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8-K - FORM 8-K - MERCURY SYSTEMS INCd8k.htm
©
2009 Mercury Computer Systems, Inc.
www.mc.com
Tenth Annual
Investor’s
Conference
November 10, 2009
Exhibit 99.1


©
2009 Mercury Computer Systems, Inc.
www.mc.com
Forward-Looking Safe Harbor Statement
This presentation contains certain forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of
1995, including those relating to anticipated fiscal 2010 business performance and beyond. You can identify these statements by our use
of the words "may," "will," "should," "plans," "expects," "anticipates," "continue," "estimate," "project," "intend," and similar expressions.
These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected or
anticipated. Such risks and uncertainties include, but are not limited to, general economic and business conditions, including unforeseen
weakness in the Company's markets, effects of continued geopolitical unrest and regional conflicts, competition, changes in technology
and methods of marketing, delays in completing engineering and manufacturing programs, changes in customer order patterns, changes
in product mix, continued success in technological advances and delivering technological innovations, continued funding of defense
programs, the timing of such funding, changes in the U.S. Government's interpretation of federal procurement rules and regulations,
market acceptance of the Company's products, shortages in components, production delays due to performance quality issues with
outsourced components, the inability to fully realize the expected benefits from acquisitions or delays in realizing such benefits, challenges
in
integrating
acquired
businesses
and
achieving
anticipated
synergies,
and
difficulties
in
retaining
key
customers.
These
risks
and
uncertainties also include such additional risk factors as are discussed in the Company's recent filings with the U.S. Securities and
Exchange
Commission,
including
its
Annual
Report
on
Form
10-K
for
the
year
ended
June
30,
2009.
The
Company
cautions
readers
not
to place undue reliance upon any such forward-looking statements, which speak only as of the date made. The Company undertakes no
obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made.
Use of Non-GAAP (Generally Accepted Accounting Principles) Financial Measures
In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, the Company provides
non-GAAP financial measures adjusted to exclude certain specified charges, which the Company believes are useful to help investors
better understand its past financial performance and prospects for the future. However, the presentation of non-GAAP financial measures
is not meant to be considered in isolation or as a substitute for financial information provided in accordance with GAAP. Management
believes these non-GAAP financial measures assist in providing a more complete understanding of the Company's underlying operational
results and trends, and management uses these measures, along with their corresponding GAAP financial measures, to manage the
Company's business, to evaluate its performance compared to prior periods and the marketplace, and to establish operational goals. A
reconciliation of GAAP to non-GAAP financial measures discussed in this presentation is contained in the Company’s First Quarter of
Fiscal
Year
2010
earnings
release,
which
can
be
found
on
our
website
at
www.mc.com/mediacenter/pressreleaseslist.aspx.
1


©
2009 Mercury Computer Systems, Inc.
www.mc.com
Corporate Overview
Mark Aslett, CEO, Mercury Computer Systems
Mercury Situational Business Analysis
Plans for ACS Defense –
the Need for a Converged Sensor Network
Mercury Federal –
Evolving our COTS business Model
Keynote:  John J. Young
Coffee Break (15 min)
Advanced Computing Solutions
Mercury Federal Systems (MFS)
Financial Review
Closing Remarks / Q&A
Agenda
2


©
2009 Mercury Computer Systems, Inc.
www.mc.com
Mercury is a platform-independent, best-of-breed 
ISR systems and services company
Founded in 1981
HQ in Massachusetts;
R&D in MA, VA, AL
517 employees
Leading provider of commercial
high-performance signal,
image and sensor processing
Focused on growing
defense ISR market
FY2009 revenues of $189M
NASDAQ: MRCY
3
Note:
$189M
Total
Revenue
includes
$2M
interco
eliminations


©
2009 Mercury Computer Systems, Inc.
www.mc.com
4
Phases of Mercury's transformation
3 Overlapping Phases –
Parallel Execution


©
2009 Mercury Computer Systems, Inc.
www.mc.com
Mercury operational and financial highlights
5
Operations
Refocused the business
Completed divestiture of all
non-core assets
Improved working capital
Refreshing product portfolio
Developed a strong growing
position in ISR market
Growing services and systems
integration business
Financial
Restored profitability
Double-digit bookings and
backlog growth
Increased operating cash flows
Repaid $125m debenture
Robust target business model
17-18% Adj. EBITDA
$100M shelf registration
effective
We enable the military to gather more relevant information,    
evaluate it faster, share and act upon it sooner


©
2009 Mercury Computer Systems, Inc.
www.mc.com
5 key business growth drivers
6
Product
Portfolio
Refresh
Application
Expansion
Platform
Penetration
Customer
Expansion
Expand Total
Addressable
Market to $3.5B
Increased
System Content
Platform
Penetration
Application
Expansion
Expand Total
Addressable
Market to $30B
Defense
Electronics
Market
Focus on
Persistent ISR
Growth in
Federal Services
Filed $100M
Universal Shelf
Complementary
ISR Businesses
Semiconductor  
Market
Rebound


©
2009 Mercury Computer Systems, Inc.
www.mc.com
ACS 5-year design win value increased 22% overall in
FY09 with 51% growth in defense
7
Defense Highlights
Aegis –
Naval BMD, C4I
Missile Defense –
Ground Radar
Argon –
Naval SIGINT
Predator –
Airborne Radar
JCREW –
Ground SIGINT
Rivet Joint –
Airborne SIGINT
Gorgon Stare –
Airborne ISR
NASP –
Airborne Sonar
Guardrail –
Airborne SIGINT
Commercial Highlights
KLA Tencor –
Semiconductor
Hughes –
Satellite Comms
Rapiscan –
Baggage Scanning
L3 –
Baggage Scanning
ASML –
Semiconductor
Note:
Potential is 5 year probable value based on customer-supplied information at time design win awarded. Actual
program value may be higher or lower


©
2009 Mercury Computer Systems, Inc.
www.mc.com
Success in semiconductor equipment –
position controller for lithography
Application Requirement:
Low-latency, deterministic
processing for precision control
in Stepper/Scanners
Initial Deal:
$10M pre-production orders booked
and partially shipped
Starting to receive production orders
Integrated platforms for production
(immersion/EUV, new/upgrades)
Advanced processing technology:
AdvancedTCA utilizing serial RapidIO
8
Note:
Potential is 5 year probable value based on customer-supplied information at time design win awarded. Actual
program value may be higher or lower
Total Opportunity Potential: ~$100M over 5 years


©
2009 Mercury Computer Systems, Inc.
www.mc.com
Services and Systems Integration drove significant
revenue growth in its first full year of operation
Expand ACS total
addressable market
From startup in FY08, FY09
bookings growth +106%,
revenue growth +157%
FY09 proved the business
model and potential
Enables
substitute
and
3
party technologies e.g. blade
computing
Enables faster time to
revenue on programs and
increased deal sizes
9
rd


©
2009 Mercury Computer Systems, Inc.
www.mc.com
Success in Services & System Integration –
Radar Digital Processor
Project Requirement:
Phased Array Radar for Ground
Missile Defense (FMS)
Initial Deal:
$12M engineering services and
system integration
$6M production order (1 country)
Advanced processing technology:
OpenVPX™
embedded computing
10
Note:
Potential is 5 year probable value based on customer-supplied information at time design win awarded. Actual
program value may be higher or lower
Future Opportunity Potential:
$12M total production for next 2 countries;
~15-20 countries expected to follow


©
2009 Mercury Computer Systems, Inc.
www.mc.com
Strong revenue ($5.7M) and
bookings ($11.9M) in FY09
Concurrently, generating
new opportunities for ACS
8 active engagements;
3 direct prime contracts
Recognized by the DoD as
advanced processing
architects for next-gen
airborne ISR systems          
Mercury
Federal
Systems
(MFS)
delivered
significant
first
year
bookings
and
revenue
11


©
2009 Mercury Computer Systems, Inc.
www.mc.com
MFS success story –
Wide Area Airborne Surveillance
Project Requirement:
Concurrent near real-time    
situational awareness for
MQ-9 Reaper UAV
(Gorgon Stare)
Initial Deal:
$7M bookings
1/2 hardware / software
1/2 engineering services
Advanced processing technology:
Embedded GPUs w/IO
12
Note:
Potential is 5 year probable value based on customer-supplied information at time design win awarded. Actual
program value may be higher or lower
Total Opportunity Potential: ~ $20M


©
2009 Mercury Computer Systems, Inc.
www.mc.com
Defense department spending FY10 forecast
13
Source: Defense Appropriations Act FY200-2009, National Defense Budget Estimates FY200, OMB Historical Tables FY2009


©
2009 Mercury Computer Systems, Inc.
www.mc.com
Military electronics is a market sweet spot
14
Retrofit and upgrades remain
strong for legacy programs
Increased need for EW;
intelligence, surveillance,
reconnaissance assets
Networked nodal platforms, 
time to information
Next-gen onboard processing,
exploitation and dissemination
architecture critical
Sources : The Military Electronics Briefing, 2008 Ed. , The TEAL Group, Frost & Sullivan, U.S C4ISR Market 2007


©
2009 Mercury Computer Systems, Inc.
www.mc.com
Key defense platforms and programs driving growth
Representative Program List
15
Global Hawk
Predator/Reaper
Rivet Joint
Gorgon Stare
F-16
F-35 JSF
BAMS
MESA
P8-MMA
MP-RTIP
Aegis
RDP -
Ground Missile
Defense Radar
THAAD
JCREW
Software
Defined Jammer
Guardrail
SSEE(F)
CADF
Deepwater


©
2009 Mercury Computer Systems, Inc.
www.mc.com
FY10
budget
reprioritization
benefiting
Mercury
Increase ISR spend by $2B
Build a 43 CAP fleet of Predator class UAVs by end of FY10
Increase manned turboprop ISR capabilities
Initiate ISR R&D for enhancements and experimental platforms
Sustain air superiority
Increase F35 JSF from 14 aircraft in FY09 to 30 in FY10
Increase JSF funding from $6.8B to $10.4B
Purchase 513 F35s over next 5 years
Ultimately purchase 2,443 F35s
Increase theatre missile defense
Additional $41M for radar support of THAAD
Fund conversion of 6 more Aegis BMD ships
Increase spending on counter IED i.e. JCREW
16


©
2009 Mercury Computer Systems, Inc.
www.mc.com
Government/DoD
frustration leads to defense
procurement reform
Today’s Model
Government frustrated
with current model
Platform-centric approach
Proprietary closed system
architectures
Significant cost overruns
Significant schedule slips
Emerging Model
Best-of-breed model
emerging
More commercial items
Open platform-independent
architectures
QRC –
rapid deployment,
lower cost and risk
Likely to occur for signal
processing and computing
17
Budget
pressure
and
significant
schedule
slippage
is
leading
to Defense procurement reforms that could benefit Mercury


©
2009 Mercury Computer Systems, Inc.
www.mc.com
To
the
warfighter,
time
to
information
is
critical
to address the growing gap between:
What’s analyzed?
What’s collected?
100GB per mission
100TB per mission
Force Protection
Mission Critical
Real-time
Forensics
Last 18 hours
Recent minutes
For decision makers who need timely,
actionable, and relevant information
What’s
actionable?
?
18


©
2009 Mercury Computer Systems, Inc.
www.mc.com
19
Airborne ISR R&D costs
Signal Processing /
Systems Integration
Platform
Sensor
Datalink
Ground
Station
10%
40%
30%
5%
15%
45%
10%
15%
10%
10%
5%
5%
Datalink
Platform
Sensor
Ground Station
Application Acceleration/
Systems Integration
Warfighter
Terminals
Warfighter
Terminals
Broadcast
Provision
Broadcast Provision
Source:  DoD
Budget Request FY93 and FY2008
1993
2008
Mercury’s
Opportunity
Mercury’s
Opportunity
Budget priorities being realigned to maintain technology edge


©
2009 Mercury Computer Systems, Inc.
www.mc.com
Mercury's new Converged Sensor Network™
(CSN™)
vision for persistent ISR
A revolutionary open architecture that combines
20
SAN
Video
Radar
SIGINT
Signal
Processing
Signal
Processing
Image
Processing
Information
Dissemination
Data
Exploitation
Become the government’s trusted partner for next-generation
ISR platform signal processing and computing
Multi-Sensor
Signal
Processing
Information
Management
Technologies
Transformational
Access to
Information in the
Tactical Edge
Global
Information
Grid


©
2009 Mercury Computer Systems, Inc.
www.mc.com
Positioned for growth
Focused on growing ISR market segment
Creating a platform-independent, best-of-breed ISR
systems and services company
Unique capabilities in commercial high-performance
embedded signal, image and sensor processing
Building government amenable business model in line
with expected Defense procurement reform
Delivering strong organic growth in defense with robust
target business model
Will pursue complementary ISR acquisitions to scale
21


©
2009 Mercury Computer Systems, Inc.
www.mc.com
Corporate Overview
Keynote
John J. Young, Former Undersecretary of Defense, ATL
Perspectives on Acquisition Challenges, Open Architectures, Budget
Outlook, and Future Program Directions
Coffee Break (15 min)
Advanced Computing Solutions
Mercury Federal Systems (MFS)
Financial Review
Closing Remarks / Q&A
Agenda
22


©
2009 Mercury Computer Systems, Inc.
www.mc.com
Corporate Overview
Keynote:  John J. Young
Advanced Computing Solutions
Didier Thibaud, SVP & GM, Advanced Computing Solutions
Commercial Market Growth
Increase Quantity/Value of Design Wins
Services and Systems Integration
Mercury Federal Systems (MFS)
Financial Review
Closing Remarks / Q&A
Agenda
23


©
2009 Mercury Computer Systems, Inc.
www.mc.com
Advanced Computing Solutions (ACS)
24
Focus on providing solutions for
high-performance embedded
computing
Leverage technologies and
product between commercial
and defense markets
Focus on C4ISR in defense
Optimized performance for SWAP
Quick Response Capabilities (QRC)
through our service offerings


©
2009 Mercury Computer Systems, Inc.
www.mc.com
5 key business growth drivers
25
Commercial
Increase
Quantity/Value
of Design Wins
Services and
Systems
Integration
Mercury
Federal
Systems
Acquisitions
Product
Portfolio
Refresh
Application
Expansion
Platform
Penetration
Customer
Expansion
Expand Total
Addressable
Market to $3.5B
Increased
System Content
Platform
Penetration
Application
Expansion
Expand Total
Addressable
Market to $30B
Defense
Electronics
Market
Focus on
Persistent ISR
Growth in
Federal Services
Filed $100M
Universal Shelf
Complementary
ISR Businesses
Semiconductor  
Market
Rebound


©
2009 Mercury Computer Systems, Inc.
www.mc.com
ACS commercial segment dynamics
Commercial revenues down 24% FY08 to FY09
Positioning for a turnaround
26


©
2009 Mercury Computer Systems, Inc.
www.mc.com
Commercial growth factors
Semiconductor –
market rebound
Early signs of market recovery
Design wins entering production
New potential opportunities
Communication
Entering new area: 4G test equipment
New satellite communication systems
in deployment
Homeland Security
Design wins still in development
New opportunities
27


©
2009 Mercury Computer Systems, Inc.
www.mc.com
Strength in ACS defense markets
Radar (32% CAGR FY07-09) and EW (9% CAGR) driving growth
28


©
2009 Mercury Computer Systems, Inc.
www.mc.com
5 key business growth drivers
29
Commercial
Increase
Quantity/Value
of Design Wins
Services and
Systems
Integration
Mercury
Federal
Systems
Acquisitions
Product
Portfolio
Refresh
Application
Expansion
Platform
Penetration
Customer
Expansion
Expand Total
Addressable
Market to $3.5B
Increased
System Content
Platform
Penetration
Application
Expansion
Expand Total
Addressable
Market to $30B
Defense
Electronics
Market
Focus on
Persistent ISR
Growth in
Federal Services
Filed $100M
Universal Shelf
Complementary
ISR Businesses
Semiconductor  
Market
Rebound


©
2009 Mercury Computer Systems, Inc.
www.mc.com
The Warfighter’s
challenge        
to Government?
Time to      
Information
Key market drivers
30
Open Systems
Quick Response Capability/
Increase Outsourcing
The Government’s challenge     
to Primes?
Lower Costs            
Faster to Theater
Enable
Deliver


©
2009 Mercury Computer Systems, Inc.
www.mc.com
Open architecture solutions to cover the ISR spectrum
31
Ensemble
ES 1000
Ensemble
ES 3000
Ensemble
ES 5000
Ensemble
ES 6000
Ensemble
ES 7100
Ensemble
ES 8000
Ensemble
ES 2000


©
2009 Mercury Computer Systems, Inc.
www.mc.com
Growth: program penetration –
SAR Predator
Provide DSP processing for SAR
Expand system footprint
RF and acquisition subsystem
Storage subsystem
Command and Control
Systems integration
32
Mercury
Processing
Boards
Opportunities for
new design wins,
product growth
and services
Total Opportunity Potential: Double our $ content per UAV


©
2009 Mercury Computer Systems, Inc.
www.mc.com
AEGIS BMD radar processing
Selected for BMD Radar
Most powerful deployed embedded computer
for digital beam-forming
Extend to Radar Control System
Addressable market 60 ships out of 92
Plan of Record for ship upgrade:
33
2011
2012
2013
2014
2015
Total
6
6
6
6-8
6-8
30-34
Additional 8 ships to be built
Upside with FMS sales and additional ships in out years
Total 5 year opportunity: $100M


©
2009 Mercury Computer Systems, Inc.
www.mc.com
Growth: platform expansion -
AEGIS
Expand to new sensor systems
beyond BMD radar
Electronic Warfare
SIGINT
EO / IR
Combat System
Example EW subsystem
Starting deployment in 2011-2012
Will be used on LCS
34
Surface Electronic
Warfare System
Additional Opportunity Potential: $100M


©
2009 Mercury Computer Systems, Inc.
www.mc.com
Growth: expand to new customers
Historically targeted LM,
Raytheon, NGC based on
Radar and SIGINT focus
New design wins with BAE,
ITT, SNC, Goodrich enabling
expansion in EW, EO/IR
and C4I
New product portfolio
opening new markets
like EO / IR
35


©
2009 Mercury Computer Systems, Inc.
www.mc.com
5 key business growth drivers
36
Product
Portfolio
Refresh
Application
Expansion
Platform
Penetration
Customer
Expansion
Expand Total
Addressable
Market to $3.5B
Increased
System Content
Platform
Penetration
Application
Expansion
Expand Total
Addressable
Market to $30B
Defense
Electronics
Market
Focus on
Persistent ISR
Growth in
Federal Services
Filed $100M
Universal Shelf
Complementary
ISR Businesses
Semiconductor  
Market
Rebound


©
2009 Mercury Computer Systems, Inc.
www.mc.com
The changing environment opens growth
opportunities through Systems Integration
Government demands increasing
Provide more warfighting capability more rapidly at lower cost
Quick reaction capability (QRC)
New requirements rapidly evolving
UAV and UGV driving small high-density systems
Proven solutions in deployment
New technology driving complex solutions
Risk reduction
“Best-of-breed”
solution
Established track record
37


©
2009 Mercury Computer Systems, Inc.
www.mc.com
ACS summary –
well positioned for growth
Commercial business ready for rebound
ISR requirements in ACS sweet spot
Full product refresh driving new design wins
Go-to-Market Strategy focusing on program, platform
and customer expansion
Services and Systems Integration tapping $3.5B market
Bridge to MFS –
Hybrid Business Model
38


©
2009 Mercury Computer Systems, Inc.
www.mc.com
Corporate Overview
Keynote:  John J. Young
Advanced Computing Solutions
Mercury Federal Systems (MFS)
J. Michael Johnson, RADM USN (Retired) and Interim President, MFS
Evolving our COTS business Model
Financial Review
Closing Remarks / Q&A
Agenda
39


©
2009 Mercury Computer Systems, Inc.
www.mc.com
5 key business growth drivers
40
Product
Portfolio
Refresh
Application
Expansion
Platform
Penetration
Customer
Expansion
Expand Total
Addressable
Market to
$3.5B??
Increased
System Content
Platform
Penetration
Application
Expansion
Expand Total
Addressable
Market to $30B
Defense
Electronics
Market
Focus on
Persistent ISR
Growth in
Federal Services
Filed $100M
Universal Shelf
Complementary
ISR Businesses
Semiconductor  
Market
Rebound


©
2009 Mercury Computer Systems, Inc.
www.mc.com
Mercury Federal Systems overview
Wholly owned subsidiary of MRCY
Incorporated 2007 in Delaware
Arlington, VA office open May 2008
13 employees
Focus on Persistent ISR government market
$12M bookings in FY09
8 programs
TS facility clearance
DCAA approved labor rates
41


©
2009 Mercury Computer Systems, Inc.
www.mc.com
MFS core strategic vision
Be the leading provider of consulting and software
engineering services to:
Deploy leading-edge computing capabilities for C4ISR systems
Increase client agility and compatibility
Reduce technological and financial risk
Accelerate system performance
Leverage
Mercury’s
expertise
to
become
the
architect
and steward of the DoD’s “smart processing”
initiative
Succeed with Mercury’s breadth, depth, and trusted
position in ISR sensors, platforms, and programs and
its heritage in COTS
42


©
2009 Mercury Computer Systems, Inc.
www.mc.com
The Federal market is continuously evolving
43
DoD
1993
2010
2013e
Budget ($B)
258
498
511
Supplemental ($B)
None
+128 GWOT
None planned
R&D ($B)
44
79
63
Procurement ($B)
56
105
113
C4ISR Budget ($B)
13
21
24
UAS Platforms (#)
25
2,100
3,300
Fed Svcs
($B)
95
250
310
Source:  DoD
Budget Request FY93 and FY2008
MFS focused on capturing growth in C4ISR
systems integration and related engineering services


©
2009 Mercury Computer Systems, Inc.
www.mc.com
Collection cycles appropriate
to track targets of interest
in any theatre of operation
Collection cycles appropriate
to track targets of interest
in any theatre of operation
Era of “persistent conflict”
defines ISR Needs
44
Global coverage
On station 24/7
Multi-function /
multi-sensor
Networked, fused data
Tactical, smart
dissemination
Robust, long endurance
Persistent ISR strives
to understand activity
as it is taking place


©
2009 Mercury Computer Systems, Inc.
www.mc.com
45
On-demand sensing
Machine-assisted
processing,
exploitation, and
dissemination
Direct to the
warfighter
In time to do
something, < 1s
Time-to-information
is our differentiator
Time-to-information
is our differentiator
Tactical Smart Processing is our strength
45
Leveraging our
trusted position in
ISR market


©
2009 Mercury Computer Systems, Inc.
www.mc.com
Maximize our
State-of-the-Shelf
Expertise
MCS/MFS approach –
hybrid business model
46
46


©
2009 Mercury Computer Systems, Inc.
www.mc.com
Benefits of a hybrid business model to Mercury
Closer to the end customer –
track the money flows,
insight years ahead of the competition
Leverages current business model to a future state
Funded product development helps lower R&D expenses,
accelerate growth and reduces risk
Larger deal sizes overall –
fighting for a bigger piece of
the platform and military electronics pie
MFS services-led strategy will balance hardware revenue
lower volatility once established
MFS faster time to revenue than pure hardware model
47


©
2009 Mercury Computer Systems, Inc.
www.mc.com
MFS program example: Gorgon Stare (WAAS)
Validation of MCS & MFS
leadership and agility
Won C4ISR Journal’s
2009 “Big 25”
award in
“Innovations”
category
Partnered with other
agile companies
(Sierra
Nevada
Corp,
ITT,
Adam Works, General Atomics)
Rapid prototyping leading to first
flight demos in 2010
48


©
2009 Mercury Computer Systems, Inc.
www.mc.com
MFS summary
Currently executing 8
Programs –
3 as Prime
Bookings grew from $.4M in
2008 to $11.9M
in 2009
Revenue grew from $.2M in
2008 to $5.7M in 2009
Positioning MFS on critical
path of several key
government programs
Demonstrating success on
current contracts
Assembling world-class
team of ISR experts
49
49


©
2009 Mercury Computer Systems, Inc.
www.mc.com
Agenda
50
Corporate Overview
Keynote:  John J. Young
Advanced Computing Solutions
Mercury Federal Systems (MFS)
Financial Review
Bob Hult, CFO, Mercury Computer Systems
FY09 Financial Results
FY10 Guidance
Closing Remarks / Q&A


©
2009 Mercury Computer Systems, Inc.
www.mc.com
51
FY07 –
FY09: Restored profitability
51
Note:
All historical income statement figures are as reported in the Company’s earnings press release at the end of the applicable fiscal year
and have not been restated for operations that have been discontinued subsequent to that time.


©
2009 Mercury Computer Systems, Inc.
www.mc.com
Major business dynamics
Focus on strengthening and growing the defense business
52
Note:
Excludes $2M interco
eliminations


©
2009 Mercury Computer Systems, Inc.
www.mc.com
53
Strong defense revenue
53
Note:
All historical figures adjusted for the discontinued operations
14% Defense CAGR
FY07 –
FY09
Revenue ($M)
Commercial
Defense


©
2009 Mercury Computer Systems, Inc.
www.mc.com
Strong growth in bookings and backlog
FY07-FY09:
Total Company
11% Bookings CAGR
18% Backlog CAGR
Defense
28% Bookings CAGR
28% Backlog CAGR
54
54
Note:
Historical figures adjusted for discontinued operations
Bookings
Total Company $M
Ending Backlog
170
199
210
70
78
98
0
25
50
75
100
125
150
175
200
225
FY07
FY08
FY09
Defense
$107
Defense
$145
Defense
$174
Defense
$58
Defense
$67
Defense
$94


©
2009 Mercury Computer Systems, Inc.
www.mc.com
FY07-FY09 profitability improves
55
Note:
GAAP
Net
Income
and
EPS
results
are
from
continuing
operations


©
2009 Mercury Computer Systems, Inc.
www.mc.com
Improved working capital efficiencies
Supply chain  
transformation
Operational efficiencies
Manufacturing lead times
Cost of quality
Competitive advantage
for Mercury and
customers
Inventory reduced $13.9M
since Q3 FY08 as reported
Customer satisfaction
Blue chip customers
End-of-quarter
shipment skew
56


©
2009 Mercury Computer Systems, Inc.
www.mc.com
Much improved cash conversion cycle
57


©
2009 Mercury Computer Systems, Inc.
www.mc.com
58
Repaid debt and improved cash balance
Note:
ARS settlement at par ($50M) with UBS 6/30/10


©
2009 Mercury Computer Systems, Inc.
www.mc.com
Strong and unencumbered balance sheet
59
Q1'10
($M)
Cash and Marketable Securities
94
Total Current Assets
152
Total Assets
226
Debt
33
Total Liabilities
76
Shareholders' Equity
150
Generated $2M free cash flow in Q1
Zero cost ARS loan of $33M
$50M ARS balance repaid at par 6/30/10
22.5M shares outstanding


©
2009 Mercury Computer Systems, Inc.
www.mc.com
60
Robust target business model
Notes:
Target Business Model assumes organic growth. ACS /MFS approx 90%/10% revenue split
Adj
EBITDA adjusts for Depreciation  2-3% of revenue and Stock Based Comp 2-3% of revenue 
Target
Business
Model


©
2009 Mercury Computer Systems, Inc.
www.mc.com
Q1'10 prior year comparison (GAAP)
61
Notes:
1)All historical income statement figures have been restated for operations that have been discontinued subsequent to that time.
2)  Adj
EBITDA is earnings before impairment charges, interest, taxes, restructuring, stock compensation, amortization and depreciation.


©
2009 Mercury Computer Systems, Inc.
www.mc.com
Last 9 quarter’s revenues and EPS exceeded
or met the top end of guidance
62
2008
Q1
Q2
Q3
Q4
Reported
Guidance
Reported
Guidance
Reported
Guidance
Reported
Guidance
Revenue
($M)
49.2
48.0
52.6
51.0
56.5
53.0-55.0
55.2
53.0-56.0
EPS
($)
0.09
(0.08)
0.04
(0.05)
0.04
(0.04)-
0.00
0.01
(0.05)-
0.01
2009
Q1
Q2
Q3
Q4
Revenue
($M)
49.1
47.0-49.0
50.7
47.0-
49.0
50.6
48.0-50.0
48.4
46.0-
48.0
EPS
($)
0.07
(0.07)-
(0.03)
0.03
(0.05)-
0.00
0.20
0.05-0.09
0.13
0.05-
0.08
2010
Q1
Q2
Q3
Q4
Revenue
($M)
47.4
43.0-45.0
EPS
($)
0.19
0.03-0.08
Note:
FY08
FY09 Guidance Reporting are on a Non-GAAP basis; Q1 FY10 is on a GAAP basis


©
2009 Mercury Computer Systems, Inc.
www.mc.com
Q2’10 guidance
63
Quarter Ending December 31, 2009
Low
High
Revenues ($M)
$40
$42
GAAP EPS
($0.08)
($0.04)
Adj
EBITDA
$0.6
$1.9
Note -
Adj
EBITDA Adjustments:
Net Income
(1.8)
(0.8)
Stock compensation
1.3
1.3
Interest Expense
0.1
0.1
Interest Income
(0.1)
(0.1)
Taxes
(0.7)
(0.4)
Amortization
0.4
0.4
Depreciation
1.4
1.4
Adj EBITDA
0.6
1.9


©
2009 Mercury Computer Systems, Inc.
www.mc.com
Financial summary
Returned to profitability
11% bookings and 18% backlog growth (CAGR)
Improved working capital efficiencies
Healthy cash flows from operations
Strong and unencumbered balance sheet
Robust target business model 17-18% Adj. EBITDA
$100M shelf registration effective
64


©
2009 Mercury Computer Systems, Inc.
www.mc.com
www.mc.com
NASDAQ: MRCY
Thank You
65


©
2009 Mercury Computer Systems, Inc.
www.mc.com
Appendix


©
2009 Mercury Computer Systems, Inc.
www.mc.com
67
GAAP to Non-GAAP Reconciliation
Notes:
1)FY07
FY08
GAAP
net
income
(loss)
figures
are
as
reported
in
the
Company’s
earnings
press
release
at
the
end
of
the
applicable
fiscal
period
2)FY09 GAAP net income (loss) figures are restated for discontinued operations as reported
3)GAAP related items: stock comp, amortization, restructuring and adjustment to taxes
Year Ended
Year Ended
Year Ended
June 30, 2007
(1)
June 30, 2008
(1)
June 30, 2009
(2)
GAAP net income (loss)
($37.8)
($35.4)
($1.3)
Adjustment to exclude stock-based compensation
10.6
10.4
4.6
Adjustment to exclude inventory write-down
0.0
0.8
0.0
Adjustment to exclude in-process research and development
3.1
0.0
0.0
Adjustment to exclude amortization of acquired intangible assets
7.2
7.3
2.4
Adjustment to exclude impairment of goodwill and long-lived assets
0.1
18.0
0.0
Adjustment to exclude restructuring
5.5
5.2
1.7
Adjustment to exclude gain on sale of long-lived assets
0.0
(3.2)
0.0
Adjustment for tax impact
5.2
0.2
(5.6)
Non-GAAP net income (loss)
($6.2)
$3.3
$1.8
Adjustment to exclude taxes and other income (expense)
7.9
2.8
0.2
Non-GAAP Income (loss) from operations
($14.1)
$0.5
$1.6
GAAP net income (loss)
($37.8)
($35.4)
($1.3)
Adjustment to exclude loss from disco ops, net of income taxes
(8.9)
(30.0)
(20.3)
Adjustment to exclude gain (loss) on sale of disco ops
0.0
(1.0)
11.1
GAAP net income (loss) from continuing operations
($28.9)
($4.4)
$7.9
Adjustment to exclude GAAP related items
(3)
3.1
Non-GAAP net income (loss) from continuing operations
$11.0
Adjustment to exclude taxes and other income (expense)
5.4
Non-GAAP Income (loss) from continuing operations
$16.4
Net income (loss) per share -
Diluted -
GAAP
($1.78)
($1.64)
($0.06)
Net income
(loss)
per
share
-
Diluted
-
Non-GAAP
($0.29)
$0.15
$0.08
Net income (loss) per share -
continuing operations -
Diluted -
GAAP
($1.36)
($0.21)
$0.35
Net income
(loss)
per
share
-
continuing
operations
-
Diluted
-
Non-GAAP
$0.49
Weighted
average
shares
-
Diluted
-
GAAP
21.2
21.6
22.4
Weighted
average
shares
-
Diluted
-
Non-GAAP
21.2
22.0
22.4


©
2009 Mercury Computer Systems, Inc.
www.mc.com
Adjusted EBITDA reconciliation
68
Note:
All historical income statement figures have been restated for operations that have been discontinued subsequent to that time.
Quarter Ended
Quarter Ended
Sept 30, 2008
Sept 30, 2009
Income from Operations
$1.3
$5.1
Other income / (expense)
0.0
0.3
Income Tax Expense
0.0
0.9
Net income from continuing operations
$1.4
$4.4
Stock-based compensation expense
1.1
0.5
Interest Expense
0.8
0.1
Interest Income
(1.0)
(0.1)
Income Tax Expense
0.0
0.9
Restructuring
0.2
0.3
Amortization of acquired intangible assets
1.0
0.4
Depreciation
1.5
1.3
Adj
EBITDA
$5.1
$7.8