Cubic Reports Record High Sales and Earnings Company Expects Continued Growth.Business Editors SAN DIEGO--(BUSINESS WIRE)--Dec. 9, 2002 Cubic Corp. (AMEX AMEX See: American Stock Exchange :CUB cub the newborn of a number of animal species as diverse as lion, fox and bear. ) today reported record high sales and earnings for fiscal 2002. Earnings for the fiscal year ended Sept. 30, 2002 were up 41 percent, and sales for the year were up 12 percent from last year. Operating profits Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. (before tax, employee profit sharing profit sharing, arrangement by which employees receive, in addition to their wages, a share of the net profits of a business. The purpose is to give them an incentive to increase their output through enhanced morale, less wasteful use of materials, better care of and bonus payments) for the fiscal year ended Sept. 30, 2002 were $54,098,000, compared to $44,752,000 for fiscal 2001. Earnings (after tax, employee profit sharing and bonus payments) for the fiscal year ended Sept. 30, 2002 were $29,437,000 or $1.10 per share ($3.30 before a 3-for-1 stock split), compared to $20,842,000 or 78 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. ($2.34 pre-split) for fiscal 2001. Sales for 2002 were $559,604,000, compared to $501,679,000 for fiscal 2001. Fourth quarter 2002 earnings were up 73 percent, and sales for the period were up 14 percent from last year. Fourth quarter earnings were $10,177,000 or 38 cents per share ($1.14 pre-split), compared to $5,884,000 or 22 cents per share (66 cents pre-split) for 2001. Sales for the quarter were $149,026,000, compared to $131,230,000 for the same period last year. Operating profits increased in both of Cubic's major segments, most significantly in the defense segment. In addition, a change in accounting rules for Goodwill added $1,715,000 after taxes, or 6 cents per share for the year, and a non-recurring fourth quarter tax benefit added $2,460,000 or 9 cents per share. The company expects that sales and operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. will continue to grow next year. New contract bookings are expected to increase substantially in fiscal 2003, which should result in continued growth in fiscal 2004. Total backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. , including unfunded contracted orders, at Sept. 30, 2002 was $1,165,000,000 compared to $1,095,000,000 at Sept. 30, 2001. Cubic's funded backlog at the end of fiscal 2002 was $777,000,000, compared to $738,000,000 at the end of last year. "There is a high demand for our defense and transportation products and services," said Cubic President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Walter J. Zable. "We are determined to win new and repeat business, and focused on earning customer trust and loyalty." Defense Segment -- 2002 Performance Defense sales increased 11 percent -- to $314 million in fiscal 2002 from $282 million in fiscal 2001. Much of the growth came from a 22 percent increase in the segment's battlefield simulation and operation and maintenance businesses. In addition, the segment had strong sales of both ground and air combat training systems. Operating profits for Defense more than doubled to $17.9 million from $7.6 million in fiscal 2001. The most significant improvement came from the company's ground and air combat training systems. The company's products and services are expected to generate significant new orders from a variety of military and government customers in the U.S. and internationally. Transportation Systems -- 2002 Performance Transportation sales increased 13 percent to $231 million in fiscal 2002 from $205 million last year. The segment's North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. market generated significant new business, and the European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. market, specifically the United Kingdom, remained strong. The company continued its good progress on the London Prestige contract, meeting its major milestones. Nearly all equipment is installed, and the system functions well. The company is pursuing additional opportunities in both North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. and continental Europe Continental Europe, also referred to as mainland Europe or simply the Continent, is the continent of Europe, explicitly excluding European islands and, at times, peninsulas. . Operating profits for the transportation segment increased by 8 percent to $23.3 million for 2002, compared to $21.6 million in 2001. The increase came despite severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when costs from closing an outdated out·dat·ed adj. Out-of-date; old-fashioned. outdated Adjective old-fashioned or obsolete Adj. 1. U.K. facility and legal costs from a dispute of an Australian Australian pertaining to or originating in Australia. Australian bat lyssavirus disease see Australian bat lyssavirus disease. Australian cattle dog a medium-sized, compact working dog used for control of cattle. contract tender. Homeland Security Noun 1. Homeland Security - the federal department that administers all matters relating to homeland security Department of Homeland Security executive department - a federal department in the executive branch of the government of the United States In addition to growing its core businesses, the company has been successful -- with minimal investment -- in marketing its products and services to government agencies looking to answer the need for Homeland Security resources. Cubic's competitive position in its core businesses remains strong, as reflected in record high sales and earnings. At the same time, technologies from Defense and Transportation -- from smart card access control technology to communications products to senior-level doctrine development and consulting -- apply to the government's critical mission areas for homeland defense and security. The company has won small, but strategically significant contracts in domestic counterterrorism coun·ter·ter·ror adj. Intended to prevent or counteract terrorism: counterterror measures; counterterror weapons. n. Action or strategy intended to counteract or suppress terrorism. and data mining, and is positioning itself with potential teammates on future business in a wide range of homeland defense and security areas. The Cubic Defense Applications Group produces instrumented air and ground combat training systems, battle command training studies and analysis, simulations, and simulation support for U.S. and allied military forces. The Group also produces high technology avionics avionics (ā'vēŏn`ĭks), electronic instruments used in air or space flight; also the design and production of such instruments. Early planes had few instruments, but as aviation and aircraft became more complex, so did instrumentation. , data links and communications products for government and commercial customers, and provides a wide range of technical and logistics services. The corporation's other major segment, Cubic Transportation Systems, designs and manufactures automatic fare collection systems -- including the most advanced smart card system -- for public mass transit mass transit, public transportation systems designed to move large numbers of passengers. Types and Advantages Mass transit refers to municipal or regional public shared transportation, such as buses, streetcars, and ferries, open to all on a authorities worldwide. In addition to historical matters, this release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. which are made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Securities Litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called 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.
CUBIC CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
Years Ended September 30,
2002 2001 2000
------------ ------------ ------------
(amounts in thousands, except per
share data)
Revenues:
Sales $559,604 $501,679 $531,516
Interest and dividends 2,266 3,915 3,819
Other income 2,441 3,129 3,890
------------ ------------ ------------
564,311 508,723 539,225
Costs and expenses:
Cost of sales 425,712 385,569 449,913
Selling, general and
administrative expenses 85,759 76,052 76,016
Research and development 8,381 9,755 6,999
Goodwill amortization -- 2,638 2,327
Interest 3,538 3,601 3,729
------------ ------------ ------------
523,390 477,615 538,984
------------ ------------ ------------
Income before income taxes 40,921 31,108 241
Income taxes (benefit) 11,484 10,266 (433)
------------ ------------ ------------
Net income $29,437 $20,842 $674
============ ============ ============
Basic and diluted net income per
common share $1.10 $0.78 $0.03
============ ============ ============
Average number of common
shares outstanding 26,720 26,720 26,720
============ ============ ============
CUBIC CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
September 30,
2002 2001
---------- ----------
(in thousands)
ASSETS
CURRENT ASSETS $296,807 $276,106
PROPERTY, PLANT AND EQUIPMENT 42,419 33,376
OTHER ASSETS 35,233 31,865
---------- ----------
TOTAL ASSETS $374,459 $341,347
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES $106,328 $94,894
LONG-TERM DEBT 48,571 50,000
OTHER LIABILITIES 6,397 5,558
SHAREHOLDERS' EQUITY 213,163 190,895
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $374,459 $341,347
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