Cubic Corporation (NYSE: CUB) today reported record high sales and
earnings for the fiscal year ended September 30, 2011. Sales in
fiscal 2011 were $1.285 billion, representing an increase of 8
percent over sales of $1.194 billion in 2010. Net income
attributable to Cubic shareholders increased 20 percent, to $84.8
million ($3.17 per share) in 2011 from $70.6 million ($2.64 per
share) last year.
Operating income increased 6 percent, to $112.3 million this
year from $105.5 million in 2010 and cash flows from operations
were $132.6 million in 2011. The Company's financial condition
continued to be very strong in 2011. Cash and short-term
investments at September 30, 2011 were $355.0 million while total
debt was only $15.9 million.
Total backlog reached a record high $2.837 billion at September
30, 2011 compared to $2.486 billion at September 30, 2010. Funded
backlog was $2.163 billion at September 30, 2011 compared to $1.872
billion at the end of last year.
Further details are available in the appendix following the
financial statements.
CUBIC CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
Years Ended Three Months Ended
September 30, September 30,
2011 2010 2011 2010
----------- ----------- ----------- -----------
(in thousands, except per share data)
Net sales:
Products $ 618,924 $ 636,739 $ 174,786 $ 179,889
Services 666,279 557,450 172,124 167,817
----------- ----------- ----------- -----------
1,285,203 1,194,189 346,910 347,706
Costs and expenses:
Products 437,992 457,651 123,090 134,524
Services 539,973 484,343 138,265 143,799
Selling, general and
administrative
expenses 154,962 120,848 43,724 32,612
Research and
development 25,260 18,976 7,453 8,633
Amortization of
purchased intangibles 14,681 6,846 4,074 1,755
----------- ----------- ----------- -----------
1,172,868 1,088,664 316,606 321,323
----------- ----------- ----------- -----------
Operating income 112,335 105,525 30,304 26,383
Other income (expenses):
Interest and dividend
income 2,568 1,590 839 236
Interest expense (1,461) (1,755) (306) (473)
Other income - net 4,205 561 3,681 (4,470)
----------- ----------- ----------- -----------
Income before income
taxes 117,647 105,921 34,518 21,676
Income taxes 32,569 35,285 10,369 8,424
----------- ----------- ----------- -----------
Net income 85,078 70,636 24,149 13,252
Less noncontrolling
interest in income of
VIE 310 - 49 -
----------- ----------- ----------- -----------
Net income attributable
to Cubic $ 84,768 $ 70,636 $ 24,100 $ 13,252
=========== =========== =========== ===========
Basic and diluted net
income per common share $ 3.17 $ 2.64 $ 0.90 $ 0.49
=========== =========== =========== ===========
Average number of common
shares outstanding 26,736 26,735 26,736 26,736
=========== =========== =========== ===========
CUBIC CORPORATION
CONSOLIDATED BALANCE SHEETS
September 30,
2011 2010
----------- -----------
(in thousands)
ASSETS
Current assets:
Cash and cash equivalents $ 329,148 $ 295,434
Short-term investments 25,829 84,081
Accounts receivable:
Trade and other receivables 20,259 11,594
Long-term contracts 204,120 199,353
Allowance for doubtful accounts (395) (663)
----------- -----------
223,984 210,284
Recoverable income taxes 20,725 8,320
Inventories 36,729 32,820
Deferred income taxes 13,778 17,825
Prepaid expenses and other current assets 20,452 25,893
----------- -----------
Total current assets 670,645 674,657
----------- -----------
Long-term contracts receivable 23,700 28,080
Property, plant and equipment - net 48,467 47,469
Deferred income taxes 11,318 18,570
Goodwill 146,355 64,142
Purchased intangibles - net 54,139 26,295
Miscellaneous other assets 4,216 5,196
----------- -----------
Total assets $ 958,840 $ 864,409
=========== ===========
CUBIC CORPORATION
CONSOLIDATED BALANCE SHEETS--continued
September 30,
2011 2010
----------- -----------
(in thousands)
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $ 38,870 $ 33,638
Customer advances 183,845 139,723
Accrued compensation 49,513 48,994
Other current liabilities 53,826 60,041
Income taxes payable 7,902 20,107
Current maturities of long-term debt 4,541 4,545
----------- -----------
Total current liabilities 338,497 307,048
----------- -----------
Long-term debt 11,377 15,949
Accrued pension liability 38,223 37,015
Deferred compensation 7,884 8,508
Income taxes payable 4,479 3,382
Other non-current liabilities 6,582 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
2011 and 2010--Issued 35,681 shares,
outstanding--26,736 shares 12,574 12,574
Retained earnings 598,849 521,567
Accumulated other comprehensive income (loss) (23,294) (9,745)
Treasury stock at cost:
2011 and 2010--8,945 shares (36,078) (36,074)
----------- -----------
Shareholders' equity related to Cubic 552,051 488,322
Noncontrolling interest in variable interest
entity (253) (563)
----------- -----------
Total shareholders' equity 551,798 487,759
----------- -----------
Total liabilities and shareholders' equity $ 958,840 $ 864,409
=========== ===========
CUBIC CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended September 30,
--------------------------
2011 2010
------------ ------------
(in thousands)
Operating Activities:
Net income $ 85,078 $ 70,636
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 22,341 14,469
Deferred income taxes 4,048 (164)
Provision for doubtful accounts - (3,889)
Changes in operating assets and
liabilities, net of effects from
acquisitions:
Accounts receivable 4,219 28,565
Inventories (3,760) 16,638
Prepaid expenses and other current
assets 5,516 4,401
Accounts payable and other current
liabilities (3,387) (27,498)
Customer advances 45,517 20,672
Income taxes (24,205) (14,614)
Other items - net (2,779) 2,507
------------ ------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 132,588 111,723
------------ ------------
Investing Activities:
Acquisition of businesses, net of cash
acquired (126,825) (8,250)
Consolidation of variable interest entity - 38,264
Proceeds from sale of short-term investments 58,252 82,992
Purchases of short-term investments - (158,946)
Purchases of property, plant and equipment (8,728) (6,878)
------------ ------------
NET CASH USED IN INVESTING ACTIVITIES (77,301) (52,818)
------------ ------------
Financing Activities:
Principal payments on long-term debt (4,555) (4,541)
Proceeds from issuance of common stock - 44
Purchases of treasury stock (4) (3)
Dividends paid to shareholders (7,486) (4,812)
------------ ------------
NET CASH USED IN FINANCING ACTIVITIES (12,045) (9,312)
------------ ------------
Effect of exchange rates on cash (9,528) 1,767
------------ ------------
NET INCREASE IN CASH AND CASH EQUIVALENTS 33,714 51,360
Cash and cash equivalents at the beginning of
the year 295,434 244,074
------------ ------------
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR $ 329,148 $ 295,434
============ ============
APPENDIX
Details of Consolidated Results The
average exchange rates between the prevailing currencies in the
Company's foreign operations and the U.S. dollar resulted in an
increase in sales in 2011 of $21.5 million, an increase of $3.4
million in operating income, and an increase in net income
attributable to Cubic shareholders of $2.4 million, or $0.09 per
share.
Cubic's net income also increased in 2011 due to the impact of
foreign currency exchange rate changes on U.S. dollar-denominated
investments held by our wholly-owned subsidiary in the U.K. that
has the British Pound as its functional currency. The impact of
exchange rates on these U.S. dollar-denominated investments is
recorded as non-operating income and resulted in a gain of $2.3
million after taxes, or $0.09 per share.
The Company's effective tax rate in 2011 decreased to 27.7
percent of pretax income compared to 33.3 percent of pretax income
in 2010 primarily due to use of available U.S. research and
development tax credits and an increase in the amount of income
earned in foreign jurisdictions that is taxed at lower rates than
the U.S. federal statutory tax rate.
Transportation Systems Segment Cubic
Transportation Systems (CTS) sales increased 8 percent to $415.4
million in 2011 from $386.0 million in 2010. Sales were higher in
2011 from work in Europe and Australia, but were lower in North
America.
Operating income from CTS increased 2 percent in 2011 to $56.0
million from $54.7 million in 2010. Increased income in 2011
resulted from higher sales in the U.K. and Australia, and an
increase in operating margin in Australia due to a reduction in bid
and proposal costs. Lower operating income on lower sales in North
America partially offset these increases.
Defense Systems Segment Cubic Defense
Systems (CDS) sales increased 8 percent to $392.7 million in 2011
from $362.8 million in 2010. Sales increased in the training
systems business, while communications business revenue
decreased.
Operating income from CDS increased 32 percent to $37.9 million
in 2011 from $28.7 million in 2010. Higher sales and improved
profit margins from training systems contributed to the increase.
In 2010, CDS acquired two new businesses that are developing cross
domain and global tracking products. During 2011 and 2010 CDA
increased its investment in the development and marketing of these
products which resulted in these businesses incurring operating
losses totaling $11.3 million in 2011 and $3.0 million in 2010.
Mission Support Services
Segment Sales at Mission Support Services (MSS) increased 7
percent to $475.8 million in 2011 from $443.3 million in 2010. The
acquisition of Abraxas added $50.0 million to 2011 revenue. Lower
sales at the Joint Readiness Training Center in Fort Polk,
Louisiana, and from the U.S. Army Quartermaster Center and School
partially offset the increase in 2011 sales. The acquisition also
added $106.8 million to the year end backlog.
Operating income from MSS was 9 percent lower in 2011 at $24.0
million compared to $26.5 million last year. This was primarily due
to the amortization of intangibles of $8.2 million and costs of
$0.7 million for the acquisition made this fiscal year. Higher
operating margins on increased sales from information operation
contracts partially offset the decrease.
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 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.
Media Contact John D. Thomas 858-505-2989 Investor Contact Diane
Dyer 858-505-2907
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