Mercury Systems Inc · NASDAQ:MRCY
Mercury Systems — Mercury Computer Systems — The AeA Classic Financial Conference 2007
47 slides from Mercury Systems's conference presentation, Nov 6, 2007
Slide 1: The AeA Classic Financial Conference November 6-7, 2007
The AeA Classic Financial Conference November 6-7, 2007 © 2007 Mercury Computer Systems, Inc. Jay Bertelli, President, Chief Executive Officer & Chairman Marcelo Lima, President, Visage Imaging Bob Hult, SVP, Chief Financial Officer Exhibit 99.1
Slide 2: Forward-Looking Safe Harbor Statement
2 © 2007 Mercury Computer Systems, Inc. www.mc.com 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 2008 business perfor
Slide 3: Mercury offers more than 20 years' experience in high-performance computing
© 2007 Mercury Computer Systems, Inc. www.mc.com 3 Mercury offers more than 20 years’ experience in designing and delivering high-performance computing systems and software, for a broad range of image- and data-intensive applications, to customers around the world. Energy Telecommunications Life Sci
Slide 4: Mercury Overview
4 © 2007 Mercury Computer Systems, Inc. www.mc.com Mercury Overview Q1 FY08 Revenue Mix: $49.2 million ACS, 42.2M Visage, 3.9M VSG, 2.6M Emerging, 0.5M
Slide 5: Investment Highlights
5 © 2007 Mercury Computer Systems, Inc. www.mc.com Investment Highlights Data explosion across multiple markets Mercury uniquely positioned to implement multi-core processing systems Strategic acquisitions starting to produce Developing applications for PACS / Radiology market using advanced visuali
Slide 6: Deep technical expertise and knowledge of the science behind applications
© 2007 Mercury Computer Systems, Inc. www.mc.com 6 We combine our deep technical expertise and extensive knowledge of the science behind our customers’ applications, to deliver reliable performance and sustained value. Medical imaging and biotechnology Radar and signals intelligence System Architect
Slide 7: Our domain expertise spans the entire data stream
© 2007 Mercury Computer Systems, Inc. www.mc.com 7 Sensor Example: acquiring sensor data from a defense application Acquire Process Transmit Mathematical Transformations Visualize Image Display Complex signal returns Sensor streaming Scalable within the application Real-time signal processing Embedd
Slide 8: Our acceleration expertise spans diverse applications
© 2007 Mercury Computer Systems, Inc. www.mc.com 8 Acquire Detect Image Correction & Defect Detection Analyze Offline Classification & Analysis Sensor Data- Scanned Wafers or Reticles Classify Searching for defects on silicon wafers or reticles Scalable compute, streaming I/O, and interconnect bandw
Slide 9: Our products span the entire signal processing chain
© 2007 Mercury Computer Systems, Inc. www.mc.com 9 Modular boards and integrated systems Robust software and tools From open-standard COTS to custom Ruggedization Scalable architectures Comprehensive services Visualization From RF to Visualization. Air to Conduction-Cooled. Boards to Systems. From R
Slide 10: Slide 10
Slide 11: Slide 11
Slide 12: Business realignment FY07 to FY08
© 2007 Mercury Computer Systems, Inc. www.mc.com 10 Computing Computing Computing Computing Software ADVANCED COMPUTING SOLUTIONS VISAGE IMAGING VISUALIZATION SCIENCES GROUP FY07 MODULAR PRODS & SERVICES ADVANCED SOLUTIONS DEFENSE COMMERCIAL IMAGING & VIZ FY08
Slide 13: Advanced Computing Solutions
© 2007 Mercury Computer Systems, Inc. www.mc.com 11 ACS focuses on specialized, high-performance computing solutions that leverage Mercury’s capabilities in sensor computing, computational acceleration, and delivery of complex system-level solutions. EXAMPLE SEGMENTS • Aerospace and defense • Semico
Slide 14: Mercury Well-Positioned in Defense
12 © 2007 Mercury Computer Systems, Inc. www.mc.com Mercury Well-Positioned in Defense • Strong customer base 20 years of experience COTS model • Technology leadership Broadest range of products RF, Data Acq, Processing, Visualization Deployed on: Ships, UAVs, Fighters, Ground Vehicles, Airborne ISR
Slide 15: Semiconductor Market
13 © 2007 Mercury Computer Systems, Inc. www.mc.com Semiconductor Market Supplying application- enabling solutions to leading OEMs Growth driven by production design wins Mask generation Wafer inspection Reticle inspection EDA market Strong Organic Growth 36% CAGR FY 2002-2007 Mercury Semiconductor
Slide 16: Communications
14 © 2007 Mercury Computer Systems, Inc. www.mc.com Communications AdvancedTCA DSP and FPGA compute solutions Satellite ground stations for Ancillary Terrestrial Component (ATC) Wideband Data Link Modems for Net-centric Warfare (HDR-RF modem) System development platforms for wireless infrastructure
Slide 17: Visualization Sciences Group
© 2007 Mercury Computer Systems, Inc. www.mc.com 15 VSG focuses on the development and distribution of software developer toolkits and 3D application software for volume rendering of very large data sets. EXAMPLE SEGMENTS • Geosciences • Engineering and manufacturing • Material sciences • Other indu
Slide 18: Emerging Businesses
© 2007 Mercury Computer Systems, Inc. www.mc.com 16 Mercury’s emerging businesses are focused on cultivating new opportunities that can benefit from Mercury’s deep optimization expertise and services. EXAMPLE SEGMENTS High-performance computing and visualization in biotech, aircraft navigation, inte
Slide 19: Merc Federal Strategy
17 © 2007 Mercury Computer Systems, Inc. www.mc.com Merc Federal Strategy Embrace and expand existing federal COTS business by repositioning ourselves in the critical path of our prime vendors and achieve new levels of COTS leverage. Initiate new business opportunities throughout the national securi
Slide 20: Visage Imaging, Inc.
© 2007 Mercury Computer Systems, Inc. www.mc.com 18 Mercury’s wholly owned subsidiary focuses on the development and distribution of advanced visualization and PACS (picture archival and communications system) solutions, and other 3D software solutions in the life sciences segment. 1QFY08 • Revenue:
Slide 21: Visage Imaging
4 VISAGE IMAGING e for Life
Slide 22: Visage Imaging at a Glance
Visage Imaging at a Glance US Corporate US Corporate Chelmsford, MA Chelmsford, MA Germany Germany Berlin, Fuerth Berlin, Fuerth US VI HQ US VI HQ San Diego, CA San Diego, CA Provider of Advanced Visualization Software and Systems to Medical Imaging Markets FY05 FY06 FY07 FY Revenues ($MM) Excludes
Slide 23: Why Visage Imaging?
Why Visage Imaging? Vertical market focus Operational efficiency Shareholder value creation 2D/3D Anywhere, Anytime Acceptance of advanced visualization makes 3D a catalyst of change in the imaging technology market
Slide 24: Visage product and channel overview
Dealers & Distributors Direct (end-user) Visage RT Visage VR Visage WS Visage PACS X (USA) SD nage viewng, pos-prressang, and mece disticufion sdutin Visage CS Visage PACS Visage CS X (USA) Amira X (research) Professional Services Embedded Systems ainirs* Visual Data Exploration
Slide 25: A Selection of Our Customers per Market Segment
A Selection of Our Customers per Market Segment Medical Imaging Surgical & Dental Microscopy & Pharma
Slide 26: Data Explosion Driving New Imaging Technology
Data Explosion Driving New Imaging Technology Data sets of up to 1GB+/study Enormous retrieval and loading times 1000+ slice studies cannot be read off film or by scrolling through 2D slice viewers Techniques such as MPR, slabs, or volume rendering increase imaging efficiency and accuracy Typical CT
Slide 27: Take Advantage of the 3D Nature of Data
Take Advantage of the 3D Nature of Data Improved diagnostics Better, faster reading 3D additional revenue source
Slide 28: What is PACS? Picture Archival & Communications Systems
What is PACS ? Picture Archival & Communications Systems Radiology Modalities Reading Room Physician‘s Office LAN On-Site Archive Remote Offices Image Distribution WEB PACS WAN VPN
Slide 29: Opportunity in Advanced Visualization PACS Appliances
Opportunity in Advanced Visualization PACS Appliances Turnkey U.S. radiology PACS market approaching maturity Growth now focused on replacement sales, community- based healthcare facilities, and the imaging center market Synergy between markets for PACS, RIS, advanced visualization, reporting, and c
Slide 30: 3D/4D Growth
3D/4D Growth North American 3D/4D Visualization for Medical Imaging Market expected to grow at a CAGR of over 15% and to over $1 billion by 2011 Source: Frost & Sullivan study, 2007 - “North American 3D/4D Visualization for Medical Imaging Markets”
Slide 31: Visage Has Most Complete Solution of Major Independent Vendors
Visage Has Most Complete Solution of Major Independent Vendors X X Barco-Voxar 19% X X X TeraRecon 28% X X Vital Images 32% X X X X Visage Imaging 5% Archive Distribute Visualize Reconstruct Market Share* Source: Frost & Sullivan study, 2007 - “North American 3D/4D Visualization for Medical Imaging
Slide 32: Isolated Workstations Aggravate the Problem
Isolated Workstations Aggravate the Problem PACS Server Data inconsistencies Sending data over the network multiple times Missing interfaces with RIS/HIS Workstation hardware quickly outdated Workplace becomes the bottleneck
Slide 33: Visage CS: Thin, Fast, and Fully Integrated PACS Server
Visage CS: Thin, Fast, and Fully Integrated PACS Server Visage CS Hospital LAN/VPN PCs and Workstations Plug-and-Play Add-On to existing PACS Process data sets on scalable server built with standard components Integrate with PACS and RIS on front end and back end – One consistent central data storag
Slide 34: Usage Example: Hospital PACS
Usage Example: Hospital PACS Modalities Emergency Room Intensive Care Unit Reading Room Radiologist‘s Office Radiologist‘s Home PACS LAN Visage CS Thin Client / Server VPN
Slide 35: Cardiac CT Analysis on Thin Clients
Cardiac CT Analysis on Thin Clients CT Scan of heart in 36 seconds! From CT Scan to diagnosis of coronary artery disease in less then 10 minutes More than 3,000 slices to read! Let the Thin 3D Client help! Why look at 3,000 slices when you could look at the entire heart in 3D! With the CS Server, th
Slide 36: 3D Viewing of Aneurysm and Vessels
3D Viewing of Aneurysm and Vessels Application example: – Cerebral aneurism – Have a closer look at the base of the aneurism to plan coiling Features: – Quick navigation and flexible reformatting – Quick 3D viewing of volumes of interest (crop box) – Flexible Maximum Intensity Projection (MIP) Benef
Slide 37: Example: Aneurysm (3D MIP)
Example: Aneurysm (3D MIP)
Slide 38: Importance of 3D in Many Areas of Medicine Increasing
Importance of 3D in Many Areas of Medicine Increasing Preclinical Imaging Drug Design Treatment Planning Cell biology Surgical Simulation Molecular Imaging
Slide 39: Thank you...
Thank you... ... for your time and attention! Questions… Learn more:
Slide 40: Financial Overview
Financial Overview © 2007 Mercury Computer Systems, Inc.
Slide 41: Revenue Follows Technology Cycles
46 © 2007 Mercury Computer Systems, Inc. www.mc.com Revenue Follows Technology Cycles Revenue ($M) $86 $107 $141 $181 $150 $180 $186 $250 $236 $225* $224 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008E Echotek – A/D-D/A June Fiscal Year End *Per Company guidance, October 24, 2007 earnings co
Slide 42: Focus on Working Capital
47 © 2007 Mercury Computer Systems, Inc. www.mc.com Focus on Working Capital Supply chain transformation Competitive advantage for Mercury and customers Customer satisfaction DSO target 50 days Days Sales Outstanding 2003 2004 2005 2006 2007 2008E Model Inventory Turns 4.9 6.9 5.4 4.6 4.1 4.2 7.5 20
Slide 43: Strong Balance Sheet
48 © 2007 Mercury Computer Systems, Inc. www.mc.com Strong Balance Sheet Historically strong balance sheet Net cash positive: $34M Projected FY08 capex of $7 million Positive free cash flow in FY08 2% convertible senior notes offering due 2024 Quarter ended September 30, 2007 Cash and Equivalents $1
Slide 44: Commitment to Timeless Business Model
49 © 2007 Mercury Computer Systems, Inc. www.mc.com Commitment to Timeless Business Model Non-GAAP FY05 FY06 FY07 Guidance FY08* Timeless Business Model Revenue 100% 100% 100% 100% 100% Gross Margin 66% 62% 56% 59% 60+% SG&A 29% 34% 36% 33% Mid 20% R&D 20% 25% 26% 24% High Teens Income from Operatio
Slide 45: Q2 Fiscal Year 2008 Guidance
50 © 2007 Mercury Computer Systems, Inc. www.mc.com Q2 Fiscal Year 2008 Guidance Impact of equity-based compensation costs related to FAS 123(R) of approximately $3.0M excluded from non-GAAP Acquisition-related amortization of approximately $1.8M excluded from non-GAAP Notes: 1) Figures in millions,
Slide 46: Fiscal Year 2008 Guidance
51 © 2007 Mercury Computer Systems, Inc. www.mc.com Fiscal Year 2008 Guidance Fiscal Year Ending June 30, 2008 Revenues ($M) $225 GAAP Non-GAAP Gross Margin 59% 59% EPS $(0.54) $0.33 Notes: 1) Figures in millions, except percent and per share data which includes adjustment for contingent convertible
Slide 47: www.mc.com
52 © 2007 Mercury Computer Systems, Inc. www.mc.com www.mc.com NASDAQ: MRCY
Mercury Computer Systems — The AeA Classic Financial Conference 2007 on 6ix