Mercury Systems Inc · NASDAQ:MRCY
Mercury Systems — Mercury Computer Systems — Cowen and Company 29th Annual Aerospace/Defense Conference (February 2008)
30 slides from Mercury Systems's conference presentation, Feb 5, 2008
Slide 1: Cowen and Company 29th Annual Aerospace/Defense Conference
Cowen and Company 29th Annual Aerospace/Defense Conference February 5, 2008 Exhibit 99.1 © 2008 Mercury Computer Systems, Inc. Mark Aslett, President & Chief Executive Officer Bob Hult, SVP & Chief Financial Officer
Slide 2: Forward-Looking Safe Harbor Statement
© 2008 Mercury Computer Systems, Inc. www.mc.com 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 2008 business perfor
Slide 3: Mercury at a Glance
© 2008 Mercury Computer Systems, Inc. www.mc.com 3 Mercury at a Glance Oil and Gas Telecommunications Embedded Computing Aerospace and Defense Semi Industry Life Sciences Mercury offers more than 20 years’ experience in designing and delivering high-performance computing systems and software, for a
Slide 4: Mercury spans the entire signal processing chain
© 2008 Mercury Computer Systems, Inc. www.mc.com 4 4 Mercury spans the entire signal processing chain • Modular boards and integrated systems • Scalable multi core architectures • Robust software and tools • Open-standard COTS to custom solutions • Ruggedized systems • Comprehensive services • Visua
Slide 5: Why customers choose Mercury
© 2008 Mercury Computer Systems, Inc. www.mc.com 5 5 Why customers choose Mercury • Significant and pioneering investments in specialized FPGA and multi core computing architectures and software We maintain ongoing relationships with silicon providers that are unique Significant multi computing R&D
Slide 6: Advanced Computing Solutions
© 2008 Mercury Computer Systems, Inc. www.mc.com 6 6 Advanced Computing Solutions 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 •
Slide 7: Visage Imaging, Inc.
© 2008 Mercury Computer Systems, Inc. www.mc.com 7 7 Visage Imaging, Inc. Mercury’s wholly owned subsidiary focuses on the development and distribution of 3D visualization and PACS (picture archiving and communications system) solutions, and other 3D software solutions in the life sciences segment.
Slide 8: Visualization Sciences Group
© 2008 Mercury Computer Systems, Inc. www.mc.com 8 8 Visualization Sciences Group VSG focuses on the development and distribution of software developer toolkits and 3D application software for very-high volume-rendering applications. Example Segments • Geosciences – Oil and Gas • Engineering and man
Slide 9: Partial customer and partner list
© 2008 Mercury Computer Systems, Inc. www.mc.com 9 9 Partial customer and partner list
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Slide 12: Business units FY07 to FY08
© 2008 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: Strategy for Sustainable Growth
© 2008 Mercury Computer Systems, Inc. www.mc.com 11 Strategy for Sustainable Growth • Short Term: Improve operations and cash flow Improve supply chain, manufacturing operations and shipment linearity Increase turns Simplify operations, cross-functional coordination • Medium Term: Strengthen and gro
Slide 14: Favorable Trends Driving Opportunities
© 2008 Mercury Computer Systems, Inc. www.mc.com 12 Favorable Trends Driving Opportunities • Data explosion in all markets Driving need for new application-specific computing and solutions • Industry rapidly shifting to multi core processing Broader set of applications needing multicomputer solution
Slide 15: Why Mercury Wins
© 2008 Mercury Computer Systems, Inc. www.mc.com 13 Why Mercury Wins • Strong brand, people and relationships • We solve problems others can’t • We make our customers’ products work better • We do it faster and at lower cost
Slide 16: Challenges Drive Innovation
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Slide 17: Mercury Overview
© 2008 Mercury Computer Systems, Inc. www.mc.com 15 Mercury Overview • HQ in Chelmsford, MA • Sales, support and R&D centers in U.S., Europe and Japan • 737 employees worldwide • Founded in 1981 • FY2007 revenues of $224 million • NASDAQ: MRCY FY07 (Ended June) Revenue Mix* *FY07 business unit reven
Slide 18: Revenue Follows Technology Cycles
© 2008 Mercury Computer Systems, Inc. www.mc.com 16 Revenue Follows Technology Cycles - Revenue ($M) $86 $107 $141 $181 $150 $180 $186 $250 $236 $209-214* $224 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008E Echotek – A/D-D/A June Fiscal Year End PowerPC RACE++ MP-510 Cell BE Processor DSP/G
Slide 19: EBITDAS Follows Revenue
© 2008 Mercury Computer Systems, Inc. www.mc.com 17 (60) (40) (20) - 20 40 60 80 EBITDAS Follows Revenue $23 $23 $30 $(16) $(2) $14 - $17 $(38) $(21) - $(18) $15 $57 $41 $42 2003 2004 2005 2006 2007 2008E* EBITDAS Net Income (GAAP) * Per Company guidance range, January 23, 2008 earnings conference c
Slide 20: Strong Balance Sheet
© 2008 Mercury Computer Systems, Inc. www.mc.com 18 Strong Balance Sheet Historically strong balance sheet Net cash positive: $31M Projected FY08 capex of $6 million Positive free cash flow in FY08 * 2% convertible senior notes offering due 2024 Quarter ended December 31, 2007 Cash and Equivalents $
Slide 21: Focus on Working Capital
© 2008 Mercury Computer Systems, Inc. www.mc.com 19 Focus on Working Capital • Supply chain transformation Operational efficiencies Manufacturing lead times Cost of quality Competitive advantage for Mercury and customers • Customer satisfaction End-of-quarter shipment skew DSO target 50 days Invento
Slide 22: Commitment to Timeless Business Model
© 2008 Mercury Computer Systems, Inc. www.mc.com 20 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% 60% 60+% SG&A 29% 34% 36% 37% - 36% Mid 20% R&D 20% 25% 26% 25% - 24% High Teens Income f
Slide 23: 1H Fiscal Year 2008 Summary
© 2008 Mercury Computer Systems, Inc. www.mc.com 21 1H Fiscal Year 2008 Summary • First half revenue and EPS exceeded guidance • Strong book-to-bill both quarters, 1.1 ending Q208 • Operating cash flow generation of $1.9 million for 1H08 • DSO: 74 days; Inventory Turns: 3.5 • Capital expenditures of
Slide 24: Q3 Fiscal Year 2008 Guidance
© 2008 Mercury Computer Systems, Inc. www.mc.com 22 Q3 Fiscal Year 2008 Guidance • Impact of equity-based compensation costs related to FAS 123(R) of approximately $3.1M excluded from non-GAAP • Acquisition-related amortization of approximately $1.8M excluded from non-GAAP Notes: 1) Figures in milli
Slide 25: Fiscal Year 2008 Guidance
© 2008 Mercury Computer Systems, Inc. www.mc.com 23 Fiscal Year 2008 Guidance Fiscal Year Ending June 30, 2008 Revenues ($M) $209 - $214 GAAP Non-GAAP Gross Margin 60% 60% EPS $(0.96) - $(0.83) $0.08 - $0.17 Notes: 1) Figures in millions, except percent and per share data 2) Company guidance, Januar
Slide 26: Investment Highlights
© 2008 Mercury Computer Systems, Inc. www.mc.com 24 Investment Highlights • Mercury uniquely positioned to implement multi core, multicomputer processing systems • Strategic acquisitions starting to produce • Recent cost reduction initiatives and a better alignment of internal resources will drive i
Slide 27: www.mc.com
© 2008 Mercury Computer Systems, Inc. www.mc.com 25 www.mc.com NASDAQ: MRCY
Slide 28: Challenges Drive Innovation
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Slide 29: GAAP to Non-GAAP Reconciliation
© 2008 Mercury Computer Systems, Inc. www.mc.com 27 GAAP to Non-GAAP Reconciliation Q308 and FY08 Guidance Reconciliation* Note: figures are rounded * Per Company guidance range, January 23, 2008 earnings conference call RECONCILIATION OF FORWARD-LOOKING GUIDANCE RANGE Year ending June 30, 2008 RANG
Slide 30: EBITDAS Reconciliation
© 2008 Mercury Computer Systems, Inc. www.mc.com 28 EBITDAS Reconciliation Note: figures are rounded * Per Company guidance range, January 23, 2008 earnings conference call Range $M Fiscal Year 2003 2004 2005 2006 2007 2008E* 2008E* EBITDAS 42.0 $ 40.9 $ 57.0 $ 14.7 $ (2.5) $ 13.9 $ 16.9 $ Stock Com