MRCY Q1 0.24 v 0.20
Mercury Computer Systems Posts Strong First Quarter; First Quarter Net Income Rises 57% Over Year-Ago Quarter
CHELMSFORD, Mass.--(BUSINESS WIRE)--Oct. 19, 1998--Mercury
Computer Systems, Inc. (NASDAQ:MRCY), a leading provider of real-time
digital signal and image processing computer systems, reported
continued growth in its first quarter of fiscal 1999, ended September
30, 1998. For the quarter, net income increased 57% to $2.5 million or
$0.24 per share (diluted), from $1.6 million, or $0.20 per share
(diluted), in the first quarter ended September 30, 1997. First
quarter fiscal 1999 revenues rose 26% to $24.1 million from $19.0
million in the first quarter of fiscal 1998.
"The fundamental drivers within our primary markets continue to
be strong," said Jay Bertelli, president and CEO of Mercury Computer
Systems, Inc. "Two of our major customers in the diagnostic medical
imaging sector have recently announced new systems that utilize our
RACE(R) technology. GE Medical Systems has announced both a computed
tomography (CT) system and a magnetic resonance imaging (MRI) system,
and Siemens Medical Systems has announced its latest computed
tomography machine. At the same time, within the worldwide defense
electronics market we continue to see major programs developing which
will require Mercury's advanced signal and image processing systems.
"During the quarter, we have been successful in two new design
wins which are noteworthy. Within the defense electronics sector,
Mercury has been selected by Lockheed Martin Missiles & Space, Boeing
Information Space and Defense Systems, and TRW Inc., as the supplier
of choice to provide high-performance computers for the Airborne Laser
(ABL) program. Mercury will provide the real-time, digital signal
processing systems for the ABL Beam Control & Fire Control Systems.
This program, if successful through its various design and
experimentation phases, promises a new generation of advanced theater
ballistic missile defense systems. For Mercury, it represents a new
application, with future deployment potential, which will take
advantage of the very best our RACE Series systems have to offer in
performance and scalability.
"The other significant design win was in the digital video
entertainment market. Mercury has been selected by DemoGraFX (Santa
Monica, CA) to provide the high-performance computers required to
support their efforts to develop an end-to-end system that will enable
the secure digital release of motion pictures to theaters. This will
be a major step in creating a true Electronic Digital Cinema as an
alternative to celluloid film-based distribution."
During the quarter, Mercury announced an entirely new line of
computer systems, called OmniStream(tm), which integrates Mercury's
high-performance, scalable, switched-fabric
interconnect--RACEway--into the PCI environment. When combined with
the company's RACE Series VantageRT(tm) product line at the low end,
and its RACE/VME and RACE Series MultiPort(tm) families at the high
end, Mercury now has the range and breadth of product offering to
match any customer's requirements today with a solution that will
offer them room for growth tomorrow. OmniStream systems will see
limited shipments next spring and production shipments in the summer,
and are the first systems to be announced as part of Mercury's $100
million Vision2000 research and development program.
Also during this quarter, Mercury formally notified customers who
use its aging Intel i860-based products that it intends to retire
those products over the next several months. To the vast majority of
customers, this was not new information, as Mercury has been actively
working with them to insure that their near-term requirements are
satisfied, and to assist them as appropriate to migrate to newer
Mercury RACE Series products. Mercury has taken the opportunity to
inform these customers, and more than 30 independent third-party
companies offering RACEway-compatible products, of its intent to
introduce a new generation of RACE technology in early November, 1998,
which will result in new product announcements in early 1999.
"Another significant event at the end of this quarter has been
the addition of Douglas F. Flood to my staff as Vice President of
Corporate Development," continued Mr. Bertelli. "Doug is responsible
for identifying and developing new business and market opportunities
for Mercury, including growth through strategic partnerships, and
merger and acquisition opportunities. Doug's unique background
includes the position of Senior Vice President for Business
Development and Planning at FTP Software, Inc. in Andover, MA, where
he identified and managed partnerships and acquisitions, including
alliances with MCI WorldCom and IBM. While we have no immediate merger
or acquisition plans, Doug's skills will help our management
team identify and select the best opportunities for increasing
shareholder value through these strategic means."
Mercury Computer Systems, Inc. (NASDAQ:MRCY) is the leading
independent producer of high-performance digital signal processing
computer systems that transform sensor data to information for
analysis and interpretation on a real-time basis. Mercury's products
play a critical role in a wide range of defense and medical imaging
applications. In air-, sea-, and land-based military platforms, these
systems process real-time radar, sonar, and signal intelligence data.
Mercury's systems are also used in state-of-the-art medical diagnostic
devices, including magnetic resonance imaging (MRI), computed
tomography (CT), and the rapidly growing field of digital cardiology.
Mercury has also developed a range of shared storage software
products that allow multiple workstations to access large digital
files using Fibre Channel at data rates up to 100 MB/sec. These
products are targetted to in the broadcast, entertainment, and digital
prepress industries, and for a variety of enterprise computing
applications.
Based in Chelmsford, Massachusetts, Mercury has more than 370
employees serving customers in North America, Europe and Asia through
a network of subsidiaries and distributors.
This press release contains certain forward-looking statements
that involve risks and uncertainties that could cause actual results
to differ materially from those projected or anticipated. Factors that
could cause or contribute to such risks and uncertainties include, but
are not limited to, general economic and business conditions,
competition, changes in technology and methods of marketing, and
various other factors beyond the company's control. These risks and
uncertainties include such factors as are described in the company's
Form 10K recently filed with the Securities and Exchange Commission.
The company wishes to caution readers not to place undue reliance upon
any such forward-looking statements, which speak only as of the date
made.
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*T
Mercury Computer Systems, Inc.
Consolidated Statements of Operations
(In thousands except per share data)
Three months ended
September 30,
1998 1997
Net revenue $24,062 $19,039
Cost of revenue 8,460 6,661
Gross profit 15,602 12,378
Operating expenses:
Selling, general and administrative 7,358 6,645
Research and development 4,707 3,381
Total operating expenses 12,065 10,026
Income from operations 3,537 2,352
Interest income, net 369 231
Other income (expenses), net 45 83
Income before income taxes 3,951 2,666
Provision for income taxes 1,422 1,060
Net income $ 2,529 $ 1,606
Diluted earnings per common share and
common share equivalent $ 0.24 $ 0.20
Weighted average diluted common
and common share equivalents 10,620 7,920
Mercury Computer Systems, Inc.
Consolidated Balance Sheets
(In thousands, except share data)
September 30, June 30,
1998 1998
ASSETS
Current assets:
Cash and cash equivalents $ 7,207 $ 6,054
Marketable securities 7,582 10,077
Trade accounts receivable, net of
allowance for doubtful accounts
of $267 and $218 at September 30 and
June 30, 1998, respectively 19,977 17,143
Inventory 7,568 9,125
Deferred income tax 1,669 1,669
Prepaid expenses and other current assets 1,061 1,255
Total current assets 45,064 45,323
Marketable securities 21,696 18,889
Property and equipment, net 10,431 8,466
Capitalized software costs, net 208 104
Deferred income tax, net 429 429
Other assets 350 358
Total assets $ 78,178 $ 73,569
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 3,935 $ 3,368
Accrued expenses 2,855 2,804
Accrued compensation 4,011 3,316
Billings in excess of revenues
and customer advances 845 1,017
Income taxes payable 2,473 2,024
Total current liabilities 14,119 12,529
Commitments and contingencies -- --
Stockholders' equity:
Preferred Stock, $.01 par value;
1,000,000 shares authorized and
none issued and outstanding at
September 30 and June 30, 1998,
respectively (liquidation preference of
none ) -- --
Common stock, $.01 par value:
25,000,000 shares authorized;
10,067,133 and 9,973,491 shares
issued and outstanding at September 30
and June 30, 1998, respectively 101 100
Additional paid-in capital 26,381 25,961
Retained earnings 38,012 35,483
Cumulative translation adjustment (110) (179)
Subscriptions and related
parties notes receivable (325) (325)
Total stockholders' equity 64,059 61,040
Total liabilities and stockholders'
equity $ 78,178 $ 73,569
*T
RACE is a registered trademark, and OmniStream, VantageRT, and
MultiPort are trademarks of Mercury Computer Systems, Inc.
CONTACT:
Mercury Computer Systems, Inc.
Gary Olin, (978) 256-1300
or
G. Mead Wyman, (978) 256-1300
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