 million tailwind and an $8 million headwind, with the $8 million headwind representing the worst-case scenario, again, based upon what we know today. As a result, you saw in yesterday's press release that we are reaffirming our full-year 2025 organic revenue growth target, adjusted EBITDA. adjusted EPS, and revenue growth, and revising the corresponding low end of adjusted EBITDA margin guidance to account for the non-tariff impacts. We remain confident in our value creation strategy and well-positioned to the evolving landscape. Brian will share additional details around our 2025 guidance, as well as share additional color on our first quarter performance. Brian?