Mercury Computer Announces Acquisition of LNX Corporation, Provides Preliminary Results for Second Quarter of Fiscal 2011

Mercury Computer Systems, Inc.

today announced that it has completed the acquisition of LNX Corporation. Based in Salem, New Hampshire, LNX designs and builds next generation RF receivers for Signals Intelligence, Communications Intelligence as well as Electronic Attack applications. Under the terms of a stock purchase agreement, Mercury acquired LNX for an all-cash purchase price of $31.0 million plus an earn-out of up to $5.0 million payable upon the achievement of financial targets in calendar years 2011 and 2012. The acquisition was funded with cash on hand, and is expected to be neutral to modestly accretive within the first year. Mercury also reported preliminary financial results for its second fiscal quarter ended December 31, 2010. All results are presented and compared on a continuing operations basis. Revenues are expected to be approximately $55.5 million, compared to $45.2 million in the second quarter of fiscal 2010, while GAAP income from continuing operations is expected to be approximately $0.20 per diluted share, compared to $0.08 per diluted share for the second quarter of fiscal 2010. Adjusted EBITDA is expected to exceed the high end of the company's prior guidance, and cash flows from operating activities are expected to be a net inflow of approximately $8.1 million, compared to a net inflow of $5.2 million in the second quarter of fiscal 2010. These results will be discussed in more detail on Mercury's upcoming second quarter fiscal 2011 earnings call scheduled for January 25 at 5:00 PM ET.