Wednesday April 18, 4:01 pm Eastern Time
Press Release
Mercury Computer Systems Reports 45% Growth in Revenues, 30% Rise in Net Income in Third Quarter
Record Quarterly Revenues of $47 Million and EPS of $0.34 Continue Company's Strong Financial Performance
CHELMSFORD, Mass.--(BUSINESS WIRE)--April 18, 2001-- Mercury Computer Systems, Inc. (NASDAQ:MRCY - news), a leading provider of embedded real-time digital signal and image processing systems, today reported results for the third quarter and first nine months of fiscal year 2001, ended March 31, 2001.
Revenues for the third quarter were $47.0 million, a 45% increase over the $32.4 million in revenue for the third quarter of the prior fiscal year. Net income for the quarter was $7.9 million, a 30% increase over the $6.1 million in net income in the year-ago quarter, representing 41 consecutive quarters of profitable company performance. Earnings per common share (diluted) was $0.34, a 31% year-to-year growth over the EPS of $0.26 reported in the prior-year quarter.
Revenues for the nine months ended March 31, 2001 were $131.7 million, a 25% increase over the $105.6 million in revenue reported for the nine months ended March 31, 2000. Net income for the nine months was $22.0 million, representing 9% growth over the $20.2 million in net income reported for the first nine months of the prior fiscal year. Earnings per common share (diluted) for the nine months was $0.95, a 7% increase over the $0.89 EPS reported for the nine-month period ended March 31, 2000.
``We are pleased to report another very strong quarter of performance with growth in revenue, earnings and cash generation,'' said Jay Bertelli, president and CEO of Mercury Computer Systems. ``We saw year-to-year growth in all segments of our business, led by our defense electronics group, where revenues grew 55% year-over-year. Medical diagnostic imaging revenues grew 36% year-over-year, and our OEM solutions group revenues grew 17% compared to the previous year's quarter. We delivered record quarterly performance while continuing to make the aggressive investments necessary to position ourselves for strong future growth in new application markets.''
Third Quarter Highlights
In the defense electronics sector, revenues for the third quarter were $31.4 million representing 67% of the total revenues for the quarter. The third quarter was a very strong bookings quarter in our worldwide defense business. Overall Mercury achieved 15 new program wins, with the international defense team once again showing significant success accounting for five of those wins. If each of these new programs were to go to full deployment, they collectively represent a five-year potential in excess of $50 million in total sales.
Mercury's worldwide medical diagnostic imaging revenues for the quarter were $10.3 million, 22% of the total revenues for the quarter. This segment continues to grow above plan for the year as the company's medical OEMs experience better-than-forecasted shipments in essentially all modalities.
The OEM solutions business grew to $5.3 million representing 11% of the company's total revenue for the quarter. Growth in this segment has come primarily in semiconductor imaging applications, including lithography and wafer inspection and testing applications. The company continues to make progress in developing new business opportunities as the semiconductor industry migrates to .13 micron and smaller design rules. The new generation of systems designed for these tiny geometries requires tremendous image-processing capability for which Mercury's scalable, ultimate performance architecture is ideally suited.
In the wireless communications market, the business unit continues to make progress in positioning the company to capitalize on this tremendous future market potential. Development work has continued on the prototype communications computer being used to demonstrate Mercury's capabilities to potential customers. The company is focusing on understanding general industry trends as the adoption rate of 3G appears to be shifting out. This trend will have no impact on Mercury's fiscal 2002 revenue growth since the company had anticipated FY02 being a development year.
Business Outlook
In looking ahead to the rest of the year, Mercury's CFO, G. Mead Wyman, said, ``Fiscal 2001 remains on track to produce another year of record financial performance. We are intently aware of the continued economic slowdown reflected in the worldwide markets and the reality that our customers could see some unanticipated impact to their business in future quarters. While optimistic that we will achieve our plan for the year, it is only prudent we remain cautious in our outlook for the remaining quarter of 2001 and the next few quarters as we work our way through this challenging period of economic uncertainty.
``Our guidance for financial performance in the fourth quarter fiscal 2001 continues to be for revenues of approximately $49 million and EPS of approximately $0.36. The company's guidance for fiscal 2002 is to anticipate revenues to be in the range of $215 million to $230 million, and EPS to be in the range of $1.55 to $1.60. During the fourth quarter the company will be completing its annual planning process. We will provide more specific guidance for fiscal 2002 with our fourth-quarter 2001 earnings report,'' concluded Mr. Wyman.
Forward-Looking Safe Harbor Statement
This press release contains certain forward-looking statements including those dealing with fourth quarter and fiscal 2002 business and segment growth. These forward-looking statements 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, delays in completing various engineering and manufacturing programs, changes in customer order patterns, changes in product mix, continued success in technological advances and delivering technological innovations, shortages in components, production delays due to performance quality issues with outsourced components, and various other factors beyond the Company's control. These risks and uncertainties include such additional factors as are described in the Company's recently filed reports with the Securities and Exchange Commission in the USA. 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.
Conference Call Information
Mercury Computer Systems will hold a quarterly conference call with investors and analysts on Wednesday, April 18, 2001 at 5:00 p.m. EDT. You may listen to a live webcast of the call on the Company's web site, www.mc.com/investor, or by telephone. To access the call via telephone from U.S. and Canada dial (800) 289-0730, or internationally dial (913) 981-5509 by 4:50 p.m. EDT. The conference access code is 572015.
A replay of the call will be available on the web site beginning in the afternoon on Thursday, April 19, and continuing through at least 5:00 p.m. EDT Friday, May 4, 2001. A replay by telephone will also be available from 8:00 p.m. on Wednesday, April 18, through midnight on Monday, April 23, 2001. To access the telephonic replay from the U.S.A. and Canada dial (888) 203-1112, or internationally dial (719) 457-0820, and enter the conference access code, 572015.
