Mercury Systems Inc · NASDAQ:MRCY
Mercury Systems — Q2 2023 Earnings Presentation
18 slides from Mercury Systems's earnings presentation, Jan 31, 2023
Slide 1: Second Quarter Fiscal Year 2023 Financial Results
SECOND QUARTER FISCAL YEAR 2023 FINANCIAL RESULTS Mark Aslett President and CEO Michael Ruppert Executive Vice President and CFO January 31, 2023, 5:00 pm ET Webcast login at www.mrcy.com/investor Webcast replay available by 7:00 p.m. ET January 31, 2023 © Mercury Systems, Inc.
Slide 2: Forward-looking safe harbor statement
Forward-looking safe harbor statement This presentation contains certain forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995, including those relating to the products and services described herein and to business performance in fiscal 2023 and
Slide 3: Board decision to review strategic alternatives
Board decision to review strategic alternatives Underscores our commitment to enhancing shareholder value During the process we will continue to execute on our strategic plan for growth and value creation No further comments, nor updates on developments, until process completed 3 © Mercury Sys
Slide 4: Q2 FY23 demand strong, maintain full year revenue and adj EBITDA guidance
Q2 FY23 demand strong, maintain full year revenue and adj EBITDA guidance Q2 marked return to organic growth, positive cash flows, revenue consistent with guidance Financial results, especially adj. EBITDA, reflect impact of customer program funding delay Industry and business continue to navi
Slide 5: Secular industry trends remain favorable, heightened geopolitical challenges
Secular industry trends remain favorable, heightened geopolitical challenges Defense bill increases reinforce challenging geopolitical environment Strong underlying bipartisan support for defense remains despite near-term budget delay risk Positive long-term outlook for growth in US/allied def
Slide 6: Improvement in business momentum, macro challenges persist
Improvement in business momentum, macro challenges persist While improving, macro industry challenges persist, supply chain remains headwind Semiconductor lead times remains challenging, supply chain issues driving delays Average semi lead times shorter than Q1; no significant improvement expe
Slide 7: Operational Excellence, 1MPACT driving value creation at scale
Operational Excellence, 1MPACT driving value creation at scale Executing on plan with visibility to multi-year period of accelerating growth and profitability Demand improving; strong bookings, record backlog; organic growth continues 1MPACT evolved to manage industry headwinds, strengthen bas
Slide 8: Q2 FY23 vs. Q2 FY22
Q2 FY23 vs. Q2 FY22 Notes In $ millions, except percentage and per share data Q2 FY22(3) Q2 FY23(3) CHANGE (1) Organic revenue represents total company revenue excluding net revenue from acquisitions for the first four full quarters since Bookings $236.9 $270.3 the entities’ acquisition date 14% (wh
Slide 9: Balance sheet
Balance sheet Notes As of (1) Rounded amounts used. (In $ millions)(1) 12/31/21 4/1/22 7/1/22 9/30/22 12/30/22 ASSETS Cash & cash equivalents $105.2 $91.7 $65.7 $52.0 $76.9 Accounts receivable, net 320.1 367.1 447.9 494.7 479.3 Inventory, net 251.3 259.6 270.3 287.6 312.0 PP&E, net 127.4 125.7 127.2
Slide 10: Cash flow summary
Cash flow summary Notes For the Fiscal Quarters Ended (1) Rounded amounts used. (2) Non-GAAP, see (In $ millions)(1) 12/31/21 4/1/22 7/1/22 9/30/22 12/30/22 reconciliation table. Net (Loss) Income ($2.6) $4.1 $16.9 ($14.3) ($10.9) Depreciation and amortization 24.1 24.5 23.4 23.7 27.2 Other non-cash
Slide 11: Q3 FY23 guidance
Q3 FY23 guidance Notes (1) (2)(5) In $ millions, except percentage and per share data Q3 FY22 Q3 FY23 CHANGE (1) Q3 FY22 figures are as reported in the Company’s earnings release dated May 3, 2022. (2) The guidance included herein is from the Company’s earnings release dated Revenue $253.1 $245.0 -
Slide 12: FY23 annual guidance
FY23 annual guidance Notes (1) (2)(5) In $ millions, except percentage and per share data FY22 FY23 CHANGE (1) FY22 figures are as reported in the Company’s earnings release dated August 2, 2022. (2) The guidance included herein is from the Company’s earnings release dated Revenue $988.2 $1,010.0 -
Slide 13: Implied Q4 FY23 guidance
Implied Q4 FY23 guidance Notes Q3 FY23 Guidance FY23 Guidance Implied Q4 In $ millions, except percentage and per share data H1 FY23 Actuals(1) (1) FY23 figures are as reported in the Midpoint(2)(5) Midpoint(2)(5) Guidance Midpoint Company’s earnings release dated January 31, 2023. (2) The guidance
Slide 14: Summary
Summary Delivered solid bookings, returned to organic growth, positive cash flow Demand strong and getting stronger; precise timing of booking conversion may vary Expect FY23 organic revenue, bookings growth, revenue >$1B, maintain FY23 revenue guidance Positioned for stronger FY24 as headwi
Slide 15: Appendix
mercury APPENDIX 15
Slide 16: Adjusted EPS reconciliation
Adjusted EPS reconciliation (2)(4) (2)(4) Notes Q3 FY23 FY23 (1) Per share information is presented on (2) (In thousands, except per share data) Q2 FY22 Q2 FY23 LTM Q2 FY22 LTM Q2 FY23 Low High Low High a fully diluted basis. (2) Rounded amounts used. (1) (3) Impact to income taxes is calculated by
Slide 17: Adjusted EBITDA reconciliation
Adjusted EBITDA reconciliation (1)(2) (1)(2) Notes Q3 FY23 FY23 1. Rounded amounts used. (1)(2) 2. All references in this presentation to (In thousands) Q2 FY22 Q2 FY23 LTM Q2 FY22 LTM Q2 FY23 Low High Low High the third quarter of fiscal 2023 are to the quarter ending March 31, 2023. Net (Loss) Inc
Slide 18: Free cash flow and organic revenue reconciliation
Free cash flow reconciliation (In thousands) Q2 FY22 Q2 FY23 LTM Q2 FY22 LTM Q2 FY23 Cash provided by (used in) operating activities $ 6,824 $ 35,392 $ 55,197 $ (54,334) Purchases of property and equipment (8,027) (13,176) (34,250) (34,756) Free cash flow $ (1,203) $ 22,216 $ 20,947 $ (89,090) Organ