Cubic Corp (Amex:CUB) Reports Earnings and Sales for the Quarter Ended March 31, 2008

(San Diego, CA, May 7, 2008) - Cubic Corporation (Amex:CUB) today reported earnings and sales for the second quarter ended March 31, 2008. Earnings were $9.6 million in the second quarter ($.36 per share) versus $11.2 million last year, while for the six-month period, earnings increased from $19.5 million last year to $20.3 million ($.76 per share) this year.

Sales for the second quarter, although higher than the first quarter, were $210.3 million this year compared to $230.0 million in the same quarter last year. Lower sales in defense were partially offset by increased sales from transportation. Last year's second quarter included sales of $3.2 million from the corrugated box business the company sold in the fourth quarter of 2007. For the first six months of the fiscal year, sales were $413.0 million compared to $433.0 million a year ago.

Operating income was up for the six-month period from $29.5 million in 2007 to $31.0 million this year but was lower for the quarter at $13.9 million versus $17.8 million in the second quarter last year. Operating income in transportation grew significantly from $6.9 million to $11.9 million in this year's second quarter, and more than doubled from $9.2 million last year to $19.2 million for the six months ended March 31, 2008. However, improvements in transportation were largely offset by a reduction in defense's operating profits to $2.8 million in the second quarter versus $11.9 million last year, and to $12.6 million for the six months ended March 31, 2008 compared to $21.4 million last year.

Cash flows from operations for the first six months of the fiscal year were $25.1 million, with both segments contributing to the positive result.

Transportation Systems Segment
Transportation Systems sales increased from $62.0 million in the second quarter last year to $72.1 million this year. Sales increased primarily due to additional work on contracts in the U.K. and system installation work on a contract in Australia. Significant progress was made on several system enhancement projects in the U.K. during the quarter, generating higher sales and profits than are expected in the remaining two quarters. Sales from system installation contracts in North America were lower, however, this decrease was partially offset by higher sales of spare parts to U.S. customers. For the first half of the fiscal year, transportation systems sales increased from $118.0 million in 2007 to $128.6 million this year for the reasons described above.

Operating income from the transportation segment improved from $6.9 million in the second quarter last year to $11.9 million this year. Strong operating income on higher sales from U.K. operations as mentioned above and profits from increased spares sales in the U.S. contributed to the improvement. For the first half of the fiscal year, transportation systems operating income more than doubled from $9.2 million to $19.2 million for the reasons described above and due to improved operating performance from system installation contracts in North America.

Defense Segment
Sales from the defense segment decreased in the second quarter from $164.8 million last year to $138.2 million this year. Defense service sales were down due to a temporary decrease in army training activities during the quarter, while combat training system sales were lower primarily because of a transition from engineering development contracts to long-term production orders, which also is expected to have only a short-term impact on sales. In addition, sales were down in the communications business due to lower sales from data link contracts. For the first six months of the fiscal year defense sales decreased from $308.1 million to $284.4 million for the reasons identified above. The company expects sales from each of the defense business units to increase in the third and fourth quarters over the second quarter level.

Operating income in the defense segment decreased in the second quarter to $2.8 million from $11.9 million last year due primarily to higher costs on development contracts and lower sales. Operating income for the first half was $12.6 million compared to $21.4 million last year. Management believes the second quarter results in the defense segment are short-term in nature and expects improved performance for the remainder of the year.

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 designs and manufactures automatic fare collection systems for public transit authorities. For more information about Cubic, see the company's website 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.

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