Cubic Corporation Reports Record High Sales
and Higher
Earnings for the Quarter
Ended March 31, 2007
SAN DIEGO, May 3, 2007—Cubic Corporation (Amex:CUB) today announced
record high sales and higher earnings for the quarter ended March 31,
2007. Sales for the company’s second fiscal quarter were $230.0
million compared to $206.6 million last year, an increase
of 11 percent. Net income was $11.2 million or $.42 per share compared
to $0.7 million
or $.03 per share in the same quarter last year.
Operating income for the second fiscal quarter was $17.8
million, a substantial improvement compared to $1.5 million in the
second quarter
last year. This year’s operating income growth reflects strong
performance from the defense segment, which more than doubled its operating
income compared to last year’s second quarter, and improved results
from the transportation segment, which generated operating
income of $6.9 million for the second quarter this year compared to an
operating
loss of $2.8 million last year. Approximately $5.1 million
of the increase in operating income for the quarter came from settlements
with customers
of amounts that were previously disputed. Of this amount,
$1.2 million was from defense and $3.9 million from transportation systems
contracts.
Six-Month Results
For the six months ended March 31, 2007, sales grew by 8
percent to $433.0 million from $401.7 million last year.
Net income was $19.5 million for the six-month period, or $0.73 per share
compared
to last year’s net income of $11.2 million, or $0.42 per share.
This year’s six-month earnings results were primarily from operations,
while last year’s net income included a gain on the sale of real
estate of approximately $4.3 million, after applicable
income taxes, or about $0.16 per share. Operating income nearly tripled
for the six-month
period, increasing from $10.1 million in 2006 to $29.5
million in 2007.
Cash flows from operations for the first six months of the fiscal year
were $38 million, with both segments contributing to the positive result.
Defense Segment
In the second quarter of 2007, defense segment sales increased
by 13 percent from $145.2 million last year to $164.8 million this
year. Defense sales were also up 13 percent for the first six months
of the fiscal year, from $272.7 million to $308.1 million. Higher sales
from Mission Support services and Readiness Systems (formerly called
Training Systems) contributed to the increase. Sales in Communications
and Electronic Systems were down for the quarter and first six months
of the fiscal year.
Operating income in the defense segment more than doubled in the second
quarter to $11.9 million from $5.2 million last year with the biggest
improvement from Readiness Systems, which had incurred an operating loss
in the second quarter last year. For the six-month period, operating
income was up by $10.3 million over the prior year, increasing from $11.1
million in 2006 to $ 21.4 million this year. The Mission Support services
business continued its strong performance, while the Readiness Systems
Business Unit improved from break-even to operating income of $8.1 million
for the six-month period.
Transportation Systems Segment
Transportation Systems posted higher sales in the second
quarter of 2007 of $62.0 million compared to $57.8 million last year
due to increased sales from its European operations. For the first
six months of the fiscal year, sales decreased 3 percent from $121.5
million to $118.0 million, resulting primarily from lower sales on
system installation contracts in North America and Australia.
Operating income in the transportation segment improved during the second
quarter to $6.9 million, compared to a loss of $2.8 million last year,
due to settlements reached with customers and bonuses earned from the
Prestige contract for system usage, despite cost growth of $4.7 million
in the quarter to complete several North American contracts. For the
six-month period, operating income increased to $9.2 million this year
from $0.4 million last year.
Backlog
Total backlog increased to $1.558 billion at March 31, 2007
compared to $1.478 billion at September 30, 2006. The growth in backlog
came from both segments.
Cubic Corporation is the parent company of two major business segments:
defense and transportation. The Cubic Defense Applications group is a
world leader in realistic combat training systems, mission support services
and defense electronics. Cubic Transportation Systems designs and manufactures
automatic fare collection systems for public transit authorities. For
more information about Cubic, see the company's Web site at www.cubic.com.
In addition to historical matters, this release may contain 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.
Contacts:
Media: Jae Lande
858 505-2642
jae.lande@cubic.com
Investors: Diane
Dyer
858 505-2907
diane.dyer@cubic.com
[financial statements]
