Mercury Computer Systems, Inc. F4Q09 (Qtr End 08/04/09) Earnings Call Transcript

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2009-08-04 18:56:20.0

Tags: Mercury Computer Systems Inc., Call Transcript, Earnings, Systems Integration, It Services, Purchasing & Procurement, Enterprise Software, Business Operations, Software, Seeking Alpha

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from the line of Tyler Hojo - Sidoti & Company.

Tyler Hojo - Sidoti & Company

I was hoping maybe you could talk a little bit more about the systems integration and services business and ACS. Last quarter, I think you gave us a number just in terms of what that contributed in revenue in the quarter and I am hoping that you can start maybe the dialogue by giving that again.

Bob Hult

Okay, so the revenue in services and systems integration this quarter was $7 million.

Tyler Hojo - Sidoti & Company

Okay, that is more than double what it was in the third quarter. Can you maybe talk about what drove that and what your expectations are for that little niche in the segment as we move in to fiscal 2010 and beyond?

Mark Aslett

Yes, so if you look at what we are trying to do at a corporate level, we are really positioning the Company as an ISR subsystems integrator that kind of building upon our expertise in high performance signal processing and adding complementary services and systems integration to increase the size of the deals that we are going after. So, what we are starting to see is more and more opportunity for deals that are within our existing pipeline to provide more of those types of services to our existing prime defense contract to customers.

So, that is kind of what we are trying to do and I think we expect good growth out of that business going forward.

Tyler Hojo - Sidoti & Company

Okay, great and maybe you could just comment on, I am not sure if you are familiar with, I imagine you are familiar with the OCI clause in the new defense procurement legislation and I am just wondering if you think this impacts basically the business model going forward and if potentially put some risk to some of the things we are trying to accomplish here.

Mark Aslett

Okay. Let me start out by talking about the rules as they stand today. I mean we have done a pretty thorough OCI review and through that review, we determined two things that currently we have no work or plan projects that trigger the current OCI rules and secondly, the way in which Mercury and Merc Fed work together does not trigger the existing OCI rules. So, I think we believe that we are fine today.

 

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