Mercury Systems Inc · NASDAQ:MRCY
Mercury Systems — Q4 2023 Earnings Presentation
17 slides from Mercury Systems's earnings presentation, Aug 15, 2023
Slide 1: Fourth Quarter and Fiscal Year 2023 Financial Results
FOURTH QUARTER AND FISCAL YEAR 2023 FINANCIAL RESULTS Bill Ballhaus President and CEO David Farnsworth Executive Vice President and CFO August 15, 2023, 5:00 pm ET Webcast login at www.mrcy.com/investor Webcast replay available by 7:00 p.m. ET August 15, 2023 © Mercury Sys tems, 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 Company's focus on enhanced execution of the Company's strategic plan under a refreshe
Slide 3: Today's Call
Today’s Call ▪ Opening remarks: recent changes, actions, and initial impressions ▪ Priorities and Focus Areas ▪ FY24 Outlook and Longer-Term Expectations ▪ Q4 and FY23 Financial Results ▪ Q&A 3 © Mercury Sys tems, Inc. Does not contain Technical Data. / /Mercury Proprietary/ No Tech Data/ /
Slide 4: First 45 Days – Changes and Actions
First 45 Days – Changes and Actions ▪ Concluded strategic alternatives review; refreshed Board; appointed CFO; named permanent President and CEO. ▪ Conducted deep dive review of business. ▪ Took immediate and initial actions to right-size Company, remedy challenged programs, and improve profitabilit
Slide 5: Initial Impressions
Initial Impressions ▪ Mercury's strategy is sound. We are a National Asset in the defense industrial base, well- positioned to benefit from strong secular growth in the market. ▪ Inorganic growth into strategically attractive areas outpaced maturity of processes and management systems leading to for
Slide 6: Our Four Focus Areas
Our Four Focus Areas ▪ Enhancing execution to deliver predictable performance. ▪ Building a thriving organic growth engine. ▪ Addressing our cost structure to improve margin expansion. ▪ Driving free cash flow release and improved conversion. 6 © Mercury Sys tems, Inc. Does not contain Technical Dat
Slide 7: We Have Confidence in Our Business Model
We Have Confidence in Our Business Model (In $ millions, except percentage data1) Focus on enhanced execution Clear path to restore core profitability on current revenue base Mid- 20% 2% 22% +++ 6% (2% ) 2% $19 $210 $56 ($22) $24 ✓ Execution improvement 14% ✓ IRAD efficiency $132 ✓ Operating leverag
Slide 8: FY24 Outlook Reflects Progress Against Enhanced Execution Plan
FY24 Outlook Reflects Progress Against Enhanced Execution Plan ▪ FY24 a transition year, taking conservative approach to guidance. ▪ Expecting revenue flat at the midpoint, with core margin improvement throughout the year. ▪ Outlook reflects benefit of actions offset by the potential for unknown ris
Slide 9: Q4 FY23 vs. Q4 FY22
Q4 FY23 vs. Q4 FY22 Notes In $ millions, except percentage and per share data Q4 FY22(3) Q4 FY23(3) CHANGE (1) Organic revenue represents total company revenue excluding net revenue from acquisitions for the first four full Bookings $331.5 $293.8 quarters since the entities’ Book-to-Bill (11%) acqui
Slide 10: FY23 vs. FY22
FY23 vs. FY22 Notes In $ millions, except percentage and per share data FY22(3) FY23(3) CHANGE (1) Organic revenue represents total company revenue excluding net revenue from acquisitions for the first four full Bookings $1,063.1 $1,076.0 quarters since the entities’ Book-to-Bill 1% acquisition date
Slide 11: Balance sheet
Balance sheet Notes As of (1) Rounded amounts used. (In $ millions)(1) 7/1/22 9/30/22 12/30/22 3/31/23 6/30/23 ASSETS Cash & cash equivalents $65.7 $52.0 $76.9 $64.4 $71.6 Accounts receivable, net 447.9 494.7 479.3 502.3 507.3 Inventory, net 270.3 287.6 312.0 342.8 337.2 PP&E, net 127.2 125.9 122.0
Slide 12: Cash flow summary
Cash flow summary Notes For the Fiscal Quarters Ended (1) Rounded amounts used. (2) Non-GAAP, see reconciliation table. (In $ millions)(1) 7/1/22 9/30/22 12/30/22 3/31/23 6/30/23 Net Income (Loss) $16.9 ($14.3) ($10.9) $5.2 ($8.2) Depreciation and amortization 23.4 23.7 27.2 23.9 22.5 Other non-cash
Slide 13: FY24 annual guidance
FY24 annual guidance Notes (1) FY23 figures are as reported in the In $ millions, except percentage and per share data FY23(1) FY24(2)(5) CHANGE Company’s earnings release dated August 15, 2023. (2) The guidance included herein is from the Company’s earnings release dated August 15, 2023. Revenue $9
Slide 14: Appendix
APPENDIX 14
Slide 15: 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 items involved in determining adjusted income and recalculating the income tax
Slide 16: Adjusted EBITDA reconciliation
Adjusted EBITDA reconciliation FY24(1)(2) Notes 1. Rounded amounts used. 2. All references in this presentation to (In thousands)(1)(2) Q4 FY22 Q4 FY23 FY22 FY23 Low High the fourth quarter and full fiscal 2022 are to the quarter and 52-week Net Income (Loss) $ 16,915 $ (8,236) $ 11,275 $ (28,335) $
Slide 17: 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