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Cubic Corporation (CUB)
Q4 2018 Earnings Conference Call
November 15, 2018, 11:00 AM ET
Kirsten Nielsen - Director of IR
Brad Feldmann - President & CEO
Anshooman Aga - EVP & CFO
Mark Strouse - JPMorgan
Jim Ricchiuti - Needham & Company
Ken Herbert - Canaccord Genuity
Brian Ruttenbur - Drexel Hamilton
Louie DiPalma - William Blair & Company
Greetings, and welcome to the Cubic Corporation Fourth Quarter and Full Year 2018 Earnings Conference Call.
Previous Statements by CUB
» Cubic's (CUB) CEO Brad Feldmann on Q3 2018 Results - Earnings Call Transcript
» Cubic Corporation's (CUB) CEO Brad Feldmann on Q2 2018 Results - Earnings Call Transcript
» Cubic Corporation's (CUB) CEO Brad Feldmann on Q1 2018 Results - Earnings Call Transcript
It is now my pleasure to introduce Kirsten Nielsen, Vice President of Investor Relations. Please go ahead.
Thank you. This morning we reported our fourth quarter and full year results for fiscal 2018. I’m joined by Brad Feldmann, Chairman, President and Chief Executive Officer; and Anshooman Aga, Executive Vice President and Chief Financial Officer.
I’ll remind everyone that statements made on today’s call that are not historical facts are considered forward-looking statements and are made pursuant to the Safe Harbor provisions of federal securities law. You can find risk factors that could cause the company’s actual results to differ materially from our expectations listed in our most recent SEC filings.
In addition, we have included non-GAAP financial measures in our discussion. Reconciliations to the most directly comparable GAAP financial measures can be found in today’s press release and in the appendix to today’s presentation.
With that, I’d like to turn the call over to Brad.
Thank you, Kirsten. Thank you, everyone, for joining us today. On today’s call, I will start with a start with a brief overview of our financial results followed by a strategy update. Then I'll hand the call over to our CFO, Anshooman Aga who will cover the financial results and next year's guidance in more detail.
Starting with Slide three, we had a great year and I want to begin by thanking my teammates for their strong performance and continued focus on winning the customer. In the fourth quarter, we achieved record sales of $379.7 million, a 9% increase compared to the fourth quarter last year.
Adjusted EBITDA was also a quarterly record at $49.1 million, an 8% increase compared to the fourth quarter of last year. For the full year, we achieved our financial guidance, delivering record sales of $1.2 billion, a 9% increase over last year and full year adjusted EBITDA of $104.6 million, an increase of 20% compared to last year. Our backlog continues to grow and is now over $4 billion, another record in Cubic's history.
Turning to Slide four, we recently closed the acquisition of Trafficware to expand our operational and analytics capabilities as part of our NextCity vision. Trafficware is a technology-driven market-leading intelligent transportation solutions company. They provide a fully integrated innovative suite of software Internet of things devices and hardware solutions that optimize the flow of vehicles and pedestrian traffic through intersections and arterial roads.
As part of their solution, they provide smart infrastructure that will support smart cars in the future. I warmly welcome the Trafficware team to Cubic.
We expect revenue synergies going forward as we advance our NextCity strategy together and reduce congestion for our customers. Anshooman will discuss the financial impact of the Trafficware acquisition in fiscal 2019.
Turning to Slide five, with our recent Bay Area transportation win, we are pleased to have successfully achieved all six growth catalysts that we had strategically targeted several quarters ago including winning New York, Boston, Brisbane and the Bay Area achieving the T2C2 full rate production and completing our ERP implementation. These wins represent $1.8 billion in new business awarded with $2 billion in potential follow-on business.
Moving to Slide six, along with our major wins, we continue to make progress with our Winning the Customer initiative. As the result show, Cubic's NextCity strategy continues to win customers and improve our execution. We continue to see very strong demand for Cubic's compelling solutions to provide full motion video to the edge of the battlefield and we continue to make progress combining live virtual and constructive simulation techniques to provide efficient performance-based training to our customers.
Lastly, we're working to deliver keener insights to our customers through digitization and developing our platform capabilities in NextCity 2.0 ISR as a service and Training-as-a-Service.
Turning the Slide seven, in NextCity we are celebrating our Bay Area Transportation Award to deliver our next-generation fare payment system to the Metropolitan Transportation Commission. We are honored to continue our long-term relationship with the MTC.
Cubic will leverage the investments the MTC and the regional operators have made to deliver new features such as mobile and new bus devices early, while completing longer-term upgrades to the back office. Our solution will offer the full range of payment and account management features we are delivering to major cities around the world including London, New York, Boston, Brisbane, Sydney, Vancouver and Chicago.
Each of these new technologies will be powered by Cubic's real-time communications and data analytics, supporting the company's account-based architecture. This technology model opens a variety of new potential partnerships between transit, bike share, ride share, card share, parking and other vertical transportation services, falling under NextCity our mobility-as-a-service strategy.
We also won the Sydney Integrated Congestion Management Program, a first of its kind program to reduce congestion in the city. The new system will enhance monitoring and management of the road network across New South Wales, coordinate the public transport network across all modes, improve management of clear ways and improve incident clearance times, while providing real-time information and advice to the public about disruptions.