Free 7-day Trial
All Articles and Columns »

Mercury Computer Systems Reports Operating Results (10-Q)

February 03, 2011 | About:
10qk

10qk

18 followers
Mercury Computer Systems (MRCY) filed Quarterly Report for the period ended 2010-12-31.

Mercury Computr has a market cap of $462 million; its shares were traded at around $18.97 with a P/E ratio of 20 and P/S ratio of 2.3. Hedge Fund Gurus that owns MRCY: George Soros of Soros Fund Management LLC, Jim Simons of Renaissance Technologies LLC. Mutual Fund and Other Gurus that owns MRCY: Chuck Royce of Royce& Associates, James Barrow of Barrow, Hanley, Mewhinney & Strauss, Mario Gabelli of GAMCO Investors, Mario Gabelli of GAMCO Investors.

Highlight of Business Operations:

As of December 31, 2010, we had 549 employees and, for the three and six months ended December 31, 2010, we had revenues of $55.5 million and $107.6 million and income from continuing operations of $5.2 million and $8.9 million, respectively.

Net ACS revenues increased $9.8 million, or 23%, to $51.9 million during the three months ended December 31, 2010 as compared to the same period in fiscal 2010. This increase was primarily driven by an increase in sales to defense customers of $8.6 million, mostly driven by an increase in the radar market, partially offset by a slight decrease in electro-optical applications. The increase was also due to a $1.2 million increase in sales to commercial customers, primarily relating an increase in the semiconductor market, slightly offset by a decrease in sales in the commercial computing market.

Selling, general and administrative expenses increased $0.5 million, or 4%, to $14.0 million during the three months ended December 31, 2010 compared to $13.5 million during the same period in fiscal 2010. The increase was primarily due to a $0.7 million increase in employee compensation expense, including stock-based compensation expense, driven by a 13 person increase in headcount and company-wide pay increases. Additionally, there was a $0.2 million increase in business meeting and travel expense and a $0.2 million increase in depreciation expense. These increases were partially offset by a $0.3 million decrease in IT support expense and a $0.2 million decrease in recruiting expense. Selling, general and administrative expenses decreased as a percentage of revenues to 25.2% during the three months ended December 31, 2010 from 29.9% during the same period in fiscal 2010.

Research and development expenses increased $0.6 million, or 6%, to $10.5 million during the three months ended December 31, 2010 compared to $9.9 million during the same period in fiscal 2010. The increase was primarily the result of a $0.3 million increase in employee compensation expense driven by an 11 person increase in headcount and company-wide pay increases, an increase of $0.2 million in IT support expense, and a $0.1 million increase in investments on simulation equipment. Research and development continues to be a focus of our business with approximately 18.9% of our revenues dedicated to research and development activities during the three months ended December 31, 2010 and approximately 21.9% of our revenues dedicated to such activities during the same period in fiscal 2010.

Other net income increased $0.1 million, or 44%, to $0.4 million during the three months ended December 31, 2010, as compared to the same period in fiscal 2010. Other income (expense) primarily consists of $0.3 million in amortization of the gain on the sale leaseback of our corporate headquarters located in Chelmsford, Massachusetts and foreign currency exchange gains and losses. The $0.1 million increase is primarily associated with a $0.1 million foreign currency exchange gain during the three months ended December 31, 2010 as compared to no foreign currency exchange gain or loss for the same period in fiscal 2010. The foreign currency exchange gain was largely driven by strengthening of the British pound and the Japanese yen against the U.S. dollar.

Operating profit for ACS increased $4.5 million during the three months ended December 31, 2010 to $7.6 million as compared to $3.1 million for the same period in fiscal 2010. The increase in operating profit was primarily driven by increased revenues of $9.8 million, which drove an improvement in gross margin. This improvement was partially offset by increases in operating expenses necessary to grow the business.

Read the The complete Report

About the author:

10qk
GuruFocus - Stock Picks and Market Insight of Gurus

Rating: 4.1/5 (11 votes)

Comments

Please leave your comment:


Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK
Email Hide