Company: MRCY
Filing Date: 2025-11-04
Form Type: 10-Q
Source: 0001049521-25-000062
Chunk: 25

Company: MERCURY SYSTEMS INC
Filing Date: 2025-11-04
Form: 10-Q
Item: Item 1
Chunk 25
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) or net realizable value, and consists of materials, labor and overhead. On a quarterly basis, the Company uses consistent methodologies to evaluate inventory for net realizable value. Once an item is written down, the value becomes the new inventory cost basis. The Company reduces the value of inventory for excess and obsolete inventory, consisting of on-hand inventory in excess of estimated usage. The excess and obsolete inventory evaluation is based upon assumptions about future demand, historical usage, product mix and possible alternative uses. During the first quarter ended September 26, 2025, the Company reclassified $4,444 of work in process inventory to property and equipment, net to support a test lab and demonstration room for its technologies and to meet anticipated production demands for its solutions through additional testing capabilities. Inventory was comprised of the following:As ofSeptember 26, 2025June 27, 2025Raw materials$191,876 $195,496 Work in process126,109 118,376 Finished goods22,261 19,048 Total$340,246 $332,920 

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E.Property and Equipment

Property and equipment, net consisted of the following:Estimated Useful Lives(Years)As ofSeptember 26, 2025June 27, 2025Computer equipment and software3-4$150,827 $149,342 Furniture and fixtures524,086 23,176 Leasehold improvementslesser of estimated useful life or lease term72,581 74,278 Machinery and equipment5-10177,676 168,412 425,170 415,208 Less: accumulated depreciation(322,536)(313,768)Property and equipment, net$102,634 $101,440 The $1,194 increase in property and equipment, net was primarily due to capital expenditures of $6,548 and the reclassification of work in process inventory to property and equipment of $4,444, partially offset by depreciation expense. There was no retirements of property and equipment during the first quarters ended September 26, 2025 and September 27, 2024. Depreciation expense related to property and equipment for the first quarters ended September 26, 2025 and September 27, 2024 was $8,654 and $9,985, respectively.

F.Goodwill

In accordance with FASB ASC 350, Intangibles-Good