8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of report (Date of earliest event reported): June 2, 2006

Mercury Computer Systems, Inc.

(Exact Name of Registrant as Specified in Charter)

Massachusetts	000-23599	04-2741391
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

199 Riverneck Road, Chelmsford, Massachusetts	01824
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (978) 256-1300

N/A

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 7.01. Regulation FD Disclosure.

The management of Mercury Computer Systems, Inc. (“Mercury”) will present an overview of Mercury’s business on Friday, June 2, 2006 at the Cowen & Company 34th Annual Technology Conference. Attached as Exhibit 99.1 to this Current Report on Form 8-K (the “Report”) is a copy of the slide presentation to be made by Mercury at the conference.

This information is being furnished pursuant to Item 7.01 of this Report and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section and will not be incorporated by reference into any registration statement filed by Mercury under the Securities Act of 1933, as amended, unless specifically identified as being incorporated therein by reference. This Report will not be deemed an admission as to the materiality of any information in this Report that is being disclosed pursuant to Regulation FD.

Please refer to page 2 of Exhibit 99.1 for a discussion of certain forward-looking statements included therein and the risks and uncertainties related thereto, as well as the use of non-GAAP financial measures included therein.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
99.1	Presentation materials dated June 2, 2006.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	MERCURY COMPUTER SYSTEMS, INC.                         (Registrant)
Date: June 2, 2006	By:	/s/ Robert E. Hult
		Robert E. Hult Senior Vice President, Operations and Finance, Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Description
99.1	Presentation materials dated June 2, 2006.

EX-99.1

©

2005  Mercury Computer Systems, Inc.

Cowen & Co. 34th Annual

Technology Conference

June 2, 2006

Jay

Bertelli,

President,

Chief

Executive

Officer

&

Chairman

Bob

Hult,

SVP,

Operations

&

Finance,

Chief

Financial

Officer

Exhibit 99.1

©

2005 Mercury Computer Systems, Inc.

2

Forward-Looking Safe Harbor Statement

This

presentation

contains

certain

forward-looking

statements,

as

that

term

is

defined

in

the

Private

Securities

Litigation

Reform

Act

of

1995,

including

those

relating

to

anticipated

fiscal

2006

business

performance

and

beyond.

You

can

identify

these

statements

by

our

use

of

the

words

"may,"

"will,"

"should,"

"plans,"

"expects,"

"anticipates,"

"continue,"

"estimate,"

"project,"

"intend,"

and

similar

expressions.

These

forward-looking

statements

involve

risks

and

uncertainties

that

could

cause

actual

results

to

differ

materially

from

those

projected

or

anticipated.

Such

risks

and

uncertainties

include,

but

are

not

limited

to,

general

economic

and

business

conditions,

including

unforeseen

weakness

in

the

Company's

markets,

effects

of

continued

geopolitical

unrest

and

regional

conflicts,

competition,

changes

in

technology,

and

methods

of

marketing,

delays

in

completing

engineering

and

manufacturing

programs,

changes

in

customer

order

patterns,

changes

in

product

mix,

continued

success

in

technological

advances

and

delivering

technological

innovations,

continued

funding

of

defense

programs,

the

timing

of

such

funding,

changes

in

the

U.S.

Government's

interpretation

of

federal

procurement

rules

and

regulations,

market

acceptance

of

the

Company's

products,

shortages

in

components,

production

delays

due

to

performance

quality

issues

with

outsourced

components,

and

inability

to

fully

realize

the

expected

benefits

from

acquisitions

or

delays

in

realizing

such

benefits,

challenges

in

integrating

acquired

businesses,

and

achieving

anticipated

synergies,

and

difficulties

in

retaining

key

customers.

These

risks

and

uncertainties

also

include

such

additional

risk

factors

as

are

discussed

in

the

Company's

recent

filings

with

the

U.S.

Securities

and

Exchange

Commission,

including

its

Quarterly

Report

on

Form

10-Q

for

the

quarter

ended

March

31,

2006.

The

Company

cautions

readers

not

to

place

undue

reliance

upon

any

such

forward-looking

statements,

which

speak

only

as

of

the

date

made.

The

Company

undertakes

no

obligation

to

update

any

forward-looking

statement

to

reflect

events

or

circumstances

after

the

date

on

which

such

statement

is

made.

Use

of

Non-GAAP

(Generally

Accepted

Accounting

Principles)

Financial

Measures

In

addition

to

reporting

financial

results

in

accordance

with

generally

accepted

accounting

principles,

or

GAAP,

the

Company

provides

non-GAAP

financial

measures

adjusted

to

exclude

certain

non-cash

and

other

specified

charges,

which

the

Company

believes

are

useful

to

help

investors

better

understand

its

past

financial

performance

and

prospects

for

the

future.

However,

the

presentation

of

non-GAAP

financial

measures

is

not

meant

to

be

considered

in

isolation

or

as

a

substitute

for

financial

information

provided

in

accordance

with

GAAP.

Management

believes

these

non-GAAP

financial

measures

assist

in

providing

a

more

complete

understanding

of

the

Company's

underlying

operational

results

and

trends,

and

management

uses

these

measures,

along

with

their

corresponding

GAAP

financial

measures,

to

manage

the

Company's

business,

to

evaluate

its

performance

compared

to

prior

periods

and

the

marketplace,

and

to

establish

operational

goals.

A

reconciliation

of

GAAP

to

non-GAAP

financial

results

discussed

in

this

presentation

is

contained

in

the

company’s

Third

Quarter

Fiscal

2006

earnings

release,

which

can

be

found

on

our

website

at

www.mc.com/mediacenter/pr/.

©

2005 Mercury Computer Systems, Inc.

3

Company Overview

•

Leader in high-performance

computing for defense and

commercial applications

•

FY05 revenues of $250

million

•

854 employees

•

HQ in Chelmsford, MA

•

Specialized technology for:

High-data rate computing and I/O

Signal processing

2D and 3D image processing

•

Industry focus areas:

Aerospace & Defense

Energy

Life Sciences

Semiconductor Equipment

Telecommunications

Research

©

2005 Mercury Computer Systems, Inc.

4

Mercury Growth Story

•

Strong competitive position in attractive and

growing markets

•

Leverage technology investments across multiple

applications in diverse markets

Defense and Commercial

•

Straightforward operating model and financial

structure

•

Strong balance sheet, operating cash flow with

significant financing flexibility

•

Open innovation strategy through partnerships and

acquisitions enhances capability to deliver solutions

across target markets

©

2005 Mercury Computer Systems, Inc.

5

Deep

Algorithm

Expertise

System

Architecture Expertise

Acceleration

Expertise

GPU

Cell

Broadband

Engine

FPGA

Applications

Expertise

…by combining extensive technical expertise with deep knowledge

of

the

science

behind

our

customers’

applications…

•

Radar

•

Sonar

•

Signals

intelligence

•

Image & data

exploitation

•

Smart weapons

Life Sciences:

•

Medical imaging

•

Biotechnology

Geosciences:

•

Oil and gas

exploration

•

Engineering and

simulation

Semiconductor

equipment:

•

Mask generation

•

Wafer inspection

High-end baggage

scanning

Telecommunications

Solving Challenging Problems…

…and delivering broad, sustained value

to our customers.

Parallel

Processing

New markets and

opportunities

that can benefit

from Mercury

expertise

©

2005 Mercury Computer Systems, Inc.

6

Mercury Broadly Leverages Embedded Markets

Telecom

Life Sciences

Defense

3-D

Visualization

Image

Processing

Shared Benefit

©

2005 Mercury Computer Systems, Inc.

7

Mercury, IBM & Cell: A Landmark Agreement

•

The Cell Broadband Engine processor is

5-100x faster than conventional

microprocessors

•

Mercury is the 1

st

non-gaming company

to integrate the Cell Broadband Engine

into its products

High-volume gaming market is transforming the

technology industry

•

Targeting applications in existing and

new markets with optimized Cell

Broadband Engine-based products

Medical imaging, inspection, defense,

geosciences, telecommunications, etc.

•

Mercury is uniquely capable

The Cell Broadband Engine is designed to solve

the same types of problems Mercury has been

solving for many years

Cell Broadband Engine is

a trademark of Sony

Computer Entertainment

Inc.

©

2005  Mercury Computer Systems, Inc.

Commercial Imaging and

Visualization (CIV)

©

2005 Mercury Computer Systems, Inc.

9

Commercial Imaging & Visualization

•

20% of FY05 revenues

50% growth over FY04

•

Delivering Imaging &

Computing Solutions to:

Life Sciences (Medical Imaging &

Biotech)

Geosciences  (Oil and gas

exploration)

Navigation

•

Strong economic trends

•

Growing, $1 billion+ market

•

Increased 3D demand

•

2D + 3D + systems =

competitive advantage

0

500

1000

1500

2000

2500

2006

2008

2010

Navigation & CAD

Geoscience

Biotech (Microscopy

& Drug Disc.)

Medical Imaging and

PACS

OEM Available Markets US$M

Source: IDC , Frost & Sullivan, MCS data

©

2005 Mercury Computer Systems, Inc.

10

CIV Customers & Targets  (not all inclusive)

Oil and Gas

©

2005 Mercury Computer Systems, Inc.

11

Acquire

Visualize

Archive

Distribute

Life Sciences Value Delivery

•

Large data set    

volume rendering

•

Workstation

•

Clinical packages

Reconstruct

•

Reconstruction

algorithms

•

GPU acceleration

•

Cell Broadband

Engine technology

acceleration

•

SoHard Gantry

Controllers

•

Echotek RF

receivers

•

SoHard

WebPACS

(2D+3D)

•

MCS Thin

Client/Server

•

SoHard

Failsafe

SW

•

Broad end-to-end medical systems OEM solution portfolio

•

All steps from scanner output to end-user applications

•

Image reconstruction, processing, and visualization

•

Embedded components and integrated solutions

©

2005  Mercury Computer Systems, Inc.

Advanced Solutions

Business Unit (ASBU)

©

2005 Mercury Computer Systems, Inc.

13

Advanced Solutions Business Unit

•

20% of FY05 revenues

81% growth over FY04

•

Market Focus

Semiconductor Capital

Equipment

Wireless Communications

Infrastructure

•

New applications in

semiconductor equipment

•

Expanding business in

communication segments

New business emerging in

Silicon Solutions and Data Links

©

2005 Mercury Computer Systems, Inc.

14

ASBU Customers & Targets (not all inclusive)

Satellite Data Links and Software Radio

Wireless Infrastructure

Base Stations and Radio Network

Controllers

Silicon IP and Component Solutions

Semiconductor Capital Equipment:

Wafer Inspection, Reticle Inspection,

Mask Generation

©

2005 Mercury Computer Systems, Inc.

15

Semiconductor Equipment Growth Drivers

Consumer demand for faster, lower power, lower-cost electronics

Drives the need for higher-performance chip equipment

Hard problems that are getting harder

More complex algorithms, higher data rates

New applications that require massive compute power

Example:  Reticle design rule verification and direct write lithography

Subject to market cyclicality

Processing needs outpace mainstream

computing as data rates and algorithm

complexity increase

Year 1

Year 2

Year 3

Moore’s

Law

Processing

Requirements

12X

4X

©

2005 Mercury Computer Systems, Inc.

16

Communications Market

•

Application Focus

Wireless base stations

Radio Network Controllers (RNCs)

Video gateways

Satellite data links

Software Defined Radio (SDR)

•

In the Labs of Tier 1 OEMs Today

Supporting development of next-

generation solutions

Accelerating customers’

next-generation

network platform deployment

©

2005  Mercury Computer Systems, Inc.

Defense Business Unit (DBU)

©

2005 Mercury Computer Systems, Inc.

18

Defense

•

60% of FY05 revenues

18% growth over FY04

•

Market focus

Radar

Signals Intelligence (SIGINT)

Other defense technologies

•

Technology leadership

Strong COTS model

Aboard demanding platforms

in air, on land, under sea

Full life-cycle support

•

Military transformation

•

CISR

Smart weapons

Cell Broadband Engine-based

technology

Representative

©

2005 Mercury Computer Systems, Inc.

19

Customer Success

Enabling our customers to win by providing

commercial off-the-shelf technology for new

applications

©

2005 Mercury Computer Systems, Inc.

20

Sensor

Defense Value Proposition

•

Sensor streaming

•

Scalable

•

Real time

•

Embedded

Real estate, environmental, cooling constraints

Real-time signal and image processing applications

Acquire

Process

Transmit

Mathematical

transformations

Visualize

Image Display

Complex signal returns

©

2005 Mercury Computer Systems, Inc.

21

Radar –

Leading through Innovation

•

Radar Processing Leadership

Tactical fighters: JSF

Airborne surveillance: MP-RTIP

•

Global Hawk

•

E10-A, JSTARS, AWACS

Shipboard missile defense: Aegis

UAV SAR: Predator LYNX

•

Expanding Radar Markets

Upgrades to existing radars

Land-based/mobile radar

Propose new technology

•

Passive radars

Cell Broadband Engine for large and

small radars

Aegis (BMD)

JSF (F-35)

©

2005 Mercury Computer Systems, Inc.

22

Signals Intelligence (SIGINT)

•

Communications Intelligence (COMINT) and Electronic

(ELINT) Intelligence

•

Fastest growing DBU segment

Proliferation of signals

Cross-cueing for other sensors

COTS adoption

•

Comprehensive product offering

RF receivers

Analog-to-digital conversion

ASIC and FPGA-based digital receivers

Programmable digital signal processing

Future integrated product

•

Leveraged investments for defense communications

©

2005 Mercury Computer Systems, Inc.

23

Revolutionizing the Industry

Widespread deployment of battlefield visualization and

decision aids previously found only in research

laboratories

Multisensor

visualization

for

ALL

warfighters

on

the

move

Comprehensive

battlefield

pictures

for

all

warfighters

Super-smart

compression

for

high-demand

data

links

Detection

and

acquisition

of

previously

intractable

targets

What You Could Only Dream About Before

PowerBlock™

200

©

2005 Mercury Computer Systems, Inc.

24

Growth Drivers

•

DoD transformation/ISR

initiative

Persistent ISR

•

Expansion to lower

echelons, smaller platforms

•

Image & data exploitation

•

Software radio/data links

ISR becoming CISR

Network-centric warfare

•

Smart weapons

COTS initiative

Today

5 Years

Available Market

$3 B

Served

Market

$380 M

*

•

Smart

Weapons

•

Image & Data

Exploitation

•

Data links

*Fiscal 2005 revenues were $148 M

231 Active Defense Programs

35 Design Wins in FY05

©

2005  Mercury Computer Systems, Inc.

Financial Overview

©

2005 Mercury Computer Systems, Inc.

26

Investment Thesis: Emerging Growth Story

FY2005: Record revenues

Revenue ($M)

$150

$180

$186

$250

$235-240*

2002A

2003A

2004A

2005A

2006E

*Per Company guidance, April 27, 2006 Q3 earnings conference call

**Growth rates calculated at midpoint of FY2006 revenue guidance

June Fiscal Year End

FY2006 Projected Growth Rates**

by Business Unit*

©

2005 Mercury Computer Systems, Inc.

27

Focus on Working Capital

Inventory Turns

3.8

4.9

6.9

5.4

8

2002

2003

2004

2005

Model

•

Supply chain investment

Competitive advantage

for Mercury and

customers

•

Customer satisfaction

DSO target 45 days

Days Sales Outstanding

45

50

51

43

64

2002

2003

2004

2005

Model

©

2005 Mercury Computer Systems, Inc.

28

$M

$15.9

$50.5

$25.9

$38.0

$26.6

$20.3

$10.2

$44.3

F2002

F2003

F2004

F2005

Operating Cash Flow

Free Cash Flow

Cash Generation

©

2005 Mercury Computer Systems, Inc.

29

Strong Balance Sheet

Historically strong

balance sheet

Supports open

innovation growth

agenda

* Includes $125 million convertible senior notes offering

*

Quarter ended March 31, 2006

Cash and Equivalents

$168

Total Current Assets

$197

Total Assets

$382

Total Debt

$126

Total Liabilities

$188

Stockholders’

Equity

$193

©

2005 Mercury Computer Systems, Inc.

30

Fiscal Year 2006 Guidance

Fiscal Year Ending June 30, 2006

Revenues ($M)

$235-240

Gross Margin

60%

      GAAP 

Non-GAAP

Operating Income

1-3%

EPS

$(0.56)-(0.47)

$0.15-0.27

Notes:

1)

Figures in millions, except percent and per share data which includes

adjustment for contingent convertibles, in accordance with GAAP

2)

Company guidance, January 26, 2006 Q2 earnings press release

Impact of equity-based compensation costs related to

FAS 123(R), amortization of purchased intangibles, and

in-process R&D charges excluded from Non-GAAP

©

2005 Mercury Computer Systems, Inc.

31

Q4 Fiscal 2006 Guidance

Impact of equity-based compensation costs related to

FAS 123(R), amortization of purchased intangibles, and

in-process R&D charges excluded from Non-GAAP

Notes:

1)

Figures in millions, except percent and per share data which includes

adjustment for contingent convertibles, in accordance with GAAP

2)

Company guidance, January 26, 2006 Q2 earnings press release

Quarter Ending June 30, 2006

Revenues ($M)

$61-66

Gross Margin

59%

      GAAP 

Non-GAAP

Operating Income

1-6%

EPS

$(0.09)-(0.00)

$0.04-0.16

©

2005 Mercury Computer Systems, Inc.

32

FY04

FY05

Guidance

FY06

Timeless

Business Model

Revenue

100%

100%

100%

100%

Gross Margin

67%

66%

60%

66-67%

SG&A

29%

29%

29-30%

R&D

21%

20%

20-21%

Income from Operations

17%

17%

1-3%

16-18%

Timeless Business Model

Notes:

FY06 non-GAAP guidance per April 27, 2006 Q3 earnings conference call

©

2005 Mercury Computer Systems, Inc.

33

www.mc.com

NASDAQ: MRCY