SOURCE: Cubic Corporation

Cubic Corporation

December 09, 2010 06:00 ET

Cubic Corp. (NYSE: CUB) Reports Record Sales, Earnings and Backlog for the Fiscal Year Ended September 30, 2010

SAN DIEGO, CA--(Marketwire - December 9, 2010) - Cubic Corporation (NYSE: CUB) today reported record high sales and earnings for the fiscal year ended September 30, 2010. Sales in fiscal 2010 were $1.194 billion, representing an increase of 17 percent over sales of $1.017 billion in 2009. Net income increased 27 percent, to $70.6 million ($2.64 per share) from $55.7 million ($2.08 per share) in 2009.

Operating income increased 25 percent, from $84.7 million in 2009 to $105.5 million this year, and cash flows from operations were strong, at $111.7 million in 2010.

Transportation Systems Segment

Cubic Transportation Systems (CTS) sales increased 27 percent to $386.0 million in 2010 from $303.4 million in 2009. Sales were higher in 2010 from work in the San Francisco Bay area, London, Southern California and Sydney, Australia.

Operating income from CTS increased 24 percent in 2010 to $54.7 million from $44.1 million in 2009. Increased income resulted from higher sales and margins in North America and from slightly higher operating profits from European operations.

Defense Systems Segment

Cubic Defense Systems (CDS) sales increased 27 percent to $362.8 million in 2010 from $285.4 million in 2009. Sales increased in both the Training Systems and Communications businesses.

Operating income from CDS increased 51 percent to $28.7 million in 2010 from $19.0 million in 2009. Higher sales of training systems and communications products and improved profit margins contributed to the increase. In addition, an allowance for doubtful accounts receivable of $3.1 million established in 2009 was fully recovered in 2010, plus attorney's fees, costs and interest, of $1.1 million.

Mission Support Services Segment

Sales at Mission Support Services (MSS) increased 4 percent to $443.3 million in 2010 from $424.4 million in 2009. Sales were higher in 2010 primarily from increased activity at the Joint Readiness Training Center in Fort Polk, Louisiana.

Operating income from MSS was slightly lower in 2010 at $26.5 million compared to $27.9 million in 2009, due primarily to a provision of $2.0 million recorded in the first quarter of 2010 for a dispute with a customer over contract terms.

Financial Condition

The Company's financial condition continued to be very strong in 2010. Cash and short-term investments at September 30, 2010 were $379.5 million while long-term debt was only $20.5 million.

Backlog

Total backlog was a record high $2.486 billion at September 30, 2010 compared to $2.183 billion at September 30, 2009. Funded backlog was $1.872 billion at September 30, 2010 compared to $1.534 billion at September 30, 2009.

SEC Form 10-K

The Company also announced that it filed its form 10-K with the Securities and Exchange Commission today. This report may be found at www.cubic.com under "Investor Info." Shareholders may also receive a free hard copy upon written request to the Company or by e-mail to Investor.Relations@cubic.com.

Cubic Corporation is the parent company of three major business segments: defense systems, mission support services and transportation systems. Cubic Defense Systems is a leading provider of realistic combat training systems, cyber technologies, asset tracking solutions, and defense electronics. Mission Support Services is a leading provider of training, operations, maintenance, technical and other support services. Cubic Transportation Systems is the world's leading provider of automated fare collection systems and services 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

                                    Years Ended        Three Months Ended
                                    September 30,         September 30,
                                  2010       2009       2010       2009
                                ---------  ---------  ---------- ---------
                                  (in thousands, except per share data)
Net sales:
   Products                     $ 636,739  $ 526,879  $  179,889 $ 144,814
   Services                       557,450    489,778     167,817   135,942
                                ---------  ---------  ---------- ---------
                                1,194,189  1,016,657     347,706   280,756
Costs and expenses:
   Products                       457,651    394,478     134,524   113,997
   Services                       484,343    411,038     143,799   112,021
   Selling, general and
    administrative expenses       120,848    111,828      32,612    30,443
   Restructuring costs                  -          -           -         -
   Research and development        18,976      8,173       8,633     2,316
   Amortization of purchased
    intangibles                     6,846      6,432       1,755     1,859
                                ---------  ---------  ---------- ---------
                                1,088,664    931,949     321,323   260,636
                                ---------  ---------  ---------- ---------

Operating income                  105,525     84,708      26,383    20,120

Other income (expenses):
   Gain on sale of assets               -          -           -         -
   Interest and dividends           1,590      1,664         236       408
   Interest expense                (1,755)    (2,031)       (473)     (409)
   Other income (expense)             561        899         569      (637)
                                ---------  ---------  ---------- ---------

Income before income taxes        105,921     85,240      26,715    19,482

Income taxes                       35,285     29,554       9,835     7,104
                                ---------  ---------  ---------- ---------

Net income                      $  70,636  $  55,686  $   16,880 $  12,378
                                =========  =========  ========== =========



Basic and diluted net income
 per common share               $    2.64  $    2.08  $     0.63 $    0.46
                                =========  =========  ========== =========

Average number of common shares
 outstanding                       26,735     26,731      26,736    26,732
                                =========  =========  ========== =========




                            CUBIC CORPORATION

                        CONSOLIDATED BALANCE SHEETS

                                                         September 30,
                                                        2010       2009
                                                      ---------  ---------
                                                         (in thousands)
ASSETS

CURRENT ASSETS
 Cash and cash equivalents                            $ 295,434  $ 244,074
 Short-term investments                                  84,081      8,127
 Accounts receivable:
  Trade and other receivables                            11,594     12,833
  Long-term contracts                                   199,353    223,186
  Allowance for doubtful accounts                          (663)    (4,558)
                                                      ---------  ---------
                                                        210,284    231,461

 Inventories                                             32,820     49,107
 Deferred income taxes                                   17,825     22,132
 Prepaid expenses and other current assets               25,893     29,957
                                                      ---------  ---------
TOTAL CURRENT ASSETS                                    666,337    584,858
                                                      ---------  ---------

LONG-TERM CONTRACT RECEIVABLES                           28,080     13,400

PROPERTY, PLANT AND EQUIPMENT
 Land and land improvements                              15,821     15,292
 Buildings and improvements                              42,754     42,661
 Machinery and other equipment                           82,129     80,018
 Leasehold improvements                                   4,829      4,685
 Accumulated depreciation and amortization              (98,064)   (93,761)
                                                      ---------  ---------
                                                         47,469     48,895
                                                      ---------  ---------

OTHER ASSETS
 Deferred income taxes                                   18,570     14,082
 Goodwill                                                64,142     59,433
 Purchased intangibles                                   26,295     28,618
 Miscellaneous other assets                               5,196      7,029
                                                      ---------  ---------
                                                        114,203    109,162
                                                      ---------  ---------

TOTAL ASSETS                                          $ 856,089  $ 756,315
                                                      =========  =========




                            CUBIC CORPORATION

                  CONSOLIDATED BALANCE SHEETS--continued

                                                         September 30,
                                                        2010       2009
                                                      ---------  ---------
                                                         (in thousands)
LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
 Trade accounts payable                               $  33,638  $  28,626
 Customer advances                                      139,723    123,458
 Accrued compensation                                    48,994     49,134
 Other current liabilities                               60,041     60,402
 Income taxes payable                                    11,787      3,491
 Current maturities of long-term debt                     4,545      4,554
                                                      ---------  ---------
TOTAL CURRENT LIABILITIES                               298,728    269,665
                                                      ---------  ---------


LONG-TERM DEBT                                           15,949     20,570

OTHER LIABILITIES
 Accrued pension liability                               37,015     32,214
 Deferred compensation                                    8,508      7,902
 Income taxes payable                                     3,382      5,119
 Other non-current liabilities                            4,748          -

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY
 Preferred stock, no par value:
  Authorized--5,000 shares
  Issued and outstanding--none                                -          -
 Common stock, no par value:
  Authorized--50,000 shares
  2010--Issued 35,682 shares, outstanding--26,736
   shares
  2009--Issued 35,677 shares, outstanding--26,732
   shares                                                12,574     12,530
 Retained earnings                                      521,567    455,743
 Accumulated other comprehensive income (loss)           (9,745)   (11,357)
 Treasury stock at cost:
  2010 and 2009--8,945 shares                           (36,074)   (36,071)
                                                      ---------  ---------
Shareholders' equity related to Cubic                   488,322    420,845
 Noncontrolling interest in variable interest entity       (563)         -
                                                      ---------  ---------
Total Shareholders' equity                              487,759    420,845
                                                      ---------  ---------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY            $ 856,089  $ 756,315
                                                      =========  =========




                            CUBIC CORPORATION

                  CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                           Years Ended
                                                          September 30,
                                                      --------------------
                                                        2010       2009
                                                      ---------  ---------
                                                         (in thousands)
Operating Activities:
 Net income                                           $  70,636  $  55,686
  Adjustments to reconcile net income to net cash
   provided by operating activities:
    Depreciation and amortization                        14,469     15,586
    Deferred income taxes                                  (164)     3,346
    Provision for doubtful accounts                      (3,889)     3,038
    Changes in operating assets and liabilities,
     net of effects from acquisitions:
      Accounts receivable                                28,565     36,211
      Inventories                                        16,638     (4,275)
      Prepaid expenses and other current assets           4,401      5,141
      Accounts payable and other current liabilities    (27,498)    14,175
      Customer advances                                  20,672     48,663
      Income taxes                                      (14,614)    (2,890)
      Other items - net                                   2,507      1,352
                                                      ---------  ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES               111,723    176,033
                                                      ---------  ---------

Investing Activities:
 Acquisition of businesses, net of cash acquired         (8,250)   (19,965)
 Consolidation of variable interest entity               38,264          -
 Proceeds from sale of short-term investments            82,992          -
 Purchases of short-term investments                   (158,946)    (8,127)
 Purchases of property, plant and equipment              (6,878)    (5,332)
 Other items - net                                            -         41
                                                      ---------  ---------
NET CASH USED IN INVESTING ACTIVITIES                   (52,818)   (33,383)
                                                      ---------  ---------

Financing Activities:
 Principal payments on long-term debt                    (4,541)    (5,970)
 Proceeds from issuance of common stock                      44         45
 Purchases of treasury stock                                 (3)         -
 Dividends paid to shareholders                          (4,812)    (4,811)
                                                      ---------  ---------
NET CASH USED IN FINANCING ACTIVITIES                    (9,312)   (10,736)
                                                      ---------  ---------

Effect of exchange rates on cash                          1,767       (536)
                                                      ---------  ---------

NET INCREASE IN CASH AND CASH EQUIVALENTS                51,360    131,378

Cash and cash equivalents at the beginning of the year  244,074    112,696
                                                      ---------  ---------

CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR      $ 295,434  $ 244,074
                                                      =========  =========

Contact Information

  • Media Contact
    John D. Thomas
    858-505-2989

    Investor Contact
    Diane Dyer
    858-505-2907