Mercury Systems Inc · NASDAQ:MRCY
Mercury Systems — Q2 FY2021 Earnings Presentation
20 slides from Mercury Systems's earnings presentation, Feb 2, 2021
Slide 1: Second Quarter Fiscal Year 2021 Financial Results
SECOND QUARTER FISCAL YEAR 2021 FINANCIAL RESULTS Mark Aslett President and CEO Michael Ruppert Executive Vice President and CFO February 2, 2021, 5:00 pm ET Webcast login at www.mrcy.com/investor Webcast replay available by 7:00 p.m. ET February 2, 2021 © 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 2021 business performance and beyond and t
Slide 3: Delivered solid fiscal 2021 second quarter
Delivered solid fiscal 2021 second quarter Exceeded guidance for total revenue and profitability Design wins of more than $300M in estimated lifetime value Closed POC acquisition December 30, 2020 Outlook positive; raising FY21 revenue, net income and adj. EBITDA guidance Expect 16-19% FY2
Slide 4: Strategy and technologies aligned with major industry drivers and trends
Strategy and technologies aligned with major industry drivers and trends New business conditions remain robust M&A activity is back; strong balance sheet; well-positioned to pursue Expect contracting environment to improve with signing of NDAA Flat to low single-digit CAGR in overall defense
Slide 5: Strategy and technologies aligned with major industry drivers and trends
Strategy and technologies aligned with major industry drivers and trends Targeting and participating in large, and faster growing market segments Sensor and effector mission systems and C4I modernization driving growth Favorable trends – outsourcing, delayering, flight to quality, trusted micr
Slide 6: Q2 and LTM FY21 results
Q2 and LTM FY21 results Notes Q2 FY21 VS. Q2 FY20 LTM FY21 VS. LTM FY20 (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 up slightly at $210M Bookings up 10% excludes
Slide 7: COVID-19 update
COVID-19 update Successfully managed COVID risks for past 12+ months Protecting health, safety and livelihoods of employees Adjusting safety protocols in line with evolving science and data Continuing to invest in weekly onsite PCR testing Testing key to ongoing employee safety and busines
Slide 8: M&A update
M&A update POC acquisition adds scale and strengthens platform and mission management Well-positioned to continue supplementing organic growth with accretive M&A M&A market very active; robust pipeline of future opportunities Perceived as great buyer due to purpose, culture, values, strategy
Slide 9: Continue to execute on strategy: strong margins, organic growth, M&A, full integration
Continue to execute on strategy: strong margins, organic growth, M&A, full integration 1) Drive ~10% average organic revenue growth supplemented by strategic M&A 2) Invest in people, technologies, facilities, manufacturing assets, business systems 3) Insource more manufacturing; drive stronger opera
Slide 10: Summary
Summary Clear purpose and positioning, unique business model and a highly-engaged workforce Targeting the right market segments and aligned with key industry trends COVID protocols working well; all facilities remain open and operational Continue to invest above industry average for future g
Slide 11: Q2 FY21 vs. Q2 FY20
Q2 FY21 vs. Q2 FY20 Notes In $ millions, except percentage and per share data Q2 FY20(3) Q2 FY21(3) CHANGE (1) Organic revenue represents total company revenue excluding net revenue from acquisitions for the first four full quarters since Bookings $209.6 $210.1 the entities’ acquisition date - (whic
Slide 12: Balance sheet
Balance sheet As of Notes (1) Rounded amounts used (In $ millions)(1) 12/27/19 3/27/20 7/3/20 10/2/20 1/1/21 ASSETS Cash & cash equivalents $182.0 $407.1 $226.8 $239.1 $109.1 Restricted cash - - - - 61.6 Accounts receivable, net 193.4 214.0 210.7 207.8 240.2 Inventory, net 153.6 161.9 178.1 206.0 21
Slide 13: Cash flow summary
Cash flow summary Notes For the Fiscal Quarters Ended (1) Rounded amounts used. (2) Non-GAAP, see (In $ millions)(1) 12/27/19 3/27/20 7/3/20 10/2/20 1/1/21 reconciliation table. Net Income $15.7 $23.6 $27.2 $15.8 $12.7 Depreciation and amortization 12.5 12.7 12.8 13.0 $13.3 (Gain)/Loss on investment
Slide 14: Q3 FY21 guidance
Q3 FY21 guidance Notes (1) Q3 FY20 figures are as reported in Q3 FY20(1) Q3 FY21(2)(5) the Company’s earnings release In $ millions, except percentage and per share data CHANGE dated April 28, 2020. Q3 FY20 figures included $3.8M, or $0.07 per share, and $1.9M, or $0.03 per share, of other non-opera
Slide 15: FY21 annual guidance
FY21 annual guidance Notes (1) FY20 figures are as reported in the FY20(1) FY21(2)(5) Company’s earnings release dated In $ millions, except percentage and per share data CHANGE August 4, 2020. The full fiscal period ended July 3, 2020 included $5.6M, or $0.10 per share, and $15.5M, or $0.28 per sha
Slide 16: Summary
Summary Solid results for Q2 driven by strong organic growth and great execution by the team Announced and completed the acquisition of POC Well-positioned to continue to deploy capital for strategic M&A Executing on our long-term financial model with above-industry-average organic revenue a
Slide 17: Appendix
APPENDIX 17
Slide 18: Adjusted EPS reconciliation
Adjusted EPS reconciliation (2)(6) (2)(6) Q3 FY21 FY21 (In thousands, except per share data) Q2 FY20 Q2 FY21 LTM Q2 FY20 LTM Q2 FY21 Low High Low High Notes (1) Per share information is presented on (1) a fully diluted basis. Earnings per share $ 0.29 $ 0.23 $ 1.18 $ 1.44 $ 0.29 $ 0.32 $ 1.24 $ 1.31
Slide 19: Adjusted EBITDA reconciliation
Adjusted EBITDA reconciliation (1)(2) (1)(2) Notes Q3 FY21 FY21 (1) Rounded amounts used. (In thousands) Q2 FY20 Q2 FY21 LTM Q2 FY20 LTM Q2 FY21 Low High Low High (2) Effective as of July 1, 2019, the Company’s fiscal year has changed to Net Income $ 15,676 $ 12,686 $ 61,836 $ 79,273 $ 15,900 $ 17,8
Slide 20: Free cash flow reconciliation; Organic revenue reconciliation
Free cash flow reconciliation (In thousands) Q2 FY20 Q2 FY21 LTM Q2 FY20 LTM Q2 FY21 Cash provided by operating activities $ 32,066 $ 23,939 $ 108,563 $ 105,678 Purchases of property and equipment (11,324) (13,775) $ (36,808) (47,128) Free cash flow $ 20,742 $ 10,164 $ 71,755 $ 58,550 Organic revenu