Cubic Corp. (NYSE: CUB) Reports Record Earnings and Higher Sales for the Quarter Ended March 31, 2012

Marketwired

SAN DIEGO, CA--(Marketwire -05/03/12)- Cubic Corporation (CUB - News) today reported record earnings and higher sales for the quarter ended March 31, 2012. Sales for the second fiscal quarter were $341.0 million compared to $334.0 million last year, an increase of 2 percent. Net income attributable to Cubic shareholders increased by 22 percent for the second quarter to $24.3 million (91 cents per share) this year compared to $19.9 million (75 cents per share) last year.

For the first six months of the fiscal year, sales increased 7 percent to $659.7 million compared to $618.4 million last year. For the six-month period, net income attributable to Cubic shareholders increased by 15 percent to $45.7 million ($1.71 per share) this year compared to $39.9 million ($1.49 per share) last year.

Operating income increased by 20 percent in the second fiscal quarter to $33.7 million, compared to $28.0 million last year, and increased 12 percent for the six-month period to $61.9 million compared to $55.2 million last year. Cash flows used in operations for the six-month period were $39.9 million primarily due to expenditures for large transportation contracts in Australia and Canada where customer payments will not be received until certain milestones are reached.

Other income for the first six months of the fiscal year included a net foreign currency exchange gain of $2.2 million, before taxes. The effective tax rate increased to 29.2 percent for the six-month period this year compared to 27.7 percent last year. The increase in the effective rate was primarily due to the retroactive reinstatement of the U.S. research and development credit in the first fiscal quarter of 2011, which reduced the income tax provision by $1.5 million for that quarter. In contrast, the expiration of this credit at the end of the first quarter this year increased the effective rate for the six-month period ended March 31, 2012.

Total backlog was $3.105 billion at March 31, 2012 compared to $2.837 billion at September 30, 2011.

The Company continues to maintain a strong liquidity position, ending the period with $307.2 million in cash, restricted cash and short-term investments, and total debt of only $11.7 million.

The Company also announced that it filed its form 10-Q with the Securities and Exchange Commission today. A link to this report may be found at www.cubic.com under "Investor Relations." 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
CONSOLIDATED CONDENSED STATEMENTS OF INCOME (UNAUDITED)
(amounts in thousands, except per share data)

Six Months Ended Three Months Ended
March 31, March 31,
2012 2011 2012 2011
--------- --------- --------- ---------

Net sales:
Products $ 314,942 $ 292,721 $ 157,630 $ 157,350
Services 344,799 325,667 183,364 176,618
--------- --------- --------- ---------
659,741 618,388 340,994 333,968

Costs and expenses:
Products 221,430 196,597 106,679 106,510
Services 278,030 274,264 145,787 152,453
Selling, general and
administrative 77,666 74,407 43,029 37,377
Research and development 12,968 11,526 8,072 5,271
Amortization of purchased
intangibles 7,707 6,350 3,668 4,312
--------- --------- --------- ---------
597,801 563,144 307,235 305,923
--------- --------- --------- ---------

Operating income 61,940 55,244 33,759 28,045

Other income (expense):
Interest and dividend income 1,726 1,239 964 375
Interest expense (678) (781) (331) (374)
Other income (expense) - net 1,703 (243) 12 (16)
--------- --------- --------- ---------

Income before income taxes 64,691 55,459 34,404 28,030

Income taxes 18,900 15,400 10,100 8,000
--------- --------- --------- ---------

Net income 45,791 40,059 24,304 20,030

Less noncontrolling interest in
income of VIE 96 205 51 84
--------- --------- --------- ---------

Net income attributable to Cubic $ 45,695 $ 39,854 $ 24,253 $ 19,946
========= ========= ========= =========

Basic and diluted net income per
common share $ 1.71 $ 1.49 $ 0.91 $ 0.75
========= ========= ========= =========

Dividends per common share $ 0.12 $ 0.19 $ 0.12 $ 0.19
========= ========= ========= =========

Average number of common shares
outstanding 26,736 26,736 26,736 26,736
========= ========= ========= =========



CUBIC CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)

September 30,
March 31, 2012 2011
(Unaudited) (See note below)
--------------- ----------------
ASSETS
Current assets:
Cash and cash equivalents $ 230,766 $ 329,148
Restricted cash 68,584 -
Short-term investments 7,895 25,829
Accounts receivable - net 292,704 223,984
Recoverable income taxes 12,392 20,725
Inventories - net 50,664 36,729
Deferred income taxes and other current
assets 24,325 34,230
--------------- ----------------
Total current assets 687,330 670,645
--------------- ----------------

Long-term contract receivables 23,590 23,700
Property, plant and equipment - net 55,525 48,467
Goodwill 146,812 146,355
Purchased intangibles - net 46,493 54,139
Other assets 18,920 15,534
--------------- ----------------
$ 978,670 $ 958,840
=============== ================

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $ 41,126 $ 38,870
Customer advances 168,670 183,845
Accrued compensation and other current
liabilities 83,499 103,339
Income taxes payable 11,922 7,902
Current portion of long-term debt 4,556 4,541
--------------- ----------------
Total current liabilities 309,773 338,497
--------------- ----------------

Long-term debt 7,191 11,377
Other long-term liabilities 57,954 57,168

Shareholders' equity:
Common stock 12,574 12,574
Retained earnings 641,336 598,849
Accumulated other comprehensive loss (13,923) (23,294)
Treasury stock at cost (36,078) (36,078)
--------------- ----------------
Shareholders' equity related to Cubic 603,909 552,051
Noncontrolling interest in variable
interest entity (157) (253)
--------------- ----------------
Total shareholders' equity 603,752 551,798
--------------- ----------------
$ 978,670 $ 958,840
=============== ================


Note: The balance sheet at September 30, 2011 has been derived from the
audited financial statements at that date.



CUBIC CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands)

Six Months Ended Three Months Ended
March 31, March 31,
2102 2011 2012 2011
--------- --------- --------- ---------
Operating Activities:
Net income $ 45,791 $ 40,059 $ 24,304 $ 20,030
Adjustments to reconcile net
income to net cash provided by
(used in) operating activities:
Depreciation and amortization 11,297 10,086 5,465 6,218
Changes in operating assets and
liabilities (97,027) (5,916) (31,334) 1,828
--------- --------- --------- ---------
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES (39,939) 44,229 (1,565) 28,076
--------- --------- --------- ---------

Investing Activities:
Acquisitions, net of cash
acquired - (126,825) - (2,394)
Net additions to property, plant
and equipment (10,150) (3,575) (4,901) (2,135)
Proceeds from maturities of
short-term investments 17,934 41,793 10,977 10,867
--------- --------- --------- ---------
NET CASH PROVIDED BY (USED IN)
INVESTING ACTIVITIES 7,784 (88,607) 6,076 6,338
--------- --------- --------- ---------

Financing Activities:
Principal payments on long-term
borrowings (4,274) (4,274) (138) (137)
Purchases of treasury stock - (4) - -
Dividends paid (3,208) - (3,208) -
Change in restricted cash (68,584) - (68,584) -
--------- --------- --------- ---------
NET CASH USED IN FINANCING
ACTIVITIES (76,066) (4,278) (71,930) (137)
--------- --------- --------- ---------

Effect of exchange rates on cash 9,839 4,198 9,044 2,428
--------- --------- --------- ---------

NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (98,382) (44,458) (58,375) 36,705

Cash and cash equivalents at the
beginning of the period 329,148 295,434 289,141 214,271
--------- --------- --------- ---------

CASH AND CASH EQUIVALENTS AT THE
END OF THE PERIOD $ 230,766 $ 250,976 $ 230,766 $ 250,976
========= ========= ========= =========

Cubic Corporation is the parent company of three major business segments: Cubic Defense Systems, Mission Support Services and Cubic 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 for U.S. and allied military and security forces. 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.

Contact:
Media
John D. Thomas
858-505-2989
Investor
Diane Dyer
858-505-2907

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