Cubic Wins $113 Million Contract to Provide Next-Generation MILES Equipment for U.S. Army; U.S. Army to Receive New Laser-Based Simulation Equipment for Infantry Weapons.

SAN DIEGO -- The defense segment of Cubic Corporation (AMEX:CUB) has won a five-year $113 million contract to produce and field the U.S. Army's next-generation Multiple Integrated Laser Engagement System (MILES) Individual Weapon System (IWS) for live force-on-force training. The initial award from the Army's PEO STRI in Orlando, Fla., totals $14 million.

MILES IWS is based on Cubic's widely endorsed MILES 2000 system, which has been fielded to more than 60,000 troops worldwide since 1997. Cubic's MILES allows troops to train with actual weapons during force-on-force exercises; provides real-time feedback on weapon engagements and "casualties" with pinpoint accuracy; and records and analyzes the events for after action reviews.

"The award of MILES IWS is a strategic event for Cubic. It not only extends our production base, but provides for the steady insertion of new technology to significantly improve the quality of training for the U.S. Army," said Gerald Dinkel, president and CEO of Cubic Defense Applications (CDA).

"We certainly appreciate the confidence the Army has placed in us, and we're committed to producing the most reliable and technically advanced system possible," Dinkel continued. "Cubic's MILES has proven its value in preparing troops for combat, and I anticipate we could see production levels even higher than those currently planned."

Cubic will deliver MILES IWS to approximately eight Army training centers and various homestations throughout the world. The contract includes initial deliveries to the National Training Center (NTC) at Fort Irwin, Calif., and the Combat Maneuvering Training Center in Hohenfels, Germany.

Seth Bokmeyer, MILES business development director, said the new system features many significant improvements over currently fielded MILES systems.

"IWS offers a significant upgrade to the basic MILES in terms of performance, weight, overall usability and long-term supportability," Bokmeyer said. "The advanced system features small, lightweight components, superior performance and a proven, cost-effective design."

IWS is interoperable with previous configurations of MILES and is expandable to include numerous possible upgrades. As an instrumentable system, IWS is designed for easy integration with Combat Training Centers and mobile homestation training systems. It also facilitates the Army's evolution to future training systems, including the One Tactical Engagement Simulation System (OneTESS) program.

Initial deliveries of MILES IWS will begin in August.

The Cubic Defense Applications group, one of Cubic's two major segments, is a world leader in realistic combat training systems, mission support services and defense electronics. The corporation's other major segment, Cubic Transportation Systems, designs and manufactures automatic fare collection systems for public mass transit authorities. For more information about Cubic, see the company's website at www.cubic.com.