Mercury Systems Inc · NASDAQ:MRCY

Mercury Systems — Q4 FY2021 Earnings Presentation

21 slides from Mercury Systems's earnings presentation, Aug 3, 2021

  1. Slide 1: Fourth Quarter and Fiscal Year 2021 Financial Results

    FOURTH QUARTER AND FISCAL YEAR 2021 FINANCIAL RESULTS Mark Aslett President and CEO Michael Ruppert Executive Vice President and CFO August 3, 2021, 5:00 pm ET Webcast login at www.mrcy.com/investor Webcast replay available by 7:00 p.m. ET August 3, 2021 © Mercury Systems, Inc.

  2. 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 acquisitions described herein and to fiscal 2021 business performance and beyond and t

  3. Slide 3: Delivered strong Q4 and fiscal 2021 results

    Delivered strong Q4 and fiscal 2021 results  FY21: 16% revenue growth, net income down 28%, 15% adjusted EBITDA growth  Another strong year for new design wins; estimated lifetime value $1.5 billion  Five-year plan remains intact; expect high single-digit to low double-digit organic growth  Comp

  4. Slide 4: Q4 and FY21 results

    Q4 and FY21 results Notes Q4 FY21 VS. Q4 FY20 FY21 VS. FY20 (1) Organic revenue represents total company revenue excluding net revenue from acquisitions for the first four full quarters since the entities’ acquisition date (which  Bookings decreased 7%  Bookings decreased 8% excludes any intercomp

  5. Slide 5: FY22 business outlook

    FY22 business outlook  Taking more conservative stance on organic growth outlook  Further reduced revenues from SEWIP and other Naval upgrades, F-35 and FMS  Biggest change since last quarter is LTAMDS has moved to FY23  Now expect flat organic growth and ~10% total company growth  Expect total

  6. Slide 6: Dramatically scaled and transformed business since FY14

    Dramatically scaled and transformed business since FY14  Deployed $1.2B in capital on 13 capability-led acquisitions  Grew total company revenue 4.4x, adjusted EBITDA 9x, resulting in 10x market cap  Increased estimated lifetime value of top 30 programs 2.4x to more than $11B  Crossing $1B reven

  7. Slide 7: 1MPACT: a 3 year effort to achieve our full growth and EBITDA potential

    1MPACT: a 3 year effort to achieve our full growth and EBITDA potential  Engaged tier 1 consulting firm to do full company assessment  Transforming organizational structure and how we do business to scale  Anticipate $22M benefit in FY22 resulting from actions taken in Q4 FY21 & Q1 FY22  Organiz

  8. Slide 8: M&A update

    M&A update  Apply 1MPACT methodologies to future M&A to accelerate value creation  Active M&A pipeline with multiple opportunities in line with strategy  Disciplined approach in deal pursuits, diligence and integration  POC and Pentek integrations on track, businesses performing as expected, gro

  9. Slide 9: Summary

    Summary  FY21 record total revenue increased 16% with record adjusted EBITDA up 15% year-over-year  Expect flat organic growth and ~10% total company growth for FY22  Foresee substantial growth in bookings and backlog in FY22  Anticipate strong FY23 as organic growth rebounds to more normal leve

  10. Slide 10: Q4 FY21 vs. Q4 FY20

    Q4 FY21 vs. Q4 FY20 Notes In $ millions, except percentage and per share data Q4 FY20(3) Q4 FY21(3) CHANGE (1) Organic revenue represents total company revenue excluding net revenue from acquisitions for the first four full quarters since Bookings $278.6 $260.2 the entities’ acquisition date (7%) (w

  11. Slide 11: FY21 vs. FY20

    FY21 vs. FY20 Notes In $ millions, except percentage and per share data FY20 FY21(3) CHANGE (1) Organic revenue represents total company revenue excluding net revenue from acquisitions for the first four full Bookings $954.3 $881.2 quarters since the entities’ 1.20 0.95 (8%) acquisition date (which

  12. Slide 12: Balance sheet

    Balance sheet Notes As of (1) Rounded amounts used. (In $ millions)(1) 7/3/20 10/2/20 1/1/21 4/2/21 7/2/21 ASSETS Cash & cash equivalents $226.8 $239.1 $109.1 $121.9 $113.8 Restricted cash - - 61.6 - - Accounts receivable, net 210.7 207.8 240.2 264.0 291.7 Inventory, net 178.1 206.0 218.4 226.8 221.

  13. Slide 13: Cash flow summary

    Cash flow summary Notes For the Fiscal Quarters Ended (1) Rounded amounts used. FY20 FY21 (2) Non-GAAP, see (In $ millions)(1) 10/2/20 1/1/21 4/2/21 7/2/21 reconciliation table. Net Income $85.7 $15.8 $12.7 $15.6 $17.9 $62.0 Depreciation and amortization 49.3 13.0 13.3 20.0 20.8 67.1 (Gain)/Loss on

  14. Slide 14: FY22 annual guidance

    FY22 annual guidance Notes (1) FY21 figures are as reported in the (1) (2)(5) In $ millions, except percentage and per share data FY21 FY22 CHANGE Company’s earnings release dated August 3, 2021. (2) The guidance included herein is from the Company’s earnings release dated August 3, 2021. Revenue $9

  15. Slide 15: Q1 FY22 guidance

    Q1 FY22 guidance Notes (1) (2)(5) In $ millions, except percentage and per share data Q1 FY21 Q1 FY22 CHANGE (1) Q1 FY21 figures are as reported in the Company’s earnings release dated November 3, 2020. (2) The guidance included herein is from the Company’s earnings release dated Revenue $205.6 $210

  16. Slide 16: 1MPACT: Estimated magnitude and timing of savings

    1MPACT: Estimated magnitude and timing of savings  Identifying workstreams and savings estimates across six key focus areas  Preliminary run-rate adjusted EBITDA savings estimates of $35-55M by FY25  Reinvesting approximately $5M in the business to support continued growth  Ramp-up of savings in

  17. Slide 17: Summary

    Summary  Delivered solid financial performance for the quarter and full fiscal year  Expecting strong bookings growth in fiscal 2022 driving growth in fiscal 2023 and beyond  1MPACT to accelerate adjusted EBITDA margin expansion over time  Continuing to execute on our long-term financial model w

  18. Slide 18: Appendix

    mercury APPENDIX 18

  19. Slide 19: Adjusted EPS reconciliation

    Adjusted EPS reconciliation (2)(4) (2)(4) Notes Q1 FY22 FY22 (1) Per share information is presented on (In thousands, except per share data) Q4 FY20 Q4 FY21 FY20 FY21 Low High Low High a fully diluted basis. (2) Rounded amounts used. (1) (3) Impact to income taxes is calculated by Earnings (loss) pe

  20. Slide 20: Adjusted EBITDA reconciliation

    Adjusted EBITDA reconciliation (1)(2) (1)(2) Notes Q1 FY22 FY22 (1) Rounded amounts used. (In thousands) Q4 FY20 Q4 FY21 FY20 FY21 Low High Low High (2) Effective as of July 1, 2019, the Company’s fiscal year has changed to Net Income (loss) $ 27,224 $ 17,925 $ 85,712 $ 62,044 $ (4,400) $ (2,300) $

  21. Slide 21: Free cash flow reconciliation / Organic revenue reconciliation

    Free cash flow reconciliation (In thousands) Q4 FY20 Q4 FY21 FY20 FY21 Cash provided by operating activities $ 28,726 $ 27,194 $ 115,184 $ 97,247 Purchases of property and equipment (11,506) (10,891) (43,294) (45,599) Free cash flow $ 17,220 $ 16,303 $ 71,890 $ 51,648 Organic revenue reconciliation

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