Mercury Computer Systems Reports First Quarter Revenues of $49.2 Million

CHELMSFORD, Mass., Oct. 24 /PRNewswire-FirstCall/ -- Mercury Computer Systems, Inc. (NASDAQ: MRCY) reported results for its first quarter of fiscal 2008, ended September 30, 2007 . First quarter revenues were $49.2 million , roughly...


CHELMSFORD, Mass., Oct. 24 /PRNewswire-FirstCall/ -- Mercury Computer Systems, Inc. (NASDAQ: MRCY) reported results for its first quarter of fiscal 2008, ended September 30, 2007 .

First quarter revenues were $49.2 million, roughly flat with the prior year's first quarter. Cash flows from operating activities were a net inflow of $4.0 million in the first quarter. Cash, cash equivalents, and marketable securities as of September 30, 2007 were $158.6 million.

First quarter GAAP operating losses were $3.3 million. First quarter GAAP net losses were $3.3 million. GAAP diluted losses per share were $0.15 for the first quarter. GAAP net losses include $4.5 million in charges, consisting of $2.7 million in stock-based compensation costs and $1.8 million in amortization of acquired intangible assets. Excluding the impact of these charges, first quarter non-GAAP operating income was $1.3 million. First quarter non-GAAP net income was $2.0 million. Non-GAAP diluted earnings per share were $0.09 for the first quarter.

"The results for the first quarter are very encouraging," said Jay Bertelli, President and Chief Executive Officer of Mercury Computer Systems, Inc. "They demonstrate that the operational effectiveness initiatives we began implementing several quarters ago in conjunction with the restructuring of the organization, cost reduction initiatives and personnel changes are beginning to show the desired results."

Mr. Bertelli continued: "The positive book-to-bill is also very encouraging, with indications that the acquisition strategy we executed on a few years ago is beginning to produce results, moving us into new markets with new products."

Backlog

The Company's total backlog at the end of the first quarter was $84.2 million, a $5.6 million sequential increase from the fourth quarter of last fiscal year, and a $12.6 million decline from the same quarter last year. Of the current total backlog, $63.4 million represents shipments scheduled over the next 12 months. The book-to-bill ratio was 1.11 for the quarter.

Revenues by Operating Unit

Effective July 1, 2007 , the Company restructured operations to achieve greater efficiencies and productivity. For fiscal 2008, the Company is organized into four operating units as follows:

Advanced Computing Solutions (ACS) -- The former Defense business, Advanced Solutions business, Modular Products and Services, and elements of Commercial Imaging and Visualization were consolidated into ACS to focus on specialized, high-performance computing solutions. Key market segments will remain aerospace and defense, semiconductor, telecommunications, and life sciences imaging. Revenues for the quarter from ACS were $42.2 million, representing 86% of the Company's total revenues. Approximately 67% of ACS's revenue related to defense. For the total Company, approximately 57% of the Company's first quarter revenue related to defense compared to 45% in the same quarter last year.

Visage Imaging (Visage) -- Visage Imaging is focused on the development and distribution of visualization and PACS (picture archive and communications system) solutions, as well as other three-dimensional (3D) software solutions for the life sciences market. Revenues for the quarter from Visage were $3.9 million, roughly flat with the same quarter last year.

Visualization Sciences Group (VSG) -- VSG is focused on the development and distribution of software developer toolkits and application software for geosciences, engineering and manufacturing, material sciences, and other industrial and scientific domains. Revenues for the quarter from VSG were $2.6 million.

Emerging Businesses -- Mercury's emerging businesses are focused on cultivating new opportunities that benefit from Mercury's capabilities across markets. Current areas of focus include high-performance computing and visualization in biotech and aircraft navigation. Revenues for the quarter from these businesses were $0.5 million.

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