Cash flows from operating activities were a net inflow of $7.4 million in the second quarter of fiscal 2014, compared to a net inflow of $1.6 million in the second quarter of fiscal 2013. Free cash flow, defined as cash flow from operating activities less capital expenditures, in the second quarter of fiscal 2014 was a net inflow of $4.5 million, compared to a net inflow of $0.8 million in the second quarter of fiscal 2013. Cash and cash equivalents as of December 31, 2013 were $44.5 million, an increase of $4.4 million from September 30, 2013.
"Mercury delivered solid results in the second quarter despite challenging conditions in the defense industry," said Mark Aslett, President and CEO, Mercury Systems. "Total revenue approached the high end of our guidance range, and we delivered financial results at or above the high end of our guidance across all of our other key metrics."
"Over the past two quarters, we have successfully laid the groundwork for the second and final phase of our acquisition integration strategy, which began in our fiscal third quarter," Aslett said. "The first phase of the strategy, which culminated with our acquisition of Micronetics in fiscal 2013, aligned our business with the needs of our customers and positioned Mercury for sustainable growth in the long-term. Our goal for the second phase is to create a fully integrated business that we can continue to profitably grow organically and scale through potential acquisitions going forward.""Our phase II integration, which is underway now, consists of three key initiatives," said Aslett. "The first is facilities consolidation around our two Advanced Microelectronics Centers; the second is business process and systems standardization across the Mercury enterprise; and the third is realignment of our engineering resources around the Advanced Development Center model we introduced internally last year."