Cubic Corp. (AMEX:CUB) 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 (before tax, employee profit sharing 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 ($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 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, 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 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 market generated significant new business, and the European 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 and continental Europe.
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 costs from closing an outdated U.K. facility and legal costs from a dispute of an Australian contract tender.
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 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, 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 authorities worldwide.
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.
CONSOLIDATED STATEMENTS OF INCOME
Years Ended September 30,
2002 2001 2000