UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K/A
AMENDMENT NO. 1
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): September 9, 2009
Mercury Computer Systems, Inc.
(Exact Name of Registrant as Specified in Charter)
| Massachusetts | 000-23599 | 04-2741391 | ||
| (State or Other Jurisdiction of Incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
201 Riverneck Road, Chelmsford, Massachusetts 01824
(Address of Principal Executive Offices) (Zip Code)
Registrant’s telephone number, including area code: (978) 256-1300
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
EXPLANATORY NOTE
Mercury Computer Systems, Inc. (the “Company”) is filing this Amendment No. 1 on Form 8-K/A (“Amendment No. 1”) to correct certain errors in Exhibit 99.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 9, 2009 (the “Original 8-K”). The purpose of this Amendment No. 1 is to file a corrected version of the presentation management made on September 9, 2009 at the Kaufman Brothers 12th Annual Investor Conference. Specifically, slide number 28 (titled “Q1 ’10 Guidance”) in the Exhibit 99.1 filed with the Original 8-K contained certain errors in the guidance for the quarter ending September 30, 2009. The Exhibit 99.1 to this Amendment No. 1 contains the correct guidance for the quarter ending September 30, 2009. The Company confirms that the guidance included in Exhibit 99.1 to this Amendment No. 1 is the same guidance contained in the Company’s earning release dated August 4, 2009 and discussed on the earnings release conference call on August 4, 2009.
| Item 7.01 | Regulation FD Disclosure. |
This information is being furnished pursuant to Item 7.01 of this Amendment No. 1 and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section and will not be incorporated by reference into any registration statement filed by the Company under the Securities Act of 1933, as amended, unless specifically identified as being incorporated therein by reference. This Amendment No. 1 will not be deemed an admission as to the materiality of any information in this Amendment No. 1 that is being disclosed pursuant to Regulation FD.
Please refer to page 2 of Exhibit 99.1 for a discussion of certain forward-looking statements included therein and the risks and uncertainties related thereto, as well as the use of non-GAAP financial measures included therein.
| Item 9.01 | Financial Statements and Exhibits. |
| (d) | Exhibits |
| Exhibit No. |
Description | |
| 99.1 | Presentation materials dated September 9, 2009 (filed herewith). | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Dated: September 10, 2009 | MERCURY COMPUTER SYSTEMS, INC. | |||||
| By: | /s/ Alex A. Van Adzin | |||||
| Alex A. Van Adzin | ||||||
| Vice President, General Counsel, and Corporation Secretary | ||||||
EXHIBIT INDEX
| Exhibit No. |
Description | |
| 99.1 | Presentation materials dated September 9, 2009 (filed herewith). | |
 www.mc.com Kaufman Brothers 12th Annual Investor Conference Mark Aslett – President & CEO Bob Hult – SVP, CFO September 9, 2009 © 2009 Mercury Computer Systems, Inc. www.mc.com Exhibit 99.1 |
 © 2009 Mercury Computer Systems, Inc. www.mc.com 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 2009 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, 2009. 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 of Fiscal Year 2009 earnings release, which can be found on our website at www.mc.com/mediacenter/pressreleaseslist.aspx. 1 |
 © 2009 Mercury Computer Systems, Inc. www.mc.com Introduction • Founded in 1981 • HQ in Massachusetts; R&D in MA, VA, AL • 550+ employees • Leading provider of high- performance embedded computer systems • Focused on robust defense ISR market • FY2009 revenues of $189M • NASDAQ: MRCY 2 Note: Excludes $2M interco eliminations |
 © 2009 Mercury Computer Systems, Inc. www.mc.com Completed the turnaround phase • Refocused the business back to the economic core • Completed the divestiture of all non-core assets • Improved the underlying operations of the business • Returned the company to profitability • Developed a strong position in the Defense ISR space • Growing services and systems integration business: ACS Defense, Mercury Federal Systems • Pursuing complementary acquisitions 3 Become the government’s trusted partner for next-generation ISR signal processing and computing solutions |
 © 2009 Mercury Computer Systems, Inc. www.mc.com 5 key business growth drivers 4 Product Portfolio Refresh Application Expansion Platform Penetration Customer Expansion Expand Total Addressable Market to $3.5B Increased System Content Platform Penetration Application Expansion Expand Total Addressable Market to $30B Defense Electronics Market Focus on Persistent ISR Growth in Federal Services Filed $100M Universal Shelf Complementary ISR Businesses Semiconductor Market Rebound |
 © 2009 Mercury Computer Systems, Inc. www.mc.com ACS 5-year design win value increased 22% overall in FY09 with 51% growth in Defense 5 Defense Highlights • Aegis – Naval BMD, C4I • Missile Defense – Ground Radar • Argon – Naval SIGINT • Predator – Airborne Radar • JCREW – Ground SIGINT • Rivet Joint – Airborne SIGINT • Gorgon Stare – Airborne ISR • NASP – Airborne Sonar • Guardrail – Airborne SIGINT Commercial Highlights • KLA Tencor – Semiconductor • Hughes – Satellite Comms • Rapiscan – Baggage Scanning • L3 – Baggage Scanning • ASML – Semiconductor |
 © 2009 Mercury Computer Systems, Inc. www.mc.com rd Services and Systems Integration drove significant revenue growth in its first full year of operation • Expand ACS total addressable market • From startup in FY08, FY09 bookings growth +106%, revenue growth +157% • FY09 proved the business model and potential • Enables substitute and 3 party technologies e.g. blade computing • Enables faster time to revenue on programs and increased deal sizes 6 |
 © 2009 Mercury Computer Systems, Inc. www.mc.com Success in Services & System Integration – Radar Digital Processor Project Requirement: • Phased Array Radar for Ground Missile Defense Initial Deal: • $18M booking • 1/3 hardware / software • 1/3 engineering services • 1/3 systems integration Advanced processing technology: • OpenVPX™ embedded computing 7 Total Opportunity Potential: 65 new/upgrades through 2013; $30M over 5 years |
 © 2009 Mercury Computer Systems, Inc. www.mc.com • Strong revenue ($5.7M) and bookings ($11.9M) in FY09 • Concurrently, generating new opportunities for ACS • 9 active engagements; 3 direct prime contracts • Recognized by the DoD as advanced processing architects for next-gen airborne ISR systems Mercury Federal Systems (MFS) delivered significant first year bookings and revenue 8 |
 ©
2009 Mercury Computer Systems, Inc. www.mc.com MFS Success Story – Wide Area Airborne Surveillance Project Requirement: • Concurrent near real-time situational awareness for MQ-9 Reaper UAV (Gorgon Stare) Initial Deal: • $7M bookings • 1/2 hardware / software • 1/2 engineering services Advanced processing technology: • Embedded GPUs w/IO 9 Total Opportunity Potential: ~ $20M |
 ©
2009 Mercury Computer Systems, Inc. www.mc.com • 25% bookings and 13% FY07-FY09 revenue CAGR • Strong revenue growth in Radar, Electronic Warfare (EW) • Persistent ISR EO market growing opportunity Strength in ACS defense markets 10 “C4ISR” |
 ©
2009 Mercury Computer Systems, Inc. www.mc.com Growing and evolving our defense core • Commercial item and Open System Architectures • Highly penetrated across many programs and platforms – presents good upgrade opportunities and lower risk • Design win-led – refresh product portfolio • Tactically penetrate more programs on new and existing platforms on land, air, and sea • Expand presence in defense application segments, such as Electronic Warfare (EW) and EO/IR (Electro Optical/Infra-Red) • Growth in complementary Services and Systems Integration • Revolutionize embedded sensor processing with the Converged Sensor Network™ vision 11 |
 ©
2009 Mercury Computer Systems, Inc. www.mc.com 12 12 Global Hawk Predator/Reaper Rivet Joint Gorgon Stare F-16 F-35 JSF BAMS MESA P8-MMA MP-RTIP Guardrail JCREW Software Defined Jammer RDP - Ground Missile Defense Radar THAAD LRR SVDF DASR Soothsayer Aegis SSEE(F) Sampson CADF Deepwater Artisan Key defense platforms and programs driving growth Representative Program List |
 ©
2009 Mercury Computer Systems, Inc. www.mc.com Military electronics is a market sweet spot 13 • Retrofit and upgrades remain strong for legacy programs • Increased need for EW; Intelligence, Surveillance, Reconnaissance assets • Networked nodal platforms, virtualized sensors • Next-gen onboard processing, exploitation and dissemination architecture critical Sources : The Military Electronics Briefing, 2008 Ed. , The TEAL Group, Frost & Sullivan, U.S C4ISR Market 2007 |
 ©
2009 Mercury Computer Systems, Inc. www.mc.com To the warfighter, time to information is critical to address the growing gap between: 14 What’s analyzed? What’s collected? 100GB per mission 100TB per mission Force Protection Mission Critical Real-time Forensics Last 18 hours Recent minutes For decision makers who need timely, actionable, and relevant information What’s actionable? ? |
 ©
2009 Mercury Computer Systems, Inc. www.mc.com 15 Airborne ISR R&D costs Signal Processing / Systems Integration Platform Sensor Datalink Ground Station 10% 40% 30% 5% 15% 45% 10% 15% 10% 10% 5% 5% Datalink Platform Sensor Ground Station Application Acceleration/ Systems Integration Warfighter Terminals Warfighter Terminals Broadcast Provision Broadcast Provision Budget priorities being realigned to maintain technology edge Source: DoD Budget Request FY93 and FY2008 1993 2008 Mercury’s Opportunity |
 ©
2009 Mercury Computer Systems, Inc. www.mc.com Mercury's new Converged Sensor Network™ (CSN™) vision for persistent ISR A revolutionary open architecture that combines 16 Video Radar SIGINT Signal Processing Image Processing Signal Processing Data Exploitation Information Dissemination SAN Global Information Grid Become the government’s trusted partner for next-generation ISR platform signal processing and computing Multi-Sensor Signal Processing Information Management Technologies Transformational Access to Information in the Tactical Edge |
 ©
2009 Mercury Computer Systems, Inc. www.mc.com Government/DoD frustration leads to Defense procurement reform Today’s Model • Government frustrated with current prime model • Platform-centric approach • Proprietary closed system architectures • Significant cost overruns • Significant schedule slips Emerging Model • Commercial items built on open platform-independent architectures • Best of breed model emerging – proven on sensor side, eg FLIR • Likely to occur for ISR signal processing and computing • Lower cost – pay once for common architecture across multiple platforms, eg MP-RTIP • QRC – Fast time to deployment and lower risk 17 Budget pressure and significant schedule slippage is leading to Defense procurement reforms that could benefit Mercury |
 ©
2009 Mercury Computer Systems, Inc. www.mc.com ACS Defense and MFS – a hybrid business model ACS Defense • Total addressable market – commercial item defense electronics ($3B annually) • Commercial item products with increased services • Board-level design wins • Develop everything on our own nickel • Long payback period – high risk with Mercury Federal • Total addressable military electronics market ($30B annually) • Consult on overall ISR signal processing architecture with the government • Platform-level design wins • Paid to develop elements that do not exist • Lower risk, faster returns 18 |
 ©
2009 Mercury Computer Systems, Inc. www.mc.com Become the government’s trusted partner for next-generation ISR signal processing and computing solutions Turnaround phase complete – focus on growth • Focus on robust Defense ISR market segment • Grow ACS defense business by targeting upgrades, new platforms and expanding application segments • Grow beyond commercial item boards through complementary Services and Systems Integration – Converged Sensor Network ™ vision • Mercury Federal a means to grow and evolve business model and expand our total addressable market • Pursue complementary ISR acquisitions 19 |
 © 2009 Mercury Computer Systems, Inc. www.mc.com Financial Overview |
 ©
2009 Mercury Computer Systems, Inc. www.mc.com 21 FY07 – FY09: Restored profitability 21 Notes: 1)All historical income statement figures are as reported in the Company’s earnings press
release at the end of the applicable fiscal year and have not been restated for
operations that have been discontinued subsequent to that time. |
 ©
2009 Mercury Computer Systems, Inc. www.mc.com Strong growth in bookings and backlog FY07-FY09: • Total Company – 11% Bookings CAGR – 18% Backlog CAGR • Defense – 28% Bookings CAGR – 28% Backlog CAGR 22 22 Note: Historical figures adjusted for discontinued operations Bookings Total Company $M Ending Backlog 170 199 210 70 78 98 0 25 50 75 100 125 150 175 200 225 FY07 FY08 FY09 Defense $107 Defense $145 Defense $174 Defense $58 Defense $67 Defense $94 |
 ©
2009 Mercury Computer Systems, Inc. www.mc.com Improved working capital efficiencies • Supply chain transformation - Operational efficiencies - Manufacturing lead times - Cost of quality - Competitive advantage for Mercury and customers - Inventory reduced $7.4M in FY09 • Customer satisfaction - DSO slightly above model - End-of-quarter shipment skew 23 23 |
 ©
2009 Mercury Computer Systems, Inc. www.mc.com 24 Repaid debt and improved cash balance 24 Note: Convertible Debt $125 ARS settlement at par ($50M) with UBS 6/30/10 |
  © 2009 Mercury Computer Systems, Inc. www.mc.com Strong and unencumbered balance sheet • Divested all non-core businesses • Repaid $125M convert debt in Q3/Q4 FY09 • Zero cost ARS loan of $33M • $50M ARS balance repaid at par 6/30/10 25 FY09 Cash and Marketable Securities 92 Total Current Assets 146 Total Assets 219 Debt 33 Total Liabilities 74 Shareholders' Equity 145 |
 ©
2009 Mercury Computer Systems, Inc. www.mc.com 26 Notes: Target Business Model assumes organic growth. ACS /MFS approx 90%/10% revenue split Adj EBITDA adjusts for Depreciation 2-3% Stock Based Comp, not included in Non-GAAP target model, is approximately 2-3% of revenue
Target Business Model Robust target business model |
 ©
2009 Mercury Computer Systems, Inc. www.mc.com Last 8 quarter’s revenues and EPS exceeded or met the top end of guidance (Non-GAAP) 27 2008 Q1 Q2 Q3 Q4 Reported Guidance Reported Guidance Reported Guidance Reported Guidance Revenue ($M) 49.2 48.0 52.6 51.0 56.5 53.0-55.0 55.2 53.0-56.0 EPS ($) 0.09 (0.08) 0.04 (0.05) 0.04 (0.04)- 0.00 0.01 (0.05)- 0.01 2009 Q1 Q2 Q3 Q4 Reported Guidance Reported Guidance Reported Guidance Reported Guidance Revenue ($M) 49.1 47.0-49.0 50.7 47.0- 49.0 50.6 48.0-50.0 48.4 46.0- 48.0 EPS ($) 0.07 (0.07)- (0.03) 0.03 (0.05)- 0.00 0.20 0.05-0.09 0.13 0.05- 0.08 |
 ©
2009 Mercury Computer Systems, Inc. www.mc.com Q1’10 Guidance 28 Quarter Ending September 30, 2009 Low High Revenue $43 $45 GAAP EPS $0.03 $0.08 Adj EBITDA $3.5 $5.0 Note – Adj EBITDA adjustments: Stock Compensation 1.0 1.0 Interest Expense 0.1 0.1 Interest Income (0.2) (0.2) Taxes 0.2 0.6 Amortization 0.4 0.4 Depreciation 1.3 1.3 |
 ©
2009 Mercury Computer Systems, Inc. www.mc.com Financial Summary • Returned to profitability • 11% bookings and 18% backlog growth (CAGR) • Improved working capital efficiencies • Healthy cash flows from operations • Strong and unencumbered balance sheet • Robust target business model 17-18% Adj. EBITDA • $100M shelf registration effective 29 |
 ©
2009 Mercury Computer Systems, Inc. www.mc.com www.mc.com NASDAQ: MRCY Thank You |
 © 2009 Mercury Computer Systems, Inc. www.mc.com Appendix |
 ©
2009 Mercury Computer Systems, Inc. www.mc.com 32 GAAP to Non-GAAP Reconciliation Notes: 1) All historical income statement figures are as reported in the Company’s earnings press
release at the end of the applicable fiscal period Year Year Year Ended Ended Ended June 30, 2007 June 30, 2008 June 30, 2009 GAAP net income (loss) from continuing operations (37.8) $ (35.4) $ 7.9 $
Adjustment to exclude stock-based compensation 10.6 10.4 4.6 Adjustment to exclude inventory write-down - 0.8 - Adjustment to exclude in-process research and development 3.1 - - Adjustment to exclude amortization of acquired intangible assets 7.2 7.3 2.4 Adjustment to exclude impairment of goodwill and long-lived assets 0.1 18.0 - Adjustment to exclude restructuring 5.5 5.2 1.7 Adjustment to exclude gain on sale of long-lived assets - (3.2) - Adjustment for tax impact 5.2 0.2 (5.6) Non-GAAP net income (loss) from continuing operations (6.1) $ 3.3 $ 11.0 $ Net income (loss) per share from continuing operations -- Diluted GAAP (1.78) $ (1.64) $ 0.35 $ Non-GAAP (0.29) $ 0.15 $ 0.49 $ Weighted average shares -- Diluted: GAAP 21.2 21.6 22.4 Non-GAAP 21.2 22.0 22.4 |