Mercury Systems Inc · NASDAQ:MRCY
Mercury Systems — Mercury Computer Systems — Investor Day (November 2006)
92 slides from Mercury Systems's investor day presentation, Nov 21, 2006
Slide 1: 7th Annual Investor Conference November 21, 2006
7th Annual Investor Conference November 21, 2006 Exhibit 99.1 © 2005 Mercury Computer Systems, Inc.
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 2007 business performance and b
Slide 3: Agenda
© 2005 Mercury Computer Systems, Inc. 3 Agenda Jay Bertelli’s Closing Remarks, Q&A 11:45-12:15 Bob Hult, SVP, Chief Financial Officer 11:30-11:45 Philippe Roy, Dir. & GM, Navigation & Simulation Systems 11:15-11:30 Mark Skalabrin, VP & GM, Advanced Solutions Business 10:45-11:15 Break & Trade Show 1
Slide 4: Corporate Overview
Corporate Overview © 2005 Mercury Computer Systems, Inc. Jay Bertelli, President, CEO & Chairman
Slide 5: What We Do
© 2005 Mercury Computer Systems, Inc. 5 What We Do For diverse customers in: Aerospace & Defense Communications Geosciences Life Sciences Semiconductor Leading provider of: Computing solutions for specialized, compute- and data- intensive applications
Slide 6: Mercury's Strategy
© 2005 Mercury Computer Systems, Inc. 6 Mercury’s Strategy Focus on relatively small ($200-400M) niche markets that are not well served by mainstream suppliers Leverage technology investments across multiple markets Focus on solving problems that are challenging and can command high margins Focus on
Slide 7: Our Unique Strengths
© 2005 Mercury Computer Systems, Inc. 7 Our Unique Strengths Signal Processing High-Data Rate Computing Sensor Data Acquisition Visualization Unique skill set and software for processing and visualizing data Years of development in software libraries and tools for embedded multicore computing Domain
Slide 8: Identifying New Markets to Drive Growth
© 2005 Mercury Computer Systems, Inc. 8 Identifying New Markets to Drive Growth Developing market opportunities Defense Business Unit (DBU) - Synthetic vision, wideband data links Commercial Imaging & Visualization (CIV) - 3D medical imaging, geosciences (oil & gas) Advanced Solutions Business Unit
Slide 9: Leverage as a Competitive Advantage
© 2005 Mercury Computer Systems, Inc. 9 Leverage as a Competitive Advantage Market-specific Innovation Leveraged Innovation Multi-market leverage of technology and core competencies results in strong competitive advantage and significant barriers to entry Defense, National Labs, Life Sciences, Semi-
Slide 10: Revenue Follows Technology Cycles
© 2005 Mercury Computer Systems, Inc. 10 Revenue Follows Technology Cycles Echotek – A/D-D/A Revenue ($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, October 26, 2006 earnings conference call Pow
Slide 11: Defense Market
Defense Market © 2005 Mercury Computer Systems, Inc. Didier Thibaud, SVP, Defense & Commercial Businesses
Slide 12: Defense Budget History and Potential Changes
© 2005 Mercury Computer Systems, Inc. 12 Defense Budget History and Potential Changes R 2 = 0.33 Threat vs. Investment Spending (FY 1976 – FY 2006) R 2 = 0.33 Actual Investment Spending Threat Model Hot War Cold War No Threat $0 $50 $100 $150 $200 $250 1955 1960 1965 1970 1975 1980 1985 1990 1995 20
Slide 13: Unique Strengths in Defense
© 2005 Mercury Computer Systems, Inc. 13 Unique Strengths in Defense Leader in airborne surveillance 14 years of experience Investing and innovating to maintain leadership position Strong business relationships and partnerships with defense primes Representative
Slide 14: Leveraging Mercury into A&D Segments
© 2005 Mercury Computer Systems, Inc. 14 Leveraging Mercury into A&D Segments Track record of success Leveraging technology to deliver best value Strong COTS model Aboard demanding platforms in air, on land, under sea Full life-cycle support Market focus C4ISR Defense embedded computing Technology t
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Slide 17: Enabling Technologies for Mission Systems
© 2005 Mercury Computer Systems, Inc. 17 Enabling Technologies for Mission Systems
Slide 18: Computing Solutions Across the Board
© 2005 Mercury Computer Systems, Inc. 18 Computing Solutions Across the Board Medium (6U) Large (8U+) Small (<=3U) XSC-100 ATX IBM BladeCenter MAC-100 Busless Embedded Benign Performance Limit Benign Modular Rugged A dvanced T CA TM Modular Performance Limit CP3-102 VPA-200 TBA-100 ECDR-GC314 PMC AT
Slide 19: Innovation for Today's Warfare Processing
© 2005 Mercury Computer Systems, Inc. 19 Innovation for Today’s Warfare Processing Solutions & Services IP & Cores Navigation & Visualization 3D Amira 3D Framework Image Archiving CELL BE Single Board Computers Fast & Flexible Radio Frequency Ultra-fast Tuning Very Low Phase Noise Mixed Signal AD/DA
Slide 20: Mercury Challenges Drive Innovation
MERCURY ™ Challenges Drive nnoeion
Slide 21: Collaborative COTS
© 2005 Mercury Computer Systems, Inc. 21 Collaborative COTS Solutions & Services Computer integration System assembly Module development Architecture and research Custom software Ruggedization Life-cycle management Intellectual property Migration services On-site support Shortening Development Cycle
Slide 22: Growth Opportunity: Radar
© 2005 Mercury Computer Systems, Inc. 22 Growth Opportunity: Radar Airborne surveillance: MP-RTIP Global Hawk (15 platforms) JSTARS and AWACS upgrade potential Tactical fighters: F-35, F-22, F-16 Shipboard missile defense: Aegis UAV: Predator LYNX SAR Land-based/mobile radar Aegis (BMD) JSF (F-35)
Slide 23: Growth Opportunity: Battlefield Communication
© 2005 Mercury Computer Systems, Inc. 23 Growth Opportunity: Battlefield Communication Projected widespread deployment of battlefield visualization and decision aids Multi-sensor visualization for war fighters on the move Comprehensive battlefield imagery for war fighters Super-smart compression whe
Slide 24: Growth Opportunity: Wideband Data Links
© 2005 Mercury Computer Systems, Inc. 24 Growth Opportunity: Wideband Data Links Ground, shipboard, and airborne communications via satellite Deployment of broadband closer to the war fighter Drives the need for new compute solutions Mercury is well positioned with COTS software- defined radio (SDR)
Slide 25: Meeting the Challenges
© 2005 Mercury Computer Systems, Inc. 25 Meeting the Challenges Budget uncertainty Strong customer base Strengthened pipeline 2x increase in business opportunities in 8 months Broadened product portfolio Technology leadership Increased market penetration Services Collaborative COTS
Slide 26: Commercial Imaging and Visualization Markets
Commercial Imaging and Visualization Markets © 2005 Mercury Computer Systems, Inc. Marcelo Lima, Vice President & General Manager
Slide 27: Tremendous Opportunities
© 2005 Mercury Computer Systems, Inc. 27 Tremendous Opportunities Big markets @ the forefront of socio- economic issues Exciting new businesses (s/w centric) Excellent growth potential
Slide 28: CIV Business Summary
© 2005 Mercury Computer Systems, Inc. 28 CIV Business Summary FY04 FY05 FY06 FY07 (plan) Revenues US$ Leading OEM provider of image processing and visualization solutions Main markets: Life Sciences and Geosciences Annualized served markets size of approximately $700M to $900M Continued revenue grow
Slide 29: CIV Revenue Trends
© 2005 Mercury Computer Systems, Inc. 29 CIV Revenue Trends FY'00 FY'01 FY'02 FY'03 FY'04 FY'05 FY06 FY07 CIV CIV Timeline of Events FY02-03 - CT designed out FY04 - DX & PET ramp, Q4 TGS acquisition FY05 - MR production full swing & TGS FY06 - Design phase out of 2D Business; crossover new business
Slide 30: Transition in Revenues FY05 – FY07 Legacy New
© 2005 Mercury Computer Systems, Inc. 30 Transition in Revenues FY05 – FY07 Legacy New FY05 FY06 FY07 Plan New Legacy 22% 78% 83% 17% 59% 41%
Slide 31: Visualization Sciences Group (VSG)
© 2005 Mercury Computer Systems, Inc. 31 Visualization Sciences Group (VSG) Industry Geosciences, visualization and computation Products & Services Visualization software toolkits (OIV, amira ® ) High-performance computers Custom engineering services Segments Oil & gas visualization – Growth > 20%
Slide 32: VSG – Oil/Gas Industry Workflow
© 2005 Mercury Computer Systems, Inc. 32 VSG – Oil/Gas Industry Workflow Mercury HARDWARE SOLUTIONS: • Cell BE-based computing cluster • Algorithms optimization & mapping • High-performance visualization cluster systems Data Processing Seismic Interpretation Structural Modeling Reservoir modeling, c
Slide 33: Mercury's Offerings to Oil & Gas Customers
© 2005 Mercury Computer Systems, Inc. 33 Mercury’s Offerings to Oil & Gas Customers Acquire Interpret & Visualize Process Data migration, mathematical transformations, complex signal returns… 3D image interpretation & visualization Increase data throughput, dramatically accelerating imaging workflow
Slide 34: Addressable Markets Overview
© 2005 Mercury Computer Systems, Inc. 34 Addressable Markets Overview VSG’s strategy: exploit short-term opportunities like seismic data processing (SDP), and s/w needs for 3D tools to fund entry into larger segments in the oil & gas market Oil & gas visualization customers’ needs are increasing and
Slide 35: VSG Competition
© 2005 Mercury Computer Systems, Inc. 35 VSG Competition Mainly small regional companies in the $10-15M range, such as Coin3D, Hue, etc. In some segments we compete with our customers: Schlumberger, Landmark, etc. Competitive advantages: ScaleViz and LDM (Large Dataset Module) extensions Multi-platf
Slide 36: Life Sciences Group (LSG) Summary
© 2005 Mercury Computer Systems, Inc. 36 Life Sciences Group (LSG) Summary Products & Services Life Sciences SCOPE OEM products (systems & software) Recon, visualization, servers, acquisition 19+ years of medical OEM experience. Open Innovation expertise: Nvidia GPUs, MGH DBT mammo, Erlangen IMP CT,
Slide 37: Life Sciences Imaging Workflow: Products
© 2005 Mercury Computer Systems, Inc. 37 Life Sciences Imaging Workflow: Products Acquire Visualize Image reconstruction, processing, and visualization Embedded components and integrated solutions Professional services & support Manage Distribute Visage VR Volume Rendering Visage WS Workstation AMIR
Slide 38: A Selection of Our Customers
© 2005 Mercury Computer Systems, Inc. 38 A Selection of Our Customers Visage VR Volume Rendering Visage WS Workstation AMIRA research (over 3000 sites worldwide) Visage RT Image Reconstruction Visage MR • WIPS CT Gantry Controllers Visage PACS Visage CS Thin Client/Server Acquire Visualize Distribut
Slide 39: LSG Medical Imaging Macro Market Conditions
© 2005 Mercury Computer Systems, Inc. 39 LSG Medical Imaging Macro Market Conditions Medical Market Transition Aging population More diagnostic imaging PET, CT and Ultrasound high growth, MR and XR flat (except oncology machines like Mammo and LINAC) Interventional radiology a reality with more comp
Slide 40: Reimbursement in 3D Growing
© 2005 Mercury Computer Systems, Inc. 40 Reimbursement in 3D Growing • In late 2005 the US announced an increase for 2006 in 3D reimbur sement rates of 30% at hospitals • 3D CPT Code (Hosp Outpatient) • • Reimbursement (Technical) • Reimbursement (Professional) • • Total • • 3D CPT Code (Img. Center
Slide 41: Addressable LSG Markets
© 2005 Mercury Computer Systems, Inc. 41 Addressable LSG Markets
Slide 42: European 3D/4D Market
© 2005 Mercury Computer Systems, Inc. 42 European 3D/4D Market – F&S, 2003 • EU OEM Market 2008 80% of $220M = $160M • US OEM Market estimate 2008 = $200M • 3D alone is a $360M OEM Market
Slide 43: U.S. Turnkey Radiology PACS Market – Growth Forecast
© 2005 Mercury Computer Systems, Inc. 43 U.S. Turnkey Radiology PACS Market – Growth Forecast
Slide 44: LSG - 3D DMI & PACS Competitive Summary
© 2005 Mercury Computer Systems, Inc. 44 LSG - 3D DMI & PACS Competitive Summary
Slide 45: CIV Competitive Advantages
© 2005 Mercury Computer Systems, Inc. 45 CIV Competitive Advantages ISO 13485 certified and Visage CS and PACS are FDA cleared ! Visage CS Image quality and SPEED Scalability COTS platform PACS integration, workflow advantages Visage PACS WEB distribution with failover technology Flexibility and sca
Slide 46: LSG Products Transforming the Diagnostic Workflow
© 2005 Mercury Computer Systems, Inc. 46 LSG Products Transforming the Diagnostic Workflow
Slide 47: More Signal, Less Noise, Faster Scans
© 2005 Mercury Computer Systems, Inc. 47 More Signal, Less Noise, Faster Scans Visage ™ MR Powerful drop-in upgrade to existing MRIs Breakthrough 16-bit A/D technology For high-field systems: Enables useful images during breath hold or cardiac timeframes For low-field systems: Provides dramatic imag
Slide 48: Advanced 3D Reconstruction Solutions
© 2005 Mercury Computer Systems, Inc. 48 Advanced 3D Reconstruction Solutions Visage™ RT – Award-Winning Technology Pioneering GPU and Cell-based reconstruction Reduces reconstruction times by 40x to 100x Cell BE-Based Solutions Cell Accelerator Board (CAB) – 180 GFLOPS 1U Dual Cell-Based Server – 4
Slide 49: Award-Winning Advanced Visualization S/W
© 2005 Mercury Computer Systems, Inc. 49 Award-Winning Advanced Visualization S/W Visage™ WS - Turnkey Medical Workstation for OEMs Full integration with PACS and modalities Customization for OEMs and PACS providers Enables fast time to market Visage™ VR - GPU Accelerated Volume Rendering Multitude
Slide 50: Ultimate Performance Visualization
© 2005 Mercury Computer Systems, Inc. 50 Ultimate Performance Visualization Visage ™ CS Thin Client/Server The world’s first fully scalable thin client/server Instant interactive viewing for 2D, 3D and 4D studies Optimal use of existing PCs throughout the enterprise Tight integration with PACS and m
Slide 51: Industry-Leading 2D/3D Image Management & Distribution
© 2005 Mercury Computer Systems, Inc. 51 Industry-Leading 2D/3D Image Management & Distribution Visage™ PACS Instant image access for web and thin clients Cluster and failover approach for optimum availability Fully scalable solution - small to large sites Flexible integration with imaging modalitie
Slide 52: Cutting-Edge Visual Data Exploration, Analysis, & Modeling
© 2005 Mercury Computer Systems, Inc. 52 Cutting-Edge Visual Data Exploration, Analysis, & Modeling amira ® 3D Visualization Powerful framework and toolbox for research Unmatched interactive speed and visual quality Supports a broad range of data formats Develop complex patient models and perform ad
Slide 53: Professional Services - Fast Time to Market
© 2005 Mercury Computer Systems, Inc. 53 Professional Services - Fast Time to Market Expertise that ensures the customer’s competitive advantage Comprehensive services across the diagnostic workflow Highest quality standards and certified products Professional services for OEMs Algorithmic optimizat
Slide 54: Break
Break © 2005 Mercury Computer Systems, Inc. Next: Mark Skalabrin, VP & General Manager Advanced Solutions Business (ASBU)
Slide 55: Leveraged Platform Investments Semiconductor & Communications Markets
Leveraged Platform Investments Semiconductor & Communications Markets © 2005 Mercury Computer Systems, Inc. Mark Skalabrin, Vice President & General Manager
Slide 56: Leveraged Product and Technology Investments
© 2005 Mercury Computer Systems, Inc. 56 Leveraged Product and Technology Investments Increasing multi-market leverage of R&D investments Includes both organically developed and acquired technology Significant trend reversal Market Investments Leveraged Investments Cell Solutions 3D Imaging Software
Slide 57: Leverage Example: Cell BE-based Solutions
© 2005 Mercury Computer Systems, Inc. 57 Leverage Example: Cell BE-based Solutions Cell Solutions Medical/ Biotech Radar Video Gaming Semi Creation Oil & Gas Intelligence National Labs 5-100x faster than conventional microprocessors A strong match to Mercury’s unique capabilities Architected to solv
Slide 58: Semiconductor Creation Market
© 2005 Mercury Computer Systems, Inc. 58 Semiconductor Creation Market Supplying application- enabling solutions to leading OEMs Growth driven by production design wins Mask generation Wafer inspection Reticle inspection Positioned for the next wave Mercury Cell BE-based solutions uniquely meet mark
Slide 59: Semiconductor Creation Market Drivers
© 2005 Mercury Computer Systems, Inc. 59 Semiconductor Creation Market Drivers Consumer electronics driving the market Demand for faster, lower cost, lower-power chips Product life cycles getting shorter Chip creation process getting harder Increased time-to-market pressure More complex physics and
Slide 60: Expanding Footprint in Chip Creation Chain
© 2005 Mercury Computer Systems, Inc. 60 Expanding Footprint in Chip Creation Chain Mask Synthesis Reticle Inspection Wafer Inspection Stepper/Scanner Mask Writing Growing through expansion into adjacent applications in the lithography process chain New Application New Application Competitive Differ
Slide 61: Growth Opportunity: EDA Mask Synthesis
© 2005 Mercury Computer Systems, Inc. 61 Growth Opportunity: EDA Mask Synthesis New application for Mercury in Electronic Design Automation (EDA) space Complex physics processing to support next generation lithography Resolution Enhancement Technology (RET) including Optical Proximity Correction (OP
Slide 62: Growth Opportunity: EDA Mask Synthesis
© 2005 Mercury Computer Systems, Inc. 62 Growth Opportunity: EDA Mask Synthesis Challenge is to turn weeks into days and days into hours Mercury Cell BE-based solutions ready to meet the market needs Teraflops to speed application by 10x to 100x Mercury middleware, algorithm, and application experti
Slide 63: Commercial Communications Market
© 2005 Mercury Computer Systems, Inc. 63 Commercial Communications Market Providing application-specific solutions for wireless infrastructure applications Primary focus is close to the radio Targeting niche applications where we add significant value Lower volume, higher value focus Growth opportun
Slide 64: Communications Growth Drivers
© 2005 Mercury Computer Systems, Inc. 64 Communications Growth Drivers OEMs are looking outside for innovation Data and multimedia driving broadband everywhere - needs new network infrastructure solutions OEMs emerging from a downturn with scaled- down development staff Strong time-to-market demands
Slide 65: Communication Platform for Growth
© 2005 Mercury Computer Systems, Inc. 65 Communication Platform for Growth Deployed in the labs of top tier Telecom OEMs Advanced base station and radio network prototypes Satellite beamformer design win Multi-market leverage emerging Leverage in and leverage out Significant year over year platform
Slide 66: Example: Satellite Communication Solution
© 2005 Mercury Computer Systems, Inc. 66 Example: Satellite Communication Solution Network Mercury Beamformer & Base station Ground-based communications system to support Ancillary Terrestrial Component (ATC) ATC allows satellites to work together with terrestrial communications systems to support s
Slide 67: Advanced Solutions Summary
© 2005 Mercury Computer Systems, Inc. 67 Advanced Solutions Summary Renewed strength in multi-market leverage Strong leverage of both organic and acquired products, technology and capabilities Well-positioned for next wave in the semiconductor creation segment Strong opportunities in existing and ne
Slide 68: Unmanned Systems Market
Unmanned Systems Market © 2005 Mercury Computer Systems, Inc. Philippe M. Roy, Director & General Manager Navigation & Simulation Systems Group
Slide 69: Mercury's Combined Capabilities
© 2005 Mercury Computer Systems, Inc. 69 Mercury’s Combined Capabilities Aeronautical Applications & Systems Knowledge 3D Visualization Embedded Design Sensor Processing Ruggedization RF Airborne Devices Display Sub-systems
Slide 70: Product: VistaNav-SSR
© 2005 Mercury Computer Systems, Inc. 70 Product: VistaNav TM -SSR Ground Control Station Airborne Components Smart Surveillance & Reconnaissance Systems Communication Satellite Sensors Video feature extraction Navigation Flight control Data compression Encryption Collision avoidance Camera
Slide 71: Airframe Platform
© 2005 Mercury Computer Systems, Inc. 71 Airframe Platform Vector-LRE Costs Partnership with innovative airframe designers
Slide 72: Synthetic Vision: The Core of the System
© 2005 Mercury Computer Systems, Inc. 72 Synthetic Vision: The Core of the System Vastly Improved Operational Capabilities Increased situational awareness Flexible software integration platform Payload (video, IR, radar) Navigation Mission control Scalable Portable ground station Trailer multi-syste
Slide 73: A Broad Range of Applications
© 2005 Mercury Computer Systems, Inc. 73 A Broad Range of Applications Forest fire detection and monitoring Oil and gas pipeline monitoring Power line monitoring Precision agriculture Border surveillance Surveillance and reconnaissance High-growth Market Opportunities Data sources include: Teal Grou
Slide 74: Unmanned Surface Vessel
© 2005 Mercury Computer Systems, Inc. 74 Unmanned Surface Vessel VistaNav controlled unmanned system Autonomous hydrofoil- multi-hull surface vessel Ultra long endurance High payload capacity for on-board rugged electronics Remote surveillance & security in open waters Military & commercial applicat
Slide 75: Nav-Sim Potential
© 2005 Mercury Computer Systems, Inc. 75 Nav-Sim Potential in Thousand USD FY07 FY08 FY09 FY10 FY11 FY12 Commercial & Military avionics 1,750 4,000 9,500 24,500 42,000 Consumer Avionics 1,300 2,500 4,000 6,500 8,000 10,000 Unmanned Systems 1,750 7,850 19,000 39,000 72,500 TOTAL AVIONICS 2,300 6,000
Slide 76: Why are We Unique?
© 2005 Mercury Computer Systems, Inc. 76 Why are We Unique? AFFORDABLE YET HIGHLY CAPABLE SYSTEMS ULTIMATE SITUATION AWARENESS UNIQUE MINIATURIZED AIRBORNE INTEGRATION SUPERIOR DATA EXPLOITATION & DISSEMINATION INNOVATIVE UNMANNED VEHICLES ACTIVE COLLISION AVOIDANCE SYSTEM
Slide 77: Financial Overview
Financial Overview © 2005 Mercury Computer Systems, Inc. Bob Hult, SVP, Chief Financial Officer
Slide 78: Mercury: The Company
© 2005 Mercury Computer Systems, Inc. 78 Mercury: The Company Well-positioned in attractive and growing markets Niche market strategy Leverage technology investments across markets Commitment to customer success Solid operating model
Slide 79: As Revenue Follows Technology Cycles
© 2005 Mercury Computer Systems, Inc. 79 As Revenue Follows Technology Cycles Echotek – A/D-D/A 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, October 26, 2006 earnings conference call
Slide 80: EBITDA Follows Revenue
© 2005 Mercury Computer Systems, Inc. 80 EBITDA Follows Revenue $M $42 $41 $57 $5 $10 2003 2004 2005 2006 2007E *Per Company guidance, October 26, 2006 earnings conference call
Slide 81: Defense Market Growth Drivers
© 2005 Mercury Computer Systems, Inc. 81 Defense Market Growth Drivers Collaborative COTS Radar – strong base Battlefield communications Unmanned systems DOD spending outlook
Slide 82: Advanced Solutions Growth Drivers
© 2005 Mercury Computer Systems, Inc. 82 Advanced Solutions Growth Drivers Communications/Satellites (ATC) Semiconductor Equipment Wafer & reticle inspection Mask writing systems Stepper/scanner control Electronic design automation (EDA)
Slide 83: Commercial Imaging & Visualization Growth Drivers
© 2005 Mercury Computer Systems, Inc. 83 Commercial Imaging & Visualization Growth Drivers Forefront of socio-economic issues Expanding product portfolio across life sciences imaging workflow Transformation of the diagnostic workflow to 3D Oil & Gas exploration – huge datasets
Slide 84: Fiscal Year 2007 Guidance
© 2005 Mercury Computer Systems, Inc. 84 Fiscal Year 2007 Guidance Fiscal Year Ending June 30, 2007 Revenues ($M) $235-245 GAAP Non-GAAP Gross Margin 57% EPS $(0.50) $0.29 Notes: 1) Figures in millions, except percent and per share data which includes adjustment for contingent convertibles, in accor
Slide 85: Q2 Fiscal Year 2007 Guidance
© 2005 Mercury Computer Systems, Inc. 85 Q2 Fiscal Year 2007 Guidance Impact of equity-based compensation costs related to FAS 123(R) of approximately $2.6M excluded from non- GAAP Acquisition-related amortization of approximately $1.7 M excluded from non-GAAP Notes: 1) Figures in millions, except p
Slide 86: Timeless Business Model
© 2005 Mercury Computer Systems, Inc. 86 Timeless Business Model *Per Company guidance, October 26, 2006 earnings conference call 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
Slide 87: Focus on Working Capital
© 2005 Mercury Computer Systems, Inc. 87 Focus on Working Capital Inventory Turns 8.0 4.9 6.9 5.4 4.6 5.5 2003 2004 2005 2006 2007E Model Supply chain transformation Competitive advantage for Mercury and customers Quality Customer satisfaction Days Sales Outstanding 2003 2004 2005 2006 2007E Model
Slide 88: Strong Balance Sheet
© 2005 Mercury Computer Systems, Inc. 88 Strong Balance Sheet Historically strong balance sheet Net cash positive Cash generation focus * Adjusted for October 19 mortgage payoff ** Convertible senior notes offering * Quarter ended September 30, 2006 Cash and Equivalents $142 Total Current Assets $17
Slide 89: Solid Operating Model
© 2005 Mercury Computer Systems, Inc. 89 Solid Operating Model Return to growth Value-add drives operating margin Working capital efficiencies EBIDTA potential Strong balance sheet
Slide 90: Why Invest in Mercury?
© 2005 Mercury Computer Systems, Inc. 90 Why Invest in Mercury? Strong competitive position in attractive and growing markets Large growth opportunities in 3D medical imaging, semiconductor applications, defense communications, and synthetic vision Leverage technology investments across multiple app
Slide 91: Closing Remarks
Closing Remarks © 2005 Mercury Computer Systems, Inc. Jay Bertelli, President, CEO & Chairman
Slide 92: www.mc.com
© 2005 Mercury Computer Systems, Inc. 92 www.mc.com NASDAQ: MRCY
Mercury Computer Systems — Investor Day (November 2006) on 6ix