Mercury Systems, a supplier of electronics to the aerospace and defense industry, turned a page in the June quarter as it beat Wall Street’s expectations, exited challenged programs and won key contracts. Excerpts from my story for Aviation Week Network below:
The defense electronics supplier posted revenue of $249 million, a book-to-bill of 1.14x, earnings before interest, taxes, depreciation and amortization (EBITDA) of $31.2 million—more than double the consensus estimate of $14 million—and free cash flow (FCF) of $61 million.
Mercury had some notable wins in the June quarter. These include a large production order from a prime contractor for Mercury Processing Solutions to be integrated on a U.S. Air Force program, processing systems employed in air and missile defense for both U.S. and international customers, and multiple production orders for F-35-related electronics content.
In July, Mercury announced an agreement with the Office of Naval Research to advance sensor processing technologies that will speed up the design process for radar and electronic warfare capabilities. By increasing the modularity of components at the chip level, the Office of Naval Research’s Open Rapid Chipletized Approach program aims to reduce the time required to design edge processing solutions. Under a $13.2 million contract, Mercury will develop a next-generation radio frequency System-in-Package that integrates the latest commercial chips from major semiconductor firms.
Mercury’s management believes that its cooperation with the Office of Naval Research will allow next-generation capabilities to be fielded at greater speed. There is potential to rapidly upgrade systems on a variety of existing platforms, Tony Trinh, Mercury’s senior director of advanced packaging, said in an announcement.
#aerospace #defense #military #semiconductor #supplychain #technology #nationalsecurity #manufacturing #f35 #airforce #navy
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