Mercury Systems Inc · NASDAQ:MRCY
Mercury Systems — Mercury Computer Systems — SG Cowen & Co. 27th Annual Aerospace/Defense Technology Conference (February 2006)
33 slides from Mercury Systems's conference presentation, Feb 8, 2006
Slide 1: SG Cowen 27th Annual Aerospace/Defense Technology Conference
SG Cowen & Co. 27 th Annual Aerospace/Defense Technology Conference February 8, 2006 © 2005 Mercury Computer Systems, Inc. Jay Bertelli, President, Chief Executive Officer & Chairman Barry Isenstein, VP & GM, Defense Business Unit
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 • Leader in high-performance computing for defense and commercial applications • FY05 revenues of $250 million • 891 employees • HQ in Chelmsford, MA • Specialized technology for: High-data rate computing and I/O Signal processing 2D and 3D im
Slide 4: Mercury Growth Story
© 2005 Mercury Computer Systems, Inc. 4 Mercury Growth Story • Strong competitive position in attractive and growing markets • Leverage technology investments across multiple applications in diverse markets Defense and Commercial • Straightforward operating model and financial structure • Strong bal
Slide 5: Solving Challenging Problems…
© 2005 Mercury Computer Systems, Inc. 5 Solving Challenging Problems… Deep Algorithm Expertise System Architecture Expertise Acceleration Expertise GPU Cell Broadband Engine FPGA Applications Expertise …by combining extensive technical expertise with deep knowledge of the science behind our customer
Slide 6: Slide 6
Slide 7: Commercial Imaging & Visualization
© 2005 Mercury Computer Systems, Inc. 7 Commercial Imaging & Visualization • 20% of FY05 revenues 50% growth over FY04 • Delivering Imaging & Computing Solutions to: Life Sciences (Medical Imaging & Biotech) Geosciences (Oil and gas exploration) Navigation • Strong economic trends • Growing, $1 bill
Slide 8: Advanced Solutions Business Unit
© 2005 Mercury Computer Systems, Inc. 8 Advanced Solutions Business Unit • 20% of FY05 revenues 81% growth over FY04 • Market Focus Semiconductor Capital Equipment Wireless Communications Infrastructure • New applications in semiconductor equipment • Expanding business in communication segments New
Slide 9: Timeless Business Model
© 2005 Mercury Computer Systems, Inc. 9 Timeless Business Model FY04 FY05 Guidance FY06 Timeless Business Model Revenue 100% 100% 100% 100% Gross Margin 67% 66% 61-63% 66-67% SG&A 29% 29% 29-30% R&D 21% 20% 20-21% Income from Operations 17% 17% 6-8% 16-18% Notes : FY06 non-GAAP guidance per January
Slide 10: Mkt”
Mkt” Cheenges Drive MiERCuRY”
Slide 11: Fiscal Year 2006 Guidance
© 2005 Mercury Computer Systems, Inc. 10 Fiscal Year 2006 Guidance Fiscal Year Ending June 30, 2006 Revenues ($M) $250-260 Gross Margin 61-63% GAAP Non-GAAP Operating Income 6-8% EPS $(0.16)-0.09 $0.50-0.70 Notes: 1) Figures in millions, except percent and per share data which includes adjustment fo
Slide 12: Mkt”
Mkt” Cheenges Drive MiERCuRY”
Slide 13: Q3 Fiscal 2006 Guidance
© 2005 Mercury Computer Systems, Inc. 11 Q3 Fiscal 2006 Guidance Quarter Ending March 31, 2006 Revenues ($M) $55-58 GAAP Non-GAAP Operating Income (6)%-(3)% EPS $(0.32)-$(0.26) $(0.10)-$(0.04) • Impact of equity-based compensation costs related to FAS 123(R), amortization of purchased intangibles, a
Slide 14: Mercury, IBM & Cell: A Landmark Agreement
© 2005 Mercury Computer Systems, Inc. 12 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 the Cell Broadband Engine into its products High-volume gaming market is t
Slide 15: Barry Isenstein, SVP, GM Defense Business Unit (DBU)
Barry Isenstein, SVP, GM Defense Business Unit (DBU) © 2005 Mercury Computer Systems, Inc.
Slide 16: Which Markets Drive Technology?
© 2005 Mercury Computer Systems, Inc. 14 Which Markets Drive Technology? Telecom/ Networking Desktop/ Server Graphics/ Gaming PMC L i nux
Slide 17: Mercury R&D Investment
© 2005 Mercury Computer Systems, Inc. 15 Mercury R&D Investment $ Millions Historically 18-21% of Revenues Enabled by Solid Financial Performance $250.2 Rev. Revenues for Fiscal years ended June 30 Research and Development $161.5M over 4 years FY2002 FY2003 FY2004 FY2005 Defense Imaging & Visualizat
Slide 18: Mercury Broadly Leverages Embedded Markets Shared Benefit
© 2005 Mercury Computer Systems, Inc. 16 Mercury Broadly Leverages Embedded Markets Shared Benefit Telecom Life Sciences Defense 3-D Visualization Image Processing
Slide 19: Defense
© 2005 Mercury Computer Systems, Inc. 17 Defense • 60% of FY05 revenues 18% growth over FY04 • 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 • Militar
Slide 20: Customer Success
© 2005 Mercury Computer Systems, Inc. 18 Customer Success Enabling our customers to win by providing commercial off-the-shelf technology for new applications
Slide 21: DBU Strategy
© 2005 Mercury Computer Systems, Inc. 19 DBU Strategy • Target High-growth CISR applications Offer COTS “more of the sensor-based computing system” Solutions: HW, SW and services Leadership in performance and functionality per volume • Leverage Leadership in existing radar and SIGINT platforms Stron
Slide 22: Defense Value Proposition
© 2005 Mercury Computer Systems, Inc. 20 Defense Value Proposition Sensor • Sensor streaming • Scalable • Real time • Embedded Real estate, environmental, cooling constraints Real-time signal and image processing applications Acquire Process Transmit Mathematical transformations Visualize Image Disp
Slide 23: Mercury Continues to Evolve
© 2005 Mercury Computer Systems, Inc. 21 Mercury Continues to Evolve High Density, High Performance Multiprocessors Conduction-Cooled Boards 3U Boards Cell-Based Products RapidIO IP Photo-realistic effects Integration, Ruggedization, Custom Software
Slide 24: DBU Elements of Stability
© 2005 Mercury Computer Systems, Inc. 22 DBU Elements of Stability • The importance of CISR Old threats New threats • The role of COTS Lower life-cycle costs Faster time to deployment • Technology is driven by non-defense markets Servers/Desktops Graphics/Gamers Telecommunications/Networking DBU is
Slide 25: Radar – Leading through Innovation
© 2005 Mercury Computer Systems, Inc. 23 Radar – Leading through Innovation • Radar Processing Leadership Tactical fighters: JSF Airborne surveillance: MP-RTIP • Global Hawk • E10-A, JSTARS, AWACS Shipboard missile defense: Aegis UAV SAR: Predator LYNX • Expanding Radar Markets Upgrades to existing
Slide 26: Signals Intelligence (SIGINT)
© 2005 Mercury Computer Systems, Inc. 24 Signals Intelligence (SIGINT) • Communications Intelligence (COMINT) and Electronic (ELINT) Intelligence • Fastest growing DBU segment Proliferation of signals Cross-cueing for other sensors COTS adoption • Comprehensive product offering RF receivers Analog-t
Slide 27: Revolutionizing the Industry
© 2005 Mercury Computer Systems, Inc. 25 Revolutionizing the Industry Widespread deployment of battlefield visualization and decision aids previously found only in research laboratories Multisensor visualization for ALL warfighters on the move Comprehensive battlefield pictures for all warfighters S
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Slide 29: Mercury Applications for Modern Warfare
© 2005 Mercury Computer Systems, Inc. 27 Mercury Applications for Modern Warfare Sensor to Shooter: Providing real-time sensor-based intelligence to the shooter on the ground A i rborne R econnaissance I mage E xploitation S ystem
Slide 30: Growth Drivers
© 2005 Mercury Computer Systems, Inc. 28 Growth Drivers • DoD transformation/ISR initiative Persistent ISR • Expansion to lower echelons, smaller platforms • Image & data exploitation • Software radio/data links ISR becoming CISR Network-centric warfare • Smart weapons COTS initiative Today 5 Years
Slide 31: DBU Summary
© 2005 Mercury Computer Systems, Inc. 29 DBU Summary • DoD investment priorities consistent with DBU strengths Transformation agenda driving increasing need for CISR and processing • COTS will grow in importance • DBU well-positioned Significant barriers to entry Strong investment strategy • Defense
Slide 32: Corporate Summary
© 2005 Mercury Computer Systems, Inc. 30 Corporate Summary • Strong competitive position in attractive and growing markets • Leveraging technology investments by entering new markets and applications Defense and commercial • Continuous partnership and acquisition activity supplements internal develo
Slide 33: www.mc.com
© 2005 Mercury Computer Systems, Inc. 31 www.mc.com NASDAQ: MRCY