As filed with the Securities and Exchange Commission on March 8, 2010

Registration No. 333-161329

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No. 4

Form S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

MIRION TECHNOLOGIES, INC.

(Exact Name of Registrant as Specified in Its Charter)


Delaware	3829	20-3979555
(State or Other Jurisdiction of	(Primary Standard Industrial	(I.R.S. Employer
Incorporation or Organization)	Classification Code Number)	Identification Number)

3000 Executive Parkway, Suite 222

San Ramon, CA 94583

(925) 543-0800

(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)

Jack A. Pacheco

Vice President and Chief Financial Officer

Mirion Technologies, Inc.

3000 Executive Parkway, Suite 222

San Ramon, CA 94583

(925) 543-0800

(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent For Service)

Copies to:


Alan F. Denenberg, Esq.		Tad J. Freese, Esq.
Davis Polk & Wardwell LLP		Latham & Watkins LLP
1600 El Camino Real		140 Scott Drive
Menlo Park, CA 94025		Menlo Park, CA 94025
(650) 752-2000		(650) 328-4600

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.

If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. o

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer o	Accelerated filer o	Non-accelerated filer þ	Smaller reporting company o

(Do not check if a smaller reporting company)

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and we are not soliciting offers to buy these securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED March 8, 2010

Mirion Technologies, Inc.

Common Stock

This is an initial public offering of shares of common stock of Mirion Technologies, Inc.

We are selling shares of common stock.

Prior to this offering, there has been no public market for our common stock. We expect the initial public offering price to be between $ and $ per share. We have applied to list our common stock for quotation on the NASDAQ Global Market under the symbol “MION.”

We have granted the underwriters an option to purchase a maximum of additional shares of common stock. The underwriters can exercise this option at any time within 30 days from the date of this prospectus.

Investing in our common stock involves risks. See “Risk Factors” on page 11.


		Underwriting
	Price to	Discounts and	Proceeds to
	Public	Commissions	Us

Per Share	$	$	$
Total	$	$	$

Delivery of the shares of common stock in book-entry form only will be made on or about , 2010.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.


Credit Suisse		BofA Merrill Lynch		J.P. Morgan

Baird

The date of this prospectus is , 2010

Protecting people, A global provider of radiation products and services to markets. the

TABLE OF CONTENTS


	Page

Prospectus Summary		1
Risk Factors		11
Forward-Looking Statements		32
Use of Proceeds		33
Dividend Policy		34
Capitalization		35
Dilution		37
Selected Consolidated Financial Data		39
Management’s Discussion and Analysis of Financial Condition and Results of Operations		43
Industry		74
Business		79
Management		99
Executive Compensation		104
Principal Stockholders		118
Certain Relationships and Related Party Transactions		121
Description of Capital Stock		125
Description of Certain Indebtedness		128
Shares Eligible for Future Sale		130
Material U.S. Federal Tax Considerations for Non-U.S. Holders of Common Stock		132
Underwriting		134
Legal Matters		141
Experts		141
Where You can Find More Information		141
Index to Financial Statements		F-1
EX-4.2
EX-10.2
EX-10.2.11
EX-10.2.12
EX-10.2.13
EX-10.2.14
EX-10.2.15
EX-10.3
EX-10.3.13
EX-10.3.14
EX-10.4
EX-10.4.1
EX-10.23
EX-10.23.1
EX-10.23.2
EX-10.23.3
EX-10.23.4
EX-23.1

You should rely only on the information contained in this prospectus and any free writing prospectus prepared by us. Neither we nor the underwriters have authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not making an offer of these securities in any jurisdiction where the offer is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the front of this prospectus.

“Mirion Technologies,” “Mirion,” “GDS,” “Global Dosimetry Solutions,” “HandFoot-Fibre,” “Imaging and Sensing Technology,” “IST,” “MGP Instruments,” “MGPI,” “SPIR Ident,” “Synodys,” “TwoStep-Exit” and any corresponding logos, are our common law and registered trademarks. Solely for convenience, we refer to our trademarks in this prospectus without the ^tm and ^® symbols, but such references are not intended to indicate that we will not assert our rights to our trademarks. Other service marks, trademarks and trade names referred to in this prospectus are the property of their owners.

References to “fiscal” before any year refer to our fiscal year ending on June 30th of the year referenced.

Dealer Prospectus Delivery Obligation

Until and including , 2010 (25 days after the date of this prospectus), all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriter and with respect to unsold allotments or subscriptions.

PROSPECTUS SUMMARY

This summary highlights the more detailed information contained elsewhere in this prospectus. This summary does not contain all of the information that you should consider before deciding to invest in our common stock. You should read the entire prospectus, including the risk factors, the consolidated financial statements and the related notes, and the other documents to which this prospectus refers, carefully before making an investment decision. In this prospectus, “Mirion,” the “Company,” “we,” “us” or “our” refer to Mirion Technologies, Inc. and its subsidiaries, except where the context makes clear that the reference is only to Mirion Technologies, Inc. and is not inclusive of its subsidiaries.

Our Company

We are a global provider of radiation detection, measurement, analysis and monitoring products and services to the nuclear, defense and medical end markets. Our customers rely on our solutions to protect people, property and the environment from nuclear and radiological hazards. Our products and services include: dosimeters; contamination & clearance monitors; detection & identification instruments; radiation monitoring systems; electrical penetrations; reactor instrumentation & control equipment and systems; dosimetry services; imaging systems; and related accessories, software and services. Many of our end markets are characterized by the need to meet rigorous regulatory standards, design qualifications and operating requirements. We believe these industry dynamics create substantial barriers to entry, thereby reinforcing our market position. We have leveraged the strength of our nuclear platform to expand the commercial applications of our technologies to defense and medical end markets. The diversity of our end markets and the global nature of our customer base are illustrated in the charts below:


Fiscal 2009 Revenue by End Markets		Fiscal 2009 Revenue by Geography



Fiscal 2009 Revenue: $201.8 Million

For more than 50 years, we and our predecessor companies have delivered products and services that help ensure the safe and efficient operation of nuclear facilities. We believe the breadth and proven performance of our solutions support our longstanding strategic customer relationships across diverse end markets. Our products and services have been sold directly and indirectly to a variety of end-use customers including, but not limited to, all of the U.S. nuclear power producers, 397 of the global installed base of 436 active nuclear power reactors, many of the leading reactor design firms, 17 of the 28 NATO militaries, numerous international government and supranational agencies, as well as medical service providers and industrial companies worldwide.

Our broad product and services portfolio of radiation detection, measurement, analysis and monitoring solutions is supported by 165 scientists, engineers and technicians, who represented approximately 19% of our workforce as of December 31, 2009. We possess numerous product qualifications, trade secrets and patents that support our market position and our ability to deliver next generation products and services. In addition, we maintain design, manufacturing and sales capabilities across seven countries, enabling us to capitalize on growth opportunities, including the anticipated increase in demand for nuclear power and ongoing spending for defense and homeland security.

Our financial performance is driven by the replacement of products and the recurring provision of services into our core end markets, as well as the construction of new nuclear power plants, or NPPs, globally. Many of our products are ordered well in advance of the anticipated shipment date, providing visibility into future revenue through our backlog and deferred contract revenue, which totaled $247.1 million and $66.8 million as of December 31, 2009. We generated revenue of $201.8 million, Adjusted EBITDA of $40.6 million and a net loss of $4.0 million for fiscal 2009. See page 10 for a definition and reconciliation of Adjusted EBITDA to cash provided by (used in) operations.

Our Market Opportunities

We sell our radiation detection, measurement, analysis and monitoring products and services into the global nuclear, defense and medical end markets. We believe that our end markets are characterized by strong fundamentals that support a robust revenue base and provide numerous growth opportunities.

Nuclear

The nuclear end market spans the entire nuclear fuel cycle, including mining, enrichment, fuel manufacturing, nuclear power generation, waste management and fuel reprocessing. Key nuclear installations include mines, fuel fabrication facilities, commercial nuclear power reactors, reprocessing facilities, research facilities, military facilities and ships, weapons facilities and waste storage facilities. We sell products and services for use in each of these types of installations, with commercial nuclear power reactors representing the majority of our sales into the nuclear end market. As of December 31, 2009, our products were installed at 91% of active nuclear power reactors globally, including all of those in the United States. We believe that the global installed base of nuclear reactors presents opportunities for replacements and upgrades of our products, as well as those of legacy suppliers, and for participation in the “decommissioning” process.

We also expect the increase in nuclear reactor construction worldwide to provide opportunities across our offerings.

Defense

Our global defense end market is driven by a combination of military, civil defense and event-driven security spending which in turn has been fueled by the unprecedented growth in global security threats.

Medical

The use of radiodiagnostic and radiotherapeutic procedures is expanding globally due to aging population demographics, technological advancements and emerging middle classes in China and India, creating a significant opportunity for us in the medical end market.

Our Competitive Strengths

Trusted radiation detection, measurement, analysis and monitoring provider. The nuclear industry is highly regulated and requires compliance with strict product specifications. Our trusted, recognized brands supported by our tradition of technical excellence, product reliability and customer service have enabled us to develop strong market share across our product and service offerings.

Broad and complementary product and service portfolio. We offer radiation detection, measurement, analysis and monitoring products and services to satisfy customer requirements throughout the NPP life cycle.

Large installed base drives recurring revenue. Our large installed base at active nuclear power reactors drives recurring revenue through replacement and service cycles.

Technical complexity creates high barriers to entry. We design products to meet demanding customer specifications, qualifications and regulatory requirements.

Our Strategy

Our objective is to continue enhancing our position as a global provider of radiation detection, measurement, analysis and monitoring products and services for the nuclear, defense and medical end markets. We intend to achieve this through the following strategies:


	•	*Exploit under-penetrated market opportunities.*

	•	*Expand addressable market.*


	•	Geographic expansion. We believe we can increase our presence in the international market. For example, we intend to leverage our relationships with leading reactor design firms to capitalize on the opening of India’s nuclear end market to U.S. firms due to a recent treaty ratification.

	•	Customer outsourcing. Some NPP operators have recently outsourced their dosimetry services in order to reduce costs. We have been able to benefit from economies of scale as well as advantages in materials procurement and processing technology to provide enhanced dosimetry services to many of these NPPs at a lower cost.

	•	Service privatization. In some regions outside the United States, dosimetry services have historically been provided by government agencies. However, privatization of dosimetry services is accelerating in some regions, such as Europe, as providers seek to reduce costs and benefit from enhanced service offerings, providing an opportunity to leverage our expertise and North American service experience.

	•	New applications for existing technologies.


	•	*Develop new products and services.*

	•	*Continuously improve our cost structure and productivity.*

	•	*Pursue strategic acquisitions.*

Our Principal Investor

Upon completion of this offering, American Capital, Ltd. (together with American Capital Equity I, LLC and American Capital Equity II, LP, “ACAS”) will beneficially own approximately % of our outstanding common stock, or approximately % if the underwriters exercise in full their over-allotment option to purchase additional shares of common stock. We are party to a number of agreements with ACAS and its affiliates. These agreements are described in the sections of this prospectus captioned, “Risk Factors—Risks Related to this Offering and Our Common Stock,” “Use of Proceeds,” “Certain Relationships and Related Party Transactions” and “Principal Stockholders.”

ACAS is a publicly traded private equity firm and global asset manager, with $13 billion in capital resources under management as of December 31, 2009.

Risk Factors

Our business is subject to many risks and uncertainties, including those highlighted in the section of this prospectus entitled “Risk Factors.” These risks could materially and adversely affect our business, financial

condition and results of operation, which could cause the trading price of our common stock to decline and could result in a partial or total loss of your investment. Some of these risks include:


	•	the long and unpredictable nature of our sales cycle;

	•	fluctuations in our financial performance;

	•	our short operating history as a consolidated entity;

	•	material weaknesses in our internal controls over financial reporting;

	•	the highly competitive nature of our markets and the resources of our competitors;

	•	the uncertain fulfillment of our backlog;

	•	the effect of the current global financial crisis and worldwide economic conditions; and

	•	changes in our customers’ budgets for radiation detection products and services and the timing of their purchasing decisions.

Company Information

We incorporated in Delaware in October 2005 as Global Monitoring Services, Inc., and combined our three predecessor companies under Global Monitoring Services, Inc. in December 2005. ACAS originally acquired our predecessor company Synodys SA (Synodys) in June 2004, our predecessor company Imaging and Sensing Technology Company (IST) in October 2004 and our predecessor company Global Dosimetry Solutions, Inc. (GDS) in October 2005. We changed our name in January 2006 to Mirion Technologies, Inc. Our principal executive offices are located at 3000 Executive Parkway, Suite 222, San Ramon, California 94583 and our telephone number is (925) 543-0800. Our website is www.mirion.com. The information that appears on our website is not part of, and is not incorporated into, this prospectus.

The Offering


Common stock offered by us		shares

Common stock to be outstanding after this offering		shares

Over-allotment option		We have granted the underwriters a 30-day option to purchase from us up to an additional shares of our common stock to cover over-allotments.

Dividend policy		We do not anticipate paying any dividends on our common stock in the foreseeable future. See “Dividend Policy.”


Risk factors		Investing in our common stock involves a high degree of risk. See “Risk Factors” beginning on page 11 of this prospectus for a discussion of factors you should carefully consider before investing in our common stock.


Use of proceeds		We estimate that the net proceeds from this offering, after deducting underwriting discounts and estimated offering expenses, will be approximately $ million, assuming the shares are offered at $ per share, the midpoint of the price range set forth on the cover page of this prospectus. We intend to use approximately $96.2 million of the net proceeds from the shares that we sell in this offering to repay borrowings from ACAS and its affiliates. We intend to repay all other debt held by ACAS and its affiliates (estimated to be approximately $87.9 million as of February 28, 2010) with borrowings under our anticipated new bank credit facilities that we expect to enter into upon the consummation of this offering. We also intend to use net proceeds from this offering to make a one-time payment of $8.0 million to American Capital Financial Services, Inc., or ACFS, a subsidiary of ACAS, to terminate an investment banking services agreement between us and ACFS. We also intend to use $0.8 million of the net proceeds from this offering to make bonus payments upon the completion of this offering to certain of our employees, including an aggregate of $0.6 million to certain of our executive officers. See “Use of Proceeds.”


Proposed NASDAQ symbol		MION

The number of shares of common stock to be outstanding after this offering is based on 1,250,786 preferred and common shares outstanding as of December 31, 2009. Absent further transactions, if this offering were to occur on February 28, 2010, there would be 1,268,661 shares of common stock (including preferred stock on an as-converted basis) outstanding. The increase in the number of shares is due to the monthly accrual of dividends from the A-1 and A-2 convertible preferred stock which are paid in the form of additional shares of convertible preferred stock. Shares outstanding as of December 31, 2009 and February 28, 2010 exclude:


	•	113,288 shares of common stock subject to outstanding options as of December 31, 2009 at a weighted average exercise price of $122.77 per share;


	•	an aggregate of 111,562 shares of common stock either reserved for issuance under our existing stock option plan or to be reserved for issuance under our amended and restated stock plan to become effective in connection with this offering, of which 15,091 shares are expected to be granted in the form of stock options to our employees and outside directors, including options to purchase


		4,001 shares to be granted to our executive officers, immediately following the pricing of this offering at an exercise price equal to the initial public offering price; and


	•	402,428 shares of common stock subject to outstanding warrants as of December 31, 2009 at a weighted average exercise price of $0.00152 per share. These warrants only become exercisable upon a sale, liquidation or dissolution of the Company or approval by our Board of Directors. Our Board of Directors has resolved that all of these warrants will become exercisable upon the consummation of this offering.

Except as otherwise indicated, all information in this prospectus assumes that:


	•	a -for- split of our common stock will occur prior to the consummation of this offering;

	•	all of the outstanding shares of our convertible preferred stock will be converted into shares of our common stock;


	•	all of the outstanding shares of our Class A Voting Common Stock and Class B Non-Voting Common Stock will be converted into shares of our common stock on a one-for-one basis;


	•	we will file our amended and restated Certificate of Incorporation prior to the consummation of this offering; and

	•	the underwriters will not exercise their over-allotment option.

Summary Consolidated Financial Data

The following table summarizes the consolidated financial data for our business. You should read this summary consolidated financial data in conjunction with the sections titled “Selected Consolidated Financial Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes, all included elsewhere in this prospectus. The summary financial data in this section is not intended to replace the consolidated financial statements and related notes included in this prospectus. The summary consolidated statements of operations data for each of the three fiscal years ending June 30, 2007, 2008 and 2009 are derived from our audited annual consolidated financial statements and related notes included elsewhere in this prospectus. The consolidated statements of operations data for the six months ended December 31, 2008 and 2009 and the consolidated balance sheet data as of December 31, 2009 are derived from our unaudited consolidated financial statements included elsewhere in this prospectus. Our historical results are not necessarily indicative of the results that should be expected in the future, and results for the six months ended December 31, 2009 are not necessarily indicative of results to be expected for the full year. The amounts below are in thousands, except percentages, share and per share data.


										Six Months Ended
	Year Ended June 30,									December 31,
	2007			2008			2009			2008			2009

Consolidated Statement of Operations Data:
Revenue	$	169,033		$	191,769		$	201,763		$	100,519		$	108,658
Cost of revenue		94,321			102,790			105,954			53,793			60,140

Gross profit		74,712			88,979			95,809			46,726			48,518

% of revenue		44.2	%		46.4	%		47.5	%		46.5	%		44.7	%
Operating expenses
Selling, general and administrative expenses		59,449			63,177			65,649			31,310			33,754
Research and development expenses		11,875			14,865			11,282			6,277			5,202

Total operating expenses		71,324			78,042			76,931			37,587			38,956

Income from operations		3,388			10,937			18,878			9,139			9,562
Interest expense, net		19,153			20,207			17,711			9,736			7,570
Other income, net		(1,001	)		(1,759	)		(490	)		71			(530	)

(Loss) Income before provision for income taxes		(14,764	)		(7,511	)		1,657			(668	)		2,522
Provision for income taxes		4,937			5,838			5,612			2,890			3,293

Net loss	$	(19,701	)	$	(13,349	)	$	(3,955	)	$	(3,558	)	$	(771	)

Paid-in-kind preferred dividends		(8,141	)		(8,993	)		(9,892	)		(4,864	)		(5,369	)

Net loss allocable to common stockholders	$	(27,842	)	$	(22,342	)	$	(13,847	)	$	(8,422	)	$	(6,140	)

Pro forma net loss per common share before conversion of preferred shares — basic and diluted(1)							$						$

Pro forma net income per common share — diluted(1)							$						$

Pro forma net income per common share — diluted as adjusted(1)(2)							$						$


	As of December 31, 2009
			Pro Forma as
Consolidated Balance Sheet Data:	Actual		Adjusted(2)

Cash and cash equivalents(3)	$	6,934
Total assets		348,540
Notes payable to ACAS(4)		183,790
New indebtedness(5)		—
Total stockholder’s equity		7,680


	Year Ended June 30,						Six Months Ended December 31,
	2007		2008		2009		2008		2009

Other Data:
Adjusted EBITDA(6)	$	29,254	$	34,218	$	40,625	$	18,719	$	18,512
Amortization of intangible assets		12,200		10,140		8,144		4,161		3,699
Capital expenditures		4,316		4,953		6,649		2,441		3,354


	As of June 30,						As of December 31,
	2007		2008		2009		2009

Backlog(7)	$	143,887	$	177,956	$	183,960	$	247,083
Deferred contract revenue		44,640		53,539		62,031		66,747


(1)		Pro forma net loss per common share before conversion of preferred shares — basic and diluted and pro forma net income per common share — diluted and diluted as adjusted for the year ended June 30, 2009 and the six months ended December 31, 2009 is calculated as follows:


	Year Ended			Six Months Ended
	June 30,			December 31,
	2009			2009
	(unaudited)

Numerator:
Net loss allocable to common stockholders	$	(13,847	)	$	(6,140	)
Interest expense from paydown of ACAS debt using proceeds of offering(a)

Pro forma net loss allocable to common stockholders before conversion of preferred shares
Effect of preferred stock dividends(b)		9,892			5,369

Pro forma net income allocable to common stockholders
Interest expense reduction from refinancing of ACAS debt(c)

Pro forma net income allocable to common stockholders — as adjusted


	Year Ended		Six Months Ended
	June 30, 2009		December 31, 2009
	(unaudited)

Denominator:
Weighted average shares outstanding from conversion of Class A and B Voting Common Stock(d)		47,741		47,741
Common shares issued in this offering(e)

Shares used in computing pro forma net loss per common share before conversion of preferred shares — basic and diluted
Weighted average shares outstanding from conversion of convertible preferred stock(f)		1,099,897		1,176,202

Shares used in computing pro forma net income per common share — basic
Weighted average common shares outstanding from exercise of warrants(g)		402,428		402,428
Weighted average common share equivalents of stock option(h)		—		6,622

Shares used in computing pro forma net income per common share — diluted and diluted as adjusted


(a)		The pro forma reduction in interest expense assumes the repayment of $ of ACAS debt using the net proceeds from this offering, giving effect to the elimination of the related interest expense as of the beginning of the period presented. The amount of interest expense eliminated by this adjustment is calculated from actual interest expense of $ and $ recorded in fiscal 2009 and for the six months ended December 31, 2009 in connection with the specific debt arrangements that will be repaid with a portion of the net proceeds of this offering. No tax expense has been provided related to this reduction in interest expense because we are in a net operating loss position and have a full valuation allowance in the affected jurisdictions.


(b)		The effect of preferred stock dividends is added back as a reduction to net loss allocable to common stockholders, assuming that all preferred stock has been converted into common shares as of the beginning of the period presented.


(c)		All ACAS debt not assumed to be repaid from the net proceeds from this offering is assumed to be refinanced with a loan from a third-party bank, at interest rates averaging % lower than existing interest rates with ACAS giving effect to the elimination of the related interest expense as of the beginning of the period presented. The amount of interest expense eliminated by this adjustment is calculated by taking the difference between the actual interest expense of $ and $ recorded in fiscal 2009 and for the six months ended December 31, 2009 in connection with the specific debt arrangements that will be repaid with a portion of the net proceeds of the new debt arrangements entered into concurrently with the completion of this offering and the interest expense on the new debt arrangements, calculated as the total of the new debt arrangements of $ multiplied by the average interest rate on those arrangements of %. No tax expense has been provided related to this reduction in interest expense because we are in a net operating loss position and have a full valuation allowance in the affected jurisdictions.


(d)		The weighted average common shares outstanding from the conversion of common stock assumes the conversion of all outstanding shares of Class A Voting Common Stock and Class B Non-Voting Common Stock on a one-for-one basis into 47,741 shares of common stock.


(e)		Includes all common shares issued in connection with this offering. Because distributions to ACAS, our principal stockholder, consisting of obligations under existing debt arrangements of $ and amounts due of $8.0 million to terminate an existing investment banking arrangement, exceed our earnings plus gross proceeds from this offering of $ , all common shares are included in the calculation under existing rules on pro forma calculations.


(f)		The weighted average common shares outstanding from the conversion of preferred stock assumes the conversion of all outstanding convertible preferred stock into common stock, including the conversion into common stock of all accrued and unpaid paid-in-kind dividends on convertible preferred stock. The 1,099,897 weighted average at June 30, 2009 is comprised of 864,307 A-1 preferred shares, which includes 185,503 accrued but unpaid paid-in-kind dividends, which are convertible at a rate of 1.1328 into 979,087 common shares and 116,522 A-2 preferred shares, which includes 46,522 accrued but unpaid paid-in-kind dividends, which are convertible at a rate of 1.0368 into 120,810 common shares. The 1,176,202 weighted average at December 31, 2009 is comprised of 917,558 A-1 preferred shares, which includes 238,754 accrued but unpaid paid-in-kind dividends, which are convertible at a rate of 1.1328 into 1,039,409 common shares and 131,937 A-2 preferred shares, which includes 61,937 accrued but unpaid paid-in-kind dividends, which are convertible at a rate of 1.0368 into 136,793 common shares. The increase in number of preferred shares between periods is due to the monthly accrual of preferred dividends which are paid in the form of additional shares of convertible preferred stock.


(g)		These warrants only become exercisable upon a sale, liquidation or dissolution of the Company or approval by our Board of Directors. Our Board of Directors has resolved that all of these warrants will become exercisable upon the consummation of this offering.


(h)		Includes the impact of the weighted average shares of common stock into which outstanding options are convertible. The shares used in computing pro forma net loss per common share before conversion of preferred shares — diluted and pro forma net income per common share — diluted and diluted as adjusted exclude 113,288 and 82,408 shares of common stock for the year ended June 30, 2009 and the six months ended December 31, 2009 because the effect would be anti-dilutive. This amount includes options expected to be granted immediately following the pricing of this offering at an exercise price equal to the initial public offering price.


(2)		On a pro forma as adjusted basis to give effect to (i) the sale of shares of our common stock to be sold by us in this offering at an assumed initial public offering price of $ per share (the midpoint of the range set forth on the cover page of this prospectus), (ii) the application of a portion of the net proceeds from the shares sold to repay $ million of our indebtedness to ACAS and its affiliates, to make a one-time, $8.0 million payment to ACFS and to make aggregate bonus payments of $0.8 million to certain of our employees, including on aggregate of $0.6 million to certain of our executive officers, (iii) the increase in accumulated deficit due to the write-off of loan origination fees previously capitalized, (iv) the increase in additional paid-in capital and corresponding increase in accumulated deficit to reflect the compensation expense associated with stock options that will vest upon this offering and (v) our intent to repay all other debt held by ACAS and its affiliates with borrowings under our anticipated new bank credit facilities that we expect to enter into upon the consummation of this offering.


(3)		As of December 31, 2009, we also had $6.9 million of restricted cash.

(4)		In addition, as of December 31, 2009, we had $5.8 million of outstanding debt held by third parties not affiliated with ACAS.

(5)		See “Description of Certain Indebtedness” for information about our anticipated new bank credit facilities that we expect to enter into upon the consummation of this offering.

(6)		We include Adjusted EBITDA in this prospectus because (i) it is a basis upon which our management assesses our operating performance, (ii) it is a factor in the evaluation of the performance of our management in determining compensation and (iii) certain maintenance covenants under our debt agreements are tied to ratios based upon Adjusted EBITDA, as defined. Adjusted EBITDA, as defined in our debt agreements, is calculated as net income (loss) plus (a) without duplication and to the extent deducted in determining net income for such period, the sum of (i) interest expense, (ii) income tax expense, (iii) all amounts attributable to depreciation and amortization expense, (iv) any extraordinary cash charges in an amount not to exceed $4,000,000, (v) any extraordinary non-cash charges, (vi) any other non-cash charges (but excluding any non-cash charge in respect of an item that was included in net income in a prior period) and (vii) any non-recurring fees, costs and expenses as


		reflected in our financial statements and any non-recurring fees, costs and expenses incurred in connection with this offering minus (b) without duplication and to the extent included in net income, (i) any cash payments made in respect of non-cash charges described in clauses (a)(vi) or (a)(vii) taken in a prior period and (ii) any extraordinary gains and any non-cash items of income, all calculated on a consolidated basis in accordance with U.S. GAAP. Adjusted EBITDA is not a measure of financial performance calculated in accordance with U.S. GAAP, and should be viewed as a supplement to—not a substitute for—our results of operations presented on the basis of U.S. GAAP. Adjusted EBITDA also does not purport to represent cash flow provided by, or used in, operating activities in accordance with U.S. GAAP. Our statements of cash flows, included elsewhere in this prospectus, present our cash flow activity in accordance with U.S. GAAP. Furthermore, Adjusted EBITDA is not necessarily comparable to similarly titled measures reported by other companies.

The following is a reconciliation of cash (used in) provided by operating activities to Adjusted EBITDA:


										Six Months
										Ended
	Year Ended June 30,									December 31,
	2007			2008			2009			2008			2009

Cash (used in) provided by operating activities	$	(3,569	)	$	(6,712	)	$	10,031		$	(2,842	)	$	(4,835	)
Interest expense, net		19,153			20,207			17,711			9,736			7,570
Income tax expense		4,937			5,838			5,612			2,890			3,293
Fees paid to ACFS		1,625			1,625			1,739			893			813
Other nonrecurring charges(*)		6,645			5,458			5,867			1,778			631
Actuarial (gain) loss		282			226			(208	)		—			—
Paid-in-kind interest expense		(1,810	)		(1,904	)		(1,992	)		(993	)		(1,041	)
Loss on disposal of property, plant and equipment		(81	)		(502	)		(592	)		(302	)		(268	)
Amortization of loan fees, debt discount and preferred stock discount		(568	)		(785	)		(522	)		(262	)		(236	)
Provision for doubtful accounts		(96	)		(30	)		(140	)		(69	)		(25	)
Provision for deferred income taxes		1,010			1,238			1,013			(763	)		916
Change in operating assets and liabilities		1,726			9,559			2,084			8,653			11,653
Currency effects and other		—			—			22			—			41

Adjusted EBITDA	$	29,254		$	34,218		$	40,625		$	18,719		$	18,512


(*)		Represents non-recurring expenses, including severance expenses and costs associated with the preparation for our initial public offering, as well as certain professional and legal expenses.


(7)		Represents purchase orders or contracts received by us that have not been shipped. Amounts representing backlog are not recorded in our financial statements.

RISK FACTORS

Investing in our common stock involves a high degree of risk. You should carefully consider the risks described below, together with all of the other information contained in this prospectus, before deciding whether to purchase our common stock. If any of the following risks occurs, the trading price of our common stock could decline and you could lose all or part of your investment.

Risks Related to Our Business

Our sales cycle can be long and unpredictable, and we may be unable to recognize revenue until many months or years after an order is placed. As a result, our revenue can be difficult to predict and may vary substantially from quarter to quarter, which may cause our operating results to fluctuate.

Our sales efforts for many of our products involve substantial discussion with customers regarding product customization and deployment. This process can be extremely lengthy and time consuming and typically involves a significant product evaluation process. The typical sales cycle for products whose procurement relates to the construction of new, or the refurbishment of existing, NPPs ranges from 12 to 36 months and has, in some cases, extended up to 60 months. In addition, these customers generally make a significant commitment of resources to test and evaluate our products prior to purchase. As a result, our sales process is often subject to delays associated with the lengthy approval processes that typically accompany the design, testing and adoption of new, technologically complex products. This results in our investing significant resources prior to orders being placed for our products, with no assurances that we will secure a sale.

In addition, a significant amount of time can pass before we recognize the revenue associated with an order once it has been placed. We may not recognize revenue for sales of certain of our products until the customer certifies the successful installation and operation of the product, which can be many months or, particularly with regard to our Sensing Systems and Radiation Monitoring Systems products, years following the receipt of a customer order. Additionally, under prevailing accounting guidance, we may be required to delay revenue recognition on products delivered to our customers until we have completed delivery of all products associated with our arrangement with the customer. The installation of our systems are also subject to construction or scheduled outage delays unrelated to our products, which can further defer the recognition of revenue.

Our long and uncertain sales cycle and the unpredictable period of time between the placement of an order and our ability to recognize the revenue associated with the order makes revenue predictions difficult, particularly on a quarterly basis, and can cause our operating results to fluctuate significantly.

Our financial performance is unpredictable.

Our business depends on the demand for our radiation detection, measurement, analysis and monitoring products and services in the nuclear, defense and medical end markets. In the past, the demand for our products in these markets has fluctuated due to a variety of factors, many of which are beyond our control. This has caused our financial performance to fluctuate. Among the factors affecting our performance are:


	•	general economic conditions, both domestically and internationally;

	•	the timing, number and size of orders from, and shipments to, our customers, as well as the relative mix of those orders;

	•	the timing of revenue recognition, which often requires customer acceptance of the delivered products;

	•	delays, postponements or cancellations of construction or decommissioning of NPPs caused by, for example, financing difficulties or regulatory delays;

	•	adverse economic, financial and/or political conditions in one or more of our target end markets;

	•	variations in the volume of orders for a particular product or product line in a particular quarter;

	•	the size and timing of new contract awards;

	•	the timing of the release of government funds for procurement of our products;


	•	the degree to which new end markets emerge for our products;

	•	the budget cycles of U.S. and foreign governments and commercial enterprises that affect timing of order placement for or delivery of our products; and

	•	the tendency of commercial enterprises to fully utilize annual capital budgets prior to expiration.

We have a short operating history as a consolidated entity and have incurred net losses since our inception.

We were formed in 2005 as a merger of several companies acquired by ACAS but operated separately. Accordingly, we rely on the employees, goodwill, brand strength, product history and qualifications of our legacy acquired companies. In addition, some of our senior executive officers have a limited history with us and no prior experience in the industries in which we compete. Furthermore, we have not achieved positive net income and, as of December 31, 2009, had an accumulated deficit of $103.3 million. We cannot assure you as to when we will achieve positive net income or, if we do so, whether we will continue to do so.

Our independent registered public accounting firm reported to us that, at each of June 30, 2008, June 30, 2009, September 30, 2009 and December 31, 2009, we had material weaknesses in our internal controls over financial reporting that, if not remediated, could result in material misstatements in our financial statements in future periods and impair our ability to comply with the accounting and reporting requirements applicable to public companies.

Our independent registered public accounting firm reported to us that at each of June 30, 2008, June 30, 2009, September 30, 2009 and December 31, 2009, we had material weaknesses in our internal controls over financial reporting that have not been remediated as of the time of this filing. Under standards established by the Public Company Accounting Oversight Board, or PCAOB, a “material weakness” is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. The material weaknesses identified were with respect to our controls in our financial accounting and reporting functions, which are necessary in order to produce U.S. generally accepted accounting principles (U.S. GAAP) compliant financial statements. These weaknesses related to a lack of sufficient accounting personnel and depth of knowledge, lack of formal policies and procedures to ensure that subsidiary financial information reflect accounting under U.S. GAAP, lack of account reconciliation procedures and untimely review and approval procedures. A significant number of audit adjustments were also required to appropriately reflect account balances in accordance with U.S. GAAP. As a result of these weaknesses, we were required to restate our consolidated financial statements for fiscal 2007, 2008 and 2009 to properly reflect a revenue restatement, the reclassification of paid-in-kind dividends on our Convertible Participating Preferred Stock as additional paid-in capital rather than accrued liabilities and the impact of recording a number of individually insignificant adjustments. We determined that revenue was improperly recognized on certain multiple element arrangements for which separation of elements was not appropriate at the time of recognition. We determined that paid-in-kind dividends payable should not have been classified as liabilities as they do not involve an obligation to make future sacrifices of assets. As we prepare for the completion of this offering, we are in the process of hiring additional finance personnel and documenting and enhancing formalized information technology policies and procedures, and the implementation of software upgrades throughout our operations. However, these and other remediation efforts may not enable us to remedy the material weaknesses or avoid other material weaknesses in the future. Because of these material weaknesses, there is heightened risk that a material misstatement of our annual or quarterly financial statements will not be prevented or detected. In the event that we have not adequately remedied these material weaknesses, and if we fail to maintain proper and effective internal controls in future periods, it could adversely affect our operating results, financial condition, ability to run our business effectively and our ability to timely meet our reporting requirements and could cause investors to lose confidence in our financial reporting. In addition, these and any other material weaknesses will need to be addressed as part of the evaluation of our internal controls over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 and may impair our ability to comply with Section 404.

We operate in highly competitive markets and in some cases compete against larger companies with greater financial resources.

The market for radiation detection, measurement, analysis and monitoring products and services is fragmented, with a variety of small and large competitors, where the degree of fragmentation and the identities of our competitors vary among our target end markets. Some of our competitors have greater financial resources than do we, and they may be able to focus those resources on developing products or services that are more attractive to potential customers than those that we offer, or on lobbying efforts to enhance their prospects of obtaining government contracts. Some of our competitors, for example, are substantially larger and better capitalized than we are and have the ability to combine solutions into an integrated offering at attractive prices. Our competitors may offer these solutions at prices below cost in order to improve their competitive positions. Any of these competitive factors could make it more difficult for us to attract and retain customers, cause us to lower our prices to compete, and reduce our market share and revenue, any of which could have a material adverse effect on our business, financial condition and results of operations.

Amounts included in our order backlog may not result in actual revenue or translate into profits.

Although the amount of our backlog is based on signed purchase orders or other written contractual commitments, we cannot guarantee that our order backlog will result in actual revenue in the originally anticipated period or at all. In addition, the mix of contracts included in our order backlog can greatly affect our margins in future periods, which may not be comparable to our historical product mix and operating results. Our customers may experience project delays or cancel orders due to factors beyond our control. If our order backlog fails to result in revenue in a timely manner or at all, we could experience a reduction in revenue and liquidity.

The current global financial crisis and adverse worldwide economic conditions may have significant effects on our business, financial condition and results of operations.

The current global financial crisis—which has included, among other things, significant reductions in available capital and liquidity, substantial reductions and fluctuations in equity and currency values, a reduction in global demand for energy and a worldwide recession, the extent of which is likely to be significant and prolonged—may have a material adverse effect on our business. We have begun to experience some weakening in demand for certain of our products and services, particularly for our high-temperature cameras used as monitoring tools in petrochemical facilities and cement kilns. Factors such as lack of business investment, government spending, the volatility and strength of the capital markets and inflation all affect the business and economic environment and, ultimately, our business, financial condition and results of operations. Continued market disruptions and broader economic downturns may affect our and our customers’ access to capital, lead to lower demand for our products and services, increase our exposure to losses from bad debts or result in our customers ceasing operations, any of which could materially adversely affect our business, financial condition and results of operations.

The credit markets have been experiencing extreme volatility and disruption for more than twelve months, and the volatility and disruption have reached unprecedented levels. In many cases, the markets have limited credit capacity for certain issuers, and lenders have requested shorter terms. The market for new debt financing is extremely limited and in some cases not available at all. In addition, the markets have increased the uncertainty that lenders will be able to comply with their previous commitments. If current levels of market disruption and volatility continue or worsen, we may not be able to refinance our existing debt, or incur additional debt, which may require us to seek alternative funding sources to meet our liquidity needs or to fund planned expansion. Such alternative sources of funding may not be available on acceptable terms or at all.

Furthermore, the tightening of credit in financial markets may delay or prevent our customers from securing funding adequate to operate their businesses and purchase our products and services and could lead to an increase in our bad debt levels.

Unfavorable currency exchange rate fluctuations could adversely affect our profitability.

Our international sales and our operations in foreign countries expose us to risks associated with fluctuating currency values and exchange rates. Most of our sales, costs, assets and liabilities are denominated in foreign currencies. For fiscal 2009, 49.9% and 3.9% of our sales were denominated in euros and pounds sterling. Gains and losses on the conversion of accounts receivable, accounts payable and other monetary assets and liabilities to U.S. dollars may contribute to fluctuations in our results of operations. In addition, increases in the value of the U.S. dollar relative to the euro and the pound sterling could have an adverse effect on our results of operations. We do not currently purchase forward contracts to hedge against the risks associated with fluctuations in exchange rates.

We may be less competitive if we fail to develop new or enhanced products and introduce them in a timely manner.

The markets in which we compete are subject to technological change, product obsolescence and evolving industry standards. Our ability to successfully compete in these markets and to continue to grow our business depends in significant part upon our ability to develop, introduce and sell new and enhanced products in a timely and cost-effective manner, and to anticipate and respond to changing customer requirements. We have experienced, and may in the future experience, delays in the development and introduction of new products. These delays could provide a competitor a first-to-market advantage and allow a competitor to achieve greater market share. Defects or errors found in our products after commencement of commercial shipment could result in delays in market acceptance of these products. Lack of market acceptance for our new products will jeopardize our ability to recoup research and development expenditures, hurt our reputation and harm our business, financial condition and results of operations. Accordingly, we can not assure you that our future product development efforts will be successful.

Our existing and future customers may reduce or halt their spending on radiation detection, measurement, analysis and monitoring products and services.

A variety of factors may cause our existing or future customers to reduce or halt their spending on radiation detection, measurement, analysis and monitoring products and services. These factors include:


	•	disruptions in the nuclear fuel cycle, such as insufficient uranium supply or conversion;

	•	unfavorable financial conditions and strategies of the builders, owners and operators of nuclear reactors;

	•	civic opposition to or changes in government policies regarding nuclear operations;

	•	a reduction in demand for nuclear generating capacity;

	•	accidents, terrorism, natural disasters or other incidents occurring at nuclear facilities; and

	•	the decision by one or more of our customers to acquire one of our competitors or otherwise administer the services we provide internally.

Certain of these events could also adversely affect us to the extent that they result in the suspension or reduction of nuclear reactor construction, refurbishment or operation; the reduction of supplies of nuclear raw materials; increased regulation; increased operational costs for us or our customers; or increased liability for actual or threatened property damage or personal injury.

If we are unable to obtain adequate supplies in a timely manner, our results of operations would be adversely affected.

We are dependent upon certain sole or limited source suppliers for critical raw materials or components of some of our products. For example, we rely on the U.S. government for the enriched uranium used in certain equipment employed in our sensing systems. We also rely on limited source suppliers of certain precious metals used in some of our reactor instrumentation, scintillator materials used in our detection & identification equipment and for analog sensor tubes used in certain of our imaging products. Most of our suppliers are not required to supply us with any minimum quantities, and we cannot assure you that we will receive adequate quantities of components on a timely basis in the future. For example, a sole source supplier

has recently informed us that its supplier is discontinuing the manufacture of a component that we use in certain of our dosimetry badges used by our Dosimetry Services division to provide dosimetry services to a majority of its dosimetry badge wearers. The notification prompted us to secure a final end-of-life order in an amount sufficient to meet our anticipated production requirements for the affected type of dosimetry badge at least through December 2013 and potentially through December 2015, the exact duration depending on the timing and degree to which our existing customers migrate to our other dosimetry badges that are unaffected by this discontinued component. We and our current suppliers already offer substitute dosimetry badges that meet the requirements of our customers, that do not require requalification and that are available at a substantially similar cost to us. Our suppliers could have financial or other problems that could cause a disruption in the supply of components to us. In addition, were we to change suppliers of components in some of our products, we may be required to seek new qualifications for such products, which can be a time-consuming and costly process. As a result of interruption of supply, we may not be able to obtain the raw materials or components that we need to fill customer orders. The inability to fill these orders could cause delays, disruptions or reductions in product shipments, require us to negotiate alternate supply arrangements with replacement suppliers where available or require product redesigns which could, in turn, damage relationships with current or prospective customers, increase costs or prices and have a material adverse effect on our business, financial condition and results of operations.

We rely on third-party manufacturers to produce non-core components for certain of our products and services. If our manufacturers are unable to meet our demand or requirements, our business could be harmed.

We use third-party manufacturers to produce certain non-core components for some of our products. From time to time demand for our products has grown faster than the supply capabilities of these vendors. In many cases, these manufacturers have no obligation to supply products to us for any specific period, in any specific quantity or at any specific price, except as set forth in a particular purchase order. Our requirements represent a small portion of the total production capacities for many of our manufacturers, and our manufacturers may reallocate capacity to other customers, even during periods of high demand for our products or services. We have in the past experienced, and may in the future experience, quality control issues and delivery delays with our manufacturers due to factors such as high industry demand or the inability of our manufacturers to consistently meet our quality or delivery requirements. In addition, third-party manufacturers may have financial difficulties and face the risk of bankruptcy, especially in light of the current worldwide economic downturn. If one of our suppliers was to cancel or materially change a commitment with us or fail to meet the quality or delivery requirements needed to satisfy customer orders for our products, we could lose time-sensitive customer orders, be unable to develop or sell our products or services cost effectively or on a timely basis, if at all, and have significantly decreased revenue, which would harm our business, financial condition and results of operations. We may qualify additional suppliers in the future which would require time and resources. If we do not qualify additional suppliers, we may be exposed to increased risk of capacity shortages due to our dependence on our current suppliers.

Some of our suppliers and customers are also our competitors.

Some of our competitors are also our suppliers and customers. For example, Canberra, one of our chief competitors in the nuclear and defense end markets, supplies us with some of the detectors employed in the radiation monitoring systems that we supply to the nuclear end market. At the same time, Areva, the controlling shareholder of Canberra, is a customer for our radiation monitoring systems for use in its EPR reactors and in other fuel cycle industry applications. Similarly, Thermo Fisher Scientific both supplies our Dosimetry Services division with TLD crystals used in some of our thermoluminescent dosimeters that we deploy as part of providing dosimetry services to our customers, and sells products competitive with those offered by our Health Physics division. As with our other suppliers, our competitor suppliers are not required to supply us with any minimum quantities, and we cannot assure you that we will receive adequate quantities of components on a timely basis in the future. The loss of orders stemming from the actions of our supplier or customer competitors could cause delays, disruptions or reductions in product shipments or require product redesigns which could, in turn, damage relationships with current or prospective customers, increase costs or prices and have a material adverse effect on our business, financial condition and results of operations.

We could lose money if we fail to accurately estimate our costs or fail to execute within our cost estimates on fixed-price contracts.

Many of our contracts are fixed-price contracts which do not provide for price escalation in the event of unanticipated cost overruns. Under these contracts, we perform our services and provide our products at a fixed price. Fixed-price contracts carry inherent risks, including risks of losses from underestimating costs, operational difficulties and other changes that may occur over the contract period. We have in the past experienced unanticipated cost overruns on some of our fixed-price contracts. If our cost estimates for a contract are inaccurate, or if we do not execute the contract within our cost estimates, we may incur losses or the contract may not be as profitable as we expected. In addition, we are sometimes required to incur costs in connection with modifications to a contract that may not be approved by the customer as to scope or price, or to incur unanticipated costs, including costs for customer-caused delays, errors in specifications or designs or contract termination, that we may not be able to recover. These, in turn, could adversely affect our business, financial condition and results of operations. The revenue, cost and gross profit realized on such contracts can vary, sometimes substantially, from the original projections due to changes in a variety of factors, such as:


	•	failure to properly estimate, or changes in, the costs of material, components or labor;

	•	currency exchange rate fluctuations;

	•	unanticipated technical problems with the products or services being supplied by us, which may require that we spend our own money to remedy the problem;

	•	our suppliers’ or subcontractors’ failure to perform;

	•	difficulties of our customers in obtaining required governmental permits or approvals;

	•	changes in local laws and regulations;

	•	unanticipated delays in construction of new NPPs and decommissioning of existing NPPs; and

	•	limited history with new products and new customers.

Many of our large contracts have penalties for late completion.

In some cases, including many of our fixed-price contracts, we have agreed to complete a project by a scheduled date. If we fail to complete the project as scheduled, we may be held responsible for costs associated with the delay, generally in the form of liquidated damages, in some cases up to the full value of the contract. We have in the past incurred penalties associated with late completion on some of our contracts. In the event that a project is delayed, the total costs of the project could exceed our original estimates, and we could experience reduced profits or a loss for that project.

Our products and services involve the detection and monitoring of radiation, and the failure of our products or services to perform to specification could adversely affect our business, financial condition or results of operations.

Our products and services involve the detection and monitoring of radiation and are crucial components of the safety measures employed with respect to ionizing radiation. The failure of our products to perform to specification could result in personal injury or death and property damage (including environmental contamination). Legal and regulatory actions taken in response to product failure could result in significant costs to us. Additionally, the failure of our products to perform to specification could adversely affect market perception of the quality and effectiveness of our products and services, which would harm our ability to attract new customers and could cause our existing customers to cease doing business with us.

While we have attempted to secure appropriate insurance coverage at a reasonable cost, we do not insure against all risks and a claim can exceed the limits of our policies. We cannot assure you that our insurers will pay a particular claim, or that we will be able to maintain coverage at reasonable rates in the future, or at all. We may also be subject to significant deductibles.

Our contracts with customers generally seek to limit our liability in connection with product failure, but we cannot assure you that these contractual limitations on liability will be effective or sufficient in scope in all

cases or that our insurance will cover the liabilities we have assumed under these contracts. The costs of defending against a claim arising out of such failure, and any damages awarded as a result of such a claim, could adversely affect our business, financial condition and results of operations.

Certain of our products and technologies for the defense end market may be eligible for designation or certification as “qualified anti-terrorism technologies” under the “SAFETY Act” provisions of The Homeland Security Act of 2002 and its implementing regulations. Under the SAFETY Act, the federal government provides for certain liability limitations and a presumption that the “government contractor” defense applies if the Department of Homeland Security “designates” or “certifies” technologies or products as “qualified anti-terrorism technologies,” and if certain other conditions apply. We may seek to qualify some or all of our products and technologies under the SAFETY Act’s provisions in order to obtain such liability protections, but there is no guarantee that the Department of Homeland Security will designate or certify our products and technologies as qualified anti-terrorism technology. To date, we have not sought such designation or certification, and our products have been sold without such qualification, and we may continue to sell our products and technologies without such qualification. To the extent we do so, we will not be entitled to the benefit of the SAFETY Act’s limitations on tort liability or to any U.S. government indemnification.

We and our customers operate in a politically sensitive environment, and the public perception of nuclear power can affect our customers and us.

We and our customers operate in a politically sensitive environment. The risks associated with radioactive materials and the public perception of those risks can affect our business. Opposition by third parties can delay or prevent the construction of new NPPs and can limit the operation of nuclear reactors. Adverse public reaction to developments in the use of nuclear power, including incidents involving the discharge of radioactive materials, could directly affect our customers and indirectly affect our business. In the past, adverse public reaction, increased regulatory scrutiny and litigation have contributed to extended construction periods for new nuclear reactors, sometimes delaying construction schedules by decades or more. For example, no new reactor has been ordered in the United States since the 1970s and anti-nuclear groups in Germany successfully lobbied for the adoption of the Nuclear Exit Law in 2002, which requires the shutdown of all German NPPs by 2021. Adverse public reaction could also lead to increased regulation or limitations on the activities of our customers, more onerous operating requirements or other conditions that could have a material adverse impact on our customers and our business.

Our operations in foreign countries are subject to political, economic and other risks, which could have a material adverse effect on us.

Revenue outside of the United States and Canada accounted for approximately 61.3%, 64.1% and 61.6% of our net sales in fiscal 2007, 2008 and 2009, and 60.3% and 62.7% of our net sales for the six months ended December 31, 2008 and 2009. We anticipate that international sales will continue to constitute a material percentage of our total net sales in future periods. As a result, our operations are subject to risks associated with global operations and sales, including:


	•	foreign currency exchange fluctuations;

	•	changes in regulatory requirements;

	•	tariffs and other barriers;

	•	timing and availability of export licenses;

	•	difficulties in accounts receivable collections;

	•	difficulties in protecting our intellectual property;

	•	difficulties in staffing and managing foreign operations;

	•	difficulties in managing sales agents, distributors and other third parties;

	•	coordination regarding, and difficulties in obtaining, governmental approvals for products that may require certification;


	•	rescission or termination of contracts by governmental parties without penalty and regardless of the terms of the contract;

	•	restrictions on transfers of funds and other assets of our subsidiaries between jurisdictions;

	•	the burden of complying with a wide variety of complex foreign laws and treaties;

	•	potentially adverse tax consequences; and

	•	uncertainties relative to regional political and economic circumstances.

We are also subject to risks associated with the imposition of legislation and regulations relating to the import or export of radiation detection and monitoring technology. For example, certain export control approvals of our sales, including sales to NPP operators located in Pakistan and India, were granted because of the supervision of customer sites by the International Atomic Energy Agency, or the IAEA. If the IAEA ceases to supervise such sites, our ability to sell to certain customers would be limited and our sales could be adversely affected. Furthermore, the failure to comply with export control regulations and to obtain required approvals could result in loss of the ability to export products, fines and penalties.

We cannot predict whether quotas, duties, taxes or other charges or restrictions upon the importation or exportation of our products will be implemented by the United States or other countries. Some of our customers’ purchase orders and agreements are governed by foreign laws, which often differ significantly from the laws of the United States. Therefore, we may be limited in our ability to enforce our rights under such agreements and to collect damages, if awarded. These factors may have a material adverse effect on our business, financial condition and results of operations.

Changes in our effective tax rate or adverse outcomes resulting from examination of our income tax returns could adversely affect our results.

Our effective tax rate could be adversely affected by several factors, many of which are outside of our control, including:


	•	earnings being lower than anticipated in countries where we are taxed at lower rates as compared to the U.S. statutory tax rate;

	•	material differences between forecasted and actual tax rates as a result of a shift in the mix of pre-tax profits and losses from one tax jurisdiction to another, our ability to use tax credits or effective tax rates by tax jurisdiction that differ from our estimates;

	•	changing tax laws or related interpretations, accounting standards and regulations and interpretations in multiple tax jurisdictions in which we operate, as well as the requirements of certain tax rulings;

	•	an increase in expenses not deductible for tax purposes, including certain stock-based compensation expense and impairment of goodwill;

	•	the tax effects of purchase accounting for acquisitions and restructuring charges that may cause fluctuations between reporting periods;

	•	changes related to our ability to ultimately realize future benefits attributed to our deferred tax assets, including those related to other-than-temporary impairments;

	•	tax assessments resulting from income tax audits or any related tax interest or penalties that would affect our income tax expense for the period in which the settlements take place; and

	•	a change in our decision to indefinitely reinvest foreign earnings.

In addition, we may be subject to examination of our income tax returns by the Internal Revenue Service or other tax authorities. If tax authorities challenge the relative mix of our U.S. and international income, our future effective income tax rates could be adversely affected. While we regularly assess the likelihood of adverse outcomes from such examinations and the adequacy of our provision for income taxes, we cannot assure you that such provision is sufficient and that a determination by a tax authority will not have an adverse effect on our business, financial condition and results of operations.

Localization requirements could adversely affect our business.

Many emerging markets, including China and South Korea, impose localization requirements which favor locally based component manufacturers in the construction of NPPs and which require some degree of technology transfer to local manufacturers. Over time, such localization requirements could limit our ability to sell into such markets and could affect our ability to maintain our trade secrets. In the past, international development agencies have, as a condition of funding, imposed localization requirements that require the transfer of technology to local manufacturers, and this requirement has affected our ability to monitor and maintain control over our intellectual property. We may be subject to similar requirements as a condition of funding in the future.

We must comply with the U.S. Foreign Corrupt Practices Act, or FCPA. Failure to comply with the FCPA could subject us to, among other things, penalties and legal expenses that could harm our reputation and have a material adverse effect on our business, financial condition and results of operations.

We are required to comply with the United States Foreign Corrupt Practices Act, which generally prohibits U.S. companies and their intermediaries from engaging in bribery or making other prohibited payments to foreign officials for the purpose of obtaining or retaining business and/or other benefits. We operate in a number of jurisdictions that pose a high risk of potential FCPA violations, we have government customers and we utilize a number of third-party sales representatives. Although we have begun to inform our personnel and third-party sales representatives regarding the requirements of the FCPA and have developed and will continue to develop and implement systems for formalizing contracting processes, performing diligence on agents and improving our record-keeping and auditing practices, we cannot assure you that our employees, third-party sales representatives or other agents have not or will not engage in conduct for which we might be held responsible under the FCPA.

If our employees, third-party sales representatives or other agents are found to have engaged in such practices, we could suffer severe penalties, including criminal and civil penalties, disgorgement and other remedial measures (including further changes or enhancements to our procedures, policies and controls, as well as potential personnel changes and disciplinary actions), any of which could have an adverse impact on our business, financial condition, results of operations and liquidity. Any investigation of any potential violations of the FCPA or other anti-corruption laws by U.S. or foreign authorities also could have an adverse impact on our business, financial condition and results of operations.

Certain foreign companies, including some of our competitors, are not subject to prohibitions as strict as those under the FCPA or, even if subjected to strict prohibitions, such prohibitions may be laxly enforced in practice. If our competitors engage in corruption, extortion, bribery, pay-offs, theft or other fraudulent practices, they may receive preferential treatment from personnel of some companies, giving our competitors an advantage in securing business, or from government officials, who might give them priority in obtaining new licenses, which would put us at a disadvantage.

We may make acquisitions that involve numerous risks. If we are not successful in integrating the technologies, operations and personnel of acquired businesses or fail to realize the anticipated benefits of an acquisition, our operations may be adversely affected.

As part of our business and growth strategy, we may acquire or make significant investments in businesses, products or technologies that allow us to complement our existing product offerings, expand our market coverage, increase our engineering workforce or enhance our technological capabilities. Any future acquisitions or investments would expose us to many risks, including:


	•	problems integrating the new personnel or the purchased operations, technologies or products;

	•	difficulty securing adequate working capital;

	•	unanticipated costs associated with the acquisition;

	•	negative effects on our ability to generate excess free cash flow;

	•	negative effects on profitability;


	•	adverse effects on existing business relationships with suppliers and customers;

	•	risks associated with entering markets in which we have no or limited prior experience;

	•	loss of key employees of the acquired business;

	•	litigation arising from the operations before they were acquired by us; and

	•	difficulty completing financial statements and audits.

Our inability to overcome problems encountered in connection with any acquisition could divert the attention of management, utilize scarce corporate resources and otherwise harm our business. In addition, we are unable to predict whether or when any prospective acquisition candidate will become available or the likelihood that any acquisition will be completed. Even if we do find suitable acquisition opportunities, we may not be able to consummate the acquisitions on commercially acceptable terms or realize the anticipated benefits of any acquisitions we do undertake.

A failure to expand our manufacturing capacity and scale our capabilities to manufacture new products could constrain our ability to grow our business.

We have needed to increase our manufacturing capacity, particularly in our locations in Lamanon, France and Hamburg, Germany to support the fulfillment of certain large contracts and to put us in position to accommodate growth in our business. Accordingly, we have initiated an expansion of our manufacturing facilities in Lamanon and renovated and reorganized our facilities in Hamburg. The future growth of our business depends on our ability to successfully expand our manufacturing capacity. Expansion of our manufacturing capacity may require us to obtain regulatory approvals or additional financing. Delay in the expansion of our manufacturing capacity could constrain our ability to grow our business, which would adversely affect our business, financial condition and results of operations.

Similarly, we could have substantial difficulty in dealing with rapid growth in markets for new products that we may introduce. If demand for our new products increases rapidly, we will need to expand internal production capacity or implement additional outsourcing. Success in developing, manufacturing and supporting products manufactured in small volumes does not guarantee comparable success in operations conducted on a larger scale. Manufacturing yields and product quality may decline as production volumes increase. If we are unable to deliver products quickly and cost effectively and in the requisite volumes, our customers may decline to purchase our new products or may purchase substitute products offered by our competitors. The costs associated with implementing new manufacturing technologies, methods, and processes, including the purchase of new equipment, and any resulting delays, inefficiencies and loss of sales, could harm our results of operations.

We rely on third-party sales representatives to assist in selling our products and services, and the failure of these representatives to perform as expected could reduce our future sales.

We typically derive 25% to 30% of our revenue from sales to our customers through third-party sales representatives. We have established relationships with some of our third-party sales representatives recently, and we are unable to predict the extent to which our third-party sales representatives will be successful in marketing and selling our products and services. Moreover, many of our third-party sales representatives also market and sell competing products and services, which may affect the extent to which our third-party sales representatives promote our products and services. Even where our relationships are formalized in contracts, our third-party sales representatives often have the right to terminate their relationships with us at any time. Our future performance will also depend, in part, on our ability to attract additional third-party sales representatives who will be able to market and support our products and services effectively, especially in markets in which we have not previously sold our products and services. If we cannot retain our current third-party sales representatives or recruit additional or replacement third-party sales representatives, our business, financial condition and results of operations could be harmed.

The elimination or any modification of the Price-Anderson Act’s indemnification authority could have adverse consequences for our business.

In the United States, the Atomic Energy Act of 1954, as amended, or the AEA, comprehensively regulates the manufacture, use and storage of radioactive materials. Section 170 of the AEA, which is known as the Price-Anderson Act, supports the nuclear services industry by offering broad indemnification to commercial NPP operators and Department of Energy, or DOE, contractors for liabilities arising out of nuclear incidents at power plants licensed by the Nuclear Regulatory Commission, or NRC, and at DOE nuclear facilities. The indemnification authority of the NRC and DOE under the Price-Anderson Act was extended through 2025 by the Energy Policy Act of 2005. Some of our customers are covered by the indemnification provisions of the Price-Anderson Act. In addition, other jurisdictions have similar indemnification authority. If the indemnification authority in the United States or other countries is eliminated or adversely modified in the future, our business could be adversely affected if the owners and operators of NPPs cancel or delay plans to build new plants or curtail the operations of existing plants.

Our ability to provide bid bonds, performance bonds or letters of credit is limited and could negatively affect our ability to bid on or enter into significant contracts.

We are sometimes required to provide bid or performance bonds or letters of credit to guarantee performance under contracts across our various divisions. Our ability to obtain such bonds and letters of credit depends upon several factors, including our capitalization, working capital, past performance, management expertise and reputation and external factors beyond our control, including the overall capacity of the surety market. Surety companies consider those factors in relation to the amount of our tangible net worth and other underwriting standards that may change from time to time. Events that affect surety markets generally may result in bonding becoming more difficult to obtain in the future, or being available only at a significantly higher cost. Our inability to obtain adequate bonding and, as a result, to bid for, or enter into, significant contracts, could adversely affect our future financial condition and results of operations.

As a U.S. government contractor, we are subject to a number of procurement rules and regulations.

U.S. government contractors and subcontractors must comply with specific procurement regulations and other requirements and are subject to routine audits and investigations by U.S. government agencies. If we fail to comply with these rules and regulations, we could be subject to reductions in the value of our government contracts, contract modification or termination, the assessment of penalties and fines, and/or suspension or debarment from government contracting or subcontracting for a period of time or permanently.

Furthermore, we have bid, and may in the future submit bids, for U.S. government contracts that require our employees to maintain various levels of security clearances and require us or our subsidiaries to maintain certain facility security clearances in compliance with Department of Defense and other government requirements. Obtaining and maintaining security clearances for employees involves a lengthy process, and it can be difficult to identify, recruit and retain employees who already hold security clearances. If our employees are unable to obtain or retain security clearances, or if our employees who hold security clearances stop working for us, we may face delays in fulfilling contracts, or be unable to fulfill or secure new contracts, with any customer involved in classified work. Any breach of security for which we are responsible could seriously harm our business, damage our reputation and make us ineligible to work on any classified programs.

The classified work that we currently perform at one of our facilities subjects us to the industrial security regulations of the Department of Defense and other federal agencies that are designed to safeguard against unauthorized access by foreigners and others to classified and other sensitive information. We may be subject to penalties for violations of these regulations. If we were to come under foreign ownership, control, or influence, the U.S. government could terminate our contracts with it or decide not to renew them and such a situation could also impair our ability to obtain new contracts and subcontracts. The government may also change its procurement practices or adopt new contracting rules and regulations that could be costly to satisfy or that could impair our ability to obtain new contracts.

We are subject to a variety of federal, state, local and foreign laws and regulatory regimes. Failure to comply with laws and regulations could subject us to, among other things, penalties and legal expenses which could have an adverse effect on our business.

Our business is subject to regulation by various federal, state, local and foreign governmental agencies. In the U.S., such regulation includes the radioactive material and exposure regulatory activities of the NRC, the anti-trust regulatory activities of the Federal Trade Commission and Department of Justice, the import/export regulatory activities of the Department of Commerce, the Department of State and the Department of Treasury, the regulatory activities of the Occupational Safety and Health Administration, the environmental regulatory activities of the Environmental Protection Agency, the labor regulatory activities of the Equal Employment Opportunity Commission and tax and other regulations by a variety of regulatory authorities in each of the areas in which we conduct business. We are also subject to regulation in other countries where we conduct business. In certain jurisdictions, such regulatory requirements may be more stringent than in the United States. We are also subject to a variety of U.S. federal and state employment and labor laws and regulations, including the Americans with Disabilities Act, the Federal Fair Labor Standards Act, the Worker Adjustment and Restructuring Notification Act, which requires employers to give affected employees at least 60 days’ notice of a plant closing or mass layoff, and other regulations related to working conditions, wage-hour pay, overtime pay, employee benefits, anti-discrimination and termination of employment. We are also subject to the employment and labor laws and regulations of the foreign jurisdictions, including France and Germany, where the majority of our employees are located.

Noncompliance with applicable regulations or requirements could subject us to investigations, sanctions, enforcement actions, disgorgement of profits, fines, damages, civil and criminal penalties, injunctions or debarment from government contracting or subcontracting. In addition, from time to time we have received, and may in the future receive, correspondence from former employees terminated by us who threaten to bring claims against us alleging that we have violated one or more labor or employment regulations. An adverse outcome in any such litigation could require us to pay damages.

Governmental enforcement actions could harm our business, financial condition and results of operations. If any governmental sanctions are imposed, or if we do not prevail in any civil or criminal litigation, our business, financial condition and results of operations could be materially adversely affected. In addition, responding to any action could be costly and result in a significant diversion of management’s attention and resources.

Certain of our products require the use of radioactive sources or incorporate radioactive materials, which subjects us and/or our customers to regulation, related costs and delays and potential liabilities for injuries or violations of environmental, health and safety laws.

Certain products in our Health Physics, Radiation Monitoring Systems and Sensing Systems divisions require the use of radioactive sources. For certain of our products, these radioactive sources are often obtained by our customers directly from third-party providers, and for others, we directly incorporate these radioactive sources into our products. Certain of our reactor instrumentation and control equipment and systems in our Sensing Systems division incorporate radioactive materials. In all such cases, licenses for radioactive sources and materials are provided by the appropriate regulatory authority in the relevant jurisdiction and such authorities may be at the state or national level. Our failure or any customer’s failure to obtain the necessary license for radioactive sources or materials required by or incorporated into our products could result in the cancellation or delay of purchases by our customers.

While the specific process and criteria for receiving a license differ from jurisdiction to jurisdiction, it generally involves an application process in which we: identify a person or persons who have appropriate training and experience to be a health physics/radiation safety officer; specify the radioactive sources or materials sought to be licensed, their physical form (i.e., sealed or unsealed) and maximum possession limits on the amount of each type of radioactive element or compound sought under the license; specifies their intended use (e.g., calibration, testing, quality assurance, manufacturing); and, set forth written policies and procedures to ensure that we have adequate measures in place to ensure health and safety. These policies and procedures typically must be designed to ensure worker, workplace, and public safety, including emergency

plans; set forth the proper handling, control and security of radioactive sources or materials on site; detail any disposal or decommissioning considerations; and adequately train personnel at the site in proper access to, and handling of, radioactive sources or materials. Our noncompliance with or failure to properly implement such policies and procedures could delay or otherwise preclude us from obtaining the necessary license for radioactive sources or materials required by or incorporated into our products, which could result in the cancellation or delay of purchases by our customers.

The particular license requirements in a given jurisdiction are normally tailored to the specific radioactive elements or compounds involved, their physical form, and possession limits. Once authorities complete their application review and any required follow-up, the authority issues the site a license which imposes specific on-going compliance obligations that typically include requirements for us to pay periodic licensing fees, submit periodic written compliance reports, and agree to periodic site inspections by regulators, which may be announced or unannounced. Our failure to comply with any of these on-going obligations could result in the revocation of the necessary license for radioactive sources or materials required by or incorporated into our products, which could result in the cancellation or delay of purchases by our customers.

We are subject to federal, state and local regulations governing storage, handling and disposal of these radioactive materials and waste products. Outside of the United States, we are also subject to radiation regulations that vary from country to country. The improper storage, use and disposal of such materials by us and/or our customers could result in direct or secondary liability, including penalties and fines, to us in the event of environmental contamination or physical injury. Although we believe that our safety procedures for storing, handling and disposing of these hazardous materials comply in all material respects with the standards prescribed by law and regulation, we cannot eliminate the risk of accidental contamination or injury from those hazardous materials nor can we control the practices of our customers. The sale and use of our products with radioactive sources or materials could also lead to the filing of claims if someone were to allege injury from the use of one of our products or allege that one of our products was defective. Such a claim could result in substantial damages, be costly and time-consuming to defend and adversely affect the marketability of our products and our reputation.

We and our customers operate in highly regulated industries that require us and them to obtain, and to comply with, federal, state, local and foreign government permits and approvals.

We and our customers operate in a highly regulated environment. Many of our products and services must comply with various domestic and international standards that are used by regulatory and accreditation bodies for approving such services and products. Many of our products, particularly those offered by our Radiation Monitoring Systems and Sensing Systems divisions, are subject to an array of product testing under extreme temperature, pressure, radiation and seismic conditions, known collectively as a qualification, for any given nuclear reactor design. The qualification is typically owned by the party who pays for the testing and so, in certain cases, we license such qualifications from a third party. In addition, many of our products and services, particularly those offered by our Dosimetry Services division, must be certified by the National Voluntary Laboratory Accreditation Program in the United States and by other governmental agencies in international markets. The termination of any such accreditation or our failure to obtain and maintain required qualification or accreditation for our products and services may adversely affect our revenue and results of operations.

Changes in these standards and accreditation requirements may also result in our having to incur substantial costs to adapt our products. Such adaptations may introduce quality assurance issues during transition as new features and products may not perform as expected. Additionally, changes affecting radiation protection practices, including new understandings of the hazards of radiation exposure and corresponding changes in regulations, may impact how our services are used by our customers and may, in some circumstances, cause us to alter our products and services.

In addition, our customers are required to obtain, and to comply with, federal, state, local and foreign government licenses, permits and approvals with respect to either their facilities or possession and use of radioactive sources or other radioactive materials. Any of these licenses, permits or approvals may be subject to denial, revocation or modification under various circumstances. Failure to obtain or comply with the

conditions of licenses, permits or approvals may adversely affect our customers’ operations by suspending their activities or delaying or preventing the receipt of radioactive sources or other radioactive materials, and may subject them to penalties and other sanctions. Although existing licenses, permits or approvals are routinely renewed by various regulators, renewal could be denied or jeopardized by various factors, including:


	•	failure to provide adequate financial assurance in the event of decommissioning or closure;

	•	failure to comply with environmental and safety laws and regulations or permit conditions;

	•	local community, political or other opposition;

	•	executive action; and

	•	legislative action.

Furthermore, if new environmental legislation or regulations are enacted or existing laws or regulations are amended or are interpreted or enforced differently, our customers may be required to obtain additional operating licenses, permits or approvals. Regulatory issues experienced by our customers may lead to delay or cancellation of their orders for our products and services or the discontinuance of future orders. We cannot assure you that we or our customers will be able to meet all potential regulatory challenges.

We could incur substantial costs as a result of violations of or liabilities under environmental laws.

Our operations and properties are subject to a variety of federal, state, local and foreign environmental laws and regulations governing, among other things, air emissions, wastewater discharges, management and disposal of hazardous and non-hazardous materials and waste and remediation of releases of hazardous materials. Our failure to obtain any necessary permits or to comply with present and future laws, regulations or permits, or the identification of contamination at our or our predecessors’ former or current facilities or at third-party waste disposal sites, could cause us to incur substantial costs, including clean-up costs, fines and penalties, investments to upgrade our facilities or curtailment of operations. The future identification of presently unidentified environmental conditions, more vigorous enforcement by regulatory agencies, enactment of more stringent laws, regulations or permit requirements or other unanticipated events may arise in the future and give rise to material environmental liabilities and related costs which could have a material adverse effect on our business, financial condition and results of operations.

A European Union, or EU, directive relating to the restriction of hazardous substances in electrical and electronic equipment, or RoHS directive, and an EU directive relating to waste electrical and electronic equipment, or WEEE directive, have been and are being implemented in EU member states. Among other things, the RoHS directive restricts the use of certain hazardous substances in the manufacture of electrical and electronic equipment and the WEEE directive requires producers of electrical goods to be responsible for the collection, recycling, treatment and disposal of these goods. In addition, laws similar to the RoHS and WEEE directives were passed in China in 2006 and South Korea in 2007. Governments in other countries and states, including the United States, are considering implementing similar laws or regulations.

In addition, a regulation regarding the registration, authorization and restriction of chemical substances in industrial products, or REACH, became effective in the EU in 2007. REACH and other regulations require us or our suppliers to substitute certain chemicals contained in our products with substances the EU considers less dangerous. We have assessed the impact that REACH is expected to have on us and have determined the impact at this time to be immaterial to our business and operations, but we cannot assure you that it or similar regulations will not materially affect us in the future.

The costs associated with complying with future laws and regulations could include costs associated with modifying or requalifying our products, recycling and other waste processing costs, legal and regulatory costs and insurance costs. We have recorded in the past and may be required to record in the future additional expenses for costs associated with compliance with regulations. The costs of complying with future environmental and worker health and safety laws and regulations could have a material adverse effect on our business, financial condition and results of operations.

Our future success is dependent on our ability to retain key personnel, including our executive officers, and attract qualified personnel. If we lose the services of these individuals or are unable to attract new talent, our business will be adversely affected.

Our future operating results depend in significant part upon the continued contributions of our key technical and senior management personnel, many of whom would be difficult to replace. We are particularly dependent on the continued service of Thomas D. Logan, our President, Chief Executive Officer and Chairman of the Board, W. Antony Besso, our Regional Vice President, EMEA, and President, Health Physics Division, Iain F. Wilson, our Regional Vice President, Asia, and President, Sensing Systems Division, and Jean-Louis Gouronc, our President, Radiation Monitoring Systems.

Our future operating results also depend in significant part upon our ability to attract, train and retain qualified management, manufacturing and quality assurance, engineering, marketing, sales and support personnel. In particular, engineers skilled in the analog technologies used in certain of our products are in high demand and competition to attract such personnel is intense. In addition, the expected increase in construction of new NPPs may exacerbate the shortage of radiation engineers and other qualified personnel. We are continually recruiting such personnel; however, we cannot assure you that we will be successful in attracting, training or retaining such personnel now or in the future. There may be only a limited number of persons with the requisite skills to serve in these positions, and it may be increasingly difficult for us to hire such persons over time. The high demand for such personnel may increase the costs to us to recruit and retain employees.

The loss of any key employee, the failure of any key employee to perform in his or her current position, our inability to attract, train and retain skilled employees as needed or the inability of our officers and key employees to expand, train and manage our employee base could materially and adversely affect our business, financial condition and results of operations.

Our ability to compete successfully and achieve future growth will depend on our ability to protect our intellectual property and to operate without infringing the intellectual property of others.

Our business is largely dependent upon our design, engineering, manufacturing and testing know-how. We attempt to protect our intellectual property rights through trade secret laws, non-disclosure agreements, confidentiality procedures and employee disclosure and invention assignment agreements. To a lesser extent, we may also seek to protect our intellectual property through patents, trademarks and copyrights. We rely upon unpatented proprietary radiation detection expertise, continuing technological innovation and other trade secrets to develop and maintain our competitive position, some of which is licensed from third parties. Confidentiality agreements with our employees and third parties are often limited in duration and could be breached, and therefore they may not provide meaningful protection for our trade secrets or proprietary radiation detection expertise. Adequate remedies may not be available in the event of an unauthorized use or disclosure of our trade secrets. Others may obtain knowledge of our trade secrets through independent development or other access by legal means. It is possible that our efforts to protect our intellectual property rights may not:


	•	prevent our competitors from independently developing similar products, duplicating our products or designing around the patents owned by us;

	•	prevent third-party patents from having an adverse effect on our ability to do business;

	•	provide adequate protection for our intellectual property rights;

	•	prevent disputes with third parties regarding ownership of, or exclusive rights to, our intellectual property;

	•	prevent disclosure of our trade secrets and know-how to third parties or into the public domain;

	•	prevent the challenge, invalidation or circumvention of our existing patents;

	•	result in patents that lead to commercially viable products or provide competitive advantages for our products; and

	•	result in issued patents and registered trademarks from any of our pending applications.

The laws of foreign countries also may not adequately protect our intellectual property rights. Many U.S. companies have encountered substantial infringement problems in foreign countries. Because we conduct a substantial portion of our operations and a majority of our sales have been outside of the United States, we have significant exposure to foreign intellectual property risks.

Others have in the past attempted, and may in the future attempt, to copy or otherwise obtain and use our intellectual property without our consent. Monitoring the unauthorized use of our intellectual property is difficult. There is a risk that our customers or their end users’ customers may attempt to copy or otherwise obtain and use our intellectual property without our consent. It may be necessary, from time to time, to initiate litigation against one or more third parties, including our customers or companies with whom we have manufacturing relationships, to preserve our intellectual property rights or to challenge the validity and scope of proprietary rights asserted by others, and we could face counterclaims. Legal disputes with our customers or companies with whom we have manufacturing relationships could substantially harm our relationships and sales. Litigation is expensive and time consuming, and an adverse outcome could subject us to significant liability for damages or invalidate our proprietary rights.

From time to time, third parties may claim that we have infringed upon, misappropriated or misused other parties’ proprietary rights, and we may already be infringing without knowing it. Any of these events or claims could result in litigation. Such litigation, whether as plaintiff or defendant, could result in significant expense to us and divert the efforts of our technical and management personnel, whether or not such litigation is ultimately determined in our favor. In the event of an adverse result in such litigation, we could be required to pay substantial damages, cease the manufacture, use and sale of certain products, expend significant resources to develop or acquire non-infringing technology, discontinue the use of certain processes, obtain licenses to use the infringed technology, or indemnify our customers. Product development or license negotiating would likely result in significant expense to us and divert the efforts of our technical and management personnel. We cannot assure you that we would be successful in such development or acquisition or that such licenses would be available on reasonable terms, or at all.

Our obligations to indemnify our customers for the infringement by our products of the intellectual property rights of others could require us to pay substantial damages.

We currently have in effect a number of agreements in which we have agreed to defend, indemnify and hold harmless our customers and suppliers from damages and costs that may arise from the infringement by our products of third-party patents, trademarks or other proprietary rights. We may periodically have to respond to claims and initiate or participate in litigation in connection with these indemnification obligations, which may result in our paying substantial damages. Our insurance does not cover intellectual property infringement.

Some of our workforce is represented by labor unions in the United States and by works councils and trade unions in the EU, which may lead to work stoppages that could adversely affect our business.

As of December 31, 2009, approximately 34, or 12%, of our U.S. employees were unionized, and the majority of our EU employees are members of, or are represented by, works councils or trade unions. Since 1988, we have experienced only two work stoppages, at our facility in Lamanon, France. We may experience work stoppages or other labor problems in the future, which could adversely affect our business. We cannot predict how stable our relationships will be or whether we will be able to satisfy union or works council requirements without impacting our operating results and financial condition. Union and works council rules may limit our flexibility to respond to changing market conditions and the application of these rules could harm our business. The unions and works councils may also limit our flexibility in dealing with our workforce. Work stoppages and instability in our relationships could negatively impact the timely production of our products, which could strain relationships with customers and cause a loss of revenue that would adversely affect our results of operations.

Our operations could be subject to natural disasters and other business disruptions, which could materially adversely affect our business and increase our expenses.

Our operations could be subject to natural disasters and other business disruptions, which could harm our future revenue and financial condition and increase our costs and expenses. For example, our corporate headquarters in San Ramon, California and the center of operations of our Dosimetry Services division in Irvine, California are located near major earthquake fault lines. In the event of a major earthquake or other natural or manmade disaster, we could experience business interruptions, destruction of or damage to facilities and/or loss of life, any of which could have a material adverse effect on our business and increase our expenses.

Risks Related to this Offering and Our Common Stock

If we cannot generate sufficient operating cash flow and obtain external financing, we may be unable to make all of our planned capital expenditures and other expenses.

Our ability to fund anticipated capital expenditures and other expenses depends on generating sufficient cash flow from operations and the availability of external financing. Since our inception in 2005, ACAS and its affiliates have provided us with the capital and debt financing that we have used to fund our growth and operations. Although ACAS will continue to be a controlling stockholder in our company upon completion of this offering, ACAS is under no obligation to continue making capital investments in us or to provide debt financing to us.

Our debt service obligations and our capital expenditures, together with on-going operating expenses, will be a substantial drain on our cash flow and may decrease our cash balances. The timing and amount of our capital requirements cannot be precisely determined at this moment and will depend on a number of factors, including demand for our products, product mix, changes in industry conditions and market competition. We intend to regularly assess markets for external financing opportunities, including debt and equity. Such financing may not be available when needed or, if available, may not be available on satisfactory terms, particularly in light of the limited financing available as a result of the current global financial crisis. Any equity financing would cause further dilution to our stockholders. See “Dilution.” Our inability to obtain needed financing or to generate sufficient cash from operations may require us to abandon projects or curtail capital expenditures, and we could be materially adversely affected. If we are not able to independently generate excess free cash flow and obtain third party debt or equity financing, our ability to grow our business may be materially adversely affected.

Upon completion of this offering, ACAS will continue to have an effective veto over matters determined by our Board of Directors and will be in a position to determine the outcome of all matters submitted to a stockholder vote as long as it continues to hold a majority of our outstanding common stock, which will limit your ability to influence corporate actions and may adversely affect the market price of our common stock.

Upon completion of this offering, ACAS and its affiliates will collectively hold approximately % of our outstanding common stock, or approximately % if the underwriters exercise in full their over-allotment option to purchase additional shares of common stock. As a result, ACAS will continue to determine the outcome of votes on all matters requiring approval by our stockholders, including the election of directors, the adoption of amendments to our Certificate of Incorporation and Bylaws and approval of significant corporate transactions, as long as it continues to hold a majority of our outstanding common stock. In addition, a provision of the Bylaws that we will adopt upon the consummation of this offering will provide that at least one of the directors designated by ACAS must be part of the majority in any action taken by our Board of Directors so long as ACAS and its affiliated funds hold at least 50.1% of our outstanding common stock, other than on matters in which ACAS has a conflict of interest (as it would if it appointed a majority of our directors). Our Bylaws will also provide that ACAS will have the right to designate three of our seven directors so long as ACAS and its affiliated funds hold at least 50.1% of our outstanding common stock, two directors so long as they hold at least 25% but less than 50.1% and one director so long as they hold at least 10% but less than 25%. ACAS will also be able to take actions that have the effect of delaying or preventing a change in control of us or discouraging others from making tender offers for our shares, which could prevent

stockholders from receiving a premium for their shares. These actions may be taken even if other stockholders oppose them. In addition, this significant concentration of stock ownership may adversely affect the trading price for our common stock because investors often perceive disadvantages in owning stock in companies with controlling stockholders. This concentration of control could be disadvantageous to other stockholders with interests different from those of our principal stockholder and the trading price of our common stock could be adversely affected. See “Principal Stockholders” for a more detailed description of the ownership of our common stock.

Conflicts of interest may arise because some of our directors are principals of ACAS.

Three persons designated by ACAS will serve on our Board of Directors upon the consummation of this offering. ACAS and its affiliates may invest in entities that directly or indirectly compete with us, or companies in which they currently invest may begin competing with us. As a result of these relationships, when conflicts between the interests of ACAS and the interests of our other stockholders arise, these directors may not be disinterested.

Although our directors and officers will have a duty of loyalty to us under Delaware law and the Certificate of Incorporation that we will adopt prior to the consummation of this offering, transactions that we enter into in which a director or officer has a conflict of interest are generally permissible so long as the material facts relating to the director’s or officer’s relationship or interest as to the transaction are disclosed to our Board of Directors and a majority of our disinterested directors, or a committee consisting solely of disinterested directors, approves the transaction.

ACAS and its affiliates do not have any duty to refrain from engaging directly or indirectly in the same or similar business activities or lines of business that we do.

Under the Certificate of Incorporation that we will adopt upon the consummation of this offering, none of ACAS or its affiliates and investment funds, or any other ACAS entity, nor any director, officer, stockholder, member, manager and/or employee of an ACAS entity, has any duty to refrain from engaging directly or indirectly in the same or similar business activities or lines of business that we do. In the event that any ACAS entity acquires knowledge of a potential transaction or matter which may be a corporate opportunity for both itself and us, the ACAS entity will not have any duty to communicate or offer the corporate opportunity to us and may pursue or acquire the corporate opportunity for itself or offer the opportunity to another person. In addition, none of ACAS’s designees on our Board of Directors will be required to offer to us any transaction opportunity of which he or she becomes aware and could take any such opportunity for him or herself or offer it to other companies (including ACAS and its other portfolio companies) in which they have an investment, unless such opportunity is expressly offered to him or her solely in his or her capacity as a director of us.

As a “controlled company,” as defined in the NASDAQ Marketplace Rules, we qualify for, and rely on, exemptions from certain corporate governance requirements.

ACAS owns, and will continue to own immediately after the completion of this offering, common stock representing more than a majority of the voting power in the election of our directors. As a result, we are considered a “controlled company” within the meaning of the corporate governance standards of the NASDAQ Marketplace Rules. Under these rules, a “controlled company” may elect not to comply with certain corporate governance requirements, including the requirement that a majority of its board of directors consist of independent directors, the requirement that it have a nominating/corporate governance committee that is composed entirely of independent directors for the purposes of director nominations and the requirement that it have a compensation committee that is composed entirely of independent directors for the purposes of approving executive compensation. We have elected to be treated as a controlled company and will rely on these exemptions. As a result, we do not have a majority of independent directors and our compensation and nominating and corporate governance committees do not consist entirely of independent directors. Furthermore, until one year following this offering, as permitted by applicable rules, we do not anticipate having an audit committee consisting solely of independent directors. Accordingly, you do not have the same protection afforded to stockholders of companies that are subject to all of the NASDAQ Marketplace corporate governance requirements.

The price of our common stock may be volatile and subject to wide fluctuations.

The market price of our common stock may be subject to wide fluctuations due to a number of factors. We may experience significant period-to-period fluctuations in our backlog, revenue and operating results in the future and any such variations may cause our stock price to fluctuate. It is likely that in some future period our operating results will be below the expectations of securities analysts or investors. If this occurs, our stock price could drop significantly. A number of factors, in addition to those cited in other risk factors applicable to our business, may contribute to fluctuations in our backlog, revenue and operating results, including:


	•	the timing and volume of orders from our customers;

	•	the rate of acceptance of our products by our customers;

	•	the rate of adoption of our products in the end markets we target;

	•	delays or cancellations in the construction of new NPPs by our customers;

	•	cancellations or deferrals of customer orders in anticipation of new products or product enhancements from us or our competitors or other providers;

	•	changes in product mix; and

	•	the rate at which new markets emerge for products we are currently developing.

Broad market and industry factors may also adversely affect the market price of our common stock, regardless of our actual operating performance. Market and industry factors that could cause fluctuations in our stock price may include, among other things:


	•	incidents affecting the nuclear industry;

	•	regulatory changes or legal developments affecting the nuclear industry;

	•	changes in financial estimates by us or by any securities analysts who might cover our stock, or our failure to meet the estimates made by securities analysts;

	•	changes in the market valuations of other companies operating in our industry;

	•	announcements by us or our competitors of significant acquisitions, strategic partnerships or divestitures;

	•	additions or departures of key personnel; and

	•	a general downturn in the stock market.

The market price of our common stock also might decline in reaction to events that affect other companies in our industry, even if these events do not directly affect us. The initial public offering price of our common stock will be determined through negotiations between the representatives of the underwriters, ACAS and us and may not be representative of the price that will prevail in the open market. You might be unable to resell your shares at or above the offering price. In the past, companies that have experienced volatility in the market price of their stock have been the subjects of securities class action litigation. If we were to become the subject of securities class action litigation, it could result in substantial costs and a diversion of management’s attention and resources.

We have and will continue to incur increased costs as a result of becoming a reporting company.

We have and will continue to face increased legal, accounting, administrative and other costs as a result of becoming a reporting company that we did not incur as a private company. The Sarbanes-Oxley Act of 2002, as well as rules subsequently implemented by the Securities and Exchange Commission, or the SEC, and the Public Company Accounting Oversight Board, have required changes in the corporate governance practices of public companies. We expect these rules and regulations to increase our legal and financial compliance costs and to make legal, accounting and administrative activities more time consuming and costly. For example, upon the consummation of this offering we will add independent directors, create additional committees of our Board of Directors and adopt policies regarding internal controls and disclosure controls and procedures. We also expect to incur substantially higher costs to obtain directors and officers’ insurance.

In addition, as we gain experience with the costs associated with being a reporting company, we may identify and incur additional overhead costs.

Our internal control over financial reporting does not currently meet the standards required by Section 404 of the Sarbanes-Oxley Act, and failure to achieve and maintain effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on us.

Our internal control over financial reporting does not currently meet the standards required by Section 404 of the Sarbanes-Oxley Act, standards that we will be required to meet in the course of preparing our fiscal 2011 financial statements. We currently have material weaknesses in our internal controls and do not currently have comprehensive documentation of our internal controls, nor do we document or test our compliance with these controls on a periodic basis in accordance with Section 404 of the Sarbanes-Oxley Act. Furthermore, we have not tested our internal controls in accordance with Section 404 and, due to our lack of documentation, such a test would not be possible to perform at this time.

We are in the early stages of addressing our internal control procedures to satisfy the requirements of Section 404, which requires an annual management assessment of the effectiveness of our internal control over financial reporting. If, as a public company, we are not able to implement the requirements of Section 404 in a timely manner or with adequate compliance, our independent registered public accounting firm may not be able to attest to the effectiveness of our internal control over financial reporting. If we are unable to maintain adequate internal control over financial reporting, we may be unable to report our financial information on a timely basis, may suffer adverse regulatory consequences or violations of applicable stock exchange listing rules and may breach the covenants under our credit facilities. There could also be a negative reaction in the financial markets due to a loss of investor confidence in us and the reliability of our financial statements.

Future sales of shares could depress our stock price.

If our existing stockholders sell substantial amounts of our common stock in the public market following this offering, the market price of our common stock could decline. Based on shares outstanding as of December 31, 2009, upon completion of this offering we will have outstanding approximately shares of common stock. Of these shares, only the shares of common stock sold in this offering will be freely tradable, without restriction, in the public market. After the lock-up agreements pertaining to this offering expire, our existing stockholders will be able to sell their shares in the public market, subject to legal restrictions on transfer. Upon the consummation of this offering, we will enter into a registration rights agreement that provides for registration rights with respect to the shares of our common stock that will be held by ACAS and its affiliates, Thomas D. Logan, W. Antony Besso and certain other stockholders following this offering. Registration of the sale of the common stock would permit their sale into the market immediately. If for any reason ACAS sells a large number of shares, the market price of our common stock could decline, as these sales may, among other things, be viewed by the public as an indication of an upcoming or recently occurring shortfall in the financial performance of our company. Moreover, the perception in the public market that these investors might sell our common stock could depress the market price of the common stock. See “Shares Eligible for Future Sale” for more detailed information. Additionally, we may sell or issue additional shares of common stock in subsequent public offerings or in connection with acquisitions.

If securities or industry analysts do not publish research or reports about our business, if they adversely change their recommendations regarding our stock or if our results of operations do not meet their expectations, our stock price and trading volume could decline.

The trading market for our common stock will be influenced by the research and reports that industry or securities analysts publish about us or our business. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline. In addition, it is likely that in some future period our operating results will be below the expectations of securities analysts or investors. If one or more of the analysts who cover us downgrade our stock, or if our results of operations do not meet their expectations, our stock price could decline.

Some provisions of our Certificate of Incorporation and Bylaws may deter third parties from acquiring us and diminish the value of our common stock.

The Certificate of Incorporation and Bylaws that we will adopt upon the consummation of this offering will provide for, among other things:


	•	restrictions on the ability of our stockholders to fill a vacancy on our Board of Directors;

	•	our ability to issue preferred stock with terms that our Board of Directors may determine, without stockholder approval;

	•	the absence of cumulative voting in the election of directors;

	•	advance notice requirements for stockholder proposals and nominations;

	•	our Board of Directors to be divided into three classes, with each class serving staggered terms; and

	•	the requirement that at least one of the directors designated by ACAS must be part of the majority in any action taken by our Board of Directors so long as ACAS and its affiliated funds hold at least 50.1% of our outstanding common stock, other than on matters in which ACAS has a conflict of interest (as it would if it appointed a majority of our directors).

These provisions may discourage, delay or prevent a transaction involving a change in control of our company that is in the best interest of our minority stockholders. Even in the absence of a takeover attempt, the existence of these provisions may adversely affect the prevailing market price of our common stock if they are viewed as discouraging future takeover attempts.

We do not anticipate paying any cash dividends for the foreseeable future.

We currently intend to retain our future earnings, if any, for the foreseeable future, to repay indebtedness and to fund the development and growth of our business. We do not intend to pay any dividends to holders of our common stock and the agreements governing our debt significantly restrict our ability to pay dividends. As a result, capital appreciation in the price of our common stock, if any, will be your only source of gain on an investment in our common stock. See “Dividend Policy.”

New investors in our common stock will experience immediate and substantial book value dilution after this offering.

The initial public offering price of our common stock will be substantially higher than the pro forma net tangible book value per share of the outstanding common stock immediately after this offering. Based on an assumed initial public offering price of $ per share (the midpoint of the price range set forth on the cover of this prospectus) and our net tangible book value as of December 31, 2009, if you purchase our common stock in this offering, you will suffer immediate dilution in net tangible book value per share of approximately $ per share. See “Dilution.”

FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements that are subject to risks and uncertainties. All statements other than statements of historical fact included in this prospectus are forward-looking statements. Forward-looking statements give our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,” “believe,” “may,” “should,” “can have,” “likely” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events.

The forward-looking statements contained in this prospectus are based on assumptions that we have made in light of our industry experience and on our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances. As you read and consider this prospectus, you should understand that these statements are not guarantees of performance or results. They involve assumptions as well as risks and uncertainties, some of which are beyond our control. Although we believe that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect our actual financial results and cause them to differ materially from those anticipated in the forward-looking statements. We believe these factors include, but are not limited to, those described under “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Should one or more of these risks or uncertainties materialize, or should any of these assumptions prove incorrect, our actual results may vary in material respects from those projected in these forward-looking statements.

Any forward-looking statement made by us in this prospectus speaks only as of the date on which we make it. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

USE OF PROCEEDS

We estimate that the net proceeds from this offering, after deducting underwriting discounts and estimated offering expenses will be approximately $ million, assuming the shares are offered at $ per share (the midpoint of the price range set forth on the cover page of this prospectus). We intend to use $ million of the net proceeds from this offering to repay certain borrowings from ACAS and its affiliates. We also intend to use net proceeds from this offering to make a one-time payment of $8.0 million to ACFS, a subsidiary of ACAS, to terminate an investment banking services agreement between us and ACFS. See “Certain Relationships and Related Party Transactions.” We also intend to use $0.8 million of the net proceeds from this offering to make bonus payments upon completion of this offering to certain of our employees, including an aggregate of $0.6 million to certain of our executive officers. See “Executive Compensation — Compensation Discussion and Analysis — Elements of Compensation.” A $1.00 increase (decrease) in the assumed initial public offering price of $ per share would increase (decrease) the net proceeds to us from this offering by $ million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting underwriting discounts and commissions and estimated expenses payable by us.

We intend to repay with a portion of the net proceeds from this offering the following outstanding debt of our subsidiaries that is held by our principal stockholder, ACAS, or its affiliates. For purposes of this section, EURIBOR means the Euro Interbank Offered Rate and LIBOR means the London Interbank Offered Rate.


					Interest Rate		Principal Balance at		Principal Balance at
			Contractual		at December 31,		December 31,		February 28,
	Due		Interest Rate		2009		2009(1)		2010(1)
							(In thousands)		(In thousands)
Revolving Credit Facilities:
$20.25 million		July 2011		LIBOR + 4.5%		4.73%	$	20,250	$	20,250
$14.0 million		July 2011		LIBOR + 5%		5.23%		13,997		13,997
$8.2 million		July 2011		EURIBOR + 2%		2.47%		7,130		7,130

							$	41,377	$	41,377

Senior Term Notes:
$24.9 million Senior Term B		July 2011		EURIBOR + 3%		3.47%	$	24,944	$	24,944
$4 million Senior Term C		Oct 2011		LIBOR + 9%		9.23%		4,000		4,000
$27 million Senior Term D		Oct 2011		LIBOR + 6.5%		6.73%		25,920		25,853

							$	54,864	$	54,797


(1)		Interest is paid by us to the lender monthly in arrears, and accordingly, the balance at each month’s end reflects only the principal balance of the related obligation. Any decrease in the principal balance between periods is due to scheduled principal repayments expected to be made by us.

We intend to repay all other debt held by ACAS and its affiliates ($87.9 million as of February 28, 2010) with borrowings under our anticipated new bank credit facilities that we expect to enter into upon the consummation of this offering.

DIVIDEND POLICY

We have never declared or paid any cash dividends on our common stock. We currently intend to retain our future earnings, if any, for the foreseeable future, to repay indebtedness and to fund the development and growth of our business. We do not intend to pay dividends to holders of our common stock and the agreements governing our anticipated new bank credit facilities significantly restrict our ability to pay cash dividends.

CAPITALIZATION

The following table sets forth our consolidated capitalization as of December 31, 2009:


	•	on an actual basis; and


	•	on a pro forma basis to give effect to the conversion of our Series A Convertible Participating Preferred Stock into 1,203,045 shares of common stock pursuant to the conversion terms in our Certificate of Incorporation and the conversion of 2,091 shares of Class A Voting Common Stock and 45,650 shares of Class B Non-Voting Common Stock on a one-for-one basis; and


	•	on a pro forma as adjusted basis to give effect to:


	•	the conversion of our Series A Convertible Participating Preferred Stock into 1,203,045 shares of common stock pursuant to the conversion terms in our Certificate of Incorporation based on a conversion rate of 1.1328 for Series A-1 preferred stock and 1.0368 for Series A-2 preferred;


	•	the conversion of 2,091 shares of Class A Voting Common Stock and 45,650 shares of Class B Non-Voting Common Stock into 47,741 shares of our common stock on a one-for-one basis;


	•	the sale by us of shares of our common stock in this offering at an assumed initial public offering price of $ per share (the midpoint of the range set forth on the cover page of this prospectus);


	•	the application, as described in “Use of Proceeds,” of a portion of the net proceeds from the shares sold in this offering (after deducting underwriting discounts and estimated offering expenses of $ million) to effect the repayment of approximately $ million of our indebtedness to ACAS and its affiliates, to make a one-time, $8.0 million payment to ACFS and to make aggregate bonus payments of $0.8 million to certain of our employees, including an aggregate of $0.6 million to certain of our executive officers;


	•	the increase in accumulated deficit due to the write-off of loan origination fees previously capitalized;


	•	the increase in additional paid-in capital and corresponding increase in accumulated deficit to reflect the compensation expense associated with stock options that will vest upon this offering; and


	•	our intent to repay all other debt held by ACAS and its affiliates (estimated on a pro forma basis to be $ million as of February 28, 2010) with borrowings under our anticipated new bank credit facilities that we expect to enter into upon the consummation of this offering.

You should read this table along with “Use of Proceeds,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and the related notes appearing elsewhere in this prospectus.


	As of December 31, 2009
					Pro Forma
	Actual		Pro Forma(1)		as Adjusted(1)
	(in thousands, except share data)

Total debt, including current portion and other payables to ACAS:
Other accrued liabilities — payable to ACAS	$	—	$		$	—
Notes payable to ACAS	$	183,790	$		$
Notes payable to third parties		5,799

New indebtedness
Revolving credit facility	$	—	$	—	$
Term loan facility		—		—

Stockholders’ equity:
Series A-1 Convertible Participating Preferred Stock, $0.001 par value; 1,200,000 shares authorized, actual; 678,804 shares issued and outstanding, actual; none authorized, pro forma; none authorized, pro forma as adjusted	$	1	$	—	$	—


	As of December 31, 2009
						Pro Forma
	Actual			Pro Forma(1)		as Adjusted(1)
	(in thousands, except share data)

Series A-2 Convertible Participating Preferred Stock, $0.001 par value; 300,000 shares authorized, actual; 70,000 shares issued and outstanding, actual; none authorized, pro forma; none authorized, pro forma as adjusted		—			—		—
Class A Voting Common Stock, $0.001 par value; 2,500,000 shares authorized, actual; 2,091 shares issued and outstanding, actual; none authorized, pro forma; none authorized, pro forma as adjusted		—			—		—
Class B Non-Voting Common Stock, $0.001 par value; 700,000 shares authorized, actual; 45,650 shares issued and outstanding, actual; none authorized, pro forma; none authorized, pro forma as adjusted		—
Common stock, $0.001 par value; none authorized, actual; none issued and outstanding, actual; shares authorized, pro forma; shares issued and outstanding, pro forma; shares authorized, pro forma as adjusted; shares issued and outstanding, pro forma as adjusted		—			—		—
Additional paid-in capital		99,016
Accumulated deficit		(103,332	)
Accumulated other comprehensive income		11,995

Total stockholders’ equity		7,680

Total capitalization	$	197,269		$		$


(1)		Assuming the number of shares sold by us in this offering remains the same as set forth on the cover page, a $1.00 increase or decrease in the assumed initial public offering price would increase or decrease, as applicable, our total cash, total stockholders’ equity and total capitalization by approximately $ million.

The table above excludes, as of December 31, 2009:


	•	113,288 shares of common stock subject to outstanding options at a weighted average exercise price of $122.77 per share;


	•	an aggregate of 111,562 shares of common stock either reserved for issuance under our existing stock option plan or to be reserved for issuance under our amended and restated stock plan to become effective in connection with this offering, of which 15,091 shares are expected to be granted in the form of stock options to our employees and outside directors, including options to purchase 4,001 shares to be granted to our executive officers, immediately following the pricing of this offering at an exercise price equal to the initial public offering price; and


	•	402,428 shares of common stock subject to outstanding warrants as of December 31, 2009 at a weighted average exercise price of $0.00152 per share. These warrants only become exercisable upon a sale, liquidation or dissolution of the Company or approval by our Board of Directors. Our Board of Directors has resolved that all of these warrants will become exercisable upon the consummation of this offering.

DILUTION

If you invest in our common stock, your interest will be diluted to the extent of the difference between the public offering price per share of our common stock and the pro forma net tangible book value per share of common stock initially upon completion of this offering.

Net tangible book value per share represents the amount of our total tangible assets less total liabilities, divided by the number of shares of common stock outstanding. After giving effect to the sale of shares of common stock offered in this offering and after deducting underwriting discounts and estimated offering expenses, our pro forma net tangible book value as of December 31, 2009 would have equaled $ per share of common stock. This represents an immediate increase in net tangible book value of $ per share to our existing stockholders and an immediate dilution in net tangible book value of $ per share to new stockholders of common stock in this offering. If the initial public offering price is higher or lower, the dilution to new stockholders will be greater or less. The following table summarizes this per share dilution:


Assumed initial public offering price per share		$
Net tangible book value per share as of December 31, 2009	$
Increase per share attributable to this offering

Pro forma net tangible book value per share after this offering

Dilution in pro forma net tangible book value per share to new stockholders		$

A $1.00 increase or decrease in the assumed initial public offering price of $ per share would increase or decrease, as applicable, our pro forma net tangible book value by $ million, the pro forma net tangible book value per share by $ per share, and the dilution in pro forma net tangible book value per share to new stockholders by $ per share.

If the underwriters exercise their over-allotment in full, pro forma net tangible book value per share after this offering will be $ , and dilution in pro forma net tangible book value per share to new stockholders will be $ .

The following table summarizes on a pro forma basis, as of December 31, 2009, the differences between our existing stockholders and new stockholders with respect to the number of shares of common stock issued by us, the total consideration paid and the average price per share paid:

Shares Purchased

Total Consideration

Average Price

Number

Percent

Amount

Percent

Per Share

(in thousands)

Existing stockholders

New stockholders

A $1.00 increase or decrease in the assumed initial public offering price of $ per share would increase or decrease, as applicable, total consideration paid by new stockholders and total consideration paid by all stockholders by $ million.

If the underwriters exercise their over-allotment option in full, the following will occur: (1) the number of shares of common stock held by existing stockholders will represent approximately % of the total number of shares of common stock outstanding after this offering; and (2) the number of shares of common stock held by new public stockholders will be increased to , or approximately % of the total number of shares of common stock outstanding after this offering.

The number of shares of common stock to be outstanding after this offering is based on 1,250,786 shares outstanding as of December 31, 2009 and excludes:


	•	113,288 shares of common stock subject to outstanding options as of December 31, 2009 at a weighted average exercise price of $122.77 per share;


	•	an aggregate of 111,562 shares of common stock either reserved for issuance under our existing stock option plan or to be reserved for issuance under our amended and restated stock plan to become


		effective in connection with this offering, of which 15,091 shares are expected to be granted in the form of stock options to our employees and outside directors, including options to purchase 4,001 shares to be granted to our executive officers, immediately following the pricing of this offering at an exercise price equal to the initial public offering price; and


	•	402,428 shares of common stock subject to outstanding warrants as of December 31, 2009 at a weighted average exercise price of $0.00152 per share. These warrants only become exercisable upon a sale, liquidation or dissolution of the Company or approval by our Board of Directors. Our Board of Directors has resolved that all of these warrants will become exercisable upon the consummation of this offering.

To the extent that options or warrants are exercised, there may be further dilution to new stockholders.

SELECTED CONSOLIDATED FINANCIAL DATA

You should read the following selected consolidated historical financial data below in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements, related notes and other financial information included elsewhere in this prospectus. The selected financial data in this section is not intended to replace the consolidated financial statements and related notes included elsewhere in this prospectus.

The selected consolidated statements of operations data for each of the three fiscal years ending June 30, 2007, 2008 and 2009 and the consolidated balance sheet data as of June 30, 2008 and 2009 are derived from our audited annual consolidated financial statements and related notes included elsewhere in this prospectus. The consolidated statements of operations data for the fiscal year ended June 30, 2006 and the consolidated balance sheet data as of June 30, 2007 are derived from our audited consolidated financial statements not included in this prospectus. The consolidated statements of operations data for the fiscal year ending June 30, 2005 and the consolidated balance sheet data as of June 30, 2005 and 2006 are derived from our unaudited financial statements not included in this prospectus. Until their merger in December 2005 resulting in the formation of Mirion, we were comprised of GDS, IST and Synodys, entities which were under the common control of ACAS. The consolidated statements of operations data for the six months ended December 31, 2008 and 2009 and the consolidated balance sheet data at December 31, 2009 are derived from our unaudited consolidated financial statements included elsewhere in this prospectus. Our historical results are not necessarily indicative of the results that should be expected in the future and results for the six months ended December 31, 2009 are not necessarily indicative of results to be expected for the full year. The amounts below are in thousands, except percentages, shares and per share data.


																Six Months Ended
	Year Ended June 30,															December 31,
	2005			2006			2007			2008			2009			2008			2009

Consolidated Statement of Operations Data:
Revenue	$	129,281		$	145,770		$	169,033		$	191,769		$	201,763		$	100,519		$	108,658
Cost of revenue		74,188			77,999			94,321			102,790			105,954			53,793			60,140


Gross profit		55,093			67,771			74,712			88,979			95,809			46,726			48,518

% of revenue		42.6	%		46.5	%		44.2	%		46.4	%		47.5	%		46.5	%		44.7	%
Operating expenses
Selling, general and administrative expenses		45,231			69,011			59,449			63,177			65,649			31,310			33,754
Research and development expenses		6,548			9,726			11,875			14,865			11,282			6,277			5,202

Total operating expenses		51,779			78,737			71,324			78,042			76,931			37,587			38,956

Income (loss) from operations		3,314			(10,966	)		3,388			10,937			18,878			9,139			9,562
Interest expense, net		21,287			20,689			19,153			20,207			17,711			9,736			7,570
Other income (expense), net		10,465			(5,103	)		(1,001	)		(1,759	)		(490	)		71			(530	)

(Loss) Income before provision for income taxes		(28,438	)		(26,552	)		(14,764	)		(7,511	)		1,657			(668	)		2,522
Provision for income taxes		2,122			1,525			4,937			5,838			5,612			2,890			3,293

Net loss	$	(30,560	)	$	(28,077	)	$	(19,701	)	$	(13,349	)	$	(3,955	)	$	(3,558	)	$	(771	)

Paid-in-kind preferred dividends		(1,785	)		(4,949	)		(8,141	)		(8,993	)		(9,892	)		(4,864	)		(5,369	)

Net loss allocable to common stockholders	$	(32,345	)	$	(33,026	)	$	(27,842	)	$	(22,342	)	$	(13,847	)	$	(8,422	)	$	(6,140	)

Net loss per common share allocable to common stockholders per share — basic and diluted				$	(738.51	)	$	(584.74	)	$	(468.72	)	$	(290.04	)	$	(176.41	)	$	(128.61	)

Weighted average number of shares used in computing net loss allocable to common stockholders — basic and diluted					44,720			47,614			47,666			47,741			47,741			47,741

Pro forma net loss per common share before conversion of preferred shares — basic and diluted(1)													$						$


Pro forma net income per common share — diluted(1)													$						$

Pro forma net income per common share — diluted as adjusted(1)													$						$


												As of
	Year Ended June 30,											December 31,
	2005			2006		2007		2008		2009		2009

Consolidated Balance Sheet Data:
Cash and cash equivalents(2)	$	4,073		$	4,858	$	6,561	$	8,959	$	5,390	$	6,934
Total assets		287,254			307,975		310,249		344,377		329,754		348,540
Notes payable to ACAS(3)		128,194			148,273		159,461		173,186		170,080		183,790
Total stockholder’s (deficit) equity		(41,751	)		35,419		21,263		19,152		6,847		7,680


	Year Ended June 30,						Six Months Ended December 31,
	2007		2008		2009		2008		2009

Other Data:
Adjusted EBITDA(4)	$	29,254	$	34,218	$	40,625	$	18,719	$	18,512
Amortization of intangible assets		12,200		10,140		8,144		4,161		3,699
Capital expenditures		4,316		4,953		6,649		2,441		3,354


							As of
	As of June 30,						December 31,
	2007		2008		2009		2009

Backlog(5)	$	143,887	$	177,956	$	183,960	$	247,083
Deferred contract revenue		44,640		53,539		62,031		66,747


(1)		Pro forma net loss per common share before conversion of preferred shares — basic and diluted and pro forma net income per common share — diluted and as adjusted for the year ended June 30, 2009 and the six months ended December 31, 2009 is calculated as follows:


	Year Ended			Six Months Ended
	June 30,			December 31,
	2009			2009
	(unaudited)

Numerator:
Net loss allocable to common shareholders	$	(13,847	)	$	(6,140	)
Interest expense from paydown of ACAS debt using proceeds of offering(a)

Pro forma net loss allocable to common shareholders before conversion of preferred shares
Effect of preferred stock dividends(b)		9,892			5,369

Pro forma net income allocable to common shareholders
Interest expense reduction from refinancing of ACAS debt(c)

Pro forma net income allocable to common shareholders — as adjusted


	Year Ended		Six Months Ended
	June 30, 2009		December 31, 2009
	(unaudited)

Denominator:
Weighted average shares outstanding from conversion of Class A and B Voting Common Stock(d)		47,741		47,741
Common shares issued in this offering(e)

Shares used in computing pro forma net loss per common share before conversion of preferred shares — basic and diluted
Weighted average shares outstanding from conversion of convertible preferred stock(f)		1,099,897		1,176,202

Shares used in computing pro forma net income per common share — basic
Weighted average common shares outstanding from exercise of warrants(g)		402,428		402,428
Weighted average common share equivalents of stock option(h)		15,091		27,068

Shares used in computing pro forma net income per common share — diluted and diluted as adjusted


(a)		The pro forma reduction in interest expense assumes the repayment of $ of ACAS debt using the net proceeds from this offering, giving effect to the elimination of the related interest expense as of the beginning of the period presented. The amount of interest expense eliminated by this adjustment is calculated from actual interest expense of $ and $ recorded in fiscal 2009 and for the six months ended December 31, 2009 in connection with the specific debt arrangements that will be repaid with the net proceeds of this offering. No tax expense has been provided related to this reduction in interest expense because we are in a net operating loss position and have a full valuation allowance in the affected jurisdictions.


(b)		The effect of preferred stock dividends is added back as a reduction to net loss allocable to common stockholders, assuming that all preferred stock has been converted into common shares as of the beginning of the period presented.


(c)		All ACAS debt not assumed to be repaid from the net proceeds from this offering is assumed to be refinanced with a loan from a third-party bank, at interest rates averaging % lower than existing interest rates with ACAS giving effect to the elimination of the related interest expense as of the beginning of the period presented. The amount of interest expense eliminated by this adjustment is calculated by taking the difference between the actual interest expense of $ and $ recorded in fiscal 2009 and for the six months ended December 31, 2009 in connection with the specific debt arrangements that will be repaid with the net proceeds of the new debt arrangements entered into concurrently with the completion of this offering and the interest expense on the new debt arrangements, calculated as the total of the new debt arrangements of $ multiplied by the average interest rate on those arrangements of %. No tax expense has been provided related to this reduction in interest expense because we are in a net operating loss position and have a full valuation allowance in the affected jurisdictions.


(d)		The weighted average common shares outstanding from the conversion of common stock assumes the conversion of all outstanding shares of Class A Voting Common Stock and Class B Non-Voting Common Stock on a one-for-one basis into 47,741 shares of common stock.


(e)		Includes all common shares issued in connection with this offering. Because distributions to ACAS, our principal stockholder, consisting of obligations under existing debt arrangements of $ and amounts due of $8.0 million to terminate an existing investment banking arrangement, exceed our earnings plus gross proceeds from this offering of $ , all common shares are included in the calculation under existing rules on pro forma calculations.


(f)		The weighted average common shares outstanding from the conversion of preferred stock assumes the conversion of all outstanding convertible preferred stock into common stock, including the conversion into common stock of all accrued and unpaid paid-in-kind dividends on convertible preferred stock. The 1,099,897 weighted average at June 30, 2009 is comprised of 864,307 A-1 preferred shares, which includes 185,503 accrued but unpaid paid-in-kind dividends, which are convertible at a rate of 1.1328 into 979,087 common shares and 116,522 A-2 preferred shares, which includes 46,522 accrued but unpaid paid-in-kind dividends, which are convertible at a rate of 1.0368 into 120,810 common shares. The 1,176,202 weighted average at December 31, 2009 is comprised of 917,558 A-1 preferred shares, which includes 238,754 accrued but unpaid paid-in-kind dividends, which are convertible at a rate of 1.1328 into 1,039,409 common shares and 131,937 A-2 preferred shares, which includes 61,937 accrued but unpaid paid-in-kind dividends, which are convertible at a rate of 1.0368 into 136,793 common shares. The increase in number of preferred shares between periods is due to the monthly accrual of preferred dividends which are paid in the form of additional shares of convertible preferred stock.


(g)		These warrants only become exercisable upon a sale, liquidation or dissolution of the Company or approval by our Board of Directors. Our Board of Directors has resolved that all of these warrants will become exercisable upon the consummation of this offering.


(h)		Includes the impact of the weighted average shares of common stock into which outstanding options are convertible. The shares used in computing pro forma net loss per common share before conversion of preferred shares — diluted and pro forma net income per common share — diluted and diluted as adjusted exclude 113,288 and 82,408 shares of common stock for the year ended June 30, 2009 and the six months ended December 31, 2009 because the effect would be anti-dilutive. This amount includes options expected to be granted immediately following the pricing of this offering at an exercise price equal to the initial public offering price.


(2)		As of December 31, 2009, we also had $6.9 million of restricted cash.

(3)		In addition, as of December 31, 2009, we had $5.8 million of outstanding debt held by third parties not affiliated with ACAS.

(4)		We include Adjusted EBITDA in this prospectus because (i) it is a basis upon which our management assesses our operating performance, (ii) it is a factor in the evaluation of the performance of our management in determining compensation and (iii) certain maintenance covenants under our debt agreements are tied to ratios based upon Adjusted EBITDA, as defined. Adjusted EBITDA, as defined in our debt agreements, is calculated as net income (loss) plus (a) without duplication and to the extent deducted in determining net income for such period, the sum of (i) interest expense, (ii) income tax expense, (iii) all amounts attributable to depreciation and amortization expense, (iv) any extraordinary cash charges in an amount not to exceed $4,000,000, (v) any extraordinary non-cash charges, (vi) any other non-cash charges (but excluding any non-cash charge in respect of an item that was included in net income in a prior period) and (vii) any non-recurring fees, costs and expenses as reflected in our consolidated financial statements and any non-recurring fees, costs and expenses incurred in connection with this offering minus (b) without duplication and to the extent included in net income, (i) any cash payments made in respect of non-cash charges described in clauses (a)(vi) or (a)(vii) taken in a prior period and (ii) any extraordinary gains and any non-cash items of income, all calculated on a consolidated basis in accordance with U.S. GAAP. Adjusted EBITDA is not a measure of financial performance calculated in accordance with U.S. GAAP, and should be viewed as a supplement to—not a substitute for—our results of operations presented on the basis of U.S. GAAP. Adjusted EBITDA also does not purport to represent cash flow provided by, or used in, operating activities in accordance with U.S. GAAP. Our statements of cash flows, included elsewhere in this prospectus, present our cash flow activity in accordance with U.S. GAAP. Furthermore, Adjusted EBITDA is not necessarily comparable to similarly titled measures reported by other companies.

The following is a reconciliation of cash (used in) provided by operating activities to Adjusted EBITDA:


										Six Months
										Ended
	Year Ended June 30,									December 31,
	2007			2008			2009			2008			2009

Cash (used in) provided by operating activities	$	(3,569	)	$	(6,712	)	$	10,031		$	(2,842	)	$	(4,835	)
Interest expense, net		19,153			20,207			17,711			9,736			7,570
Income tax expense		4,937			5,838			5,612			2,890			3,293
Fees paid to ACFS		1,625			1,625			1,739			893			813
Other nonrecurring charges(*)		6,645			5,458			5,867			1,778			631
Actuarial (gain) loss		282			226			(208	)		—			—
Pain-in-kind interest expense		(1,810	)		(1,904	)		(1,992	)		(993	)		(1,041	)
Loss on disposal of property, plant and equipment		(81	)		(502	)		(592	)		(302	)		(268	)
Amortization of loan fees, debt discount and preferred stock discount		(568	)		(785	)		(522	)		(262	)		(236	)
Provision for doubtful accounts		(96	)		(30	)		(140	)		(69	)		(25	)
Provision for deferred income taxes		1,010			1,238			1,013			(763	)		916
Change in operating assets and liabilities		1,726			9,559			2,084			8,653			11,653
Currency effects and other		—			—			22			—			41

Adjusted EBITDA	$	29,254		$	34,218		$	40,625		$	18,719		$	18,512


(*)		Represents non-recurring expenses, including severance expenses and costs associated with the preparation for our initial public offering, as well as certain professional and legal expenses.


(5)		Represents purchase orders or contracts received by us that have not been shipped. Amounts representing backlog are not recorded in our financial statements.

MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of the financial condition and results of our operations should be read together with “Selected Consolidated Financial Data” and the consolidated financial statements and the related notes included elsewhere in this prospectus. This discussion contains forward-looking statements, based on current expectations related to future events and our future financial performance, that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth under “Risk Factors” and elsewhere in this prospectus.

Overview

We provide our products and services through five segments: Health Physics, Radiation Monitoring Systems, Sensing Systems, Dosimetry Services and Imaging Systems. Our Health Physics segment derives revenue from the nuclear, defense and medical end markets. We provide our Health Physics customers, which include power and utility companies, military organizations, engineering companies as well as governmental agencies, with dosimeters, contamination & clearance monitors as well as equipment that detects and identifies radioactive isotopes. Our Radiation Monitoring Systems segment offers systems that provide process and post-event radiation monitoring to the nuclear end market. Our Radiation Monitoring Systems customers include power and utility companies, engineering companies, research laboratories, universities, as well as governmental agencies. Our Sensing Systems segment supplies electrical penetrations as well as reactor instrumentation & control equipment and systems to the builders and operators of nuclear reactors. Our Sensing Systems customers include power and utility companies, the U.S. Navy, as well as engineering companies. Our Dosimetry Services segment provides analytical services to determine occupational and environmental radiation exposure to employers of radiation workers in the nuclear and medical end markets. Our Dosimetry Services customers include power and utility companies, hospitals, governmental agencies, medical professionals, dentists and veterinarians. Our Imaging Systems segment provides specialized closed circuit camera systems used for inspection and surveillance in difficult and hazardous environments to the nuclear and other end markets. We provide these systems to power and utility companies, operators of waste management facilities, cement kilns and petrochemical facilities.

Of the $201.8 million in total revenue we generated in fiscal 2009, $69.1 million, or 34.2%, was attributable to our Health Physics segment, $41.1 million, or 20.4%, was attributable to our Radiation Monitoring Systems segment, $45.0 million, or 22.3%, was attributable to our Sensing Systems segment, $29.5 million, or 14.6%, was attributable to our Dosimetry Services segment and $17.1 million, or 8.5%, was attributable to our Imaging Systems segment. Please see Note 15 of our consolidated financial statements for additional financial information about our segments.

Despite achieving positive operating income in fiscal 2007, 2008 and 2009, we have not achieved positive net income, due in large part to our leverage, in any fiscal year since our inception in 2005. As of December 31, 2009, we had an accumulated deficit of $103.3 million. We expect to reduce our leverage through the repayment of certain of our indebtedness with the net proceeds from this offering. See “Use of Proceeds.”

We incorporated in Delaware in October 2005 as Global Monitoring Services, Inc. Our business was formed through a series of transactions in December 2005 resulting in the combination of three companies, all owned by ACAS, our principal stockholder, and its affiliates. The three companies were GDS, a provider of dosimetry services to the nuclear and medical industries, IST, a manufacturer of electrical penetrations, reactor instrumentation & control equipment and systems and imaging systems for the nuclear, defense and other

industries and Synodys, a designer and manufacturer of radiation detection, measurement, analysis and monitoring equipment for the nuclear, defense and medical industries. Following these transactions, we changed our name in January 2006 to Mirion Technologies, Inc.

We are a global company with operations in Canada, China, Finland, France, Germany, the United Kingdom and the United States. Accordingly, currency exchange rates can impact our reported results of operations. Revenue outside of the United States and Canada accounted for 64.1%, 61.6% and 62.7% of total revenue for fiscal 2008 and 2009 and the six months ended December 31, 2009. Please see Note 15 to our consolidated financial statements for additional financial information about geographic areas.

Our independent registered public accounting firm reported to us that at each of June 30, 2008, June 30, 2009 and September 30, 2009, we had material weaknesses in our internal controls over financial reporting which we have not yet corrected. The material weaknesses identified were with respect to our controls in our financial accounting and reporting functions, which are necessary in order to produce U.S. generally accepted accounting principles (U.S. GAAP) compliant financial statements. See “Risk Factors” for a further description of the foregoing material weaknesses.

References to “fiscal” before any year refer to our fiscal year ending on June 30th of the year referenced.

Key Indicators of Performance

In evaluating our business, our management considers Adjusted EBITDA as a key indicator of operating performance. We include Adjusted EBITDA in this prospectus because (i) it is a basis upon which our management assesses our operating performance, (ii) it is a factor in the evaluation of the performance of our management in determining compensation and (iii) certain maintenance covenants under our debt agreements are tied to ratios based upon Adjusted EBITDA, as defined. We define Adjusted EBITDA as net income (loss) less extraordinary gains (loss) and interest income, plus interest expense, charges against income for taxes, depreciation expense, amortization expense, mark to market (loss) gain, certain non-recurring charges, management fees paid to ACFS and all non-cash compensation expenses.

We use Adjusted EBITDA as a key performance measure because we believe it facilitates operating performance comparisons from period to period by excluding potential differences caused by variations in capital structures (affecting interest expense), tax positions (such as the impact on periods or companies of changes in effective tax rates or net operating losses) and the impact of depreciation and amortization expense on definite lived intangible assets. Because Adjusted EBITDA facilitates internal comparisons of our historical operating performance on a more consistent basis, we also use Adjusted EBITDA for business planning purposes, to incentivize and compensate our management personnel, in measuring our performance relative to that of our competitors and in evaluating acquisition opportunities.

In addition, we believe Adjusted EBITDA and similar measures are widely used by investors, securities analysts, ratings agencies and other interested parties as a measure of financial performance and debt-service capabilities. Our use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under U.S. GAAP. Some of these limitations are:


	•	it does not reflect our cash expenditures for capital equipment or other contractual commitments;

	•	although depreciation, amortization and asset impairment charges and write-offs are non-cash charges, the assets being depreciated, amortized or written off may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements;

	•	it does not reflect changes in, or cash requirements for, our working capital needs;

	•	it does not consider the potentially dilutive impact of issuing equity-based compensation to our management team and employees;

	•	it does not reflect the significant interest expense or the cash requirements necessary to service interest or principal payments on our indebtedness;

	•	it does not reflect certain tax payments that may represent a reduction in cash available to us; and


	•	other companies, including companies in our industry, may calculate these measures differently, and as the number of differences in the way two different companies calculate these measures increases, the degree of their usefulness as a comparative measure correspondingly decreases.

Because of these limitations, Adjusted EBITDA should not be considered as a measure of discretionary cash available to us to invest in the growth of our business. We compensate for these limitations by relying primarily on our U.S. GAAP results and using Adjusted EBITDA only supplementally. We carefully review our operating income at a segment level, which is discussed in detail in our period-to-period comparison of operating results.

Components of Revenue and Expenses

Revenue and Cost of Revenue

Health Physics

We generate revenue in our Health Physics segment primarily from the sale of dosimeters, both active and passive, which measure ionizing radiation dose; contamination & clearance monitors, which detect alpha, beta, gamma and/or neutron contamination of objects of various sizes and types, from tools to trucks; and devices that detect, locate and identify radioactive isotopes. We sell our equipment either pursuant to written agreements or contracts requiring delivery of products or services over a specified time period or one-time purchase orders depending on the nature of the product and the dollar value of the sale. We typically use contracts for large installations of our equipment to power and utility companies as well as military organizations. These contracts are typically fixed price, where we bear the risk for changes in material costs as well as currency movements. The time period from receipt of a contract to the recognition of revenue generally ranges from a few months to a year. We typically use purchase orders for the sale of replacement components as well as small dollar value orders. For customer projects with customer specific acceptance criteria, we typically do not recognize revenue and the related cost of revenue until our customer has installed the equipment and certified that it is operating correctly or until we have otherwise determined that all customer-specific acceptance criteria have been met. Furthermore, customers may delay delivery or acceptance of equipment, causing postponement of revenue recognition even though we may have received payment. We record payments received from customers prior to the time we recognize revenue for associated sales as deferred contract revenue.

Revenue in our Health Physics segment has been primarily driven by product sales for new nuclear power reactor construction in Asia, replacement product sales for NPPs in the Americas and Europe, as well as replacement product sales for the defense end market.

Cost of revenue in our Health Physics segment primarily consists of cost of goods purchased for the manufacture of our equipment, facility costs, compensation and benefits to manufacturing employees and outsourcing costs for subcontractor services for the manufacture of various material sub-components.

Radiation Monitoring Systems

We generate revenue in our Radiation Monitoring Systems segment from the sale of radiation monitoring systems and services to engineering firms that design and construct nuclear reactors, power and utility companies that operate NPPs and, to a lesser extent, research laboratories and universities. We generate most of the revenue in our Radiation Monitoring Systems segment from contracts with a duration greater than one year. These contracts are typically fixed price, where we bear the risk for changes in material cost as well as currency movements.

Revenue in our Radiation Monitoring Systems segment can fluctuate significantly from period to period because of customer requirements, which depend upon the operating schedules of nuclear reactors. The operating schedules of nuclear reactors are affected by, among other things, seasonality in the demand for electricity and reactor refueling and maintenance. Power and utility companies typically schedule refueling and maintenance to coincide with periods of reduced power demand, typically in the spring and fall. Therefore, our revenue may be higher during these periods when equipment is typically installed. Revenue may also fluctuate from period to period as our equipment is installed in newly constructed nuclear reactors.

Our contracts often contain multiple elements with deliveries scheduled over multiple reporting periods. Because we are unable to achieve separation of the elements under U.S. GAAP, we typically do not recognize revenue and the related cost of revenue on these contracts until our customer has installed the equipment and certified that it is operating correctly, which generally can extend to 12 months from shipment, although in some cases can be longer or until we have otherwise determined that all customer-specific acceptance criteria have been met. Furthermore, customers may delay delivery or acceptance of equipment, causing postponement of revenue recognition, even though we may have received payment. In each of the preceding circumstances, we record payments received from customers prior to the time we recognize revenue for associated sales as deferred contract revenue.

The Radiation Monitoring Systems segment is a project-driven business where each project is negotiated on a stand-alone basis. Gross margins can vary significantly by project for a number of reasons, including level of competition, type of customer, and the uniqueness or complexity of the project. Accordingly, an increase or decrease in revenues from one period to another may not result in a proportional increase or decrease in gross margins or operating income due to the mix of projects completed in any given quarter or year.

Revenue in our Radiation Monitoring Systems segment has been primarily driven by new nuclear power reactor construction in Asia and Europe, as well as the retrofitting of existing reactors. Revenue in the Americas region has been primarily driven by renewed sales for the retrofitting of existing reactors.

Cost of revenue in our Radiation Monitoring Systems segment primarily consists of cost of goods purchased for the manufacture of our equipment, facility costs, compensation and benefits to employees and outsourcing costs for subcontractor services for the manufacture of various material sub-components.

Sensing Systems

We generate revenue in our Sensing Systems segment primarily through sales of our electrical penetrations which are conduits through a nuclear reactor containment structure, as well as sales of our reactor instrumentation & control detectors, which are used in nuclear facilities to monitor radiation and temperature within a nuclear reactor core (“in-core” detectors) and in surrounding areas (“ex-core” detectors). Our Sensing Systems segment sells primarily through contracts with engineering firms that design and construct nuclear reactors as well as power and utility companies that operate NPPs. These contracts are typically fixed price, where we bear the risk for changes in material costs as well as currency movements. We have had a long-term relationship with one company that provides plant design and equipment to a significant number of nuclear power plants around the world. Revenues from this customer have represented approximately 23% to 29% of the Sensing Systems segment revenue in fiscal years 2007, 2008, 2009 and the six months ended December 31, 2009. If we were to lose this customer, it could have a material impact on the results of the Sensing Systems segment. We have generated the majority of the revenue in our Sensing Systems segment from contracts with a duration greater than one year.

Revenue in our Sensing Systems segment has been primarily driven by new nuclear power reactor construction in Asia and Europe for our electrical penetrations as well as by the replacement of reactor instrumentation & control equipment and systems for existing reactors in Asia, Europe and the Americas.

Cost of revenue in our Sensing Systems segment primarily consists of cost of goods purchased for the manufacture of our equipment, facility costs, compensation and benefits to employees and outsourcing costs for subcontractor services for the manufacture of various material sub-components.

Dosimetry Services

Revenue from our Dosimetry Services segment is of a subscription nature. We provide these services to customers on an agreed-upon recurring monthly, quarterly or annual basis. Badge production, badge analysis and report preparation are all integral to the service that we provide to our customers, and therefore, we define the service period to include the provision of all of those services. We recognize revenue and related costs on a straight-line basis over the service period as the service is continuous.

Revenue in our Dosimetry Services segment has been primarily driven by the increased use of our dosimetry services in hospitals and other medical facilities resulting from increases in the incidence of radiological medical procedures, along with the increased use of our services by dental and veterinary offices in the United States.

Cost of revenue in our Dosimetry Services segment primarily consists of compensation and benefits to employees, outsourcing costs for subcontractor services and cost of goods purchased for use in our badges.

Imaging Systems

We generate revenue in our Imaging Systems segment through the sale of highly specialized closed circuit camera systems used for inspection and surveillance in difficult and hazardous environments through contracts with engineering firms that design and construct nuclear reactors, power and utility companies that operate NPPs, waste management facilities, as well as companies that operate pulp and paper recovery boilers, gas or coal-fired power boilers and cement kilns. These contracts are typically fixed price, where we bear the risk of changes in material cost and currency movements.

Revenue in our Imaging Systems segment has been primarily driven by increased demand in Asia for high radiation-tolerant cameras for use in new NPP construction, and for use in radioactive waste management and nuclear facility decommissioning projects globally.

Cost of revenue in our Imaging Systems segment primarily consists of cost of goods purchased for the manufacture of our equipment, facility costs, compensation and benefits to employees, and outsourcing costs for subcontractor services for the manufacture of various material sub-components.

Selling, General and Administrative Expenses

Selling, general and administrative, or SG&A, expenses consist primarily of personnel costs (including salaries, performance-based bonuses, commissions and employee benefits), facilities and equipment costs, costs related to advertising and marketing and other general corporate and support costs including utilities, insurance and professional fees. SG&A expenses also include $1.6 million per year in management fees we have paid to ACFS under an investment banking services agreement. We intend to use a portion of the net proceeds from this offering to make a one-time payment of $8.0 million to ACFS upon completion of this offering to terminate the agreement related to these payments. This $8.0 million payment will be included in SG&A expenses in the period paid. See “Certain Relationships and Related Party Transactions.”

Research and Development Expenses

Research and development expenses consist primarily of the costs associated with the design and testing of new products, as well as the upgrading of existing products. These costs relate primarily to compensation of personnel involved with our product development efforts, materials and outside design and testing services. Our customers sometimes compensate us separately for design and engineering work involved in developing our products for them. However, in most cases we expense product development efforts for our customers and we do not receive reimbursement.

Interest Expense, Net

Interest expense, net includes both cash and accrued interest expense and income and amortization of financing costs, as well as paid-in-kind interest on our long-term debt.

Other Income, Net

Other income, net includes gains and losses on the sale of assets, mark-to-market gains and losses on our interest rate swap agreements and foreign exchange windows.

Paid-In-Kind Preferred Dividends

Paid-in-kind, or PIK, dividends consists of expenses attributable to dividends on our convertible preferred stock payable in additional shares of such convertible preferred stock. Our preferred stock will convert into common stock upon the completion of this offering. As a result, following the completion of this offering, we will no longer pay any additional PIK dividends.

Provision for Income Taxes

Provision for income taxes represents our estimated income tax expense for the period presented. Despite historical net losses, we have incurred income tax expense for each of the past three fiscal years, as we incur income taxes in various jurisdictions as a result of the global nature of our business and operations.

Off-Balance Sheet Arrangements

We do not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes, nor do we have any undisclosed material transactions or commitments involving related persons or entities.

Critical Accounting Policies

This management’s discussion and analysis of financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and assumptions about matters that are uncertain. These estimates and assumptions are often based on judgments that we believe to be reasonable under the circumstances, but all such estimates and assumptions are inherently uncertain and unpredictable. Actual results may differ from those estimates and assumptions, and it is possible that other professionals, applying their own judgment to the same facts and circumstances, could develop and support alternative estimates and assumptions that would result in material changes to our operating results and financial condition.

Critical accounting policies are those that both are important to the presentation of our financial condition and results of operations and require management’s most difficult, complex or subjective estimates and assumptions. Our critical accounting policies are discussed below.

Revenue Recognition

We record revenue and the related costs of revenue when all of the following conditions exist:


	•	evidence of an agreement with our customer;

	•	work has been performed;

	•	the amount of revenue can be reasonably estimated; and

	•	collection of revenue from our customer is reasonably assured.

Revenue from certain of our fixed-price contracts in our Sensing Systems segment is recognized on the percentage-of-completion method, measured by the cost-to-cost method. A cost-to-cost approach accurately reflects our obligations and performance on these contracts, as this is the best available measure of our progress as well as meeting our customers’ expectations of the production being performed. Therefore, we believe that input measures used to measure progress toward completion on certain fixed-price projects provide a reasonable surrogate for output measures.

Revisions to revenue, cost and profit estimates, or measurements of the extent of progress toward completion are changes in accounting estimates accounted for in the period of change (using the cumulative catch-up method). Contracts typically provide for periodic billings on a monthly basis or based on contract milestones. Costs and estimated earnings in excess of billings on uncompleted contracts represent amounts

recognized as revenue that has not been billed. Billings in excess of costs represent amounts billed and collected for which revenue has not been recognized and is recorded as deferred contract revenue.

We derive most of our revenue in our Dosimetry Services segment from subscriptions and such revenue is continuous. We recognize revenue on a straight-line basis over a set service period that includes badge production, badge wearing, badge analysis and report preparation as the service is continuous and no other discernable pattern of recognition is evident. We provide these services to customers on an agreed-upon monthly, quarterly or annual basis that our customers choose for their wear period, payable in advance or in arrears. The amounts recorded as deferred contract revenue on our balance sheets represent customer deposits invoiced in advance for services to be rendered over the service period, net of a reserve for estimated cancellations and net of services recognized through the balance sheet date.

In our Radiation Monitoring Systems and Health Physics segments, revenue recognition is sometimes delayed until customer acceptance and certification of the product. As a result, revenue recognition can be delayed, sometimes materially, following delivery of the product by us to the customer. In addition, certain of our contracts contain multiple elements with deliveries scheduled over multiple reporting periods. When we are not able to separate the elements under U.S. GAAP, we delay recognition on products delivered to our customers until we have completed delivery of all products associated with the customer. Funds received from the customer in advance of revenue recognition are recorded on our balance sheets as deferred contract revenue.

Recoverability of Long-Lived Assets, Including Goodwill

Goodwill represents the excess of costs over the fair value of net assets of businesses acquired. Goodwill is tested at the reporting unit level at least annually for impairment and is reviewed for impairment more frequently if events and circumstances indicate that the asset might be impaired. FASB-issued authoritative guidance on goodwill and other intangible assets requires a two-step impairment test. In the first step, we determine the fair value of the reporting unit using a discounted cash flow valuation model and compare the fair value to the reporting unit’s carrying value. If the fair value of the reporting unit exceeds its carrying value, goodwill of the reporting unit is not impaired, and no further testing is required. If the fair value does not exceed the carrying value, the second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any. In the second step of the goodwill impairment test, we compare the implied fair value of the reporting unit’s goodwill to the carrying value. We determine the implied fair value of the reporting unit’s goodwill as if the reporting unit had been acquired in a business combination. If the carrying value of the reporting unit’s goodwill exceeds the implied value, we recognize an impairment loss in an amount equal to the excess.

We estimate future cash flows at the reporting unit level using a discounted cash flow methodology by assessing each major existing contract and projecting the earnings that will be recognized in future periods. We also make estimates for earnings from new contracts that we anticipate based on our evaluation of future business prospects. The valuation of goodwill could be affected if actual results differ substantially from our estimates. Circumstances that could affect the valuation of goodwill include a significant change in our business climate, decisions by our customers to terminate our existing contracts and decisions by our customers to award to our competitors new contracts that we anticipated to be awarded to us.

We measure intangible assets acquired in a business combination at fair value at the date of acquisition. We assess the useful lives of other intangible assets to determine whether events or circumstances warrant a revision to the remaining period of amortization. If the estimate of an intangible asset’s remaining useful life is changed, we amortize the remaining carrying amount of the intangible asset prospectively over the revised remaining useful life. We review intangible assets for impairment whenever events or circumstances indicate that the carrying value of such assets may not be recoverable. As of December 31, 2009, we had $140.4 million of goodwill and $20.2 million of intangible assets with estimable useful lives on our consolidated balance sheets. We do not have any intangible assets with indefinite useful lives.

Intangible assets subject to amortization consist of customer relationships, backlog, qualifications, software, territorial rights, trade names, technology and non-compete agreements. We evaluate customer

relationships and territorial rights, which include the fair value of acquired customer contracts, using a discounted cash flow methodology, and amortize them over a term of five to 17 years. We derive estimated future cash flows based on detailed budgets and projections prepared by management. We amortize backlog over a term of one to three years based on the estimated delivery of the backlog. We prepare the valuation of order backlog based on a discounted cash flow methodology. We evaluate qualifications using a discounted cash flow methodology and amortize them over six years. We derive estimated future cash flows based on projections prepared by management. We amortize software over a five year life and derive it by estimating the replacement cost of the software. We amortize trade names over a period of four to 13 years and derive it based on the relief from royalty method, which tries to estimate a royalty stream for the trade names derived from a benchmark for similar industrial products. We evaluate technology and non-compete agreements using a discounted cash flow methodology. We amortize intangible technology assets over a term of eight years, and non-compete agreements over a term of five years. We derive estimated future cash flows for each technology and non-compete agreement based on detailed budgets and projections prepared by management.

We review long-lived assets such as property, plant and equipment annually for impairment and whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. We measure recoverability of assets to be held and used by comparing the carrying amount of the asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, we recognize an impairment charge by the amount of excess carrying value over fair value.

Customer Concentration

No single customer represented more than 10% of consolidated revenue for fiscal 2007, 2008 or 2009 or for the six months ended December 31, 2008 or 2009.

Stock-Based Compensation Expense

Pursuant to FASB-issued authoritative guidance on stock-based compensation, we account for equity-based compensation awards, including grants of employee stock options, based on the fair values of the equity instruments issued. We determine fair value of our equity instruments based on a valuation using an option pricing model which takes into account various assumptions that are subjective. Key assumptions used in the valuation included the expected term of the equity award taking into account both the contractual term of the award, the effects of employees’ expected exercise and post-vesting termination behavior, expected volatility, expected dividends and the risk-free interest rate for the expected term of the award. The exercise prices of our options were set at values for us consistent with the fair value of ACAS’s investment in Mirion as reported in ACAS’s publicly filed financial statements.

Prior to July 1, 2005, we measured compensation expense for our employee stock-based compensation plans using the intrinsic value method under the provisions of Accounting Principles Board Opinion, Accounting for Stock Issued to Employees, and related interpretations. As the exercise price of all options granted under this plan was at or above the estimated market price of the underlying common stock on the date of grant, no stock-based compensation cost was recognized in the consolidated statements of operations under this Accounting Principles Board Opinion.

Effective July 1, 2005, we adopted FASB-issued updated authoritative guidance on stock-based compensation using the prospective transition method. This method requires the recognition of compensation cost for all stock-based awards that are unvested as of July 1, 2005. The cost related to stock-based compensation included in the determination of consolidation net loss for the twelve months ended June 30, 2007, 2008 and 2009 and the six months ended December 31, 2008 and 2009 includes all awards outstanding that vested during those periods. In connection with the reorganization of our three predecessor companies into Mirion in December 2005, we established the Mirion 2006 stock plan and exchanged stock options of the three predecessor companies for stock options in the newly formed company. Under this guidance, the exchange was deemed a modification, resulting in incremental compensation expense of $749,000 recorded at January 1, 2006 for those options that were vested as of

January 1, 2006. For the unvested options at January 1, 2006, we are expensing incremental compensation expense of $618,000 over the remaining vesting period of approximately two years.

The stock awards under the Mirion 2006 stock plan include stock awards with performance and market-based vesting (“PSA”) and time-based vesting (“TSA”). Under the terms of the PSA agreements, we grant employee stock option awards whose vesting is contingent upon meeting company-wide market goals including earnings before interest, taxes and depreciation targets or market conditions, including internal rate of return targets. The TSAs include stock options granted by us whose vesting occurs over a period of five to 60 months. The PSAs include 10,094 options for which the market-based conditions are first contingent upon a performance based goal of a qualified sale of the Company, which does not include a public offering.

In order to determine the fair value of options granted, the fair value of the underlying stock must first be determined. Following is a discussion of the methodology used in the valuation of our stock on dates when options were granted.

The valuation of our common stock was determined in accordance with the guidance set forth in the AICPA Audit and Accounting Practice Aid Series: Valuation of Privately Held Company Equity Securities Issued as Compensation. Our calculation of the fair value of our common stock was not performed contemporaneously with the grant of options because we did not have in place a process to perform such valuations at the time such options were granted. However, we considered the retrospective valuation in our calculation of the fair value of our common stock at the grant dates. The calculation reflects our best estimate of relevant variables at those dates. We considered three methods for the allocation of value among our various classes of equity: the Current Value Method, the Probability Weighted Expected Return Method, or PWERM, and the Option-Pricing Method. The Current Value Method is useful for early stage companies or when a liquidation is imminent. PWERM is useful when there are several potential future scenarios for a company to achieve a return on investment for its investors; it is future looking and incorporates future economic events and outcomes into the determination of value as of the present. The Option-Pricing Method is useful when the range of possible future outcomes is difficult to predict.

We did not use the Current Value Method in our valuation since we have not been an early stage company nor have we been near liquidation. Since our inception there have been several potential alternatives for changes in our ownership structure, including an initial public offering, a sale or merger, and retention in our current form as a private company. For most of the time since our inception, the range of possible future outcomes has been difficult to predict, and PWERM could not be used. Therefore, we used the Option-Pricing Method. However, as of the most recent valuation which was performed for June 2009, we believe that the range of possible future outcomes could be reasonably predicted, and as such used PWERM for this period.

Following is a description of the Option-Pricing Method, which we used to allocate value among the various classes of equity for the period from January 2006 through December 2008.

The first step in determining the valuation of our common stock was to determine the value of our total equity. The second step was to allocate the total equity among the different classes of stock. In determining the fair value of our total equity, we considered the three traditional approaches to valuation: the cost approach, the market approach and the income approach. The cost approach was not utilized, while the market approach and income approach were.

The market approach is based on the assumption that the value of an asset (including a company) is equal to the value of a substitute asset with the same or similar characteristics. Therefore, the value of an asset can be determined by finding similar assets (or interest in similar assets) that have been sold in recent arms-length transactions.

One methodology in the market approach is the Guideline Company Method, which compares the subject company with guideline publicly-traded companies. Valuation multiples are calculated from selected guideline companies to provide an indication of how much a current investor in the marketplace would be willing to pay for a company with similar characteristics to the subject company. The Guideline Company Method is most appropriate when public companies that are reasonably similar to the subject company can be found.

Another methodology in the market approach is the Guideline Transaction Method. This method relies on data of actual transactions (such as mergers and acquisitions) that have occurred in the subject company’s industry or in related industries. As in the Guideline Company Method, valuation multiples are developed and applied to the subject company’s operating data to estimate fair value.

The income approach seeks to measure the future benefits that can be quantified in monetary terms. The income approach typically involves two general steps: the first step is to make a projection of the total cash flows expected to accrue to an investor in the asset; the second step involves discounting these cash flows to present value at a discount rate that considers the degree of risk (or uncertainty) associated with the realization of the projected monetary benefits. The discounted cash flow method is a form of the income approach often used in the valuation of entire businesses, major segments of a business or intangible property.

Once we determined our valuation using each of the various methods, we then weighted the results to arrive at a single valuation of our equity. The market approach Guideline Company Method, the market approach Guideline Transaction Method and the income approach were weighted 25%, 25% and 50%.

We then allocated this total value to the different classes of our equity using the Option-Pricing Method. As disclosed in Note 13 to our consolidated financial statements, we have issued Series A-1 and A-2 preferred stock, Class A and Class B common stock, stock options and warrants, over which to allocate the total value of equity. Stock options and warrants are assumed to be converted if they are in-the-money.

The Option-Pricing Method treats the preferred and common stock as call options that give their owner the right but not the obligation to buy the underlying total equity at a predetermined price. This is done by creating a series of call options with exercise prices based on the liquidation preference, participation rights and conversion behavior of the preferred stock. The value of each share of preferred and common stock can then be inferred by analyzing these options. Based on the seniority of the classes of equity in liquidation, three call options were created and valued. The first option uses an exercise price in which Series A-1 and A-2 preferred stock begin to receive values in liquidation. Since these are the most senior classes of equity, the exercise price is $0. The second option uses an exercise price in which Series A-1 and A-2 preferred stock have received their full liquidation preferences. The third option uses an exercise price in which Series A-1 and A-2 preferred stock will convert to common stock to share in the upside gain (the as-converted value is greater than the liquidation preference). Thus, common stock is valued as a call option with a claim on us at an exercise price equal to the remaining value beyond the preferred stock’s liquidation preference.

The following is a description of the PWERM Method, which we used to allocate value among the various classes of equity as of June 2009.

In PWERM, our total equity valuation was developed for various potential scenarios: an initial public offering, a sale or maintaining current ownership as a private company.

In determining the fair value of our equity under each of the scenarios, the three traditional approaches to valuation were considered: the cost approach, the market approach and the income approach. The cost approach was not utilized, while the market approach and income approach were. We used the Guideline Company Method of the market approach in the valuation of our equity for the initial public offering scenario. We used the Guideline Transaction Method of the market approach to value our equity for the sale scenario. We used the income approach to value our equity in the continuing operations scenario.

After we determined the valuation of our common equity using the three methodologies above, the results were then weighted based on our estimate of expected outcomes. The initial public offering scenario, the sale scenario and the current ownership as a private company scenario were weighted 60%, 35% and 5%.

During fiscal 2009, we granted options to employees to purchase a total of 45,886 shares of common stock at exercise prices ranging from $138.58 to $144.95 per share. The deemed market value of our common stock on the dates these options were granted ranged from $46.60 to $96.18 per share.

We expect to grant options to purchase 15,091 shares of our common stock immediately following the pricing of this offering to our employees and outside directors, including executive officers, at an exercise price equal to the initial public offering price. The purpose of this option grant will be to incentivize employees to work to increase stockholder value and to provide an equity interest for our outside directors. The options will be valued using the Black-Scholes option pricing model. Key assumptions used to value these options will be

determined as of the grant date of the options and are as follows: expected term is years, risk-free interest rate is %, dividend yield is 0.0%, volatility is %, the exercise price is $ and the fair value of our common stock is $ . The aggregate value of these options to purchase 15,091 shares of our common stock is $ , which will be recognized evenly over their four-year vesting period.

Information on employee stock options, granted since the beginning of fiscal 2009 is summarized as follows:


					Deemed
	Number of				Market Value		Intrinsic
Date of Issuance	Options Granted		Exercise Price		Per Share		Value

July 28, 2008(1)		12,000	$	138.58	$	96.18	$	0.00
August 5, 2008		32,886		144.95		96.18		0.00
December 9, 2008		1,000		144.24		46.60		0.00


(1)		The 12,000 options were a modification on July 28, 2008 of 15,000 options granted on November 5, 2007. The 12,000 options, which have time-based vesting, replaced the 15,000 options, which had performance-based vesting.

We make a number of estimates and assumptions related to FASB-issued authoritative guidance on stock-based compensation. The estimation of stock awards that will ultimately vest requires judgment, and to the extent actual results differ from our estimates, we will record such amounts as an adjustment in the period such estimates are revised. Actual results may differ substantially from these estimates. In valuing stock-based awards under this guidance, significant judgment is required in determining the expected volatility of our common stock and the expected term individuals will hold their stock-based awards prior to exercising. We base expected volatility of the stock on our peer group in the industry in which we do business, because we do not have sufficient historical volatility data for our own stock. We determine the expected term of the option based on factors including vesting period, life of option, strike price and fair market value of our common stock on the date of grant. In the future, as we gain historical data for volatility in our own stock and the actual term employees hold our options, expected volatility and expected term may change, which could substantially change the grant date fair value of future awards of stock options and ultimately the expense we record.

We recorded non-cash compensation expense of $0.2 million, $0.2 million, $1.2 million, $0.6 million and $0.5 million for fiscal 2007, 2008 and 2009 and the six months ended December 31, 2008 and 2009.

In addition to the stock options we granted to our employees, our President, Chief Executive Officer and Chairman of the Board, Thomas D. Logan, entered into a Call Option Agreement on April 19, 2004 with ACAS and certain of its affiliates, in which ACAS granted time and performance-based options with market conditions to Mr. Logan to purchase shares of the common stock of two of our predecessors in connection with his services as an officer and director. Modification of these options occurred in substance on January 1, 2006, in connection with the formation of Mirion in December 2005, and was formalized in an agreement dated August 18, 2006. As a result of the modification, Mr. Logan was granted performance-based options with market conditions to purchase 54,564 shares of Mirion’s common stock held by ACAS. These options were further modified on December 7, 2007 to modify the vesting criteria of the performance based options to additionally provide that such options would vest upon the achievement of certain returns on investment, as discussed in detail below. The exercise price of these options is $88.75 per share, and the total maximum value resulting from the option modification is $2.1 million. The original grant date fair value of these options was negligible. We will recognize expense on these options in the period and to the extent that we are able to either complete an effective offering in the public markets or complete a qualifying sale of the Company.

The performance-based options with market conditions are divided into three tranches, each of which will either vest or be cancelled in two halves upon an initial public offering (“IPO”) or change in control, depending on whether ACAS achieves certain internal rates of return or returns on investment in such an event. Upon completion of an IPO (i.e., the performance condition), vesting of these performance-based options will occur in two stages upon achievement of certain market-based conditions. The first stage occurs 30 days after the effective time of the IPO at which time 50% of the options in each tranche will vest if ACAS achieves certain

minimum internal rates of return, ranging between 25–40% or certain minimum returns on investment ranging between 2.0–2.7x. If neither goal is met, the options in this tranche will be cancelled. The second stage occurs on the earlier of two years after the effective time of an IPO or upon the sale by ACAS of its investments in us, at which time the remaining 50% of the options in each tranche will vest if ACAS achieves certain minimum internal rates of return ranging between 25–40% or certain minimum returns on investment of 2.0–2.7x. If neither goal is met, the options in this tranche will be cancelled. We have not recorded stock compensation expense in connection with these options because vesting is contingent upon future events.

The modifications of the performance-based stock options with market conditions were accounted for under FASB-issued authoritative guidance on stock-based payments, such that the total compensation cost measured at the date of modification was determined to be the grant-date fair value of the original award plus the incremental cost resulting from the modification, in which vesting of both the original and modified awards were considered to be probable. Because these options contain market-based vesting criteria, we used a Monte Carlo simulation model, rather than a Black-Scholes model, to value such options. In the Monte Carlo simulation model, weekly stock prices were simulated until the liquidity event time using a geometric Brownian motion model. Based on the simulated stock price at the liquidity event and the vesting requirements, the number of vested shares was determined. The stock price at liquidity and the options’ exercise price were used to determine the intrinsic value per share of the options at the liquidity event. The intrinsic value was then discounted to the present at the risk free rate to determine the option value for each simulation. Fifty thousand simulations were run for each valuation date, and the sum value of those simulations was averaged to determine the value of the options. Key valuation assumptions as of the January 1, 2006 modification are an expected term of 4.5 years, volatility of 41.8%, a risk-free rate of interest of 4.3%, and a dividend yield of 0%. Key valuation assumptions as of the December 7, 2007 modification are an expected term of 2.6 years, volatility of 39.8%, a risk-free rate of interest of 3.1%, and a dividend yield of 0%.

The Call Option Agreement also provides Mr. Logan with an option to purchase 17,750 shares of our common stock held by ACAS that vest on a monthly schedule. The exercise price of these options is $88.75 per share and the total incremental value resulting from the option modification is $592,000. All such options have vested as of June 30, 2008. In connection with these options, we recorded stock compensation expense of $151,000 and $121,000 in fiscal 2007 and 2008.

The modification of the time-based stock options were accounted for under FASB-issued authoritative guidance on stock-based payments, such that the total compensation cost measured at the date of modification was determined to be the grant-date fair value of the original award plus the incremental cost resulting from the modification, in which vesting of both the original and modified awards were considered to be probable. These options were valued using the Black-Scholes model. Key valuation assumptions as of the January 1, 2006 modification are an expected term of 4.5 years, volatility of 41.8%, a risk-free rate of interest of 4.3%, and a dividend yield of 0%.

All options granted by ACAS and its affiliates to Mr. Logan pursuant to the Call Option Agreement are to be reduced on an economically equivalent basis in the event we grant Mr. Logan options to purchase shares of our common stock after the date of the Call Option Agreement, provided such options are no less favorable to Mr. Logan.

In addition to the 54,564 performance-based options with market conditions granted to Mr. Logan by ACAS, there are 10,094 unvested outstanding performance-based options that we have granted to other employees. These 10,094 options are different from those granted to Mr. Logan in that they were granted by us rather than by ACAS. Furthermore, these options only vest in the event of a sale transaction, which does not include this offering. Therefore, it is not expected that we will record expense for such options.

Accounts Receivable

We evaluate the collectability of accounts receivable based on a combination of factors. In cases where we are aware of circumstances that may impair a specific customer’s ability to meet its financial obligations, we record a specific allowance against amounts due and, thereby, reduce the net recognized receivable to the

amount we reasonably believe will be collected. We record increases to the allowance for bad debt as a component of general and administrative expenses.

Income Taxes

The determination of our tax provision is subject to judgments and estimates due to the complexity of the tax law that we are subject to in several tax jurisdictions. Earnings derived from our international business are generally taxed at rates that are different than U.S. rates, resulting in an effective tax rate different than the U.S. statutory tax rate of 34.0%. The ability to maintain our current effective tax rate is contingent on existing tax laws in both the United States and the respective countries in which our international subsidiaries are located. In addition, a decrease in the percentage of our total earnings from international business or a change in the mix of international business among particular tax jurisdictions could alter our overall effective tax rate.

Income taxes are accounted for under the asset and liability method in accordance with FASB-issued authoritative guidance on accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the tax bases of assets and liabilities and their financial statement carrying amounts, and consideration is given to operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on the deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. This guidance also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some or all of the deferred tax asset will not be realized. We have provided a valuation allowance of $31.4 million as of June 30, 2009 and $27.6 million as of June 30, 2008 on primarily our U.S. jurisdiction deferred tax assets.

On July 1, 2007, we adopted FASB-issued authoritative guidance on accounting for uncertainty in income taxes. This guidance clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with FASB-issued authoritative guidance on accounting for income taxes. This interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. As a result of the implementation of this guidance, we recognize the tax liability for uncertain income tax positions on the income tax return based on the two-step process prescribed in the interpretation. The first step is to determine whether it is more likely than not that each income tax position would be sustained upon audit. The second step is to estimate and measure the tax benefit as the amount that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority. Estimating these amounts requires us to determine the probability of various possible outcomes. We evaluate these uncertain tax positions on a quarterly basis. This evaluation is based on the consideration of several factors, including changes in facts or circumstances, changes in applicable tax law, settlement of issues under audit, and new exposures. If we later determine that our exposure is lower or that the liability is not sufficient to cover our revised expectations, we adjust the liability and effect a related change in our tax provision during the period in which we make such determination.

Inventory Valuation

At each balance sheet date, we evaluate our ending inventories for excess quantities and obsolescence. This evaluation includes analysis of sales levels by products. Among other factors, we consider historical demand and forecasted demand in relation to the inventory on hand, product life cycles and the number of facilities using our products when determining obsolescence and net realizable value. We adjust remaining balances to approximate the lower of our manufacturing cost or market value. We determine inventory cost on a first-in, first-out basis and include material, labor and manufacturing overhead costs. We may be required to write-down inventory for reasons such as obsolescence, excess quantities and declines in market value below our costs.

Outlook

We expect the following factors to affect our results of operation in future periods. In addition to these factors, please refer to “Risk Factors” for additional information on what could cause our actual results to differ from our expectations.

Industry growth trends. Our performance depends on the timing and level of spending for our products by each of our customers in each of our five segments. Our success is dependent upon the continued increase in construction activity for new NPPs in Asia and Europe, as well as the operating life extension of plants in Europe, Asia and the United States. We expect defense spending to detect and prevent radiological threats to continue, as well as spending in connection with large-scale public events. The expansion of radiological medical procedures is also providing us with opportunities for continued growth. For discussion of the factors that influence spending on our products, see “Industry.”

Research and development expenses. We expect our research and development expenses as a percentage of revenue to decrease as we grow our business, focus our engineering activities on customer driven initiatives and benefit from the reduced engineering costs associated with optimized product lines.

SG&A expenses. We expect our SG&A expenses as a percentage of revenue to decrease as our business grows and we continue to manage expenses and reduce our amortization expense on an annual basis. The majority of our amortization expenses are in SG&A expenses. We have incurred expenses in the past in connection with the integration of the legacy businesses of which we are comprised, in addition to severance costs associated with our cost reduction efforts. We do not expect these expenses to recur. We also expect to eliminate $1.6 million per year in annual management fees we have paid to ACFS pursuant to an investment banking services agreement that we intend to terminate by making a one-time payment of $8.0 million to ACFS upon completion of this offering. We expect any reduction in our SG&A expenses to be partially offset by expenses we will incur as a result of becoming a reporting company following this offering.

Interest expenses. We expect that our interest expenses will be reduced in periods following the completion of this offering reflecting the reduced level of our outstanding indebtedness.

Foreign exchange impact. We are a global company with operations in Canada, China, Finland, France, Germany, the United Kingdom and the United States. Accordingly, currency exchange rates can impact our reported results of operations.

Unamortized debt issuance costs. We expect to record a non-cash charge associated with the repayment of certain of our indebtedness with a portion of the net proceeds of this offering. This charge will consist of the write-off of unamortized debt issuance costs.

Income taxes. Despite historical net losses, we have incurred income tax expense for each of the past three fiscal years. In any given period, the jurisdictional mix of our income can vary significantly as a result of the global nature of our business and operations. The income tax rates, available deductions and credits vary significantly in the jurisdictions we do business. Accordingly, the income tax expense in any given period is a function of the effective tax rate and related income secured in a particular jurisdiction. Although we have reported historic consolidated losses, we recognized income in foreign jurisdictions and losses in the United States for the past three years. We have incurred tax expense in foreign jurisdictions due to the taxable income position. We have provided a valuation allowance on our United States based tax attributes and as a result, no tax benefit is recognized for the United States operating losses.

We have net operating loss carryforwards (“NOLs”) which we can use to reduce our United States tax expense in future periods. These NOLs are subject to elimination or reduction in the event of a change of control. We do not expect such a change of control to occur in connection with this offering. However, a future sale of our common stock by ACAS could result in such a change of control.

Amortization costs related to intangible assets. Our non-cash amortization costs related to intangible assets were $12.2 million, $10.1 million, $8.1 million, $4.2 million and $3.7 million for fiscal 2007, 2008 and

2009 and the six months ended December 31, 2008 and 2009. Our future amortization expense at the foreign exchange rates determined as of June 30, 2009 is as follows (in thousands):


	Annual
	Amortization
Year Ending June 30,	Expense

2010	$	6,484
2011		4,760
2012		3,709
2013		2,749
2014		1,622
2015 and thereafter		4,364

Total	$	23,688

Consolidated Results of Operations

The following table summarizes certain items of our consolidated results of operations for fiscal 2007, 2008 and 2009 and the six months ended December 31, 2008 and 2009 (in thousands, except percentages):


										Six Months Ended
	Year Ended June 30,									December 31,
	2007			2008			2009			2008			2009

Revenue	$	169,033		$	191,769		$	201,763		$	100,519		$	108,658
Cost of revenue		94,321			102,790			105,954			53,793			60,140

Gross profit		74,712			88,979			95,809			46,726			48,518
% of revenue		44.2	%		46.4	%		47.5	%		46.5	%		44.7	%
Operating expenses:
Selling, general and administrative expenses		59,449			63,177			65,649			31,310			33,754
Research and development expenses		11,875			14,865			11,282			6,277			5,202

Total operating expenses		71,324			78,042			76,931			37,587			38,956

Income from operations		3,388			10,937			18,878			9,139			9,562
Interest expense, net		19,153			20,207			17,711			9,736			7,570
Other income, net		(1,001	)		(1,759	)		(490	)		71			(530	)

(Loss) income before provision for income taxes		(14,764	)		(7,511	)		1,657			(668	)		2,522
Provision for income taxes		4,937			5,838			5,612			2,890			3,293

Net loss	$	(19,701	)	$	(13,349	)	$	(3,955	)	$	(3,558	)	$	(771	)

Period-to-Period Analysis

As the results of operations of our business are best understood when examined on a segment-by-segment basis, we have more fully described period-to-period changes in the section of this Management’s Discussion and Analysis of Financial Condition and Results of Operation entitled “Segment Results of Operations” rather than in the section immediately below.

Six Months Ended December 31, 2009 as Compared to the Six Months Ended December 31, 2008

Revenue

Consolidated revenue for the six months ended December 31, 2009 was $108.7 million, an increase of $8.1 million, or 8.1%, from revenue of $100.5 million for the six months ended December 31, 2008. Revenue in our Health Physics segment increased $3.6 million, or 10.7%, with an $11.4 million increase in revenue from contamination and clearance monitors offset by a $6.8 million decrease in dosimetry revenue due to completion of some large projects in the six months ended December 31, 2008 with no similar projects in the

comparable period of 2009, and a $1.3 million decrease in detection and identification products. Revenue recognized for sales by our Radiation Monitoring Systems segment increased $7.0 million, or 33.5%, principally due to recognition of revenue from a radiation monitoring systems installation project in Asia. Revenue from sales by our Imaging Systems segment decreased $1.5 million, or 16.6%, principally due to weak demand for high-temperature cameras in industrial end markets. Revenue for the six months ended December 31, 2009 was positively impacted due to foreign currency movements by approximately $3.3 million. $30.6 million, or 28.2%, of revenue for the six months ended December 31, 2009 was attributed to sales in connection with new nuclear plant construction, an increase of $12.8 million, or 71.5%, from revenue of $17.8 million in connection with new nuclear plant construction for the six months ended December 31, 2008. The remaining revenue of $78.1 million for the six months ended December 31, 2009 and remaining revenue of $82.7 million for the six months ended December 31, 2008 was attributed to sales other than in connection with new nuclear plant construction, including sales of replacement or recurring products and services.

Gross Profit

Consolidated gross profit for the six months ended December 31, 2009 was $48.5 million, an increase of $1.8 million, or 3.8% compared to the six months ended December 31, 2008. Gross margin decreased 1.8% to 44.7% for the six months ended December 31, 2009 primarily from lower margins in both the Health Physics segment and the Radiation Monitoring Systems segment due to product mix in each of these segments. Gross profit was positively impacted due to foreign currency movements by approximately $1.4 million.

Operating Expenses

SG&A expenses for the six months ended December 31, 2009 were $33.8 million, an increase of $2.4 million, or 7.8%, from $31.3 million for the comparable period of 2008. This increase was primarily due to an increase in professional fees, principally associated with preparation for our initial public offering.

Research and development expenses for the six months ended December 31, 2009 were $5.2 million, a decrease of $1.1 million, or 17.1%, from $6.3 million for the six months ended December 31, 2008, primarily due to higher professional fees associated with new product development in the prior period.

Interest Expense, Net

Interest expense, net for the six months ended December 31, 2009 was $7.6 million, a decrease of $2.2 million, or 22.3%, from $9.7 million for the comparable period of 2008. This reduction was primarily the result of the decline in our interest expense on our variable rate instruments as our interest rates tied to LIBOR and EURIBOR declined from the comparable period of 2008.

Other Income, Net

Other income, net increased from a loss of $0.1 million in the first half of fiscal 2009 to a gain of $0.5 million for the first half of fiscal 2010. This increase was largely due to foreign exchange gains in fiscal 2010.

Income Taxes

The provision for income taxes for the six months ended December 31, 2009 was approximately $3.3 million, with an estimated effective tax rate of 130.6%, compared with a provision for income taxes of approximately $2.9 million, with an estimated effective tax rate of negative 433% for the comparable period of fiscal 2009. The provision for income taxes for the six months ended December 31, 2008 and 2009 are comprised mainly of foreign income taxes. The fiscal 2010 effective tax rate was also impacted by losses generated in the United States where we do not record any benefit for tax attributes due to the valuation allowance.

Fiscal 2009 as Compared to Fiscal 2008

Revenue

Consolidated revenue for fiscal 2009 was $201.8 million, an increase of $10.0 million, or 5.2%, from revenue of $191.8 million for fiscal 2008.

$19.3 million of revenue in fiscal 2009 was attributed to sales in connection with new nuclear plant construction, an increase of $2.1 million, or 12.2%, from revenue of $17.2 million in connection with new nuclear plant construction for fiscal 2008. The remaining revenue of $182.5 million for fiscal 2009 was attributed to sales other than in connection with new nuclear plant construction, including sales of replacement or recurring products and services for existing plants and customers facilities. The remaining revenue of $174.6 million for fiscal 2008 was attributed to sales other than in connection with new nuclear plant construction, which includes sales of replacement or recurring products and services.

Revenue in our Health Physics segment increased 17.8%, or $10.4 million, principally due to higher sales volumes in the following product lines:


	•	$1.9 million increase in sales of dosimeters, principally into existing NPPs in Asia and the Americas; and

	•	$5.4 million increase in sales of contamination & clearance monitors, principally into existing NPPs in the Americas.

	•	$3.1 million increase in sales of detection and identification devices principally to the defense end market in Europe.

Revenue in our Radiation Monitoring Systems segment decreased $2.1 million, or 4.8%, principally due to the negative impact of foreign currency movements of approximately $3.5 million in fiscal 2009.

Revenue in our Sensing Systems segment increased $5.1 million, or 12.8%, principally due to higher sales volumes in the following product lines:


	•	$3.4 million increase in revenue recognized from contracts for the production of penetration products used in the construction of NPPs; and

	•	$1.7 million increase in revenue recognized from contracts for the production of detectors used in NPPs.

Revenue in our Dosimetry Services segment increased by $0.6 million, or 2.2%, while revenues in our Imaging Systems segment fell by $4.1 million, or 19.3%, due to weakening demand for high-temperature cameras in industrial end markets.

Revenue in fiscal 2009 was negatively impacted due to foreign currency movements by approximately $10.2 million.

Gross Profit

Consolidated gross profit for fiscal 2009 was $95.8 million, an increase of $6.8 million, or 7.7%, from gross profit of $89.0 million for fiscal 2008. Gross margin increased 1.1% to 47.5% for fiscal 2009, primarily due to lower material costs in the Sensing Systems segment. Gross profit was negatively impacted due to foreign currency movements by approximately $4.9 million.

Operating Expenses

SG&A expenses for fiscal 2009 were $65.6 million, an increase of $2.5 million, or 3.9%, from $63.2 million for fiscal 2008. This increase was primarily due to an increase in professional fees associated with preparation for our initial public offering, offset by a reduction in compensation expense, as well as an overall reduction of expense due to favorable currency exchange as our expenses in U.S. dollars were positively impacted by weaker foreign currencies, primarily the euro and the British pound.

Research and development expenses for fiscal 2009 were $11.3 million, a decrease of $3.6 million, or 24.1%, from $14.9 million for fiscal 2008. This decrease was primarily due to a decrease in compensation and subcontractor expense due to product rationalization as well as a reduction of expense due to favorable currency exchange as our expenses in U.S. dollars were positively impacted by weaker foreign currencies, principally the euro and the British pound, offset by an increase in supplies and services.

Interest Expense, Net

Interest expense, net for fiscal 2009 was $17.7 million, a decrease of $2.5 million, or 12.4%, from $20.2 million for fiscal 2008. This reduction was primarily the result of the decline in our interest expense on our variable rate instruments as our interest rates tied to LIBOR and EURIBOR declined from fiscal 2008.

Other Income, Net

Other income, net decreased $1.3 million, or 72.1%, to other income, net of $0.5 million for fiscal 2009, from other income, net of $1.8 million for fiscal 2008. This decrease of other income, net was primarily a result of a decrease in foreign exchange gains of $1.4 million.

Income Taxes

We recognized income tax expense of $5.6 million for fiscal 2009, a decrease of $0.2 million, or 3.9%, from fiscal 2008. The decrease was primarily due to the geographic composition of our consolidated income, with less tax expense attributable to foreign operations. In addition, the fiscal 2009 effective tax rate was impacted by losses generated in the United States where we do not record benefit for tax attributes due to the valuation allowance.

Fiscal 2008 as Compared to Fiscal 2007

Revenue

Consolidated revenue for fiscal 2008 was $191.8 million, an increase of $22.7 million, or 13.5%, from revenue of $169.0 million in fiscal 2007. $17.2 million of revenue in fiscal 2008 was attributed to sales in connection with new nuclear plant construction, an increase of $0.2 million, or 1.2%, from revenue of $17.0 million in connection with new nuclear plant construction in fiscal 2007. The remaining revenue of $174.6 million for fiscal 2008 was attributed to sales other than in connection with new nuclear plant construction, which includes sales of replacement or recurring products and services for existing plants and customer facilities. The remaining revenue of $152.0 million for fiscal 2007 was attributed to sales other than in connection with new nuclear plant construction, which includes sales of replacement or recurring products and services. Revenue from detectors sold by our Sensing Systems segment into NPPs increased $5.2 million, or 33.2%, while revenue recognized for electrical penetrations sold by our Sensing Systems segment grew $5.6 million, or 41.9%. Revenue of radiation monitoring equipment sold by our Radiation Monitoring segment increased by $9.7 million or 28.9% primarily related to the completion of a large NPP project, shipped in previous years but with customer acceptance occurring in fiscal 2008.

Revenue in fiscal 2008 was positively impacted due to foreign currency movements by approximately $11.3 million.

Gross Profit

Consolidated gross profit for fiscal 2008 was $89.0 million, an increase of $14.3 million, or 19.1%, from $74.7 million for fiscal 2007. Gross margin increased 2.2% to 46.4% for fiscal 2008, from 44.2% for fiscal 2007, due to better factory utilization in our Health Physics and Sensing Systems segments. The increase in gross profit was primarily due to the increase in revenue in our Health Physics and Sensing Systems segments. Gross profit in fiscal 2008 was positively impacted due to foreign currency movements by approximately $5.4 million.

Operating Expenses

SG&A expenses for fiscal 2008 were $63.2 million, an increase of $3.7 million, or 6.3%, from $59.4 million for fiscal 2007. This increase was primarily due to an increase in compensation and benefit cost due to the hiring of the majority of our corporate staff and severance costs due to employee terminations, offset by a reduction in amortization cost and professional fees. SG&A expenses in fiscal 2008 were negatively impacted due to foreign currency movements by approximately $3.3 million.

Research and development expenses for fiscal 2008 were $14.9 million, an increase of $3.0 million, or 25.2%, from $11.9 million for fiscal 2007. This increase was primarily due to an increase in compensation and supplies expense for new projects and products, offset by a decrease in professional fees.

Interest Expense, Net

Interest expense, net for fiscal 2008 was $20.2 million, an increase of $1.1 million, or 5.5%, from fiscal 2007 expense of $19.2 million. The $1.1 million increase was primarily due to increased borrowings to fund our growth.

Other Income, Net

Other income, net increased $0.8 million, or 75.7%, to other income, net of $1.8 million for fiscal 2008, from other income, net of $1.0 million for fiscal 2007. This increase in other income, net was primarily the result of an increase in foreign exchange gains of $0.9 million.

Income Taxes

We recognized income tax expense of $5.8 million for fiscal 2008, versus $4.9 million for fiscal 2007. The $0.9 million increase was primarily due to the geographic composition of our consolidated income, with greater tax expense attributable to foreign operations. In addition, the fiscal 2008 effective tax rate was impacted by losses generated in the United States where we do not record benefit for tax attributes due to the valuation allowance.

Segment Results of Operations

The following table summarizes certain items for our segments for fiscal 2007, 2008 and 2009 and the six months ended December 31, 2008 and 2009. The amounts below are in thousands.


										Six Months Ended
	Year Ended June 30,									December 31,
	2007			2008			2009			2008			2009

Revenue:
Health Physics	$	58,020		$	58,691		$	69,109		$	33,140		$	36,695
Radiation Monitoring Systems		33,521			43,201			41,116			20,803			27,765
Sensing Systems		29,049			39,866			44,979			22,858			22,339
Dosimetry Services		27,785			28,824			29,457			14,830			14,445
Imaging Systems		20,658			21,187			17,102			8,888			7,414

Total	$	169,033		$	191,769		$	201,763		$	100,519		$	108,658

Operating income:
Health Physics	$	(993	)	$	(912	)	$	6,317		$	776		$	1,875
Radiation Monitoring Systems		1,775			1,085			4,109			1,793			3,349
Sensing Systems		3,881			10,234			14,973			8,395			8,801
Dosimetry Services		5,879			7,746			7,968			4,019			3,561
Imaging Systems		200			1,339			1,064			428			334
Unallocated corporate items		(7,354	)		(8,555	)		(15,553	)		(6,272	)		(8,358	)

Total	$	3,388		$	10,937		$	18,878		$	9,139		$	9,562

Health Physics

Six Months Ended December 31, 2009 as Compared to the Six Months Ended December 31, 2008

Revenue in our Health Physics segment increased $3.6 million, or 10.7%, to $36.7 million for the six months ended December 31, 2009, from $33.1 million for the comparable period of 2008. This increase was primarily due to increased revenue from contamination and clearance monitors which saw strong growth in demand as customers spent against their 2009 budgets more so than experienced in the end of 2008. Revenues for the six months ended December 31, 2009 was favorably impacted by foreign currency movements by approximately $1.5 million.

Operating income in our Health Physics segment increased $1.1 million, or 141.6%, to $1.9 million for the six months ended December 31, 2009, from $0.8 million for the comparable period of 2008. This increase was due to increased gross profit and favorable exchange rates. Costs from selling, general and administrative expenses, as well as research and development expenses, remained relatively constant.

Fiscal 2009 as Compared to Fiscal 2008

Revenue in our Health Physics segment increased $10.4 million, or 17.8%, to $69.1 million for fiscal 2009, from $58.7 million for fiscal 2008. This increase was primarily due to increased dosimeter sales of $1.9 million, principally into existing NPPs in Asia and the Americas, $5.5 million of increased sales of contamination & clearance monitors principally into existing NPPs in the Americas and $3.0 million of increased sales of detection and identification products into the defense end market, primarily in Europe. Revenue for fiscal 2009 was negatively impacted by foreign currency movements by approximately $4.0 million.

Operating income in our Health Physics segment increased $7.2 million, or 792.6%, to $6.3 million for fiscal 2009, from $(0.9) million for fiscal 2008. This increase was due to increased gross profit due to higher revenues and lower research and development expenses arising from our product rationalization efforts. During fiscal 2009, we continued to review our product portfolio and discontinued engineering work on products that were deemed to be duplicative or nearing the end of useful life. As a result we were able to eliminate a portion of our temporary and consulting engineers and correspondingly reduce engineering expense. Expenses were positively impacted by foreign currency movements, which partially offset the negative impact of currency movements on revenue.

Fiscal 2008 as Compared to Fiscal 2007

Revenue in our Health Physics segment increased $0.7 million, or 1.2%, to $58.7 million for fiscal 2008, from $58.0 million for fiscal 2007. Revenue in fiscal 2008 was positively impacted due to foreign currency movements in the euro-dollar exchange rate by approximately $5.0 million.

Operating income for our Health Physics segment increased $0.1 million, or 8.2%, to $(0.9) million for fiscal 2008, from $(1.0) million for fiscal 2007. This increase was due to increased gross profit margin due to improved factory utilization and lower material costs, partly offset by an increase in operating expenses related to professional fees for cost improvement initiatives and severance costs due to employee terminations. We engaged an outside consulting firm to review our current cost structure and assist us with the implementation of certain cost improvement initiates. Expenses were negatively impacted by $2.7 million due to foreign exchange currency movements in the euro-dollar exchange rate.

Radiation Monitoring Systems

Six Months Ended December 31, 2009 as Compared to the Six Months Ended December 31, 2008

Revenue in our Radiation Monitoring Systems segment increased $7.0 million, or 33.5%, to $27.8 million for the six months ended December 31, 2009, from $20.8 million for the comparable period of 2008. This increase was principally due to the timing of revenue recognition on a single nuclear power plant project in Asia in the second quarter of fiscal 2010. This revenue was recognized upon product delivery to the customer

and prior to receipt of notification of formal customer acceptance because we were able to demonstrate that it had met all of the customer-specified objective acceptance criteria at delivery.

Operating income in our Radiation Monitoring Systems segment increased $1.5 million, or 86.8%, to $3.3 million for the six months ended December 31, 2009, from $1.8 million for the comparable period of 2008. The disproportionate increase in operating income as compared to revenues is due to a substantial portion of our costs being fixed. Revenues were positively impacted by $1.6 million due to foreign currency movements, which were partly offset by the negative impact of currency movements on expenses.

Fiscal 2009 as Compared to Fiscal 2008

Revenue in our Radiation Monitoring Systems segment decreased $2.1 million, or 4.8%, to $41.1 million for fiscal 2009, from $43.2 million for fiscal 2008. This decrease was largely due to the negative impact of foreign currency movements of approximately $3.5 million in fiscal 2009, and was partially offset by increased revenue from a higher number of customer installations in fiscal 2009.

Operating income in our Radiation Monitoring Systems segment increased $3.0 million, or 278.7%, from $1.1 million in fiscal 2008 to $4.1 million in fiscal 2009. $1.1 million of this increase was due to two projects in fiscal 2009 in Europe that had higher-than-usual gross profits due to the mix of the components sold to each customer. Both projects were for the replacement of the customers’ existing equipment. Operating income was also favorably impacted by a $0.3 million reduction in selling, general and administrative expenses due to lowered compensation-related expenses that resulted from a prior year restructuring and $0.4 million reduction in research and development expenses due to the elimination of a portion of our temporary and consulting engineer positions. Operating expenses were further positively impacted by foreign currency movements by $1.1 million, which partially offset the negative impact on revenue related to currency movements.

Fiscal 2008 as Compared to Fiscal 2007

Revenue in our Radiation Monitoring Systems segment increased $9.7 million, or 28.9%, to $43.2 million for fiscal 2008, from $33.5 million for fiscal 2007. This increase was due to some large NPP Projects shipped in fiscal 2006 and fiscal 2007 but with customer acceptance in fiscal 2008. Revenue in fiscal 2008 was positively impacted due to foreign currency movements in the euro-dollar exchange rate by approximately $4.8 million.

Operating income for our Radiation Monitoring Systems segment decreased $0.7 million, or 38.9%, to $1.1 million for fiscal 2008, from $1.8 million for fiscal 2007. This decrease was due to a decrease in gross margin due to an increase in material costs. Operating expenses also increased due to professional fees for cost improvement initiatives and severance costs due to employee terminations. We engaged an outside consulting firm to review our current cost structure and assist us with the implementation of certain cost improvement initiates. Operating expenses were negatively impacted by foreign exchange currency movements in the euro-dollar exchange rate by $1.8 million.

Sensing Systems

Six Months Ended December 31, 2009 as Compared to the Six Months Ended December 31, 2008

Revenue in our Sensing Systems segment decreased $0.5 million, or 2.3%, to $22.3 million for the six months ended December 31, 2009, from $22.9 million for the comparable period of 2008, due to the timing of completion of some long term contracts.

Operating income in our Sensing Systems segment increased $0.4 million, or 4.8%, to $8.8 million for the six months ended December 31, 2009, from $8.4 million for the comparable period of 2008. This increase was primarily due to decreased cost of goods sold despite no significant change in revenue due to the mix of products sold in favor of higher gross margin products, while operating expenses remained relatively constant.

Fiscal 2009 as Compared to Fiscal 2008

Revenue in our Sensing Systems segment increased $5.1 million, or 12.8%, to $45.0 million for fiscal 2009, from $39.9 million for fiscal 2008. This increase was due to an increase in revenue recognized for new electrical penetrations of $3.4 million and an increase in revenue recognized for our ex-core detectors of $2.3 million, partially offset by a reduction in nuclear reactor core detector revenue of $0.6 million. Revenue in fiscal 2009 was negatively impacted due to foreign currency movements by approximately $0.8 million.

Operating income in our Sensing Systems segment increased $4.7 million, or 46.3%, to $15.0 million for fiscal 2009, from $10.2 million for fiscal 2008. This increase was primarily due to increased revenue as well as a decrease in material costs due to declining prices over fiscal 2009 for precious metals and other raw materials. Operating expenses decreased by $0.4 million, or 5.4% primarily due to lower amortization expenses.

Fiscal 2008 as Compared to Fiscal 2007

Revenue in our Sensing Systems segment increased $10.8 million, or 37.2%, to $39.9 million for fiscal 2008, from $29.0 million for fiscal 2007. This increase was due to an increase in other replaceable detector revenue of $6.3 million and an increase in revenue recognized for new electrical penetrations of $5.6 million, offset by a reduction in nuclear core reactor detector revenue of $1.1 million. Revenue in fiscal 2008 was favorably impacted due to foreign currency movements by approximately $1.2 million.

Operating income for our Sensing Systems segment increased $6.4 million, or 163.7%, to $10.2 million for fiscal 2008, from $3.9 million for fiscal 2007. This increase was primarily due to increased revenue and a $1.1 million reduction in amortization expense in fiscal 2008, as customer relationship intangible assets are amortized using an accelerated method to reflect estimated customer attrition patterns and rates. Other operating expenses remained constant between years.

Dosimetry Services

Six Months Ended December 31, 2009 as Compared to the Six Months Ended December 31, 2008

Revenue in our Dosimetry Services segment decreased $0.4 million, or 2.6%, to $14.4 million for the six months ended December 31, 2009, from $14.8 million for the comparable period of 2008 due to slightly lower revenue from the United Kingdom market and some competitive pricing pressures in the American market.

Operating income in our Dosimetry Services segment decreased $0.5 million, or 11.4%, to $3.6 million for the six months ended December 31, 2009, from $4.0 million for the comparable period of 2008. The decrease was primarily due to increased production costs related to a new passive dosimeter product introduced to the market in late fiscal 2009 and an increase in operating expenses, primarily due to recruitment related expenses.

Fiscal 2009 as Compared to Fiscal 2008

Revenue in our Dosimetry Services segment increased $0.6 million, or 2.2%, to $29.5 million for fiscal 2009, from $28.8 million for fiscal 2008. This increase was primarily due to an increase in sales to the small medical practitioner market.

Operating income in our Dosimetry Services segment increased $0.2 million, or 2.9%, to $8.0 million for fiscal 2009, from $7.7 million for fiscal 2008. This increase was principally due to increased revenue, partially offset by increased research and development expenses related to new product development.

Fiscal 2008 as Compared to Fiscal 2007

Revenue in our Dosimetry Services segment increased $1.0 million, or 3.7%, to $28.8 million for fiscal 2008, from $27.8 million for fiscal 2007. This increase was primarily due to increased business in the nuclear and medical end markets of $0.6 million and growth in sales of dosimeters to the small medical practitioner market of $0.2 million.

Operating income for our Dosimetry Services segment increased $1.9 million, or 31.8%, to $7.7 million for fiscal 2008, from $5.9 million for fiscal 2007. This increase was primarily due to increased revenue as well as a decrease in amortization costs.

Imaging Systems

Six Months Ended December 31, 2009 as Compared to the Six Months Ended December 31, 2008

Revenue in our Imaging Systems segment decreased $1.5 million, or 16.6%, to $7.4 million for the six months ended December 31, 2009, from $8.9 million for the comparable period of 2008. This decrease was primarily attributable to a reduction in sales of our high temperature cameras. We continue to experience some weakening of demand for these products in the industrial end market due to the current economic climate.

Operating income in our Imaging Systems segment decreased $0.1 million, or 22.0%, to $0.3 million for the six months ended December 31, 2009, from $0.4 million for the comparable period of 2008. Lower gross profit due to reduced sales was partially offset by reduced amortization and marketing expenses during the six months ended December 31, 2009.

Fiscal 2009 as Compared to Fiscal 2008

Revenue in our Imaging Systems segment decreased $4.1 million, or 19.3%, to $17.1 million for fiscal 2009, from $21.2 million for fiscal 2008. This decrease was primarily attributable to a reduction in sales of our high temperature cameras of $3.0 million. We began to experience some weakening of demand for these products into the industrial end market, as a result of the economic climate in fiscal 2009. The products represented $7.3 million, or 42.6%, of segment sales in fiscal 2009, compared to $10.3 million, or 48.5%, of segment sales in fiscal 2008. Revenues for fiscal 2009 were negatively impacted by foreign currency movements by approximately $2.0 million, due to the weaker British pound.

Operating income in our Imaging Systems segment decreased $0.3 million, or 20.5%, to $1.1 million for fiscal 2009, from $1.3 million for fiscal 2008. This decrease was primarily attributable to the impact of a weaker British pound, with a $0.7 million positive currency impact on operating expenses partially offsetting the negative impact on revenues. Aside from the currency impact, there was a reduction of operating expenses in fiscal 2009 due to a decrease in facilities costs, primarily due to the consolidation of office facilities.

Fiscal 2008 as Compared to Fiscal 2007

Revenue in our Imaging Systems segment increased $0.5 million, or 2.6%, to $21.2 million for fiscal 2008, from $20.7 million for fiscal 2007. This increase was due to an increase in sales of high temperature cameras of $1.2 million, partially offset by a decrease in sales of cameras for the nuclear end market of $0.7 million.

Operating income for our Imaging Systems segment increased $1.1 million, or 569.5%, to $1.3 million for fiscal 2008, from $0.2 million for fiscal 2007. This increase was due to a decrease in operating expenses, primarily reduced compensation expenses, partially offset by higher costs for our camera products for the nuclear end market.

Liquidity and Capital Resources

We have financed our operations primarily through cash provided by operations and our lines of credit. As of December 31, 2009, our principal sources of liquidity consisted of $6.9 million of cash and cash equivalents and $1.1 million available under our revolving credit facilities. A substantial majority of our outstanding debt has been provided by ACAS, our principal stockholder, through senior and junior debt facilities as well as lines of credit. ACAS has also provided us with substantially all of our equity financing.

The terms of our credit agreements with ACAS require us and our subsidiaries to meet certain restrictive financial covenants and ratios computed quarterly, including a minimum fixed charge coverage ratio (Adjusted EBITDA minus capital expenditures, over cash paid for interest, debt payments, tax payments and management

fees) of one-to-one, maximum debt to adjusted EBITDA ratio (total debt over adjusted EBITDA) of 5.50-to-one, minimum interest coverage ratio (adjusted EBITDA over cash interest expense) of 1.50-to-one and a maximum capital expenditure level of $7.5 million per fiscal year, with provisions for a one-year carry-forward.

Our credit agreements with ACAS are material to our consolidated business, and the financial covenants to our credit agreements are material in that any non-compliance with such covenants could result in an event of default under such credit agreements. Upon an event of default, ACAS may require us to pay penalty interest on debt under the credit agreements, accelerate any unpaid principal and interest under the credit agreements and charge a prepayment premium in the event of acceleration. In particular, in the event of an acceleration of the indebtedness held by ACAS, we may not be able to secure alternative financing on acceptable terms or at all. In such an event, we could be forced to sell assets to repay the indebtedness or take other actions that could have a material adverse effect on our business and operations. We are in compliance with all of our financial covenants as of December 31, 2009.

Our anticipated new bank credit facilities that we expect to enter into upon the consummation of this offering also include financial covenants with which we will be required to comply. These include (i) a minimum fixed charge coverage of Adjusted EBITDA minus capital expenditures, over interest expense and scheduled principal payments on indebtedness, of 1.50-to-one, (ii) a minimum net worth of 80% of our consolidated stockholders’ equity as of the effective date of the agreement plus 50% of net income earned in each fiscal quarter thereafter and (iii) a maximum ratio of total indebtedness over Adjusted EBITDA for four consecutive fiscal quarters of 2.75-to-one, stepping down to 2.25-to-one. Our anticipated new bank credit facilities will be material to our business, and the financial covenants in our anticipated new bank credit facilities will be material in that any non-compliance with such covenants could result in an event of default. Upon an event of default, the lenders may require us to pay penalty interest on debt under the credit facilities and accelerate any unpaid principal and interest under the credit facilities. In particular, in the event of an acceleration of the indebtedness under our anticipated new bank credit facilities, we may not be able to secure alternative financing on acceptable terms or at all. In such an event, we could be forced to sell assets to repay the indebtedness or take other actions that could have a material adverse effect on our business and operations.

During the six months ended December 31, 2009, our cash and cash equivalents increased $1.5 million to $6.9 million. During this time, we had cash outflows from operating activities of $4.8 million. We had cash outflows from investing activities of $4.2 million, related to purchase of property, plant and equipment and restrictions on cash, and net cash inflows from financing activities of $10.9 million. This was principally due to an increase in borrowings under our ACAS revolving credit facilities of $12.7 million, offset by reductions in borrowings from our third-party revolving credit facilities of $1.6 million during the period.

During fiscal 2009 our cash and cash equivalents decreased $3.6 million to $5.4 million. During this time we had cash inflows from operating activities of $10.0 million. This was offset by cash outflows from investing activities of $7.4 million, primarily for the purchase of property, plant and equipment, and financing activities of $5.8 million from payments under our revolving credit facilities.

During fiscal 2008, we incurred net cash outflows from investing activities of $3.3 million, primarily for the purchase of property, plant and equipment, and net cash outflows from operating activities of $6.7 million. These outflows were offset in part by net cash inflows from borrowings under our revolving credit facilities with ACAS of $10.3 million, as well as net borrowings under our third-party credit agreements of $3.1 million.

Our principal need for liquidity has been, and will continue to be, for working capital, to pay down debt and for capital expenditures. We believe that our cash flow from operations, available cash and cash equivalents and available borrowings under the revolving portion of our credit facilities will be sufficient to meet our liquidity requirements for at least the next twelve months. However, our ability to make scheduled payments of principal and to pay the interest on, or to refinance, our debt and to fund planned capital expenditures will depend on our future performance. Accordingly, we may be required to raise debt or equity financing, and such financing may not be available on acceptable terms.

Although we currently have no specific plans to do so, if we decide to pursue one or more significant strategic acquisitions, we may incur additional debt or sell additional equity to finance the purchase of those businesses.

Historical Cash Flows

Cash Flow from Operating Activities

We used $4.8 million in cash flows from operating activities during the six months ended December 31, 2009 and used $2.8 million from operating activities during the six months ended December 31, 2008.

The $2.0 million decrease in net operating cash flows for the six months ended December 31, 2009 compared to net operating cash flows for the six months ended December 31, 2008 were primarily due to increased cash outflows from the following components: (i) increased cash outflows from changes in cost in excess of billings on uncompleted contracts, reflecting changes in the timing of completion of project work, which accounted for $1.1 million of net cash outflows for the six months ended December 31, 2009 compared to net cash inflows of $7.5 million for the six months ended December 31, 2008 and (ii) increased net cash outflows of $9.3 million for accrued expenses and other liabilities.

These decreases in net operating cash flows for the six months ended December 31, 2009 compared to the comparable period ended December 31, 2008 were partially offset by (i) a $5.6 million reduction of operating cash outflow for deferred cost of revenue, offset by a $0.7 million decrease in cash inflow from changes in deferred revenues, which was the result of timing differences on project completion activity between the two periods, and (ii) a $6.0 million increase in cash flows from accounts payable and a $4.2 million increase in cash flows from accounts receivable balances, including receivables pledged to creditors, with an increase of $11.9 million during the six months ended December 31, 2009 compared to an increase of $16.1 million for the six months ended December 31, 2008. The increase in the accounts receivable and accounts payable balances reflects some of the seasonal nature of our business, with a typical spike in revenue, and associated cost of revenue, and an increase in billing at the end of the calendar year. This is particularly the case in our Dosimetry Services segment, where a significant portion of our customers are on annual billing cycles.

We used $3.6 million and $6.7 million and generated $10.0 million in cash flows from operating activities in fiscal 2007, 2008 and 2009.

The $16.7 million increase in cash provided from operating activities in fiscal 2009 compared to fiscal 2008 was primarily due to (i) a $9.4 million decrease in net loss for the period, due primarily to increased revenue and slightly improved gross margins in fiscal 2009, (ii) cash inflow of $2.7 million due to a decrease in costs in excess of billings on uncompleted contracts in fiscal 2009 compared to a cash outflow of $9.5 million due to an increase in costs in excess of billings on uncompleted contracts during fiscal 2008, primarily due to timing differences on project activity between the two periods. This increase in operating cash inflows was offset by an increase in operating cash outflow of $7.8 million on accounts payable with higher purchases made towards the end of fiscal 2009 when compared to fiscal 2008.

The $3.1 million increase in cash used in operating activities in fiscal 2008 compared to fiscal 2007 was primarily due to (i) a $13.4 million reduction in cash inflow from accounts receivable, with a net cash outflow due to change in accounts receivable balances of $3.7 million in fiscal 2008, compared to a net cash inflow due to change in accounts receivable balance of $9.6 million in fiscal 2007, (ii) increase in cash outflow due to changes in deferred cost of revenue balances of $8.6 million, and costs in excess of billings on completed contracts of $6.3 million, with net cash outflow of $15.7 million due to changes in these balances as a result of timing of project completion in fiscal 2008, compared with a net cash outflow of $0.9 million in fiscal 2007. These increases in cash outflow were offset by (i) a $12.8 million reduction of cash outflows due to changes in deferred contract revenue, also due to the timing of completion and revenue recognition on project activity, and (ii) a $4.6 million reduction of cash outflows due to changes in accounts payable balances between the periods.

Cash Flow from Investing Activities

We used $3.1 million and $4.2 million in cash from investing activities during the six months ended December 31, 2008 and the six months ended December 31, 2009. The increase of $1.1 million was primarily due to an increase of purchases of property, plant and equipment for the six months ended December 31, 2009.

We used $5.0 million, $3.3 million and $7.4 million in cash from investing activities during fiscal 2007, 2008 and 2009.

The $4.1 million increased use of cash in fiscal 2009 as compared to 2008 was due to higher purchases of property plant and equipment in fiscal 2009 as well as a one-time return of escrow funds that occurred in fiscal 2008. The $1.7 million decreased use of cash in fiscal 2008 as compared to 2007 was primarily due to the cash inflow of $2.8 million from escrow funds during fiscal 2008, which was partly offset by higher purchases of property, plant and equipment in that same year.

Cash Flow from Financing Activities

We generated $7.6 million and $10.9 million in cash flow from financing activities during the six months ended December 31, 2008 and 2009. The increase of $3.3 million was primarily due to an increase of $6.9 million in net borrowings on our ACAS revolving credit facilities, from $5.6 million borrowed under these facilities during the six months ended December 31, 2008 to $12.5 million borrowed during the six months ended December 31, 2009. In the six months ended December 31, 2009, $1.5 million of this borrowing was used to reduce other borrowings against third-party revolving credit facilities and other third-party notes payable balances. The balance of the ACAS borrowings was used to fund the operational and investing net cash outflows in the period.

We generated $9.9 million and $13.4 million and used $5.8 million in cash from financing activities during fiscal 2007, 2008 and 2009.

The $19.2 million decrease in cash from financing activities in fiscal 2009 as compared to 2008 was due to a $14.2 million reduction in net borrowing on notes from ACAS as well as a $4.9 million reduction in net borrowing from third parties. The $3.5 million increase in cash from financing activities in fiscal 2008 as compared to 2007 was due to an increase in net borrowings on notes from ACAS of $1.5 million and a $1.8 million increase in net borrowing from third parties.

Capital Expenditures

We had capital expenditures of $2.4 million and $3.4 million in the six months ended December 31, 2008 and 2009 and $4.3 million, $5.0 million and $6.6 million in fiscal 2007, 2008 and 2009. The majority of our capital expenditures has been for the replacement of existing equipment or the purchase of new equipment to support our business. We are subject to a maximum annual capital expenditure amount under the debt covenant terms of our credit agreements with ACAS. We expect to invest $4.1 million in capital expenditures for the remainder of fiscal 2010, although we do not have any capital expenditure related commitments as of December 31, 2009.

As of December 31, 2009, our contractual obligations and other commitments were as follows (in thousands):


			2010
	Total		(6 Months)		2011-2012		2013-2014		Thereafter

Debt obligations(1)	$	189,589	$	5,281	$	184,154	$	154	$	—
Operating lease obligations		15,828		4,142		6,679		4,061		946

Total	$	205,417	$	9,423	$	190,833	$	4,215	$	946


(1)		Includes only obligations to pay principal (as described below) and does not reflect the use of net proceeds from this offering. A portion of our debt has a PIK interest feature. As a result, the principal


		amount of such debt increases on a periodic basis. Also does not include pensions, which are described in Note 11 of our consolidated financial statements.

Credit Facilities and Long-term Debt

Our credit facilities and long-term debt with ACAS, our principal stockholder, are as follows (in thousands):


							Amount
				Interest Rate			Outstanding
	Maturity		Contractual	as of			as of
Credit Facilities and Long-term Debt	Due		Interest Rate (%)	December 31, 2009			December 31, 2009

Revolving credit facilities:
$20.25 million		July 2011	LIBOR + 4.5%		4.73	%	$	20,250
$14.0 million		July 2011	LIBOR + 5%		5.23	%		13,997
$8.2 million		July 2011	EURIBOR + 2%		2.47	%		7,130
Senior term notes:
$24.9 million Senior Term B		July 2011	EURIBOR + 3%		3.47	%		24,944
$7.5 million Senior Term B		July 2011	LIBOR + 8%		8.23	%		5,026
$2.0 million Senior Term B		July 2011	LIBOR + 8%		8.23	%		1,924
$4.0 million Senior Term C		Oct 2011	LIBOR + 9%		9.23	%		4,000
$4.0 million Senior Term C		Nov 2011	LIBOR + 8.25%		8.48	%		4,000
$27.0 million Senior Term D		Oct 2011	LIBOR + 6.5%		6.73	%		25,920
$15.0 million Senior Term D		Oct 2011	LIBOR + 6.5%		6.73	%		14,362
Senior subordinated notes:
$7.5 million paid-in-kind		July 2011	14%		14	%		8,402
$8.6 million paid-in-kind		July 2011	15%		15	%		9,749
$12.2 million paid-in-kind		July 2011	EURIBOR + 11%		11.47	%		15,992
Junior subordinated notes:
$4.3 million paid-in-kind		July 2011	17%		17	%		5,191
$4.3 million paid-in-kind		July 2011	17%		17	%		5,191
$1.25 million paid-in-kind		May 2012	14%		14	%		1,400
$4.9 million paid-in-kind		July 2011	EURIBOR + 12%		12.47	%		6,908
Stockholder loan:			Three-month
$8.0 million		June 2011	EURIBOR + 2%		2.76	%		9,404

Total notes payable to ACAS								183,790
Less current portion								(520	)

Notes payable to ACAS — long term							$	183,270

We were in compliance with all of our financial covenants as of December 31, 2009. The credit facilities include customary events of default and affirmative, restrictive and financial covenants that, among other things, require us to maintain certain financial ratios and limit our ability to incur additional indebtedness, create liens, pay dividends, redeem capital stock or make certain other restricted payments or investments, sell assets including capital stock, engage in transactions with affiliates and effect a consolidation or merger. For more information on our financial covenants, see “—Liquidity and Capital Resources.” We are not in compliance with certain non-financial covenants that were in effect prior to the formation of Mirion. These non-financial covenants were negotiated with the predecessor companies (GDS, IST and Synodys) and were not amended at the time of the formation of Mirion. The non-financial covenants relate to matters such as changing the fiscal years or names of our subsidiaries, amending the charter documents and bylaws of our subsidiaries and the provision of audited financial statements to ACFS. We have obtained a waiver for the violations of non-financial covenants through July 1, 2010.

We have a term loan of €651,000 ($0.9 million) as of December 31, 2009, which is due November 2012 and bears interest at a rate of EURIBOR + 1%. We also have various line of credit arrangements in Germany and France. The terms and use of these credit arrangements are detailed in Note 8 of our consolidated financial statements.

In connection with the consummation of this offering, we expect to enter into new bank credit facilities. See “Description of Certain Indebtedness.”

Recent Accounting Pronouncements

Business Combinations

In December 2007, the FASB issued authoritative guidance on business combinations. This guidance changes the accounting for acquisition transaction costs by requiring them to be expensed in the period incurred and also changes the accounting for contingent consideration, acquired contingencies and restructuring costs related to an acquisition. FASB-issued authoritative guidance on business combinations is effective for fiscal years beginning on or after December 15, 2008, which is effective for our fiscal year beginning July 1, 2009. The adoption of this guidance is expected to change our accounting treatment for business combinations on a prospective basis.

Fair Value Measurements

Effective July 1, 2008, we adopted the provisions of FASB-issued authoritative guidance on fair value measurements, which defines fair value, establishes a framework for measuring fair value and expands disclosure of fair value measurements. The fair value criteria are primarily applied prospectively upon adoption of this guidance. FASB-issued authoritative guidance on fair value measurements was effective for fiscal years beginning November 15, 2007. In February 2008, the FASB issued further guidance on fair value measurements, delaying the effective date of this guidance for non financial assets and non financial liabilities, except for items that are recognized or disclosed at fair value on a recurring basis. We adopted the delayed portions of this guidance beginning in the first quarter of our fiscal year ending June 30, 2010. The adoption of this guidance did not have a material impact on our consolidated financial statements.

In October 2008, the FASB issued authoritative guidance on determining the fair value of a financial asset when the market for that asset is not active. This guidance clarified the application of FASB-issued authoritative guidance on fair value measurement. This guidance demonstrated how the fair value of a financial asset is determined when the market for that financial asset is inactive. This guidance was effective upon issuance, including prior periods for which financial statements had not been issued. The implementation of this guidance did not have a material impact on our financial position, results of operations or cash flows.

In April 2009, the FASB issued authoritative guidance on determining fair value when the volume and level of activity for the asset or liability have significantly decreased and identifying transactions that are not orderly. This guidance provides additional guidance for estimating fair value when the market activity for an

asset or liability has declined significantly. This guidance is effective for interim and annual periods ending after June 15, 2009 and we are applying this guidance prospectively. The implementation of this guidance did not have a material impact on our financial position, results of operations or cash flows.

Fair Value Option for Financial Assets and Liabilities

In February 2007, the FASB issued authoritative guidance on the fair value option for financial assets and financial liabilities. This guidance provides the option to measure, at fair value, eligible financial instrument items using fair value, which are not otherwise required to be measured at fair value. The irrevocable decision to measure items at fair value is made at specified election dates on an instrument-by-instrument basis. Changes in that instrument’s fair value must be recognized in current earnings in subsequent reporting periods. If elected, the first measurement to fair value is reported as a cumulative-effect adjustment to the opening balance of retained earnings in the year of adoption. We did not elect to measure eligible assets at fair value. The guidance was effective for us beginning in fiscal 2009.

Disclosures about Derivative Instruments and Hedging Activities

In March 2008, the FASB issued authoritative guidance on disclosures about derivative instruments and hedging activities. This guidance establishes enhanced disclosures about how and why an entity uses derivative instruments, how derivative instruments and related hedged items are accounted for under FASB-issued authoritative guidance on accounting for derivative instruments and hedging activities and its related interpretations and how derivative instruments and related hedged items affect an entity’s financial position, financial performance and cash flows. It is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early adoption encouraged. This guidance encourages, but does not require, comparative disclosures for earlier periods at initial adoption. We adopted this guidance at the beginning of the third quarter of our fiscal 2009, as required.

Instruments Granted in Stock-Based Payment Transactions

In June 2008, the FASB issued authoritative guidance on determining whether instruments granted in stock-based payment transactions are participating securities. This guidance states that unvested stock-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method. This guidance is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those years. Upon adoption, a company is required to retrospectively adjust its earnings per share data (including any amounts related to interim periods, summaries of earnings and selected financial data) to conform with the provisions in this guidance. We adopted this guidance beginning fiscal 2010, as required. Adoption of this guidance did not have a material impact on our consolidated financial position, results of operations or cash flows.

Disclosures about Postretirement Benefit Plan Assets

In December 2008, the FASB issued authoritative guidance on employers’ disclosures about postretirement benefit plan assets, which is effective for fiscal years ending after December 15, 2009. This guidance requires additional disclosures such as: the investment allocation decision making process; the fair value of each major category of plan assets; inputs and valuation techniques used to measure the fair value of plan assets; and significant concentrations of risk within plan assets. We adopted this guidance beginning in fiscal 2010, as required. Adoption of this guidance did not have a material impact on our consolidated financial position, results of operations and cash flows.

Recognition and Presentation of Other-Than-Temporary Impairments

In April 2009, the FASB issued authoritative guidance on recognition and presentation of other-than-temporary impairments. This guidance establishes a new method for recognizing and reporting other-than-temporary impairment of debt securities and also contain additional disclosure requirements for both debt and equity securities. This guidance is effective for interim and annual periods ended after June 15, 2009. The implementation of this guidance did not have a material impact on our financial position, results of operations or cash flows.

Interim Disclosures about Fair Value of Financial Instruments

In April 2009, the FASB issued authoritative guidance on interim disclosures about fair value of financial instruments. This guidance amends previous guidance on disclosures about fair value of financial instruments, to require an entity to provide disclosures about the fair value of financial instruments in interim financial information. This guidance also amends previous guidance on interim financial reporting, to require those disclosures in summarized financial information at interim reporting periods. FASB-issued authoritative guidance on interim disclosures about fair value of financial instruments is effective for interim periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. We adopted this guidance beginning in our first quarter of fiscal 2010.

Subsequent Events

In May 2009, the FASB issued authoritative guidance on subsequent events. This guidance is intended to establish general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. It requires the disclosure of the date through which an entity has evaluated subsequent events and the basis for that date—that is, whether that date represents the date the financial statements were issued or were available to be issued. This guidance is effective for interim and annual periods ended after June 15, 2009 and should be applied prospectively. We have adopted this guidance for fiscal 2009.

Codification and the Hierarchy of Generally Accepted Accounting Principles

In June 2009, the FASB issued authoritative guidance on the FASB accounting standards codification and the hierarchy of generally accepted accounting principles—establishes the FASB Accounting Standards Codification as the source of authoritative accounting principles and the framework for selecting the principles used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles in the United States (U.S. GAAP). This Statement is effective for our first quarter of fiscal 2010. Beginning with the first fiscal quarter of 2010, references made to U.S. GAAP by us will use the new Codification numbering system prescribed by the FASB. As the Codification is not intended to change or alter existing U.S. GAAP, this guidance did not have any impact on our consolidated financial statements.

In October 2009, the FASB issued guidance on multiple-deliverable revenue arrangements. This new guidance modifies the fair value requirements of the existing guidance by allowing the use of the “best estimate of selling price” in addition to vendor-specific objective evidence and third-party evidence for determining the selling price of a deliverable. This guidance establishes a selling price hierarchy for determining the selling price of a deliverable, which is based on: (a) vendor-specific objective evidence, (b) third-party evidence, or (c) estimates. In addition, the residual method of allocating arrangement consideration is no longer permitted. The new guidance also requires expanded quantitative and qualitative disclosures about revenue from arrangements with multiple deliverables. This guidance is effective for the Company beginning in its fiscal year ending June 30, 2011. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.

Qualitative and Quantitative Disclosures about Market Risk

Foreign Exchange Risks

We have foreign currency exposure related to our operations in France, Germany and the United Kingdom, as well as in other foreign locations. This foreign currency exposure arises primarily from the translation or re-measurement of our foreign subsidiaries’ financial statements into U.S. dollars. For example, a substantial portion of our annual revenue and operating costs are denominated in euros, and we have exposure related to revenue and operating costs increasing or decreasing based on changes in currency exchange rates. If the U.S. dollar increases in value against these foreign currencies, the value in U.S. dollars of the assets and liabilities originally recorded in these foreign currencies will decrease. Conversely, if the U.S. dollar decreases in value against these foreign currencies, the value in U.S. dollars of the assets and liabilities originally recorded in these foreign currencies will increase. Thus, increases and decreases in the value of the U.S. dollar relative to these foreign currencies have a direct impact on the value in U.S. dollars of our foreign currency denominated assets and liabilities, even if the value of these items has not changed in their original currency. At present we do not purchase forward contracts as hedging instruments, but may do so as circumstances warrant.

Interest Rate Risks

We are subject to interest rate risk in connection with our long-term debt and our revolving lines of credit. As of December 31, 2009, we had total long-term debt of $183.9 million. Our debt consists of both variable interest rate as well as fixed interest rate debt. As of December 31, 2009, we had $153.9 million of debt with variable interest rates. We swapped approximately $1.8 million of variable debt for a fixed rate of 3.865% that expires in November 2012. A 1% increase in our variable interest rates would increase our annual interest expense and decrease our cash flows and income before taxes by approximately $1.5 million per year.

Inflation

We do not believe that inflation has had a material effect on our business, financial condition or results of operations. If our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases as many of our contracts are fixed-price contracts which do not provide for price escalations. Our inability or failure to do so could adversely affect our business, financial condition and results of operations.

INDUSTRY

We sell our radiation detection, measurement, analysis and monitoring products and services into the global nuclear, defense and medical end markets. We believe that our end markets are characterized by strong fundamentals that support an established revenue base, as well as provide numerous growth opportunities.

Nuclear

Increasing Global Demand For Electricity and Nuclear Power

Increasing electricity demand. The International Energy Agency, or IEA, projects a near doubling of world electricity demand from 2006 to 2030, creating the need for approximately 4,500 GWe of new generating capacity. The IEA projects this increase in electricity demand is expected to be driven by a wide range of global trends including (i) population growth, (ii) increasing standards of living in the developing world, including in China and India and (iii) continued proliferation and commercialization of technologies dependent on the delivery of a reliable electricity supply, such as consumer electronics and information technology.

Increasing demand for nuclear power. We believe that nuclear energy is the best-positioned alternative to fossil fuels (e.g., coal, natural gas and oil) with the capability to meet electricity demand for base-load, or continuously delivered, electricity production. In addition, increased public concern regarding the effects of greenhouse gas emissions has accelerated interest in reliable, low-emissions alternatives to fossil fuels, such as nuclear power. The use of other renewable energy sources, such as wind and solar power, for base-load generation suffers from issues of intermittency while also requiring major investments to create a transmission grid capable of moving the power from the remote geographic areas where it is generated to consumers, and to adequately manage variable load-shifting requirements. We believe the existing global installed base of nuclear power reactors to be the most cost-effective and reliable source of base-load energy currently available, with relatively low marginal cost of energy production, as compared to fossil fueled generation with higher input cost volatility.

Increased public support for nuclear power also has been augmented by an increasing global desire to reduce dependency on foreign sources of fossil fuels as well as the recognition that nuclear power has maintained a very safe operating track record. Significant regulatory oversight, as well as rigorously enforced safety, quality and inspection protocols, have helped the nuclear industry achieve a favorable safety record with respect to attributable fatalities per GWe of electricity produced compared to other forms of primary energy production, including coal, natural gas and hydroelectric production. Many governments around the world are adopting policies favorable to nuclear power.

Nuclear Power Global Installed Base

According to the WNA, as of February 2010, there were 436 nuclear power reactors in operation globally. Additionally, there are 53 reactors currently under construction with an additional 142 reactors planned and 327 proposed worldwide. The average expected life cycle of an NPP (which contains one or more reactors), including planning, construction, operation and decommissioning, is between 55 and 80 years, of which the expected operating life is 40 to 60 years.

As of February 2010, nuclear power was responsible for approximately 15% of electricity generation globally and substantially more in certain nuclear-intensive countries. As shown in the table below, as of February 2010,

nuclear power provided 76% of the electricity output in France, over 40% in Belgium, Ukraine and Sweden, over 30% in Switzerland, South Korea and the Czech Republic and over 20% in Germany and Japan.


		Percentage of National Electricity Output from
Number of Operational Reactors by Country		Nuclear Power by Country

Source: World Nuclear Association, as of February 2010.

Nuclear power plant re-licensing. Regulatory authorities worldwide have established timely license renewal processes and requirements to extend plant life in a manner that assures safe operation. In the United States, for instance, the Atomic Energy Act and NRC regulations limit commercial power reactor licenses to an initial term of 40 years, but also permit such licenses to be renewed for up to an additional 20 years. The NRC views the timely renewal of licenses as an important step to ensure an adequate domestic energy supply. Of the 104 nuclear power reactors in operation in the United States as of November 2009, eight are subject to license expiration within the next five years. In the United States, the NRC has approved license renewal for 59 reactors to date, with an additional 19 reactor re-licensings currently under review and 20 more reactor re-licensing applications anticipated. License renewals are generally approved for those plants where the reactor continues to operate at an efficient level and only after any necessary upgrades to the instrumentation & control equipment and systems have been made.

Nuclear power plant up-rating. NPP up-rating is a licensing, improvement and equipment modification process designed to enhance power output of existing plants by enabling reactors to operate at increased temperature and pressure levels. Utilities have used power up-rates since the 1970s as a way to generate more electricity from existing nuclear plants. In the United States alone, 129 up-rates have been approved by the NRC as of October 2009, resulting in the creation of an additional 5,726 MWe capacity within the existing nuclear footprint. Collectively, these up-rates have added generating capacity at existing plants that is equivalent to more than five new reactors, according to the NRC. In most cases, up-rating activities involve an upgrade of many critical reactor components, including instrumentation & control equipment and systems.

Nuclear power capacity factors. Increasing the capacity factor of existing plants provides a means of generating more nuclear power without building new reactors. The capacity factor of a power plant is defined as its actual power generation divided by its rated capacity. The average capacity factor for U.S. NPPs was 56% in 1980, but improved substantially to greater than 90% in 2002, according to a 2008 report of the United States Energy Information Administration. Based on this data, we estimate that the increase in capacity factor from 1990 to 2008 was equivalent to the construction of approximately 26 new reactors at 1,000 MWe capacity each. Suppliers providing reliable radiation detection, measurement, analysis and monitoring products and services have played a crucial role in the improvement of capacity factors.

New Nuclear Power Plant Construction

The re-licensing, up-rating and increased capacity factors have helped to improve the output of the existing nuclear power reactor fleet. However, in order to keep pace with increasing demand for nuclear power

globally, 53 new reactors are currently under construction, with an additional 142 reactors planned and 327 proposed for future development, as of February 2010.

We expect strong long-term economic growth in Asia and Eastern Europe to drive the demand for new nuclear power reactor builds, as economic growth and power usage in these regions would require additional power generation capacity. Additionally, the U.S. government has also initiated programs to provide incentives to build new reactors. The Energy Policy Act of 2005, for example, provides a tax credit of 1.8 cents per kilowatt-hour for up to 6 GWe of capacity built before 2021 and also authorizes the Department of Energy to issue loan guarantees worth approximately $18.5 billion for up to 80% of the cost of new nuclear projects.

Worldwide Nuclear Power Reactors


	Nuclear
	Electricity		% of National		Number of Reactors
	Generation 2008		Electricity				Under
Country	(Billion KWh)		Output		Operable		Construction		Planned(1)		Proposed(2)

United States		809		20		104		1		11		19
France		418		76		58		1		1		1
Japan		241		25		54		1		13		1
Russia		152		17		31		9		8		37
South Korea		144		36		20		6		6		0
United Kingdom		53		14		19		0		4		6
Canada		89		15		18		2		4		3
India		13		2		18		5		23		15
Germany		141		28		17		0		0		0
Ukraine		84		47		15		0		2		20
China		65		2		11		20		37		120
Sweden		61		42		10		0		0		0
Spain		56		18		8		0		0		0
Belgium		43		54		7		0		0		0
Czech Republic		25		33		6		0		0		2
Rest of World		206		N/A		40		8		33		103

Total		2,601		15		436		53		142		327

Source: World Nuclear Association, as of February 2010.


(1)	Planned reactors have approvals, funding or major commitments in place, mostly expected to be in operation within eight to ten years, or with construction well advanced but suspended indefinitely.

(2)	Proposed reactors have specific program or site proposals, with expected operation mostly within 15 years.

Nuclear Decommissioning

Following the useful life of any nuclear reactor, it must be decommissioned and decontaminated. The decommissioning process can take ten years or more to complete, with the facility requiring ongoing radiation detection, monitoring and measurement services throughout this period. Through 2007, 90 commercial nuclear power reactors and 250 research reactors had been retired from operation globally.

Other Nuclear Facilities

According to the WNA, there were 250 operational nuclear research reactors in 56 countries, with more under construction, as of mid 2009. Most of these reactors reside on university campuses and are used for research and training, materials testing, medicine and industrial functions. Additionally, the WNA estimates that, as of December 2009, approximately 150 maritime vessels, primarily naval submarines, are powered by more than 220 nuclear reactors. Although not used for commercial power generation, these facilities require similar levels of radiation detection, measurement, analysis and monitoring products and services as commercial reactors.

Defense

Our global defense end market is driven by a combination of military, civil defense and event-driven security spending. The proliferation of global security threats has reached unprecedented levels, driven by an unstable geopolitical climate, the emergence and expansion of terrorist organizations and the proliferation of radiological and nuclear technologies. Taken together, these threats have the potential to cause significant human casualties and economic loss. As a result, militaries, civil defense and other security organizations have bolstered investment in the prevention and detection of radiological threats as well as in technologies capable of detecting and monitoring radiation levels in the aftermath of radiological attack.

Militaries throughout the world utilize radiation detection technologies for troop security. Spending on personnel protection and detection of radiological threats is a high priority for both NATO and non-NATO militaries and, as such, has led many countries to provide dosimeters to military personnel on a standard-issue basis. We believe that spending on these technologies will remain a high priority among armed forces globally.

Spending within the global civil defense, or homeland security, market has rapidly expanded in recent years based on increased threats presented by terrorist organizations. As a result, civil defense, first responder and other security organizations have invested in technologies and services designed both to protect civil defense personnel, civilians and domestic infrastructure from radiological threats and to detect and monitor radiation levels following a radiological incident, such as the release of a nuclear or other radiological device. In addition, homeland security organizations are increasingly focused on enhancing radiological detection capabilities at critical points of entry, such as airports, ports and borders. Within the United States, for example, the Domestic Nuclear Detection Office, or DNDO, was created within the Department of Homeland Security to implement a comprehensive inter-agency system to detect, report and respond to nuclear or radiological threats.

Additionally, large-scale public meeting events have greatly increased security measures at facilities, including rapid adoption of radiological detection technologies to address the increased threat of radiological attacks, due to their profile as high visibility targets. For example, the Olympic Games increased its security spending ten-fold from $180 million for the 2000 Sydney summer games to $1.9 billion for the 2008 Beijing summer games. We believe security spending at the Olympic Games and other public events and venues will continue to expand and increasingly incorporate radiological detection capabilities as a necessary component of crowd and facility security solutions.

Medical

Nuclear and radiological medical technologies are used for diagnostic and therapeutic procedures. These technologies provide highly accurate, cost-effective and less invasive alternatives compared to traditional techniques. Procedures where radiation exposure is most prevalent include radiodiagnostic procedures, such as x-rays and computed axial tomography (CAT) scanning, as well as radiotherapeutic procedures, such as external linear accelerator therapy, gamma knife stereotactic radiotherapy and brachytherapy. Medical imaging improves diagnosis and treatment of a variety of illnesses and conditions, including cancer, stroke, heart disease, trauma, sports injury and abdominal and neurological conditions. According to the WNA, as of January 2010, there are over 10,000 hospitals worldwide using radioisotopes in medicine, with about 90% of

the procedures for diagnostics. There are approximately 37 million nuclear medicine procedures performed per year globally, with the United States and Europe accounting for approximately 18 million and 10 million procedures per year.

As a result of the proliferation of radiological medical technologies, hospitals, clinics and other medical facilities rely on dosimetry systems and services to ensure the safety of both medical personnel and patients. The proliferation of nuclear and radiological medical technologies coupled with increased use of radiological medical procedures have increased the market for radiation detection and monitoring products and services. The WNA estimates that the use of radiopharmaceuticals in diagnosis continues to grow at over 10% per year.

Other

Other end markets include industrial facilities such as cement kilns, pulp and paper mills and coal/gas fired power boilers that utilize high-temperature industrial processes. These high-temperature processes are critical to plant operation and must be accurately monitored to ensure optimal operating conditions. Imaging equipment capable of withstanding the high temperatures and environmental conditions found in these facilities is employed to monitor and optimize process efficiency. Similar to the products employed in NPPs, these imaging systems require routine replacement or upgrades.

BUSINESS

Business Overview

We are a global provider of radiation detection, measurement, analysis and monitoring products and services to the nuclear, defense and medical end markets. Our customers rely on our solutions to protect people, property and the environment from nuclear and radiological hazards. Our products and services include: dosimeters; contamination & clearance monitors; detection & identification instruments; radiation monitoring systems; electrical penetrations; reactor instrumentation & control equipment and systems; dosimetry services; imaging systems; and related accessories, software and services. Many of our end markets are characterized by the need to meet rigorous regulatory standards, design qualifications and operating requirements. We believe these industry dynamics create substantial barriers to entry, thereby reinforcing our market position. We have successfully leveraged the strength of our nuclear platform to expand the commercial applications of our technologies to defense and other end markets. The diversity of our end markets and the global nature of our customer base are illustrated in the charts below:


Fiscal 2009 Revenue by End Markets		Fiscal 2009 Revenue by Geography



Fiscal 2009 Revenue: $201.8 Million

Our broad product and services portfolio of radiation detection, measurement, analysis and monitoring solutions is supported by our research and development organization of 165 scientists, engineers and technicians, who represented approximately 19% of our workforce as of December 31, 2009. We possess numerous product qualifications, trade secrets and patents that support our market position and our ability to deliver next generation products and services. In addition, we maintain design, manufacturing and sales capabilities across seven countries, enabling us to capitalize on growth opportunities, including the anticipated increase in demand for nuclear power and the ongoing spending for defense and homeland security.

Our financial performance is driven by the replacement of products and the recurring provision of services into our core end markets, as well as the construction of new NPPs globally. Many of our products are ordered well in advance of the anticipated shipment date, providing visibility into future revenue through our backlog and deferred contract revenue, which were $247.1 million and $66.8 million as of December 31,2009. We generated revenue of $201.8 million, Adjusted EBITDA of $40.6 million and a net loss of $4.0 million for fiscal 2009. See page 10 for a definition and reconciliation of Adjusted EBITDA to cash provided by (used in) operating activities.

Our Market Opportunity

We believe that significant opportunities for growth exist within each of our primary end markets.

Nuclear

Our legacy in the nuclear industry positions us to capitalize on the growth in demand for radiation detection, measurement, analysis and monitoring products and services in each phase of the nuclear life cycle, as outlined in the chart below.

We believe the following dynamics support the sustainability of our existing business and will drive new sources of organic growth.

Predictable upgrade, replacement and retirement cycles. Our radiation detection, measurement, analysis and monitoring products and systems have predictable life spans, typically ranging from four to 25 years. Our complex monitoring systems typically require at least one comprehensive upgrade during their useful life to optimize their functionality. In addition, many of our products require replacement parts, components and service due to normal wear during their useful lives.

Aging installed base. The existing global installed base of nuclear reactors has an average age of 26 years. This aging installed base requires frequent product replacements and upgrades over an operating life cycle that generally ranges from 40 to 60 years. Furthermore, as reactors reach the end of their useful lives, the onset of a multi-year “decommissioning” process represents a further revenue opportunity in the reactor life cycle for our products.

Large installed base of “orphaned” products and systems. Most currently operating reactors were commissioned prior to 1990. Operators of many aging NPPs often must consider new suppliers to meet their detection needs as many of the suppliers of legacy radiation detection, measurement, analysis and monitoring systems no longer service the nuclear industry.

Reduction in trade barriers. Historically closed markets, such as India, have recently opened due to enhanced globalization and free trade.

Dosimetry outsourcing. NPPs have historically managed the majority of their dosimetry service requirements internally. However, the cost benefits of outsourcing these services have become increasingly attractive to NPP operators as they focus on improving profitability and enhancing service.

New build opportunity. We expect the increase in the installed base of nuclear reactors worldwide to provide opportunities across our offerings. The nuclear industry is experiencing robust growth in activity related to new reactor build. As of February 2010, there were 53 reactors under construction, 142 planned and 327 proposed, according to the WNA. The first phase of this “nuclear renaissance” is occurring internationally and our global footprint positions us to capitalize on these opportunities. Since the early stages of reactor development generally represent more than 20% of our revenue opportunity over the life cycle of a reactor, we are positioned to benefit from increased global reactor construction. In addition, as new plants are added to the global nuclear fleet, we believe our recurring revenue opportunity associated with replacements, spares, software, services and system upgrades should continue to increase. Although no new commercial reactors have been ordered in the United States since the 1970s, there is some support to build new nuclear power reactors in the United States, including federal government incentives, the desire to meet long-term energy demand with reduced CO₂ emissions and an increased focus on energy self-sufficiency.

Defense

Focus on military personnel. Global militaries must contend with radiological threats and the difficulties of protecting soldiers and monitoring areas of enemy engagement. The combination of our active dosimeters and telemetry technology provide a differentiated solution that addresses the radiation detection needs of modern militaries.

Increased civil defense spending on radiation detection. Civil defense and homeland security organizations are focused on preventing the illicit transportation of radiological materials across borders. The commercial application of our radiation detection expertise positions us to benefit from government spending on detection technologies.

Enhanced event specific security. The visibility of high profile events and venues has increased their value as targets of terrorist activity. In response, security spending at events, such as the Olympic Games, has increased substantially, as has the utilization of radiation detection technology, providing an expanding market opportunity for our products.

Medical

Radiological procedure growth. The use of radiodiagnostic and radiotherapeutic procedures is expanding globally due to aging population demographics, technological advancements and emerging middle classes in China and India. As the use of radiological procedures increases in the medical industry, so does our associated market opportunity.

Dosimetry outsourcing. In some regions outside the United States, dosimetry services for health care practitioners historically have been provided by government agencies. We believe that more government agencies are outsourcing dosimetry services to private providers due to favorable cost dynamics in some regions, such as Europe. This provides a market opportunity where we can leverage our technical expertise and North American service experience to expand into other regions.

Our Competitive Strengths

We believe that the following competitive strengths will enable us to maintain our position and capitalize on growth opportunities in our end markets:

Trusted radiation detection, measurement, analysis and monitoring provider. The nuclear industry is highly regulated and requires compliance with strict product specifications. Our track record in the nuclear end market enables us to gain market share across our product and service offerings. We and our predecessor companies have served the radiation detection, measurement, analysis and monitoring needs of our customers for over 50 years, having developed trusted, recognized brands supported by our tradition of technical excellence, product reliability and customer service. In addition, we have leveraged our detection expertise to commercialize applications for the defense and medical end markets. In the defense market, our products serve as critical components of personnel protection for military and civil defense applications around the

world while our medical products and services support important reporting and measurement requirements for medical personnel.

Broad and complementary product and service portfolio. We are one of the only companies that offers radiation detection, measurement, analysis and monitoring products and services to satisfy customer requirements throughout the NPP life cycle. Our comprehensive product line supports virtually all radiation detection and monitoring needs associated with the nuclear, defense and medical end markets. As a result, we believe that we have consistently gained market share as some of our key customers rationalize their supply chain. Furthermore, our portfolio provides us with a natural opportunity to cross-sell our products and services to our customers. For example, our relationships developed through sales of dosimeters led us to win a recently announced contract to supply radiation monitoring systems and electrical penetration adaptors to Ringhals NPP in Sweden.

Large installed base driving recurring revenue. We possess longstanding customer relationships in all of our end markets. As of December 31, 2009, our products were installed at 397 of the 436 active nuclear power reactors globally, which have an average age of 26 years. This installed base drives recurring revenue through replacement and service cycles associated with our offerings and the typical 40 to 60 year operating life cycle of an NPP. The length and quality of supplier relationships are important customer buying criteria due to high switching costs and the importance of proven product reliability. In addition, we maintain relationships with global military and government organizations that value operating longevity and technological expertise. For example, our products have been sold to 17 of the 28 NATO militaries as well as the U.S. Departments of Energy, State, Defense and Homeland Security. Our customers’ focus on personnel protection drives their recurring expenditures on service, recalibration and product upgrades in our defense end market.

Technical complexity creates high barriers to entry. Across our end markets, we design our products to meet demanding customer specifications, qualifications and regulatory requirements. In many circumstances, we design our products to be compatible with highly complex facilities and operate effectively in harsh environments. Reliability is critical for our safety-related products since a product failure may cause an unplanned nuclear power reactor shutdown resulting in costs that may exceed $1.0 million per day.

Global footprint designed to meet local customer needs. Our global footprint, augmented by our established network of suppliers and distributors, enables us to be responsive to our customers and provide locally customized solutions. We operate facilities in seven countries, accommodating the desire of certain of our customers to procure products and services from local providers. Sales outside of the United States and Canada accounted for 61.6% of total revenue for fiscal 2009. We believe that our established global infrastructure provides a scalable platform to meet the growing worldwide demand for our products and services.

Seasoned management team complemented by highly skilled engineers. We are led by an experienced management team with a mix of private sector and government experience across different industries and functions. Our five divisional presidents have an average tenure of over 20 years in the nuclear industry. Our management team has successfully integrated the legacy businesses of which we are comprised, and has positioned us as a global provider of radiation detection, measurement, analysis and monitoring. Our senior management team is complemented by a team of 165 scientists, engineers and technicians. A number of our employees are participants in international and U.S. standards setting organizations related to radiation detection in the nuclear, defense and medical end markets. Through these activities, we help define the setting of standards and preview changes that impact our products, customers and end markets.

Our Strategy

Our objective is to continue enhancing our position as a global provider of radiation detection, measurement, analysis and monitoring products and services for the global nuclear, defense and medical end markets. We intend to achieve this through the following strategies:

Exploit under-penetrated market opportunities. We believe that we can exploit historically under-penetrated segments of our end markets by leveraging our existing positions across our major product categories. For example, we have leveraged our position in active dosimetry in the North American nuclear

market to increase sales of our contamination & clearance monitors, as evidenced by the sale of over 100 whole body contamination monitors to Bruce Power L.P., a large Canadian nuclear power generating company.

Expand addressable market. We believe that substantial opportunities exist for us to expand our addressable market by marketing our products and services to customers in new geographic regions; providing products and services to customers moving to an outsource model; entering markets where the government is privatizing services; and introducing new applications for existing technologies.


	•	Geographic expansion. Although we sold products and services to customers in over 90 countries between fiscal 2006 and 2009, there remain international markets where we believe we can increase our presence. One such market is India, where we intend to leverage our relationships with leading reactor design firms to capitalize on the opening of the nuclear end market to U.S. firms due to a recent treaty ratification. Other markets for expansion include the Middle East, Eastern Europe and the former Soviet Union, where we intend to increase our presence by leveraging relationships with local partners.

	•	Customer outsourcing. We believe we will continue to capitalize on customer outsourcing within the nuclear end market. Within the United States, several NPP operators have recently outsourced their dosimetry services in order to reduce costs. We have been able to benefit from economies of scale as well as advantages in materials procurement and processing technology to provide enhanced dosimetry services to many of these NPPs at a lower cost.

	•	Service privatization. In regions outside the United States, dosimetry services have historically been provided by government agencies. However, privatization of dosimetry services is accelerating in some regions, such as Europe, as providers seek to reduce costs and benefit from enhanced service offerings, providing an opportunity to leverage our expertise and North American service experience.

	•	New applications for existing technologies. A portion of our development effort is focused on adapting existing technologies to alternative applications. For example, in response to market demand, we adapted our proprietary fiber-optic detector technology used in our TwoStep-Exit whole body monitor designed for the nuclear end market to create the HandFoot-Fibre hand and foot monitor designed for both the nuclear and medical end markets.

Develop new products and services. We believe that significant near-term opportunities exist for us to develop new products and services by capitalizing on our understanding of our customers’ needs and requirements. For example, we developed our proprietary fiber-optic technology that is used in certain of our contamination & clearance monitors through consultation with existing customers. This technology is attractive to customers because, unlike conventional contamination & clearance monitors, its detection functionality does not require a gas supply, thus reducing maintenance and total life cycle costs for end users. This technology recently helped us secure a sale for installation in two Russian utilities.

Continuously improve our cost structure and productivity. As we continue to grow our business, we have implemented a coordinated program of ongoing operating improvements, such as rationalizing costs, optimizing our product portfolio, minimizing working capital requirements, as well as reducing the use of subcontractors, that we believe will permit us to improve our operating margins. We will continue to actively pursue other continuous improvement initiatives through programs across all of our operating segments.

Pursue strategic acquisitions. We have successfully integrated acquisitions to augment our organic growth. We were formed by the merger of GDS, IST and Synodys. Since our formation, we have effectively integrated these businesses, creating a global provider of radiation detection, measurement, analysis and monitoring. We intend to further complement our organic growth with selective acquisitions that enhance our existing products and services, strengthen our position with existing customers and enable us to expand into new markets.

Our Segments

Our segments correspond to our five operating divisions: Health Physics, Radiation Monitoring Systems, Sensing Systems, Dosimetry Services and Imaging Systems.

Health Physics

The Health Physics division encompasses three major product lines focused on detecting radiation and protecting individuals from hazardous exposure. The dosimeters, contamination & clearance monitors, and detection & identification equipment have applications across the nuclear, defense and medical end markets. The products in our Health Physics division are summarized below:


Product Category	End Markets	Applications	NPP Life Cycle Phase	Products

Dosimeters	• Nuclear • Defense • Medical	Pager-sized personnel monitors which monitor radiation dose rate and cumulative dose, along with readers, telemetry, software and other accessories	• Plant operation • Recommissioning • Decommissioning • Waste management	• Active dosimeters • Passive dosimeters • Readers • Calibrators • Dosimetry software • Telemetry systems • Accessories • Software • Services

Contamination & Clearance Monitors	• Nuclear • Defense • Medical	Stationary systems designed to detect radioactive contamination of people, waste, tools, laundry, vehicles and cargo	• Plant operations • Recommissioning • Decommissioning • Waste management	• Body monitors • Waste chambers • Tool monitors • Laundry monitors • Vehicle monitors • Accessories • Software • Services

Detection & Identification Devices	• Nuclear • Defense • Medical	Hand-held and fixed devices used for detecting and locating ionizing radiation sources and/or spectroscopically identifying the active radioisotopes	• Plant operations • Recommissioning • Waste management	• Survey meters • Handheld identifiers • Spectroscopic portal monitors • Accessories • Software • Services

Dosimeters

Our dosimeter product line, which measures ionizing radiation dose, consists of both active and passive dosimeters. Active dosimeters detect and measure radiation levels in real time and provide warnings if the dose rate or cumulative dose exceeds specific thresholds. Passive dosimeters are worn by personnel and monitor cumulative radiation dosage.

Our active dosimeters are most often utilized in NPP and defense environments. Active dosimeters are typically pager sized, and may be worn or fix-mounted, with some models having wireless capabilities. We

generally sell our dosimeters as part of larger systems, which often include readers, software, telemetry and other accessories. Certain systems require commercially available, sealed radioactive sources for calibration and quality assurance purposes.

Our active dosimeters have an average lifespan of approximately seven to ten years, depending on the usage and environment. Replacement cycles can vary by country, depending on the applicable regulatory regime or customer practices. This provides recurring revenue opportunities as customers must replace and upgrade components during this timeframe. In addition, as companies upgrade their dosimeters, they often purchase upgraded readers, software, services and accessories.

We are a global provider of active dosimetry products and services to the nuclear end market. Over 68% of operating NPPs in the United States use our active dosimetry products and services. In addition, sales to the defense end market constitute a significant portion of our active dosimeter revenue. For example, 17 of the 28 NATO militaries have purchased our active dosimeters. We designed our military dosimeter to be flash-dose capable, enabling the device to effectively measure radiation dose following a nuclear event. Also, civil security forces in various countries, including first responders from France, Italy and the United States, use our active dosimeters to assess radiological risk.

We also sell passive dosimeters, which are worn by nuclear, defense and medical and industrial workers with the potential to be exposed to radiation. As with active dosimeters, we typically sell passive dosimetry equipment as a system, consisting of dosimeters, readers, accessories and software.

Contamination & Clearance Monitors

Our contamination & clearance monitors include products that detect alpha, beta, gamma and/or neutron contamination of objects of various sizes and types, from people to trucks. We have a wide range of products, ranging from small tool monitors to whole body monitors for personnel, to large portal monitors for vehicles and cargo. Our monitors utilize gas, inorganic or plastic scintillators with fiber-optic technology to detect radioactive contamination. Our patented fiber-optic technology is differentiated in the market because its detection functionality does not require a gas supply, thus reducing maintenance and total life cycle costs for end users. Certain monitors require commercially available, sealed radioactive sources for calibration and quality assurance purposes.

In the nuclear end market, our monitors are used to screen personnel, their clothing and tools, as well as vehicles entering and exiting reactor sites. In the defense end market, our products are used for homeland security applications to screen people, luggage, vehicles and cargo transiting a port or border. In the medical end market, our monitors are used to screen the hands and feet of nuclear medicine workers in hospitals and are used in the steel industry to screen scrap metal for radioactive contamination.

Detection & Identification Devices

We provide a suite of devices that detect, locate and identify radioactive isotopes. These are typically handheld or fixed devices and can also be integrated into more complex mobile systems. For example, our SPIR Ident product has been incorporated into both military vehicles and helicopters. These detection & identification devices distinguish themselves through their high level of sensitivity and their capacity to distinguish between different radioisotopes using spectroscopy identification algorithms.

For this reason, these devices are typically used in the defense end market. In homeland security and military environments, these devices are used to rapidly identify potential radiological threats originating from dangerous nuclear material, while distinguishing such threats from naturally occurring radioactive materials and medical isotopes.

Radiation Monitoring Systems

Our Radiation Monitoring Systems division supplies fixed and mobile systems consisting of sensors, display and processing electronics and software, which are used for barrier leak control, effluent release monitoring, radiation protection of workers, operational process monitoring and post event monitoring in nuclear installations. The products in our Radiation Monitoring Systems division are summarized below:


Product Category	End Markets	Applications	NPP Life Cycle Phase	Products

Radiation Monitoring Systems	• Nuclear	Systems consisting of sensors, displays, control electronics and software which are used for barrier leak control, effluent release monitoring, radiation protection of workers, operational process monitoring and “post event” monitoring in NPPs, nuclear fuel cycle industry, reactors and military installations.	• Construction • Plant operation • Recommissioning • Decommissioning • Waste management	• Alpha, beta, gamma and neutron sensors • Channels for monitoring: volume contamination (particulates, iodine, gas and liquids); dose rates (gamma and neutron); and neutron flux • Fixed and mobile instrumentation skids • Display and processing electronics • Accessories • Software • Services

We are a global provider of radiation monitoring systems, with particularly strong positions in Europe and Asia. We sell fully integrated systems that can transmit data to a central computer that tracks radiation levels continuously throughout the plant. Many of our systems incorporate or use commercially available, sealed radioactive sources for calibration and quality assurance purposes, the exact type and quantity of such sources being dependent on the requirements of the intended application. To accompany these systems, we also supply proprietary software, which allows operators to monitor trends, alarm levels, historical incident files and status reports.

Within a typical nuclear reactor, a radiation monitoring system consists of between 40 and 120 sensors and a similar number of processing and display units, all of which are generally networked to a central control system. Safety-related monitors are subject to qualifications which are time consuming and expensive to obtain. Qualification of our products often requires close cooperation by us with customers and substantial technical expertise, sometimes requiring a multi-year process and substantial expenditures of funds in advance of customer orders. Qualification is a lengthy and costly endeavor in which equipment is rigorously tested in simulated real-world environmental conditions to ensure that it meets the criteria defined in the standards applicable to the nuclear environment. Qualifications must be performed according to independent reference standards that define the methodologies, criteria and severity required. Upon achievement, qualifications are not typically subject to requalification, revocation or challenge, although a qualification may be obsoleted or required to be revised if the standards organization or regulatory changes determine that the original qualification is insufficient for its intended purpose or the standards themselves evolve, inducing changes in the methodology, criteria or severity required of the qualification. Some equipment requires lengthier qualification periods than others, but the typical period ranges from one to four years. Once a component’s qualified life has been reached, it must be replaced. The qualification process for our radiation monitoring systems typically requires one to three years.

Radiation monitoring systems are typically installed in nuclear facilities during construction, and they are replaced or upgraded upon life extensions or reactor upgrades. The expected life for a radiation monitoring system is 15 to 25 years, depending on the usage and environment, necessitating a significant upgrade of equipment at least once during a nuclear facility’s useful life. Replacement cycles can vary by country, depending on the applicable regulatory regime or customer practices. This provides recurring revenue opportunities as customers must replace and upgrade components and services during this timeframe.

The decommissioning of an NPP, which can take over ten years, also requires radiation monitoring systems. Typically, a larger deployment of mobile monitors is required during the decommissioning process than in normal NPP operations. The new construction, operation and decommissioning phases of the NPP life cycle each provide opportunities for sales of our radiation monitoring systems.

Radiation monitoring systems are also prevalent in the nuclear fuel cycle industry, spanning fuel fabrication, reprocessing and storage. These systems are used in many types of accelerators, including medical positron emission tomography and high-energy particle accelerators and can also be used in the operation and monitoring of nuclear military installations.

Sensing Systems

Our Sensing Systems division provides products that facilitate reactor control, safety and containment structure integrity. These products meet proprietary reactor design qualifications and are essential to the safe and efficient operation of a reactor. The products in our Sensing Systems division are summarized below:


Product Category	End Markets	Applications	NPP Life Cycle Phase	Products

Electrical Penetrations	• Nuclear	Conduit systems that are used to pass electrical and fiber-optic lines through the containment structure of an NPP, without compromising the pressure or radiological integrity of the structure	• Construction • Recommissioning	• Electrical penetrations containment assemblies • Temperature sensors • Instrumentation seals • Thermowells • Explosive valves
Reactor Instrumentation & Control Equipment and Systems	• Nuclear • Defense	Sensors and electronics designed to monitor radiation and temperature within a reactor core and in surrounding areas to facilitate safe and efficient reactor operation	• Construction • Plant operation • Recommissioning	• In-core detectors • Ex-core detectors • Control electronics

Electrical Penetrations

Electrical penetrations are conduits through a nuclear reactor containment structure. Our penetrations allow wiring for electrical and optical signals to pass safely through the containment structure wall, while maintaining the integrity of the wall and not permitting radiation or pressure to escape. Containment structures consist of concrete walls that can extend up to fourteen feet in thickness with a stainless steel liner designed to contain radioactive emissions in a confined space. The containment wall is the primary safety barrier in the reactor.

Our electrical penetrations enable the supply of power for safety systems as well as the reception of signals from neutron flux detectors, radiation monitoring detectors, cameras and other control surveillance devices. Typically, a nuclear reactor has 40 to 70 major electrical penetrations with up to 12,000 individual electrical connections, or feedthroughs.

We are a global provider of electrical penetrations. As with radiation monitoring systems, electrical penetrations must be qualified. The qualification process for our electrical penetrations typically requires three to four years, and our electrical penetrations have been qualified for installation in most major reactor designs by reactor design firms and the major utilities.

As a critical component of reactor design, electrical penetrations provide us with increased visibility into new plant builds. Our position in electrical penetrations provides us with cross-selling opportunities for other products, such as detectors, radiation monitoring systems, imaging systems and contamination & clearance monitors.

Reactor Instrumentation & Control Equipment and Systems

We are a global provider of reactor instrumentation & control equipment and systems. Our reactor instrumentation & control detectors are used in nuclear facilities to monitor radiation and temperature within a nuclear reactor core (“in-core” detectors) and in surrounding areas (“ex-core” detectors). Our detectors measure the distribution of neutron/gamma flux and temperature both in, and adjacent to, a reactor core and are critical components to maintaining the efficient and safe operation of a reactor. Our detectors incorporate various radioactive materials and generate a signal, giving a precise measurement of the radiation flux, which contributes to safe and efficient reactor operation.

As with radiation monitoring systems and electrical penetrations, these detectors must be qualified and such qualification is established by tests which are designed to demonstrate the intended function of a detector when subjected to conditions that simulate installed life under design service conditions. The qualification process typically requires one to two years for our detectors. Our reactor instrumentation & control detectors are qualified for all major reactor designs. Once a qualification is obtained and a contract is awarded, the supplier is well positioned for replacement revenue due to the high switching costs involved in qualifying new products and services from other suppliers.

Reactor instrumentation & control detectors are typically installed in nuclear facilities during construction and are replaced or upgraded regularly. The expected life of a detector can range from four to 25 years, depending on the type of detector and the operating environment. This provides recurring revenue opportunities as customers must replace and upgrade components during these timeframes. In addition, there are opportunities to provide more comprehensive upgrades of reactor instrumentation & control detector systems in certain existing reactors to facilitate up-rating.

Dosimetry Services

Our Dosimetry Services division provides an official “dose of record” to employers of radiation workers. The services in our Dosimetry Services division are illustrated below:


Product Category	End Markets	Applications	NPP Life Cycle Phase	Products

Dosimetry Services	• Nuclear • Defense • Medical	An information service, which provides environmental radiation monitoring services as well as an official dose of record to employers and occupationally exposed employees	• Plant operation • Decommissioning • Waste management	• Extremity, whole body, eye, environmental and fetal monitoring reports • Online applications for dosimetry data management • Consulting services

At the request of employers, we provide cumulative dose monitoring services to personnel at nuclear installations, research labs, government agencies, hospitals, dental offices, veterinary offices and other medical facilities where there is a potential for radiation exposure. Government regulations and industry guidelines (e.g., OSHA, NCRP, ANSI, IAEA) often require these individuals to wear dosimeters to monitor their radiation dose. We provide our customers with services such as cumulative dose reports and data management. We are a provider of dosimetry services, primarily serving the U.S. nuclear and medical end markets.

Our service uses film, thermoluminescent and track-etch dosimeters. Each of these has distinct characteristics that make them suitable for specific applications and customer types.

Dose is calculated algorithmically using filtering mechanisms to customize the dosimeter response for the type of radiation and potential exposure. Each dosimeter is identified to provide a chain of custody throughout the service cycle. We ship the dosimeters to the customer, whose personnel wear them for intervals ranging from one month to one year. As the wear period nears its end, we send the customer a new set of dosimeters, and the customer returns the original dosimeters to us for processing. After processing, we report dose information to the customer in a format that complies with relevant governing standards or regulations.

Reports generally take seven to ten business days to process and document each wearer’s current wear period dose, quarter-to-date dose, year-to-date dose and lifetime dose.

In fiscal 2009 over 90% of our dosimetry services customers, representing 65% of our dosimetry services revenue, pre-paid their annual subscriptions. In the six months ended December 31, 2009, over 89% of our dosimetry customers, representing 68% of our dosimetry services revenue, pre-paid their annual subscriptions.

Imaging Systems

Our Imaging Systems division is a global provider of highly specialized closed circuit camera systems used for inspection and surveillance in difficult and hazardous environments. The products in our Imaging Systems division are illustrated below:


Product Category	End Markets	Applications	NPP Life Cycle Phases	Products

Imaging Systems	• Nuclear • Other	Nuclear: imaging systems for nuclear fuel handling, control, monitoring and inspection; reactor vessel maintenance; underwater surveillance; tank and vessel inspection; and cameras for remotely operated vehicles High-temperature: kiln viewing and recovery boiler monitoring	• Construction • Plant operation • Recommissioning • Decommissioning • Waste management	• Radiation hardened surveillance and inspection cameras • Video management and control systems • Lighting systems • Telemetry control units • Thru-wall endoscopes • High temperature cameras with pyrometry • Software

We have designed our imaging systems to operate in nuclear installations, with many of our cameras being radiation “hardened,” allowing them to operate in the high levels of radiation frequently found in these installations. We supply cameras for all stages of the nuclear life cycle, from construction through operation, to decommissioning and waste management. Our products are used in NPPs, nuclear reprocessing plants and waste management facilities. For example, our cameras are used during refueling shutdowns for inspecting the integrity of critical structures in nuclear reactors.

Our products are also designed for use in high temperature environments, such as pulp and paper recovery boilers, gas or coal-fired power boilers and cement kilns. In these environments, our cameras provide real time video as well as accurate temperature measurement. This enables operators to closely monitor their processes, helping to ensure plant safety and increased operational efficiency. For example, our cameras are used by two of the world’s largest cement producers to monitor flame patterns and temperature in cement kilns, helping operators maximize operational efficiency.

The expected life of our cameras typically ranges from one to five years, depending on the operating environment. This provides recurring revenue opportunities as customers must replace and upgrade components during these timeframes.

Research and Development

Our research and development efforts allow us to introduce new products to the marketplace, fulfill specific customer needs and continue to meet qualification requirements for next generation nuclear reactors and other evolving regulatory standards. Our five operating divisions are committed to both technology research and product development to fulfill their strategic objectives and are supported by our engineering and research and development organization consisting of 165 scientists, technicians and engineers, representing approximately 19% of our total workforce, as of December 31, 2009. A number of them participate in international standards setting organizations and committees. We engage in research and development activities at most of our facilities worldwide.

We expensed approximately $11.9 million, $14.9 million and $11.3 million on research and development for fiscal 2007, 2008 and 2009 and $6.3 million and $5.2 million for the six months ended December 31, 2008 and 2009. Research and development activities range from the development of radiation tolerant electronics to the development of customized software solutions for customer-specific applications, among others. We conduct these efforts through a mix of in-house research, collaboration with academia, customers and regulatory authorities as well as selected outsourcing through external vendors. The scope and extent of the outsourced portion of research and development activities vary by division, but typically, critical hardware design, software development and project management activities are conducted in-house while specialized services such as consulting services, algorithm design, thermal analysis, complex modeling and calculations and testing services are provided by third parties.

Sales and Marketing

We sell our products and services through our direct sales organization and indirectly through our global network of independent, third-party sales representatives and distributors. Our internal sales team is organized by operating division and end market to provide a higher level of service and understanding of our customers’ unique needs. We recently instituted a key account strategy in which we have designated senior executives taking a lead role with our top customers. This enables us to systematically and actively maintain close relationships with our top customers and provide solutions that meet their specifications. We have 14 sales offices in North America, Europe and Asia, and as of December 31, 2009, our sales and marketing personnel consisted of 140 employees, which represents approximately 16% of our total workforce.

We derive a portion of our revenue from sales of our products and services through channel partners, such as independent sales representatives and distributors. In particular, our independent sales representatives are an important source of sales leads for us and augment our internal resources in remote geographies. We sell through distributors in situations in which our customers prefer to purchase from a local business entity or purchase in smaller volume.

Our marketing activities include participation in many tradeshows worldwide across our nuclear, defense and medical end markets. We advertise in technical journals, publish articles in leading industry periodicals and utilize direct mail campaigns.

We host our annual Users’ Training and Benchmarking Seminar, where customers participate in a variety of programs designed to exchange ideas and discuss occupational challenges. The event also brings together key channel partners and vendors to strengthen our sales and marketing network. Attendees gain insight into our product plans and participate in interactive sessions that give them the opportunity to better understand our current suite of products and services as well as provide feedback on our product roadmap.

Our Customers

Our principal customers include power and utility companies, reactor design firms, NPPs, government agencies, military organizations, medical service providers and industrial companies. For fiscal 2009, no single customer accounted for more than 10.0% of our consolidated revenue, while our top ten customers together accounted for approximately 27.3% of our consolidated sales. For the six months ended December 31, 2009, no customer accounted for greater than 10% of our consolidated revenue and our top ten customers together accounted for approximately 34.8% of our consolidated sales.

We have had a long term relationship with one company that provides plant design and equipment to a significant number of nuclear power plants around the world. Revenues from this customer have represented approximately 23% to 29% of the Sensing Systems segment revenue in fiscal years 2007, 2008, 2009 and the six months ended December 31, 2009. If we were to lose this customer, it could have a material impact on the results of the Sensing Systems segment. Due to the project nature of our business, there are other customers in the Sensing Systems segment, as well as in the Imaging Systems, Health Physics, and Radiation Monitoring Systems segments, that may represent approximately 3% to 5% of consolidated revenue in any one period. However, these large customer projects are continually replaced in subsequent periods with equivalent projects from different customers. We

do not believe that the loss of any one or several of these major customers would have a material adverse effect on our segment results or on our consolidated financial statements.

Manufacturing and Supply Chain

Given the diversity of our products, we employ numerous manufacturing techniques, including high-volume process manufacturing, discrete manufacturing, cellular manufacturing and hybrid approaches. Our production personnel engage in manufacturing, procurement and logistics activities. Our production activities are located in the United States, Canada, France, Germany, Finland and the United Kingdom. As of December 31, 2009, our production personnel consisted of 420 employees, which represents approximately 49% of our total workforce.

Our manufacturing activities are focused mainly on the production of the core value-add devices and components of our products, while non-core components and sub-assemblies are generally outsourced. This strategy enables us to protect important intellectual property while minimizing the time, cost and effort to produce commoditized components. Most of the time, the design, assembly and integration of the components are performed in-house, allowing our engineers to customize the products according to customer specifications. For highly engineered nuclear products, production volumes are typically low, with a high degree of custom engineering required. For other product lines, such as passive dosimetry products, production volumes tend to be higher. We apply rigorous quality control processes and calibrate radiation detection devices internally, leading to high quality standards and customization capabilities. Most of our production sites are certified to production quality standards such as ISO 9001, 10 CFR 50 Appendix B and ASME NQA-1.

The principal materials used in our manufacturing processes are commodities that are available from a variety of sources. The key metal materials used in our manufacturing processes include precious metals, tungsten, copper, aluminum, magnesium products, steel, stainless steel and various alloys, which are formed into parts such as detectors, sensors and cable assemblies. The key non-metal materials used include amorphous and crystalline scintillator materials, ceramics, epoxies, silicon and fused silica, polyethylene, polyurethane and injection molded plastic parts and components such as lenses, monitors, sensors, dosimeters, electronic boards, detectors and cables.

Properties

The table below lists our properties as of December 31, 2009.


						Lease
		Approximate				Expiration
Location		Square Feet			Facility Use / Description	Date

Production facilities:
Canada	Cambridge, ON		31,800		Sensing Systems	July 31, 2012
Finland	Turku		9,800		Health Physics	N/A(1)
France	Fussy (Bourges)		24,000		Sensing Systems	May 31, 2015
France	Lamanon		77,700		Health Physics & Radiation Monitoring Systems	N/A(2)
France	Lamanon		6,500		Health Physics & Radiation Monitoring Systems	November 30, 2017
Germany	Hamburg		29,600		Health Physics	December 31, 2016
Germany	Munich		28,100		Radiation Monitoring Systems	September 30, 2013
United Kingdom	Alton		27,000		Imaging Systems	December 14, 2010(3)
United States	Atlanta (Smyrna), GA		24,100		Health Physics & Radiation Monitoring Systems	June 30, 2014
United States	Buffalo (Cheektowaga), NY		26,200		Sensing Systems	May 31, 2013
United States	Horseheads, NY		50,500	(4)	Sensing Systems & Imaging Systems	November 30, 2014
United States	Irvine, CA		43,500		Dosimetry Services	August 31, 2014

Sales / Research and Development / Administrative locations
China	Beijing		500		Sales center	February 28, 2011
China	Beijing		2,200		Sales center	August 31, 2010
Germany	Bonn		1,000		Imaging Systems	N/A(5)
United Kingdom	Whitehaven, Cumbria		3,000		Imaging Systems	N/A(5)
United States	Pickerington, OH		2,900		Imaging Systems	May 31, 2011
United States	San Ramon, CA		10,300		Corporate headquarters	April 12, 2012
United States	Woodinville, WA		1,000		Imaging Systems	July 31, 2012


(1)		The lease on the property we occupy in Turku, Finland is current and terminable by either party with twelve months’ notice. No notice of termination with respect to this lease has been given or received as of the date of this prospectus.


(2)		We lease all listed properties except the property located in Lamanon, France, which we own.


(3)		The lease on the property we occupy in Alton, United Kingdom will expire in December 2010; however, we are negotiating an agreement to lease an adequate substitute for this property, which we expect will be on commercially reasonable terms, that will commence on or before the expiration of the prior lease.


(4)		Our current lease consists of a total of approximately 60,675 square feet, of which we sublet, or otherwise do not use, approximately 10,175 square feet.


(5)		The term of such leases are month to month.

We believe that our properties are adequate to meet the anticipated requirements of our business for at least the next twelve months. We are currently in the process of expanding our manufacturing facilities in Lamanon, France, and we recently renovated and reorganized our facilities in Hamburg, Germany and Cambridge, Ontario, Canada. If we were to require additional space at any of our locations, we believe that it would be readily available on commercially reasonable terms.

Competition

The global markets for our products and services are competitive and continually evolving. Within each of our operating segments, we encounter a variety of competitors, ranging from small independent companies providing niche solutions to larger multi-national corporations providing a broader set of products and services to our targeted

end markets. We believe that the principal bases upon which we compete in our target end markets include product quality and reliability, technical capability and product qualification, strength of customer relationships, customer service and price. In particular, customers in the nuclear and defense end markets tend to emphasize product quality and reliability, technical capability and strength of supplier relationships, while customers in the medical end markets, in particular for passive dosimetry products and services, tend to make purchasing decisions on a combination of brand recognition, price, service and reliability.

We believe the primary competitors in each of our segments are as follows:


	•	Health Physics: Thermo Fisher Scientific and Areva (Canberra).

	•	Radiation Monitoring Systems: General Atomics (Sorrento Electronics) and Areva (Canberra).

	•	Sensing Systems: Reuter-Stokes (General Electric), Schott and Areva.

	•	Dosimetry Services: Landauer.

	•	Imaging Systems: Diakont.

Intellectual Property

We rely on a combination of intellectual property rights, including qualifications, trade secrets, patents, copyrights and trademarks, as well as contractual protections, to protect our proprietary products, methods, documentation and other technology.

As of December 31, 2009, we held approximately 12 issued U.S. patents, 38 issued foreign counterparts of U.S. patents and three other issued foreign patents with expiration dates ranging from 2010 to 2025. In addition, we have filed seven foreign counterpart patent applications and five other foreign patent applications. We also hold exclusive and non-exclusive licenses related to patents and other intellectual property of third parties. We held approximately 14 U.S. registered and pending trademarks, 22 international counterparts of such registered and pending trademarks and seven additional international registered and pending trademarks, as of December 31, 2009.

In many instances, we rely on trade secret protection and confidentiality agreements to safeguard our interests. Due to the long useful life of certain aspects of our technology, we believe that the patent registration process, which requires public disclosure of patented claims and inventions, could harm our competitive position. We differentiate our products and technologies primarily through our proprietary know-how, technology or data that are not covered by patents or patent applications, including technical processes, equipment designs, testing and other procedures. Our employees are generally required to assign to us all of the inventions, designs and technologies they develop during the course of employment with us, either through written agreements or by operation of law, depending on the jurisdiction. Where appropriate, we require third parties with whom we deal to enter into agreements with us that address issues of confidentiality and intellectual property.

Environmental Matters

We are subject to a variety of environmental, health and safety and pollution-control laws and regulations in the jurisdictions in which we operate. We do not believe the costs of compliance with these laws and regulations will be material. We use, generate, discharge and dispose of hazardous substances, chemicals and wastes at some of our facilities in connection with our product development, testing and manufacturing activities. Any failure by us to control the use of, to remediate the presence of, or to restrict adequately the discharge of, such substances, chemicals or wastes could subject us to potentially significant liabilities, clean-up costs, monetary damages and fines or suspensions in our business operations. In addition, some of our facilities are located on properties with a history of use involving hazardous substances, chemicals and wastes and may be contaminated. Although we have not incurred, and do not currently anticipate, any material liabilities in connection with contamination, we may be required to make expenditures for environmental remediation in the future with respect to contamination at our or our predecessors’ former or current facilities or at third-party waste disposal sites. See “Risk Factors—Risks Relating to Our Business—We could incur substantial costs as a result of violations of or liabilities under environmental laws.”

Regulation

We are subject to a variety of laws and regulations, including but not limited to those of the United States, Canada, the EU, the EU member states and the People’s Republic of China, that impose regulatory systems that govern many aspects of our operations, including but not limited to our use, storage and disposal of radioactive materials and hazardous waste. In addition, these jurisdictions impose trade controls requirements that restrict trade to comply with applicable export controls and economic sanctions laws and requirements, and legal requirements that are intended to curtail bribery and corruption. These laws and regulations apply by virtue of the nature of our industry, end markets and products, as well as the range of potential uses of our products, the origin of the technology incorporated into our products, and the jurisdictions in which we produce and sell our products.

The multi-jurisdictional legal and regulatory environments in which we operate are subject to extensive and changing laws and regulations administered by various national, regional and local governmental agencies both within and outside the United States.

We are a federal government contractor and, as such, we are subject to Executive Order 11246 and other relevant laws and regulations. As part of our compliance obligations, we implement on an annual basis an affirmative action plan and program which, in part, include our good faith efforts to achieve in our workforce full utilization of qualified women and minorities. In addition, we have in place an affirmative action plan with respect to disabled individuals, as well as Vietnam era, disabled or other veterans.

Some of the U.S. laws affecting our operations include, but are not limited to, the AEA, the Energy Reorganization Act of 1974, or ERA, the Resource Conservation and Recovery Act of 1976 as amended by the Hazardous and Solid Waste Amendments of 1984, or RCRA, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, or CERCLA, the Hazardous Materials Transportation Act, the Federal Water Pollution Control Act, or the Clean Water Act, the Toxic Substances Control Act of 1976, or TSCA, the Organized Crime Control Act of 1970, or the OCCA, and the Occupational Safety and Health Act, or OSHA, as well as the state laws governing radiation control, hazardous waste management, water quality and air quality in the states of New York, Georgia and California, each as from time to time amended. We are also subject to a variety of U.S. federal and state employment and labor laws and regulations, including the Americans with Disabilities Act, the Federal Fair Labor Standards Act, the Worker Adjustment and Restructuring Notification Act, or WARN Act, which requires employers to give affected employees at least 60 days’ notice of a plant closing or mass layoff, and other regulations related to working conditions, wage-hour pay, overtime pay, employee benefits, anti-discrimination and termination of employment. The classified work that we currently perform at one of our U.S. facilities subjects us to the industrial security regulations of the Department of Defense and other federal agencies that are designed to safeguard against unauthorized access by foreigners and others to classified and other sensitive information.

In the United States, the AEA and ERA authorize the NRC, and state authorities where applicable, to regulate the receipt, possession, use and transfer of radioactive materials. The NRC, and state authorities where applicable, sets regulatory standards for worker protection and public exposure to radioactive materials or wastes to which we are required to adhere in our operations that use radioactive materials in research and development, product manufacture, testing and calibration.

Certain products in our Health Physics, Radiation Monitoring Systems and Sensing Systems divisions require the use of radioactive sources. For certain of our products, these radioactive sources are often obtained by our customers directly from third-party providers, and for others, we directly incorporate these radioactive sources into our products. Certain of our reactor instrumentation and control equipment and systems in our Sensing Systems division incorporate radioactive materials. In all such cases, licenses for radioactive sources and materials are provided by the appropriate regulatory authority in the relevant jurisdiction and such authorities may be at the state or national level. For example, at our sites in the United States that handle radioactive sources or materials, the appropriate licenses are issued by state-level authorities which are, respectively, the New York State Department of Health, Georgia Department of Natural Resources, and California Department of Public Health; at our site in Canada, the relevant authority is the national-level Canadian Nuclear Safety Commission; at our site in Finland, the relevant authority is the national-

level Radiation and Nuclear Safety Authority (STUK); in Germany, the relevant authorities are the state-level Hamburg State Office for Work Safety for our Hamburg site and the Bavarian State Office for the Environment for our Munich site; and, at our site in France, the relevant authority is the national-level French Nuclear Safety Authority (ASN).

The particular license requirements in a given jurisdiction are normally tailored to the specific radioactive elements or compounds involved, their physical form, and possession limits. Once authorities complete their application review and any required follow-up, the authority issues the site a license which imposes specific on-going compliance obligations that typically include requirements for us to pay periodic licensing fees, submit periodic written compliance reports, and agree to periodic site inspections by regulators, which may be announced or unannounced. Once a site has an existing license, the process for expanding or reducing the licensing scope generally is simpler than applying for a new license.

We have numerous licenses in effect at our various facilities in the United States, Canada, Finland, Germany, and France and the expiration dates of individual licenses differ by their term and effective date. Typical license terms range from two to five years, with authorities in some jurisdictions (e.g., Finland and Bavaria, Germany) issuing licenses that are perpetual subject to our on-going license compliance. While specific regulations vary by jurisdiction, generally a license may be terminated by the regulatory authority immediately upon a finding of a substantial safety violation or other material violation of licensing requirements. For more minor violations, regulatory authorities typically provide the licensee with a written statement of deficiency stating required remediation steps and a demand for proof of remediation; depending on the severity of the violation, a re-inspection of the site may be performed by the authority to ensure adequate remedial steps have been completed.

In most cases, our various sites (including our predecessors) have held, maintained and (where required) renewed their licenses for a decade or more. In all cases, the licenses we required related to radioactive sources or materials are current and in force and, to the best of our knowledge, we are not aware of any basis to expect that those of its existing licenses subject to periodic renewals will not be renewed.

RCRA provides a comprehensive framework for the regulation of hazardous and solid waste which applies to our operations. RCRA prohibits improper hazardous waste disposal and imposes criminal and civil liability for failure to comply with its requirements. TSCA provides a comprehensive framework for the management by the EPA of over 60,000 commercially produced chemical substances, some of which are used by our operations. The Clean Water Act regulates the discharge of pollutants into certain waters and may require us to apply for and obtain discharge permits, conduct sampling and monitoring and, under certain circumstances, reduce the quantity of pollutants in those discharges. The OCCA provides for the regulation of explosives, which applies in particular to our facility in Buffalo which manufactures and tests products that incorporate explosives. The OCCA establishes a framework for licensing, use, storage and sale of explosives and products containing explosives and imposes criminal and civil liability for failure to comply with its requirements. OSHA provides for the establishment of standards governing workplace safety and health requirements, including setting permissible exposure levels for hazardous chemicals. We must follow OSHA standards, including the preparation of material safety data sheets, hazardous response training and process safety management, as well as various record-keeping, disclosure and procedural requirements.

Our operations outside the United States are subject to similar, and sometimes more stringent, laws and regulations. For example, an EU directive relating to the restriction of hazardous substances in electrical and electronic equipment, or RoHS directive, and a directive relating to waste electrical and electronic equipment, or WEEE directive, have been and are being implemented in EU member states. Among other things, the RoHS directive restricts the use of certain hazardous substances in the manufacture of electrical and electronic equipment and the WEEE directive requires producers of electrical goods to be responsible for the collection, recycling, treatment and disposal of these goods. In addition, laws similar to the RoHS and WEEE directives were passed in China in 2006 and South Korea in 2007. Governments in other countries and states, including the United States, are considering implementing similar laws or regulations. In addition, a regulation regarding the registration, authorization and restriction of chemical substances in industrial products, or REACH, became effective in the EU in 2007. REACH and other regulations requires us or our suppliers to substitute certain chemicals contained in our products with substances the EU considers less dangerous. We have assessed the impact that REACH is expected to have on us and have determined the impact at this time to be immaterial. We have completed the chemical substitutions required by REACH and expect to complete any associated requalifications in fiscal 2010. We are also subject to the employment and labor laws and regulations of the foreign jurisdictions where the majority of our employees are located.

We deal with numerous U.S. and non-U.S. government agencies and entities, including the U.S. military, the armed forces of many NATO countries, the U.S. Department of Defense, the U.S. Department of State, the U.S. Department of Treasury, the U.S. NRC, the U.S. Department of Homeland Security and the corresponding governmental agencies and entities in the European Union and Canada. When working with these and other government agencies and entities, we must comply with, and are affected by, laws and regulations relating to the formation, administration and performance of contracts. These laws and regulations, among other things require certification and disclosure of all cost or pricing data in connection with various contract negotiations; impose acquisition regulations that define allowable and unallowable costs and otherwise govern our right to reimbursement under various cost-based U.S. government contracts; and restrict the use and dissemination of information classified for national security purposes and the exportation of certain products and technical data.

We believe that certain of our products and technologies are eligible for designation or certification as “qualified anti-terrorism technologies” under the SAFETY Act provisions of The Homeland Security Act of 2002, and its implementing regulations. Under the SAFETY Act, the federal government provides for certain liability limitations and a presumption that the “government contractor” defense applies if the Department of Homeland Security “designates” or “certifies” technologies or products as “qualified anti-terrorism technologies,” and if certain other conditions apply. We may seek to qualify some or all of our products and technologies under the SAFETY Act’s provisions in order to obtain such liability protections, but there is no guarantee that the Department of Homeland Security will designate or certify our products and technologies as qualified anti-terrorism technology. To date, we have not sought such designation or certification as a qualified anti-terrorism technology, and our products have been sold without such qualification and we may continue to sell our products and technologies without such qualification. To the extent we do so, we will not be entitled to the benefit of the SAFETY Act’s limitations on tort liability or to any U.S. government indemnification.

Many of our products are subject to export controls of the United States, Canada and the member states of the EU, depending on a number of factors, including the nature of the product and its potential uses, the origin of the technology incorporated into the product, and the jurisdictions in which we produce and sell our products. Certain of our products are subject to U.S. export control laws and regulations, which have certain registration, licensing and recordkeeping requirements for the sale or transfer of controlled technology or information to non-U.S. persons. These regulations include the U.S. Department of Commerce’s Export Administration Regulations, or the EAR, the U.S. Department of State’s International Traffic in Arms Regulations, or ITAR and the U.S. Nuclear Regulatory Commission regulations. Certain products that have dual-use commercial and military applications are controlled under the EAR’s Commerce Control List, and we have export compliance systems for determining the proper export licensing requirements for such products. We need to keep such export compliance systems, which include third-party service provider screening of

compliance lists, monitoring of Department of Commerce notifications and periodic reviews of applicable regulations, up to date and properly maintained.

U.S. laws restrict the ability of U.S. companies, U.S. citizens and U.S. permanent residents, or U.S. persons, from involvement in certain types of transactions with countries, businesses and individuals that have been targeted by U.S. economic sanctions. For example, U.S. persons are precluded from undertaking virtually any activity of any kind on the part of any U.S. person with regard to any potential or actual transactions involving Cuba, Iran and Sudan without the prior approval of the U.S. Department of Treasury’s Office of Foreign Assets Control, or OFAC. OFAC also administers U.S. sanctions against a lengthy list of entities and individuals, wherever they may be located, that the United States considers to be closely associated with these sanctioned countries or that are considered terrorists or traffickers in either narcotics or weapons of mass destruction. Furthermore, U.S. economic sanctions forbid U.S. persons from circumventing direct U.S. restrictions or from facilitating transactions by non-U.S. persons if those activities are forbidden to U.S. persons. Penalties for violating provisions such as these can include significant civil and criminal fines, imprisonment and loss of tax credits or export privileges.

The Foreign Corrupt Practices Act of 1977, or the FCPA, as amended by the Omnibus Trade and Competitiveness Act of 1988 and the International Anti-Bribery and Fair Competition Act of 1998, makes it a criminal offense for a U.S. corporation or other U.S. domestic concern to make payments, gifts or give anything of value directly or indirectly to foreign officials for the purpose of obtaining or retaining business, or to obtain any other unfair or improper advantage. In addition, the FCPA imposes accounting standards and requirements on publicly traded U.S. corporations and their foreign affiliates, which are intended to prevent the diversion of corporate funds to the payment of bribes and other improper payments, and to prevent the establishment of “off books” slush funds from which such improper payments can be made. We are also subject to laws and regulations covering subject matter similar to that of the FCPA that have been enacted by countries outside of the United States. For example, the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions was signed by the members of the Organization for Economic Cooperation and Development and certain other countries in December 1997. The Convention requires each signatory to enact legislation that prohibits local persons and firms from making payments to foreign officials for the purpose of obtaining business or securing other unfair advantages from foreign governments. Failure to comply with these laws could subject us to, among other things, penalties and legal expenses, which could harm our reputation and have a material adverse effect on our business, financial condition and results of operations.

Compliance with the myriad of export control laws of the various jurisdictions in which we do business is a challenge for any company involved in export activities within the nuclear and defense end markets. We have compliance systems in our U.S. and non-U.S. subsidiaries to identify those products and technologies that are subject to export control regulatory restrictions and, where required, we obtain authorization from relevant regulatory authorities for sales to foreign buyers or for technology transfers to foreign consultants, companies, universities or foreign national employees. We also have a compliance system that is intended to proactively address potential compliance issues including those related to export control, trade sanctions and embargoes, as well as anti-bribery situations, and we are implementing this through such mechanisms as training, formalizing contracting processes, performing diligence on agents and continuing to improve our record-keeping and auditing practices with respect to third-party relationships and otherwise. Thus far, as part of our compliance system, for instance, we have developed a Code of Ethics and Conduct that informs all of our employees of their compliance obligations. Furthermore, we have developed an ethics and conduct training program that all of our employees are required to undertake, as well as other targeted compliance training relevant to their position, such as specific FCPA training for all of our worldwide controllers. Violations of any of the various U.S. or non-U.S. export control laws can result in significant civil or criminal penalties, or even loss of export privileges, as mentioned above. We recognize that an effective compliance program can help protect the reputation and relationship of a regulated company with the regulatory agencies administering these laws and regulations. In the United States, each of the regulatory agencies administering these laws and regulations has a voluntary disclosure program that offers the possibility of significantly reduced penalties, if any are applicable, and we intend to use these programs as part of our overall compliance program, as necessary.

Backlog and Deferred Contract Revenue

Total backlog represents committed but undelivered contracts and purchase orders at period end. Backlog excludes maintenance-related activity and agreements that do not represent firm purchase orders. Customer agreements that contain cancellation for convenience terms are generally not reflected in backlog until firm purchase orders are received. Backlog is not a complete measure of our future business due to these customer agreements. Backlog can fluctuate significantly due to the timing of large project awards. In addition, annual or multi-year contracts are subject to rescheduling and cancellation by customers due to the long-term nature of the contracts.

Deferred contract revenue represents the prepayment of measuring and monitoring services. The amounts are recorded as deferred contract revenue in our balance sheets and represent customer deposits invoiced in advance for services to be rendered over the service period.

Information on backlog and deferred contract revenue follows (in thousands):


							As of
	As of June 30,						December 31,
	2007		2008		2009		2009

Backlog	$	143,887	$	177,956	$	183,960	$	247,083
Deferred contract revenue		44,640		53,539		62,031		66,747

Furthermore, we anticipate that approximately 63% of our December 31, 2009 total backlog will not be filled within the current fiscal year.

Legal Proceedings

From time to time, we are involved in various routine legal proceedings. We cannot predict the outcome of these lawsuits, legal proceedings and claims with certainty. Nevertheless, we believe that the outcome of these proceedings, even if determined adversely, would not have a material adverse effect on our business, financial condition and results of operations.

Employees

As of December 31, 2009, we had 863 employees worldwide, consisting of 140 employees in sales and marketing, 420 in production, 165 in research and development and 138 in general and administrative functions. Geographically, we had 328 employees in North America, 531 in Europe and four in Asia and other regions as of December 31, 2009. We maintain both union and non-union workforces in the United States, with unionized workforces comprising a small minority of the overall U.S. employee base. As of December 31, 2009, 34 U.S.-based employees, primarily located in Horseheads and Buffalo, New York, were members of a union. Pursuant to applicable industrial relations laws, our employees located in France and Germany were represented by works councils, and our employees located in France and Finland were represented by trade unions.

MANAGEMENT

The following table sets forth certain information with respect to our executive officers and members of our Board of Directors:


Name	Age	Position

Thomas D. Logan	49	President, Chief Executive Officer and Chairman of the Board
Jack A. Pacheco	50	Vice President and Chief Financial Officer
Seth B. Rosen	41	General Counsel, Vice President, Corporate Development, and Secretary
W. Antony Besso	40	Regional Vice President, EMEA, and President, Health Physics Division
Iain F. Wilson	47	Regional Vice President, Asia, and President, Sensing Systems Division
Robert J. Klein(1)(2)(3)(4)	45	Director
Dustin G. Smith(1)(2)(4)	33	Director Nominee
Brian S. Graff(1)(2)	44	Director Nominee
Michael T. Everett(3)	60	Director Nominee
Earl R. Lewis(3)(4)	66	Director Nominee
Alfred E. Barry, Jr.	54	Director Nominee


(1)		ACAS-designated representative.


(2)		To be a member of the Nominating and Corporate Governance Committee upon the consummation of this offering.


(3)		To be a member of the Audit Committee upon the consummation of this offering.


(4)		To be a member of the Compensation Committee upon the consummation of this offering.

Thomas D. Logan has been our President, Chief Executive Officer and Chairman of the Board since our formation in December 2005. From 2004 to 2007, Mr. Logan served as CEO for Global Dosimetry Solutions, one of our predecessor companies and currently a subsidiary of ours. Mr. Logan has more than 22 years of energy industry experience. In addition, he has nine years of experience within the contract manufacturing and consumer products industries. Mr. Logan holds a Bachelor of Science degree and a Master of Business Administration degree from Cornell University.

Jack A. Pacheco has served as our Vice President and Chief Financial Officer since March 2008. From 2004 to 2008, Mr. Pacheco served as Chief Financial Officer of Smart Modular Technologies, a public company listed on the NASDAQ stock exchange. From 2001 to 2004, Mr. Pacheco served as Chief Financial Officer for Ignis Optics, Inc., an optical components startup acquired by Bookham Technology. He holds a Master of Business Administration degree from Golden Gate University and a Bachelor of Science degree in Business Administration from Washington State University.

Seth B. Rosen is our General Counsel, Vice President, Corporate Development, and Secretary, a position he has held since January 2008. In 2007, Mr. Rosen served as a business and legal consultant to a variety of existing and startup businesses. From 2006 to 2007, he was CEO of Golden Gate Energy Corporation, a solar energy startup company. From 1998 to 2006, he served as Senior Licensing Associate and then Principal Licensing Associate at the Technology Transfer Department of Lawrence Berkeley National Laboratory. From 1997 to 1998, Mr. Rosen served as Corporate Counsel at Siebel Systems, Inc. From 1994 to 1997, he was an associate at the law firm of Baker & McKenzie. Mr. Rosen received his Juris Doctor degree from Harvard Law School, his Master of Business Administration from the joint program at the Haas School of Business at the University of California at Berkeley and the Graduate School of Business at Columbia University, and his Bachelor of Arts from the University of California at Berkeley.

W. Antony Besso has been our Regional Vice President, EMEA, and President, Health Physics Division since February 2006. From 2004 to 2006, Mr. Besso acted as an advisor and interim manager for private

equity firms and individual investors in a diverse range of industries. From 1996 to 2004, Mr. Besso held a series of senior management positions in the global engineering group ALSTOM SA. Mr. Besso was also a founding partner in Advention Business Partners, a leading independent consulting firm with operations in France, Germany and China. Mr. Besso holds a Bachelor of Arts degree from Queen’s University and a Master of Business Administration from Dalhousie University.

Iain F. Wilson has served as our Regional Vice President, Asia, and President, Sensing Systems Division since our formation in December 2005. From 2000 to 2005, Mr. Wilson was General Manager, Sensing Systems Group of IST, one of our predecessor companies. Previously, Mr. Wilson held numerous technical roles with IST, focused principally in the areas of Quality Management, Engineering and Plant Operations. He began his career as the Quality Manager for GE Reuter Stokes, Canada. Mr. Wilson holds a Bachelor of Science degree from Ryerson University, Toronto, Canada. Mr. Wilson is a member of the American Nuclear Society.

Robert J. Klein has served as a Director since our formation in December 2005. Mr. Klein has served as a Managing Director and Senior Vice President of ACAS, our principal stockholder, since 2004, where he leads the New York private equity practice. From 2002 to 2004, he served as a Principal of ACAS. Prior to joining ACAS, he was a Principal at American Securities Capital Partners. Mr. Klein received a Bachelor of Arts degree from Yale University and a Juris Doctor degree from Stanford University Law School. Mr. Klein is an ACAS-designated member of our Board of Directors.

Dustin G. Smith has been designated to serve as a member of our Board of Directors upon the consummation of this offering. Mr. Smith has served as a Principal and Vice President in the Buyouts division of ACAS since July 2007 and serves on the Board of Directors of Halt Medical, eLynx Holdings and DelStar Technologies. Mr. Smith joined ACAS in 2004 as an Associate and served as a Vice President from 2004 to 2007. From 2002 to 2004, Mr. Smith was with Mezzanine Management, a mezzanine and private equity fund specializing in growth financings for middle-market companies. He is a graduate of Georgetown University with both Bachelor of Science and Master of Science degrees. Mr. Smith is an ACAS-designated member of our Board of Directors.

Brian S. Graff has been designated to serve as a member of our Board of Directors upon the consummation of this offering. Mr. Graff has served as Senior Vice President of ACAS since 2004 and as a Senior Managing Director since 2008. From 2005 to 2008 he served as a Regional Managing Director of ACAS and from 2004 to 2005 he served as a Managing Director of ACAS. Mr. Graff also served as a Vice President and Principal of ACAS from 2001 to 2004. From 2000 to 2001, he was a Principal of Odyssey Investments Partners, a private equity fund. Mr. Graff is an ACAS-designated member of our Board of Directors.

Michael T. Everett has been designated to serve as a member of our Board of Directors upon the consummation of this offering. From May 2007 until his retirement in December 2008, Mr. Everett served as a vice president of finance for Cisco Systems. From April 2003 to May 2007, Mr. Everett was Chief Financial Officer of WebEx Communications, Inc. From February 1997 to November 2000, Mr. Everett served as executive vice president and Chief Financial Officer of Netro Corporation, a wireless broadband access equipment provider. From August 1988 to August 1993, Mr. Everett served as senior vice president and Chief Financial Officer of Raychem Corporation, a telecommunications and electronics component manufacturer. Before joining Raychem Corporation, Mr. Everett served as a partner of Heller, Ehrman, White & McAuliffe LLC. Mr. Everett serves as a director of Calix Networks, Inc. and Broncus Technologies, Inc. Mr. Everett holds a Bachelor of Arts degree from Dartmouth College and a Juris Doctor degree from the University of Pennsylvania Law School.

Earl R. Lewis has been designated to serve as a member of our Board of Directors upon the consummation of this offering. Mr. Lewis has served as Chairman, President and Chief Executive Officer of FLIR Systems, Inc. since November 1, 2000. Prior to joining FLIR, Mr. Lewis served in various capacities at Thermo Instrument Systems, Inc., with his last role as President and Chief Executive Officer. Mr. Lewis is a member of the Board of Directors of Harvard BioScience, NxStage Medical, Inc. and American DG Energy, Inc. Mr. Lewis is a Trustee of Clarkson University and New Hampton School. Mr. Lewis holds a Bachelor of

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Science degree from Clarkson College of Technology and has attended post-graduate programs at the University of Buffalo, Northeastern University and Harvard University.

Alfred E. Barry, Jr. has been designated to serve as a member of our Board of Directors upon the consummation of this offering. Mr. Barry has served as Principal of Al Barry Consulting LLC since October 2009. Mr. Barry also currently serves as President of Stanlok Corporation, an industrial components manufacturer, and as a director of Wuxi REM Co., Ltd. From January 2008 to July 2009, Mr. Barry served as a director of Standard Lock Washer & Mfg. Co. Inc. From September 2001 until May 2007, Mr. Barry served as Chief Executive Officer of Central Industrial Supply Co., Inc., a mechanical hardware supplier for the computer server industry. Mr. Barry holds a Bachelor of Science degree from Worcester Polytechnic Institute, and Masters of Science degrees from Georgia Institute of Technology.

Board Structure and Compensation

The Bylaws that we will adopt upon the consummation of this offering will provide that at least one of the directors designated by ACAS must be part of the majority in any action taken by our Board of Directors so long as ACAS and its affiliated funds hold at least 50.1% of our outstanding common stock, other than on matters in which ACAS has a conflict of interest (as it would if it appointed a majority of our directors). Our Bylaws will also provide that ACAS will have the right to designate three of our seven directors so long as ACAS and its affiliated funds hold at least 50.1% of our outstanding common stock, two directors so long as they hold at least 25% but less than 50.1% and one director so long as they hold at least 10% but less than 25%.

Our Board of Directors currently consists of two members. Upon the consummation of this offering, our Board of Directors will consist of seven members and will be divided into three classes, as follows:


	•	Class I, which will consist of Messrs. Logan and Klein, and whose term will expire at our annual meeting of stockholders to be held in 2010;

	•	Class II, which will consist of Messrs. Smith and Everett, and whose term will expire at our annual meeting of stockholders to be held in 2011; and

	•	Class III, which will consist of Messrs. Graff, Lewis and Barry, and whose term will expire at our annual meeting of stockholders to be held in 2012.

At each annual meeting of stockholders to be held after the initial classification, the successors to directors whose terms then expire will serve until the third annual meeting following their election and until their successors are duly elected and qualified.

Our Board of Directors has determined that Messrs. Everett, Lewis and Barry are independent pursuant to the rules of The Nasdaq Stock Market and Rule 10A-3 of the Exchange Act of 1934, as amended.

Our Board of Directors has the following committees:

Audit Committee

Upon the consummation of this offering, the Audit Committee shall consist of Messrs. Everett, Lewis and Klein. Our Board of Directors has determined that each member of the Audit Committee meets the requirements for financial literacy under the applicable rules of The Nasdaq Stock Market. Our Board of Directors has also determined that Mr. Everett is an “audit committee financial expert” as defined under the applicable rules and regulations of the SEC and has the accounting and related financial sophistication required by the applicable rules of The Nasdaq Stock Market. Mr. Klein is not independent under the applicable rules and regulations of The Nasdaq Stock Market or the SEC, and we intend to replace Mr. Klein on the Audit Committee with a director who is independent under the applicable rules prior to the date that is one year following the completion of this offering. The Audit Committee reviews and, as it deems appropriate, recommends to the Board of Directors our internal accounting and financial controls and the accounting principles and auditing practices and procedures to be employed in preparation and review of our financial statements. The Audit Committee is directly responsible for the appointment, compensation, retention and

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oversight of the work of our independent public auditors and the scope of the audit to be undertaken by such auditors. Such auditors will report directly to the Audit Committee. Mr. Everett will serve as chairperson of the Audit Committee.

Compensation Committee

Upon the consummation of this offering, the Compensation Committee shall consist of Messrs. Lewis, Klein, and Smith. The Compensation Committee reviews and, as it deems appropriate, recommends to the Board of Directors policies, practices and procedures relating to the compensation of our officers and the establishment and administration of employee benefit plans. The Committee advises and consults with our officers as may be requested regarding managerial personnel policies. Mr. Lewis will serve as chairperson of the Compensation Committee.

Nominating and Corporate Governance Committee

Upon the consummation of this offering, the Nominating and Corporate Governance Committee shall consist of Messrs. Klein, Smith and Graff. The Nominating and Corporate Governance Committee reviews and, as it deems appropriate, recommends to the Board of Directors policies and procedures relating to director and board committee nominations and corporate governance policies. Mr. Klein will serve as chairperson of the Nominating and Corporate Governance Committee.

Compensation Committee Interlocks and Insider Participation

None of our executive officers currently serves, or in the past year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our Board of Directors or Compensation Committee. Additional information concerning transactions between us and entities affiliated with members of the Compensation Committee is included in this prospectus under the caption “Certain Relationships and Related Party Transactions.”

Director Compensation

During fiscal 2009, there was one non-employee director, Robert J. Klein, who is affiliated with ACAS and received no compensation for services as a member of either our Board of Directors or of the Board’s Compensation Committee. Mr. Logan’s compensation is reported below under the Summary Compensation Table, and he did not receive separate compensation for his service on our Board of Directors.

In connection with this offering, our Board of Directors will adopt a compensation policy applicable to all directors who are not employees of Mirion and who are not affiliated with ACAS. We expect that the initial compensation policy will provide that each such director will receive the following compensation:


	•	an annual cash retainer of $50,000 for serving on the board;

	•	an annual cash retainer of $10,000 for serving as the Chairperson of the Audit Committee and of $5,000 for serving as the Chairperson of each of the Compensation Committee and the Nominating and Corporate Governance Committee; and

	•	upon first joining the board, an initial grant of an option to purchase 1,000 shares of our common stock, and thereafter an annual grant of an option to purchase 333 shares of our common stock, with each such option vesting over a four-year period and subject to accelerated vesting in the event of a change in control.

Directors who are employees of Mirion or its subsidiaries or affiliated with ACAS will receive no compensation for services as members of either our Board of Directors or committees.

We will reimburse all directors for reasonable expenses incurred to attend meetings of our Board of Directors or committees.

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Code of Ethics and Conduct

On June 12, 2008, our Board of Directors adopted a revised Code of Ethics and Conduct that establishes the standards of ethical conduct applicable to all of our directors, officers and employees. The Code of Ethics and Conduct (the “Code of Conduct”) addresses, among other things, competition and fair dealing, conflicts of interest, financial matters and external reporting, company funds and assets, confidentiality and corporate opportunity requirements and the process for reporting violations of the Code of Conduct, employee misconduct, conflicts of interest or other violations.

In connection with this offering, our Board of Directors will adopt a revised code of ethics that revises, as necessary, the process for reporting violations of the Code of Conduct, employee misconduct, conflicts of interest or other violations to conform with applicable legal requirements of the United States and the other jurisdictions in which Mirion operates.

Our Code of Conduct will be publicly available on our website at www.mirion.com. Any waiver of the Code of Conduct with respect to any of our executive officers or directors may only be granted by the Board of Directors and must be disclosed to our stockholders.

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EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

The following discussion specifically relates to the compensation for fiscal 2009 of our “named executive officers” set forth in the Summary Compensation Table below, as well as discussing the overall principles underlying our executive compensation policies and decisions.

Objectives of Executive Compensation Program

The objectives of our executive compensation program are to recruit and retain an executive management team with the skills necessary to achieve our business objectives and thereby create value for our stockholders. Our executive compensation program is designed to support key business goals, such as integrating acquired businesses and retaining key executives, that are particularly important to us as a company with a limited operating history.

We implement this program through a combination of fixed cash compensation, variable short-term incentive compensation (determined by our operating performance as well as achievement of individual annual performance objectives), and equity incentives designed to reward long-term performance and align interests of our executive officers with our stockholders.

As a company whose equity was not publicly traded before this offering, our compensation philosophy has focused on the achievement of performance objectives that we believe would deliver meaningful return to our investors through a public offering or a sale of our company. In connection with this offering, we have reviewed our compensation philosophy and expect to adopt a compensation philosophy and objectives that are generally more consistent with those of a public, rather than private, company.

Executive Compensation Program

Our compensation program reflects our stage of development as a company. We have a limited operating history. We were incorporated in October 2005 and consist of a series of earlier acquisitions of geographically and technologically diverse companies. We have recruited several of our executive officers from other employers, and our initial compensation for these officers generally reflects the outcome of negotiated recruitment and hiring process.

As a company with a limited operating history, retention of executive officers is a key business objective. Weathering undesirable personnel changes would be more difficult for us than for a more established company. Accordingly, our Board of Directors believes it is critical to pay sufficient base compensation and provide adequate incentives to our executive officers to ensure continuity of our management team.

The Compensation Committee of the Board of Directors was established in July 2006. During fiscal 2009, Mr. Robert Klein was the sole member of the Compensation Committee. Our current executive compensation policies and objectives were developed and implemented by the Compensation Committee while we were a private company. The Compensation Committee has allocated compensation between long-term and short-term, between cash and non-cash compensation and among different forms of non-cash compensation in a manner considered to be typical of a private equity-backed enterprise. Our compensation program has focused on offering incentives necessary to recruit and retain executives from diverse backgrounds who possess the skills necessary to achieve our business objectives. We have not adopted any formal or informal policies or guidelines for allocating compensation between long-term and short-term compensation, between cash and non-cash compensation or among different forms of non-cash compensation.

Since the inception of the Compensation Committee, it has sought to review our executive officers’ compensation packages at least annually to determine whether they provide adequate incentives to achieve our business goals. In evaluating the market, the Compensation Committee has relied generally on its experience as well as market feedback and experience derived inherently from the process of recruiting new executives to our team. Our Chief Executive Officer recommends to the Compensation Committee compensation allocations

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for our named executive officers other than himself. The Compensation Committee sets the compensation for our Chief Executive Officer.

During fiscal 2009, the Compensation Committee of our Board of Directors engaged The Hay Group as an outside compensation consultant to undertake a review of director and executive officer compensation trends in the regions in which we operate and at comparable public and private companies for the purpose of providing recommendations with respect to future compensation arrangements for both executive officers and directors. The Hay Group provided the Compensation Committee with an assessment of executive officer compensation; however, the Compensation Committee did not consider the results of this assessment in determining compensation for fiscal 2009. In future periods, we expect to retain an outside consultant to provide recommendations with respect to future compensation arrangements for both executive officers and directors. The Hay Group has not provided us with any other services beyond the scope of this engagement.

Elements of Compensation

The following describes each element of our executive compensation program and discusses determinations regarding compensation for fiscal 2009:

Base Compensation. Our Compensation Committee sets named executive officer base salaries based on the skills, experience and scope of responsibilities of each executive. Our Compensation Committee reviews base salaries at least annually. Base salaries are adjusted from time to time to reflect each executive’s overall contribution and to conform salaries to the compensation committee’s views of market levels. Our Compensation Committee has relied primarily on its experience to negotiate base salaries. Our named executive officers’ base salaries were determined initially in the context of negotiated employment agreements. The Compensation Committee agreed to increase the base compensation of our Chief Executive Officer as of January 1, 2009 to $325,000 to be closer to what it believes to be an appropriate level for a company preparing for an initial public offering, to $400,000 on the date of the initial public offering to reflect the significant increase in responsibilities of a chief executive officer of a public company and to $450,000 on the one-year anniversary of the initial public offering. With respect to our other named executive officers, we did not make material changes to base compensation during fiscal 2009. The Compensation Committee determined these amounts primarily based on its experience with other private and public companies, as well as its experience in determining pay levels required to recruit individuals in similar roles. Although the Compensation Committee engaged the Hay Group to undertake a review that included an assessment of the compensation of the Chief Executive Officer, the Compensation Committee did not make material changes based on this review and did not target base compensation to a specific percentile within a comparative group.

Annual Incentive Bonuses. Our executive bonus program provides for executives to receive a bonus based on the following factors:


	•	the achievement of financial and operational goals for the fiscal year;

	•	commitment to future growth in revenue and earnings for the subsequent fiscal year in the financial forecast approved by our Board of Directors upon recommendation of our Chief Executive Officer; and

	•	achievement of individual annual performance objectives.

Annual performance objectives are approved by the Compensation Committee as part of the Board of Director’s review of our prior fiscal year financial results. Our Chief Executive Officer makes recommendations to our Compensation Committee regarding individual performance objectives and awards for named executive officers other than himself. Performance objectives and awards for our Chief Executive Officer are determined solely by the Compensation Committee. The Compensation Committee retains full discretion to determine the final bonus amounts and does not rely solely on our financial results. For fiscal 2009, the total potential bonus pool was calculated based on achievement of the financial goals, subject to

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increase or decrease based on our goal of decreasing our working capital requirements, as further described below. Then payment of the bonus pool is allocated as follows:


	•	50% of the bonus pool is paid based solely on this achievement of Adjusted EBITDA, as described below;


	•	25% of the bonus pool is paid based on attainment of personal objectives; and

	•	25% of the bonus pool is paid based on financial objectives specified in the following year’s plan.

For fiscal 2009, the Compensation Committee specified that the financial goal would be achievement of Adjusted EBITDA (or, for named executive officers who are division presidents, Adjusted EBITDA for the applicable division). We calculate Adjusted EBITDA as net income (loss), less extraordinary gains and losses and interest income, plus interest expense, charges against income for taxes, depreciation expense, amortization expense, non-recurring charges, management fees paid to ACFS and all non-cash compensation expenses. For more information about the calculation of Adjusted EBITDA and a reconciliation to cash provided by (used in) operating activities, see page 10 of this prospectus. Adjusted EBITDA results are not set forth in our audited financial statements and our calculations of these goals as a private company may differ from actual audited results. For purposes of the bonus plan, the determination of Adjusted EBITDA is made on a currency-adjusted basis, so although the calculation is derived from our audited result, the numbers will not be the same as the audited result. Although we expect the financial results to require improved performance and exceptional work each year, the goals are set to be consistent with our business plan objectives and to be achievable. For fiscal 2009, the potential bonus pool percentage set forth in the table below is increased or decreased by up to 30% depending on how the change in our working capital (generally defined for this purpose as accounts receivable plus inventory, minus the sum of accounts payable and non-financial accrued liabilities) compares to our percentage increase in revenue. That is, if there was a 20% or greater increase in working capital versus revenue, the bonus pool would be decreased by 30%; if there was between a 10% increase and 10% decrease in working capital versus revenue, there would be no change in the bonus pool; and if there was a 20% or greater decrease in working capital versus revenue, the bonus pool would be increased by 30%.

Each named executive officer was given a target bonus (expressed as a percentage of base salary), with a minimum threshold and maximum target bonus based on financial goal performance (prior to any working capital adjustment). The following table shows the target bonus pool amounts for each of our named executive officers for different levels of achievement of the Adjusted EBITDA financial target (which for fiscal 2009 was $38.9 million):

Below

90% of

100% of

110% of

Threshold

Target

Target or Above

Thomas D. Logan

25% salary

50% salary

100% salary

Jack A. Pacheco

25% salary

50% salary

100% salary

Seth B. Rosen

25% salary

40% salary

80% salary

For each division president, target levels were based on Adjusted EBITDA for the particular business unit for which he is responsible (approximately $11 million for the Health Physics Division for Mr. Besso and approximately $12 million for the Sensing Systems Division for Mr. Wilson):

Below

$1.5 MM

100% of

$1.5 MM

Threshold

Below Target

Target

Above Target

W. Antony Besso

40% salary

50% salary

60% salary

Iain F. Wilson

25% salary

40% salary

80% salary

Although the determination of our financial performance is an important factor in approving the actual bonus payment, our Compensation Committee believes it is preferable to retain discretion to determine awards (including above or below the amounts in the table above) based on qualitative and quantitative contributions of our named executive officers.

After determining our success during fiscal 2009 in achieving the financial goals described above, the Compensation Committee reviewed each named executive officer’s achievement of individual annual

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performance objectives and addition of long-term value, particularly in carrying out our integration plan and positioning us for this offering. Many of the individual performance objectives are subjectively determined, but for any individual executive officer, each performance objective generally carries the same weight as other objectives. The individual objectives vary because they are specific for each executive officer’s particular functions. For example, for fiscal 2009: Mr. Logan’s objectives included steps preparing for our initial public offering as well as commercializing and repositioning specific business lines and products; Mr. Pacheco’s goals focused on audit objectives as well as reduction of working capital; Mr. Rosen’s objectives focused on legal preparation for an initial public offering and implementing internal systems; Mr. Besso’s goals mainly related to specific products and business lines for which he is responsible; and Mr. Wilson’s goals included developing and implementing business unit strategies in particular locations.

In September 2009, the Compensation Committee determined performance results for fiscal 2009 and awarded bonuses in the amounts set forth under “Non-Equity Incentive Plan Compensation” in the Summary Compensation Table below. In determining the amount of the bonuses for the year, the Committee first reviewed our financial results. Our Adjusted EBITDA results exceeded our maximum target level at the corporate level and for our Sensing Systems division, so the potential bonus pool for Messrs. Logan, Pacheco, Rosen and Wilson was the maximum amount in the table above. Mr. Besso’s potential bonus pool was between his target and maximum level. There was no working capital adjustment at the corporate level, but each of Mr. Besso and Mr. Wilson achieved the maximum working capital goals for their divisions, and so their potential bonus pools were increased by 30% above the amounts in the table above. The Committee then reviewed each named executive officer’s individual performance objectives, some of which require a subjective determination. After this review, each of our chief executive officer, chief financial officer and general counsel received a bonus greater than his target bonus, and each of Mr. Besso and Mr. Wilson received a bonus greater than their “maximum” bonus set forth in the table above because of the upward working capital adjustment for each of their divisions.

For fiscal 2009, bonus amounts were calculated as set forth in the table below, based on the following determinations:


	•	For the 50% of bonus based on Adjusted EBITDA, we exceeded the target levels and so achieved 100% of this metric.


	•	For the 25% of bonus based on personal objectives, the Committee made a subjective determination based on the individual performance factors described below the table to determine the percentage achievements set forth in the table below for each individual.


	•	For the 25% of bonus based on whether our performance situates us for a potentially higher level of achievement for the following year, the Committee determined that we met 50% of this objective at the corporate level because of our commitment to continued achievement of Adjusted EBITDA levels.


										Working
										Capital							Payout
										Modifier		Eligible					(Weighted
	%						Weighted			(added to		Bonus Pool					Achievement
	Achieve-						Achieve-			Baseline%		(as% of			Eligible		x Eligible
	ment			Weight			ment			of Salary)		Salary)			Bonus Pool		Bonus Pool)

Logan
2009 Financial		100	%		50	%		50	%
Personal Objectives		71	%		25	%		17.86	%
Future Planning		50	%		25	%		12.5	%

TOTAL								80.36	%		—		100	%		$312,473		$251,094
Pacheco
2009 Financial		100	%		50	%		50	%
Personal Objectives		38	%		25	%		9.38	%
Future Planning		50	%		25	%		12.5	%

TOTAL								71.88	%		—		100	%		$278,000		$199,813

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										Working
										Capital									Payout
										Modifier			Eligible						(Weighted
	%						Weighted			(added to			Bonus Pool						Achievement
	Achieve-						Achieve-			Baseline%			(as% of			Eligible			x Eligible
	ment			Weight			ment			of Salary)			Salary)			Bonus Pool			Bonus Pool)

Rosen
2009 Financial		100	%		50	%		50	%
Personal Objectives		83	%		25	%		20.83	%
Future Planning		50	%		25	%		12.5	%

TOTAL								83.33	%		—			80	%		$185,600			$154,667
Besso
2009 Financial		100	%		50	%		50	%
Personal Objectives		83	%		25	%		20.83	%
Future Planning		0	%(1)		25	%		0	%

TOTAL								70.83	%		30	%		86.41	%(2)		189,619	€		134,314	€

																				($184,586	)
Wilson
2009 Financial		100	%		50	%		50	%
Personal Objectives		100	%		25	%		25	%
Future Planning		100	%(1)		25	%		25	%

TOTAL								100	%		30	%		110	%		Cdn 236,500			Cdn 236,500

																				($204,298	)


(1)		For Mr. Besso, the Committee determined that although fiscal 2009 performance exceeded target objectives, the future planning metric was not met. For Mr. Wilson, the Committee determined that performance in both Adjusted EBITDA and revenue for the Sensing Systems Division should result in achievement of 100% of the future planning target.


(2)		Initial bonus pool of 56.41% of base salary was interpolated between the “target” and “maximum” levels shown in the table above based on his division’s achievement of 2009 Adjusted EBITDA between those levels, and the 30% working capital modifier was added to this baseline percentage.

In approving the individual performance level, the Compensation Committee considered the following successful individual performance factors:


	•	Mr. Logan: Preparation for the initial public offering by developing MD&A and presenting a plan for the public company’s board composition and recruitment; commercialization of new products; and leadership training.


	•	Mr. Pacheco: Development of MD&A; implementing new financial planning systems; and review of tax structure.


	•	Mr. Rosen: Preparation and support of corporate document data room for the initial public offering; leadership training; and implementation of management bonus program and evaluation process for the general employee population.

	•	Mr. Besso: Organizational improvements in his business unit’s sales, marketing and finance functions; reduction of working capital for his business unit; and completion of operational efficiency projects.

	•	Mr. Wilson: Achievement of product designs and proposals; reduction of working capital for his business unit; commercialization of new products; and organizational improvements and planning.

Going forward, the type of financial performance target we use, and individual performance objectives, may change if our Compensation Committee determines it would be appropriate to use different types of goals

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as a public company, although for fiscal 2010 we expect to use the same types of financial goals. In addition, we will pay bonuses to some of our employees, including certain executive officers, if and when this initial public offering is completed. Mr. Logan will be eligible to receive a bonus of $125,000 and Mr. Besso will be eligible to receive a bonus of up to $507,509. The amount of Mr. Besso’s bonus was negotiated with him in conjunction with efforts to retain him by fulfilling an earlier commitment to him and as a supplement to his stock options, which also vest on an initial public offering.

Equity Awards. We design our equity programs to align employees’ interests with those of our stockholders by offering employees the opportunity to acquire stock and therefore have a direct interest in helping to increase the value of our stock. The design of these equity incentives is typical of the Compensation Committee’s experience with a private equity-backed enterprise. To date, we have granted stock options to our executive officers and a limited group of other employees. Stock options permit the employee to exercise the option at a fixed price (at or above the fair market value of the stock on the grant date) in the future after the option has become vested. Grants typically are made around the time an employee is hired, and we may make additional grants following a significant change in job responsibilities or to meet other specific retention objectives. Our Compensation Committee determines the size and type of equity awards taking into account the recommendations of management and also determines the vesting schedule of the options. The terms of initial equity grants made to each named executive upon joining the company are based primarily on competitive conditions applicable to the executive officers’ specific position. We made the equity awards reflected in the compensation tables below primarily in the context of negotiated employment agreements. As a private company, the overall size of our option pool was based on a range of potential dilution levels historically used by our majority stockholder with its other private companies. The chief executive officer receives the largest share of the option pool because he has the most significant impact on value. Other executive officers’ option amounts were then determined, although individual allocations were not based on a specific formula or value. Instead, the number of options depended on a combination of share availability in the option pool, negotiations at the time of offering employment to a new officer, the Compensation Committee’s expectation for the officer’s potential impact on future value of our company and the past experience of the Compensation Committee. We have not currently adopted stock ownership or equity grant guidelines, but we may implement guidelines regarding the issuance of new equity awards in the future.

Immediately following the pricing of this offering, we expect to grant stock options covering 15,091 shares of our common stock to our employees and outside directors, including grants of 2,001 stock options to Mr. Wilson and 2,000 stock options to Mr. Rosen. The per share exercise price of these options is expected to be equal to the initial public offering price (the fair market value on the grant date), and the options will vest over four years. The determination of the individual amounts for Mr. Rosen and Mr. Wilson was based on the Compensation Committee’s subjective judgment regarding increased expectations in these positions once we become a public company and in order to further align these officers’ interests with those of stockholders given that they will be executive officers of a public company. In determining to make grants to these particular individuals and not the other executive officers, the Compensation Committee reviewed the number of outstanding equity awards held by each executive officer (as set forth under “Outstanding Equity Awards” below) and determined that because these individuals currently hold fewer stock options than the other executive officers, it would be appropriate to bring the equity ownership of the executive officers into closer alignment (while not committing to provide each officer with exactly the same equity amounts). The Compensation Committee did not base its decision on a third-party study or on market competitiveness.

Severance and Change in Control Arrangements. Each of our named executive officers, with the exception of Mr. Wilson, has an employment agreement that would provide severance on specified involuntary terminations of employment. We have also agreed to accelerated vesting of Messrs. Logan’s and Pacheco’s stock options in the event of certain change in control events and of Mr. Besso in the event of this initial public offering or a change in control. The terms and estimated amounts of these benefits are described below under “Employment Agreements and Potential Payments upon Termination or Change in Control.” Based on the past experience of the Compensation Committee, we believe these arrangements are competitive with arrangements offered to senior executives by companies with whom we compete for executives and are necessary to the achievement of our business objective of management retention. Given our limited operating

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history, our Compensation Committee believes these provisions were a key part of hiring and retaining management to ensure continuity of our management team.

Perquisites and Other Benefits. Our named executive officers are eligible to participate in our employee benefit plans provided for employees which vary by country. In the United States, these benefits include a 401(k) plan with a matching contribution, group medical and dental insurance, group life insurance and short- and long-term disability insurance. As set forth in the Summary Compensation Table below, Messrs. Besso and Wilson receive specified benefits that are typical for executives in their locations, or required by law, but these additional benefits are limited in amount and scope.

Tax and Accounting Considerations. We recognize a charge to earnings for accounting purposes for equity awards granted. As we become a public company, we expect that the Compensation Committee will consider the accounting impact of equity awards in addition to consider the impact to dilution and overhang when deciding on amounts and terms of equity grants. We do not require executive compensation to be tax deductible for us, but instead balance the cost and benefits of tax deductibility to comply with our executive compensation goals, including the potential future effects of Section 162(m) of the Internal Revenue Code on the compensation paid to our executive officers. Section 162(m) disallows a tax deduction for any publicly held company for individual compensation exceeding $1 million in any taxable year for our Chief Executive Officer and each of the other named executive officers (other than our Chief Financial Officer), unless the compensation is performance-based.

Summary Compensation Table

The following table sets forth information concerning the compensation of our Chief Executive Officer, Chief Financial Officer and three other most highly compensated executive officers for fiscal 2009. We refer to these individuals as our “named executive officers” elsewhere in this prospectus.


									Non-Equity
							Option		Incentive Plan			All Other
			Salary		Bonus		Awards		Compensation			Compensation			Total
Name and Principal Position	Fiscal Year		($)		($)		($)(1)		($)			($)			($)

Thomas D. Logan President, Chief Executive Officer and Chairman		2009		312,473		—		—		251,094(2	)		36,884	(3)		600,451(2	)
Jack A. Pacheco Vice President and Chief Financial Officer		2009		278,000		—		198,870		199,813(2	)		6,906	(3)		683,589(2	)
Seth B. Rosen General Counsel, Vice President Corporate Development, and Secretary		2009		232,000		—		100,698		154,667(2	)		6,853	(3)		494,218(2	)
W. Antony Besso(4) Regional Vice President, EMEA and President, Health Physics Division		2009		303,861		—		215,080		184,586(2	)		62,806	(3)		766,333(2	)
Iain F. Wilson(4) Regional Vice President, Asia and President, Sensing Systems Division		2009		185,726		—		71,629		204,298(2	)		16,749	(3)		478,402(2	)

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(1)		The amounts in this column reflect the dollar amount of compensation cost recognized for financial statement reporting purposes for fiscal 2009 in accordance with FASB-issued authoritative guidance on stock-based payment with respect to stock options that have been granted, whether or not the awards were granted during fiscal 2009. Pursuant to SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. For information on the valuation assumptions, see Note 13 to our consolidated financial statements. See the Grants of Plan-Based Awards Table below for additional information on the stock options granted in fiscal 2009.


(2)		Represents payments under our executive bonus program for performance during fiscal 2009, as described above under Compensation Discussion and Analysis.

(3)		Includes our matching 401(k) contributions for the following named executive officers’ accounts in the following amounts: Mr. Logan ($5,702), Mr. Pacheco ($6,906) and Mr. Rosen ($6,853). For Mr. Logan, the amount also includes car allowance ($9,217) and amounts paid for accrued vacation above the maximum accrual limit ($21,965) under our annual vacation cashout policy for executive officers. For Mr. Besso, the amount consists of his car allowance ($6,259), an allowance for travel ($8,670), child school allowance ($13,743), a housing allowance ($24,050) which was discontinued in February 2009 and private unemployment insurance ($10,083). For Mr. Wilson, this amount consists of car allowance ($5,183) and contributions to his Registered Retirement Savings Plan, a defined contribution plan in Canada ($7,280) and vacation pay ($4,286).

(4)		Mr. Besso’s compensation, which is paid in euros, and Mr. Wilson’s compensation, which is paid in Canadian dollars, have been converted into U.S. dollars using the respective average rate of exchange for the fiscal year.

Grants of Plan-Based Awards for Fiscal 2009

The following table sets forth information concerning grants of plan-based awards made to the executive officers named in the Summary Compensation Table during fiscal 2009.

All Other

Option

Estimated Future

Awards:

Payouts Under

Number of

Exercise

Grant Date

Non-Equity Incentive

Securities

Price

Fair Value

Plan Awards(1)

Underlying

of Option

Grant

Threshold

Target

Maximum

Options

Awards

Name

Date

($)

(#)

($/Sh)

($)(2)

Thomas D. Logan

08/05/08

78,118

156,237

312,473

Jack A. Pacheco

08/05/08

69,500

139,000

278,000

Seth B. Rosen

08/05/08

58,000

92,800

185,600

08/05/08

2,000

144.95

99,400

W. Antony Besso(3)

08/05/08

120,635

150,794

180,953

08/05/08

12,731

144.95

598,742

Iain F. Wilson(3)

08/05/08

46,431

74,290

148,580

08/05/08

5,000

144.95

248,499


(1)		Threshold, Target and Maximum amounts refer to the annualized eligible bonus for each named executive officer if specified financial performance criteria were met, as more fully discussed above in the “Compensation Discussion and Analysis” and below under “Executive Bonus Program.” The actual annual performance bonus payable is subject to determination by the Compensation Committee after a review of the financial performance of Mirion or the applicable business unit, as well as each named executive officer’s achievement of their individual annual performance objectives, which may result in a higher or lower actual bonus payment. See “Compensation Discussion and Analysis—Elements of Compensation.” Actual amounts paid for fiscal 2009 are set forth in the Summary Compensation Table above.

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(2)		The amounts in this column represent the grant date fair value, computed in accordance with FASB-issued authoritative guidance on stock-based payment of each option granted to the named executive officer in fiscal 2009. For information on valuation assumptions, see Note 13 to our consolidated financial statements.


(3)		Converted into U.S. dollars using the average rate of exchange for the fiscal year.

Executive Bonus Program. As further described in the Compensation Discussion and Analysis above, the awards for fiscal 2009 were first determined on our corporate Adjusted EBITDA performance (or business segment for each of Messrs. Besso and Wilson) and working capital, but are also subject to determination of individual performance and other factors. Each of the executive bonus awards would be 0% of base salary if the performance level was below a specified threshold of performance. Between the threshold level and target level, and between the target level (payable if 100% of plan was achieved) and the maximum level, amounts would be interpolated. The Compensation Committee retains discretion to pay amounts over the maximum level for exceptional performance. Each executive officer’s target bonus amount is set as a percentage of base salary, with target amounts for fiscal 2009 of 50% of base salary for Messrs. Logan, Pacheco and Besso and 40% of base salary for Messrs. Rosen and Wilson.

Outstanding Equity Awards at Fiscal Year-End June 30, 2009

The following table sets forth information concerning unexercised stock options for the executive officers named in the Summary Compensation Table as of the end of fiscal 2009. There were no unvested stock awards outstanding as of the end of the fiscal year.


	Option Awards
							Number of
	Numbers of			Numbers of			Securities
	Securities			Securities			Underlying
	Underlying			Underlying			Unexercised			Option
	Unexercised			Unexercised			Unearned			Exercise		Option
	Options (#)			Options (#)			Options			Price		Expiration
Name	Exercisable			Unexercisable			(#)			($)		Date

Thomas D. Logan		14,564									88.75		1/1/16
		17,750	(1)		—			54,564	(1)		88.75		8/18/14
Jack A. Pacheco		5,328	(2)		10,672	(2)					111.30		3/31/18
Seth B. Rosen		3,006	(3)		4,994	(3)					138.58		1/7/18
		—			2,000	(4)					144.95		8/5/18
W. Antony Besso		—			12,731	(5)					144.95		8/5/18
Iain F. Wilson		1,837			—						88.75		1/1/16
		1,837			—						88.75		1/1/16
		484	(6)		841	(6)					121.24		9/6/17
		—			5,000	(4)					144.95		8/5/18


(1)		These options were not granted by us, and represent options to purchase shares of Mirion stock from ACAS and its affiliates. The unearned portion of these options is subject to performance and market vesting following this initial public offering, as described further under “Certain Relationships and Related Party Transactions—Interested Transactions—Transactions with Management.”

(2)		Options vest in equal monthly installments over four years from March 31, 2008.

(3)		Options vest in equal monthly installments over four years from January 7, 2008.

(4)		25% of options vest on August 5, 2009, and thereafter the remaining 75% of options vest in equal monthly installments over three years.


(5)		25% of options vest on August 5, 2009, and thereafter the remaining 75% of options vest in equal quarterly installments over three years, subject to full accelerated vesting upon the consummation of this offering.


(6)		Options vest in equal monthly installments over five years from September 6, 2007.

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Option Exercises and Stock Vested for Fiscal 2009

No executive officers named in the Summary Compensation Table above exercised any stock options, or had any stock award become vested, during fiscal 2009.

Pension Benefits

Upon his retirement, Mr. Besso will be eligible for benefits under a mandatory French pension system, and we will pay Mr. Besso a lump-sum length of service award at his retirement based on his years of service and salary.

Number of

Present Value

Payments

Years of

of Accumulated

During

Name

Plan Name

Credited Service

Benefits

Last Fiscal Year

W. Antony Besso

French pension system

5,978

(1)

—


(1)		This amount has been converted from euros into U.S. dollars using the average rate of exchange for the fiscal year. For information on the valuation assumptions, see Note 11 to our consolidated financial statements.

Employment Agreements and Potential Payments on Termination and Change of Control

We have entered into employment agreements with each of our named executive officers as described below. Generally, these agreements were the result of negotiations with the executive and provide that we will pay severance benefits to an executive if he is terminated without cause or resigns for good reason (which generally includes a material reduction in compensation or duties or a significant relocation), subject to the executive signing a general release of claims. In addition, our Chief Executive Officer and our Chief Financial Officer, as well as Mr. Besso, would receive accelerated vesting of some of their equity awards on change in control transactions, as further described below.

Thomas D. Logan. Under the terms of his August 2006 employment agreement, as amended in December 2008 and January 2009, if Mr. Logan is involuntarily terminated without cause or resigns for good reason, he will be entitled to receive the following benefits if he signs a general release:


	•	an amount equal to his annual base salary;

	•	a pro rata portion of his incentive bonus, if any, for the applicable period during the fiscal year in which termination occurs; and

	•	continuation of all health benefits offered to senior executive for one year after the date of termination.

In addition, Mr. Logan’s Employment Agreement provides that upon a change in control, 100% of his unvested options will vest and, if applicable, he will receive reimbursement for excise taxes imposed on him as a result of Section 280G of the Internal Revenue Code, and that 50% of his unvested options will vest upon the consummation of this offering. Further, Mr. Logan’s Employment Agreement provides for a one-time bonus upon the consummation of this offering, equal to $50,000 plus an amount not to exceed $75,000, with such additional amount to be determined based upon the time taken to complete this offering.

Jack A. Pacheco. Under the terms of his March 2008 employment agreement, as amended in December 2008, if Mr. Pacheco is involuntarily terminated without cause or resigns for good reason, he will be entitled to receive the following benefits if he signs a general release:


	•	an amount equal to his annual base salary; and

	•	a pro rata portion of his incentive bonus, if any, for the applicable period during the fiscal year in which termination occurs.

In addition, his employment agreement provides that 100% of his unvested options will vest in the event that either (i) ACAS or its affiliates no longer own at least 50% of the outstanding capital stock of us; provided that no such vesting shall occur as a result of the initial public offering of our capital stock or a

113

company affiliated with us formed for the purpose of an initial public offering; or (ii) all or substantially all of our assets are sold, transferred or disposed of to a person (or group of persons acting in concert) that is not an affiliate of ACAS.)

Seth B. Rosen. Under the terms of his January 2008 employment agreement, as amended in December 2008, if Mr. Rosen is involuntarily terminated without cause or resigns for good reason, he will be entitled to receive the following benefits if he signs a general release:


	•	an amount equal to his annual base salary;

	•	a pro rata portion of his incentive bonus, if any, for the applicable period during the fiscal year in which termination occurs; and

	•	continued payment by us for a maximum of 12 months of his health coverage premiums under COBRA.

Iain F. Wilson. There are no specific requirements with respect to any obligations of us in connection with a termination of Mr. Wilson’s employment under any employment agreement. Pursuant to Canadian law, executive officers may be entitled to benefits or a notice period upon termination of employment, depending on length of service and other factors.

W. Antony Besso. Mr. Besso’s employment agreement is governed by French law. Under the terms of his 2006 employment agreement, as amended in November 2007, if Mr. Besso is terminated, he will be entitled to receive the following benefits:


	•	an amount equal to 12 months of remuneration, consisting of base salary, incentive bonus, and all other bonuses and benefits received by Mr. Besso during the last twelve months preceding his termination; and

	•	any payments under the applicable collective bargaining agreement.

Mr. Besso’s agreement provides that either party may terminate the agreement with three months’ notice. The agreement includes a non-competition covenant for two years following the termination of Mr. Besso’s employment, if we pay to Mr. Besso an amount not to exceed 6/10 of the monthly average of specified pay and benefits from the last 12 months of his employment. In addition, Mr. Besso received stock options in August 2008 that provided for accelerated vesting upon a change in control or an initial public offering.

Potential Termination and Change in Control Benefits. The table below provides an estimate of the value of the compensation and benefits due to each of our named executive officers in the event of: (i) an involuntary termination; (ii) death or disability; or (iii) a change in control. The amounts shown assume that specified event was effective as of June 30, 2009. The actual amounts to be paid can only be determined at the time of the termination of employment or change in control, as applicable.


	Involuntary			Disability			Change in
	Termination			or Death			Control
Name	($)			($)			($)

Thomas D. Logan		497,661	(1)		172,661	(2)			(3)
Jack A. Pacheco		417,000	(1)		139,000	(2)			(3)
Seth B. Rosen		341,225	(1)		92,800	(2)		—
W. Antony Besso		517,461	(4)		—				(3)
Iain F. Wilson		—	(5)		—			—


(1)		Consists of payments due on a termination without cause or resignation for good reason, subject to the executive signing a release. This amount consists of (i) 100% of annual base salary, (ii) a pro rata portion of any incentive bonus (which for a termination at June 30, 2009, we have assumed to be 100% of the target bonus for fiscal 2009), and (iii) our payments for continued health benefits in the case of Mr. Logan and Mr. Rosen. Such amount would be payable at the same time as such payment would be made while the executive was employed with us. This amount does not include any amounts that are accrued and owing at the time of termination (such as accrued vacation and salary through the date of termination).

114


(2)		Consists of pro rata portion of any incentive bonus (which we have assumed to be 100% of the target bonus) and, for Mr. Logan, continued health benefits for his family for 12 months.

(3)		For Mr. Logan, this amount reflects (i) 100% vesting of any unvested stock options and (ii) remittance of net proceeds upon the sale by ACAS of vested and unexercised IRR Options under the Call Option Agreement. For Mr. Pacheco, this reflects 100% vesting of any unvested stock options in the event that (i) ACAS no longer owns at least 50% of our outstanding capital stock, or (ii) all or substantially all of our assets are sold, transferred or disposed of, in the case of Mr. Pacheco. For Mr. Besso, this reflects 100% vesting of any unvested stock options from an August 2008 grant which will vest in the event of a change in control or upon the consummation of this offering. The dollar value in each case is based on an assumed public offering price of $ , based on the mid-range of the offering price range, but otherwise assumes the transaction occurred based on unvested options at June 30, 2009.

(4)		Amount includes 12 months of salary and other compensation paid for 2009, assuming payment of the target bonus for fiscal 2009. Amount does not include three months of notice and assumes we do not elect to pay for Mr. Besso’s continued non-competition agreement, as described above.

(5)		Does not include amounts that may be payable as required by law.

Employee Benefit Plans

Stock Plan

The following contains a summary of the material terms of our 2006 Stock Plan, which was originally approved in December 2005. Prior to the consummation of this offering, we expect our Board of Directors and stockholders to approve amendments to this plan, and we refer to the amended plan as the Stock Plan below.

Share Reserve. As of June 30, 2009, an aggregate of 118,690 shares of our common stock were reserved for issuance, options to purchase 113,288 shares were outstanding and 5,402 shares were available for future grant under the Stock Plan. Prior to the consummation of this offering, we expect to reserve 106,160 additional shares under the Stock Plan. In general, if options or other awards granted under the Stock Plan are forfeited or terminate for any other reason before being exercised or settled, then the shares subject to such options or awards will again become available for awards under the Stock Plan.

Administration of the Stock Plan. The Stock Plan will be administered by our Board of Directors or our Compensation Committee or another committee designated by our Board of Directors. The administrator has complete discretion to make all decisions relating to the interpretation and operation of the Stock Plan. The administrator will have the discretion to determine who will receive an award, the type of award, the number of shares that will be covered by the award, the vesting requirements of the award, if any, and all other features and conditions of the award. The administrator may implement rules and procedures that differ from those described below in order to adapt the Stock Plan to the requirements of countries other than the United States.

Eligibility. Any employee, consultant or non-employee director may be selected by the administrator to participate in the Stock Plan. Directors affiliated with ACAS and its affiliates are not expected to receive grants.

Type of Awards. To date, we have granted options under the Stock Plan. Following this offering, awards granted under the Stock Plan may include any of the following:


	•	stock options to purchase shares of our common stock at a specified exercise price;

Mirion Technologies, Inc. S-1/A