Mercury Systems Inc · NASDAQ:MRCY
Mercury Systems — Mercury Computer Systems — AeA Classic Financial Conference 2005
35 slides from Mercury Systems's conference presentation, Nov 7, 2005
Slide 1: AeA Classic Financial Conference November 6-9, 2005
AeA Classic Financial Conference November 6-9, 2005 Exhibit 99.1 © 2005 Mercury Computer Systems, Inc. Jay Bertelli, President, CEO & Chairman Bob Hult, SVP, Operations & Finance, CFO Marcelo Lima, VP & GM, Commercial Imaging & Visualization
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 Founded in 1981 Leading provider of innovative, engineered computing solutions for compute- intensive applications Office locations in U.S., UK, France, Germany and Japan; R&D centers in U.S., France, and Germany 880 employees worldwide; 320 e
Slide 4: Today's Mercury
© 2005 Mercury Computer Systems, Inc. 4 Today’s Mercury Customers are attracted to Mercury based on our common interest in making a difference through technology We help our customers to make a positive impact on critical issues that affect our lives Improving international security Advancing health
Slide 5: Sample Application Areas Enabled by Mercury
© 2005 Mercury Computer Systems, Inc. 5 Sample Application Areas Enabled by Mercury J-STARS Aircraft RADAR Mobile C-Arm (Digital X-Ray) Wafer Inspection Image Processing Special-Purpose Computing & I/O Visualization & Rendering Signal Processing Wireless Communications Base Stations Image Storage &
Slide 6: Key Elements of Mercury's Strategy
© 2005 Mercury Computer Systems, Inc. 6 Key Elements of Mercury’s Strategy Committed to driving innovation Average R&D y/y is approximately 20% of revenues Focused on continually enhancing our expertise to maintain our leading edge Internal development Cross-pollinating commercial technologies/exper
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 Cell into its products High-volume gaming market is transforming the technology
Slide 8: Defense Business
Defense Business © 2005 Mercury Computer Systems, Inc.
Slide 9: Defense Business Overview
© 2005 Mercury Computer Systems, Inc. 9 Defense Business Overview 60% of FY05 revenues Market focus Radar Signals intelligence (SIGINT) Defense technologies Technology leadership Strong COTS model Aboard demanding platforms in air, on land, under sea Full life-cycle support Growth Transformation CIS
Slide 10: Value Proposition
© 2005 Mercury Computer Systems, Inc. 10 Value Proposition Sensor Real-time signal and image processing applications Sensor streaming Scalable Real time Embedded (real estate, environmental, cooling constraints) Acquire Process Transmit Mathematical Transformations Visualize Image Display Complex si
Slide 11: Customer Success
© 2005 Mercury Computer Systems, Inc. 11 Customer Success Enabling our customers to win by providing commercial off-the-shelf technology for new applications
Slide 12: Growth Drivers
© 2005 Mercury Computer Systems, Inc. 12 Growth Drivers DoD transformation/ISR initiative Signals intelligence (SIGINT) Image & data exploitation ISR becoming CISR Expansion to lower echelons, smaller platforms Network-centric warfare Software radio/data links Smart weapons Today 5 Years Available M
Slide 13: Advanced Solutions Business
Advanced Solutions Business © 2005 Mercury Computer Systems, Inc.
Slide 14: Advanced Solutions Markets
© 2005 Mercury Computer Systems, Inc. 14 Advanced Solutions Markets Semiconductor capital equipment market Wafer and reticle inspection Systems that process streaming data to find defects Mask writing Systems that generate patterns to write to semiconductor and flat-panel masks Communications comput
Slide 15: Communications Market
© 2005 Mercury Computer Systems, Inc. 15 Communications Market Applications Wireless base stations Radio network controllers Video gateways Satellite data links Software defined radio Technology High-availability middleware Component deployment middleware RapidIO ® DSP and FPGA compute nodes Interco
Slide 16: Value Proposition
© 2005 Mercury Computer Systems, Inc. 16 Value Proposition Acquire Detect Image Correction & Defect Detection Searching for defects on silicon wafers or reticles Scalable compute, streaming I/O, and interconnect bandwidth Enabling customer algorithm performance enhancements Software-programmable sol
Slide 17: Growth Drivers
© 2005 Mercury Computer Systems, Inc. 17 Growth Drivers Semiconductor capital equipment solutions Processing needs continue to outpace mainstream computing Data rates and algorithm complexity increase New applications on the horizon Subject to market cyclicality New market opportunities in telecommu
Slide 18: Commercial Imaging and Visualization Business
Commercial Imaging and Visualization Business © 2005 Mercury Computer Systems, Inc.
Slide 19: CIV Overview
© 2005 Mercury Computer Systems, Inc. 19 CIV Overview 20% of FY05 revenues Market focus Medical imaging Biotechnology Oil and gas exploration Technology leadership Scalable systems High-performance 3D Large data sets Growth Organic: New product intros – VisageRT, ExamineRT, Thin Client/Server, Amira
Slide 20: CIV Customers & Targets
© 2005 Mercury Computer Systems, Inc. 20 CIV Customers & Targets (not all-inclusive) Geosciences (Oil & Gas)
Slide 21: Growing Served Markets
© 2005 Mercury Computer Systems, Inc. 21 Growing Served Markets Life Sciences Diagnostic medical imaging modalities Picture Archiving & Communications System (PACS) Biotechnology Microscopy Structured drug design Geosciences Oil & gas Other Computer-aided design, navigation/simulation OEM Available
Slide 22: Strategy & Core Competencies
© 2005 Mercury Computer Systems, Inc. 22 Strategy & Core Competencies Strategy: Lead in end-to-end OEM solutions Data acquisition, reconstruction, computation, visualization, distribution Innovate Scalable systems, large data set computing, 3D visualization Leverage Research alliances (ZIB, MGH) Par
Slide 23: Data Explosion Drives 3D Everywhere
© 2005 Mercury Computer Systems, Inc. 23 Data Explosion Drives 3D Everywhere Improving sensors Large data sets Growing need for intensive computing Enhanced image accuracy Real-time 3D Time to market Multi-slice CT (32/64) 4 Gbytes typical OIV/VolumeViz large data set module 100 Gbytes typical
Slide 24: Value Proposition
© 2005 Mercury Computer Systems, Inc. 24 Value Proposition Acquire Visualize Archive Distribute Reconstruct Broad end-to-end medical systems OEM solution portfolio All steps from scanner output to end-user applications Image reconstruction, processing, and visualization Embedded components and integ
Slide 25: Oil & Gas Value Creation
© 2005 Mercury Computer Systems, Inc. 25 Oil & Gas Value Creation Competitive advantages Power/cubic inch Scalable systems Extremely large data sets Computing solutions Seismic acquisition Seismic processing Visualization solutions Seismic QC and interpretation Horizons, faults, well bores, etc. Cor
Slide 26: CIV Summary
© 2005 Mercury Computer Systems, Inc. 26 CIV Summary Growing markets Product innovation Acquisitions Aligned with trends Solving real problems 2D + 3D + systems = competitive advantage Quality and time to market Extending customer base Growing business -> 35%
Slide 27: Financial Overview
Financial Overview © 2005 Mercury Computer Systems, Inc.
Slide 28: Slide 28
Slide 29: Fiscal Year 2006 Guidance
© 2005 Mercury Computer Systems, Inc. 29 Fiscal Year 2006 Guidance Notes: 1) Figures in millions, except percent and per share data which includes adjustment for contingent convertibles, in accordance with GAAP 2) Company guidance, October 20, 2005 Q1 earnings press release Impact of equity-based co
Slide 30: Q2 Fiscal 2006 Guidance
© 2005 Mercury Computer Systems, Inc. 30 Q2 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
Slide 31: Timeless Business Model
© 2005 Mercury Computer Systems, Inc. 31 Timeless Business Model FY04 FY05 Guidance FY06 Timeless Business Model Revenue 100% 100% 100% 100% Gross Margin 67% 66% 64-65% 66-67% SG&A 30% 29% 29-30% R&D 21% 20% 20-21% Income from Operations 17% 17% 12% 16-18% Notes: Acquisition-related amortization of
Slide 32: Cash Generation
© 2005 Mercury Computer Systems, Inc. 32 Cash Generation $M $50.5 $25.9 $38.0 $26.6 $44.3 $20.3 2003 2004 2005 Operating Cash Flow Free Cash Flow
Slide 33: Strong Balance Sheet
© 2005 Mercury Computer Systems, Inc. 33 Strong Balance Sheet Historically strong balance sheet Supports open innovation growth agenda (Quarter ended September 30, 2005) Cash and Equivalents $171 Total Current Assets $182 Total Assets $393 Total Debt $139 Total Liabilities $190 Stockholders’ Equity
Slide 34: MRCY Summary
© 2005 Mercury Computer Systems, Inc. 34 MRCY Summary Strong competitive position in attractive and growing markets Diversified revenue base – defense and commercial Straightforward operating model and financial structure Strong balance sheet, operating cash flow with significant financing flexibili
Slide 35: www.mc.com
© 2005 Mercury Computer Systems, Inc. 35 www.mc.com NASDAQ: MRCY
Mercury Computer Systems — AeA Classic Financial Conference 2005 on 6ix