Mercury Systems Inc · NASDAQ:MRCY
Mercury Systems — Mercury Computer Systems — Kaufman Bros. 9th Annual Investor Conference (September 2006)
32 slides from Mercury Systems's conference presentation, Sep 6, 2006
Slide 1: Kaufman Bros. 9th Annual Investor Conference
Kaufman Bros. 9th Annual Investor Conference September 6, 2006 Exhibit 99.1 © 2005 Mercury Computer Systems, Inc. Jay Bertelli, President, Chief Executive Officer & Chairman Bob Hult, SVP, Chief Financial Officer
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 • Leading provider of embedded computing solutions for specialized applications • FY06 revenues: $236 million • 836 employees • HQ in Chelmsford, MA Sales, support, and R&D centers in U.S., Europe, and Japan • Industry focus areas: Aerospace &
Slide 4: Revenue Follows Technology Cycles
© 2005 Mercury Computer Systems, Inc. 4 Revenue Follows Technology Cycles Revenue ($M) $186 $250 $150 $181 $141 $107 $86 $180 $235-245* $236 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007E June Fiscal Year End *Per Company guidance, July 27, 2006 earnings conference call PowerPC RACE++ MP-510 Cel
Slide 5: Strong New Business Pipeline
© 2005 Mercury Computer Systems, Inc. 5 Strong New Business Pipeline Q105 Q205 Q305 Q405 Q106 Q206 Q306 Q406 Total Design Wins • DBU – • CIV - • ASBU -
Slide 6: Market Growth Drivers
© 2005 Mercury Computer Systems, Inc. 6 Market Growth Drivers • Data explosion across multiple markets, driving need for increased use of 3D visualization • Continued need for real-time processing in demanding applications • Introduction of multi-core processors across markets to increase performanc
Slide 7: Our Unique Competitive Advantages
© 2005 Mercury Computer Systems, Inc. 7 Our Unique Competitive Advantages • Unique skill set and software for processing and visualizing data • Mercury’s heterogeneous architectures enable systems to perform optimally in demanding applications • Libraries and tools for multi-core, multi- processor c
Slide 8: Growth Strategy
© 2005 Mercury Computer Systems, Inc. 8 Growth Strategy • Leverage technology investments across multiple high-performance computing applications in diverse markets • Develop and acquire application software for select markets PACS, Biotechnology, VistaNav™, etc. • Deliver more of the overall soluti
Slide 9: Leveraging Expertise Across End Markets
© 2005 Mercury Computer Systems, Inc. 9 Leveraging Expertise Across End Markets • Diversified revenue base Defense • Radar • Sonar • SIGINT • Communications Commercial • Medical Imaging • Wafer Inspection • Mask Generation • Oil & Gas Exploration • Semiconductor Design for Manufacturing • Communicat
Slide 10: Mercury, IBM & Cell: A Landmark Agreement
© 2005 Mercury Computer Systems, Inc. 10 Mercury, IBM & Cell: A Landmark Agreement • 5-100x faster than conventional microprocessors • Designed to solve the same types of problems Mercury has been solving for many years • Mercury is 1 st non-gaming company to integrate Cell • Applicable across multi
Slide 11: Commercial Imaging and Visualization (CIV)
Commercial Imaging and Visualization (CIV) © 2005 Mercury Computer Systems, Inc.
Slide 12: CIV Customers & Targets Oil and Gas
© 2005 Mercury Computer Systems, Inc. 12 CIV Customers & Targets (not all - inclusive) Oil and Gas
Slide 13: Life Sciences Value Delivery
© 2005 Mercury Computer Systems, Inc. 13 Life Sciences Value Delivery Acquire Visualize Archive Distribute • Large data set volume rendering • Workstation • Clinical packages Reconstruct • Reconstruction algorithms • GPU acceleration • Cell Broadband Engine technology acceleration • SoHard Gantry Co
Slide 14: Advanced Solutions Business Unit (ASBU)
Advanced Solutions Business Unit (ASBU) © 2005 Mercury Computer Systems, Inc.
Slide 15: ASBU Customers & Targets
© 2005 Mercury Computer Systems, Inc. 15 ASBU Customers & Targets (not all - inclusive) Satellite Data Links and Software Radio Wireless Infrastructure Base Stations and Radio Network Controllers Silicon IP and Component Solutions Semiconductor Capital Equipment: Wafer Inspection, Reticle Inspection
Slide 16: Semiconductor Equipment Growth Drivers
© 2005 Mercury Computer Systems, Inc. 16 Semiconductor Equipment Growth Drivers Consumer demand for faster, lower power, lower-cost electronics Drives the need for higher-performance chip equipment Hard problems that are getting harder More complex algorithms, higher data rates New applications that
Slide 17: Defense Business Unit (DBU)
Defense Business Unit (DBU) © 2005 Mercury Computer Systems, Inc.
Slide 18: Defense Business
© 2005 Mercury Computer Systems, Inc. 18 Defense Business • Market focus Radar Signals Intelligence (SIGINT) Other defense technologies • Technology leadership Strong COTS model Aboard demanding platforms in air, on land, under sea Full life-cycle support Representative
Slide 19: Customer Success
© 2005 Mercury Computer Systems, Inc. 19 Customer Success Enabling our customers to win by providing commercial off-the-shelf technology for new applications
Slide 20: Radar – Leading through Innovation
© 2005 Mercury Computer Systems, Inc. 20 Radar – Leading through Innovation • Radar Processing Leadership Tactical fighters: JSF, F-22, F-16 Airborne surveillance: MP-RTIP • Global Hawk • E10-A, JSTARS, AWACS Shipboard missile defense: Aegis UAV SAR: Predator LYNX • Radar Market Opportunities Upgrad
Slide 21: Signals Intelligence (SIGINT)
© 2005 Mercury Computer Systems, Inc. 21 Signals Intelligence (SIGINT) • Communications Intelligence (COMINT) and Electronic (ELINT) Intelligence • Fastest growing defense segment 19% 5-Year CAGR • Comprehensive product offering • Investments for defense communications RF Processing Data Conversion
Slide 22: Revolutionizing the Industry
© 2005 Mercury Computer Systems, Inc. 22 Revolutionizing the Industry Widespread deployment of battlefield visualization and decision aids previously found only in research laboratories Multi-sensor visualization for ALL warfighters on the move Comprehensive battlefield pictures for all warfighters
Slide 23: Financial Overview
Financial Overview © 2005 Mercury Computer Systems, Inc.
Slide 24: Historical Revenue Pattern
© 2005 Mercury Computer Systems, Inc. 24 Historical Revenue Pattern Revenue ($M) $186 $250 $150 $181 $141 $107 $86 $180 $235-245* $236 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007E June Fiscal Year End Revenue Follows Technology Cycles *Per Company guidance, July 27, 2006 earnings conference ca
Slide 25: Earnings per Share
© 2005 Mercury Computer Systems, Inc. 25 Earnings per Share $1.05 $1.25 $0.29 ~$0.29* $1.03 $0.47 $0.62 $1.10 $1.33 $0.69 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007E *Per Company guidance, July 27, 2006 earnings conference call Note: Non-GAAP EPS shown from 2006 onward
Slide 26: Focus on Working Capital
© 2005 Mercury Computer Systems, Inc. 26 Focus on Working Capital Inventory Turns 4.9 6.9 5.4 4.6 8.0 2003 2004 2005 2006 Model • Supply chain investment Competitive advantage for Mercury and customers • Customer satisfaction DSO target 45 days Days Sales Outstanding 2003 2004 2005 2006 Model
Slide 27: Cash Generation
© 2005 Mercury Computer Systems, Inc. 27 Cash Generation $M $22 $26 $51 $16 $26 $31 $38 $27 $11 $20 $19 $24 $10 $44 2000 2001 2002 2003 2004 2005 2006 Operating Cash Flow Free Cash Flow
Slide 28: Strong Balance Sheet
© 2005 Mercury Computer Systems, Inc. 28 Strong Balance Sheet Historically strong balance sheet Supports open innovation growth agenda * Includes $125 million convertible senior notes offering * Quarter ended June 30, 2006 Cash and Equivalents $162 Total Current Assets $200 Total Assets $379 Total D
Slide 29: Q1 Fiscal Year 2007 Guidance
© 2005 Mercury Computer Systems, Inc. 29 Q1 Fiscal Year 2007 Guidance • Impact of equity-based compensation costs related to FAS 123(R) excluded from Non-GAAP • Acquisition-related amortization of approximately $1.7 M excluded from Non-GAAP Notes: 1) Figures in millions, except percent and per share
Slide 30: Fiscal Year 2007 Guidance
© 2005 Mercury Computer Systems, Inc. 30 Fiscal Year 2007 Guidance Fiscal Year Ending June 30, 2007 Revenues ($M) $235-245 GAAP Non-GAAP Gross Margin 57% EPS ~$(0.37) ~$0.29 Notes: 1) Figures in millions, except percent and per share data which includes adjustment for contingent convertibles, in acc
Slide 31: Timeless Business Model
© 2005 Mercury Computer Systems, Inc. 31 Timeless Business Model Non-GAAP FY04 FY05 FY06 Guidance FY07* Timeless Business Model Revenue 100% 100% 100% 100% 100% Gross Margin 67% 66% 62% 57% 60+% SG&A 30% 29% 34% R&D 21% 20% 25% Income from Operations 17% 17% 3% ~2% 16-18% *Per Company guidance, July
Slide 32: www.mc.com
© 2005 Mercury Computer Systems, Inc. 32 www.mc.com NASDAQ: MRCY
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