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Mercury Systems Reports Fourth Quarter And Fiscal 2013 Results

Stocks in this article: MRCY

Management Comments

"Mercury closed fiscal 2013 with a very strong quarter for bookings, as we anticipated," said Mark Aslett, President and CEO, Mercury Systems. "Bookings grew 40% from the sequential third quarter, and we ended the year with a record backlog of more than $140 million. In addition, we made good progress on our most important ongoing programs, and design wins were up substantially compared with the third quarter. Mercury's results for the fourth quarter were at or above the high end of our guidance across all key metrics, and we concluded fiscal 2013 with positive momentum, despite a year of challenging conditions in the defense industry."

"Our MCE core compute business delivered significantly improved bookings on a sequential basis," Aslett said. "Bookings for the Navy's Aegis Ballistic Missile Defense System were up more than 100% from last quarter and nearly 250% year-over-year. This was another strong bookings quarter for the Navy's Surface Electronic Warfare Improvement Program (SEWIP) Block 2, and we were pleased to receive an initial small order for the Patriot Air and Missile defense system upgrades for the U.S. Army."

"Sequestration driven uncertainty and the slow progress in Washington on next year's defense budget continues to cloud our visibility regarding future deal timing and revenues." said Aslett. "However, we believe that Mercury is well-prepared for the challenges ahead. We were one of the first to see the impact of sequestration early in fiscal 2013. We responded immediately and proactively, and through the year managed our revenue and expense levels conservatively with a focus on growing our backlog and preserving liquidity. This strategy should continue to serve us well in fiscal 2014."

"We believe that, on balance, our technology, capabilities and ongoing programs and platforms align well with the Defense Department's new roles and missions. Looking ahead into fiscal 2014, we have the opportunity for a number of major new design wins and programs should our customers be selected. One such design win that came to fruition last week involved our customer, Northrop Grumman, being awarded the upgraded radar for the F-16.We are confident that, given our strategy and positioning, the defense industry's ultimate recovery will lead to a significant improvement in Mercury's profitability, cash flow generation and enterprise value over time."

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