Mercury Systems Inc · NASDAQ:MRCY
Mercury Systems — Mercury Computer Systems — Cowen & Co. 34th Annual Technology Conference (June 2006)
33 slides from Mercury Systems's conference presentation, Jun 2, 2006
Slide 1: Cowen & Co. 34th Annual Technology Conference
Cowen & Co. 34th Annual Technology Conference June 2, 2006 Exhibit 99.1 © 2005 Mercury Computer Systems, Inc. Jay Bertelli, President, Chief Executive Officer & Chairman Bob Hult, SVP, Operations & Finance, Chief Financial Officer
Slide 2: Forward-Looking Safe Harbor Statement
© 2005 Mercury Computer Systems, Inc. 2 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 anticipated fiscal 2006 business performance and b
Slide 3: Company Overview
© 2005 Mercury Computer Systems, Inc. 3 Company Overview • Leader in high-performance computing for defense and commercial applications • FY05 revenues of $250 million • 854 employees • HQ in Chelmsford, MA • Specialized technology for: High-data rate computing and I/O Signal processing 2D and 3D im
Slide 4: Mercury Growth Story
© 2005 Mercury Computer Systems, Inc. 4 Mercury Growth Story • Strong competitive position in attractive and growing markets • Leverage technology investments across multiple applications in diverse markets Defense and Commercial • Straightforward operating model and financial structure • Strong bal
Slide 5: Solving Challenging Problems…
© 2005 Mercury Computer Systems, Inc. 5 Solving Challenging Problems… Deep Algorithm Expertise System Architecture Expertise Acceleration Expertise GPU Cell Broadband Engine FPGA Applications Expertise …by combining extensive technical expertise with deep knowledge of the science behind our customer
Slide 6: Mercury Broadly Leverages Embedded Markets Shared Benefit
© 2005 Mercury Computer Systems, Inc. 6 Mercury Broadly Leverages Embedded Markets Shared Benefit Telecom Life Sciences Defense 3-D Visualization Image Processing
Slide 7: Mercury, IBM & Cell: A Landmark Agreement
© 2005 Mercury Computer Systems, Inc. 7 Mercury, IBM & Cell: A Landmark Agreement • The Cell Broadband Engine processor is 5-100x faster than conventional microprocessors • Mercury is the 1 st non-gaming company to integrate the Cell Broadband Engine into its products High-volume gaming market is tr
Slide 8: Commercial Imaging and Visualization (CIV)
Commercial Imaging and Visualization (CIV) © 2005 Mercury Computer Systems, Inc.
Slide 9: Commercial Imaging & Visualization
© 2005 Mercury Computer Systems, Inc. 9 Commercial Imaging & Visualization • 20% of FY05 revenues 50% growth over FY04 • Delivering Imaging & Computing Solutions to: Life Sciences (Medical Imaging & Biotech) Geosciences (Oil and gas exploration) Navigation • Strong economic trends • Growing, $1 bill
Slide 10: CIV Customers & Targets (not all inclusive) Oil and Gas
© 2005 Mercury Computer Systems, Inc. 10 CIV Customers & Targets (not all inclusive) Oil and Gas
Slide 11: Life Sciences Value Delivery
© 2005 Mercury Computer Systems, Inc. 11 Life Sciences Value Delivery Acquire Visualize Archive Distribute • Large data set volume rendering • Workstation • Clinical packages Reconstruct • Reconstruction algorithms • GPU acceleration • Cell Broadband Engine technology acceleration • SoHard Gantry Co
Slide 12: Advanced Solutions Business Unit (ASBU)
Advanced Solutions Business Unit (ASBU) © 2005 Mercury Computer Systems, Inc.
Slide 13: Advanced Solutions Business Unit
© 2005 Mercury Computer Systems, Inc. 13 Advanced Solutions Business Unit • 20% of FY05 revenues 81% growth over FY04 • Market Focus Semiconductor Capital Equipment Wireless Communications Infrastructure • New applications in semiconductor equipment • Expanding business in communication segments New
Slide 14: ASBU Customers & Targets
© 2005 Mercury Computer Systems, Inc. 14 ASBU Customers & Targets (not all inclusive) Satellite Data Links and Software Radio Wireless Infrastructure Base Stations and Radio Network Controllers Silicon IP and Component Solutions Semiconductor Capital Equipment: Wafer Inspection, Reticle Inspection,
Slide 15: Semiconductor Equipment Growth Drivers
© 2005 Mercury Computer Systems, Inc. 15 Semiconductor Equipment Growth Drivers Consumer demand for faster, lower power, lower-cost electronics Drives the need for higher-performance chip equipment Hard problems that are getting harder More complex algorithms, higher data rates New applications that
Slide 16: Communications Market
© 2005 Mercury Computer Systems, Inc. 16 Communications Market • Application Focus Wireless base stations Radio Network Controllers (RNCs) Video gateways Satellite data links Software Defined Radio (SDR) • In the Labs of Tier 1 OEMs Today Supporting development of next- generation solutions Accelera
Slide 17: Defense Business Unit (DBU)
Defense Business Unit (DBU) © 2005 Mercury Computer Systems, Inc.
Slide 18: Defense
© 2005 Mercury Computer Systems, Inc. 18 Defense • 60% of FY05 revenues 18% growth over FY04 • Market focus Radar Signals Intelligence (SIGINT) Other defense technologies • Technology leadership Strong COTS model Aboard demanding platforms in air, on land, under sea Full life-cycle support • Militar
Slide 19: Customer Success
© 2005 Mercury Computer Systems, Inc. 19 Customer Success Enabling our customers to win by providing commercial off-the-shelf technology for new applications
Slide 20: Defense Value Proposition
© 2005 Mercury Computer Systems, Inc. 20 Defense Value Proposition Sensor • Sensor streaming • Scalable • Real time • Embedded Real estate, environmental, cooling constraints Real-time signal and image processing applications Acquire Process Transmit Mathematical transformations Visualize Image Disp
Slide 21: Radar – Leading through Innovation
© 2005 Mercury Computer Systems, Inc. 21 Radar – Leading through Innovation • Radar Processing Leadership Tactical fighters: JSF Airborne surveillance: MP-RTIP • Global Hawk • E10-A, JSTARS, AWACS Shipboard missile defense: Aegis UAV SAR: Predator LYNX • Expanding Radar Markets Upgrades to existing
Slide 22: Signals Intelligence (SIGINT)
© 2005 Mercury Computer Systems, Inc. 22 Signals Intelligence (SIGINT) • Communications Intelligence (COMINT) and Electronic (ELINT) Intelligence • Fastest growing DBU segment Proliferation of signals Cross-cueing for other sensors COTS adoption • Comprehensive product offering RF receivers Analog-t
Slide 23: Revolutionizing the Industry
© 2005 Mercury Computer Systems, Inc. 23 Revolutionizing the Industry Widespread deployment of battlefield visualization and decision aids previously found only in research laboratories Multisensor visualization for ALL warfighters on the move Comprehensive battlefield pictures for all warfighters S
Slide 24: Growth Drivers
© 2005 Mercury Computer Systems, Inc. 24 Growth Drivers • DoD transformation/ISR initiative Persistent ISR • Expansion to lower echelons, smaller platforms • Image & data exploitation • Software radio/data links ISR becoming CISR Network-centric warfare • Smart weapons COTS initiative Today 5 Years
Slide 25: Financial Overview
Financial Overview © 2005 Mercury Computer Systems, Inc.
Slide 26: Investment Thesis: Emerging Growth Story
© 2005 Mercury Computer Systems, Inc. 26 Investment Thesis: Emerging Growth Story FY2005: Record revenues Revenue ($M) $150 $180 $186 $250 $235-240* 2002A 2003A 2004A 2005A 2006E *Per Company guidance, April 27, 2006 Q3 earnings conference call **Growth rates calculated at midpoint of FY2006 revenue
Slide 27: Focus on Working Capital
© 2005 Mercury Computer Systems, Inc. 27 Focus on Working Capital Inventory Turns 3.8 4.9 6.9 5.4 2002 2003 2004 2005 Model • Supply chain investment Competitive advantage for Mercury and customers • Customer satisfaction DSO target 45 days Days Sales Outstanding 2002 2003 2004 2005 Model
Slide 28: Cash Generation
© 2005 Mercury Computer Systems, Inc. 28 Cash Generation $M $15.9 $50.5 $25.9 $38.0 $26.6 $20.3 $10.2 $44.3 F2002 F2003 F2004 F2005 Operating Cash Flow Free Cash Flow
Slide 29: Strong Balance Sheet
© 2005 Mercury Computer Systems, Inc. 29 Strong Balance Sheet Historically strong balance sheet Supports open innovation growth agenda * Includes $125 million convertible senior notes offering * Quarter ended March 31, 2006 Cash and Equivalents $168 Total Current Assets $197 Total Assets $382 Total
Slide 30: Fiscal Year 2006 Guidance
© 2005 Mercury Computer Systems, Inc. 30 Fiscal Year 2006 Guidance Fiscal Year Ending June 30, 2006 Revenues ($M) $235-240 Gross Margin 60% GAAP Non-GAAP Operating Income 1-3% EPS $(0.56)-(0.47) $0.15-0.27 Notes: 1) Figures in millions, except percent and per share data which includes adjustment for
Slide 31: Q4 Fiscal 2006 Guidance
© 2005 Mercury Computer Systems, Inc. 31 Q4 Fiscal 2006 Guidance Impact of equity-based compensation costs related to FAS 123(R), amortization of purchased intangibles, and in-process R&D charges excluded from Non-GAAP Notes: 1) Figures in millions, except percent and per share data which includes a
Slide 32: Timeless Business Model
© 2005 Mercury Computer Systems, Inc. 32 Timeless Business Model FY04 FY05 Guidance FY06 Timeless Business Model Revenue 100% 100% 100% 100% Gross Margin 67% 66% 60% 66-67% SG&A 29% 29% 29-30% R&D 21% 20% 20-21% Income from Operations 17% 17% 1-3% 16-18% Notes : FY06 non-GAAP guidance per April 27,
Slide 33: www.mc.com
© 2005 Mercury Computer Systems, Inc. 33 www.mc.com NASDAQ: MRCY
Mercury Computer Systems — Cowen & Co. 34th Annual Technology Conference (June 2006) on 6ix