The Rising Influence of Rising Affluence

[DewDiligence]

Cubic Reports FY1Q11 Results and Record Backlog

[CUB does not hold quarterly CC’s. The best way to become acquainted with CUB’s businesses is to catch their occasional presentations at investor conferences—or to read the posts on this board :- )

Please see the prologue of #msg-53598437 for the reason I think CUB is a good stock and a beneficiary of The Global Demographic Tailwind. (And be sure to read #msg-53690679 if you have not done so already!)

In FY1Q11, sales and operating income increased strongly in the mass-transit and defense-systems segments, but were stagnant in the mission-support-services segment. Two out of three ain’t bad, however, and the overall backlog reached is at a record-high level.]

http://finance.yahoo.com/news/Cubic-Corp-NYSE-CUB-Reports-iw-3425970912.html?x=0&.v=1

›Thursday February 3, 2011, 6:00 am

SAN DIEGO, CA--(Marketwire - 02/03/11) - Cubic Corporation (NYSE:CUB) today reported earnings and sales for the quarter ended December 31, 2010. Sales for the first fiscal quarter were $284.4 million compared to $250.7 million last year, an increase of 13 percent. Net income attributable to Cubic shareholders increased by 45 percent to $19.9 million or 74 cents per share this year compared to $13.7 million or 51 cents per share last year. Net income in the first quarter benefitted from the retroactive reinstatement of the U.S. research and development credit, which reduced the income tax provision by $1.5 million.

Operating income increased in all three business segments. Consolidated operating income increased by 33 percent in the first fiscal quarter to $27.2 million, compared to $20.4 million last year. Cash flows from operations were $16.2 million for the quarter.

Cubic's acquisition of Abraxas Corporation on December 20, 2010 did not have a significant impact on sales, net income or operating income for the first quarter as only 11 days of Abraxas operations were included in the first quarter results.

Transportation Systems Segment

Cubic Transportation Systems (CTS) sales increased in the first quarter this year by 20 percent to $89.4 million from $74.3 million last year. Sales were higher from work on contracts in Australia and London.

Operating income from CTS increased 37 percent in the first quarter from $11.0 million last year to $15.1 million this year. Higher sales from contracts in Australia and London contributed to the increase, along with improved margins on contracts in North America.

Defense Systems Segment

Cubic Defense Systems (CDS) sales increased 27 percent to $95.8 million from $75.6 million in last year's first quarter. Sales increases in the training systems business were partially offset by a small decrease in communications business sales.

Operating income improved to $8.3 million from $6.7 million in last year's first quarter despite investment in development and marketing of cross domain and global tracking products that negatively impacted operating income by $2.3 million during the first quarter. Higher operating income on higher training systems sales contributed to the overall increase in operating income.

Mission Support Services Segment

Sales at Mission Support Services (MSS) decreased 1 percent to $98.8 million from $100.2 million in the first quarter of last year.

Operating income from MSS was $5.1 million compared to $4.0 million in the prior year's first quarter. Last year's first quarter included a provision of $2.0 million for a dispute with a customer over contract terms. Partially offsetting the improvement in operating income for the quarter over last year were expenses of $0.7 million incurred in the first quarter this year related to the acquisition of Abraxas.

Backlog

Total backlog was a record high $2.840 billion at December 31, 2010, compared to $2.486 billion at September 30, 2010, the Company's previous high backlog. The acquisition of Abraxas Corporation during the quarter added $107.7 million to total backlog.

Financial Condition

The company continues to maintain a strong liquidity position, ending the period with $267.4 million in cash and short-term investments, and total debt of only $16.3 million. The Company made cash payments of $124.0 million during the quarter in connection with the acquisition of Abraxas.

Cubic Corporation is the parent company of three major business segments: defense systems, mission support services and transportation systems. Cubic Defense Applications is a leading supplier of combat training systems, communications, cyber technologies, and global tracking solutions. 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.‹