Cubic Reports Fourth Quarter and Fiscal 2018 Results; Record Quarter, Annual Sales and Backlog
SAN DIEGO, Nov. 15, 2018 /PRNewswire/ -- Cubic Corporation (NYSE: CUB) today announced its financial results for the fourth quarter and fiscal year ended September 30, 2018.
"We are extremely pleased by the strong growth in fiscal 2018, driven by record fourth quarter sales and Adjusted EBITDA. Additionally, we yet again have the highest backlog in our history with the most recent Bay Area win," said Bradley H. Feldmann, chairman, president and chief executive officer of Cubic Corporation. "This year, our team achieved the six Goal 2020 growth catalysts that will drive accelerated growth and value for our customers, shareholders and employees going forward."
Financial Results Summary
Year Ended Three Months Ended
September 30, September 30,
2018 2017 2018 2017
(in millions, except per share data)
Sales $
1,202.9 $
1,107.7 $
379.7 $
349.1
Operating income 24.4 2.6 27.7 21.2
Adjusted EBITDA (1) 104.6 87.5 49.1 45.5
Income (loss) from
continuing operations
attributable to Cubic
before income taxes $
15.2 $
(11.1) $
24.8 $
18.3
Income tax provision from
continuing operations
attributable to Cubic 7.1 14.6 2.8 8.7
Net income (loss) from
continuing operations
attributable to Cubic 8.1 (25.7) 22.0 9.6
Earnings (loss) per share
from continuing operations
attributable to Cubic 0.29 (0.95) 0.80 0.35
Net income (loss) from
discontinued operations
before income taxes $
8.0 $
14.9 $
(0.8) $
4.1
Income tax provision from
discontinued operations 3.8 0.4 3.3 0.6
Net income (loss) from
discontinued operations 4.2 14.5 (4.1) 3.5
Earnings (loss) per share
from discontinued
operations 0.16 0.54 (0.15) 0.13
Acquisition-related
expenses, excluding
amortization (1) $
4.5 $
(0.2) $
2.0 $
0.6
Strategic and IT system
resource planning expenses
(1) 24.1 34.4 5.3 10.8
Depreciation and
amortization 46.6 48.0 12.5 12.2
Research and development
expense 52.4 52.7 12.3 13.9
_____________________________
(1) See the section below titled "Use of Non-GAAP Financial Information"
for a description of these items and additional information
regarding Non-GAAP financial measures.
Fourth Quarter Fiscal 2018 Results
Sales in the fourth quarter of fiscal 2018 increased 9% to $379.7 million from $349.1 million in the fourth quarter of fiscal 2017 driven by growth in Cubic Transportation Systems (CTS) and Cubic Mission Solutions (CMS). Foreign currency translation had an unfavorable impact of $3.0 million.
Operating income in the fourth quarter of fiscal 2018 increased 30% to $27.7 million compared to $21.2 million in the fourth quarter of fiscal 2017. The increase reflects higher sales, improved performance and lower expenses related to Enterprise Resource Planning (ERP) initiatives. Operating income increased year-over-year despite an $8.0 million gain recognized on an equitable contract adjustment in Cubic Global Defense (CGD) in 2017.
Adjusted EBITDA in the fourth quarter of fiscal 2018 increased 8% to $49.1 million, compared to $45.5 million in the fourth quarter of fiscal 2017. Foreign currency translation had an unfavorable impact of $0.3 million.
Net income from continuing operations attributable to Cubic in the fourth quarter of fiscal 2018 was $22.0 million compared to $9.6 million in the fourth quarter of fiscal 2017. The increase in net income reflects higher operating income and a lower effective tax rate.
Operating cash flow from continuing operations was $40.4 million in the fourth quarter of fiscal 2018 compared to $42.3 million in the fourth quarter of fiscal 2017.
Full Year Fiscal 2018 Results
Full year fiscal 2018 sales increased 9% to $1.203 billion from $1.108 billion in fiscal 2017 driven by growth in CTS and CMS and reflects growth in both products and services. In fiscal 2018, 59% of sales were derived from products while 41% of sales were derived from services. Foreign currency translation had a favorable impact of $11.9 million.
Operating income in fiscal 2018 was $24.4 million compared to $2.6 million in fiscal 2017. The increase reflects higher sales, improved performance and a decrease in expenses related to ERP initiatives. Foreign currency translation had a favorable impact of $2.1 million.
Adjusted EBITDA in fiscal 2018 increased 20% to $104.6 million compared to $87.5 million in fiscal 2017. Foreign currency translation had a favorable impact of $2.2 million.
Net income from continuing operations attributable to Cubic in fiscal 2018 was $8.1 million compared to a net loss of $25.7 million in fiscal 2017. The increase in net income reflects higher operating income, lower interest expense and a lower effective tax rate, inclusive of a $7.1 million one-time, non-cash tax benefit in 2018.
Net income from discontinued operations was $4.2 million in fiscal 2018 compared to $14.5 million in fiscal 2017. In fiscal 2018, net income from discontinued operations includes a loss on the sale of CGD Services of $6.1 million.
Operating cash flow from continuing operations was a net inflow of $8.6 million in fiscal 2018 compared to a net outflow of $3.0 million in fiscal 2017.
Discontinued Operations
On May 31, 2018, Cubic sold CGD Services. Beginning in March 2018, all criteria were met for the classification of CGD Services as a discontinued operation. As a result, the operating results of CGD Services have been classified as discontinued operations in the condensed consolidated statements of income (loss) for all periods presented. In the application of the accounting requirements for discontinued operations, corporate overhead is not allocated to discontinued operations. Therefore, certain corporate overhead costs that had previously been allocated to CGD Services have been included in the unallocated corporate expenses amounts below. Such amounts totaled $5.3 million and $8.0 million for the full year fiscal 2018 and 2017, respectively.
Reportable Segment Results
Year Ended Three Months Ended
September 30, September 30,
2018 2017 2018 2017
Sales:
(in millions)
Cubic Transportation Systems $
670.7 $
578.6 $
192.6 $
170.7
Cubic Mission Solutions 207.0 168.9 95.1 65.6
Cubic Global Defense 325.2 360.2 92.0 112.8
Total sales $
1,202.9 $
1,107.7 $
379.7 $
349.1
Operating income:
Cubic Transportation Systems $
60.4 $
39.8 $
17.7 $
23.3
Cubic Mission Solutions (0.1) (9.3) 17.1 5.2
Cubic Global Defense 16.6 28.1 3.0 9.7
Unallocated corporate expenses (52.5) (56.0) (10.1) (17.0)
Total operating income $
24.4 $
2.6 $
27.7 $
21.2
Adjusted EBITDA:
Cubic Transportation Systems $
73.3 $
48.8 $
20.9 $
25.3
Cubic Mission Solutions 26.2 14.4 25.0 11.4
Cubic Global Defense 26.3 39.4 5.7 12.5
Unallocated corporate expenses (21.2) (15.1) (2.5) (3.7)
Total Adjusted EBITDA $
104.6 $
87.5 $
49.1 $
45.5
Cubic Transportation Systems (CTS)
Fourth quarter CTS sales increased 13% to $192.6 million compared to $170.7 million in the fourth quarter of 2017. Full year sales increased 16% to $670.7 million compared to $578.6 million in 2017. The increase in fourth quarter and full year sales was supported by system development work on the New York New Fare Payment System contract and reflects overall growth in both products and services. Foreign currency translation had an unfavorable impact of $2.0 million in the fourth quarter and a favorable impact of $12.4 million in fiscal 2018.
Fourth quarter CTS Adjusted EBITDA was $20.9 million compared to $25.3 million in the fourth quarter of 2017. Full year Adjusted EBITDA increased 50% to $73.3 million compared to $48.8 million in 2017. The increases in quarterly and full year Adjusted EBITDA reflect higher sales, operating cost reductions, lower research and development (R&D) investment and strong execution. Foreign currency translation had an unfavorable impact of $0.4 million in the fourth quarter and a favorable impact of $2.4 million in fiscal 2018.
Cubic Mission Solutions (CMS)
Fourth quarter CMS sales increased 45% to $95.1 million compared to $65.6 million in the fourth quarter of 2017. Full year sales increased 23% to $207.0 million compared to $168.9 million in 2017. The increase for the fourth quarter and full year reflects increased shipments of expeditionary satellite communications, tactical networking and C2ISR (Command, Control, Intelligence, Surveillance and Reconnaissance) products.
Fourth quarter Adjusted EBITDA increased 119% to $25.0 million compared to $11.4 million in the fourth quarter of 2017. Full year Adjusted EBITDA increased 82% to $26.2 million compared to $14.4 million in 2017. The increase in Adjusted EBITDA reflects higher sales, favorable sales mix and improved performance which more than offset a $10.8 million increase in R&D investment in fiscal 2018.
Cubic Global Defense (CGD)
Fourth quarter CGD sales were $92.0 million compared to $112.8 million in the fourth quarter of 2017. Full year sales were $325.2 million compared to $360.2 million in 2017. The decrease in sales for the fourth quarter and full year reflect the completion of various projects.
Fourth quarter Adjusted EBITDA was $5.7 million compared to $12.5 million in the fourth quarter of 2017. Full year Adjusted EBITDA was $26.3 million compared to $39.4 million in 2017.
Comparative sales and Adjusted EBITDA between fiscal years 2017 and 2018 were impacted by an $8.0 million gain recognized on an equitable contract adjustment in the third quarter of fiscal 2017 for our Littoral Combat Ship virtual training contract. Fourth quarter and full year 2018 Adjusted EBITDA was also negatively impacted by a $1.7 million settlement of a legal arbitration matter, which is now closed. Full year R&D investment in CGD increased by $1.8 million year-over-year.
Backlog
Total backlog increased $1.528 billion from September 30, 2017 to September 30, 2018 driven by significant contract wins. In particular, in fiscal 2018, we were awarded a contract by the New York Metropolitan Transportation Authority to replace the MetroCard system with a New Fare Payment System; a contract by the Massachusetts Bay Transit Authority to provide the CharlieCard system with a next-generation fare payment system; a contract by the Queensland Department of Transportation & Main Roads to provide a new fare system for the state of Queensland, Australia; and a contract by the San Francisco Bay Area's Metropolitan Transportation Commission to deliver next-generation fare payment technology and operational services to the Clipper smart card system serving the Bay Area.
Fiscal 2019 Full Year Guidance
Constant currency basis with 2018; Adoption of Accounting Standards Codification (ASC) Topic 606
-- Sales: $1,370 million to $1,450 million
-- Adjusted EBITDA: $135 million to $155 million
Conference Call and Webcast
Cubic will host a conference call today, Thursday, November 15 at 11:00 a.m. Eastern Time to present fourth quarter and fiscal 2018 results. Access the live audio webcast via: https://event.webcasts.com/starthere.jsp?ei=1218760&tp_key=8685c66645
An archive of the webcast and presentation materials will be made available on the Investor Relations section of Cubic's website at https://www.cubic.com/investor-relations/financials.
Financial analysts and institutional investors are invited to dial:
-- 877-407-9708
-- 201-689-8259 (international)
To avoid delay in the start time, please dial in beginning 10:45 a.m. Eastern Time.
About Cubic Corporation
Cubic is a technology-driven, market-leading provider of integrated solutions that increase situational understanding for transportation, defense C4ISR and training customers worldwide to decrease urban congestion and improve the militaries' effectiveness and operational readiness. Our teams innovate to make a positive difference in people's lives. We simplify their daily journeys. We promote mission success and safety for those who serve their nation. For more information about Cubic, please visit the company's website at www.cubic.com or on Twitter @CubicCorp.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to the safe harbor created by such Act. Forward-looking statements include, among others, statements about our expectations regarding future events or our future financial and/or operating performance, including our Goal 2020 growth catalysts driving future accelerated growth and value and fiscal 2019 full year guidance. 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 risks, estimates, assumptions and uncertainties that could cause actual results to differ materially from those expressed in these statements, including, among others: our dependence on U.S. and foreign government contracts; delays in approving U.S. and foreign government budgets and cuts in U.S. and foreign government defense expenditures; the ability of certain government agencies to unilaterally terminate or modify our contracts with them; the effects of potential sequestration on our contracts; our assumptions covering behavior by public transit authorities; our ability to successfully integrate new companies into our business and to properly assess the effects of such integration on our financial condition; the U.S. government's increased emphasis on awarding contracts to small businesses, and our ability to retain existing contracts or win new contracts under competitive bidding processes; negative audits by the U.S. government; the effects of politics and economic conditions on negotiations and business dealings in the various countries in which we do business or intend to do business; competition and technology changes in the defense and transportation industries; the change in the way transit agencies pay for transit systems; our ability to accurately estimate the time and resources necessary to satisfy obligations under our contracts; the effect of adverse regulatory changes on our ability to sell products and services; our ability to identify, attract and retain qualified employees; unforeseen problems with the implementation and maintenance of our information systems, including our new ERP system; business disruptions due to cyber security threats, physical threats, terrorist acts, acts of nature and public health crises; our involvement in litigation, including litigation related to patents, proprietary rights and employee misconduct; our reliance on subcontractors and on a limited number of third parties to manufacture and supply our products; our ability to comply with our development contracts and to successfully develop, introduce and sell new products, systems and services in current and future markets; defects in, or a lack of adequate coverage by insurance or indemnity for, our products and systems; and changes in U.S. and foreign tax laws, exchange rates or our economic assumptions regarding our pension plans. In addition, please refer to the risk factors contained in our SEC filings available at www.sec.gov, including our most recent Annual Report on Form 10?K. Because the risks, estimates, assumptions and uncertainties referred to above could cause actual results or outcomes to differ materially from those expressed in any forward-looking statements, you should not place undue reliance on any forward-looking statements. Any forward-looking statement speaks only as of the date hereof, and, except as required by law, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date hereof.
Use of Non-GAAP Financial Information
We believe that the presentation of Earnings before interest, taxes, depreciation, and amortization (EBITDA) and Adjusted EBITDA included in this report provides useful information to investors with which to analyze our operating trends and performance and ability to service and incur debt. Also, we believe EBITDA facilitates company-to-company operating performance comparisons by backing out potential differences caused by variations in capital structures (affecting net interest expense), taxation, variations in organic versus inorganic growth (affecting amortization expense) and the age and book depreciation of property, plant and equipment (affecting relative depreciation expense). We believe Adjusted EBITDA further facilitates company-to-company operating comparisons by backing out items that we believe are not part of our core operating performance. Items backed out of Adjusted EBITDA are comprised of expenses incurred in the development of our ERP system and the redesign of our supply chain which include internal labor costs and external costs of materials and services that do not qualify for capitalization, business acquisition expenses including retention bonus expenses, due diligence and consulting costs incurred in connection with the acquisitions, expenses recognized related to the change in the fair value of contingent consideration for acquisitions, restructuring costs, gains and losses on disposals of fixed assets, and income and expenses classified as other non-operating income and expenses which may vary for different companies for reasons unrelated to operating performance.
EBITDA and Adjusted EBITDA are not measurements of financial performance under GAAP and should not be considered as measures of discretionary cash available to the company or as alternatives to net income as a measure of performance. In addition, other companies may define EBITDA and Adjusted EBITDA differently and, as a result, our measures of EBITDA and Adjusted EBITDA may not be directly comparable to EBITDA and Adjusted EBITDA of other companies. Furthermore, EBITDA and Adjusted EBITDA have limitations as analytical tools, and you should not consider either of them in isolation, or as a substitute for analysis of our results as reported under GAAP.
The following table reconciles EBITDA and Adjusted EBITDA to net income (loss), which we consider to be the most directly comparable GAAP financial measure. On May 31, 2018 Cubic sold the CGD Services business. The operating results of this business and loss on sale have been excluded from the figures for all periods presented.
GAAP to Non-GAAP Reconciliation
Continuing Operations
Earnings before interest, taxes, depreciation and amortization (EBITDA) and Adjusted EBITDA
($ In Millions) Twelve Months Ended September 30, Three Months Ended September 30,
Cubic Transportation Systems 2018 2017 2018 2017
---
Sales $670.7 $578.6 $192.6 $170.7
Operating income $60.4 $39.8 $17.7 $23.3
Depreciation and amortization 12.0 8.8 2.9 2.0
Acquisition related expenses, excluding amortization 0.5 (0.2) 0.5
Restructuring costs 0.4 0.4 (0.2)
Adjusted EBITDA $73.3 $48.8 $20.9 $25.3
Adjusted EBITDA margin 10.9% 8.4% 10.9% 14.8%
Twelve Months Ended September 30, Three Months Ended September 30,
Cubic Mission Solutions 2018 2017 2018 2017
---
Sales $207.0 $168.9 $95.1 $65.6
Operating income (loss) $(0.1) $(9.3) $17.1 $5.2
Depreciation and amortization 22.4 23.8 6.6 5.7
Acquisition related expenses, excluding amortization 3.7 (0.1) 1.1 0.5
Restructuring costs 0.2 0.2
Adjusted EBITDA $26.2 $14.4 $25.0 $11.4
Adjusted EBITDA margin 12.7% 8.5% 26.3% 17.4%
Twelve Months Ended September 30, Three Months Ended September 30,
Cubic Global Defense 2018 2017 2018 2017
---
Sales $325.2 $360.2 $92.0 $112.8
Operating income $16.6 $28.1 $3.0 $9.7
Depreciation and amortization 8.5 10.4 2.4 3.1
Acquisition related expenses, excluding amortization (0.1)
Restructuring costs 1.3 0.9 0.3 (0.3)
Adjusted EBITDA $26.3 $39.4 $5.7 $12.5
Adjusted EBITDA margin 8.1% 10.9% 6.2% 11.1%
($ In Millions) Twelve Months Ended September 30, Three Months Ended September 30,
Cubic Consolidated 2018 2017 2018 2017
---
Sales $1,202.9 $1,107.7 $379.7 $349.1
Net income (loss) from continuing operations attributable to
Cubic $8.1 $(25.7) $22.0 $9.6
Noncontrolling interest in loss of VIE (0.3) 1.6
Income tax provision 7.1 14.6 2.8 8.7
Interest expense, net 8.8 14.1 2.5 2.6
Other non-operating expense (income), net 0.7 (0.4) (1.2) 0.3
Operating income 24.4 2.6 27.7 21.2
Depreciation and amortization 46.6 48.0 12.5 12.2
Other non-operating (expense) income, net (0.7) 0.4 1.2 (0.3)
EBITDA 70.3 51.0 41.4 33.1
Acquisition-related expenses, excluding amortization 4.5 (0.2) 2.0 0.6
Strategic and IT system resource planning expenses 24.1 34.4 5.3 10.8
Restructuring costs 5.0 2.3 1.6 0.7
Loss on sale of fixed assets 0.4
Other non-operating expense (income), net 0.7 (0.4) (1.2) 0.3
Adjusted EBITDA $104.6 $87.5 $49.1 $45.5
Adjusted EBITDA margin 8.7% 7.9% 12.9% 13.0%
Financial Statements
CUBIC CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(amounts in thousands, except per share data)
Years Ended September 30, Three Months Ended September 30,
2018 2017 2018 2017
Net sales:
Products $
704,941 $
681,559 $
235,992 $
215,488
Services 497,957 426,150 143,717 133,627
1,202,898 1,107,709 379,709 349,115
Costs and expenses:
Products 472,698 473,670 138,496 139,080
Services 362,694 305,653 117,619 97,143
Selling, general and administrative
expenses 258,644 240,601 74,924 69,871
Research and development 52,398 52,652 12,285 13,873
Amortization of purchased
intangibles 27,064 30,245 7,076 7,297
Restructuring costs 5,018 2,260 1,636 644
1,178,516 1,105,081 352,036 327,908
Operating income 24,382 2,628 27,673 21,207
Other income (expenses):
Interest and dividend income 1,615 953 (257) 271
Interest expense (10,424) (15,027) (2,272) (2,825)
Other income (expense), net (687) 364 1,194 (353)
Income (loss) from continuing
operations before income taxes 14,886 (11,082) 26,338 18,300
Income tax provision 7,093 14,658 2,794 8,691
Net income (loss) from continuing
operations 7,793 (25,740) 23,544 9,609
Net income (loss) from discontinued
operations 4,243 14,531 (4,121) 3,546
Net income (loss) 12,036 (11,209) 19,423 13,155
Less noncontrolling interest in loss
of VIE (274) 1,607
Net income (loss) attributable to
Cubic $
12,310 $
(11,209) $
17,816 $
13,155
Amounts attributable to Cubic:
Net income (loss) from continuing
operations 8,067 (25,740) 21,937 9,609
Net income (loss) from discontinued
operations 4,243 14,531 (4,121) 3,546
Net income (loss) attributable to
Cubic $
12,310 $
(11,209) $
17,816 $
13,155
Net income (loss) per share:
Basic
Continuing operations attributable
to Cubic $
0.30 $
(0.95) $
0.80 $
0.35
Discontinued operations $
0.16 $
0.54 $
(0.15) $
0.13
Basic earnings per share
attributable to Cubic $
0.45 $
(0.41) $
0.65 $
0.48
Diluted
Continuing operations attributable
to Cubic $
0.29 $
(0.95) $
0.80 $
0.35
Discontinued operations $
0.16 $
0.54 $
(0.15) $
0.13
Diluted earnings per share
attributable to Cubic $
0.45 $
(0.41) $
0.65 $
0.48
Weighted average shares used in per
share calculations:
Basic 27,229 27,106 27,254 27,126
Diluted 27,351 27,106 27,433 27,240
CUBIC CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands)
September 30, September 30,
2018 2017
ASSETS
Current assets:
Cash and cash equivalents $
111,834 $
60,143
Cash in consolidated VIE 374
Restricted cash 17,400 8,434
Restricted cash in consolidated VIE 10,000
Accounts receivable:
Long-term contracts 393,691 354,476
Allowance for doubtful accounts (1,324) (436)
392,367 354,040
Recoverable income taxes 91 5,360
Inventories 84,199 87,715
Assets held for sale 8,177
Other current assets 43,705 29,951
Current assets of discontinued operations 75,900
Total current assets 668,147 621,543
Long-term contract receivables 6,134 17,457
Long-term capitalized contract costs 84,924 56,471
Long-term capitalized contract costs in consolidated VIE 1,258
Property, plant and equipment, net 117,546 113,220
Deferred income taxes 4,713 7,385
Goodwill 333,626 321,562
Purchased intangibles, net 73,533 89,858
Other assets 14,192 10,515
Other noncurrent assets in consolidated VIE 810
Noncurrent assets of discontinued operations 98,274
Total assets $
1,304,883 $
1,336,285
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term borrowings
$ $
55,000
Trade accounts payable 125,414 88,521
Trade accounts payable in consolidated VIE 165
Customer advances 75,941 56,132
Accrued compensation 65,277 79,577
Other current liabilities 52,956 50,549
Income taxes payable 8,586 9,838
Current liabilities of discontinued operations 36,862
Total current liabilities 328,339 376,479
Long-term debt 199,793 199,761
Long-term debt in consolidated VIE 9,056
Accrued pension liability 7,802 25,375
Deferred compensation 11,476 11,435
Income taxes payable 2,406 7,465
Deferred income taxes 2,689 10,407
Other noncurrent liabilities 19,113 15,732
Other noncurrent liabilities in consolidated VIE 13
Shareholders' equity:
Common stock, no par value:
Authorized--50,000 shares
36,201 issued and 27,255 outstanding at September 30, 2018
36,072 issued and 27,127 outstanding at September 30, 2017 45,008 37,850
Retained earnings 801,834 794,485
Accumulated other comprehensive loss (110,643) (106,626)
Treasury stock at cost - 8,945 shares (36,078) (36,078)
Shareholders' equity related to Cubic 700,121 689,631
Noncontrolling interest in VIE 24,075
Total shareholders' equity 724,196 689,631
Total liabilities and shareholders' equity $
1,304,883 $
1,336,285
CUBIC CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Years Ended September 30,
2018 2017
Operating Activities:
Net income (loss) $
12,036 $
(11,209)
Net income from discontinued operations (4,243) (14,531)
Adjustments to reconcile net income (loss)
to net cash provided by operating
activities:
Depreciation and amortization 46,600 48,045
Share-based compensation expense 7,515 5,012
Change in fair value of contingent
consideration 1,029 (3,878)
(Gain) loss on disposal of assets (1,474) 405
Deferred income taxes (6,860) (917)
Net pension cost (benefit) (2,770) (1,046)
Excess tax benefits from equity incentive
plans (35)
Changes in operating assets and
liabilities, net of effects from
acquisitions:
Accounts receivable (34,762) (45,443)
Inventories 3,023 (18,867)
Prepaid expenses and other current assets (15,455) 7,286
Long-term capitalized contract costs (29,552) 8,911
Accounts payable and other current
liabilities 30,423 13,389
Customer advances 21,566 7,383
Income taxes (361) 8,240
Other items, net (18,126) (5,756)
NET CASH PROVIDED BY (USED IN) CONTINUING
OPERATING ACTIVITIES 8,589 (3,011)
NET CASH PROVIDED BY OPERATING ACTIVITIES
FROM DISCONTINUED OPERATIONS 10,376 27,747
NET CASH PROVIDED BY OPERATING ACTIVITIES 18,965 24,736
Investing Activities:
Acquisition of businesses, net of cash
acquired (16,322) (16,830)
Purchases of marketable securities (19,121)
Proceeds from sales or maturities of
marketable securities 31,868
Purchases of property, plant and equipment (31,696) (36,916)
Purchase of non-marketable debt and
equity securities (1,500) (2,700)
Proceeds from the sale of assets 2,400
NET CASH USED IN INVESTING ACTIVITIES FROM
CONTINUING OPERATIONS (47,118) (43,699)
NET CASH PROVIDED BY INVESTING ACTIVITIES
FROM DISCONTINUED OPERATIONS 133,795 1,217
NET CASH PROVIDED BY (USED IN) INVESTING
ACTIVITIES 86,677 (42,482)
Financing Activities:
Proceeds from short-term borrowings 269,770 130,780
Principal payments on short-term
borrowings (324,770) (315,780)
Principal payments on long-term debt (978)
Proceeds from long-term borrowings in
consolidated VIE 13,196
Deferred financing fees in consolidated
VIE (4,778)
Proceeds from stock issued under employee
stock purchase plan 1,517 2,234
Purchase of common stock (2,449) (2,444)
Dividends paid (7,355) (7,341)
Excess tax benefits from equity incentive
plans 35
Contingent consideration payments related
to acquisitions of businesses (1,156) (2,625)
Equity contribution from Boston VIE
partner 24,349
Net change in restricted cash (19,509) 66,293
NET CASH PROVIDED BY (USED IN) FINANCING
ACTIVITIES (51,185) (129,826)
Effect of exchange rates on cash (2,392) 10,588
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 52,065 (136,984)
Cash and cash equivalents at the beginning
of the period 60,143 197,127
CASH AND CASH EQUIVALENTS AT THE END OF
THE PERIOD $
112,208 $
60,143
Supplemental disclosure of non-cash
investing and financing activities:
Liability incurred to acquire Shield
Aviation, net $
6,248
$
Liability incurred to acquire MotionDSP,
net
$ $
1,327
Liability incurred to acquire Vocality,
net
$ $
271
CUBIC CORPORATION
BACKLOG
September September
30, 30,
2018 2017
(in millions)
Total backlog
---
Cubic
Transportation
Systems $
3,544.9 $
2,043.9
Cubic Mission
Solutions 77.0 72.3
Cubic Global
Defense 442.6 420.3
Total $
4,064.5 $
2,536.5
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SOURCE Cubic Corporation
