SOURCE: Cubic Corporation

December 06, 2007 06:00 ET

Cubic Corp. (AMEX: CUB) Reports Record Sales and Earnings for the Fiscal Year Ended September 30, 2007

SAN DIEGO, CA--(Marketwire - December 6, 2007) - Cubic Corporation (AMEX: CUB) today reported record sales and earnings for the fiscal year ended September 30, 2007. Sales in fiscal 2007 grew to $889.9 million from $821.4 million last year, while net income increased 72 percent to $41.6 million or $1.56 per share this year from $24.1 million or 90 cents per share last year. Cash flow from operations was strong again this year, at $69.2 million for the year, following $31.3 million in 2006.

The increase in sales came from the defense segment while the earnings improvement came from both the defense and transportation segments. Operating income doubled from $30.9 million in 2006 to $62.1 million this year. Strong cash flows and currency exchange gains resulted in net investment and other income of $1.3 million this year versus net interest expense of $2.8 million last year, an improvement of $4.1 million, before applicable income taxes.

Defense Segment

Sales from the defense segment increased 14 percent to $641.1 million from $562.8 million in 2006. Both the Mission Support Services and Readiness Systems businesses posted strong increases in sales. Operating income in the defense segment increased to $44.2 million from $31.4 million in 2006, a 41 percent increase. The increase in operating income came from both Mission Support Services and Readiness Systems due to sales growth and improved operating performance.

Transportation Systems Segment

Transportation Systems sales decreased 3 percent from $243.9 million in 2006 to $236.6 million in 2007. Sales in Europe increased, due primarily to the strength of the British Pound versus the US Dollar while sales in North America decreased due to the near completion of several contracts. Operating income from the transportation segment improved from $2.8 million in 2006 to $20.1 million this year. Strong operating income from European operations and settlements reached with several customers contributed to the improvement.

Backlog

Total backlog was $2.034 billion at September 30, 2007 compared to $1.479 billion at September 30, 2006. Funded backlog was $1.389 billion at September 30, 2007 compared to $1.224 billion at September 30, 2006.

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 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 STATEMENTS OF INCOME




                                     Year Ended        Three Months Ended
                                    September 30,         September 30,
                                  2007       2006       2007       2006
                                ---------  ---------  ---------  ---------

Net sales:
   Products                     $ 517,165  $ 489,286  $ 125,602  $ 118,056
   Services                       372,705    332,100     97,543     86,696
                                ---------  ---------  ---------  ---------
                                  889,870    821,386    223,145    204,752
Costs and expenses:
   Products                       415,729    411,181     97,698     93,194
   Services                       311,811    276,032     83,937     73,352
   Selling, general and
    administrative expenses        95,054     97,166     22,885     26,746
   Research and development         5,178      6,112      2,577        975
                                ---------  ---------  ---------  ---------
                                  827,772    790,491    207,097    194,267
                                ---------  ---------  ---------  ---------

Operating income                   62,098     30,895     16,048     10,485

Other income (expenses):
   Gain on sale of assets           1,052      7,237      1,052          -
   Interest and dividends           3,431      1,891      1,640        570
   Interest expense                (3,403)    (5,112)    (1,201)    (1,578)
   Other income                     1,299        433        104        261
   Minority interest in loss of
    subsidiary                        771        985        192        177
                                ---------  ---------  ---------  ---------

Income before income taxes         65,248     36,329     17,835      9,915

Income taxes                       23,662     12,196      6,962      2,996
                                ---------  ---------  ---------  ---------

Net income                      $  41,586  $  24,133  $  10,873  $   6,919
                                =========  =========  =========  =========



Basic and diluted net income
 per common share               $    1.56  $    0.90  $    0.41  $    0.26
                                =========  =========  =========  =========

Average number of common
 shares outstanding                26,720     26,720     26,720     26,720
                                =========  =========  =========  =========





                            CUBIC CORPORATION

                        CONSOLIDATED BALANCE SHEETS


                                                          September 30,
                                                        2007       2006
                                                      ---------  ---------
                                                         (in thousands)
ASSETS

CURRENT ASSETS
 Cash and cash equivalents                            $  73,563  $  42,380
 Marketable securities, available-for-sale               27,200      8,874
 Accounts receivable:
  Trade and other receivables                            13,024     15,686
  Long-term contracts                                   297,792    319,847
  Allowance for doubtful accounts                        (5,144)    (5,086)
                                                      ---------  ---------
                                                        305,672    330,447

 Inventories                                             27,342     20,209
 Deferred income taxes                                   18,492     19,042
 Prepaid expenses and other current assets               21,105     17,117
                                                      ---------  ---------
TOTAL CURRENT ASSETS                                    473,374    438,069
                                                      ---------  ---------

LONG-TERM CONTRACT RECEIVABLES                           16,650      2,200

PROPERTY, PLANT AND EQUIPMENT
 Land and land improvements                              14,601     14,412
 Buildings and improvements                              46,519     43,779
 Machinery and other equipment                           84,149     83,301
 Leasehold improvements                                   4,299      5,368
 Accumulated depreciation and amortization              (92,317)   (92,296)
                                                      ---------  ---------
                                                         57,251     54,564
                                                      ---------  ---------

OTHER ASSETS
 Deferred income taxes                                      195      7,360
 Goodwill                                                36,003     34,750
 Miscellaneous other assets                               9,092     11,128
                                                      ---------  ---------
                                                         45,290     53,238
                                                      ---------  ---------

TOTAL ASSETS                                          $ 592,565  $ 548,071
                                                      =========  =========




                            CUBIC CORPORATION

                  CONSOLIDATED BALANCE SHEETS--continued


                                                          September 30,
                                                        2007       2006
                                                      ---------  ---------
                                                         (in thousands)
LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
 Short-term borrowings                                $       -  $  10,000
 Trade accounts payable                                  27,992     23,240
 Customer advances                                       58,412     43,752
 Accrued compensation                                    38,183     37,176
 Accrued pension liability                                    -      6,283
 Other current liabilities                               31,787     26,919
 Income taxes payable                                     4,905      7,099
 Current maturities of long-term debt                     6,138      6,078
                                                      ---------  ---------
TOTAL CURRENT LIABILITIES                               167,417    160,547
                                                      ---------  ---------


LONG-TERM DEBT                                           32,699     38,159

OTHER LIABILITIES
 Accrued pension liability                                1,530     18,208
 Deferred compensation                                    8,148      7,565

MINORITY INTEREST                                             -        366

COMMITMENTS AND CONTINGENCIES                                 -          -

SHAREHOLDERS' EQUITY
 Preferred stock, no par value:
  Authorized--5,000,000 shares
  Issued and outstanding--none                                -          -
 Common stock, no par value:
  Authorized--50,000,000 shares
  Issued--35,664,729 shares, outstanding--
   26,719,663 shares                                        234        234
 Additional paid-in capital                              12,123     12,123
 Retained earnings                                      375,299    338,523
 Accumulated other comprehensive income                  31,184      8,415
 Treasury stock at cost--8,945,066 shares               (36,069)   (36,069)
                                                      ---------  ---------
                                                        382,771    323,226
                                                      ---------  ---------


TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY            $ 592,565  $ 548,071
                                                      =========  =========


Contact Information

  • Media:
    David Liddle
    858-505-2642

    Investors:
    Diane Dyer
    858-505-2907

    9333 Balboa Ave.
    San Diego, CA 92123
    www.cubic.com