Mercury Computer Systems Reports Third Quarter FY08 Results

CHELMSFORD, Mass. , April 23 /PRNewswire-FirstCall/ -- Mercury Computer Systems, Inc. (NASDAQ: MRCY) reported results for its third quarter of fiscal 2008, which ended March 31, 2008 . Third quarter revenues were $56.5 million , up 7...


CHELMSFORD, Mass. , April 23 /PRNewswire-FirstCall/ -- Mercury Computer Systems, Inc. (NASDAQ: MRCY) reported results for its third quarter of fiscal 2008, which ended March 31, 2008 .

Third quarter revenues were $56.5 million, up 7% from second quarter revenues of $52.6 million. The book-to-bill ratio was 1.15 for the quarter.

Third quarter GAAP operating losses were $7.0 million. Third quarter GAAP net losses were $5.6 million. GAAP diluted losses per share were $0.26 for the third quarter. GAAP operating losses include $7.0 million in charges, consisting of $3.2 million in stock-based compensation costs, $1.8 million in amortization of acquired intangible assets, a $0.8 million inventory writedown, and $1.2 million in restructuring costs. Excluding the impact of these charges, third quarter non-GAAP operating income was breakeven. Third quarter non-GAAP net income was $1.0 million. Non-GAAP diluted earnings per share were $0.04 for the third quarter.

Cash flows from operating activities were a net inflow of $9.6 million in the third quarter. Cash, cash equivalents, and marketable securities as of March 31, 2008 were $162.1 million.

The Company's total backlog at the end of the third quarter was $98.0 million, an $8.4 million sequential increase from the second quarter of the fiscal year. Of the current total backlog, $90.7 million represents shipments scheduled over the next 12 months.

"I'm pleased to report that we've made progress in strengthening and growing the core defense business in ACS, which performed well this quarter," said Mark Aslett , President and Chief Executive Officer of Mercury Computer Systems, Inc. "Also, by addressing certain elements of our portfolio of businesses, we have laid the groundwork to take costs out of the model, focus operations, and increase our cash balance."

Advanced Computing Solutions (ACS) -- Revenues for the third quarter from ACS were $50.3 million, up $3.6 million or 8% from the second quarter, and now represent 89% of the Company's total revenues. Approximately 70% of ACS's revenues related to defense, compared to approximately 56% in the same quarter last year.

Visage Imaging (Visage) -- Revenues for the third quarter for Mercury's wholly owned subsidiary were $2.9 million, a slight decline of $0.1 million from the second quarter of the fiscal year.

Other -- Combined revenues from Mercury's other business segments totaled $3.3 million.

Business Outlook

This section presents our current expectations and estimates, given current visibility, on our business outlook for the upcoming fiscal quarter and the fiscal year. It is possible that actual performance will differ materially from the estimates given -- either on the upside or on the downside. Investors should consider all of the risks, including those listed in the Safe Harbor Statement below, with respect to these estimates, and make themselves aware of the risk factors that may impact the Company's actual performance.

For the fourth quarter of fiscal year 2008, revenues are currently expected to be in the range of approximately $53 to $56 million. The Company currently expects fourth quarter fiscal 2008 GAAP losses per share to be in the range of a loss of $0.30 to a loss of $0.22. Excluding the impact of stock-based compensation costs, amortization of acquired intangible assets, and restructuring and impairment costs, fourth quarter fiscal year 2008 non- GAAP per share estimates are currently expected to be in the range of a loss of $0.05 to earnings of $0.01.

For the full year, the Company currently expects revenues to be in the range of approximately $211 to $214 million, increasing the bottom end of the range from the previously guided $209 million to $214 million. The Company currently expects fiscal year 2008 GAAP losses per share to be in the range of a loss of $0.99 to a loss of $0.91. Excluding the impact of stock-based compensation costs, amortization of acquired intangible assets, the inventory writedown, and restructuring and impairment costs, fiscal year 2008 non-GAAP earnings per share are currently expected to be in the range of $0.12 to $0.18.

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