Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | |
Dec. 31, 2013 | Jan. 31, 2014 | |
Document Information [Line Items] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 31-Dec-13 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q2 | ' |
Trading Symbol | 'MRCY | ' |
Entity Registrant Name | 'MERCURY SYSTEMS INC | ' |
Entity Central Index Key | '0001049521 | ' |
Current Fiscal Year End Date | '--06-30 | ' |
Entity Filer Category | 'Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 33,251,547 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2013 | Jun. 30, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $44,535 | $39,126 |
Accounts receivable, net of allowance for doubtful accounts of $3 and $33 at December 31, 2013 and June 30, 2013, respectively | 31,117 | 30,498 |
Unbilled receivables and costs in excess of billings | 9,888 | 17,743 |
Inventory | 33,140 | 37,432 |
Deferred income taxes | 10,190 | 11,672 |
Prepaid income taxes | 8,681 | 2,369 |
Prepaid expenses and other current assets | 6,916 | 7,461 |
Total current assets | 144,467 | 146,301 |
Restricted cash | 546 | 546 |
Property and equipment, net | 16,145 | 15,019 |
Goodwill | 176,612 | 176,521 |
Intangible assets, net | 31,131 | 34,866 |
Other non-current assets | 841 | 1,178 |
Total assets | 369,742 | 374,431 |
Current liabilities: | ' | ' |
Accounts payable | 3,553 | 4,813 |
Accrued expenses | 6,793 | 7,999 |
Accrued compensation | 9,105 | 12,218 |
Deferred revenues and customer advances | 4,879 | 5,788 |
Total current liabilities | 24,330 | 30,818 |
Deferred gain on sale-leaseback | 2,664 | 3,242 |
Deferred income taxes | 7,035 | 7,721 |
Income taxes payable | 2,880 | 2,880 |
Other non-current liabilities | 2,021 | 1,269 |
Total liabilities | 38,930 | 45,930 |
Commitments and contingencies (Note H) | ' | ' |
Shareholders' equity: | ' | ' |
Preferred stock, $0.01 par value; 1,000,000 shares authorized; no shares issued or outstanding | 0 | 0 |
Common stock, $0.01 par value; 85,000,000 shares authorized; 31,123,090 and 30,381,254 shares issued and outstanding at December 31, 2013 and June 30, 2013, respectively | 311 | 304 |
Additional paid-in capital | 237,331 | 231,711 |
Retained earnings | 92,223 | 95,524 |
Accumulated other comprehensive income | 947 | 962 |
Total shareholders' equity | 330,812 | 328,501 |
Total liabilities and shareholders' equity | $369,742 | $374,431 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2013 | Jun. 30, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ' | ' |
Accounts receivable, allowance for doubtful accounts | $3 | $33 |
Preferred stock, par value | $0.01 | $0.01 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 85,000,000 | 85,000,000 |
Common stock, shares issued | 31,123,090 | 30,381,254 |
Common stock, shares outstanding | 31,123,090 | 30,381,254 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations and Comprehensive Loss (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Statement [Abstract] | ' | ' | ' | ' |
Net revenues | $53,090 | $49,804 | $107,030 | $99,232 |
Cost of revenues | 28,152 | 32,232 | 59,507 | 61,270 |
Gross margin | 24,938 | 17,572 | 47,523 | 37,962 |
Operating expenses: | ' | ' | ' | ' |
Selling, general and administrative | 14,753 | 14,574 | 29,854 | 29,107 |
Research and development | 10,231 | 7,588 | 19,575 | 17,627 |
Amortization of intangible assets | 1,927 | 2,230 | 4,035 | 4,018 |
Restructuring and other charges | 97 | 217 | 82 | 5,201 |
Acquisition costs and other related expenses | 0 | 42 | 0 | 272 |
Total operating expenses | 27,008 | 24,651 | 53,546 | 56,225 |
Loss from operations | -2,070 | -7,079 | -6,023 | -18,263 |
Interest income | 3 | 2 | 4 | 4 |
Interest expense | -11 | -15 | -26 | -23 |
Other income, net | 440 | 116 | 872 | 455 |
Loss before income taxes | -1,638 | -6,976 | -5,173 | -17,827 |
Tax benefit | -593 | -2,192 | -1,872 | -5,843 |
Net loss | -1,045 | -4,784 | -3,301 | -11,984 |
Basic net loss per share: (in dollars per share) | ($0.03) | ($0.16) | ($0.11) | ($0.40) |
Diluted net loss per share: (in dollars per share) | ($0.03) | ($0.16) | ($0.11) | ($0.40) |
Weighted-average shares outstanding: | ' | ' | ' | ' |
Basic (in shares) | 30,988 | 30,107 | 30,820 | 29,995 |
Diluted (in shares) | 30,988 | 30,107 | 30,820 | 29,995 |
Comprehensive loss: | ' | ' | ' | ' |
Net loss | -1,045 | -4,784 | -3,301 | -11,984 |
Foreign currency translation adjustments | -74 | -132 | -15 | -100 |
Total comprehensive loss | ($1,119) | ($4,916) | ($3,316) | ($12,084) |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Cash flows from operating activities: | ' | ' |
Net loss | ($3,301) | ($11,984) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ' | ' |
Depreciation and amortization expense | 8,028 | 8,420 |
Stock-based compensation expense | 5,752 | 4,359 |
Provision (benefit) for deferred income taxes | 796 | -5,890 |
Excess tax benefit from stock-based compensation | -3 | -9 |
Other non-cash items | -527 | -275 |
Changes in operating assets and liabilities, net of effects of businesses acquired: | ' | ' |
Accounts receivable, unbilled receivable, and cost in excess of billings | 7,332 | 5,110 |
Inventory | 4,319 | -2,847 |
Prepaid income taxes | -6,312 | 804 |
Prepaid expenses and other current assets | 560 | 1,230 |
Other non-current assets | 336 | 566 |
Accounts payable and accrued expenses | -6,495 | -9,689 |
Deferred revenues and customer advances | -762 | 822 |
Income taxes payable | 0 | 486 |
Other non-current liabilities | -192 | 507 |
Net cash provided by (used in) operating activities | 9,531 | -8,390 |
Cash flows from investing activities: | ' | ' |
Acquisition of businesses, net of cash acquired | 0 | -67,721 |
Purchases of property and equipment | -3,934 | -1,726 |
Increase in other investing activities | -300 | -377 |
Net cash used in investing activities | -4,234 | -69,824 |
Cash flows from financing activities: | ' | ' |
Proceeds from employee stock plans | 580 | 670 |
Excess tax benefits from stock-based compensation | 3 | 9 |
Payments of deferred financing and offering costs | 0 | 774 |
Payments of acquired debt | 0 | -6,575 |
Decrease in restricted cash | 0 | 3,000 |
Payments of capital lease obligations | -343 | -268 |
Net cash provided by (used in) financing activities | 240 | -3,938 |
Effect of exchange rate changes on cash and cash equivalents | -128 | 88 |
Net increase (decrease) in cash and cash equivalents | 5,409 | -82,064 |
Cash and cash equivalents at beginning of period | 39,126 | 115,964 |
Cash and cash equivalents at end of period | 44,535 | 33,900 |
Cash paid (received) during the period for: | ' | ' |
Interest | 26 | 23 |
Income taxes | 5,068 | -1,308 |
Supplemental disclosures-non-cash activities: | ' | ' |
Issuance of restricted stock awards to employees | 8,313 | 12,324 |
Capital lease | 494 | 0 |
Share-based business combination consideration | $0 | $513 |
Description_of_Business
Description of Business | 6 Months Ended |
Dec. 31, 2013 | |
Accounting Policies [Abstract] | ' |
Description of Business | ' |
Description of Business | |
Mercury Systems, Inc. (the “Company” or “Mercury”) provides commercially developed, open sensor and Big Data processing systems, software and services for critical commercial, defense and intelligence applications. The Company delivers innovative solutions, rapid time-to-value and world-class service and support to our defense prime contractor customers. The Company's products and solutions have been deployed in more than 300 programs with over 25 different defense prime contractors. Key programs include Aegis, Patriot, Surface Electronic Warfare Improvement Program ("SEWIP"), F-15, Predator and Reaper. The Company also delivers services and solutions in support of the intelligence community. Mercury Systems operates across a broad spectrum of defense and intelligence programs and the Company delivers its solutions and services via three operating segments: (i) Mercury Commercial Electronics ("MCE"); (ii) Mercury Defense Systems ("MDS") and; (iii) Mercury Intelligence Systems ("MIS"). | |
MCE delivers innovative, commercially developed, open sensor and Big Data processing systems, software and services that include embedded multi-computing and embedded sensor processing. Mercury's products include, but are not limited to, embedded processing boards, digital receiver boards, and chassis-based systems using air, conduction, and proprietary cooling technologies. MCE has added capabilities around radio frequency ("RF") and microwave technologies, including tuners, converters, transceivers, switch filters, and power amplifiers and limiters, as well as emerging new manufacturing capabilities on a more scalable basis. MDS leverages commercially available technologies and solutions (or “building blocks”) from the Company's MCE business. MDS leverages this technology to develop integrated sensor processing subsystems and capabilities, for the C4ISR (command, control, communications, computers, intelligence, surveillance and reconnaissance), electronic warfare ("EW"), electronic counter measures ("ECM"), signals intelligence ("SIGINT") and radar test and simulation markets. MIS delivers Big Data processing capabilities, software data processing solutions and predictive analytics capabilities to address intelligence community and Department of Defense ("DoD") mission needs. These three operating segments allow the Company to deliver capabilities that combine technology building blocks, deep domain expertise in the defense sector and critical solution areas, and specialized skills in serving the DoD and the intelligence community. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 6 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Accounting Policies [Abstract] | ' | |||||||||||
Summary of Significant Accounting Policies | ' | |||||||||||
Summary of Significant Accounting Policies | ||||||||||||
BASIS OF PRESENTATION | ||||||||||||
The accompanying consolidated financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to the Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures, normally included in annual consolidated financial statements have been condensed or omitted pursuant to those rules and regulations; however, in the opinion of management the financial information reflects all adjustments, consisting of adjustments of a normal recurring nature, necessary for fair presentation. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes for the fiscal year ended June 30, 2013 which are contained in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on August 16, 2013. The results for the three and six months ended December 31, 2013 are not necessarily indicative of the results to be expected for the full fiscal year. | ||||||||||||
The Company is comprised of the following three operating segments: MCE, MDS and MIS. The Company reports MCE as a standalone reportable segment and has aggregated MDS and MIS to form the reportable segment Mercury Defense and Intelligence Systems (“MDIS”). During the third quarter of fiscal 2013, the Company redefined its operating and reportable segments. The Company reclassified the segment data for the prior periods to conform to the current year's presentation. None of these changes impact the Company’s previously reported consolidated financial results. See Note K of the Notes to Consolidated Financial Statements for further discussion. | ||||||||||||
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated. | ||||||||||||
USE OF ESTIMATES | ||||||||||||
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. | ||||||||||||
REVENUE RECOGNITION | ||||||||||||
The Company relies upon FASB ASC 605, Revenue Recognition to account for its revenue transactions. Revenue from sales are recognized upon shipment provided that title and risk of loss have passed to the customer, there is persuasive evidence of an arrangement, the sales price is fixed or determinable, collection of the related receivable is reasonably assured, and customer acceptance criteria, if any, have been successfully demonstrated. Out-of-pocket expenses that are reimbursed by the customer are included in revenue and cost of revenue. | ||||||||||||
Certain contracts with customers require the Company to perform tests of its products prior to shipment to ensure their performance complies with the Company’s published product specifications and, on occasion, with additional customer-requested specifications. In these cases, the Company conducts such tests and, if they are completed successfully, includes a written confirmation with each order shipped. As a result, at the time of each product shipment, the Company believes that no further customer testing requirements exist and that there is no uncertainty of acceptance by its customer. | ||||||||||||
The Company uses FASB Accounting Standards Update (“ASU”) No. 2009-13 (“FASB ASU 2009-13”), Multiple-Deliverable Revenue Arrangements. FASB ASU 2009-13 establishes a selling price hierarchy for determining the selling price of a deliverable, which includes: (1) vendor-specific objective evidence (“VSOE”) if available; (2) third-party evidence (“TPE”) if VSOE is not available; and (3) best estimated selling price (“BESP”), if neither VSOE nor TPE is available. Additionally, FASB ASU 2009-13 expands the disclosure requirements related to a vendor’s multiple-deliverable revenue arrangements. | ||||||||||||
The Company enters into multiple-deliverable arrangements that may include a combination of hardware components, related integration or other services. These arrangements generally do not include any performance-, cancellation-, termination- or refund-type provisions. Total revenue recognized under multiple-deliverable revenue arrangements was 53% and 40% of total revenues in the three and six months ended December 31, 2013, respectively. Total revenue recognized under multiple-deliverable revenue arrangements was 33% and 31% of total revenues in the three and six months ended December 31, 2012, respectively. | ||||||||||||
In accordance with the provisions of FASB ASU 2009-13, the Company allocates arrangement consideration to each deliverable in an arrangement based on its relative selling price. The Company generally expects that it will not be able to establish VSOE or TPE due to limited single element transactions and the nature of the markets in which the Company competes, and, as such, the Company typically determines its relative selling price using BESP. | ||||||||||||
The Company uses BESP in its allocation of arrangement consideration. The objective of BESP is to determine the price at which the Company would transact if the product or service were sold by the Company on a standalone basis. | ||||||||||||
The Company’s determination of BESP involves the consideration of several factors based on the specific facts and circumstances of each arrangement. Specifically, the Company considers the cost to produce the deliverable, the anticipated margin on that deliverable, the selling price and profit margin for similar parts, the Company’s ongoing pricing strategy and policies (as evident from the price list established and updated by management on a regular basis), the value of any enhancements that have been built into the deliverable and the characteristics of the varying markets in which the deliverable is sold. | ||||||||||||
The Company analyzes the selling prices used in its allocation of arrangement consideration at a minimum on an annual basis. Selling prices will be analyzed on a more frequent basis if a significant change in the Company’s business necessitates a more timely analysis or if the Company experiences significant variances in its selling prices. | ||||||||||||
Each deliverable within the Company’s multiple-deliverable revenue arrangements is accounted for as a separate unit of accounting under the guidance of FASB ASU 2009-13 if both of the following criteria are met: the delivered item or items have value to the customer on a standalone basis; and for an arrangement that includes a general right of return relative to the delivered item(s), delivery or performance of the undelivered item(s) is considered probable and substantially in the control of the Company. The Company's revenue arrangements generally do not include a general right of return relative to delivered products. The Company considers a deliverable to have standalone value if the item is sold separately by the Company or another vendor or if the item could be resold by the customer. | ||||||||||||
Deliverables not meeting the criteria for being a separate unit of accounting are combined with a deliverable that does meet that criterion. The appropriate allocation of arrangement consideration and recognition of revenue is then determined for the combined unit of accounting. | ||||||||||||
The Company also engages in long-term contracts for development, production and services activities which it accounts for consistent with FASB ASC 605-35, Accounting for Performance of Construction-Type and Certain Production-Type Contracts, and other relevant revenue recognition accounting literature. The Company considers the nature of these contracts and the types of products and services provided when determining the proper accounting for a particular contract. Generally for fixed-price contracts, other than service-type contracts, revenue is recognized primarily under the percentage of completion method or, for certain short-term contracts, by the completed contract method. Revenue from service-type fixed-price contracts is recognized ratably over the contract period or by other appropriate input or output methods to measure service provided, and contract costs are expensed as incurred. The Company establishes billing terms at the time project deliverables and milestones are agreed. Revenues recognized in excess of the amounts invoiced to clients are classified as unbilled receivables. The risk to the Company on a fixed-price contract is that if estimates to complete the contract change from one period to the next, profit levels will vary from period to period. For time and materials contracts, revenue reflects the number of direct labor hours expended in the performance of a contract multiplied by the contract billing rate, as well as reimbursement of other billable direct costs. For all types of contracts, the Company recognizes anticipated contract losses as soon as they become known and estimable. | ||||||||||||
The use of contract accounting requires significant judgment relative to estimating total contract revenues and costs, including assumptions relative to the length of time to complete the contract, the nature and complexity of the work to be performed, anticipated increases in wages and prices for subcontractor services and materials, and the availability of subcontractor services and materials. The Company’s estimates are based upon the professional knowledge and experience of its engineers, program managers and other personnel, who review each long-term contract monthly to assess the contract’s schedule, performance, technical matters and estimated cost at completion. When adjustments in estimated contract costs are identified, such revisions may result in current period adjustments to earnings applicable to performance in prior periods. | ||||||||||||
The Company does not provide its customers with rights of product return, other than those related to warranty provisions that permit repair or replacement of defective goods. The Company accrues for anticipated warranty costs upon product shipment. Revenues from product royalties are recognized upon invoice by the Company. Additionally, all revenues are reported net of government assessed taxes (e.g. sales taxes or value-added taxes). | ||||||||||||
WEIGHTED-AVERAGE SHARES | ||||||||||||
Weighted-average shares were calculated as follows: | ||||||||||||
Three Months Ended December 31, | Six Months Ended December 31, | |||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||
Basic weighted-average shares outstanding | 30,988 | 30,107 | 30,820 | 29,995 | ||||||||
Effect of dilutive equity instruments | — | — | — | — | ||||||||
Diluted weighted-average shares outstanding | 30,988 | 30,107 | 30,820 | 29,995 | ||||||||
Equity instruments to purchase 3,871 shares of common stock were not included in the calculation of diluted net earnings per share for the three and six months ended December 31, 2013, because the equity instruments were anti-dilutive. Equity instruments to purchase 4,301 shares of common stock were not included in the calculation of diluted net earnings per share for the three and six months ended December 31, 2012, because the equity instruments were anti-dilutive. |
Fair_Value_of_Financial_Instru
Fair Value of Financial Instruments | 6 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||||||
Fair Value of Financial Instruments | ' | ||||||||||||||||
Fair Value of Financial Instruments | |||||||||||||||||
The Company measures at fair value certain financial assets and liabilities, including cash equivalents and restricted cash. FASB ASC 820, Fair Value Measurement and Disclosures, specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. These two types of inputs have created the following fair-value hierarchy: | |||||||||||||||||
Level 1—Quoted prices for identical instruments in active markets; | |||||||||||||||||
Level 2—Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and | |||||||||||||||||
Level 3—Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. | |||||||||||||||||
The following table summarizes the Company’s financial assets measured at fair value on a recurring basis at December 31, 2013: | |||||||||||||||||
Fair Value Measurements | |||||||||||||||||
31-Dec-13 | Level 1 | Level 2 | Level 3 | ||||||||||||||
Assets: | |||||||||||||||||
U.S. Treasury bills and money market funds | $ | 23,026 | $ | 23,026 | $ | — | $ | — | |||||||||
Operating cash | 21,509 | 21,509 | — | — | |||||||||||||
Restricted cash | 546 | 546 | — | — | |||||||||||||
Total | $ | 45,081 | $ | 45,081 | $ | — | $ | — | |||||||||
The carrying values of cash and cash equivalents, including all U.S. Treasury bills and money market funds, accounts receivable and payable, and accrued liabilities approximate fair value due to the short-term maturities of these assets and liabilities. |
Inventory
Inventory | 6 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Inventory Disclosure [Abstract] | ' | ||||||||
Inventory | ' | ||||||||
Inventory | |||||||||
Inventory is stated at the lower of cost (first-in, first-out) or market value, and consists of materials, labor and overhead. On a quarterly basis, the Company uses consistent methodologies to evaluate inventory for net realizable value. The Company reduces the value of inventory for excess and obsolete inventory, consisting of on-hand and non-cancelable on-order inventory in excess of estimated usage. The excess and obsolete inventory evaluation is based upon assumptions about future demand, history, product mix and possible alternative uses. Inventory was comprised of the following: | |||||||||
31-Dec-13 | 30-Jun-13 | ||||||||
Raw materials | $ | 15,978 | $ | 17,512 | |||||
Work in process | 11,775 | 13,432 | |||||||
Finished goods | 5,387 | 6,488 | |||||||
Total | $ | 33,140 | $ | 37,432 | |||||
There are no amounts in inventory relating to contracts having production cycles longer than one year. |
Goodwill
Goodwill | 6 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ||||||||||||||||
Goodwill | ' | ||||||||||||||||
Goodwill | |||||||||||||||||
The following table sets forth the changes in the carrying amount of goodwill for the six months ended December 31, 2013: | |||||||||||||||||
MCE | MDS | MIS | Total | ||||||||||||||
Balance at June 30, 2013 | $ | 133,783 | $ | 33,768 | $ | 8,970 | $ | 176,521 | |||||||||
Goodwill adjustment for the Micronetics acquisition | 91 | — | — | 91 | |||||||||||||
Balance at December 31, 2013 | $ | 133,874 | $ | 33,768 | $ | 8,970 | $ | 176,612 | |||||||||
In the six months ended December 31, 2013, there were no triggering events, as defined by FASB ASC 350, which required an interim goodwill impairment test. The Company performs its annual goodwill impairment test in the fourth quarter of each fiscal year. The goodwill adjustment for the Micronetics acquisition is the result of changes in fair value estimates derived from additional information gained during the measurement period which ended August 7, 2013. | |||||||||||||||||
The Company determines its reporting units in accordance with FASB ASC 350, by assessing whether discrete financial information is available and if management regularly reviews the operating results of that component. Following this assessment, the Company determined that its reporting units are the same as its operating segments, MCE, MDS and MIS. |
Restructuring_Plan
Restructuring Plan | 6 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Restructuring and Related Activities [Abstract] | ' | ||||||||||||
Restructuring Plan | ' | ||||||||||||
Restructuring Plan | |||||||||||||
The following table presents the detail of activity for the Company’s restructuring plans: | |||||||||||||
Severance & | Facilities | Total | |||||||||||
Related | & Other | ||||||||||||
Restructuring liability at June 30, 2013 | $ | 434 | $ | 286 | $ | 720 | |||||||
MCE restructuring charges | — | 165 | 165 | ||||||||||
Cash paid | (397 | ) | (242 | ) | (639 | ) | |||||||
Reversals(*) | (23 | ) | (60 | ) | (83 | ) | |||||||
Restructuring liability at December 31, 2013 | $ | 14 | $ | 149 | $ | 163 | |||||||
( *) Reversals result from the finalization of severance agreements and unused outplacement services. | |||||||||||||
All of the restructuring charges are within the MCE reportable segment and classified as operating expenses in the consolidated statements of operations and comprehensive loss and any remaining obligations are expected to be paid within the next twelve months. The remaining restructuring liability is classified as accrued expenses in the consolidated balance sheets. On January 27, 2014, the Company announced a restructuring plan that is being implemented as part of the final phase of integration activities relating to the Company’s recent acquisitions. See Note L of the Notes to Consolidated Financial Statements for further discussion. |
Income_Taxes
Income Taxes | 6 Months Ended |
Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | ' |
Income Taxes | ' |
Income Taxes | |
The Company recorded a tax benefit of $593 and $2,192 on a loss before taxes of $1,638 and $6,976 for the three months ended December 31, 2013 and 2012, respectively. The Company recorded a tax benefit of $1,872 and $5,843 on a loss before taxes of $5,173 and $17,827 for the six months ended December 31, 2013 and 2012. Income tax benefit for the three and six months ended December 31, 2013 differed from the federal statutory rate primarily due to the impact of federal research and development tax credits, Section 199 manufacturing deduction and stock compensation. Income tax benefit for the three and six months ended December 31, 2012 differed from the federal statutory rate primarily due to the impact of a Section 199 manufacturing deduction, state taxes and stock compensation. During the three and six months ended December 31, 2013, the Company included an income tax benefit of approximately $231 for an immaterial error that was subsequently corrected related to the Company's June 30, 2013 and 2012 income taxes payable. The Company concluded that the impact of the correction was neither quantitatively nor qualitatively material to the prior fiscal years ended June 30, 2013 and 2012 and each of its respective quarters ended during these fiscal years. | |
No material changes in the Company’s unrecognized tax positions occurred during the three and six months ended December 31, 2013. The Company estimates that the unrecognized tax benefits of up to $117 could be realized within the next 12 months as a result of resolutions of tax positions and the expiration of applicable statutes of limitations. |
Commitments_and_Contingencies
Commitments and Contingencies | 6 Months Ended |
Dec. 31, 2013 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Commitments and Contingencies | ' |
Commitments and Contingencies | |
LEGAL CLAIMS | |
The Company is subject to litigation, claims, investigations and audits arising from time to time in the ordinary course of our business. Although legal proceedings are inherently unpredictable, the Company believes that it has valid defenses with respect to any matters currently pending against the Company and intends to defend itself vigorously. The outcome of these matters, individually and in the aggregate, is not expected to have a material impact on the Company’s cash flows, results of operations, or financial position. | |
INDEMNIFICATION OBLIGATIONS | |
The Company’s standard product sales and license agreements entered into in the ordinary course of business typically contain an indemnification provision pursuant to which the Company indemnifies, holds harmless, and agrees to reimburse the indemnified party for losses suffered or incurred by the indemnified party in connection with any patent, copyright or other intellectual property infringement claim by any third party with respect to the Company’s products. Such provisions generally survive termination or expiration of the agreements. The potential amount of future payments the Company could be required to make under these indemnification provisions is, in some instances, unlimited. | |
PURCHASE COMMITMENTS | |
As of December 31, 2013, the Company has entered into non-cancelable purchase commitments for certain inventory components and services used in its normal operations. The purchase commitments covered by these agreements are for less than one year and aggregate to $18,036. |
Debt
Debt | 6 Months Ended |
Dec. 31, 2013 | |
Debt Disclosure [Abstract] | ' |
Debt | ' |
Debt | |
Senior Unsecured Credit Facility | |
On October 12, 2012, the Company entered into a credit agreement (the “Credit Agreement”) with a syndicate of commercial banks, with KeyBank National Association acting as the administrative agent. The Credit Agreement provides for a $200,000 senior unsecured revolving line of credit (the “Revolver”). The Company can borrow up to $200,000 based on consolidated EBITDA for the four quarters ended December 31, 2013 and subject to compliance with the financial covenants discussed below. The Revolver is available for working capital, acquisitions, and general corporate purposes of the Company and its subsidiaries. The Revolver is available for borrowing during a five year period, with interest payable periodically during such period as provided in the Credit Agreement and principal due at the maturity of the Revolver. | |
The Credit Agreement has an accordion feature permitting the Company to request from the lenders an increase in the aggregate amount of the credit facility in the form of an incremental revolver or term loan in an amount not to exceed $50,000. Any such increase would require only the consent of the lenders increasing their respective commitments under the credit facility. | |
The interest rates applicable to borrowings under the Credit Agreement involve various rate options that are available to the Company. The rates are calculated using a combination of conventional base rate measures plus a margin over those rates. The base rates consist of LIBOR rates or prime rates. The actual rates will depend on the level of these underlying rates plus a margin based on the Company’s leverage at the time of borrowing. | |
Borrowings under the Credit Agreement are senior unsecured loans. Each of the Company’s domestic subsidiaries is a guarantor under the Credit Agreement. | |
The Credit Agreement provides for conventional affirmative and negative covenants, including a maximum leverage ratio of 3.50x and a minimum interest coverage ratio of 3.0x. Each of the two ratios referred to above is calculated based on consolidated EBITDA, as defined in the Credit Agreement, for each consecutive four fiscal quarter period, after giving pro forma effect for any acquisitions or dispositions. Acquisitions are permitted under the Credit Agreement without any dollar limitation so long as, among other requirements, no default or event of default exists or would result therefore; as of December 31, 2013, the Company is in compliance with a maximum leverage ratio of 3.50x and a minimum interest coverage ratio of 3.0x. In addition, the Credit Agreement contains certain customary representations and warranties, and events of default. | |
As of December 31, 2013, there was $57,105 of borrowing capacity available. There were no borrowings outstanding on the Credit Agreement; however, there were outstanding letters of credit of $4,299. The Company was in compliance with all covenants and conditions under the Credit Agreement. |
StockBased_Compensation
Stock-Based Compensation | 6 Months Ended | |||||||||||||||
Dec. 31, 2013 | ||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | |||||||||||||||
Stock-Based Compensation | ' | |||||||||||||||
Stock-Based Compensation | ||||||||||||||||
STOCK OPTION PLANS | ||||||||||||||||
The number of shares authorized for issuance under the Company’s 2005 Stock Incentive Plan, as amended and restated (the “2005 Plan”), is 8,018 shares at December 31, 2013. On November 7, 2013, the Company's number of shares authorized for issuance under the 2005 Plan increased by 254 shares as a result of forfeitures, cancellations and/or terminations from the Company's 1997 Stock Option Plan (the "1997 Plan"). The 2005 Plan will be increased by any future cancellations, forfeitures or terminations (other than by exercise) under the 1997 Plan. The 2005 Plan provides for the grant of non-qualified and incentive stock options, restricted stock, stock appreciation rights and deferred stock awards to employees and non-employees. All stock options are granted with an exercise price of not less than 100% of the fair value of the Company’s common stock at the date of grant and the options generally have a term of seven years. There were 1,095 shares available for future grant under the 2005 Plan at December 31, 2013. | ||||||||||||||||
EMPLOYEE STOCK PURCHASE PLAN | ||||||||||||||||
The number of shares authorized for issuance under the Company’s 1997 Employee Stock Purchase Plan, as amended and restated (“ESPP”), is 1,400 shares. Under the ESPP, rights are granted to purchase shares of common stock at 85% of the lesser of the market value of such shares at either the beginning or the end of each six-month offering period. The ESPP permits employees to purchase common stock through payroll deductions, which may not exceed 10% of an employee’s compensation as defined in the ESPP. There were 55 and 52 shares issued under the ESPP during the six months ended December 31, 2013 and 2012, respectively. Shares available for future purchase under the ESPP totaled 201 at December 31, 2013. | ||||||||||||||||
STOCK OPTION AND AWARD ACTIVITY | ||||||||||||||||
The following table summarizes activity of the Company’s stock option plans since June 30, 2013: | ||||||||||||||||
Options Outstanding | ||||||||||||||||
Number of | Weighted Average | Weighted Average | ||||||||||||||
Shares | Exercise Price | Remaining | ||||||||||||||
Contractual Term | ||||||||||||||||
(Years) | ||||||||||||||||
Outstanding at June 30, 2013 | 2,070 | $ | 13.44 | 2.6 | ||||||||||||
Granted | — | — | ||||||||||||||
Exercised | (22 | ) | 6.48 | |||||||||||||
Cancelled | (397 | ) | 17.51 | |||||||||||||
Outstanding at December 31, 2013 | 1,651 | $ | 12.55 | 2.59 | ||||||||||||
The following table summarizes the status of the Company’s non-vested restricted stock awards since June 30, 2013: | ||||||||||||||||
Non-vested Restricted Stock Awards | ||||||||||||||||
Number of | Weighted Average | |||||||||||||||
Shares | Grant Date | |||||||||||||||
Fair Value | ||||||||||||||||
Outstanding at June 30, 2013 | 2,007 | $ | 10.82 | |||||||||||||
Granted | 903 | 9.2 | ||||||||||||||
Vested | (664 | ) | 10.61 | |||||||||||||
Forfeited | (26 | ) | 10.72 | |||||||||||||
Outstanding at December 31, 2013 | 2,220 | $ | 10.23 | |||||||||||||
STOCK-BASED COMPENSATION EXPENSE | ||||||||||||||||
The Company recognized the full expense of its share-based payment plans in the consolidated statements of operations for the three and six months ended December 31, 2013 and 2012 in accordance with FASB ASC 718 and did not capitalize any such costs on the consolidated balance sheets, as such costs that qualified for capitalization were not material. Under the fair value recognition provisions of FASB ASC 718, stock-based compensation cost is measured at the grant date based on the value of the award and is recognized as expense over the service period. The following table presents share-based compensation expenses included in the Company’s consolidated statements of operations: | ||||||||||||||||
Three Months Ended December 31, | Six Months Ended December 31, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Cost of revenues | $ | 260 | $ | 99 | $ | 496 | $ | 230 | ||||||||
Selling, general and administrative | 2,037 | 1,706 | 4,369 | 3,609 | ||||||||||||
Research and development | 420 | 205 | 887 | 520 | ||||||||||||
Share-based compensation expense before tax | 2,717 | 2,010 | 5,752 | 4,359 | ||||||||||||
Income taxes | (932 | ) | (752 | ) | (2,022 | ) | (1,605 | ) | ||||||||
Net compensation expense | $ | 1,785 | $ | 1,258 | $ | 3,730 | $ | 2,754 | ||||||||
Operating_Segment_Geographic_I
Operating Segment, Geographic Information and Significant Customers | 6 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||||||||||
Operating Segment, Geographic Information and Significant Customers | ' | ||||||||||||||||||||
Operating Segment, Geographic Information and Significant Customers | |||||||||||||||||||||
Operating segments are defined as components of an enterprise evaluated regularly by the Company’s chief operating decision maker (“CODM”) in deciding how to allocate resources and assess performance. The Company is presently organized in three operating segments. The following operating segments were determined based upon the nature of the products offered to customers, the market characteristics of each operating segment and the Company’s management structure: | |||||||||||||||||||||
• | Mercury Commercial Electronics (“MCE”): this operating segment delivers innovative, commercially developed, open sensor and Big Data processing systems, software and services for critical commercial, defense and intelligence applications. MCE delivers solutions that are secure and based upon open architectures and widely adopted industry standards. MCE's products include, but are not limited to, embedded processing boards, digital receiver boards, chassis-based systems using air, conduction, and proprietary cooling technologies and RF and microwave technologies, including tuners, converters, transceivers, switch filters, and power amplifiers and limiters. MCE delivers rapid time-to-value and world-class service and support to our commercial and defense prime contractor customers. | ||||||||||||||||||||
• | Mercury Defense Systems (“MDS”): this operating segment delivers innovative, open sensor processing solutions to key defense prime contractors leveraging commercially available technologies and solutions from our MCE business. MDS leverages this technology to develop integrated sensor processing subsystems, often including classified application-specific software and intellectual property (“IP”) for the C4ISR (command, control, communications, computers, intelligence, surveillance and reconnaissance), EW, and ECM markets. MDS's products include, but are not limited to, Digital Radio Frequency Memory ("DRFM") jammers and radar environment simulators. | ||||||||||||||||||||
• | Mercury Intelligence Systems (“MIS”): this operating segment delivers technologically advanced hardware and software data processing solutions and predictive analytics capabilities to address the intelligence community and Department of Defense mission needs. | ||||||||||||||||||||
The Company’s operating segments were evaluated in accordance with FASB ASC 280- “Segment Reporting” in order to determine which operating segments qualified as reportable segments. The Company considered qualitative factors, including the economic characteristics of each operating segment to determine if any of its three operating segments qualified for aggregation into fewer reportable segments. | |||||||||||||||||||||
The Company’s evaluation of the economic characteristics of its operating segments included comparisons of revenues and applicable growth rates, gross margins, operating margins, future projections, and additional non-GAAP financial measurements which indicate that MDS and MIS have similar economic characteristics. The Company also evaluated the following qualitative factors in accordance with FASB ASC 280 paragraph 10-50-11: the nature of products and services, the corresponding production processes, the types of customers, distribution methods for products and services and the nature of the corresponding regulatory environment associated with its operating segments. The Company determined each of these factors are similar for both the MDS and MIS operating segments and supports the aggregation of MDS and MIS into one reportable segment, Mercury Defense and Intelligence Systems (“MDIS”). | |||||||||||||||||||||
The Company analyzed quantitative thresholds of each reportable segment including but not limited to reported revenues, including sales to external customers and intersegment sales or transfers, reported profits or losses, and total assets of each operating segment. The Company determined that both MCE and MDIS met the quantitative thresholds for reporting. | |||||||||||||||||||||
During the third quarter of fiscal 2013, the Company redefined its operating and reportable segments. The Company reclassified the segment data for the prior periods presented below to conform to the current year’s presentation. | |||||||||||||||||||||
The accounting policies of the reportable segments are the same as those described in “Note B: Summary of Significant Accounting Policies.” The profitability measure employed by the Company and its CODM as the basis for allocating resources to segments and assessing segment performance is adjusted EBITDA. The Company believes the adjusted EBITDA financial measure assists in providing an enhanced understanding of its underlying operational measures to manage its business, to evaluate its performance compared to prior periods and the marketplace, and to establish operational goals. | |||||||||||||||||||||
Adjusted EBITDA is defined as net income (loss) before interest income and expense, income taxes, depreciation, amortization of acquired intangible assets, restructuring, impairment of long-lived assets, acquisition costs and other related expenses, fair value adjustments from purchase accounting and stock-based compensation costs. Prior year’s amounts have been presented to reflect the current profitability measures for comparative purposes. Additionally, asset information by reportable segment is not reported because the Company and its CODM utilize consolidated asset information when making business decisions. The following is a summary of the performance of the Company’s operations by reportable segment: | |||||||||||||||||||||
MCE | MDIS | Eliminations | Total | ||||||||||||||||||
THREE MONTHS ENDED | |||||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||
Net revenues to unaffiliated customers | $ | 42,305 | $ | 10,603 | $ | 182 | $ | 53,090 | |||||||||||||
Intersegment revenues | 2,733 | — | (2,733 | ) | — | ||||||||||||||||
Net revenues | $ | 45,038 | $ | 10,603 | $ | (2,551 | ) | $ | 53,090 | ||||||||||||
Adjusted EBITDA | $ | 4,082 | $ | 921 | $ | 89 | $ | 5,092 | |||||||||||||
THREE MONTHS ENDED | |||||||||||||||||||||
31-Dec-12 | |||||||||||||||||||||
Net revenues to unaffiliated customers | $ | 37,251 | $ | 14,064 | $ | (1,511 | ) | $ | 49,804 | ||||||||||||
Intersegment revenues | 3,239 | 4 | (3,243 | ) | — | ||||||||||||||||
Net revenues | $ | 40,490 | $ | 14,068 | $ | (4,754 | ) | $ | 49,804 | ||||||||||||
Adjusted EBITDA | $ | (324 | ) | $ | 1,973 | $ | (650 | ) | $ | 999 | |||||||||||
SIX MONTHS ENDED | |||||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||
Net revenues to unaffiliated customers | $ | 85,793 | $ | 21,733 | $ | (496 | ) | $ | 107,030 | ||||||||||||
Intersegment revenues | 3,847 | — | (3,847 | ) | — | ||||||||||||||||
Net revenues | $ | 89,640 | $ | 21,733 | $ | (4,343 | ) | $ | 107,030 | ||||||||||||
Adjusted EBITDA | $ | 6,425 | $ | 2,279 | $ | 7 | $ | 8,711 | |||||||||||||
SIX MONTHS ENDED | |||||||||||||||||||||
31-Dec-12 | |||||||||||||||||||||
Net revenues to unaffiliated customers | $ | 69,147 | $ | 29,892 | $ | 193 | $ | 99,232 | |||||||||||||
Intersegment revenues | 8,147 | 12 | (8,159 | ) | — | ||||||||||||||||
Net revenues | $ | 77,294 | $ | 29,904 | $ | (7,966 | ) | $ | 99,232 | ||||||||||||
Adjusted EBITDA | $ | (2,531 | ) | $ | 5,199 | $ | (27 | ) | $ | 2,641 | |||||||||||
The following table reconciles the Company’s net loss, the most directly comparable GAAP financial measure, to its adjusted EBITDA: | |||||||||||||||||||||
Three Months Ended December 31, | Six Months Ended December 31, | ||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||||
Net loss | $ | (1,045 | ) | $ | (4,784 | ) | $ | (3,301 | ) | $ | (11,984 | ) | |||||||||
Interest expense, net | 8 | 13 | 22 | 19 | |||||||||||||||||
Tax benefit | (593 | ) | (2,192 | ) | (1,872 | ) | (5,843 | ) | |||||||||||||
Depreciation | 1,981 | 2,191 | 3,993 | 4,402 | |||||||||||||||||
Amortization of intangible assets | 1,927 | 2,230 | 4,035 | 4,018 | |||||||||||||||||
Restructuring and other charges | 97 | 217 | 82 | 5,201 | |||||||||||||||||
Acquisition costs and other related expenses | — | 42 | — | 272 | |||||||||||||||||
Fair value adjustments from purchase accounting | — | 1,272 | — | 2,197 | |||||||||||||||||
Stock-based compensation expense | 2,717 | 2,010 | 5,752 | 4,359 | |||||||||||||||||
Adjusted EBITDA | $ | 5,092 | $ | 999 | $ | 8,711 | $ | 2,641 | |||||||||||||
The geographic distribution of the Company’s revenues is summarized as follows: | |||||||||||||||||||||
US | Europe | Asia Pacific | Eliminations | Total | |||||||||||||||||
THREE MONTHS ENDED | |||||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||
Net revenues to unaffiliated customers | $ | 52,509 | $ | 451 | $ | 130 | $ | — | $ | 53,090 | |||||||||||
Inter-geographic revenues | 679 | 47 | — | (726 | ) | — | |||||||||||||||
Net revenues | $ | 53,188 | $ | 498 | $ | 130 | $ | (726 | ) | $ | 53,090 | ||||||||||
THREE MONTHS ENDED | |||||||||||||||||||||
31-Dec-12 | |||||||||||||||||||||
Net revenues to unaffiliated customers | $ | 45,953 | $ | 1,084 | $ | 2,767 | $ | — | $ | 49,804 | |||||||||||
Inter-geographic revenues | 2,749 | 138 | 19 | (2,906 | ) | — | |||||||||||||||
Net revenues | $ | 48,702 | $ | 1,222 | $ | 2,786 | $ | (2,906 | ) | $ | 49,804 | ||||||||||
SIX MONTHS ENDED | |||||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||
Net revenues to unaffiliated customers | $ | 105,178 | $ | 959 | $ | 893 | $ | — | $ | 107,030 | |||||||||||
Inter-geographic revenues | 1,498 | 204 | 140 | (1,842 | ) | — | |||||||||||||||
Net revenues | $ | 106,676 | $ | 1,163 | $ | 1,033 | $ | (1,842 | ) | $ | 107,030 | ||||||||||
SIX MONTHS ENDED | |||||||||||||||||||||
31-Dec-12 | |||||||||||||||||||||
Net revenues to unaffiliated customers | $ | 93,588 | $ | 1,428 | $ | 4,216 | $ | — | $ | 99,232 | |||||||||||
Inter-geographic revenues | 3,927 | 187 | 45 | (4,159 | ) | — | |||||||||||||||
Net revenues | $ | 97,515 | $ | 1,615 | $ | 4,261 | $ | (4,159 | ) | $ | 99,232 | ||||||||||
Foreign revenue is based on the country in which the Company’s legal subsidiary is domiciled. | |||||||||||||||||||||
The geographic distribution of the Company’s long-lived assets is summarized as follows: | |||||||||||||||||||||
U.S. | Europe | Asia Pacific | Eliminations | Total | |||||||||||||||||
31-Dec-13 | $ | 16,104 | $ | 41 | $ | — | $ | — | $ | 16,145 | |||||||||||
30-Jun-13 | $ | 14,986 | $ | 33 | $ | — | $ | — | $ | 15,019 | |||||||||||
Identifiable long-lived assets exclude goodwill and intangible assets. | |||||||||||||||||||||
Customers comprising 10% or more of the Company’s revenues for the periods shown below are as follows: | |||||||||||||||||||||
Three Months Ended December 31, | Six Months Ended December 31, | ||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||||
Lockheed Martin Corporation | 29 | % | * | 20 | % | * | |||||||||||||||
Northrop Grumman Corporation | 14 | % | 13 | % | 15 | % | 12 | % | |||||||||||||
Raytheon Company | 12 | % | 12 | % | 13 | % | * | ||||||||||||||
55 | % | 25 | % | 48 | % | 12 | % | ||||||||||||||
* | Indicates that the amount is less than 10% of the Company’s revenues for the respective period. | ||||||||||||||||||||
While the Company typically has customers from which it derives 10% or more of its revenue, the sales to each of these customers are spread across multiple programs and platforms. For the three and six months ended December 31, 2013, only one program, Aegis, individually comprised more than 10% of the Company's revenue at 27% and 16% , respectively. For the three and six months ended December 31, 2012, no single program comprised 10% or more of the Company's revenue. |
Subsequent_Events
Subsequent Events | 6 Months Ended |
Dec. 31, 2013 | |
Subsequent Events [Abstract] | ' |
Subsequent Events | ' |
Subsequent Events | |
On January 27, 2014, the Company announced a restructuring plan that is being implemented as part of the final phase of integration activities relating to the Company’s recent acquisitions. This integration plan includes the consolidation of manufacturing facilities, centralization of administrative functions using common systems and processes and realignment of research and development resources. The Company expects to incur approximately $4,900 of restructuring charges in the second half of fiscal 2014 associated with this integration plan. For the third quarter of fiscal 2014, the Company anticipates incurring restructuring charges of $3,325 associated with involuntary separation costs related to a reduction in force which eliminated 54 positions largely in engineering, manufacturing and administrative functions. The estimated charges in the second half of fiscal 2014 will primarily affect the MCE reportable segment. The Company expects to incur approximately $4,200 of restructuring charges in fiscal 2015 related to the integration plan, which is expected to be completed by the end of fiscal 2015. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 6 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Accounting Policies [Abstract] | ' | |||||||||||
Basis of Presentation | ' | |||||||||||
BASIS OF PRESENTATION | ||||||||||||
The accompanying consolidated financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to the Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures, normally included in annual consolidated financial statements have been condensed or omitted pursuant to those rules and regulations; however, in the opinion of management the financial information reflects all adjustments, consisting of adjustments of a normal recurring nature, necessary for fair presentation. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes for the fiscal year ended June 30, 2013 which are contained in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on August 16, 2013. The results for the three and six months ended December 31, 2013 are not necessarily indicative of the results to be expected for the full fiscal year. | ||||||||||||
The Company is comprised of the following three operating segments: MCE, MDS and MIS. The Company reports MCE as a standalone reportable segment and has aggregated MDS and MIS to form the reportable segment Mercury Defense and Intelligence Systems (“MDIS”). During the third quarter of fiscal 2013, the Company redefined its operating and reportable segments. The Company reclassified the segment data for the prior periods to conform to the current year's presentation. None of these changes impact the Company’s previously reported consolidated financial results. See Note K of the Notes to Consolidated Financial Statements for further discussion. | ||||||||||||
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated. | ||||||||||||
Use of Estimates | ' | |||||||||||
USE OF ESTIMATES | ||||||||||||
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. | ||||||||||||
Revenue Recognition | ' | |||||||||||
REVENUE RECOGNITION | ||||||||||||
The Company relies upon FASB ASC 605, Revenue Recognition to account for its revenue transactions. Revenue from sales are recognized upon shipment provided that title and risk of loss have passed to the customer, there is persuasive evidence of an arrangement, the sales price is fixed or determinable, collection of the related receivable is reasonably assured, and customer acceptance criteria, if any, have been successfully demonstrated. Out-of-pocket expenses that are reimbursed by the customer are included in revenue and cost of revenue. | ||||||||||||
Certain contracts with customers require the Company to perform tests of its products prior to shipment to ensure their performance complies with the Company’s published product specifications and, on occasion, with additional customer-requested specifications. In these cases, the Company conducts such tests and, if they are completed successfully, includes a written confirmation with each order shipped. As a result, at the time of each product shipment, the Company believes that no further customer testing requirements exist and that there is no uncertainty of acceptance by its customer. | ||||||||||||
The Company uses FASB Accounting Standards Update (“ASU”) No. 2009-13 (“FASB ASU 2009-13”), Multiple-Deliverable Revenue Arrangements. FASB ASU 2009-13 establishes a selling price hierarchy for determining the selling price of a deliverable, which includes: (1) vendor-specific objective evidence (“VSOE”) if available; (2) third-party evidence (“TPE”) if VSOE is not available; and (3) best estimated selling price (“BESP”), if neither VSOE nor TPE is available. Additionally, FASB ASU 2009-13 expands the disclosure requirements related to a vendor’s multiple-deliverable revenue arrangements. | ||||||||||||
The Company enters into multiple-deliverable arrangements that may include a combination of hardware components, related integration or other services. These arrangements generally do not include any performance-, cancellation-, termination- or refund-type provisions. Total revenue recognized under multiple-deliverable revenue arrangements was 53% and 40% of total revenues in the three and six months ended December 31, 2013, respectively. Total revenue recognized under multiple-deliverable revenue arrangements was 33% and 31% of total revenues in the three and six months ended December 31, 2012, respectively. | ||||||||||||
In accordance with the provisions of FASB ASU 2009-13, the Company allocates arrangement consideration to each deliverable in an arrangement based on its relative selling price. The Company generally expects that it will not be able to establish VSOE or TPE due to limited single element transactions and the nature of the markets in which the Company competes, and, as such, the Company typically determines its relative selling price using BESP. | ||||||||||||
The Company uses BESP in its allocation of arrangement consideration. The objective of BESP is to determine the price at which the Company would transact if the product or service were sold by the Company on a standalone basis. | ||||||||||||
The Company’s determination of BESP involves the consideration of several factors based on the specific facts and circumstances of each arrangement. Specifically, the Company considers the cost to produce the deliverable, the anticipated margin on that deliverable, the selling price and profit margin for similar parts, the Company’s ongoing pricing strategy and policies (as evident from the price list established and updated by management on a regular basis), the value of any enhancements that have been built into the deliverable and the characteristics of the varying markets in which the deliverable is sold. | ||||||||||||
The Company analyzes the selling prices used in its allocation of arrangement consideration at a minimum on an annual basis. Selling prices will be analyzed on a more frequent basis if a significant change in the Company’s business necessitates a more timely analysis or if the Company experiences significant variances in its selling prices. | ||||||||||||
Each deliverable within the Company’s multiple-deliverable revenue arrangements is accounted for as a separate unit of accounting under the guidance of FASB ASU 2009-13 if both of the following criteria are met: the delivered item or items have value to the customer on a standalone basis; and for an arrangement that includes a general right of return relative to the delivered item(s), delivery or performance of the undelivered item(s) is considered probable and substantially in the control of the Company. The Company's revenue arrangements generally do not include a general right of return relative to delivered products. The Company considers a deliverable to have standalone value if the item is sold separately by the Company or another vendor or if the item could be resold by the customer. | ||||||||||||
Deliverables not meeting the criteria for being a separate unit of accounting are combined with a deliverable that does meet that criterion. The appropriate allocation of arrangement consideration and recognition of revenue is then determined for the combined unit of accounting. | ||||||||||||
The Company also engages in long-term contracts for development, production and services activities which it accounts for consistent with FASB ASC 605-35, Accounting for Performance of Construction-Type and Certain Production-Type Contracts, and other relevant revenue recognition accounting literature. The Company considers the nature of these contracts and the types of products and services provided when determining the proper accounting for a particular contract. Generally for fixed-price contracts, other than service-type contracts, revenue is recognized primarily under the percentage of completion method or, for certain short-term contracts, by the completed contract method. Revenue from service-type fixed-price contracts is recognized ratably over the contract period or by other appropriate input or output methods to measure service provided, and contract costs are expensed as incurred. The Company establishes billing terms at the time project deliverables and milestones are agreed. Revenues recognized in excess of the amounts invoiced to clients are classified as unbilled receivables. The risk to the Company on a fixed-price contract is that if estimates to complete the contract change from one period to the next, profit levels will vary from period to period. For time and materials contracts, revenue reflects the number of direct labor hours expended in the performance of a contract multiplied by the contract billing rate, as well as reimbursement of other billable direct costs. For all types of contracts, the Company recognizes anticipated contract losses as soon as they become known and estimable. | ||||||||||||
The use of contract accounting requires significant judgment relative to estimating total contract revenues and costs, including assumptions relative to the length of time to complete the contract, the nature and complexity of the work to be performed, anticipated increases in wages and prices for subcontractor services and materials, and the availability of subcontractor services and materials. The Company’s estimates are based upon the professional knowledge and experience of its engineers, program managers and other personnel, who review each long-term contract monthly to assess the contract’s schedule, performance, technical matters and estimated cost at completion. When adjustments in estimated contract costs are identified, such revisions may result in current period adjustments to earnings applicable to performance in prior periods. | ||||||||||||
The Company does not provide its customers with rights of product return, other than those related to warranty provisions that permit repair or replacement of defective goods. The Company accrues for anticipated warranty costs upon product shipment. Revenues from product royalties are recognized upon invoice by the Company. Additionally, all revenues are reported net of government assessed taxes (e.g. sales taxes or value-added taxes). | ||||||||||||
Weighted-Average Shares | ' | |||||||||||
WEIGHTED-AVERAGE SHARES | ||||||||||||
Weighted-average shares were calculated as follows: | ||||||||||||
Three Months Ended December 31, | Six Months Ended December 31, | |||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||
Basic weighted-average shares outstanding | 30,988 | 30,107 | 30,820 | 29,995 | ||||||||
Effect of dilutive equity instruments | — | — | — | — | ||||||||
Diluted weighted-average shares outstanding | 30,988 | 30,107 | 30,820 | 29,995 | ||||||||
Equity instruments to purchase 3,871 shares of common stock were not included in the calculation of diluted net earnings per share for the three and six months ended December 31, 2013, because the equity instruments were anti-dilutive. Equity instruments to purchase 4,301 shares of common stock were not included in the calculation of diluted net earnings per share for the three and six months ended December 31, 2012, because the equity instruments were anti-dilutive. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 6 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Accounting Policies [Abstract] | ' | |||||||||||
Basic and Diluted Weighted Average Shares Outstanding | ' | |||||||||||
WEIGHTED-AVERAGE SHARES | ||||||||||||
Weighted-average shares were calculated as follows: | ||||||||||||
Three Months Ended December 31, | Six Months Ended December 31, | |||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||
Basic weighted-average shares outstanding | 30,988 | 30,107 | 30,820 | 29,995 | ||||||||
Effect of dilutive equity instruments | — | — | — | — | ||||||||
Diluted weighted-average shares outstanding | 30,988 | 30,107 | 30,820 | 29,995 | ||||||||
Fair_Value_of_Financial_Instru1
Fair Value of Financial Instruments (Tables) | 6 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||||||
Summary of Financial Assets Measured at Fair Value | ' | ||||||||||||||||
The following table summarizes the Company’s financial assets measured at fair value on a recurring basis at December 31, 2013: | |||||||||||||||||
Fair Value Measurements | |||||||||||||||||
31-Dec-13 | Level 1 | Level 2 | Level 3 | ||||||||||||||
Assets: | |||||||||||||||||
U.S. Treasury bills and money market funds | $ | 23,026 | $ | 23,026 | $ | — | $ | — | |||||||||
Operating cash | 21,509 | 21,509 | — | — | |||||||||||||
Restricted cash | 546 | 546 | — | — | |||||||||||||
Total | $ | 45,081 | $ | 45,081 | $ | — | $ | — | |||||||||
Inventory_Tables
Inventory (Tables) | 6 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Inventory Disclosure [Abstract] | ' | ||||||||
Inventory | ' | ||||||||
Inventory was comprised of the following: | |||||||||
31-Dec-13 | 30-Jun-13 | ||||||||
Raw materials | $ | 15,978 | $ | 17,512 | |||||
Work in process | 11,775 | 13,432 | |||||||
Finished goods | 5,387 | 6,488 | |||||||
Total | $ | 33,140 | $ | 37,432 | |||||
Goodwill_Tables
Goodwill (Tables) | 6 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ||||||||||||||||
Changes in Carrying Amount of Goodwill | ' | ||||||||||||||||
The following table sets forth the changes in the carrying amount of goodwill for the six months ended December 31, 2013: | |||||||||||||||||
MCE | MDS | MIS | Total | ||||||||||||||
Balance at June 30, 2013 | $ | 133,783 | $ | 33,768 | $ | 8,970 | $ | 176,521 | |||||||||
Goodwill adjustment for the Micronetics acquisition | 91 | — | — | 91 | |||||||||||||
Balance at December 31, 2013 | $ | 133,874 | $ | 33,768 | $ | 8,970 | $ | 176,612 | |||||||||
Restructuring_Plan_Tables
Restructuring Plan (Tables) | 6 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Restructuring and Related Activities [Abstract] | ' | ||||||||||||
Expenses by Reportable Segment for Restructuring Plans | ' | ||||||||||||
The following table presents the detail of activity for the Company’s restructuring plans: | |||||||||||||
Severance & | Facilities | Total | |||||||||||
Related | & Other | ||||||||||||
Restructuring liability at June 30, 2013 | $ | 434 | $ | 286 | $ | 720 | |||||||
MCE restructuring charges | — | 165 | 165 | ||||||||||
Cash paid | (397 | ) | (242 | ) | (639 | ) | |||||||
Reversals(*) | (23 | ) | (60 | ) | (83 | ) | |||||||
Restructuring liability at December 31, 2013 | $ | 14 | $ | 149 | $ | 163 | |||||||
( *) Reversals result from the finalization of severance agreements and unused outplacement services. |
StockBased_Compensation_Tables
Stock-Based Compensation (Tables) | 6 Months Ended | |||||||||||||||
Dec. 31, 2013 | ||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | |||||||||||||||
Summary of Stock Option Plans | ' | |||||||||||||||
The following table summarizes activity of the Company’s stock option plans since June 30, 2013: | ||||||||||||||||
Options Outstanding | ||||||||||||||||
Number of | Weighted Average | Weighted Average | ||||||||||||||
Shares | Exercise Price | Remaining | ||||||||||||||
Contractual Term | ||||||||||||||||
(Years) | ||||||||||||||||
Outstanding at June 30, 2013 | 2,070 | $ | 13.44 | 2.6 | ||||||||||||
Granted | — | — | ||||||||||||||
Exercised | (22 | ) | 6.48 | |||||||||||||
Cancelled | (397 | ) | 17.51 | |||||||||||||
Outstanding at December 31, 2013 | 1,651 | $ | 12.55 | 2.59 | ||||||||||||
Summary of Nonvested Restricted Stock | ' | |||||||||||||||
The following table summarizes the status of the Company’s non-vested restricted stock awards since June 30, 2013: | ||||||||||||||||
Non-vested Restricted Stock Awards | ||||||||||||||||
Number of | Weighted Average | |||||||||||||||
Shares | Grant Date | |||||||||||||||
Fair Value | ||||||||||||||||
Outstanding at June 30, 2013 | 2,007 | $ | 10.82 | |||||||||||||
Granted | 903 | 9.2 | ||||||||||||||
Vested | (664 | ) | 10.61 | |||||||||||||
Forfeited | (26 | ) | 10.72 | |||||||||||||
Outstanding at December 31, 2013 | 2,220 | $ | 10.23 | |||||||||||||
Stock Based Compensation Expenses | ' | |||||||||||||||
The following table presents share-based compensation expenses included in the Company’s consolidated statements of operations: | ||||||||||||||||
Three Months Ended December 31, | Six Months Ended December 31, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Cost of revenues | $ | 260 | $ | 99 | $ | 496 | $ | 230 | ||||||||
Selling, general and administrative | 2,037 | 1,706 | 4,369 | 3,609 | ||||||||||||
Research and development | 420 | 205 | 887 | 520 | ||||||||||||
Share-based compensation expense before tax | 2,717 | 2,010 | 5,752 | 4,359 | ||||||||||||
Income taxes | (932 | ) | (752 | ) | (2,022 | ) | (1,605 | ) | ||||||||
Net compensation expense | $ | 1,785 | $ | 1,258 | $ | 3,730 | $ | 2,754 | ||||||||
Operating_Segment_Geographic_I1
Operating Segment, Geographic Information and Significant Customers (Tables) | 6 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||||||||||
Summary of Performance of Operations by Reportable Segment | ' | ||||||||||||||||||||
The following is a summary of the performance of the Company’s operations by reportable segment: | |||||||||||||||||||||
MCE | MDIS | Eliminations | Total | ||||||||||||||||||
THREE MONTHS ENDED | |||||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||
Net revenues to unaffiliated customers | $ | 42,305 | $ | 10,603 | $ | 182 | $ | 53,090 | |||||||||||||
Intersegment revenues | 2,733 | — | (2,733 | ) | — | ||||||||||||||||
Net revenues | $ | 45,038 | $ | 10,603 | $ | (2,551 | ) | $ | 53,090 | ||||||||||||
Adjusted EBITDA | $ | 4,082 | $ | 921 | $ | 89 | $ | 5,092 | |||||||||||||
THREE MONTHS ENDED | |||||||||||||||||||||
31-Dec-12 | |||||||||||||||||||||
Net revenues to unaffiliated customers | $ | 37,251 | $ | 14,064 | $ | (1,511 | ) | $ | 49,804 | ||||||||||||
Intersegment revenues | 3,239 | 4 | (3,243 | ) | — | ||||||||||||||||
Net revenues | $ | 40,490 | $ | 14,068 | $ | (4,754 | ) | $ | 49,804 | ||||||||||||
Adjusted EBITDA | $ | (324 | ) | $ | 1,973 | $ | (650 | ) | $ | 999 | |||||||||||
SIX MONTHS ENDED | |||||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||
Net revenues to unaffiliated customers | $ | 85,793 | $ | 21,733 | $ | (496 | ) | $ | 107,030 | ||||||||||||
Intersegment revenues | 3,847 | — | (3,847 | ) | — | ||||||||||||||||
Net revenues | $ | 89,640 | $ | 21,733 | $ | (4,343 | ) | $ | 107,030 | ||||||||||||
Adjusted EBITDA | $ | 6,425 | $ | 2,279 | $ | 7 | $ | 8,711 | |||||||||||||
SIX MONTHS ENDED | |||||||||||||||||||||
31-Dec-12 | |||||||||||||||||||||
Net revenues to unaffiliated customers | $ | 69,147 | $ | 29,892 | $ | 193 | $ | 99,232 | |||||||||||||
Intersegment revenues | 8,147 | 12 | (8,159 | ) | — | ||||||||||||||||
Net revenues | $ | 77,294 | $ | 29,904 | $ | (7,966 | ) | $ | 99,232 | ||||||||||||
Adjusted EBITDA | $ | (2,531 | ) | $ | 5,199 | $ | (27 | ) | $ | 2,641 | |||||||||||
Reconciliation of Net Income (loss), Most Directly Comparable GAAP Financial Measure to Adjusted EBITDA | ' | ||||||||||||||||||||
The following table reconciles the Company’s net loss, the most directly comparable GAAP financial measure, to its adjusted EBITDA: | |||||||||||||||||||||
Three Months Ended December 31, | Six Months Ended December 31, | ||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||||
Net loss | $ | (1,045 | ) | $ | (4,784 | ) | $ | (3,301 | ) | $ | (11,984 | ) | |||||||||
Interest expense, net | 8 | 13 | 22 | 19 | |||||||||||||||||
Tax benefit | (593 | ) | (2,192 | ) | (1,872 | ) | (5,843 | ) | |||||||||||||
Depreciation | 1,981 | 2,191 | 3,993 | 4,402 | |||||||||||||||||
Amortization of intangible assets | 1,927 | 2,230 | 4,035 | 4,018 | |||||||||||||||||
Restructuring and other charges | 97 | 217 | 82 | 5,201 | |||||||||||||||||
Acquisition costs and other related expenses | — | 42 | — | 272 | |||||||||||||||||
Fair value adjustments from purchase accounting | — | 1,272 | — | 2,197 | |||||||||||||||||
Stock-based compensation expense | 2,717 | 2,010 | 5,752 | 4,359 | |||||||||||||||||
Adjusted EBITDA | $ | 5,092 | $ | 999 | $ | 8,711 | $ | 2,641 | |||||||||||||
Geographic Distribution of Revenues and Long Lived Assets from Continuing Operations | ' | ||||||||||||||||||||
The geographic distribution of the Company’s revenues is summarized as follows: | |||||||||||||||||||||
US | Europe | Asia Pacific | Eliminations | Total | |||||||||||||||||
THREE MONTHS ENDED | |||||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||
Net revenues to unaffiliated customers | $ | 52,509 | $ | 451 | $ | 130 | $ | — | $ | 53,090 | |||||||||||
Inter-geographic revenues | 679 | 47 | — | (726 | ) | — | |||||||||||||||
Net revenues | $ | 53,188 | $ | 498 | $ | 130 | $ | (726 | ) | $ | 53,090 | ||||||||||
THREE MONTHS ENDED | |||||||||||||||||||||
31-Dec-12 | |||||||||||||||||||||
Net revenues to unaffiliated customers | $ | 45,953 | $ | 1,084 | $ | 2,767 | $ | — | $ | 49,804 | |||||||||||
Inter-geographic revenues | 2,749 | 138 | 19 | (2,906 | ) | — | |||||||||||||||
Net revenues | $ | 48,702 | $ | 1,222 | $ | 2,786 | $ | (2,906 | ) | $ | 49,804 | ||||||||||
SIX MONTHS ENDED | |||||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||
Net revenues to unaffiliated customers | $ | 105,178 | $ | 959 | $ | 893 | $ | — | $ | 107,030 | |||||||||||
Inter-geographic revenues | 1,498 | 204 | 140 | (1,842 | ) | — | |||||||||||||||
Net revenues | $ | 106,676 | $ | 1,163 | $ | 1,033 | $ | (1,842 | ) | $ | 107,030 | ||||||||||
SIX MONTHS ENDED | |||||||||||||||||||||
31-Dec-12 | |||||||||||||||||||||
Net revenues to unaffiliated customers | $ | 93,588 | $ | 1,428 | $ | 4,216 | $ | — | $ | 99,232 | |||||||||||
Inter-geographic revenues | 3,927 | 187 | 45 | (4,159 | ) | — | |||||||||||||||
Net revenues | $ | 97,515 | $ | 1,615 | $ | 4,261 | $ | (4,159 | ) | $ | 99,232 | ||||||||||
Foreign revenue is based on the country in which the Company’s legal subsidiary is domiciled. | |||||||||||||||||||||
The geographic distribution of the Company’s long-lived assets is summarized as follows: | |||||||||||||||||||||
U.S. | Europe | Asia Pacific | Eliminations | Total | |||||||||||||||||
31-Dec-13 | $ | 16,104 | $ | 41 | $ | — | $ | — | $ | 16,145 | |||||||||||
30-Jun-13 | $ | 14,986 | $ | 33 | $ | — | $ | — | $ | 15,019 | |||||||||||
Customers Comprising Ten Percent or More Revenues | ' | ||||||||||||||||||||
Customers comprising 10% or more of the Company’s revenues for the periods shown below are as follows: | |||||||||||||||||||||
Three Months Ended December 31, | Six Months Ended December 31, | ||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||||
Lockheed Martin Corporation | 29 | % | * | 20 | % | * | |||||||||||||||
Northrop Grumman Corporation | 14 | % | 13 | % | 15 | % | 12 | % | |||||||||||||
Raytheon Company | 12 | % | 12 | % | 13 | % | * | ||||||||||||||
55 | % | 25 | % | 48 | % | 12 | % | ||||||||||||||
* | Indicates that the amount is less than 10% of the Company’s revenues for the respective period. |
Description_of_Business_Detail
Description of Business (Details) | 6 Months Ended |
Dec. 31, 2013 | |
contractor | |
program | |
Accounting Policies [Abstract] | ' |
Number of programs using products and services | 300 |
Number of contractors using products and services | 25 |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies - Additional Information (Detail) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 |
Segment | ||||
Accounting Policies [Abstract] | ' | ' | ' | ' |
Number of Operating Segments | ' | ' | 3 | ' |
Significant Accounting Policies [Line Items] | ' | ' | ' | ' |
Common stock excluded from diluted earning per share | 3,871 | 4,301 | 3,871 | 4 |
Multiple Delivery Revenue [Member] | ' | ' | ' | ' |
Significant Accounting Policies [Line Items] | ' | ' | ' | ' |
Percentage Of Revenue Recognized | 53.00% | 33.00% | 40.00% | 31.00% |
Basic_and_Diluted_Weighted_Ave
Basic and Diluted Weighted Average Shares Outstanding (Detail) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 |
Earnings Per Share [Abstract] | ' | ' | ' | ' |
Basic weighted-average shares outstanding | 30,988 | 30,107 | 30,820 | 29,995 |
Effect of dilutive equity instruments | 0 | 0 | 0 | 0 |
Diluted weighted-average shares outstanding | 30,988 | 30,107 | 30,820 | 29,995 |
Summary_of_Financial_Assets_Me
Summary of Financial Assets Measured at Fair Value on Recurring Basis (Detail) (Fair Value, Measurements, Recurring [Member], USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Assets: | ' |
Fair value measurement disclosure | $45,081 |
Fair Value, Inputs, Level 1 [Member] | ' |
Assets: | ' |
Fair value measurement disclosure | 45,081 |
Fair Value, Inputs, Level 2 [Member] | ' |
Assets: | ' |
Fair value measurement disclosure | 0 |
Fair Value, Inputs, Level 3 [Member] | ' |
Assets: | ' |
Fair value measurement disclosure | 0 |
U.S. Treasury bills and money market funds | ' |
Assets: | ' |
Fair value measurement disclosure | 23,026 |
U.S. Treasury bills and money market funds | Fair Value, Inputs, Level 1 [Member] | ' |
Assets: | ' |
Fair value measurement disclosure | 23,026 |
U.S. Treasury bills and money market funds | Fair Value, Inputs, Level 2 [Member] | ' |
Assets: | ' |
Fair value measurement disclosure | 0 |
U.S. Treasury bills and money market funds | Fair Value, Inputs, Level 3 [Member] | ' |
Assets: | ' |
Fair value measurement disclosure | 0 |
Operating cash | ' |
Assets: | ' |
Fair value measurement disclosure | 21,509 |
Operating cash | Fair Value, Inputs, Level 1 [Member] | ' |
Assets: | ' |
Fair value measurement disclosure | 21,509 |
Operating cash | Fair Value, Inputs, Level 2 [Member] | ' |
Assets: | ' |
Fair value measurement disclosure | 0 |
Operating cash | Fair Value, Inputs, Level 3 [Member] | ' |
Assets: | ' |
Fair value measurement disclosure | 0 |
Restricted cash | ' |
Assets: | ' |
Fair value measurement disclosure | 546 |
Restricted cash | Fair Value, Inputs, Level 1 [Member] | ' |
Assets: | ' |
Fair value measurement disclosure | 546 |
Restricted cash | Fair Value, Inputs, Level 2 [Member] | ' |
Assets: | ' |
Fair value measurement disclosure | 0 |
Restricted cash | Fair Value, Inputs, Level 3 [Member] | ' |
Assets: | ' |
Fair value measurement disclosure | $0 |
Inventory_Detail
Inventory (Detail) (USD $) | Dec. 31, 2013 | Jun. 30, 2013 |
In Thousands, unless otherwise specified | ||
Inventory Disclosure [Abstract] | ' | ' |
Raw materials | $15,978 | $17,512 |
Work in process | 11,775 | 13,432 |
Finished goods | 5,387 | 6,488 |
Total | $33,140 | $37,432 |
Inventory_Additional_Informati
Inventory - Additional Information (Detail) (USD $) | 6 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Schedule of Inventory [Line Items] | ' | ' |
Increase in Inventory | ($4,319,000) | $2,847,000 |
Production Cycle Term | 'Longer than one year | ' |
Product | ' | ' |
Schedule of Inventory [Line Items] | ' | ' |
Inventory relating to contracts having production cycles longer than one year | $0 | ' |
Changes_in_Carrying_Amount_of_
Changes in Carrying Amount of Goodwill (Detail) (USD $) | Dec. 31, 2013 | Jun. 30, 2013 | Dec. 31, 2013 | Jun. 30, 2013 | Dec. 31, 2013 | Jun. 30, 2013 | Dec. 31, 2013 | Jun. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | MCE | MCE | MDS | MDS | MIS | MIS | Micronetics | Micronetics | ||
MCE | ||||||||||
Goodwill [Roll Forward] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Beginning Balance | $176,612 | $176,521 | $133,874 | $133,783 | $33,768 | $33,768 | $8,970 | $8,970 | ' | ' |
Goodwill adjustment for the Micronetics acquisition | ' | ' | ' | ' | ' | ' | ' | ' | 91 | 91 |
Ending Balance | $176,612 | $176,521 | $133,874 | $133,783 | $33,768 | $33,768 | $8,970 | $8,970 | ' | ' |
Expenses_by_Reportable_Segment
Expenses by Reportable Segment for Restructuring Plans (Detail) (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | |
Restructuring Reserve [Roll Forward] | ' | |
Restructuring liability at beginning of period | $720 | |
Cash paid | -639 | |
Reversals | -83 | [1] |
Restructuring liability at end of period | 163 | |
Severance | ' | |
Restructuring Reserve [Roll Forward] | ' | |
Restructuring liability at beginning of period | 434 | |
Cash paid | -397 | |
Reversals | -23 | [1] |
Restructuring liability at end of period | 14 | |
Facilities And Other | ' | |
Restructuring Reserve [Roll Forward] | ' | |
Restructuring liability at beginning of period | 286 | |
Cash paid | -242 | |
Reversals | 60 | |
Restructuring liability at end of period | 149 | |
MCE | ' | |
Component of Operating Other Cost and Expense [Line Items] | ' | |
Restructuring, Settlement and Impairment Provisions | 165 | |
MCE | Severance | ' | |
Component of Operating Other Cost and Expense [Line Items] | ' | |
Restructuring, Settlement and Impairment Provisions | 0 | |
MCE | Facilities And Other | ' | |
Component of Operating Other Cost and Expense [Line Items] | ' | |
Restructuring, Settlement and Impairment Provisions | $165 | |
[1] | Reversals result from the finalization of severance agreements and unused outplacement services. |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Disclosure [Abstract] | ' | ' | ' | ' |
Income tax (benefit) expense | ($593) | ($2,192) | ($1,872) | ($5,843) |
(Loss) income from operations before income taxes | -1,638 | -6,976 | -5,173 | -17,827 |
Immaterial Error Correction | '231 | ' | '231 | ' |
Estimated changes in unrecognized tax benefits | $117 | ' | $117 | ' |
Commitments_And_Contingencies_
Commitments And Contingencies - Additional Information (Detail) (Non-cancelable purchase commitments, USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Non-cancelable purchase commitments | ' |
Long-term Purchase Commitment [Line Items] | ' |
Purchase commitments for less than one year | $18,036 |
Debt_Additional_Information_De
Debt - Additional Information (Detail) (Senior Unsecured Credit Facilities, USD $) | Dec. 31, 2013 | Oct. 12, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Oct. 12, 2012 | Dec. 31, 2013 | Dec. 31, 2013 |
Maximum | Minimum | KeyBank National Association | Acquisition Covenants | Acquisition Covenants | |||
Maximum | Minimum | ||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Maximum borrowing capacity | ' | ' | ' | ' | $200,000,000 | ' | ' |
Debt instrument borrowing period | ' | ' | ' | ' | '5 years | ' | ' |
Credit Agreement accordion feature, incremental revolver or term loan amount | ' | 50,000,000 | ' | ' | ' | ' | ' |
Leverage Ratio | ' | ' | 3.5 | ' | ' | 3.5 | ' |
Interest Coverage Ratio | ' | ' | ' | 3 | ' | ' | 3 |
Remaining borrowing capacity | 57,105,000 | ' | ' | ' | ' | ' | ' |
Borrowings outstanding | 0 | ' | ' | ' | ' | ' | ' |
Amount of outstanding letter of credit | $4,299,000 | ' | ' | ' | ' | ' | ' |
Stock_Based_Compensation_Addit
Stock Based Compensation - Additional Information (Detail) | 6 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2013 |
Employee Stock [Member] | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Shares authorized for issuance under stock incentive plan | 1,400 |
Shares available for future grant | 201 |
Purchase price as a percentage of the lesser of the market value of such shares at either the beginning or the end of each nine-month offering period | 85.00% |
Percentage of employee compensation that may be uses to purchase common stock through payroll deductions, maximum | 10.00% |
2005 Stock Incentive Plan | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Shares authorized for issuance under stock incentive plan | 8,018 |
Exercise price of stock option, percentage | 100.00% |
Shares available for future grant | 1,095 |
2005 Stock Incentive Plan | Maximum | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Term of stock option | '7 years |
Summary_of_Stock_Option_Plans_
Summary of Stock Option Plans (Detail) (USD $) | 6 Months Ended | 12 Months Ended | 0 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Jun. 30, 2013 | Nov. 07, 2013 |
Employee Stock [Member] | Employee Stock [Member] | Stock Options | Stock Options | 2005 Stock Incentive Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized | ' | ' | ' | ' | 0 |
Number of Shares | ' | ' | ' | ' | ' |
Outstanding at beginning of period | ' | ' | 2,070 | ' | ' |
Granted | 0 | 0 | 0 | ' | ' |
Exercised | ' | ' | -22 | ' | ' |
Cancelled | ' | ' | -397 | ' | ' |
Outstanding at end of period | ' | ' | 1,651 | 2,070 | ' |
Weighted Average Exercise Price | ' | ' | ' | ' | ' |
Outstanding at beginning of period | ' | ' | $13.44 | ' | ' |
Granted | ' | ' | $0 | ' | ' |
Exercised | ' | ' | $6.48 | ' | ' |
Cancelled | ' | ' | $17.51 | ' | ' |
Outstanding at end of period | ' | ' | $12.55 | $13.44 | ' |
Weighted Average Remaining Contractual Term (Years) | ' | ' | ' | ' | ' |
Outstanding at end of period | ' | ' | '2 years 7 months 2 days | '2 years 7 months 6 days | ' |
Summary_of_Nonvested_Restricte
Summary of Nonvested Restricted Stock (Detail) (Restricted Stock, USD $) | 6 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 |
Restricted Stock | ' |
Number of Shares | ' |
Beginning Balance | 2,007 |
Granted | 903 |
Vested | -664 |
Forfeited | -26 |
Ending Balance | 2,220 |
Weighted Average Grant Date Fair Value | ' |
Beginning Balance | $10.82 |
Granted | $9.20 |
Vested | $10.61 |
Forfeited | $10.72 |
Ending Balance | $10.23 |
Stock_Based_Compensation_Expen
Stock Based Compensation Expenses (Detail) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Share-based compensation expense before tax | $2,717 | $2,010 | $5,752 | $4,359 |
Income taxes | -932 | -752 | -2,022 | -1,605 |
Net compensation expense | 1,785 | 1,258 | 3,730 | 2,754 |
Cost of revenues | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Share-based compensation expense before tax | 260 | 99 | 496 | 230 |
Selling, general and administrative | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Share-based compensation expense before tax | 2,037 | 1,706 | 4,369 | 3,609 |
Research and development | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Share-based compensation expense before tax | $420 | $205 | $887 | $520 |
Summary_of_Performance_of_Oper
Summary of Performance of Operations by Reportable Segment (Detail) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 |
Segment Reporting, Revenue Reconciling Item [Line Items] | ' | ' | ' | ' |
Intersegment revenues | $0 | $0 | $0 | $0 |
Net revenues | 53,090 | 49,804 | 107,030 | 99,232 |
Adjusted EBITDA | 5,092 | 999 | 8,711 | 2,641 |
Reportable Segment | ' | ' | ' | ' |
Segment Reporting, Revenue Reconciling Item [Line Items] | ' | ' | ' | ' |
Net revenues to unaffiliated customers | 53,090 | 49,804 | 107,030 | 99,232 |
Net revenues | 53,090 | 49,804 | 107,030 | 99,232 |
Adjusted EBITDA | 5,092 | 999 | 8,711 | 2,641 |
MCE | Reportable Segment | ' | ' | ' | ' |
Segment Reporting, Revenue Reconciling Item [Line Items] | ' | ' | ' | ' |
Net revenues to unaffiliated customers | 42,305 | 37,251 | 85,793 | 69,147 |
Intersegment revenues | 2,733 | 3,239 | 3,847 | 8,147 |
Net revenues | 45,038 | 40,490 | 89,640 | 77,294 |
Adjusted EBITDA | 4,082 | -324 | 6,425 | -2,531 |
Mercury Defense and Intelligence Systems | Reportable Segment | ' | ' | ' | ' |
Segment Reporting, Revenue Reconciling Item [Line Items] | ' | ' | ' | ' |
Net revenues to unaffiliated customers | 10,603 | 14,064 | 21,733 | 29,892 |
Intersegment revenues | ' | 4 | 0 | 12 |
Net revenues | 10,603 | 14,068 | 21,733 | 29,904 |
Adjusted EBITDA | 921 | 1,973 | 2,279 | 5,199 |
Eliminations | Reportable Segment | ' | ' | ' | ' |
Segment Reporting, Revenue Reconciling Item [Line Items] | ' | ' | ' | ' |
Net revenues to unaffiliated customers | 182 | -1,511 | -496 | 193 |
Intersegment revenues | -2,733 | -3,243 | -3,847 | -8,159 |
Net revenues | -2,551 | -4,754 | -4,343 | -7,966 |
Adjusted EBITDA | $89 | ($650) | $7 | ($27) |
Reconciles_Net_Income_loss_Mos
Reconciles Net Income (loss), Most Directly Comparable GAAP Financial Measure to Adjusted EBITDA (Detail) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 |
Segment Reporting [Abstract] | ' | ' | ' | ' |
Net loss | ($1,045) | ($4,784) | ($3,301) | ($11,984) |
Interest expense, net | 8 | 13 | 22 | 19 |
Tax benefit | -593 | -2,192 | -1,872 | -5,843 |
Depreciation | 1,981 | 2,191 | 3,993 | 4,402 |
Amortization of intangible assets | 1,927 | 2,230 | 4,035 | 4,018 |
Restructuring and other charges | 97 | 217 | 82 | 5,201 |
Acquisition costs and other related expenses | 0 | 42 | 0 | 272 |
Fair value adjustments from purchase accounting | 0 | 1,272 | 0 | 2,197 |
Stock-based compensation expense | 2,717 | 2,010 | 5,752 | 4,359 |
Adjusted EBITDA | $5,092 | $999 | $8,711 | $2,641 |
Geographic_Distribution_of_Rev
Geographic Distribution of Revenues and Long Lived Assets from Continuing Operations (Detail) (USD $) | 3 Months Ended | 6 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 30, 2013 |
Segment Reporting, Revenue Reconciling Item [Line Items] | ' | ' | ' | ' | ' |
Net revenues to unaffiliated customers | $53,090 | $49,804 | $107,030 | $99,232 | ' |
Net revenues | 53,090 | 49,804 | 107,030 | 99,232 | ' |
Identifiable long-lived assets | 16,145 | ' | 16,145 | ' | 15,019 |
US | ' | ' | ' | ' | ' |
Segment Reporting, Revenue Reconciling Item [Line Items] | ' | ' | ' | ' | ' |
Net revenues to unaffiliated customers | 52,509 | 45,953 | 105,178 | 93,588 | ' |
Inter-geographic revenues | 679 | 2,749 | 1,498 | 3,927 | ' |
Net revenues | 53,188 | 48,702 | 106,676 | 97,515 | ' |
Identifiable long-lived assets | 16,104 | ' | 16,104 | ' | 14,986 |
Europe | ' | ' | ' | ' | ' |
Segment Reporting, Revenue Reconciling Item [Line Items] | ' | ' | ' | ' | ' |
Net revenues to unaffiliated customers | 451 | 1,084 | 959 | 1,428 | ' |
Inter-geographic revenues | 47 | 138 | 204 | 187 | ' |
Net revenues | 498 | 1,222 | 1,163 | 1,615 | ' |
Identifiable long-lived assets | 41 | ' | 41 | ' | 33 |
Asia Pacific | ' | ' | ' | ' | ' |
Segment Reporting, Revenue Reconciling Item [Line Items] | ' | ' | ' | ' | ' |
Net revenues to unaffiliated customers | 130 | 2,767 | 893 | 4,216 | ' |
Inter-geographic revenues | 0 | 19 | 140 | 45 | ' |
Net revenues | 130 | 2,786 | 1,033 | 4,261 | ' |
Identifiable long-lived assets | ' | ' | ' | ' | 0 |
Eliminations | ' | ' | ' | ' | ' |
Segment Reporting, Revenue Reconciling Item [Line Items] | ' | ' | ' | ' | ' |
Inter-geographic revenues | -726 | -2,906 | -1,842 | -4,159 | ' |
Net revenues | ($726) | ($2,906) | ($1,842) | ($4,159) | ' |
Customers_Comprising_Ten_Perce
Customers Comprising Ten Percent or more Revenues (Detail) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | |
Revenue, Major Customer [Line Items] | ' | ' | ' | ' |
Revenue from Customers | 55.00% | 25.00% | 48.00% | 12.00% |
MCE | Northrop Grumman Corporation | ' | ' | ' | ' |
Revenue, Major Customer [Line Items] | ' | ' | ' | ' |
Revenue from Customers | 14.00% | 13.00% | 15.00% | 12.00% |
MCE | Raytheon Company | ' | ' | ' | ' |
Revenue, Major Customer [Line Items] | ' | ' | ' | ' |
Revenue from Customers | 12.00% | 12.00% | 13.00% | ' |
MCE | Lockheed Martin Corporation | ' | ' | ' | ' |
Revenue, Major Customer [Line Items] | ' | ' | ' | ' |
Revenue from Customers | 29.00% | ' | 20.00% | ' |
Customers_Comprising_Ten_Perce1
Customers Comprising Ten Percent or more Revenues (Parenthetical) (Detail) (Maximum) | 6 Months Ended |
Dec. 31, 2013 | |
Maximum | ' |
Revenue, Major Customer [Line Items] | ' |
Percent of company revenue | 10.00% |
Programs_Comprising_Ten_Percen
Programs Comprising Ten Percent or more of Company's Revenue (Detail) (Program One [Member]) | 3 Months Ended | 6 Months Ended |
Dec. 31, 2013 | Dec. 31, 2013 | |
Program One [Member] | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Percent of company revenue | 27.00% | 16.00% |
Subsequent_Events_Details
Subsequent Events (Details) (USD $) | 3 Months Ended | 6 Months Ended | 0 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Jan. 27, 2014 | Mar. 31, 2014 | Jun. 30, 2014 | Jun. 30, 2015 |
Subsequent Event [Member] | Forecast [Member] | Forecast [Member] | Forecast [Member] | |||||
Person | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Restructuring and other charges | $97 | $217 | $82 | $5,201 | ' | $3,325 | $4,900 | $4,200 |
Number of positions eliminated | ' | ' | ' | ' | 54 | ' | ' | ' |