Science & Technology 
Science and Technology
Science and Technology 
Thu, February 5, 2009
Cubic Corporation: Cubic Corp (NYSE: CUB) Reports Increased Sales and Earnings for the Quarter Ended December 31, 2008
SAN DIEGO, CA--(Marketwire - February 5, 2009) - Cubic Corporation (
Sales and operating income increased in both the defense and transportation systems segments. Operating income increased from $17.1 million in the first quarter last year to $21.1 million this year.
Defense Segment
Sales from the defense segment increased 16 percent to $169.8 million from $146.2 million in last year's first quarter. Sales were higher from the Mission Support Services and communications businesses while sales were lower from training systems. More than half of the increase in Mission Support Services sales came from a company acquired in the fourth quarter last year. Operating income in the defense segment increased to $12.7 million from $9.8 million last year, a 30 percent increase.
Transportation Systems Segment
Transportation systems sales increased from $56.5 million in the first quarter last year to $74.4 million this year. Sales increased primarily in North America from a fare collection development contract awarded last year and from the sale of spare parts. Sales to train operating companies in the U.K. also increased over the first quarter of last year. Operating income from transportation systems increased in the first quarter from $7.3 million last year to $10.0 million this year.
Backlog
Total backlog increased to $1.843 billion at December 31, 2008 compared to $1.773 billion at September 30, 2008. Transportation systems backlog increased $173.0 million and defense backlog decreased $103.3 million during the quarter. A new transportation systems contract awarded by Transport for London that essentially replaced a contract that was terminated last year added $255 million (£170 million), however, a lower exchange rate between the British Pound and the U.S. Dollar as of the end of the quarter decreased backlog by approximately $50 million compared to September 30, 2008.
Cubic Corporation is the parent company of two major business segments: defense and transportation. The Cubic Defense group is a world leader in realistic combat training systems, mission support services and defense electronics. Cubic Transportation Systems is a leader in the design and manufacture of automated fare collection systems and services for public transit authorities worldwide. For more information about Cubic, see the company's Web site at [ www.cubic.com ].
In addition to historical matters, this release contains forward-looking statements which are made pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995. These forward-looking statements involve predictions of future results. Investors are cautioned that forward-looking statements involve risks and uncertainties which may affect the Company's business and prospects. These include the effects of politics on negotiations and business dealings with government entities, economic conditions in the various countries in which the Company does or hopes to do business, competition and technology changes in the defense and transit industries, and other competitive and technological factors.
Any statements about the Company's expectations, beliefs, plans, objectives, assumptions or future events or future financial and/or operating performance are not historical and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as "may," "will," "anticipate," "estimate," "plan," "project," "continuing," "ongoing," "expect," "believe," "intend," "predict," "potential," "opportunity" and similar words or phrases or the negatives of these words or phrases. These statements involve estimates, assumptions and uncertainties.
Since actual results or outcomes may differ materially from those expressed in any forward-looking statements made by the Company, investors should not place undue reliance on any forward-looking statements. In addition, past financial and/or operating performance is not necessarily a reliable indicator of future performance and investors should not use the Company's historical performance to anticipate results or future period trends. Further, any forward-looking statement speaks only as of the date on which it is made, and the Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for the Company to predict which factors will arise. In addition, the Company cannot assess the impact of each factor on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.
CUBIC CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF INCOME (UNAUDITED) (amounts in thousands, except per share data) Three Months Ended December 31, 2008 2007 ----------- ----------- Net sales Products $ 123,077 $ 112,347 Services 121,774 90,375 ----------- ----------- 244,851 202,722 Cost and expenses Products 94,984 84,190 Services 100,231 74,891 Selling, general and administrative 26,646 24,779 Research and development 1,860 1,774 ----------- ----------- 223,721 185,634 ----------- ----------- Operating income 21,130 17,088 Other income (expenses): Interest and dividends 570 1,521 Interest expense (532) (732) Other income (expense) (85) (306) Minority interest in loss of subsidiary - 5 ----------- ----------- Income before income taxes 21,083 17,576 Income taxes 6,900 6,900 ----------- ----------- Net income $ 14,183 $ 10,676 =========== =========== Basic and diluted net income per common share $ 0.53 $ 0.40 =========== =========== Average number of common shares outstanding 26,727 26,722 =========== =========== CUBIC CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS (in thousands) December 31, September 30, 2008 2008 (Unaudited) (See note below) ------------- -------------- ASSETS Current assets: Cash and cash equivalents $ 91,276 $ 112,696 Accounts receivable, net 275,344 268,884 Inventories 42,658 45,118 Deferred income taxes and other current assets 48,567 48,630 ------------- ------------- Total current assets 457,845 475,328 ------------- ------------- Long-term contract receivables 12,500 19,930 Property, plant and equipment - net 51,072 53,887 Goodwill 59,266 61,032 Purchased intangibles 17,619 19,060 Deferred income taxes and other non-current assets 11,496 12,015 ------------- ------------- $ 609,798 $ 641,252 ============= ============= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Trade accounts payable $ 21,439 $ 23,288 Customer advances 64,495 74,963 Other current liabilities 74,094 85,832 Income taxes payable 5,190 6,017 Current portion of long-term debt 5,935 6,045 ------------- ------------- Total current liabilities 171,153 196,145 ------------- ------------- Long-term debt 19,124 25,700 Other long-term liabilities 30,105 30,555 Shareholders' equity: Common stock 12,485 12,485 Retained earnings 419,051 404,868 Accumulated other comprehensive income (6,049) 7,570 Treasury stock at cost (36,071) (36,071) ------------- ------------- 389,416 388,852 ------------- ------------- $ 609,798 $ 641,252 ============= ============= Note: The balance sheet at September 30, 2008 has been derived from the audited financial statements at that date. CUBIC CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) (amounts in thousands, except per share data) Three Months Ended December 31, 2008 2007 --------- --------- Operating Activities: Net income $ 14,183 $ 10,676 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 3,460 2,106 Changes in operating assets and liabilities (13,151) 14,038 --------- --------- NET CASH PROVIDED BY OPERATING ACTIVITIES 4,492 26,820 --------- --------- Investing Activities: Net additions to property, plant and equipment (1,448) (1,828) Acquisitions net of cash acquired (6,100) - Proceeds from sales of marketable securities - 66,300 Purchases of marketable securities - (39,100) --------- --------- NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (7,548) 25,372 --------- --------- Financing Activities: Principal payments on long-term borrowings (5,568) (5,605) Other - 43 --------- --------- NET CASH USED IN FINANCING ACTIVITIES (5,568) (5,562) --------- --------- Effect of exchange rates on cash (12,796) (1,111) --------- --------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (21,420) 45,519 Cash and cash equivalents at the beginning of the period 112,696 73,563 --------- --------- CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD $ 91,276 $ 119,082 ========= =========