-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, K0POSw34pzG6M2jLmbVjclvX/baemyEb2hmh9FZC7pnKj/Cqk0i/L+hsTguha9y8 BCsNAUctZqpyAe1ucCc1PQ== 0000912057-96-008209.txt : 19960507 0000912057-96-008209.hdr.sgml : 19960507 ACCESSION NUMBER: 0000912057-96-008209 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960506 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: CUBIC CORP /DE/ CENTRAL INDEX KEY: 0000026076 STANDARD INDUSTRIAL CLASSIFICATION: SEARCH, DETECTION, NAVIGATION, GUIDANCE, AERONAUTICAL SYS [3812] IRS NUMBER: 951678055 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-08931 FILM NUMBER: 96556843 BUSINESS ADDRESS: STREET 1: 9333 BALBOA AVE CITY: SAN DIEGO STATE: CA ZIP: 92123 BUSINESS PHONE: 6192776780 MAIL ADDRESS: STREET 1: PO BOX 85587 CITY: SAN DIEGO STATE: CA ZIP: 92186-5587 10-Q 1 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarter Ended March 31, 1996 1-8931 ------ Commission File Number CUBIC CORPORATION Exact Name of Registrant as Specified in its Charter Delaware 95-1678055 -------- ---------- State of Incorporation IRS Employer Identification No. 9333 Balboa Avenue San Diego, California 92123 Telephone (619) 277-6780 Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- As of April 22, 1996, Registrant had only one class of common stock of which there were 5,987,384 shares outstanding (after deducting 1,938,230 shares held as treasury stock). PART I - FINANCIAL INFORMATION ITEM 1 - FINANCIAL STATEMENTS CUBIC CORPORATION CONSOLIDATED CONDENSED STATEMENT OF INCOME (UNAUDITED) (amounts in thousands, except per share data)
Six Months Ended Three Months Ended March 31 March 31 1996 1995 1996 1995 ---------- ---------- ---------- ---------- Revenues: Net sales $ 204,834 $ 161,575 $ 110,870 $ 91,968 Other income 2,488 2,392 1,332 1,495 ---------- ---------- ---------- ---------- 207,322 163,967 112,202 93,463 Costs and expenses: Cost of sales 162,669 124,360 87,974 72,844 Selling, general and administrative expenses 30,822 28,543 16,880 15,868 Research and development 4,104 4,520 2,121 2,521 Interest 1,865 1,405 1,168 778 ---------- ---------- ---------- ---------- 199,460 158,828 108,143 92,011 ---------- ---------- ---------- ---------- Income before income taxes and minority interest 7,862 5,139 4,059 1,452 Income taxes 2,850 1,800 1,550 400 Minority interest in income of subsidiary 360 1,107 23 678 ---------- ---------- ---------- ---------- Net income $ 4,652 $ 2,232 $ 2,486 $ 374 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Net income per share $ .78 $ .37 $ .42 $ .06 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Dividends per share $ .265 $ .265 $ .265 $ .265 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Average shares of common stock outstanding 5,987 5,987 5,987 5,987 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
See accompanying notes. CUBIC CORPORATION CONSOLIDATED CONDENSED BALANCE SHEET (thousands of dollars)
March 31 September 30 1996 1995 (Unaudited) (See note below) --------- -------------- ASSETS Current assets: Cash and cash equivalents $ 28,593 $ 20,705 Marketable securities, available-for-sale 3,115 3,405 Accounts receivable 152,374 153,582 Inventories: Finished products 3,147 2,846 Work in process 4,855 6,850 Raw material and purchased parts 8,654 9,299 --------- ----------- 16,656 18,995 Deferred income taxes and other current assets 10,165 11,070 --------- ----------- Total current assets 210,903 207,757 Property, plant and equipment - net 35,503 34,711 Toll equipment under operating leases - net 10,909 10,933 Preferred stock of U. S. Elevator Corp. 20,000 20,000 Cost in excess of net tangible assets of purchased businesses, less amortization 16,737 16,886 Miscellaneous other assets 8,138 9,407 --------- ----------- $ 302,190 $ 299,694 --------- ----------- --------- ----------- LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable and other current liabilities $ 75,252 $ 79,888 Income taxes payable 2,275 4,172 Current portion of long-term debt 5,000 5,000 --------- ----------- Total current liabilities 82,527 89,060 Long-term debt 44,800 39,000 Deferred income taxes and other 5,423 5,304 Minority interest 6,670 6,465 Shareholders' equity: Common stock 234 234 Additional paid-in capital 12,123 12,123 Retained earnings 184,730 181,665 Foreign currency translation adjustment (591) (434) Treasury stock at cost (33,726) (33,723) --------- ----------- 162,770 159,865 --------- ----------- $ 302,190 $ 299,694 --------- ----------- --------- -----------
Note: The balance sheet at September 30, 1995 has been derived from the audited financial statements at that date. See accompanying notes. 2 CUBIC CORPORATION CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS (UNAUDITED) (thousands of dollars)
Six Months Ended March 31 1996 1995 --------- --------- Operating Activities: Net income $ 4,652 $ 2,232 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 5,839 5,392 Minority interest 360 1,107 Undistributed earnings of affiliates - (84) Changes in operating assets and liabilities (500) (21,514) --------- --------- NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 10,351 (12,867) --------- --------- Investing Activities: Sales of marketable securities 290 786 Net additions to property, plant and equipment and toll equipment under operating leases (5,644) (3,593) Other items - net (917) 23 --------- --------- NET CASH USED IN INVESTING ACTIVITIES (6,271) (2,784) --------- --------- Financing Activities: Long-term borrowings 5,800 6,000 Purchases of treasury stock (3) - Dividends paid (1,587) (1,587) --------- --------- NET CASH PROVIDED BY FINANCING ACTIVITIES 4,210 4,413 --------- --------- Effect of exchange rates on cash (402) 252 --------- --------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 7,888 (10,986) Cash and cash equivalents at the beginning of the period 20,705 25,782 --------- --------- CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD $ 28,593 $ 14,796 --------- --------- --------- ---------
See accompanying notes. 3 CUBIC CORPORATION NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS March 31, 1996 A. BASIS FOR PRESENTATION The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the quarter are not necessarily indicative of the results that may be expected for the year ended September 30, 1996. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report on form 10-K for the year ended September 30, 1995. The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Certain prior period amounts have been reclassified to conform to current period classifications. B. PER SHARE AMOUNTS Per share amounts are based upon the weighted average number of shares of common stock outstanding. C. REVIEW BY INDEPENDENT ACCOUNTANTS A review of the data presented was made by Ernst & Young LLP, independent accountants, in accordance with established professional standards and procedures, and their report is included herein. 4 CUBIC CORPORATION NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS--continued March 31, 1996 D. LEGAL MATTERS In 1991, the government of Iran commenced an arbitration proceeding against the Company seeking $12.9 million for reimbursement of payments made for equipment that was to comprise an Air Combat Maneuvering Range pursuant to a contract executed in 1977, and an additional $15 million for unspecified damages. The Company believes that Iran defaulted on the agreement and has brought a counterclaim for compensatory damages of $10.4 million, plus interest. The Company is vigorously contesting Iran's claim and believes its defenses and counterclaim are strong and that the ultimate outcome of the matter will not have a material effect on the Company's financial statements. In 1993, the Company and its subsidiary, Cubic Defense Systems, Inc., filed a lawsuit against British Aerospace PLC in the United States District Court for the District of Columbia seeking $9.9 million in compensatory damages, plus interest, and unspecified punitive damages for breach of contract and fiduciary duty. The suit claims fraudulent misrepresentation in connection with the construction of an Air Combat Maneuvering Range in the North Sea. In 1994, British Aerospace PLC filed a counterclaim for $95 million in damages for misrepresentation and breach of fiduciary duty, which was subsequently reduced to $69.4 million. Discovery on the allegations of both the original lawsuit and the counterclaim is virtually complete and trial is currently set for June 3, 1996. The Company believes the counterclaim is without merit and will not have a material effect on the Company's financial statements, and is vigorously pursuing its lawsuit. In July 1995, UDT Sensors, Inc. a potential subcontractor, filed a lawsuit against Cubic Defense Systems, Inc. in the Superior Court of the State of California in Los Angeles, alleging breach of a written contract, fraud and deceit, among other related charges. The lawsuit claims damages in the amount of $20 million and more according to proof at trial, exemplary damages in an amount to be determined at trial, pre-judgement interest and costs of suit. The claims allegedly arise out of a strategic supplier agreement in which UDT Sensors, Inc. alleges it was to receive a subcontract to provide certain product if Cubic Defense Systems, Inc. was selected by the United States Army as the prime contractor for a certain government program. After winning the prime contract, Cubic Defense Systems, Inc. was unable to reach a subcontract with UDT Sensors, Inc. and the lawsuit was filed. Written and deposition discovery has been initiated but no trial date has yet been set. The Company believes the lawsuit is without merit and will not have a material effect on the Company's financial statements, and is vigorously pursuing its defense. In March 1996, the Superior Court dismissed the part of UDT Sensors' claim dealing with breach of contract. The only remaining claims are ones for fraud and unjust enrichment. 5 CUBIC CORPORATION ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS March 31, 1996 Sales for the first six months of fiscal 1996 increased by 27% over the same period of the previous year. Sales continued to be higher in all segments of the company, with the largest increase in the automatic revenue collection systems segment. The increase in sales came primarily from the company's major rail and bus system contracts and from combat training system contracts awarded to the Company in 1995. Operating profits in the defense segment were higher for the quarter ended March 31 and for the first six months of 1996, as a result of higher sales volume and because of reduced expenditures for research and development. The automatic revenue collection systems segment produced significantly higher operating profits in the second quarter of the fiscal year, when compared to last year, due to the non-recurrence of a toll systems loss incurred in the second quarter of fiscal 1995. This, along with the higher sales volume, also resulted in higher operating profits for the first six months of the fiscal year. Selling, general and administrative expenses decreased as a percent of sales from 18% in the six months ended March 31, 1995, to 15% in the same period of fiscal 1996, as a result of the increase in sales volume, without the need for corresponding increases in selling, general and administrative expenses. FINANCIAL POSITION AND LIQUIDITY During the six month period ended March 31, 1996, operating activities provided $10.4 million of positive cash flow, resulting in an increase of cash and cash equivalents of $7.9 million during the period. Cash was used to purchase equipment and build toll equipment for lease, as well as pay a dividend to shareholders. Toll equipment additions were financed by borrowings under the line of credit facility of the Company's leasing subsidiary. The Company's financial condition remains strong with working capital of $128.4 million and a current ratio of 2.6 to 1 at March 31, 1996. The Company expects that cash on hand and available through its line of credit facilities will be adequate to meet its short-term financing needs. The backlog of orders was $326 million at March 31, 1996 compared to $383 million at September 30, 1995 and $385 million at March 31, 1995. 6 PART II - OTHER INFORMATION ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K (a) The following exhibits are included herein: 15--Independent Accountants' Review Report 27--Financial Data Schedule (b) No reports on Form 8-K were filed during the quarter. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CUBIC CORPORATION Date May 6, 1996 /s/ W. W. Boyle ---------------- -------------------------------- W. W. Boyle Vice President Finance and CFO Date May 6, 1996 /s/ T. A. Baz --------------- -------------------------------- T. A. Baz Vice President and Controller EX-15 2 EX-15 EXHIBIT 15 -- INDEPENDENT ACCOUNTANTS' REVIEW REPORT The Board of Directors Cubic Corporation We have reviewed the accompanying consolidated condensed balance sheet of Cubic Corporation as of March 31, 1996, and the related consolidated condensed statement of income for the three and six-month periods ended March 31, 1996 and 1995 and consolidated condensed statement of cash flows for the six-month periods ended March 31, 1996 and 1995. These financial statements are the responsibility of the Company's management. We conducted our reviews in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data, and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, which will be performed for the full year with the objective of expressing an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying consolidated condensed financial statements referred to above for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet of Cubic Corporation as of September 30, 1995, and the related consolidated statements of income, retained earnings, and cash flows for the year then ended (not presented herein) and in our report dated November 29, 1995, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated condensed balance sheet at September 30, 1995, is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived. ERNST & YOUNG LLP April 24, 1996 San Diego, California EX-27 3 EX-27
5 This schedule contains summary financial information extracted from the consolidated condensed balance sheet as of March 31, 1996 and the related consolidated condensed statement of income for the six months then ended and is qualified in its entirety by reference to such financial statements. 1,000 6-MOS SEP-30-1996 MAR-31-1996 28593 3115 152374 0 16656 210903 35503 0 302190 82527 0 0 0 234 162536 302190 204834 207322 162669 162669 34926 0 1865 7862 2850 4652 0 0 0 4652 .78 0
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