Cubic Corp. [CUB] on Tuesday reported record sales and net income in its fourth quarter driven by top line gains at its commercial transportation and defense systems segments and two acquisitions during the year.
Net income was $32.8 million, $1.22 earnings per share (EPS), versus an operating loss a year ago, while sales increased 16 percent to $396.4 million from $340.8 million. Organic growth was still strong at 11 percent as acquisitions during Cubic’s fiscal year added $16.2 million in sales.
Cubic said the sales growth was driven mainly by strong Cubic Transportation Systems segment sales in the United Kingdom and Australia, and increased training systems sales in its Cubic Defense Systems segment. The swing to profit was also driven by the higher sales to the United Kingdom and Australia and international sales of air combat training systems.
Lower sales in Cubic’s Mission Support Services segment partially offset the top line gains in the quarter.
For the year, Cubic’s net income more than doubled to $69.5 million ($2.59 earnings per share) from $25.1 million (94 cents EPS), driven by strong growth and improved margins in the Defense Systems segment and a swing to profitability in the Mission Support Services business, which was hit by a goodwill impairment charge a year ago.
Sales for the year increased 3 percent on gains at Transportation Systems and Defense Systems, which were largely offset by a decline at Mission Support Services. The Mission Support Services segment saw its sales fall 15 percent for the year to $398.1 million due in part to the shut down of the United States government in October 2013 and from lower government spending.
The Defense Systems segment posted a 10 percent increase in sales for the year to $400.6 million on a new ground combat training simulation system development contract in the Far East, tactical engagement simulation system contracts, and from simulator contracts, including an award to develop simulation trainers for the Navy’s Littoral Combat Ships.
In its fiscal year 2015, Cubic projects sales to be between $1.4 billion and $1.7 billion and earnings to range between $2.60 and $2.85 EPS.
Backlog at the end of the fiscal year stood at $3.2 billion.