Mercury Systems (formerly Mercury Computer Systems) delivers digital signals faster than a wing-footed messenger. The company makes real-time digital signal processing (DSP) systems for the homeland security, military and aerospace, and telecommunications markets. Its military systems process radar, sonar, and other signals. It also makes specialized electronics used in semiconductor wafer inspection and airport baggage screeners. Mercury Systems acts as a subcontractor to prime contractors such as Northrop Grumman and Raytheon.
Mercury Systems operates in two business segments: Mercury Commercial Electronics (MCE), 88% of revenue, and Mercury Defense Systems (MDS) 12% of revenue. MCE provides specialized processing subsystems for defense and intelligence applications. Technologies and capabilities include embedded processing modules and subsystems, RF and microwave multi-function assemblies, and RF and microwave components.
MDS provides capabilities for systems used in electronic warfare (EW), electronic attack and electronic counter measure subsystems, signal intelligence, and radar environment test and simulation systems.
Mercury Systems has research and development centers and other facilities in the US (Alabama, California, Massachusetts, New Hampshire, New Jersey, and Virginia), Japan, and the UK. It generates more than 98% of sales from the US; Europe and the Asia-Pacific region each account for about 1%.
Sales and Marketing
Together, Raytheon, Northrop Grumman, and Lockheed Martin account for more than 60% of revenue.
Revenue jumped 12.5% in 2015 (ended June) to $234.8 million. In the previous two years revenue was stuck at about $208 million. Revenue in the MCE unit increased 18% in 2015 from projects such as the F-35 jet, Patriot missile, and the Surface Electronic Warfare Improvement Program (SEWIP).
Mercury posted a profit in 2014, $10.3 million, for the first time in three years. Better sales combined with lower operating costs to produce the profit.
After a series of acquisitions, Mercury restructured some operations as part of integrating new units into the company. It cut about 70 jobs and closed four facilities, relocating activities to its Advanced Microelectronics Center in Hudson, New Hampshire. It also completed the first phase of the Chelmsford, Massachusetts headquarters consolidation in 2014.
Mercury closed the sale of its Mercury Intelligence Systems in 2015. It sold the unit because it didn't fit into its core business.
As part of its investment in research and development, the company opened the second of four planned innovation centers. The new center is at Mercury's Chelmsford headquarters.
Mergers and Acquisitions
The company uses acquisitions to add products, services, and technical capabilities. Looking to bolster its sensor processing product line, in 2012 it bought microwave and radio-frequency (RF) components maker Micronetics in a deal valued at around $75 million, including $3.2 million of debt. The acquisition added new microwave and RF capabilities to Mercury's integrated subsystems for the defense and intelligence industries. More than three-quarters of Micronetics' sales come from defense applications, including electronic warfare, radar, electronic countermeasures products.