Slide 1: Second Quarter Fiscal Year 2022 Financial Results
SECOND QUARTER FISCAL YEAR 2022 FINANCIAL RESULTS Mark Aslett President and CEO Michael Ruppert Executive Vice President and CFO February 1, 2022, 5:00 pm ET Webcast login at www.mrcy.com/investor Webcast replay available by 7:00 p.m. ET February 1, 2022 © 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 acquisitions described herein and to fiscal 2022 business performance and beyond and t
Slide 3: Delivered solid results for Q2 with strong outlook for FY22 and beyond
Delivered solid results for Q2 with strong outlook for FY22 and beyond Bookings increased substantially vs. low water mark in Q1 Anticipate even stronger bookings in H2 Expect significant bookings increase for FY22 year-over-year Well-positioned for return to more normal levels of revenue gr
Slide 4: Q2 and LTM FY22 results
Q2 and LTM FY22 results Notes Q2 FY22 VS. Q2 FY21 LTM FY22 VS. LTM FY21 (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 increased 13% Bookings decreased 4% excludes
Slide 5: FY22 business outlook
FY22 business outlook Expect ~10% total revenue growth exceeding $1B, record adjusted EBITDA Outlook reflects slightly more conservative organic revenue growth reflecting industry headwinds Anticipate substantial H2 bookings growth, positive book-to-bill, solid backlog growth for FY22 Expect
Slide 6: 1MPACT: a 4-year effort to achieve full growth and adj. EBITDA potential
1MPACT: a 4-year effort to achieve full growth and adj. EBITDA potential Proactively launched 1MPACT to lay foundation for next phase of value creation at scale Launch of 1MPACT not related to industry challenges at the time Aimed at improving our organic growth rate and margin expansion Con
Slide 7: M&A update
M&A update Track record of successful acquisitions and strong balance sheet positions us well for future M&A Strong pipeline with multiple opportunities in line with strategy Continuing disciplined approach in deal pursuits, diligence, pricing and integration Closed Avalex Technologies and A
Slide 8: Strategy and technologies aligned with major industry drivers and trends
Strategy and technologies aligned with major industry drivers and trends Expect total company revenue to continue growing faster than overall defense spending Targeting and participating in larger, faster growing defense market segments Well-aligned with national defense strategy; need for mod
Slide 9: Q2 FY22 vs. Q2 FY21
Q2 FY22 vs. Q2 FY21 Notes In $ millions, except percentage and per share data Q2 FY21(3) Q2 FY22(3) CHANGE (1) Organic revenue represents total company revenue excluding net revenue from acquisitions for the first four full quarters since Bookings $210.1 $236.9 the entities’ acquisition date 13% (wh
Slide 10: Balance sheet
Balance sheet Notes As of (1) Rounded amounts used. (In $ millions)(1) 1/1/21 4/2/21 7/2/21 10/1/21 12/31/21 ASSETS Cash & cash equivalents $109.1 $121.9 $113.8 $95.8 $105.2 Restricted cash 61.6 - - - - Accounts receivable, net 240.2 264.0 291.7 301.2 320.1 Inventory, net 218.4 226.8 221.6 234.4 251
Slide 11: Cash flow summary
Cash flow summary Notes For the Fiscal Quarters Ended (1) Rounded amounts used. (2) Non-GAAP, see (In $ millions)(1) 1/1/21 4/2/21 7/2/21 10/1/21 12/31/21 reconciliation table. Net Income (Loss) $12.7 $15.6 $17.9 ($7.1) ($2.6) Depreciation and amortization 13.3 20.0 20.8 21.5 24.1 Gain on investment
Slide 12: Q3 FY22 guidance
Q3 FY22 guidance Notes In $ millions, except percentage and per share data Q3 FY21(1) Q3 FY22(2)(5) CHANGE (1) Q3 FY21 figures are as reported in the Company’s earnings release dated May 4, 2021. (2) The guidance included herein is from the Company’s earnings release dated Revenue $256.9 $245.0 - $2
Slide 13: FY22 annual guidance
FY22 annual guidance Notes In $ millions, except percentage and per share data FY21(1) FY22(2)(5) CHANGE (1) FY21 figures are as reported in the Company’s earnings release dated August 3, 2021. (2) The guidance included herein is from the Company’s earnings release dated Revenue $924.0 $1,000.0 - $1
Slide 14: Implied Q4 FY22 guidance
Implied Q4 FY22 guidance Notes Q3 FY22 H1 FY22 FY22 Guidance Implied Q4 Guidance (1) H1 FY22 figures are as reported in the In $ millions, except percentage and per share data Guidance Company’s earnings release dated Actuals (1) Midpoint(2) (5) Midpoint February 1, 2022. Midpoint(2) (5) (2) The gui
Slide 15: Implied Q4 FY22 guidance
Implied Q4 FY22 guidance Record Q4 financial performance expected across all key metrics Current backlog and expected Q3 bookings provide strong visibility into Q4 Sole source, recurring and well-funded programs driving Q3/Q4 bookings Margin expansion resulting from production program and li
Slide 16: Summary
Summary Delivered solid results for Q2 Expect strong FY23 as organic growth returns to more normal levels 1MPACT expected to drive margin expansion Secure processing, trusted microelectronics, and open mission systems driving growth Benefiting from outsourcing, secure processing, delayerin
Slide 17: Appendix
APPENDIX 17
Slide 18: Adjusted EPS reconciliation
Adjusted EPS reconciliation Notes (1) Per share information is presented on a fully diluted basis. (2) Rounded amounts used. (3) Impact to income taxes is calculated by recasting income before income taxes to include the add-backs involved in determining adjusted income and recalculating the income
Slide 19: Adjusted EBITDA reconciliation
Adjusted EBITDA reconciliation Notes (1) Rounded amounts used. (2) All references in this presentation to the third quarter of fiscal 2022 and full fiscal 2022 are to the quarter ending April 1, 2022 and the 52-week period ending July 1, 2022. 19 © Mercury Systems, Inc. Does not contain Technical Da
Slide 20: Free cash flow and organic revenue reconciliation
Free cash flow reconciliation Organic revenue reconciliation Notes (1) Organic revenue represents total company revenue excluding net revenue from acquisitions for the first four full quarters since the entities’ acquisition date (which excludes any intercompany transactions). After the completion o