Item 9A. Controls and Procedures
ITEM 9A. CONTROLS AND PROCEDURES
(a) E FFECTIVENESS OF D ISCLOSURE C ONTROLS AND P ROCEDURES
We conducted an evaluation as of June 27, 2025 under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer (our principal executive officer and principal financial officer, respectively), and concluded that our disclosure controls and procedures (as defined in Rule 13a-15(e) or Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended, the “Exchange Act”) were effective as of June 27, 2025 and designed to ensure that the information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that it is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
(b) I NHERENT L IMITATIONS ON E FFECTIVENESS OF C ONTROLS
Our management, including the Chief Executive Officer and Chief Financial Officer, does not expect that our internal control over financial reporting or our internal controls will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
(c) M ANAGEMENT ’ S A NNUAL R EPORT ON I NTERNAL C ONTROL O VER F INANCIAL R EPORTING
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Under the supervision of the Chief Executive Officer and Chief Financial Officer, management conducted an assessment of the effectiveness of our internal control over financial reporting as of June 27, 2025 based on the framework in Internal Control - Integrated Framework (2013) published by the Committee of Sponsoring Organizations of the Treadway Commission. As a result of this assessment, management concluded that our internal control over financial reporting was effective as of June 27, 2025. The effectiveness of our internal control over financial reporting as of June 27, 2025 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in its report.
(d) C HANGES IN I NTERNAL C ONTROL O VER F INANCIAL R EPORTING
There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fourth quarter of fiscal 2025 identified in connection with our Chief Executive Officer’s and Chief Financial Officer’s evaluation that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
During the fourth quarter ended June 27, 2025, none of the Company's directors or executive officers adopted , modified or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement as each term is defined in Section 408(a) of Regulation S-K.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
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PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The information required by this item is incorporated herein by reference to our Proxy Statement for our 2025 Annual Meeting of Shareholders (the “Shareholders Meeting”), except that information required by this item concerning our executive officers appears in Part I, Item 4.1. of this Annual Report on Form 10-K.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this item is incorporated by reference to our Proxy Statement for the Shareholders Meeting.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The information required by this item is incorporated herein by reference to our Proxy Statement for the Shareholders Meeting.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information required by this item is incorporated herein by reference to our Proxy Statement for the Shareholders Meeting.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Our independent registered public accounting firm is KPMG LLP , Boston, MA , Auditor Firm ID: 185
The information required by this item is incorporated herein by reference to our Proxy Statement for the Shareholders Meeting.
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) FINANCIAL STATEMENTS, SCHEDULES AND EXHIBITS
The financial statements, schedule, and exhibits listed below are included in or incorporated by reference as part of this report:
1. Financial statements:
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets as of June 27, 2025 and June 28, 2024
Consolidated Statements of Operations and Comprehensive Loss for the fiscal years ended June 27, 2025, June 28, 2024, and June 30, 2023
Consolidated Statements of Shareholders’ Equity for the fiscal years ended June 27, 2025, June 28, 2024, and June 30, 2023
Consolidated Statements of Cash Flows for the years ended June 27, 2025, June 28, 2024, and June 30, 2023
Notes to Consolidated Financial Statements
2. Financial Statement Schedule:
II. Valuation and Qualifying Accounts
ITEM 16. FORM 10-K SUMMARY
None.
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MERCURY SYSTEMS, INC.
SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS
FOR FISCAL YEARS ENDED JUNE 27, 2025, JUNE 28, 2024, and JUNE 30, 2023
(In thousands)
Accounts receivable, Unbilled receivables and costs in excess of billings, allowance for credit losses
BALANCE
AT
BEGINNING
OF PERIOD ADDITIONS REVERSALS WRITE-
OFFS BALANCE
AT END OF
PERIOD
2025 $ 8,360 $ 982 $ 106 $ 2,158 $ 7,078
2024 $ 1,335 $ 15,439 $ 138 $ 8,276 $ 8,360
2023 $ 2,074 $ 408 $ 15 $ 1,132 $ 1,335
Deferred Tax Asset Valuation Allowance
BALANCE
AT
BEGINNING
OF PERIOD CHARGED
TO COSTS &
EXPENSES CHARGED
TO OTHER
ACCOUNTS DEDUCTIONS BALANCE
AT END OF
PERIOD
2025 $ 17,575 $ (159) $ — $ — $ 17,416
2024 $ 14,785 $ 2,394 $ 396 $ — $ 17,575
2023 $ 15,349 $ 906 $ (1,470) $ — $ 14,785
3. Exhibits:
Exhibits required by Item 601 of Regulation S-K are listed in the Exhibit Index on page 81, which is incorporated herein by reference.
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Signatures
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in Andover, Massachusetts, on August 11, 2025.
MERCURY SYSTEMS, INC.
By /s/ DAVID E. FARNSWORTH
David E. Farnsworth
EXECUTIVE VICE PRESIDENT, CHIEF FINANCIAL OFFICER
[PRINCIPAL FINANCIAL OFFICER]
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature Title(s) Date
/s/ WILLIAM L. BALLHAUS President, Chief Executive Officer, and Chairman of the Board of Directors (principal executive officer) August 11, 2025
William L. Ballhaus
/S/ DAVID E. FARNSWORTH Executive Vice President, Chief Financial Officer (principal financial officer) August 11, 2025
David E. Farnsworth
/S/ DOUGLAS D. MUNRO Vice President, Chief Accounting Officer (principal accounting officer) August 11, 2025
Douglas D. Munro
/S/ ORLANDO P. CARVALHO Director August 11, 2025
Orlando P. Carvalho
/S/ GERARD J. DEMURO Director August 11, 2025
Gerard J. DeMuro
/S/ LISA S. DISBROW Director August 11, 2025
Lisa S. Disbrow
/S/ JEAN BUA Director August 11, 2025
Jean Bua
/S/ HOWARD L. LANCE Director August 11, 2025
Howard L. Lance
/S/ BARRY R. NEARHOS Director August 11, 2025
Barry R. Nearhos
/S/ SCOTT OSTFELD Director August 11, 2025
Scott Ostfeld
/S/ DEBORA A. PLUNKETT Director August 11, 2025
Debora A. Plunkett
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EXHIBIT INDEX
ITEM NO. DESCRIPTION OF EXHIBIT
3.1.1
Articles of Organization (incorporated herein by reference to Exhibit 3.1.1 of the Company’s annual report on Form 10-K for the fiscal year ended June 30, 2009)
3.1.2
Articles of Amendment (incorporated herein by reference to Exhibit 3.1.2 of the Company’s annual report on Form 10-K for the fiscal year ended June 30, 2010)
3.1.3
Articles of Amendment (incorporated herein by reference to Exhibit 1 of the Company’s registration statement on Form 8-A filed on December 15, 2005)
3.1.4
Articles of Amendment (incorporated herein by reference to Exhibit 3.1 of the Company's current report on Form 8-K filed on November 13, 2012)
3.1.5
Articles of Amendment (incorporated herein by reference to Exhibit 3.1 of the Company's current report on Form 8-K filed on June 30, 2015)
3.1.6
Articles of Amendment (incorporated herein by reference to Exhibit 3.1 of the Company’s current report on Form 8-K filed on December 29, 2021)
3.2
Bylaws, amended and restated, effective as of October 26, 2022 (incorporated herein by reference to Exhibit 3.1 of the Company’s current report on Form 8-K filed on October 28, 2022 )
4.1
Form of Stock Certificate (incorporated herein by reference to Exhibit 4.1 of the Company’s Registration Statement on Form S-1/A filed on January 7, 1998)
4.2
Description of Registrant's Securities (incorporated herein by reference to Exhibit 4.2 of the Company’s annual report on Form 10-K for the fiscal year ended July 3, 2020)
10.1*
2024 Employee Stock Purchase Plan (incorporated herein by reference to Exhibit 10.1 of the Company’s Registration Statement on Form S-8 filed May 8, 2024)
10.2*
Form of Indemnification Agreement between the Company and each of its current directors (incorporated herein by reference to Exhibit 10.4 of the Company’s annual report on Form 10-K for the fiscal year ended June 30, 2009)
10.3*
2018 Stock Incentive Plan, as amended and restated (incorporated herein by reference to Exhibit 10.3 of the Company's annual report on Form 10-K for the fiscal year end June 28, 2024)
10.4.1*
Form of Stock Option Agreement under the 2018 Stock Incentive Plan (incorporated herein by reference to Exhibit 10.1 of the Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2019)
10.4.2*
Form of Restricted Stock Award Agreement under the 2018 Stock Incentive Plan (incorporated herein by reference to Exhibit 10.2 of the Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2019)
10.4.3*
Form of Deferred Stock Award Agreement under the 2018 Stock Incentive Plan (incorporated herein by reference to Exhibit 10.3 of the Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2019)
10.4.4*
Form of Stock Option Agreement for performance stock options under the 2005 Stock Incentive Plan (incorporated herein by reference to Exhibit 10.1 of the Company’s current report on Form 8-K filed on September 28, 2007)
10.4.5*
Form of Performance-Based Restricted Stock Award Agreement under the 2018 Stock Incentive Plan (incorporated herein by reference to Exhibit 10.5 of the Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2019)
10.5*
Form of Change in Control Severance Agreement between the Company and Non-CEO Executives (incorporated herein by reference to Exhibit 10.9.2 of the Company’s annual report on Form 10-K for the fiscal year ended June 30, 2011)
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ITEM NO. DESCRIPTION OF EXHIBIT
10.6*
Compensation Policy for Non-Employee Directors (incorporated herein by reference to Exhibit 10.3 of the Company's annual report on Form 10-K for the fiscal year end June 28, 2024)
10.7.1
Credit Agreement, dated May 2, 2016, among the Company, the Guarantors party thereto, the Lenders party thereto and Bank of America, N.A., as Administrative Agent (incorporated herein by reference to Exhibit 10.1 of the Company's current report on Form 8-K filed on May 2, 2016)
10.7.2
Amendment No. 1 to Credit Agreement, dated June 27, 2017, among the Company, the Guarantors party thereto, the Lenders party thereto and Bank of America, N.A., as Administrative Agent (incorporated herein by reference to Exhibit 10.1 of the Company's current report on Form 8-K filed on June 27, 2017)
10.7.3
Amendment No. 3 to Credit Agreement, dated September 28, 2018, among the Company, the Guarantors party thereto, the Lenders party thereto and Bank of America, N.A., as Administrative Agent (incorporated herein by reference to Exhibit 10.1 of the Company’s current report on Form 8-K filed on October 1, 2018)
10.7.4
Amendment No. 4 to Credit Agreement, dated February 28, 2022, among the Company, the Guarantors party thereto, the Lenders party thereto and Bank of America, N.A., as Administrative Agent (incorporated herein by reference to Exhibit 10.1 of the Company’s current report on Form 8-K filed on February 28, 2022)
10.7.5
Amendment No. 5 to Credit Agreement, dated November 7, 2023, among the Company, the Guarantors party thereto, the Lenders party thereto and Bank of America, N.A., as Administrative Agent (incorporated by reference to Exhibit 10.1 of the Company’s current report on Form 8-K filed on November 7, 2023)
10.7.6
Amendment No. 6 to Credit Agreement, dated August 13, 2024, among the Company, the Guarantors party thereto, the Lenders party thereto and Bank of America, N.A., as Administrative Agent (incorporated by reference to Exhibit 10.1 of the Company’s current report on Form 8-K filed August 13, 2024)
10.8*
Form of Severance Benefits Agreement between the Company and Non-CEO Executives (incorporated herein by reference to Exhibit 10.14 of the Company's annual report on Form 10-K for the fiscal year ended June 30, 2019)
10.9 *
Employment Agreement, dated August 15, 2023, between the Company and William L. Ballhaus (incorporated herein by reference to Exhibit 10.1 of the Company’s current report on Form 8-K filed on August 15, 2023)
10.10*
Letter Agreement, dated June 20, 2023, between the Company and David E. Farnsworth (incorporated herein by reference to Exhibit 10.1 of the Company’s current report on Form 8-K filed on June 29, 2023)
10.1 1 *
Deferred Compensation Matching Plan (incorporated herein by reference to Exhibit 99.1 of the Company’s Registration Statement on Form S-8 filed on November 9, 2023)
10.1 2 *
Deferred Compensation Matching Plan Adoption Agreement (incorporated herein by reference to Exhibit 99.2 of the Company’s Registration Statement on Form S-8 filed on November 9, 2023)
10.13*†
Restricted Stock Unit Agreement, dated April 15, 2025, between the Company and David E. Farnsworth
19.1
Insider Trading Policy (incorporated herein by reference to Exhibit 10.3 of the Company's annual report on Form 10-K for the fiscal year end June 28, 2024)
21.1†
Subsidiaries of the Company
23.1†
Consent of KPMG LLP
31.1†
Certification of the Company’s Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2†
Certification of the Company’s Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1†
Certification of the Company’s Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
97.1*
Compensation Recoupment Policy (incorporated herein by reference to Exhibit 10.3 of the Company's annual report on Form 10-K for the fiscal year end June 28, 2024)
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ITEM NO. DESCRIPTION OF EXHIBIT
101† Interactive data files pursuant to Rule 405 of Regulation S-T: (i) Consolidated Balance Sheet, (ii) Consolidated Statement of Operations, (iii) Consolidated Statement of Shareholders’ Equity, (iv) Consolidated Statement of Cash Flows, and (v) Notes to Consolidated Financial Statements
101.INS
eXtensible Business Reporting Language (XBRL) Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH XBRL Taxonomy Extension Schema Document
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF XBRL Taxonomy Extension Definition Linkbase Document
101.LAB XBRL Taxonomy Extension Label Linkbase Document
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document
104 Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
* Identifies a management contract or compensatory plan or arrangement in which an executive officer or director of the Company participates.
† Filed with this Form 10-K.
+ Furnished herewith. This certification shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section, nor shall it be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.
83