EX-99.1 2 dex991.htm PRESENTATION MATERIALS PRESENTATION MATERIALS
©
2005  Mercury Computer Systems, Inc.
Jay
Bertelli,
President,
Chief
Executive
Officer
&
Chairman
Bob
Hult,
SVP,
Chief
Financial
Officer
Kaufman Bros. 10th Annual Investor
Conference
September 6, 2007
Exhibit 99.1

©
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
beyond.
You
can
identify
these
statements
by
our
use
of
the
words
"may,"
"will,"
"should,"
"plans,"
"expects,"
"anticipates,"
"continue,"
"estimate,"
"project,"
"intend,"
and
similar
expressions.
These
forward-looking
statements
involve
risks
and
uncertainties
that
could
cause
actual
results
to
differ
materially
from
those
projected
or
anticipated.
Such
risks
and
uncertainties
include,
but
are
not
limited
to,
general
economic
and
business
conditions,
including
unforeseen
weakness
in
the
Company's
markets,
effects
of
continued
geopolitical
unrest
and
regional
conflicts,
competition,
changes
in
technology
and
methods
of
marketing,
delays
in
completing
engineering
and
manufacturing
programs,
changes
in
customer
order
patterns,
changes
in
product
mix,
continued
success
in
technological
advances
and
delivering
technological
innovations,
continued
funding
of
defense
programs,
the
timing
of
such
funding,
changes
in
the
U.S.
Government's
interpretation
of
federal
procurement
rules
and
regulations,
market
acceptance
of
the
Company's
products,
shortages
in
components,
production
delays
due
to
performance
quality
issues
with
outsourced
components,
the
inability
to
fully
realize
the
expected
benefits
from
acquisitions
or
delays
in
realizing
such
benefits,
challenges
in
integrating
acquired
businesses
and
achieving
anticipated
synergies,
and
difficulties
in
retaining
key
customers.
These
risks
and
uncertainties
also
include
such
additional
risk
factors
as
are
discussed
in
the
Company's
recent
filings
with
the
U.S.
Securities
and
Exchange
Commission,
including
its
Annual
Report
on
Form
10-K
for
the
year
ended
June
30,
2006.
The
Company
cautions
readers
not
to
place
undue
reliance
upon
any
such
forward-looking
statements,
which
speak
only
as
of
the
date
made.
The
Company
undertakes
no
obligation
to
update
any
forward-looking
statement
to
reflect
events
or
circumstances
after
the
date
on
which
such
statement
is
made.
Use of Non-GAAP (Generally Accepted Accounting Principles) Financial Measures
In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, the
Company provides non-GAAP financial measures adjusted to exclude certain specified charges, which the Company
believes
are
useful
to
help
investors
better
understand
its
past
financial
performance
and
prospects
for
the
future.
However, the presentation of non-GAAP financial measures is not meant to be considered in isolation or as a substitute
for financial information provided in accordance with GAAP. Management believes these non-GAAP financial measures
assist in providing a more complete understanding of the Company's underlying operational results and trends, and
management uses these measures, along with their corresponding GAAP financial measures, to manage the
Company's business, to evaluate its performance compared to prior periods and the marketplace, and to establish
operational goals. A reconciliation of GAAP to non-GAAP financial measures discussed in this presentation is contained
in the company’s Fourth Quarter and Fiscal Year 2007 earnings release, which can be found on our website at
www.mc.com/mediacenter/pr/.

©
2005 Mercury Computer Systems, Inc.
3
What We Do
•
Solve problems too complex for standard computing
•
Architect optimal solutions for compute and data
intensive applications
•
Unique skill set for advanced, real-time, 3D visualization
•
Provide cost-effective hardware and software products
and system-level solutions
Customer
Specific
Application
Specific
High Performance
Computing
Commodity
Computing
Specialized
Computing
Platforms
Outsourced
Solution
Services

©
2005 Mercury Computer Systems, Inc.
4
Mercury Overview
•
Founded in 1983
•
FY2007 revenues of        
$224 million
•
End markets:
Aerospace &
Defense
Life Sciences
Semiconductor
Equipment
Geosciences
Communications
FY07 (Ended June) Revenue Mix
Defense
CIV
ABSU
MPS

©
2005 Mercury Computer Systems, Inc.
5
Investment Highlights
•
Data explosion across multiple markets
•
Mercury uniquely positioned to implement multi-core
processing systems
•
Strategic acquisitions starting to produce
•
Large opportunity in 3D medical imaging
•
New alignment of internal competencies should drive
new business opportunities
•
Recent cost-reduction initiatives should improve
margins

©
2005 Mercury Computer Systems, Inc.
6
Unique Set of Technology Capabilities
Solutions for Complex Computing Problems
Aerospace &
Defense
Life Sciences
Communications
Video
Semiconductor
Geosciences
Cell BE, FPGA,
GPU,
Multicore,
Pentium
DSP
Processor Platforms
Compute-intensive
applications
software, systems
Mercury
engineering, and
domain
expertise

©
2005 Mercury Computer Systems, Inc.
7
Emerging Markets
Organizing the Company Around our Core Business Model
AUSG
Biotech
Visage
Imaging
(Life
Sciences,
amira-
medical)
Advanced Computing Solutions
Market Investments
Leveraged
Core Product
Investments
Stream
Computing
Application
Acceleration
Radar
SIGINT
Def
Comms
Semi
MEDICAL
Comms
Solution
Architecture
SEISMIC
Sonar
Specialized Computing Business
Federal
VSG
Visualization

©
2005 Mercury Computer Systems, Inc.
8
New Business Unit:  Advanced Computing Solutions
Leveraging Mercury
technology across:
•
Defense
•
Semiconductor
•
Communications
•
Intelligence
•
Homeland
Security
•
Research

©
2005 Mercury Computer Systems, Inc.
9
Mercury Well-Positioned in Defense
•Strong customer base
20 years of experience
COTS model
•Technology leadership
Strong position in large, complex radar
systems
Programmable solutions moving closer
to the war fighter
•Broadening market portfolio
Signals intelligence
Net-centric warfare
•
Wideband Data Links
UAVs
•
Synthetic Vision
Sonar
Smart weapons
Ground based radar

©
2005 Mercury Computer Systems, Inc.
10
Mercury Federal
GOAL:
Extend Mercury’s capabilities directly into:
•
Intelligence Agencies
•
Homeland Security
To solve their unique problems
•
Massive amounts of sensor data into intelligent information
actionable by the recipient
New business model for Mercury
•
Government contracting vehicle
•
Consulting services
•
Systems engineering
•
Products and services

©
2005 Mercury Computer Systems, Inc.
11
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 market needs
Emerging new applications for
Mercury solutions
Strong Organic Growth
36% CAGR
FY 2002-2007
Mercury Semiconductor Segment  Revenue
FY
2002
–
FY
2007
$7 M
FY 2002
$32 M
FY 2007

©
2005 Mercury Computer Systems, Inc.
12
EDA:  New Market Leveraging Mercury Technology
•
Compute-intensive processing 
required to prepare designs for
mask creation
Resolution Enhancement
Technology (RET)
Design For Manufacturing (DFM)
•
Mercury Cell BE-based solutions
to provide over 10 Teraflops to
speed application by 10x to 100x
•
Partnership with Mentor
Graphics to deploy first Cell BE-
based platform for EDA market

©
2005 Mercury Computer Systems, Inc.
13
Communications
•
Communications market
potential
System development
platforms for wireless
infrastructure applications
•
Growth Opportunity
AdvancedTCA DSP and FPGA
compute solutions
•
Example: Satellite ground stations
for Ancillary Terrestrial Component
(ATC)
•
Wideband Data Link Modems for
Net-centric Warfare

©
2005 Mercury Computer Systems, Inc.
14
Visage Imaging
•
Wholly owned subsidiary
•
Focused on software-based
medical imaging solutions
•
Web based PACS
•
Client / server model for 3D
visualization
•
Distribution Strategy
•
OEMs
•
Direct
•
Distributors
•
Market Segments
•
Clinical DMI
•
Microscopy
•
Biomedical Research
•
Pharma

©
2005 Mercury Computer Systems, Inc.
15
Broad Set of Capabilities
Acquire
Visualize
Manage
Distribute
•
Visage VR
volume
rendering
•
Visage WS
workstation
•
Visage CS thin
client server
Reconstruct
•
Visage RT image
reconstruction
•
GPU acceleration
•
CELL technology
acceleration
•
Multi-channel
MRI receiver
•
CT gantry
dose
controller
•
Visage PACS
•
Visage CS thin
client server
•
Visage CS
Cardiac analysis
•
Visage
PACS
•

©
2005 Mercury Computer Systems, Inc.
16
Visage Has Most Complete Solution
X
X
X
X
X
Visage Imaging
(Mercury)
X
X
Analogic
X
X
X
Merge/Cedara
X
X
Vital Images +
Innovation
X
X
X
TeraRecon
X
Barco/Voxar
X
X
X
X
X
X
X
Analogic
X
X
X
Merge/Cedara
X
X
Vital Images +
X
X
X
TeraRecon
X
Barco/Voxar
Control
Recon
Visualize  
Distribute  
Archive
Medical
Imaging
–
Signal
Processing
and
Workflow
Hardware & Software Solutions
Gantry
Data
Explosion
Competition

©
2005 Mercury Computer Systems, Inc.
17
Emerging Businesses
•
Emerging markets where Mercury can leverage its
technology
Visualization Sciences Group (incubator)
•
Oil and Gas Exploration
•
Industrial Design
•
Corp and Univ Research Labs
•
Non-destructive Testing
Synthetic Vision for UAVs
•
Border Patrol
•
Forest Fire Detection
•
Utility and Pipeline Monitoring
Biotech
•
Drug discovery –
computer simulation
•
Very early stage
•
Potentially large niche markets
•
Focus on selling applications and services
•
FY08 Investment Year

©
2005  Mercury Computer Systems, Inc.
Financial Overview

©
2005 Mercury Computer Systems, Inc.
19
Revenue ($M)
$86
$107
$141
$181
$150
$180
$186
$250
$236
$225*
$224
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008E
Revenue Follows Technology Cycles
Echotek –
A/D-D/A
June Fiscal Year End
*Per Company guidance, July 26, 2007 earnings conference call
PowerPC
RACE++
MP-510
Cell BE
Processor
DSP/GPU / FPGA Processors
Northstar
Ensemble
PowerStream 7000
TGS –
3D
Momentum -
SBC
SoHard –
PACS
ARC -
RF
Rapid IO
10% CAGR
FY98 –
FY08E

©
2005 Mercury Computer Systems, Inc.
20
Focus on Working Capital
•
Supply chain
transformation
Competitive advantage for
Mercury and customers
•
Customer satisfaction
DSO target 50 days
Inventory Turns
4.9
6.9
5.4
4.6
4.1
4.6
7.5
2003
2004
2005
2006
2007
2008E
Model
Days Sales Outstanding
43
51
53
59
61
56
50
2003
2004
2005
2006
2007
2008E
Model

©
2005 Mercury Computer Systems, Inc.
21
Strong Balance Sheet
Historically strong
balance sheet
Net cash positive
Projected FY08 capex
of $7 million
Positive free cash
flow in FY08
•
2% convertible senior notes offering due 2024
Quarter ended June 30, 2007
Cash and Equivalents
$157
Total Current Assets
$196
Total Assets
$360
Total Debt
$125
Total Liabilities
$191
Stockholders’
Equity
$169
*

©
2005 Mercury Computer Systems, Inc.
22
Commitment to Timeless Business Model
Non-GAAP 
FY05
FY06
FY07
Guidance
FY08*
Timeless
Business Model
Revenue
100%
100%
100%
100%
100%
Gross Margin
66%
62%
56%
57%
60+%
SG&A
29%
34%
36%
R&D
20%
25%
26%
Income from Operations
17%
3%
(6%)
0%
16-18%
*Per Company guidance, July 26, 2007 earnings conference call

©
2005 Mercury Computer Systems, Inc.
23
Q1 Fiscal Year 2008 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 $1.8M
excluded from non-GAAP
Notes:
1)
Figures in millions, except percent and per share data which includes
adjustment for contingent convertibles, in accordance with GAAP
2)
Company guidance, July 26, 2007 earnings conference call
Quarter Ending September 30, 2007
Revenues ($M)
$48
      GAAP 
Non-GAAP
Gross Margin
57%
57%
EPS
$(0.33)
$(0.08)

©
2005 Mercury Computer Systems, Inc.
24
Fiscal Year 2008 Guidance
Fiscal Year Ending June 30, 2008
Revenues ($M)
$225
      GAAP 
Non-GAAP
Gross Margin
57%
57%
EPS
$(0.63)
$0.17
Notes:
1)
Figures in millions, except percent and per share data which includes
adjustment for contingent convertibles, in accordance with GAAP
2)
Company guidance, July 26, 2007 earnings conference call
•
Impact of equity-based compensation costs related to FAS
123(R) of approximately $11M excluded from non-GAAP
•
Acquisition-related amortization of approximately $7M
excluded from non-GAAP

©
2005 Mercury Computer Systems, Inc.
25
www.mc.com
NASDAQ: MRCY