|
|
|
|
|
Massachusetts
|
|
000-23599
|
|
04-2741391
|
(State or Other Jurisdiction
of Incorporation)
|
|
(Commission File Number)
|
|
(IRS Employer
Identification No.)
|
|
|
|
50 Minuteman Road, Andover, Massachusetts
|
|
01810
|
(Address of Principal Executive Offices)
|
|
(Zip Code)
|
¨
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
¨
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
¨
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
¨
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
Exhibit No.
|
Description
|
|
|
99.1
|
Press Release, dated April 30, 2019, of Mercury Systems, Inc.
|
99.2
|
Earnings Presentation, dated April 30, 2019, of Mercury Systems, Inc.
|
|
|
|
|
|
Dated: April 30, 2019
|
MERCURY SYSTEMS, INC.
|
|
|
|
By:
/s/ Michael D. Ruppert
Michael D. Ruppert
Executive Vice President, Chief Financial Officer,
and Treasurer
|
|
News Release
|
MERCURY SYSTEMS, INC.
|
|
|||||||
UNAUDITED CONSOLIDATED BALANCE SHEETS
|
|
|||||||
(In thousands)
|
|
|
|
|
||||
|
|
March 31,
|
|
June 30,
|
||||
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
||||
Assets
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
112,515
|
|
|
$
|
66,521
|
|
Accounts receivable, net
|
|
114,806
|
|
|
104,040
|
|
||
Unbilled receivables and costs in excess of billings
|
|
55,941
|
|
|
39,774
|
|
||
Inventory
|
|
131,655
|
|
|
108,585
|
|
||
Prepaid income taxes
|
|
—
|
|
|
3,761
|
|
||
Prepaid expenses and other current assets
|
|
10,253
|
|
|
9,062
|
|
||
Total current assets
|
|
425,170
|
|
|
331,743
|
|
||
|
|
|
|
|
||||
Property and equipment, net
|
|
55,857
|
|
|
50,980
|
|
||
Goodwill
|
|
543,515
|
|
|
497,442
|
|
||
Intangible assets, net
|
|
180,828
|
|
|
177,904
|
|
||
Other non-current assets
|
|
7,011
|
|
|
6,411
|
|
||
Total assets
|
|
$
|
1,212,381
|
|
|
$
|
1,064,480
|
|
|
|
|
|
|
||||
Liabilities and Shareholders’ Equity
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Accounts payable
|
|
$
|
35,220
|
|
|
$
|
21,323
|
|
Accrued expenses
|
|
20,342
|
|
|
16,386
|
|
||
Accrued compensation
|
|
27,500
|
|
|
21,375
|
|
||
Deferred revenues and customer advances
|
|
10,728
|
|
|
12,596
|
|
||
Total current liabilities
|
|
93,790
|
|
|
71,680
|
|
||
|
|
|
|
|
||||
Deferred income taxes
|
|
11,811
|
|
|
13,635
|
|
||
Income taxes payable
|
|
2,880
|
|
|
998
|
|
||
Long-term debt
|
|
276,500
|
|
|
195,000
|
|
||
Other non-current liabilities
|
|
15,018
|
|
|
11,276
|
|
||
Total liabilities
|
|
399,999
|
|
|
292,589
|
|
||
|
|
|
|
|
||||
Shareholders’ equity:
|
|
|
|
|
||||
Common stock
|
|
473
|
|
|
469
|
|
||
Additional paid-in capital
|
|
599,238
|
|
|
590,163
|
|
||
Retained earnings
|
|
213,939
|
|
|
179,968
|
|
||
Accumulated other comprehensive income
|
|
(1,268
|
)
|
|
1,291
|
|
||
Total shareholders’ equity
|
|
812,382
|
|
|
771,891
|
|
||
Total liabilities and shareholders’ equity
|
|
$
|
1,212,381
|
|
|
$
|
1,064,480
|
|
MERCURY SYSTEMS, INC.
|
|
|
|
|
|
|
|
|
||||||||
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
|
|
||||||||||||
(In thousands, except per share data)
|
|
|
|
|
|
|
|
|
||||||||
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
March 31,
|
|
March 31,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net revenues
|
|
$
|
174,636
|
|
|
$
|
116,336
|
|
|
$
|
477,781
|
|
|
$
|
340,317
|
|
Cost of revenues
(1)
|
|
100,789
|
|
|
63,570
|
|
|
271,464
|
|
|
182,717
|
|
||||
Gross margin
|
|
73,847
|
|
|
52,766
|
|
|
206,317
|
|
|
157,600
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative
(1)
|
|
27,411
|
|
|
21,138
|
|
|
79,971
|
|
|
62,928
|
|
||||
Research and development
(1)
|
|
17,439
|
|
|
15,021
|
|
|
48,579
|
|
|
43,950
|
|
||||
Amortization of intangible assets
|
|
6,786
|
|
|
7,104
|
|
|
20,906
|
|
|
18,568
|
|
||||
Restructuring and other charges
|
|
46
|
|
|
1,384
|
|
|
573
|
|
|
1,792
|
|
||||
Acquisition costs and other related expenses
|
|
103
|
|
|
1,281
|
|
|
555
|
|
|
2,265
|
|
||||
Total operating expenses
|
|
51,785
|
|
|
45,928
|
|
|
150,584
|
|
|
129,503
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Income from operations
|
|
22,062
|
|
|
6,838
|
|
|
55,733
|
|
|
28,097
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Interest income
|
|
205
|
|
|
—
|
|
|
342
|
|
|
14
|
|
||||
Interest expense
|
|
(2,473
|
)
|
|
(999
|
)
|
|
(6,928
|
)
|
|
(1,101
|
)
|
||||
Other (expense) income, net
|
|
(328
|
)
|
|
66
|
|
|
(2,207
|
)
|
|
(1,065
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Income before income taxes
|
|
19,466
|
|
|
5,905
|
|
|
46,940
|
|
|
25,945
|
|
||||
Tax provision (benefit)
|
|
5,357
|
|
|
2,209
|
|
|
12,969
|
|
|
(4,837
|
)
|
||||
Net income
|
|
$
|
14,109
|
|
|
$
|
3,696
|
|
|
$
|
33,971
|
|
|
$
|
30,782
|
|
|
|
|
|
|
|
|
|
|
||||||||
Basic net earnings per share:
|
|
$
|
0.30
|
|
|
$
|
0.08
|
|
|
$
|
0.72
|
|
|
$
|
0.66
|
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted net earnings per share:
|
|
$
|
0.29
|
|
|
$
|
0.08
|
|
|
$
|
0.71
|
|
|
$
|
0.65
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares outstanding:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
47,258
|
|
|
46,844
|
|
|
47,164
|
|
|
46,685
|
|
||||
Diluted
|
|
47,958
|
|
|
47,532
|
|
|
47,783
|
|
|
47,473
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
(1) Includes stock-based compensation expense, allocated as follows:
|
|
|
||||||||||||||
Cost of revenues
|
|
$
|
188
|
|
|
$
|
169
|
|
|
$
|
599
|
|
|
$
|
364
|
|
Selling, general and administrative
|
|
$
|
4,039
|
|
|
$
|
2,929
|
|
|
$
|
12,465
|
|
|
$
|
11,175
|
|
Research and development
|
|
$
|
646
|
|
|
$
|
499
|
|
|
$
|
1,772
|
|
|
$
|
1,506
|
|
MERCURY SYSTEMS, INC.
|
|
|
|
|
|
|
|
|
||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||||||||||||||
(In thousands)
|
|
|
|
|
|
|
|
|
||||||||
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
March 31,
|
|
March 31,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
|
$
|
14,109
|
|
|
$
|
3,696
|
|
|
$
|
33,971
|
|
|
$
|
30,782
|
|
Depreciation and amortization
|
|
11,576
|
|
|
11,381
|
|
|
34,830
|
|
|
30,320
|
|
||||
Other non-cash items, net
|
|
6,333
|
|
|
3,344
|
|
|
16,497
|
|
|
8,806
|
|
||||
Changes in operating assets and liabilities
|
|
(5,800
|
)
|
|
(17,548
|
)
|
|
(13,750
|
)
|
|
(52,228
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net cash provided by operating activities
|
|
26,218
|
|
|
873
|
|
|
71,548
|
|
|
17,680
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
||||||||
Acquisition of businesses, net of cash acquired
|
|
(36,500
|
)
|
|
(179,598
|
)
|
|
(81,529
|
)
|
|
(185,396
|
)
|
||||
Purchases of property and equipment
|
|
(7,060
|
)
|
|
(3,475
|
)
|
|
(17,862
|
)
|
|
(11,067
|
)
|
||||
Other investing activities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(375
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net cash used in investing activities
|
|
(43,560
|
)
|
|
(183,073
|
)
|
|
(99,391
|
)
|
|
(196,838
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
||||||||
Proceeds from employee stock plans
|
|
—
|
|
|
—
|
|
|
1,677
|
|
|
2,049
|
|
||||
Payments under credit facilities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15,000
|
)
|
||||
Borrowings under credit facilities
|
|
36,500
|
|
|
195,000
|
|
|
81,500
|
|
|
210,000
|
|
||||
Payments of deferred financing and offering costs
|
|
—
|
|
|
—
|
|
|
(1,851
|
)
|
|
—
|
|
||||
Payments for retirement of common stock
|
|
(502
|
)
|
|
(209
|
)
|
|
(7,434
|
)
|
|
(15,118
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net cash provided by financing activities
|
|
35,998
|
|
|
194,791
|
|
|
73,892
|
|
|
181,931
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Effect of exchange rate changes on cash and cash equivalents
|
|
(44
|
)
|
|
(409
|
)
|
|
(55
|
)
|
|
(193
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net increase in cash and cash equivalents
|
|
18,612
|
|
|
12,182
|
|
|
45,994
|
|
|
2,580
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents at beginning of period
|
|
93,903
|
|
|
32,035
|
|
|
66,521
|
|
|
41,637
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents at end of period
|
|
$
|
112,515
|
|
|
$
|
44,217
|
|
|
$
|
112,515
|
|
|
$
|
44,217
|
|
UNAUDITED SUPPLEMENTAL INFORMATION RECONCILIATION OF GAAP TO NON-GAAP MEASURES
|
||||||
(In thousands)
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
March 31,
|
|
March 31,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Cash flows from operations
|
|
$
|
26,218
|
|
|
$
|
873
|
|
|
$
|
71,548
|
|
|
$
|
17,680
|
|
Capital expenditures
|
|
(7,060
|
)
|
|
(3,475
|
)
|
|
(17,862
|
)
|
|
(11,067
|
)
|
||||
Free cash flow
|
|
$
|
19,158
|
|
|
$
|
(2,602
|
)
|
|
$
|
53,686
|
|
|
$
|
6,613
|
|
UNAUDITED SUPPLEMENTAL INFORMATION RECONCILIATION OF GAAP TO NON-GAAP MEASURES
|
||||||
(In thousands, except per share data)
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
|||||||||||||||
|
|
March 31,
|
|||||||||||||||
|
|
2019
|
|
2018
|
|||||||||||||
Net income and earnings per share
|
|
$
|
33,971
|
|
|
$
|
0.71
|
|
|
$
|
30,782
|
|
|
$
|
0.65
|
|
|
Amortization of intangible assets
|
|
20,906
|
|
|
|
|
18,568
|
|
|
|
|||||||
Restructuring and other charges
|
|
573
|
|
|
|
|
1,792
|
|
|
|
|||||||
Impairment of long-lived assets
|
|
—
|
|
|
|
|
—
|
|
|
|
|||||||
Acquisition and financing costs
|
|
2,592
|
|
|
|
|
4,129
|
|
|
|
|||||||
Fair value adjustments from purchase accounting
|
|
713
|
|
|
|
|
1,132
|
|
|
|
|||||||
Litigation and settlement expense (income), net
|
|
325
|
|
|
|
|
—
|
|
|
|
|||||||
Stock-based and other non-cash compensation expense
|
|
14,995
|
|
|
|
|
13,306
|
|
|
|
|||||||
Impact to income taxes
(1)
|
|
(8,932
|
)
|
|
|
|
(24,648
|
)
|
|
|
|||||||
Adjusted income and adjusted earnings per share
|
|
$
|
65,143
|
|
|
$
|
1.36
|
|
|
$
|
45,061
|
|
|
$
|
0.95
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Diluted weighted-average shares outstanding:
|
|
|
|
47,783
|
|
|
|
|
47,473
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||
(1) Impact to income taxes is calculated by recasting income before income taxes to include the add-backs involved in determining adjusted income and recalculating the income tax provision using this adjusted income from operations before income taxes.
|
|||||||||||||||||
UNAUDITED SUPPLEMENTAL INFORMATION RECONCILIATION OF GAAP TO NON-GAAP MEASURES
|
||||||
(In thousands)
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
March 31,
|
|
March 31,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Organic revenue
|
|
$
|
139,812
|
|
|
$
|
106,835
|
|
|
$
|
382,939
|
|
|
$
|
330,816
|
|
Acquired revenue
|
|
34,824
|
|
|
9,501
|
|
|
94,842
|
|
|
9,501
|
|
||||
Net revenues
|
|
$
|
174,636
|
|
|
$
|
116,336
|
|
|
$
|
477,781
|
|
|
$
|
340,317
|
|
MERCURY SYSTEMS, INC.
|
|||
RECONCILIATION OF FORWARD-LOOKING GUIDANCE RANGE
|
|
|
|
Quarter Ending June 30, 2019
|
|
|
|
Year Ending June 30, 2019
|
|
|
|
(In thousands)
|
|
|
|
MERCURY SYSTEMS, INC.
|
|||
RECONCILIATION OF FORWARD-LOOKING GUIDANCE RANGE
|
|
|
|
Quarter Ending June 30, 2019
|
|
|
|
Year Ending June 30, 2019
|
|
|
|
(In thousands, except per share data)
|
|
|
|
|
|
Three Months Ending June 30, 2019
(1)
|
||||||||||||||
|
|
Range
|
||||||||||||||
|
|
Low
|
|
High
|
||||||||||||
GAAP expectation -- Net income and earnings per share
|
|
$
|
11,300
|
|
|
$
|
0.23
|
|
|
$
|
13,400
|
|
|
$
|
0.28
|
|
Amortization of intangible assets
|
|
6,300
|
|
|
|
|
6,300
|
|
|
|
||||||
Restructuring and other charges
|
|
—
|
|
|
|
|
—
|
|
|
|
||||||
Impairment of long-lived assets
|
|
—
|
|
|
|
|
—
|
|
|
|
||||||
Acquisition and financing costs
|
|
700
|
|
|
|
|
700
|
|
|
|
||||||
Fair value adjustments from purchase accounting
|
|
—
|
|
|
|
|
—
|
|
|
|
||||||
Litigation and settlement expense (income), net
|
|
—
|
|
|
|
|
—
|
|
|
|
||||||
Stock-based and other non-cash compensation expense
|
|
4,700
|
|
|
|
|
4,700
|
|
|
|
||||||
Impact to income taxes
(2)
|
|
(2,600
|
)
|
|
|
|
(2,600
|
)
|
|
|
||||||
Adjusted income and adjusted earnings per share expectation
|
|
$
|
20,400
|
|
|
$
|
0.42
|
|
|
$
|
22,500
|
|
|
$
|
0.47
|
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted weighted-average shares outstanding expectation:
|
|
|
|
48,100
|
|
|
|
|
48,100
|
|
|
|
Twelve Months Ending June 30, 2019
(1)
|
|||||||||||||||
|
|
Range
|
|||||||||||||||
|
|
Low
|
|
High
|
|||||||||||||
GAAP expectation -- Net income and earnings per share
|
|
$
|
45,200
|
|
|
$
|
0.95
|
|
|
$
|
47,400
|
|
|
$
|
0.99
|
|
|
Amortization of intangible assets
|
|
27,200
|
|
|
|
|
27,200
|
|
|
|
|||||||
Restructuring and other charges
|
|
600
|
|
|
|
|
600
|
|
|
|
|||||||
Impairment of long-lived assets
|
|
—
|
|
|
|
|
—
|
|
|
|
|||||||
Acquisition and financing costs
|
|
3,300
|
|
|
|
|
3,300
|
|
|
|
|||||||
Fair value adjustments from purchase accounting
|
|
700
|
|
|
|
|
700
|
|
|
|
|||||||
Litigation and settlement expense (income), net
|
|
300
|
|
|
|
|
300
|
|
|
|
|||||||
Stock-based and other non-cash compensation expense
|
|
19,700
|
|
|
|
|
19,700
|
|
|
|
|||||||
Impact to income taxes
(2)
|
|
(11,400
|
)
|
|
|
|
(11,400
|
)
|
|
|
|||||||
Adjusted income and adjusted earnings per share expectation
|
|
$
|
85,600
|
|
|
$
|
1.79
|
|
|
$
|
87,800
|
|
|
$
|
1.83
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Diluted weighted-average shares outstanding expectation:
|
|
|
|
47,900
|
|
|
|
|
47,900
|
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||||
(1) Rounded amounts used.
|
|||||||||||||||||
(2) Impact to income taxes is calculated by recasting income before income taxes to include the add-backs involved in determining adjusted income and recalculating the income tax provision using this adjusted income from operations before income taxes.
|
|||||||||||||||||