Cash flows from operating activities were a net inflow of $2.2 million in the first quarter of fiscal 2014, compared to a net outflow of $9.9 million in the first quarter of fiscal 2013. Free cash flow, defined as cash flow from operating activities less capital expenditures, in the first quarter of fiscal 2014 was a net inflow of $1.1 million, compared to a net outflow of $10.9 million in the first quarter of fiscal 2013. Cash and cash equivalents as of September 30, 2013 were $40.1 million, an increase of $1.0 million from June 30, 2013.Management Comments "Mercury performed well in the first quarter despite continued industry headwinds, and our financial results were at or above the high end of our guidance across all key metrics," said Mark Aslett, President and CEO, Mercury Systems. "Given the ongoing budgetary uncertainties in Washington, military spending has been slow and likely will remain so until a new defense appropriations bill is signed into law. In addition, the armed services appear to be assuming that sequestration, or a derivative, is here to stay as they prepare their next round of budget submissions, all of which continues to cloud visibility in our business." "We continue to believe, however, that Mercury's strategy, technology, capabilities and ongoing programs align well with the Defense Department's new priorities and those of the primes, which has allowed us to drive improved performance despite conditions very similar to a year ago." said Aslett. "Our defense bookings for the first quarter were up 19% year-over-year, highlighted by another strong quarter of orders related to the Navy's Aegis Ballistic Missile Defense System program, as we expected. Our other key bookings included a classified airborne program with Northrop Grumman, an order for U.S. Army Patriot with Raytheon, Predator/Reaper radar upgrades with General Atomics, and additional orders for existing and next-generation electronic warfare products in our MDIS segment."