Cubic Corp. (NYSE: CUB) Reports Higher Sales and Earnings and Record Backlog for the Quarter Ended December 31, 2011
SAN DIEGO, CA -- (Marketwire) -- 02/02/12 -- Cubic Corporation (NYSE: CUB) today reported earnings and sales for the quarter ended December 31, 2011. Sales for the first fiscal quarter were $318.7 million compared to $284.4 million last year, an increase of 12 percent. Net income attributable to Cubic shareholders increased by 8 percent to $21.4 million (80 cents per share) this year compared to $19.9 million (74 cents per share) last year.
Operating income increased by 4 percent in the first fiscal quarter to $28.2 million, compared to $27.2 million last year. Cash flows used in operations were $38.4 million primarily due to increases in accounts receivable caused by increased sales.
Other income in the first quarter this year included a net foreign currency exchange gain of $1.9 million, before taxes. The effective tax rate increased to 29.1 percent for this fiscal quarter compared to 27.0 percent for the same quarter last year. The increase in the effective rate was primarily due to the retroactive reinstatement of the U.S. research and development credit in 2010, which reduced the income tax provision by $1.5 million for the quarter ended December 31, 2010. In contrast, the expiration of this credit during this fiscal year increased the effective rate for the quarter ended December 31, 2011.
Total backlog was a record high $3.184 billion at December 31, 2011 compared to $2.837 billion at September 30, 2011, the Company's previous high backlog. During the quarter ended December 31, 2011, Cubic Transportation Systems signed a contract with the Chicago Transit Authority (CTA) to design, build, operate and maintain CTA's next-generation open payment fare system which added $454 million to backlog as of December 31, 2011.
The company continues to maintain a strong liquidity position, ending the period with $308.0 million in cash and short-term investments, and total debt of only $11.8 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 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 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.
CUBIC CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF INCOME (UNAUDITED)
(amounts in thousands, except per share data)
Three Months Ended
December 31,
2011 2010
--------------- ---------------
Net sales:
Products $ 157,312 $ 135,371
Services 161,435 149,049
--------------- ---------------
318,747 284,420
Cost and expenses:
Products 114,751 90,087
Services 132,243 121,811
Selling, general and administrative 34,637 37,030
Research and development 4,896 6,255
Amortization of purchased intangibles 4,039 2,038
--------------- ---------------
290,566 257,221
--------------- ---------------
Operating income 28,181 27,199
Other income (expense):
Interest and dividend income 762 864
Interest expense (347) (407)
Other income (expense) - net 1,691 (227)
--------------- ---------------
Income before income taxes 30,287 27,429
Income taxes 8,800 7,400
--------------- ---------------
Net income 21,487 20,029
Less noncontrolling interest in income of
VIE 45 121
--------------- ---------------
Net income attributable to Cubic $ 21,442 $ 19,908
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Basic and diluted net income per common
share $ 0.80 $ 0.74
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Average number of common shares outstanding
26,736 26,736
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CUBIC CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
December 31, September 30,
2011 2011
(Unaudited) (See note below)
-------------- --------------
ASSETS
Current assets:
Cash and cash equivalents $ 289,141 $ 329,148
Short-term investments 18,872 25,829
Accounts receivable - net 254,811 223,984
Recoverable income taxes 22,177 20,725
Inventories - net 42,172 36,729
Deferred income taxes and other current
assets 20,783 34,230
-------------- --------------
Total current assets 647,956 670,645
-------------- --------------
Long-term contract receivables 24,140 23,700
Property, plant and equipment - net 52,045 48,467
Goodwill 146,413 146,355
Purchased intangibles - net 50,147 54,139
Other assets 18,118 15,534
-------------- --------------
$ 938,819 $ 958,840
============== ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $ 30,372 $ 38,870
Customer advances 172,988 183,845
Accrued compensation and other current
liabilities 86,344 103,339
Income taxes payable 8,460 7,902
Current portion of long-term debt 4,539 4,541
-------------- --------------
Total current liabilities 302,703 338,497
-------------- --------------
Long-term debt 7,233 11,377
Other long-term liabilities 56,157 57,168
Shareholders' equity:
Common stock 12,574 12,574
Retained earnings 620,291 598,849
Accumulated other comprehensive loss (23,853) (23,294)
Treasury stock at cost (36,078) (36,078)
-------------- --------------
Shareholders' equity related to Cubic 572,934 552,051
Noncontrolling interest in variable
interest entity (208) (253)
-------------- --------------
Total shareholders' equity 572,726 551,798
-------------- --------------
$ 938,819 $ 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)
Three Months Ended
December 31,
2011 2010
--------- ---------
Operating Activities:
Net income $ 21,487 $ 20,029
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 5,832 3,868
Changes in operating assets and liabilities (65,693) (7,744)
--------- ---------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (38,374) 16,153
--------- ---------
Investing Activities:
Acquisitions, net of cash acquired - (124,431)
Net additions to property, plant and equipment (5,249) (1,440)
Proceeds from sales or maturities of short-term
investments 6,957 30,926
--------- ---------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES 1,708 (94,945)
--------- ---------
Financing Activities:
Principal payments on long-term borrowings (4,136) (4,137)
Purchases of treasury stock - (4)
--------- ---------
NET CASH USED IN FINANCING ACTIVITIES (4,136) (4,141)
--------- ---------
Effect of exchange rates on cash 795 1,770
--------- ---------
NET DECREASE IN CASH AND CASH EQUIVALENTS (40,007) (81,163)
Cash and cash equivalents at the beginning of the
period 329,148 295,434
--------- ---------
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD $ 289,141 $ 214,271
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Media Contact:
John D. Thomas
858-505-2989
Investor Contact:
Diane Dyer
858-505-2907