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Mercury Computer Systems Reports Operating Results (10-Q)

February 08, 2013 | About:
10qk

10qk

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Mercury Computer Systems (MRCY) filed Quarterly Report for the period ended 2012-12-31.

Mercury Systems Inc has a market cap of $224.081 million; its shares were traded at around $6.98 with a P/E ratio of 16.3666 and P/S ratio of 0.8516.

Highlight of Business Operations:

Net ACS revenues decreased $20.6 million, or 32%, during the three months ended December 31, 2012 as compared to the same period in fiscal 2012. This decrease was primarily driven by lower defense sales of $20.8 million which were slightly offset by a $0.2 million increase in commercial sales. Organic ACS defense revenues for the three months ended December 31, 2012 declined $36.5 million as a result of lower revenues in four particular programs year over year and a general slowdown in funding due to current constraints on U.S. defense spending and uncertainties surrounding the future defense budget. This decline was offset by $6.2 million and $9.5 million of revenues from the acquisitions of KOR Electronics and Micronetics, respectively.

Selling, general and administrative expenses increased $0.2 million, or 1%, to $14.6 million during the three months ended December 31, 2012, compared to $14.4 million during the comparable period in fiscal 2012. The increase was primarily due to a $0.4 million increase in employee compensation expense, primarily as a result of the KOR, PDI and Micronetics acquisitions which was partially offset by the cost reduction initiatives as a result of our fiscal 2013 restructuring plan. Selling, general and administrative expenses increased as a percentage of revenues to 29.3% during the three months ended December 31, 2012 from 21.2% during the same period in fiscal 2012 due to lower revenues in the second quarter of fiscal 2013 as compared to the comparable period in fiscal 2012.

Net ACS revenues decreased $28.2 million, or 26%, during the six months ended December 31, 2012 as compared to the same period in fiscal 2012. This decrease was primarily driven by lower defense sales of $29.2 million which were slightly offset by a $1.0 million increase in commercial sales. Organic ACS defense revenues for the six months ended December 31, 2012 declined $55.7 million as a result of lower revenues in five particular programs year over year and a general slowdown in funding due to current constraints on U.S. defense spending and uncertainties surrounding the future defense budget. This decline was partially offset by $12.1 million and $14.4 million of revenues from the acquisitions of KOR Electronics and Micronetics, respectively.

Selling, general and administrative expenses increased $1.0 million, or 3.7%, to $29.1 million during the six months ended December 31, 2012, compared to $28.1 million during the comparable period in fiscal 2012. The increase was primarily due to a $0.8 million increase in employee compensation expense, including stock based compensation, primarily as a result of the KOR, PDI and Micronetics acquisitions which was partially offset by the cost reduction initiatives as a result of our fiscal 2013 restructuring plan. Selling, general and administrative expenses increased as a percentage of revenues to 29.3 % during the six months ended December 31, 2012 from 24.0% during the same period in fiscal 2012 due to lower revenues in the first six months of fiscal 2013 as compared to the same period in fiscal 2012.

During the six months ended December 31, 2012, we used $8.4 million in cash for operating activities compared to $15.2 million in cash generated from operating activities during the same period in fiscal 2012. The $23.6 million decline in cash generated by operating activities was primarily a result of lower comparable net income of $23.7 million and a $4.0 million increase in cash used for payables and accrued expenses. These increases in the use of cash were partially offset by $3.9 million in higher cash generation from the collection of receivables. Our ability to generate cash from operations in future periods will depend in large part on profitability, the rate and timing of collections of accounts receivable, our inventory turns and our ability to manage other areas of working capital.

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