Mirion Technologies, Inc. — Call Transcript 2025

Greetings and welcome to the Mirion Technologies acquisition of Paragon conference call. At this time, all participants are in a listen-only mode. A 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. I would now like to turn the conference over to your host, Mr. Eric Linn, Treasurer and Vice President of Investor Relations. Thank you, sir. You may begin. Thank you and good morning. Welcome to Mirion's investor call to discuss our announced acquisition of Paragon Energy Solutions. Joining me this morning are Mirion's Chairman and CEO, Tom Logan, and Mirion's CFO and Medical Group President, Brian Schopfer. Before we begin today's prepared remarks, allow me to remind you that comments made during this call will include forward-looking statements, and actual results may differ materially from those projected in the forward-looking statements. The comments made during this call will also include certain financial measures that were not prepared in accordance with generally accepted accounting principles. All investor materials can be found in the Investor Relations section of our website at www.mirion.com. With that, let me now turn the call over to Tom Logan. Eric, thank you, and good morning to everybody joining us on such short notice today. We're excited to announce a definitive agreement to acquire Paragon Energy Solutions. This morning, we issued a press release outlining the details of the transaction. Panel Three articulates the highlights. Most fundamentally, this is a highly strategic transaction supporting our quest to become the leading cradle-to-grave play in the nuclear industry. The acquisition will materially enhance our scope in the U.S. nuclear power segment, significantly strengthen our position with key SMR players, and meaningfully broaden the solutions that we offer to our international nuclear customers. All of this as the public and private sector support for nuclear power continues to increase. As with any successful business, the most important asset is human capital. Paragon brings with it best-in-class talent. Their world-class team reflects extraordinary industry knowledge and experience with an exceptional history of superior performance. Moreover, their positive, results-oriented entrepreneurial culture is strongly aligned with ours. We look forward to joining forces with them and know that we will be the better for it. Also, the addition of Paragon's complementary portfolio of products and services into our global network represents strong synergy potential. Brian will share details on the quantum of the opportunities in a bit. Lastly, this deal supports long-term organic growth, is accretive to earnings in year one, and retains balance sheet flexibility. As mentioned, Paragon has a strong presence in the North American nuclear market highlighted on Panel Four. Paragon is present in 100% of reactors in the region. In total, Paragon serves 140+ nuclear reactors around the world. These reactors are served by a highly skilled team of approximately 150 engineers and technicians. Notably, Paragon has made numerous recent key SMR hires, effectively doubling the SMR team to help facilitate relationships in this rapidly growing space. In addition to world-class talent, this acquisition adds critical systems technology to the Mirion product portfolio. Beyond a well-established position within the existing fleet, Paragon is designed in with multiple well-capitalized SMR OEMs today. Combining our complementary portfolios will create an enhanced solution set for our customers in both nuclear power and DOE segments. Panel Five outlines the highlights of each portfolio. A great example of what Paragon brings to the table is their reactor protection system technology, or RPS. This product is the brains of a reactor safety system and is designed to automatically shut down the reactor and initiate safety protocols if hazardous conditions are detected. Paragon's branded RPS system, called HIPS, is the only modern RPS designed specifically to meet the unique needs of SMRs and the only new design approved by the U.S. Nuclear Regulatory Commission in the last decade. HIPS is already specced into multiple leading SMR OEM designs and is an attractive solution for digital upgrades at existing utility-scale reactors. Expanding our SMR partnership opportunities was a key catalyst for this acquisition. This deal is expected to double our potential SMR-related revenue in the future and sets us up for accelerated growth as the SMR fleet gains scale. As you're aware, SMR support from hyperscalers and more recently the Trump administration has hastened the development of this revolutionary market. It is estimated that U.S. SMR capacity could total 6 to 10 gigawatts by 2040, implying approximately 20 SMR reactors in process or completed by 2030. Many of Paragon's products are designed in parallel with SMR customers' reactor design development and, like Mirion's products, are critical to safe and efficient operations. The combination will give us substantial content and strategic relationships with key SMR players. Importantly, while we're excited by the growing SMR partnerships that Paragon has developed, it's important to note that approximately 94% of their revenue comes from the installed base. Jointly, we see significant opportunity to grow this end market through capacity upgrades, life extensions, and digital modernization. Beyond their RPS design, Paragon also specializes in designing, building, and qualifying critical replacement parts and equipment. The latter includes electrical and mechanical components such as electrical panels, twist gears, chillers, heat exchangers, and many others. They are essential to nuclear facility supply chains and provide Paragon with a highly recurring base of business. Paragon also specializes in complex equipment and part engineering solutions. Oftentimes, clients call Paragon first to help with custom engineering work, to machine spare parts, or reverse engineer obsolete electronic components. In total, Paragon brings a spare parts offering of more than 20,000 specific components. Before I turn it to Brian to discuss financials, allow me to speak briefly on how the deal enhances our nuclear power exposure, as shown on Panel Six. This deal will increase our total anticipated nuclear power-related revenue to 45% of consolidated revenue, up significantly from the 37% previously disclosed at our 2024 investor day. Let me turn it over to Brian now to discuss the financial details of the deal. Brian. Thanks, Tom, and good morning, everyone. Let's discuss some of the key transaction details beginning on Slide Seven. As noted in the press release, the purchase price of $585 million represents approximately 18 times Paragon's expected 2026 EBITDA. Post-synergies, the valuation is approximately 14 times 2026 EBITDA. This reflects expected cost and commercial benefits of approximately $10 million on an annualized basis. More on this in a few minutes. From a diluted EPS perspective, today's deal is expected to add $0.02 to $0.03 per share during the first full year post-close. From an adjusted EBITDA perspective, we expect pro forma nuclear and safety segment margin expansion post-synergy realization. In terms of capital allocation, this deal delivers shareholder value creation. First, it supports long-term growth and creates an upside opportunity to Mirion's long-term organic growth profile. Second, it delivers on our commitment to enhance our nuclear power position by expanding our U.S. presence and augmenting our product and services portfolio. The acquisition is supported through a financing commitment from Goldman Sachs & Co. LLC. Permanent financing is expected to include a mix of equity, debt, or equity-linked financing to maintain a pro forma net debt to adjusted EBITDA ratio of 3.5 times or lower, with strong deleveraging expected post-close. Recall our investor day, we are targeting long-term net debt to adjusted EBITDA of below 2.5 times. Finally, we are expecting to close the deal by year-end, subject to customary closing conditions. Before we take your questions, Slide Eight has details on expected synergy opportunities. Through the diligence process, we've identified a mix of commercial and cost synergies totaling approximately $10 million annualized by year five. As Tom described, cross-selling creates significant upside opportunities to work more closely with customers. Paragon's RPS offering can create incremental opportunities for Mirion's product portfolio to help meet customer needs. More broadly, our combined companies will create more frequent touchpoints with customers. Based on the nature of Paragon's services and equipment, they are more frequently on-site at the nuclear power plants. On the cost side, we see an opportunity for knowledge share to drive efficiencies. For example, a lot of the work we're doing internally with procurement can be applied at Paragon. Additionally, we plan to implement our Mirion business system at Paragon over the first 18 months of the integration. From a talent perspective, we believe Paragon's team of engineers can enhance the innovation underway at Mirion. This also reduces the need for future hiring to scale up to meet growing nuclear power and market demand. These are just a few early opportunities ahead. We'll identify more opportunities as the teams are able to work more closely together. With that, operator, please open the lines for questions. Thank you. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. To allow for as many questions as possible, we ask that you keep to one question and one follow-up each. Thank you. Our first question comes from the line of Jo Richie with Goldman Sachs & Co. LLC. Please proceed with your question. Hi, thanks. This is Anvi on for Jo. Congrats on the deal. Good to see the capital momentum going on. I just had two questions on the broader portfolio. Firstly, you know, you closed Ceratec earlier in the year within nuclear as well. Can you elaborate on how these two acquisitions possibly complement each other? If there are, what the other focus areas for capital deployment going forward would be based on gaps that you see within the nuclear portfolio? Tom? I'm sorry, I was on mute. Let me address that. Firstly, noting that the complementarity between the Paragon Energy Solutions portfolio and the Mirion portfolio is exceedingly high. I think we've articulated well the very attractive dynamics associated with their recurring business and how we see their deep commercial entrenchment within the installed base as being a net positive factor in driving greater pull-through of the broader Mirion portfolio, not only to the nuclear power sector, but also into the DOE sector. As we look ahead, the real strategic attractiveness of the deal ties in with the work that Paragon Energy Solutions has done in and around really the central nervous system of nuclear power plants, both through the Reactor Protection Systems, HIPS digital Reactor Protection System, that we've talked about, as well as the developments they've done in neutron flux measurement systems. I think the key takeaway there is that with the combined capabilities of the two companies, we think there's an enormous opportunity to add value by technologically taking best of breed in the evolution of the product line, but also in terms of the customer-facing AI opportunity that this represents. Again, the strategic goodness of HIPS here is extraordinary. It increases our optionality substantially in the small modular reactor space and our broad presence, the breadth of our presence in that space. It also will drive far greater customer intimacy within the American installed base, and that'll be extremely attractive. In terms of how we think about broader M&A themes, as we've noted, I think consistently through the majority of our calls, we continue to be very active in cultivating our M&A pipeline. We are very pleased with the quality of that pipeline right now. Without getting into any specifics, we do continue to see attractive adjacencies, not only in the nuclear power market where our focus has been a bit over-indexed, but also in nuclear medicine and other arenas. Thanks, that's super helpful. Just a quick follow-up, since you took down the guide for the year in terms of organic outlook, could you provide some color on what you're seeing within dosimetry and also on the ground in China? That would be helpful. What we're seeing broadly is that we've had very, very strong performance in this dosimetry product line, and this really relates specifically to one of the NATO armed forces where today we serve 22 of the NATO armed forces, and we've been experiencing a fairly robust demand for, you know, essentially militarized dosimeters, green gear used by these forces throughout the European theater overall. That demand continues to be very strong. This is simply a deferral of a specific large customer order that we fully expect to book and does not in any way undermine the health of that segment overall. In terms of China, we have seen a slowdown in order flow coming from China specifically in our laboratory instruments sector. This is not, candidly not surprising given the trade dynamics that are at play right now. We're being cautious here in terms of how we try and guide the outlook there. We continue to be optimistic that that is a market that is not moving away from us, but rather, again, that this is a deferral dynamic that's largely caught up in broader trade issues. The final piece of the puzzle, too, is we noted that we also saw a deferral of some orders associated with one of our big gold mining customers where we do a lot of really interesting work with gamma spectroscopy applied to assay processes within gold mining. Again, we see this as a deferral dynamic rather than, again, some fundamental erosion, certainly given the run-up in pricing in the gold market overall. The dynamics at play within that industry continue to be very healthy overall. All of this is driven by a desire for us to be conservative in how we're guiding the overall views, noting that nuclear power continues to be an extremely strong market for us and performing well, and we're really pleased to add to our overall nuclear exposure and to experience the attendant, you know, lift in our overall organic growth rates. Thank you. Our next question comes from the line of Vlad Vistricky with Citigroup. Please proceed with your question. Morning, guys. Thanks for taking my call and congratulations on the deal. Hey, Vlad. I guess before I get into some specifics on Paragon, maybe just following up on the question around the guidance. You lowered the organic revenue, but I didn't see any commentary around the EBITDA outlook. Just any comments or colors that you want to give there? Yeah, maybe I'll take that one. I mean, look, we last updated our other guidance on July 31, 2023. We have not updated since. That's kind of all we're going to say about the rest right now. Okay, got it. Thanks, Brian. Just on Paragon, it looks obviously very strategic and very interesting. Can you talk about, I see the 13% revenue CAGR over the past few years. Can you talk about sort of how much of that is organic or was organic versus whether there's been M&A tailwinds in that? Yeah, maybe I'll take that. I mean, the 13% number is kind of the core organic number of the business. They have done some acquisitions over that time, but that's really representative of the business we're buying and how strong those organic tailwinds have been over the last kind of three years. Great, that's helpful, Brian. Appreciate it. In terms of the margin profile of Paragon and what it means for Mirion overall, it looks like it comes in a little dilutive to nuclear segment margins. I guess how does that impact how you're thinking about the margin profile over the next couple of years and the longer-term 30% target for Mirion overall? Yeah, look, it's not abnormal for us to buy assets that don't look and feel like Mirion's P&L structure today. Actually, that's one of the, I think, the advantages that we've had over the years is our ability to take companies that have P&L structures that are different and help move them into a direction that ultimately becomes accretive to us, Vlad. I think we're very confident in our ability to integrate. I think we're very confident in our ability to drive value creation through that integration. I would remind you that, pre this deal, historically we've kind of bought, but pre this deal in Certec, historically we've bought at kind of 13 times pre-synergy and have been able to synergize it down to seven. There's quite a bit of value capture there, obviously. Assets have gotten a bit more expensive. There's a lot more competition in the market trying to buy assets like this. We think we are uniquely positioned because of our size and scale and our ability to integrate to drive synergies. I think over time, we're very confident that this will look and feel like everything else we're doing in that segment. We continue to be confident in driving towards that 30% EBITDA margin that we've been talking about. Vlad, if I could just tag onto that as well, I would note that Paragon has been very forward-looking in terms of their investment in human capital, particularly in and around building a very, very strong position in the SMR space. This is going to provide great benefit to Mirion overall. As I highlighted in my commentary, the human capital element of this deal is one of the most attractive components of it to us. As Brian noted, we're confident in our ability working jointly with the Paragon team to really monetize and synergize the vast opportunities that we see ahead of us. Yeah, look, operating leverage has always been our friend. I don't think that'll be any different here. Thank you. Our next question comes from the line of Rob Mason with Baird. Please proceed with your question. Yeah, good morning, Tom, Brian. My congrats on the deal as well. Maybe I'll start on Paragon. Could you, Tom, maybe frame, it's been helpful in the past to get a sense of what your content opportunity is within the reactor base. Is there an analog that you could layer onto Paragon, similar to how you've talked about it with Mirion, just in terms of what the content opportunity is? Yeah, I think, again, as we noted, Rob, the vast majority of their business is tied to supporting the existing fleet. The majority of that is, again, associated with the specialized engineering, the spare parts that they provide to keep the existing fleet operating, particularly in the face of a dramatic upsurge in demand, a desire to drive toward higher capacity factors, life extensions, power upgrades, etc. They are really a core player in that market overall, recognizing that the majority of American reactors were built in the 1970s and 1980s. There are many, many analog systems and subcomponents that need to be supported where the original OEM is no longer in that business. That is, again, an incredible recurring revenue dynamic that they've driven, ultimately creating more than 20,000 Paragon-specific part numbers that support the fleet overall. That dynamic is very, very, very important. It's just kind of the core base of their business. The second element of it, and the element I think that represents the greater optionality, is the work they've done again around neutron flux monitoring systems and reactor protection systems, with a clear focus on SMRs, but also a great deal of relevance in the existing utility scale or gigawatt scale market overall. Clearly, as the SMR movement continues to move to the left and become far more tangible. To be clear, recently I was part of the U.S. trade mission to the IAEA last week. Prior to that, a few weeks prior, we had the big annual nuclear power trade show. The tangibility of what's happening in the SMR space continues to exceed our expectations. They're very, very well positioned in that. When you look at the SMR dynamic on a combined basis, this really gives us great strength in a majority and a strong majority of the leading SMR players. On top of that, it also broadens the solution set that we'll be able to carry to legacy, again, utility scale operators, not only in the U.S., but leveraging our global network to help bring some of that Paragon content into the broader international markets where we have great strength. Yeah, it clearly broadens your scope to serve SMRs. I'm curious, does it change the way you're thinking about timing on material revenue in SMR? You know, we're obviously going to be careful about guiding that because there continues to be a high degree of volatility in and around that market. The guideposts here, Rob, are that if you look externally at estimates, the most recent estimate came out of the IAEA where they do an annual nuclear power forecast. They put this out two weeks ago, and their projection, take it with a grain of salt, but their projection is that there will be a terawatt of nuclear generating capacity by 2050. Of that total quantum, that's somewhere between 5% and kind of the mid-20% range will be supported by SMRs. I think if you look at the news feed on what's happening in the industry, one of the key takeaways from this U.S. trade mission where Chris Wright, the Energy Secretary, was there, David Wright, the Chairman of the NRC, a huge array of Department of Commerce players. The support for this movement from the U.S. government is incredible. We like the dynamic. Again, we're going to be very careful about how we guide growth in the space. To be clear, this substantially enhances our optionality in SMRs, and that's strategically very important to us. Yeah, maybe just to tag on with a little bit of number color. I mean, if you look at Mirion today, our SMR revenue on an annual basis is less than 0.5%. It's very small. If you combine that with what, let's say, Nucleon's done on an LTM basis, you're still less than 1%. I think the point of that is there will be continued significant opportunity to grow that number over time. I think that's what we're focused on. The point being, it's very, very small in the grand scheme of things today. SMRs are exciting, as Tom just alluded. This also fits very well with our existing fleet core that really drives the engine of our nuclear safety business on top of that. I think we get both things here as part of that asset, and I think that's really, really exciting. For the avoidance of doubt, Nucleon was the code name for Paragon. Oh, sorry, Paragon. Thank you. Our next question comes from the line of Chris Moore with CJS Securities. Please proceed with your question. Hey, good morning, guys. Thanks for taking a couple. Maybe just focus on the revenue. I'm trying to get a sense as to maybe a little more breakdown. How much of Paragon revenue is recurring or reoccurring at this point? Yeah, look, we haven't disclosed that. I think, you know, our view is more that it's really tied to the existing fleet more than anything else. The nature of the revenue being tied to the existing fleet kind of gives you that continuous bite at the apple, whether it's on the parts side or the services side, or in Mirion's case, in a little bit in Paragon's case, but definitely in Certec's case, the software side. I think that's the focus, Chris, is that, you know, reoccurring replacement nature of the business is very consistent between Paragon and Mirion. Got it. Maybe back to a prior question. The revenue CAGR was 13% from 2022 to 2025. It sounds like the majority of that was organic. Is that fair? I mean, are they thinking double-digit organic growth for a little bit from here, or just any thoughts, any further thoughts on organic growth from Paragon? Yeah, look, I think we're super excited. I mean, we talked back in July, we talked about double-digit nuclear power growth at Mirion. I think this business is at or better than the growth rates we're seeing in our nuclear business. I think we're super excited about the organic growth profile both within the existing fleet, but also in the SMR base. Thank you. Our final question this morning comes from the line of Yuan Ji with B. Riley Securities. Please proceed with your question. Thank you for taking our questions. Tom and Brian, maybe can you talk about Paragon's near-term growth drivers? Do you anticipate any inflection point in the near term to drive the top line growth higher than 13%? Yeah, Yuan, good morning. The starting point again is, as with Mirion, you know, we frequently note that 80% of our nuclear power-related revenue comes from the installed base. With Paragon, clearly that number is higher. We noted 94% overall. The inflection point and the most important theme in the near term, again, is just the strength of the sector overall. Power plant operators are very profitable now, and that's a stark contrast from the dynamics that have existed for much of the last 30 years or so. There is a strong incentive financially for owners of these assets to operate them at higher capacity utilization or capacity factors, to life extend them, and in some cases, bringing decommissioned plants back online, to operate capacity, and throughout all of that, to drive a level of digital modernization, you know, coupled with emerging AI opportunities in the space overall. That is the most important dynamic. We've seen an acceleration in flow business in support of this. We expect that that dynamic will continue and probably will continue to improve overall. Again, number one most important factor is just that that dynamic at play within the installed base. On top of that, as we see increased expectations of gigawatt scale development globally, but also in the U.S., where there's a focus on building 10 gigawatt scale reactors in the U.S. in the near term. As that accelerates, and on top of that, as the SMR-related activity accelerates, then that represents not only a strong opportunity to become embedded in those new facilities, enjoying that front-end concentration of revenue, but then to add to that downstream recurring and replacement revenue dynamic, that in the case of utility scale plants, it's essentially, you know, 100 years in duration. Those are the two most important dynamics. Got it. Maybe can you clarify how this acquisition will impact your developing U.S. market shares and the relationships that you may not have advantage in the past? Yeah, one of the advantages that Paragon brings to the fabric of Mirion is the customer intimacy. As you know, both Brian and I alluded to, they've got an incredible commercial team. Given the nature of what they do, which is different from what our core business in the sector has been historically, it really requires a very high level of customer touch. Accordingly, what they will bring to the table is really expanded, enhanced relationships, if you will, with many of the leading power plant operators in the U.S., a much greater degree of knowledge in and around capital spending dynamics. Ultimately, we think the pull-through as it relates to legacy Mirion products that go beyond the scope of what Paragon does today is likely to be meaningful. There is a very high degree of complementarity, and we think that is really one of the key elements of the synergy story as we look ahead. Thank you. We have one more follow-up from the line of Rob Mason with Baird. Please proceed with your question. Yes, thanks for taking the follow-up. Just a point of clarification around the guidance revision on core sales. It sounded like, as you described, where you're seeing the headwinds. This all falls within the nuclear and safety segment, but I just wanted to make sure that was the case. That's correct. I'm sorry? Yeah. That's correct. That's correct. Okay. You didn't allude, I didn't hear you allude to at least any kind of U.S. government spend impact in that labs and research segment, but any update that you can provide there? Yeah, again, Rob, I think in our last quarterly call, we indicated that the lab space in nuclear and safety would be down year over year. That's entirely due to DOGE-related activities where there have been headcount cuts of relevance to the space that we plan overall, some budgetary cuts. That's the dynamic that we've experienced there. Essentially, 100% of that specific callout relates to government budgetary dynamics. We're not through Q3 yet. Government year-end is September 30. There's always a little bit of volatility in and around that because there is a use-it-or-lose-it dynamic associated with capital budgets for government agencies. We'll talk about that in our Q3 earnings call a few weeks down the road. Thank you. Ladies and gentlemen, this concludes our question and answer session. I'll turn the floor back to Mr. Logan for any final comments. Thank you, operator, and thanks to everybody for joining us this morning. Today is a really important strategic milestone for us towards creating a great public company. We're really pleased with this deal. We're really excited to welcome the Paragon team again into the fabric of Mirion. We expect to do great things together. We're also pleased that we're kind of back in the game from an M&A standpoint after having worked very hard to deleverage our balance sheet over the last couple of years. We're very encouraged by our continuing pipeline of M&A opportunities. We're excited to show what we can do as we integrate this asset and move ahead. Appreciate the time and attention today, and we'll look forward to speaking to all of you in our Q3 earnings call in a few weeks. Thank you and good day. Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.

Speaker 1: Greetings and welcome to the Mirion Technologies acquisition of Paragon conference call. At this time, all participants are in a listen-only mode. A 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. I would now like to turn the conference over to your host, Mr. Eric Linn, Treasurer and Vice President of Investor Relations. Thank you, sir. You may begin. Greetings and welcome to the Mirion Technologies acquisition of Paragon conference call. greetings and welcome to the mirion technologies acquisition of paragon conference call At this time, all participants are in a listen-only mode. at this time all participants are in a listen-only mode A question and answer session will follow the formal presentation. a 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. 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. as a reminder this conference is being recorded I would now like to turn the conference over to your host, Mr. Eric Linn, Treasurer and Vice President of Investor Relations. i would now like to turn the conference over to your host mr eric linn treasurer and vice president of investor relations Thank you, sir. thank you sir You may begin. you may begin

Speaker 2: Thank you and good morning. Welcome to Mirion's investor call to discuss our announced acquisition of Paragon Energy Solutions. Joining me this morning are Mirion's Chairman and CEO, Tom Logan, and Mirion's CFO and Medical Group President, Brian Schopfer. Before we begin today's prepared remarks, allow me to remind you that comments made during this call will include forward-looking statements, and actual results may differ materially from those projected in the forward-looking statements. The comments made during this call will also include certain financial measures that were not prepared in accordance with generally accepted accounting principles. All investor materials can be found in the Investor Relations section of our website at www.mirion.com. With that, let me now turn the call over to Tom Logan. Thank you and good morning. thank you and good morning Welcome to Mirion's investor call to discuss our announced acquisition of Paragon Energy Solutions. welcome to mirion's investor call to discuss our announced acquisition of paragon energy solutions Joining me this morning are Mirion's Chairman and CEO, Tom Logan, and Mirion's CFO and Medical Group President, Brian Schopfer. joining me this morning are mirion's chairman and ceo tom logan and mirion's cfo and medical group president brian schopfer Before we begin today's prepared remarks, allow me to remind you that comments made during this call will include forward-looking statements, and actual results may differ materially from those projected in the forward-looking statements. before we begin today's prepared remarks allow me to remind you that comments made during this call will include forward-looking statements and actual results may differ materially from those projected in the forward-looking statements The comments made during this call will also include certain financial measures that were not prepared in accordance with generally accepted accounting principles. the comments made during this call will also include certain financial measures that were not prepared in accordance with generally accepted accounting principles All investor materials can be found in the Investor Relations section of our website at www.mirion.com. all investor materials can be found in the investor relations section of our website at www.mirion.com With that, let me now turn the call over to Tom Logan. with that let me now turn the call over to tom logan

Speaker 3: Eric, thank you, and good morning to everybody joining us on such short notice today. We're excited to announce a definitive agreement to acquire Paragon Energy Solutions. This morning, we issued a press release outlining the details of the transaction. Panel Three articulates the highlights. Most fundamentally, this is a highly strategic transaction supporting our quest to become the leading cradle-to-grave play in the nuclear industry. The acquisition will materially enhance our scope in the U.S. nuclear power segment, significantly strengthen our position with key SMR players, and meaningfully broaden the solutions that we offer to our international nuclear customers. All of this as the public and private sector support for nuclear power continues to increase. As with any successful business, the most important asset is human capital. Paragon brings with it best-in-class talent. Their world-class team reflects extraordinary industry knowledge and experience with an exceptional history of superior performance. Eric, thank you, and good morning to everybody joining us on such short notice today. eric thank you and good morning to everybody joining us on such short notice today We're excited to announce a definitive agreement to acquire Paragon Energy Solutions. we're excited to announce a definitive agreement to acquire paragon energy solutions This morning, we issued a press release outlining the details of the transaction. this morning we issued a press release outlining the details of the transaction Panel Three articulates the highlights. panel three articulates the highlights Most fundamentally, this is a highly strategic transaction supporting our quest to become the leading cradle-to-grave play in the nuclear industry. most fundamentally this is a highly strategic transaction supporting our quest to become the leading cradle-to-grave play in the nuclear industry The acquisition will materially enhance our scope in the U.S. nuclear power segment, significantly strengthen our position with key SMR players, and meaningfully broaden the solutions that we offer to our international nuclear customers. the acquisition will materially enhance our scope in the u.s nuclear power segment significantly strengthen our position with key smr players and meaningfully broaden the solutions that we offer to our international nuclear customers All of this as the public and private sector support for nuclear power continues to increase. all of this as the public and private sector support for nuclear power continues to increase As with any successful business, the most important asset is human capital. as with any successful business the most important asset is human capital Paragon brings with it best-in-class talent. paragon brings with it best-in-class talent Their world-class team reflects extraordinary industry knowledge and experience with an exceptional history of superior performance. their world-class team reflects extraordinary industry knowledge and experience with an exceptional history of superior performance Moreover, their positive, results-oriented entrepreneurial culture is strongly aligned with ours. We look forward to joining forces with them and know that we will be the better for it. Also, the addition of Paragon's complementary portfolio of products and services into our global network represents strong synergy potential. Brian will share details on the quantum of the opportunities in a bit. Lastly, this deal supports long-term organic growth, is accretive to earnings in year one, and retains balance sheet flexibility. As mentioned, Paragon has a strong presence in the North American nuclear market highlighted on Panel Four. Paragon is present in 100% of reactors in the region. In total, Paragon serves 140+ nuclear reactors around the world. These reactors are served by a highly skilled team of approximately 150 engineers and technicians. Moreover, their positive, results-oriented entrepreneurial culture is strongly aligned with ours. moreover their positive results-oriented entrepreneurial culture is strongly aligned with ours We look forward to joining forces with them and know that we will be the better for it. we look forward to joining forces with them and know that we will be the better for it Also, the addition of Paragon's complementary portfolio of products and services into our global network represents strong synergy potential. also the addition of paragon's complementary portfolio of products and services into our global network represents strong synergy potential Brian will share details on the quantum of the opportunities in a bit. brian will share details on the quantum of the opportunities in a bit Lastly, this deal supports long-term organic growth, is accretive to earnings in year one, and retains balance sheet flexibility. lastly this deal supports long-term organic growth is accretive to earnings in year one and retains balance sheet flexibility As mentioned, Paragon has a strong presence in the North American nuclear market highlighted on Panel Four. as mentioned paragon has a strong presence in the north american nuclear market highlighted on panel four Paragon is present in 100% of reactors in the region. paragon is present in 100% of reactors in the region In total, Paragon serves 140+ nuclear reactors around the world. in total paragon serves 140+ nuclear reactors around the world These reactors are served by a highly skilled team of approximately 150 engineers and technicians. these reactors are served by a highly skilled team of approximately 150 engineers and technicians Notably, Paragon has made numerous recent key SMR hires, effectively doubling the SMR team to help facilitate relationships in this rapidly growing space. In addition to world-class talent, this acquisition adds critical systems technology to the Mirion product portfolio. Beyond a well-established position within the existing fleet, Paragon is designed in with multiple well-capitalized SMR OEMs today. Combining our complementary portfolios will create an enhanced solution set for our customers in both nuclear power and DOE segments. Panel Five outlines the highlights of each portfolio. A great example of what Paragon brings to the table is their reactor protection system technology, or RPS. This product is the brains of a reactor safety system and is designed to automatically shut down the reactor and initiate safety protocols if hazardous conditions are detected. Notably, Paragon has made numerous recent key SMR hires, effectively doubling the SMR team to help facilitate relationships in this rapidly growing space. notably paragon has made numerous recent key smr hires effectively doubling the smr team to help facilitate relationships in this rapidly growing space In addition to world-class talent, this acquisition adds critical systems technology to the Mirion product portfolio. in addition to world-class talent this acquisition adds critical systems technology to the mirion product portfolio Beyond a well-established position within the existing fleet, Paragon is designed in with multiple well-capitalized SMR OEMs today. beyond a well-established position within the existing fleet paragon is designed in with multiple well-capitalized smr oems today Combining our complementary portfolios will create an enhanced solution set for our customers in both nuclear power and DOE segments. combining our complementary portfolios will create an enhanced solution set for our customers in both nuclear power and doe segments Panel Five outlines the highlights of each portfolio. panel five outlines the highlights of each portfolio A great example of what Paragon brings to the table is their reactor protection system technology, or RPS. a great example of what paragon brings to the table is their reactor protection system technology or rps This product is the brains of a reactor safety system and is designed to automatically shut down the reactor and initiate safety protocols if hazardous conditions are detected. this product is the brains of a reactor safety system and is designed to automatically shut down the reactor and initiate safety protocols if hazardous conditions are detected Paragon's branded RPS system, called HIPS, is the only modern RPS designed specifically to meet the unique needs of SMRs and the only new design approved by the U.S. Nuclear Regulatory Commission in the last decade. HIPS is already specced into multiple leading SMR OEM designs and is an attractive solution for digital upgrades at existing utility-scale reactors. Expanding our SMR partnership opportunities was a key catalyst for this acquisition. This deal is expected to double our potential SMR-related revenue in the future and sets us up for accelerated growth as the SMR fleet gains scale. As you're aware, SMR support from hyperscalers and more recently the Trump administration has hastened the development of this revolutionary market. It is estimated that U.S. SMR capacity could total 6 to 10 gigawatts by 2040, implying approximately 20 SMR reactors in process or completed by 2030. Paragon's branded RPS system, called HIPS, is the only modern RPS designed specifically to meet the unique needs of SMRs and the only new design approved by the U.S. paragon's branded rps system called hips is the only modern rps designed specifically to meet the unique needs of smrs and the only new design approved by the u.s Nuclear Regulatory Commission in the last decade. nuclear regulatory commission in the last decade HIPS is already specced into multiple leading SMR OEM designs and is an attractive solution for digital upgrades at existing utility-scale reactors. hips is already specced into multiple leading smr oem designs and is an attractive solution for digital upgrades at existing utility-scale reactors Expanding our SMR partnership opportunities was a key catalyst for this acquisition. expanding our smr partnership opportunities was a key catalyst for this acquisition This deal is expected to double our potential SMR-related revenue in the future and sets us up for accelerated growth as the SMR fleet gains scale. this deal is expected to double our potential smr-related revenue in the future and sets us up for accelerated growth as the smr fleet gains scale As you're aware, SMR support from hyperscalers and more recently the Trump administration has hastened the development of this revolutionary market. as you're aware smr support from hyperscalers and more recently the trump administration has hastened the development of this revolutionary market It is estimated that U.S. it is estimated that u.s SMR capacity could total 6 to 10 gigawatts by 2040, implying approximately 20 SMR reactors in process or completed by 2030. smr capacity could total 6 to 10 gigawatts by 2040 implying approximately 20 smr reactors in process or completed by 2030 Many of Paragon's products are designed in parallel with SMR customers' reactor design development and, like Mirion's products, are critical to safe and efficient operations. The combination will give us substantial content and strategic relationships with key SMR players. Importantly, while we're excited by the growing SMR partnerships that Paragon has developed, it's important to note that approximately 94% of their revenue comes from the installed base. Jointly, we see significant opportunity to grow this end market through capacity upgrades, life extensions, and digital modernization. Beyond their RPS design, Paragon also specializes in designing, building, and qualifying critical replacement parts and equipment. The latter includes electrical and mechanical components such as electrical panels, twist gears, chillers, heat exchangers, and many others. They are essential to nuclear facility supply chains and provide Paragon with a highly recurring base of business. Paragon also specializes in complex equipment and part engineering solutions. Many of Paragon's products are designed in parallel with SMR customers' reactor design development and, like Mirion's products, are critical to safe and efficient operations. many of paragon's products are designed in parallel with smr customers' reactor design development and like mirion's products are critical to safe and efficient operations The combination will give us substantial content and strategic relationships with key SMR players. the combination will give us substantial content and strategic relationships with key smr players Importantly, while we're excited by the growing SMR partnerships that Paragon has developed, it's important to note that approximately 94% of their revenue comes from the installed base. importantly while we're excited by the growing smr partnerships that paragon has developed it's important to note that approximately 94% of their revenue comes from the installed base Jointly, we see significant opportunity to grow this end market through capacity upgrades, life extensions, and digital modernization. jointly we see significant opportunity to grow this end market through capacity upgrades life extensions and digital modernization Beyond their RPS design, Paragon also specializes in designing, building, and qualifying critical replacement parts and equipment. beyond their rps design paragon also specializes in designing building and qualifying critical replacement parts and equipment The latter includes electrical and mechanical components such as electrical panels, twist gears, chillers, heat exchangers, and many others. the latter includes electrical and mechanical components such as electrical panels twist gears chillers heat exchangers and many others They are essential to nuclear facility supply chains and provide Paragon with a highly recurring base of business. they are essential to nuclear facility supply chains and provide paragon with a highly recurring base of business Paragon also specializes in complex equipment and part engineering solutions. paragon also specializes in complex equipment and part engineering solutions Oftentimes, clients call Paragon first to help with custom engineering work, to machine spare parts, or reverse engineer obsolete electronic components. In total, Paragon brings a spare parts offering of more than 20,000 specific components. Before I turn it to Brian to discuss financials, allow me to speak briefly on how the deal enhances our nuclear power exposure, as shown on Panel Six. This deal will increase our total anticipated nuclear power-related revenue to 45% of consolidated revenue, up significantly from the 37% previously disclosed at our 2024 investor day. Let me turn it over to Brian now to discuss the financial details of the deal. Brian. Oftentimes, clients call Paragon first to help with custom engineering work, to machine spare parts, or reverse engineer obsolete electronic components. oftentimes clients call paragon first to help with custom engineering work to machine spare parts or reverse engineer obsolete electronic components In total, Paragon brings a spare parts offering of more than 20,000 specific components. in total paragon brings a spare parts offering of more than 20,000 specific components Before I turn it to Brian to discuss financials, allow me to speak briefly on how the deal enhances our nuclear power exposure, as shown on Panel Six. before i turn it to brian to discuss financials allow me to speak briefly on how the deal enhances our nuclear power exposure as shown on panel six This deal will increase our total anticipated nuclear power-related revenue to 45% of consolidated revenue, up significantly from the 37% previously disclosed at our 2024 investor day. this deal will increase our total anticipated nuclear power-related revenue to 45% of consolidated revenue up significantly from the 37% previously disclosed at our 2024 investor day Let me turn it over to Brian now to discuss the financial details of the deal. let me turn it over to brian now to discuss the financial details of the deal Brian. brian

Speaker 4: Thanks, Tom, and good morning, everyone. Let's discuss some of the key transaction details beginning on Slide Seven. As noted in the press release, the purchase price of $585 million represents approximately 18 times Paragon's expected 2026 EBITDA. Post-synergies, the valuation is approximately 14 times 2026 EBITDA. This reflects expected cost and commercial benefits of approximately $10 million on an annualized basis. More on this in a few minutes. From a diluted EPS perspective, today's deal is expected to add $0.02 to $0.03 per share during the first full year post-close. From an adjusted EBITDA perspective, we expect pro forma nuclear and safety segment margin expansion post-synergy realization. In terms of capital allocation, this deal delivers shareholder value creation. First, it supports long-term growth and creates an upside opportunity to Mirion's long-term organic growth profile. Thanks, Tom, and good morning, everyone. thanks tom and good morning everyone Let's discuss some of the key transaction details beginning on Slide Seven. let's discuss some of the key transaction details beginning on slide seven As noted in the press release, the purchase price of $585 million represents approximately 18 times Paragon's expected 2026 EBITDA. as noted in the press release the purchase price of $585 million represents approximately 18 times paragon's expected 2026 ebitda Post-synergies, the valuation is approximately 14 times 2026 EBITDA. post-synergies the valuation is approximately 14 times 2026 ebitda This reflects expected cost and commercial benefits of approximately $10 million on an annualized basis. this reflects expected cost and commercial benefits of approximately $10 million on an annualized basis More on this in a few minutes. more on this in a few minutes From a diluted EPS perspective, today's deal is expected to add $0.02 to $0.03 per share during the first full year post-close. from a diluted eps perspective today's deal is expected to add $0.02 to $0.03 per share during the first full year post-close From an adjusted EBITDA perspective, we expect pro forma nuclear and safety segment margin expansion post-synergy realization. from an adjusted ebitda perspective we expect pro forma nuclear and safety segment margin expansion post-synergy realization In terms of capital allocation, this deal delivers shareholder value creation. in terms of capital allocation this deal delivers shareholder value creation First, it supports long-term growth and creates an upside opportunity to Mirion's long-term organic growth profile. first it supports long-term growth and creates an upside opportunity to mirion's long-term organic growth profile Second, it delivers on our commitment to enhance our nuclear power position by expanding our U.S. presence and augmenting our product and services portfolio. The acquisition is supported through a financing commitment from Goldman Sachs & Co. LLC. Permanent financing is expected to include a mix of equity, debt, or equity-linked financing to maintain a pro forma net debt to adjusted EBITDA ratio of 3.5 times or lower, with strong deleveraging expected post-close. Recall our investor day, we are targeting long-term net debt to adjusted EBITDA of below 2.5 times. Finally, we are expecting to close the deal by year-end, subject to customary closing conditions. Before we take your questions, Slide Eight has details on expected synergy opportunities. Through the diligence process, we've identified a mix of commercial and cost synergies totaling approximately $10 million annualized by year five. Second, it delivers on our commitment to enhance our nuclear power position by expanding our U.S. presence and augmenting our product and services portfolio. second it delivers on our commitment to enhance our nuclear power position by expanding our u.s presence and augmenting our product and services portfolio The acquisition is supported through a financing commitment from Goldman Sachs & Co. the acquisition is supported through a financing commitment from goldman sachs & co LLC. llc Permanent financing is expected to include a mix of equity, debt, or equity-linked financing to maintain a pro forma net debt to adjusted EBITDA ratio of 3.5 times or lower, with strong deleveraging expected post-close. permanent financing is expected to include a mix of equity debt or equity-linked financing to maintain a pro forma net debt to adjusted ebitda ratio of 3.5 times or lower with strong deleveraging expected post-close Recall our investor day, we are targeting long-term net debt to adjusted EBITDA of below 2.5 times. recall our investor day we are targeting long-term net debt to adjusted ebitda of below 2.5 times Finally, we are expecting to close the deal by year-end, subject to customary closing conditions. finally we are expecting to close the deal by year-end subject to customary closing conditions Before we take your questions, Slide Eight has details on expected synergy opportunities. before we take your questions slide eight has details on expected synergy opportunities Through the diligence process, we've identified a mix of commercial and cost synergies totaling approximately $10 million annualized by year five. through the diligence process we've identified a mix of commercial and cost synergies totaling approximately $10 million annualized by year five As Tom described, cross-selling creates significant upside opportunities to work more closely with customers. Paragon's RPS offering can create incremental opportunities for Mirion's product portfolio to help meet customer needs. More broadly, our combined companies will create more frequent touchpoints with customers. Based on the nature of Paragon's services and equipment, they are more frequently on-site at the nuclear power plants. On the cost side, we see an opportunity for knowledge share to drive efficiencies. For example, a lot of the work we're doing internally with procurement can be applied at Paragon. Additionally, we plan to implement our Mirion business system at Paragon over the first 18 months of the integration. From a talent perspective, we believe Paragon's team of engineers can enhance the innovation underway at Mirion. This also reduces the need for future hiring to scale up to meet growing nuclear power and market demand. As Tom described, cross-selling creates significant upside opportunities to work more closely with customers. as tom described cross-selling creates significant upside opportunities to work more closely with customers Paragon's RPS offering can create incremental opportunities for Mirion's product portfolio to help meet customer needs. paragon's rps offering can create incremental opportunities for mirion's product portfolio to help meet customer needs More broadly, our combined companies will create more frequent touchpoints with customers. more broadly our combined companies will create more frequent touchpoints with customers Based on the nature of Paragon's services and equipment, they are more frequently on-site at the nuclear power plants. based on the nature of paragon's services and equipment they are more frequently on-site at the nuclear power plants On the cost side, we see an opportunity for knowledge share to drive efficiencies. on the cost side we see an opportunity for knowledge share to drive efficiencies For example, a lot of the work we're doing internally with procurement can be applied at Paragon. for example a lot of the work we're doing internally with procurement can be applied at paragon Additionally, we plan to implement our Mirion business system at Paragon over the first 18 months of the integration. additionally we plan to implement our mirion business system at paragon over the first 18 months of the integration From a talent perspective, we believe Paragon's team of engineers can enhance the innovation underway at Mirion. from a talent perspective we believe paragon's team of engineers can enhance the innovation underway at mirion This also reduces the need for future hiring to scale up to meet growing nuclear power and market demand. this also reduces the need for future hiring to scale up to meet growing nuclear power and market demand These are just a few early opportunities ahead. We'll identify more opportunities as the teams are able to work more closely together. With that, operator, please open the lines for questions. These are just a few early opportunities ahead. these are just a few early opportunities ahead We'll identify more opportunities as the teams are able to work more closely together. we'll identify more opportunities as the teams are able to work more closely together With that, operator, please open the lines for questions. with that operator please open the lines for questions

Speaker 1: Thank you. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. To allow for as many questions as possible, we ask that you keep to one question and one follow-up each. Thank you. Our first question comes from the line of Jo Richie with Goldman Sachs & Co. LLC. Please proceed with your question. Thank you. thank you If you'd like to ask a question, please press star one on your telephone keypad. if you'd like to ask a question please press star one on your telephone keypad A confirmation tone will indicate your line is in the question queue. a confirmation tone will indicate your line is in the question queue You may press star two if you'd like to remove your question from the queue. you may press star two if you'd like to remove your question from the queue For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. for participants using speaker equipment it may be necessary to pick up your handset before pressing the star keys To allow for as many questions as possible, we ask that you keep to one question and one follow-up each. to allow for as many questions as possible we ask that you keep to one question and one follow-up each Thank you. thank you Our first question comes from the line of Jo Richie with Goldman Sachs & Co. our first question comes from the line of jo richie with goldman sachs & co LLC. llc Please proceed with your question. please proceed with your question

Speaker 5: Hi, thanks. This is Anvi on for Jo. Congrats on the deal. Good to see the capital momentum going on. I just had two questions on the broader portfolio. Firstly, you know, you closed Ceratec earlier in the year within nuclear as well. Can you elaborate on how these two acquisitions possibly complement each other? If there are, what the other focus areas for capital deployment going forward would be based on gaps that you see within the nuclear portfolio? Hi, thanks. hi thanks This is Anvi on for Jo. this is anvi on for jo Congrats on the deal. congrats on the deal Good to see the capital momentum going on. good to see the capital momentum going on I just had two questions on the broader portfolio. i just had two questions on the broader portfolio Firstly, you know, you closed Ceratec earlier in the year within nuclear as well. firstly you know you closed ceratec earlier in the year within nuclear as well Can you elaborate on how these two acquisitions possibly complement each other? can you elaborate on how these two acquisitions possibly complement each other If there are, what the other focus areas for capital deployment going forward would be based on gaps that you see within the nuclear portfolio? if there are what the other focus areas for capital deployment going forward would be based on gaps that you see within the nuclear portfolio

Speaker 2: Tom? Tom? tom

Speaker 3: I'm sorry, I was on mute. Let me address that. Firstly, noting that the complementarity between the Paragon Energy Solutions portfolio and the Mirion portfolio is exceedingly high. I think we've articulated well the very attractive dynamics associated with their recurring business and how we see their deep commercial entrenchment within the installed base as being a net positive factor in driving greater pull-through of the broader Mirion portfolio, not only to the nuclear power sector, but also into the DOE sector. As we look ahead, the real strategic attractiveness of the deal ties in with the work that Paragon Energy Solutions has done in and around really the central nervous system of nuclear power plants, both through the Reactor Protection Systems, HIPS digital Reactor Protection System, that we've talked about, as well as the developments they've done in neutron flux measurement systems. I'm sorry, I was on mute. i'm sorry i was on mute Let me address that. let me address that Firstly, noting that the complementarity between the Paragon Energy Solutions portfolio and the Mirion portfolio is exceedingly high. firstly noting that the complementarity between the paragon energy solutions portfolio and the mirion portfolio is exceedingly high I think we've articulated well the very attractive dynamics associated with their recurring business and how we see their deep commercial entrenchment within the installed base as being a net positive factor in driving greater pull-through of the broader Mirion portfolio, not only to the nuclear power sector, but also into the DOE sector. i think we've articulated well the very attractive dynamics associated with their recurring business and how we see their deep commercial entrenchment within the installed base as being a net positive factor in driving greater pull-through of the broader mirion portfolio not only to the nuclear power sector but also into the doe sector As we look ahead, the real strategic attractiveness of the deal ties in with the work that Paragon Energy Solutions has done in and around really the central nervous system of nuclear power plants, both through the Reactor Protection Systems, HIPS digital Reactor Protection System, that we've talked about, as well as the developments they've done in neutron flux measurement systems. as we look ahead the real strategic attractiveness of the deal ties in with the work that paragon energy solutions has done in and around really the central nervous system of nuclear power plants, both through the reactor protection systems, hips digital reactor protection system that we've talked about as well as the developments they've done in neutron flux measurement systems I think the key takeaway there is that with the combined capabilities of the two companies, we think there's an enormous opportunity to add value by technologically taking best of breed in the evolution of the product line, but also in terms of the customer-facing AI opportunity that this represents. Again, the strategic goodness of HIPS here is extraordinary. It increases our optionality substantially in the small modular reactor space and our broad presence, the breadth of our presence in that space. It also will drive far greater customer intimacy within the American installed base, and that'll be extremely attractive. In terms of how we think about broader M&A themes, as we've noted, I think consistently through the majority of our calls, we continue to be very active in cultivating our M&A pipeline. We are very pleased with the quality of that pipeline right now. I think the key takeaway there is that with the combined capabilities of the two companies, we think there's an enormous opportunity to add value by technologically taking best of breed in the evolution of the product line, but also in terms of the customer-facing AI opportunity that this represents. i think the key takeaway there is that with the combined capabilities of the two companies we think there's an enormous opportunity to add value by technologically taking best of breed in the evolution of the product line but also in terms of the customer-facing ai opportunity that this represents Again, the strategic goodness of HIPS here is extraordinary. again the strategic goodness of hips here is extraordinary It increases our optionality substantially in the small modular reactor space and our broad presence, the breadth of our presence in that space. it increases our optionality substantially in the small modular reactor space and our broad presence the breadth of our presence in that space It also will drive far greater customer intimacy within the American installed base, and that'll be extremely attractive. it also will drive far greater customer intimacy within the american installed base and that'll be extremely attractive In terms of how we think about broader M&A themes, as we've noted, I think consistently through the majority of our calls, we continue to be very active in cultivating our M&A pipeline. in terms of how we think about broader m&a themes as we've noted i think consistently through the majority of our calls we continue to be very active in cultivating our m&a pipeline We are very pleased with the quality of that pipeline right now. we are very pleased with the quality of that pipeline right now Without getting into any specifics, we do continue to see attractive adjacencies, not only in the nuclear power market where our focus has been a bit over-indexed, but also in nuclear medicine and other arenas. Without getting into any specifics, we do continue to see attractive adjacencies, not only in the nuclear power market where our focus has been a bit over-indexed, but also in nuclear medicine and other arenas. without getting into any specifics we do continue to see attractive adjacencies not only in the nuclear power market where our focus has been a bit over-indexed but also in nuclear medicine and other arenas

Speaker 5: Thanks, that's super helpful. Just a quick follow-up, since you took down the guide for the year in terms of organic outlook, could you provide some color on what you're seeing within dosimetry and also on the ground in China? That would be helpful. Thanks, that's super helpful. thanks that's super helpful Just a quick follow-up, since you took down the guide for the year in terms of organic outlook, could you provide some color on what you're seeing within dosimetry and also on the ground in China? just a quick follow-up since you took down the guide for the year in terms of organic outlook could you provide some color on what you're seeing within dosimetry and also on the ground in china That would be helpful. that would be helpful

Speaker 3: What we're seeing broadly is that we've had very, very strong performance in this dosimetry product line, and this really relates specifically to one of the NATO armed forces where today we serve 22 of the NATO armed forces, and we've been experiencing a fairly robust demand for, you know, essentially militarized dosimeters, green gear used by these forces throughout the European theater overall. That demand continues to be very strong. This is simply a deferral of a specific large customer order that we fully expect to book and does not in any way undermine the health of that segment overall. In terms of China, we have seen a slowdown in order flow coming from China specifically in our laboratory instruments sector. This is not, candidly not surprising given the trade dynamics that are at play right now. What we're seeing broadly is that we've had very, very strong performance in this dosimetry product line, and this really relates specifically to one of the NATO armed forces where today we serve 22 of the NATO armed forces, and we've been experiencing a fairly robust demand for, you know, essentially militarized dosimeters, green gear used by these forces throughout the European theater overall. what we're seeing broadly is that we've had very very strong performance in this dosimetry product line and this really relates specifically to one of the nato armed forces where today we serve 22 of the nato armed forces and we've been experiencing a fairly robust demand for you know essentially militarized dosimeters green gear used by these forces throughout the european theater overall That demand continues to be very strong. that demand continues to be very strong This is simply a deferral of a specific large customer order that we fully expect to book and does not in any way undermine the health of that segment overall. this is simply a deferral of a specific large customer order that we fully expect to book and does not in any way undermine the health of that segment overall In terms of China, we have seen a slowdown in order flow coming from China specifically in our laboratory instruments sector. in terms of china we have seen a slowdown in order flow coming from china specifically in our laboratory instruments sector This is not, candidly not surprising given the trade dynamics that are at play right now. this is not candidly not surprising given the trade dynamics that are at play right now We're being cautious here in terms of how we try and guide the outlook there. We continue to be optimistic that that is a market that is not moving away from us, but rather, again, that this is a deferral dynamic that's largely caught up in broader trade issues. The final piece of the puzzle, too, is we noted that we also saw a deferral of some orders associated with one of our big gold mining customers where we do a lot of really interesting work with gamma spectroscopy applied to assay processes within gold mining. Again, we see this as a deferral dynamic rather than, again, some fundamental erosion, certainly given the run-up in pricing in the gold market overall. The dynamics at play within that industry continue to be very healthy overall. We're being cautious here in terms of how we try and guide the outlook there. we're being cautious here in terms of how we try and guide the outlook there We continue to be optimistic that that is a market that is not moving away from us, but rather, again, that this is a deferral dynamic that's largely caught up in broader trade issues. we continue to be optimistic that that is a market that is not moving away from us but rather again that this is a deferral dynamic that's largely caught up in broader trade issues The final piece of the puzzle, too, is we noted that we also saw a deferral of some orders associated with one of our big gold mining customers where we do a lot of really interesting work with gamma spectroscopy applied to assay processes within gold mining. the final piece of the puzzle too is we noted that we also saw a deferral of some orders associated with one of our big gold mining customers where we do a lot of really interesting work with gamma spectroscopy applied to assay processes within gold mining Again, we see this as a deferral dynamic rather than, again, some fundamental erosion, certainly given the run-up in pricing in the gold market overall. again we see this as a deferral dynamic rather than again some fundamental erosion certainly given the run-up in pricing in the gold market overall The dynamics at play within that industry continue to be very healthy overall. the dynamics at play within that industry continue to be very healthy overall All of this is driven by a desire for us to be conservative in how we're guiding the overall views, noting that nuclear power continues to be an extremely strong market for us and performing well, and we're really pleased to add to our overall nuclear exposure and to experience the attendant, you know, lift in our overall organic growth rates. All of this is driven by a desire for us to be conservative in how we're guiding the overall views, noting that nuclear power continues to be an extremely strong market for us and performing well, and we're really pleased to add to our overall nuclear exposure and to experience the attendant, you know, lift in our overall organic growth rates. all of this is driven by a desire for us to be conservative in how we're guiding the overall views noting that nuclear power continues to be an extremely strong market for us and performing well and we're really pleased to add to our overall nuclear exposure and to experience the attendant you know lift in our overall organic growth rates

Speaker 1: Thank you. Our next question comes from the line of Vlad Vistricky with Citigroup. Please proceed with your question. Thank you. thank you Our next question comes from the line of Vlad Vistricky with Citigroup. our next question comes from the line of vlad vistricky with citigroup Please proceed with your question. please proceed with your question

Speaker 6: Morning, guys. Thanks for taking my call and congratulations on the deal. Morning, guys. morning guys Thanks for taking my call and congratulations on the deal. thanks for taking my call and congratulations on the deal

Speaker 3: Hey, Vlad. Hey, Vlad. hey vlad

Speaker 6: I guess before I get into some specifics on Paragon, maybe just following up on the question around the guidance. You lowered the organic revenue, but I didn't see any commentary around the EBITDA outlook. Just any comments or colors that you want to give there? I guess before I get into some specifics on Paragon, maybe just following up on the question around the guidance. i guess before i get into some specifics on paragon maybe just following up on the question around the guidance You lowered the organic revenue, but I didn't see any commentary around the EBITDA outlook. you lowered the organic revenue but i didn't see any commentary around the ebitda outlook Just any comments or colors that you want to give there? just any comments or colors that you want to give there

Speaker 3: Yeah, maybe I'll take that one. I mean, look, we last updated our other guidance on July 31, 2023. We have not updated since. That's kind of all we're going to say about the rest right now. Yeah, maybe I'll take that one. yeah maybe i'll take that one I mean, look, we last updated our other guidance on July 31, 2023. i mean look we last updated our other guidance on july 31 2023 We have not updated since. we have not updated since That's kind of all we're going to say about the rest right now. that's kind of all we're going to say about the rest right now

Speaker 6: Okay, got it. Thanks, Brian. Just on Paragon, it looks obviously very strategic and very interesting. Can you talk about, I see the 13% revenue CAGR over the past few years. Can you talk about sort of how much of that is organic or was organic versus whether there's been M&A tailwinds in that? Okay, got it. okay got it Thanks, Brian. thanks brian Just on Paragon, it looks obviously very strategic and very interesting. just on paragon it looks obviously very strategic and very interesting Can you talk about, I see the 13% revenue CAGR over the past few years. can you talk about i see the 13% revenue cagr over the past few years Can you talk about sort of how much of that is organic or was organic versus whether there's been M&A tailwinds in that? can you talk about sort of how much of that is organic or was organic versus whether there's been m&a tailwinds in that

Speaker 4: Yeah, maybe I'll take that. I mean, the 13% number is kind of the core organic number of the business. They have done some acquisitions over that time, but that's really representative of the business we're buying and how strong those organic tailwinds have been over the last kind of three years. Yeah, maybe I'll take that. yeah maybe i'll take that I mean, the 13% number is kind of the core organic number of the business. i mean the 13% number is kind of the core organic number of the business They have done some acquisitions over that time, but that's really representative of the business we're buying and how strong those organic tailwinds have been over the last kind of three years. they have done some acquisitions over that time but that's really representative of the business we're buying and how strong those organic tailwinds have been over the last kind of three years

Speaker 6: Great, that's helpful, Brian. Appreciate it. In terms of the margin profile of Paragon and what it means for Mirion overall, it looks like it comes in a little dilutive to nuclear segment margins. I guess how does that impact how you're thinking about the margin profile over the next couple of years and the longer-term 30% target for Mirion overall? Great, that's helpful, Brian. great that's helpful brian Appreciate it. appreciate it In terms of the margin profile of Paragon and what it means for Mirion overall, it looks like it comes in a little dilutive to nuclear segment margins. in terms of the margin profile of paragon and what it means for mirion overall it looks like it comes in a little dilutive to nuclear segment margins I guess how does that impact how you're thinking about the margin profile over the next couple of years and the longer-term 30% target for Mirion overall? i guess how does that impact how you're thinking about the margin profile over the next couple of years and the longer-term 30% target for mirion overall

Speaker 4: Yeah, look, it's not abnormal for us to buy assets that don't look and feel like Mirion's P&L structure today. Actually, that's one of the, I think, the advantages that we've had over the years is our ability to take companies that have P&L structures that are different and help move them into a direction that ultimately becomes accretive to us, Vlad. I think we're very confident in our ability to integrate. I think we're very confident in our ability to drive value creation through that integration. I would remind you that, pre this deal, historically we've kind of bought, but pre this deal in Certec, historically we've bought at kind of 13 times pre-synergy and have been able to synergize it down to seven. There's quite a bit of value capture there, obviously. Assets have gotten a bit more expensive. Yeah, look, it's not abnormal for us to buy assets that don't look and feel like Mirion's P&L structure today. yeah look it's not abnormal for us to buy assets that don't look and feel like mirion's p&l structure today Actually, that's one of the, I think, the advantages that we've had over the years is our ability to take companies that have P&L structures that are different and help move them into a direction that ultimately becomes accretive to us, Vlad. actually that's one of the i think the advantages that we've had over the years is our ability to take companies that have p&l structures that are different and help move them into a direction that ultimately becomes accretive to us vlad I think we're very confident in our ability to integrate. i think we're very confident in our ability to integrate I think we're very confident in our ability to drive value creation through that integration. i think we're very confident in our ability to drive value creation through that integration I would remind you that, pre this deal, historically we've kind of bought, but pre this deal in Certec, historically we've bought at kind of 13 times pre-synergy and have been able to synergize it down to seven. i would remind you that pre this deal historically we've kind of bought but pre this deal in certec historically we've bought at kind of 13 times pre-synergy and have been able to synergize it down to seven There's quite a bit of value capture there, obviously. there's quite a bit of value capture there obviously Assets have gotten a bit more expensive. assets have gotten a bit more expensive There's a lot more competition in the market trying to buy assets like this. We think we are uniquely positioned because of our size and scale and our ability to integrate to drive synergies. I think over time, we're very confident that this will look and feel like everything else we're doing in that segment. We continue to be confident in driving towards that 30% EBITDA margin that we've been talking about. There's a lot more competition in the market trying to buy assets like this. there's a lot more competition in the market trying to buy assets like this We think we are uniquely positioned because of our size and scale and our ability to integrate to drive synergies. we think we are uniquely positioned because of our size and scale and our ability to integrate to drive synergies I think over time, we're very confident that this will look and feel like everything else we're doing in that segment. i think over time we're very confident that this will look and feel like everything else we're doing in that segment We continue to be confident in driving towards that 30% EBITDA margin that we've been talking about. we continue to be confident in driving towards that 30% ebitda margin that we've been talking about

Speaker 3: Vlad, if I could just tag onto that as well, I would note that Paragon has been very forward-looking in terms of their investment in human capital, particularly in and around building a very, very strong position in the SMR space. This is going to provide great benefit to Mirion overall. As I highlighted in my commentary, the human capital element of this deal is one of the most attractive components of it to us. As Brian noted, we're confident in our ability working jointly with the Paragon team to really monetize and synergize the vast opportunities that we see ahead of us. Vlad, if I could just tag onto that as well, I would note that Paragon has been very forward-looking in terms of their investment in human capital, particularly in and around building a very, very strong position in the SMR space. vlad if i could just tag onto that as well i would note that paragon has been very forward-looking in terms of their investment in human capital particularly in and around building a very very strong position in the smr space This is going to provide great benefit to Mirion overall. this is going to provide great benefit to mirion overall As I highlighted in my commentary, the human capital element of this deal is one of the most attractive components of it to us. as i highlighted in my commentary the human capital element of this deal is one of the most attractive components of it to us As Brian noted, we're confident in our ability working jointly with the Paragon team to really monetize and synergize the vast opportunities that we see ahead of us. as brian noted we're confident in our ability working jointly with the paragon team to really monetize and synergize the vast opportunities that we see ahead of us

Speaker 4: Yeah, look, operating leverage has always been our friend. I don't think that'll be any different here. Yeah, look, operating leverage has always been our friend. yeah look operating leverage has always been our friend I don't think that'll be any different here. i don't think that'll be any different here

Speaker 1: Thank you. Our next question comes from the line of Rob Mason with Baird. Please proceed with your question. Thank you. thank you Our next question comes from the line of Rob Mason with Baird. our next question comes from the line of rob mason with baird Please proceed with your question. please proceed with your question

Speaker 7: Yeah, good morning, Tom, Brian. My congrats on the deal as well. Maybe I'll start on Paragon. Could you, Tom, maybe frame, it's been helpful in the past to get a sense of what your content opportunity is within the reactor base. Is there an analog that you could layer onto Paragon, similar to how you've talked about it with Mirion, just in terms of what the content opportunity is? Yeah, good morning, Tom, Brian. yeah good morning tom brian My congrats on the deal as well. my congrats on the deal as well Maybe I'll start on Paragon. maybe i'll start on paragon Could you, Tom, maybe frame, it's been helpful in the past to get a sense of what your content opportunity is within the reactor base. could you tom maybe frame it's been helpful in the past to get a sense of what your content opportunity is within the reactor base Is there an analog that you could layer onto Paragon, similar to how you've talked about it with Mirion, just in terms of what the content opportunity is? is there an analog that you could layer onto paragon similar to how you've talked about it with mirion just in terms of what the content opportunity is

Speaker 3: Yeah, I think, again, as we noted, Rob, the vast majority of their business is tied to supporting the existing fleet. The majority of that is, again, associated with the specialized engineering, the spare parts that they provide to keep the existing fleet operating, particularly in the face of a dramatic upsurge in demand, a desire to drive toward higher capacity factors, life extensions, power upgrades, etc. They are really a core player in that market overall, recognizing that the majority of American reactors were built in the 1970s and 1980s. There are many, many analog systems and subcomponents that need to be supported where the original OEM is no longer in that business. That is, again, an incredible recurring revenue dynamic that they've driven, ultimately creating more than 20,000 Paragon-specific part numbers that support the fleet overall. That dynamic is very, very, very important. Yeah, I think, again, as we noted, Rob, the vast majority of their business is tied to supporting the existing fleet. yeah i think again as we noted rob the vast majority of their business is tied to supporting the existing fleet The majority of that is, again, associated with the specialized engineering, the spare parts that they provide to keep the existing fleet operating, particularly in the face of a dramatic upsurge in demand, a desire to drive toward higher capacity factors, life extensions, power upgrades, etc. They are really a core player in that market overall, recognizing that the majority of American reactors were built in the 1970s and 1980s. the majority of that is again associated with the specialized engineering the spare parts that they provide to keep the existing fleet operating particularly in the face of a dramatic upsurge in demand a desire to drive toward higher capacity factors life extensions power upgrades etc they are really a core player in that market overall recognizing that the majority of american reactors were built in the 1970s and 1980s There are many, many analog systems and subcomponents that need to be supported where the original OEM is no longer in that business. there are many many analog systems and subcomponents that need to be supported where the original oem is no longer in that business That is, again, an incredible recurring revenue dynamic that they've driven, ultimately creating more than 20,000 Paragon-specific part numbers that support the fleet overall. that is again an incredible recurring revenue dynamic that they've driven ultimately creating more than 20,000 paragon-specific part numbers that support the fleet overall That dynamic is very, very, very important. that dynamic is very very very important It's just kind of the core base of their business. The second element of it, and the element I think that represents the greater optionality, is the work they've done again around neutron flux monitoring systems and reactor protection systems, with a clear focus on SMRs, but also a great deal of relevance in the existing utility scale or gigawatt scale market overall. Clearly, as the SMR movement continues to move to the left and become far more tangible. To be clear, recently I was part of the U.S. trade mission to the IAEA last week. Prior to that, a few weeks prior, we had the big annual nuclear power trade show. The tangibility of what's happening in the SMR space continues to exceed our expectations. They're very, very well positioned in that. It's just kind of the core base of their business. it's just kind of the core base of their business The second element of it, and the element I think that represents the greater optionality, is the work they've done again around neutron flux monitoring systems and reactor protection systems, with a clear focus on SMRs, but also a great deal of relevance in the existing utility scale or gigawatt scale market overall. the second element of it and the element i think that represents the greater optionality is the work they've done again around neutron flux monitoring systems and reactor protection systems with a clear focus on smrs but also a great deal of relevance in the existing utility scale or gigawatt scale market overall Clearly, as the SMR movement continues to move to the left and become far more tangible. clearly as the smr movement continues to move to the left and become far more tangible To be clear, recently I was part of the U.S. trade mission to the IAEA last week. to be clear recently i was part of the u.s trade mission to the iaea last week Prior to that, a few weeks prior, we had the big annual nuclear power trade show. prior to that a few weeks prior we had the big annual nuclear power trade show The tangibility of what's happening in the SMR space continues to exceed our expectations. the tangibility of what's happening in the smr space continues to exceed our expectations They're very, very well positioned in that. they're very very well positioned in that When you look at the SMR dynamic on a combined basis, this really gives us great strength in a majority and a strong majority of the leading SMR players. On top of that, it also broadens the solution set that we'll be able to carry to legacy, again, utility scale operators, not only in the U.S., but leveraging our global network to help bring some of that Paragon content into the broader international markets where we have great strength. When you look at the SMR dynamic on a combined basis, this really gives us great strength in a majority and a strong majority of the leading SMR players. when you look at the smr dynamic on a combined basis this really gives us great strength in a majority and a strong majority of the leading smr players On top of that, it also broadens the solution set that we'll be able to carry to legacy, again, utility scale operators, not only in the U.S., but leveraging our global network to help bring some of that Paragon content into the broader international markets where we have great strength. on top of that it also broadens the solution set that we'll be able to carry to legacy again utility scale operators not only in the u.s but leveraging our global network to help bring some of that paragon content into the broader international markets where we have great strength

Speaker 7: Yeah, it clearly broadens your scope to serve SMRs. I'm curious, does it change the way you're thinking about timing on material revenue in SMR? Yeah, it clearly broadens your scope to serve SMRs. yeah it clearly broadens your scope to serve smrs I'm curious, does it change the way you're thinking about timing on material revenue in SMR? i'm curious does it change the way you're thinking about timing on material revenue in smr

Speaker 3: You know, we're obviously going to be careful about guiding that because there continues to be a high degree of volatility in and around that market. The guideposts here, Rob, are that if you look externally at estimates, the most recent estimate came out of the IAEA where they do an annual nuclear power forecast. They put this out two weeks ago, and their projection, take it with a grain of salt, but their projection is that there will be a terawatt of nuclear generating capacity by 2050. Of that total quantum, that's somewhere between 5% and kind of the mid-20% range will be supported by SMRs. I think if you look at the news feed on what's happening in the industry, one of the key takeaways from this U.S. You know, we're obviously going to be careful about guiding that because there continues to be a high degree of volatility in and around that market. you know we're obviously going to be careful about guiding that because there continues to be a high degree of volatility in and around that market The guideposts here, Rob, are that if you look externally at estimates, the most recent estimate came out of the IAEA where they do an annual nuclear power forecast. the guideposts here rob are that if you look externally at estimates the most recent estimate came out of the iaea where they do an annual nuclear power forecast They put this out two weeks ago, and their projection, take it with a grain of salt, but their projection is that there will be a terawatt of nuclear generating capacity by 2050. they put this out two weeks ago and their projection take it with a grain of salt but their projection is that there will be a terawatt of nuclear generating capacity by 2050 Of that total quantum, that's somewhere between 5% and kind of the mid-20% range will be supported by SMRs. of that total quantum that's somewhere between 5% and kind of the mid-20% range will be supported by smrs I think if you look at the news feed on what's happening in the industry, one of the key takeaways from this U.S. i think if you look at the news feed on what's happening in the industry one of the key takeaways from this u.s trade mission where Chris Wright, the Energy Secretary, was there, David Wright, the Chairman of the NRC, a huge array of Department of Commerce players. The support for this movement from the U.S. government is incredible. We like the dynamic. Again, we're going to be very careful about how we guide growth in the space. To be clear, this substantially enhances our optionality in SMRs, and that's strategically very important to us. trade mission where Chris Wright, the Energy Secretary, was there, David Wright, the Chairman of the NRC, a huge array of Department of Commerce players. trade mission where chris wright the energy secretary was there david wright the chairman of the nrc a huge array of department of commerce players The support for this movement from the U.S. government is incredible. the support for this movement from the u.s government is incredible We like the dynamic. we like the dynamic Again, we're going to be very careful about how we guide growth in the space. again we're going to be very careful about how we guide growth in the space To be clear, this substantially enhances our optionality in SMRs, and that's strategically very important to us. to be clear this substantially enhances our optionality in smrs and that's strategically very important to us

Speaker 4: Yeah, maybe just to tag on with a little bit of number color. I mean, if you look at Mirion today, our SMR revenue on an annual basis is less than 0.5%. It's very small. If you combine that with what, let's say, Nucleon's done on an LTM basis, you're still less than 1%. I think the point of that is there will be continued significant opportunity to grow that number over time. I think that's what we're focused on. The point being, it's very, very small in the grand scheme of things today. SMRs are exciting, as Tom just alluded. This also fits very well with our existing fleet core that really drives the engine of our nuclear safety business on top of that. I think we get both things here as part of that asset, and I think that's really, really exciting. Yeah, maybe just to tag on with a little bit of number color. yeah maybe just to tag on with a little bit of number color I mean, if you look at Mirion today, our SMR revenue on an annual basis is less than 0.5%. i mean if you look at mirion today our smr revenue on an annual basis is less than 0.5% It's very small. it's very small If you combine that with what, let's say, Nucleon's done on an LTM basis, you're still less than 1%. if you combine that with what let's say nucleon's done on an ltm basis you're still less than 1% I think the point of that is there will be continued significant opportunity to grow that number over time. i think the point of that is there will be continued significant opportunity to grow that number over time I think that's what we're focused on. i think that's what we're focused on The point being, it's very, very small in the grand scheme of things today. the point being it's very very small in the grand scheme of things today SMRs are exciting, as Tom just alluded. smrs are exciting as tom just alluded This also fits very well with our existing fleet core that really drives the engine of our nuclear safety business on top of that. this also fits very well with our existing fleet core that really drives the engine of our nuclear safety business on top of that I think we get both things here as part of that asset, and I think that's really, really exciting. i think we get both things here as part of that asset and i think that's really really exciting

Speaker 3: For the avoidance of doubt, Nucleon was the code name for Paragon. For the avoidance of doubt, Nucleon was the code name for Paragon. for the avoidance of doubt nucleon was the code name for paragon

Speaker 4: Oh, sorry, Paragon. Oh, sorry, Paragon. oh sorry paragon

Speaker 1: Thank you. Our next question comes from the line of Chris Moore with CJS Securities. Please proceed with your question. Thank you. thank you Our next question comes from the line of Chris Moore with CJS Securities. our next question comes from the line of chris moore with cjs securities Please proceed with your question. please proceed with your question

Speaker 8: Hey, good morning, guys. Thanks for taking a couple. Maybe just focus on the revenue. I'm trying to get a sense as to maybe a little more breakdown. How much of Paragon revenue is recurring or reoccurring at this point? Hey, good morning, guys. hey good morning guys Thanks for taking a couple. thanks for taking a couple Maybe just focus on the revenue. maybe just focus on the revenue I'm trying to get a sense as to maybe a little more breakdown. i'm trying to get a sense as to maybe a little more breakdown How much of Paragon revenue is recurring or reoccurring at this point? how much of paragon revenue is recurring or reoccurring at this point

Speaker 4: Yeah, look, we haven't disclosed that. I think, you know, our view is more that it's really tied to the existing fleet more than anything else. The nature of the revenue being tied to the existing fleet kind of gives you that continuous bite at the apple, whether it's on the parts side or the services side, or in Mirion's case, in a little bit in Paragon's case, but definitely in Certec's case, the software side. I think that's the focus, Chris, is that, you know, reoccurring replacement nature of the business is very consistent between Paragon and Mirion. Yeah, look, we haven't disclosed that. yeah look we haven't disclosed that I think, you know, our view is more that it's really tied to the existing fleet more than anything else. i think you know our view is more that it's really tied to the existing fleet more than anything else The nature of the revenue being tied to the existing fleet kind of gives you that continuous bite at the apple, whether it's on the parts side or the services side, or in Mirion's case, in a little bit in Paragon's case, but definitely in Certec's case, the software side. the nature of the revenue being tied to the existing fleet kind of gives you that continuous bite at the apple whether it's on the parts side or the services side or in mirion's case in a little bit in paragon's case but definitely in certec's case the software side I think that's the focus, Chris, is that, you know, reoccurring replacement nature of the business is very consistent between Paragon and Mirion. i think that's the focus chris is that you know reoccurring replacement nature of the business is very consistent between paragon and mirion

Speaker 8: Got it. Maybe back to a prior question. The revenue CAGR was 13% from 2022 to 2025. It sounds like the majority of that was organic. Is that fair? I mean, are they thinking double-digit organic growth for a little bit from here, or just any thoughts, any further thoughts on organic growth from Paragon? Got it. got it Maybe back to a prior question. maybe back to a prior question The revenue CAGR was 13% from 2022 to 2025. the revenue cagr was 13% from 2022 to 2025 It sounds like the majority of that was organic. it sounds like the majority of that was organic Is that fair? is that fair I mean, are they thinking double-digit organic growth for a little bit from here, or just any thoughts, any further thoughts on organic growth from Paragon? i mean are they thinking double-digit organic growth for a little bit from here or just any thoughts any further thoughts on organic growth from paragon

Speaker 4: Yeah, look, I think we're super excited. I mean, we talked back in July, we talked about double-digit nuclear power growth at Mirion. I think this business is at or better than the growth rates we're seeing in our nuclear business. I think we're super excited about the organic growth profile both within the existing fleet, but also in the SMR base. Yeah, look, I think we're super excited. yeah look i think we're super excited I mean, we talked back in July, we talked about double-digit nuclear power growth at Mirion. i mean we talked back in july we talked about double-digit nuclear power growth at mirion I think this business is at or better than the growth rates we're seeing in our nuclear business. i think this business is at or better than the growth rates we're seeing in our nuclear business I think we're super excited about the organic growth profile both within the existing fleet, but also in the SMR base. i think we're super excited about the organic growth profile both within the existing fleet but also in the smr base

Speaker 1: Thank you. Our final question this morning comes from the line of Yuan Ji with B. Riley Securities. Please proceed with your question. Thank you. thank you Our final question this morning comes from the line of Yuan Ji with B. our final question this morning comes from the line of yuan ji with b Riley Securities. riley securities Please proceed with your question. please proceed with your question

Speaker 9: Thank you for taking our questions. Tom and Brian, maybe can you talk about Paragon's near-term growth drivers? Do you anticipate any inflection point in the near term to drive the top line growth higher than 13%? Thank you for taking our questions. thank you for taking our questions Tom and Brian, maybe can you talk about Paragon's near-term growth drivers? tom and brian maybe can you talk about paragon's near-term growth drivers Do you anticipate any inflection point in the near term to drive the top line growth higher than 13%? do you anticipate any inflection point in the near term to drive the top line growth higher than 13%

Speaker 3: Yeah, Yuan, good morning. The starting point again is, as with Mirion, you know, we frequently note that 80% of our nuclear power-related revenue comes from the installed base. With Paragon, clearly that number is higher. We noted 94% overall. The inflection point and the most important theme in the near term, again, is just the strength of the sector overall. Power plant operators are very profitable now, and that's a stark contrast from the dynamics that have existed for much of the last 30 years or so. There is a strong incentive financially for owners of these assets to operate them at higher capacity utilization or capacity factors, to life extend them, and in some cases, bringing decommissioned plants back online, to operate capacity, and throughout all of that, to drive a level of digital modernization, you know, coupled with emerging AI opportunities in the space overall. Yeah, Yuan, good morning. yeah yuan good morning The starting point again is, as with Mirion, you know, we frequently note that 80% of our nuclear power-related revenue comes from the installed base. the starting point again is as with mirion you know we frequently note that 80% of our nuclear power-related revenue comes from the installed base With Paragon, clearly that number is higher. with paragon clearly that number is higher We noted 94% overall. we noted 94% overall The inflection point and the most important theme in the near term, again, is just the strength of the sector overall. the inflection point and the most important theme in the near term again is just the strength of the sector overall Power plant operators are very profitable now, and that's a stark contrast from the dynamics that have existed for much of the last 30 years or so. power plant operators are very profitable now and that's a stark contrast from the dynamics that have existed for much of the last 30 years or so There is a strong incentive financially for owners of these assets to operate them at higher capacity utilization or capacity factors, to life extend them, and in some cases, bringing decommissioned plants back online, to operate capacity, and throughout all of that, to drive a level of digital modernization, you know, coupled with emerging AI opportunities in the space overall. there is a strong incentive financially for owners of these assets to operate them at higher capacity utilization or capacity factors to life extend them and in some cases bringing decommissioned plants back online to operate capacity and throughout all of that to drive a level of digital modernization you know coupled with emerging ai opportunities in the space overall That is the most important dynamic. We've seen an acceleration in flow business in support of this. We expect that that dynamic will continue and probably will continue to improve overall. Again, number one most important factor is just that that dynamic at play within the installed base. On top of that, as we see increased expectations of gigawatt scale development globally, but also in the U.S., where there's a focus on building 10 gigawatt scale reactors in the U.S. in the near term. As that accelerates, and on top of that, as the SMR-related activity accelerates, then that represents not only a strong opportunity to become embedded in those new facilities, enjoying that front-end concentration of revenue, but then to add to that downstream recurring and replacement revenue dynamic, that in the case of utility scale plants, it's essentially, you know, 100 years in duration. Those are the two most important dynamics. That is the most important dynamic. that is the most important dynamic We've seen an acceleration in flow business in support of this. we've seen an acceleration in flow business in support of this We expect that that dynamic will continue and probably will continue to improve overall. we expect that that dynamic will continue and probably will continue to improve overall Again, number one most important factor is just that that dynamic at play within the installed base. again number one most important factor is just that that dynamic at play within the installed base On top of that, as we see increased expectations of gigawatt scale development globally, but also in the U.S., where there's a focus on building 10 gigawatt scale reactors in the U.S. in the near term. on top of that as we see increased expectations of gigawatt scale development globally but also in the u.s where there's a focus on building 10 gigawatt scale reactors in the u.s in the near term As that accelerates, and on top of that, as the SMR-related activity accelerates, then that represents not only a strong opportunity to become embedded in those new facilities, enjoying that front-end concentration of revenue, but then to add to that downstream recurring and replacement revenue dynamic, that in the case of utility scale plants, it's essentially, you know, 100 years in duration. as that accelerates and on top of that as the smr-related activity accelerates then that represents not only a strong opportunity to become embedded in those new facilities enjoying that front-end concentration of revenue but then to add to that downstream recurring and replacement revenue dynamic that in the case of utility scale plants it's essentially you know 100 years in duration Those are the two most important dynamics. those are the two most important dynamics

Speaker 9: Got it. Maybe can you clarify how this acquisition will impact your developing U.S. market shares and the relationships that you may not have advantage in the past? Got it. got it Maybe can you clarify how this acquisition will impact your developing U.S. market shares and the relationships that you may not have advantage in the past? maybe can you clarify how this acquisition will impact your developing u.s market shares and the relationships that you may not have advantage in the past

Speaker 3: Yeah, one of the advantages that Paragon brings to the fabric of Mirion is the customer intimacy. As you know, both Brian and I alluded to, they've got an incredible commercial team. Given the nature of what they do, which is different from what our core business in the sector has been historically, it really requires a very high level of customer touch. Accordingly, what they will bring to the table is really expanded, enhanced relationships, if you will, with many of the leading power plant operators in the U.S., a much greater degree of knowledge in and around capital spending dynamics. Ultimately, we think the pull-through as it relates to legacy Mirion products that go beyond the scope of what Paragon does today is likely to be meaningful. Yeah, one of the advantages that Paragon brings to the fabric of Mirion is the customer intimacy. yeah one of the advantages that paragon brings to the fabric of mirion is the customer intimacy As you know, both Brian and I alluded to, they've got an incredible commercial team. as you know both brian and i alluded to they've got an incredible commercial team Given the nature of what they do, which is different from what our core business in the sector has been historically, it really requires a very high level of customer touch. given the nature of what they do which is different from what our core business in the sector has been historically it really requires a very high level of customer touch Accordingly, what they will bring to the table is really expanded, enhanced relationships, if you will, with many of the leading power plant operators in the U.S., a much greater degree of knowledge in and around capital spending dynamics. accordingly what they will bring to the table is really expanded enhanced relationships if you will with many of the leading power plant operators in the u.s a much greater degree of knowledge in and around capital spending dynamics Ultimately, we think the pull-through as it relates to legacy Mirion products that go beyond the scope of what Paragon does today is likely to be meaningful. ultimately we think the pull-through as it relates to legacy mirion products that go beyond the scope of what paragon does today is likely to be meaningful There is a very high degree of complementarity, and we think that is really one of the key elements of the synergy story as we look ahead. There is a very high degree of complementarity, and we think that is really one of the key elements of the synergy story as we look ahead. there is a very high degree of complementarity and we think that is really one of the key elements of the synergy story as we look ahead

Speaker 1: Thank you. We have one more follow-up from the line of Rob Mason with Baird. Please proceed with your question. Thank you. thank you We have one more follow-up from the line of Rob Mason with Baird. we have one more follow-up from the line of rob mason with baird Please proceed with your question. please proceed with your question

Speaker 7: Yes, thanks for taking the follow-up. Just a point of clarification around the guidance revision on core sales. It sounded like, as you described, where you're seeing the headwinds. This all falls within the nuclear and safety segment, but I just wanted to make sure that was the case. Yes, thanks for taking the follow-up. yes thanks for taking the follow-up Just a point of clarification around the guidance revision on core sales. just a point of clarification around the guidance revision on core sales It sounded like, as you described, where you're seeing the headwinds. it sounded like as you described where you're seeing the headwinds This all falls within the nuclear and safety segment, but I just wanted to make sure that was the case. this all falls within the nuclear and safety segment but i just wanted to make sure that was the case

Speaker 3: That's correct. I'm sorry? Yeah. That's correct. That's correct. That's correct. that's correct I'm sorry? i'm sorry Yeah. yeah That's correct. that's correct That's correct. that's correct

Speaker 7: Okay. You didn't allude, I didn't hear you allude to at least any kind of U.S. government spend impact in that labs and research segment, but any update that you can provide there? Okay. okay You didn't allude, I didn't hear you allude to at least any kind of U.S. government spend impact in that labs and research segment, but any update that you can provide there? you didn't allude i didn't hear you allude to at least any kind of u.s government spend impact in that labs and research segment but any update that you can provide there

Speaker 3: Yeah, again, Rob, I think in our last quarterly call, we indicated that the lab space in nuclear and safety would be down year over year. That's entirely due to DOGE-related activities where there have been headcount cuts of relevance to the space that we plan overall, some budgetary cuts. That's the dynamic that we've experienced there. Essentially, 100% of that specific callout relates to government budgetary dynamics. We're not through Q3 yet. Government year-end is September 30. There's always a little bit of volatility in and around that because there is a use-it-or-lose-it dynamic associated with capital budgets for government agencies. We'll talk about that in our Q3 earnings call a few weeks down the road. Yeah, again, Rob, I think in our last quarterly call, we indicated that the lab space in nuclear and safety would be down year over year. yeah again rob i think in our last quarterly call we indicated that the lab space in nuclear and safety would be down year over year That's entirely due to DOGE-related activities where there have been headcount cuts of relevance to the space that we plan overall, some budgetary cuts. that's entirely due to doge-related activities where there have been headcount cuts of relevance to the space that we plan overall some budgetary cuts That's the dynamic that we've experienced there. that's the dynamic that we've experienced there Essentially, 100% of that specific callout relates to government budgetary dynamics. essentially 100% of that specific callout relates to government budgetary dynamics We're not through Q3 yet. we're not through q3 yet Government year-end is September 30. government year-end is september 30 There's always a little bit of volatility in and around that because there is a use-it-or-lose-it dynamic associated with capital budgets for government agencies. there's always a little bit of volatility in and around that because there is a use-it-or-lose-it dynamic associated with capital budgets for government agencies We'll talk about that in our Q3 earnings call a few weeks down the road. we'll talk about that in our q3 earnings call a few weeks down the road

Speaker 1: Thank you. Ladies and gentlemen, this concludes our question and answer session. I'll turn the floor back to Mr. Logan for any final comments. Thank you. thank you Ladies and gentlemen, this concludes our question and answer session. ladies and gentlemen this concludes our question and answer session I'll turn the floor back to Mr. Logan for any final comments. i'll turn the floor back to mr logan for any final comments

Speaker 3: Thank you, operator, and thanks to everybody for joining us this morning. Today is a really important strategic milestone for us towards creating a great public company. We're really pleased with this deal. We're really excited to welcome the Paragon team again into the fabric of Mirion. We expect to do great things together. We're also pleased that we're kind of back in the game from an M&A standpoint after having worked very hard to deleverage our balance sheet over the last couple of years. We're very encouraged by our continuing pipeline of M&A opportunities. We're excited to show what we can do as we integrate this asset and move ahead. Appreciate the time and attention today, and we'll look forward to speaking to all of you in our Q3 earnings call in a few weeks. Thank you and good day. Thank you, operator, and thanks to everybody for joining us this morning. thank you operator and thanks to everybody for joining us this morning Today is a really important strategic milestone for us towards creating a great public company. today is a really important strategic milestone for us towards creating a great public company We're really pleased with this deal. we're really pleased with this deal We're really excited to welcome the Paragon team again into the fabric of Mirion. we're really excited to welcome the paragon team again into the fabric of mirion We expect to do great things together. we expect to do great things together We're also pleased that we're kind of back in the game from an M&A standpoint after having worked very hard to deleverage our balance sheet over the last couple of years. we're also pleased that we're kind of back in the game from an m&a standpoint after having worked very hard to deleverage our balance sheet over the last couple of years We're very encouraged by our continuing pipeline of M&A opportunities. we're very encouraged by our continuing pipeline of m&a opportunities We're excited to show what we can do as we integrate this asset and move ahead. we're excited to show what we can do as we integrate this asset and move ahead Appreciate the time and attention today, and we'll look forward to speaking to all of you in our Q3 earnings call in a few weeks. appreciate the time and attention today and we'll look forward to speaking to all of you in our q3 earnings call in a few weeks Thank you and good day. thank you and good day

Speaker 1: Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation. Thank you. thank you This concludes today's conference call. this concludes today's conference call You may disconnect your lines at this time. you may disconnect your lines at this time Thank you for your participation. thank you for your participation