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Cubic Corporation (CUB)
Q2 2019 Earnings Conference Call
May 2, 2019, 5:00 pm ET
Kirsten Nielsen - VP, IR
Brad Feldmann - Chairman, President & CEO
Anshooman Aga - EVP & CFO
Conference Call Participants
Jim Ricchiuti - Needham & Company
Ken Herbert - Canaccord Genuity
Louie DiPalma - William Blair
Previous Statements by CUB
» Cubic Corporation (CUB) CEO Brad Feldmann on Q1 2019 Results - Earnings Call Transcript
» Cubic Corporation (CUB) CEO Brad Feldmann on Q4 2018 Results - Earnings Call Transcript
» Cubic's (CUB) CEO Brad Feldmann on Q3 2018 Results - Earnings Call Transcript
It is now my pleasure to introduce your host Kirsten Nielsen, Vice President of Investor Relations. Thank you. You may begin.
Hello, everyone, and thank you joining Cubic's webcast. I'm joined today in by Brad Feldmann, Chairman, President and Chief Executive Officer; and Anshooman Aga, Executive Vice President and Chief Financial Officer.
Before we begin, I'll remind everyone that our presentation considered forward-looking statements. 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 by discussing our second quarter and first half results for fiscal year 2019, followed by an update on our strategic priorities. Then I'll turn the call over to Anshooman, who will cover our financial results and outlook in more detail.
Starting with Slide 3. Sales for the second quarter were $337.3 million, a 21% increase compared to the second quarter last year. Sales for the first half were $642.6 million, a 22% increase compared to the first half of last year.
Adjusted EBITDA for Q2 was $19.4 million, a 23% increase compared to the second quarter of last year. And $39.4 million for the first half, a 44% increase compared to the first half of last year. Our year-to-date performance reflects strong growth from our transportation projects and ongoing robust demand across the mission solutions portfolio. We expect this growth to continue based on our high backlog of $3.8 billion, plus the additional $640 million of unused T2C2 contract ceiling, which together amounted to approximately four times last year's revenue.
In line with our efforts to provide additional insight into our operating performance, we have introduced adjusted earnings per share to our quarterly disclosures in guidance. Adjusted EPS excludes items that we do not believe are part of our core operating performance. We believe it indicates a more consistent measure of our financial performance on a comparative basis, from quarter-to-quarter and year-to-year. And therefore we'll be a helpful metric for analysts and investors.
Lastly, we are pleased to be featured among Forbe's best large employers in America. This year Cubic ranked 103rd out of 500 companies, in the overall large employers list. I would like to thank my Cubic teammates for their great efforts, as we continue to transform our Company.
Turning to Slide 4 to discuss our most recent acquisition. On March 14th, we completed the acquisition of Nuvotronics, an innovator of high frequency millimeter wave and wide band RF communications technologies for defense primes, government agencies and commercial markets. Nuvotronics' unique PolyStrata technology provides exceptional performance with unmatched size, weight and power SWaP parameters and allows Cubic to offer best-in-class solutions to our customers. We are particularly excited about the supply chain benefits. We expect this will create as we integrate their products into Cubic's protected communications solutions. We see substantial upside opportunity as this acquisition strategically positions Cubic to address a wide array of high growth markets including some that have both military and commercial applications. This investment is aligned with our strategy to build technology driven market-leading businesses with strong growth potential.
Turning to Slide 5, during the past five years, we have made a number of strategic acquisitions of technology driven market-leading businesses that align with our overall capital allocation strategy. I wanted to take a moment to provide an overview of those acquisitions, including the strategic rationale and how they are performing today. The Mission Solutions we have acquired businesses that align with our strategy to serve our customers' mission chain needs. In aggregate, these acquisitions have grown at a CAGR of nearly 30% and -- but we believe they will continue to drive value for our shareholders for years to come.
We continue to see strong demand for GATR Cubic's next generation satellite antenna system, which is the program of record for the United States Army's Transportable Tactical Command Communications T2C2 program. Beyond T2C2, we believe that GATR has the potential to replace the Army's satellite ground terminals for other networks. Additionally, we are also seeing strong and synergistic demand for DTAC rugged Internet of Things IoT capabilities with many wins allowing our customers to network satellite communications around the battlefield. In Transportation, our recent acquisitions of Trafficware and GRIDSMART are consistent with our NextCity vision to apply technologies and services to optimize urban mobility and reduced congestion.
Controlling the intersections with leading technology, allows us to optimize the flow of people in traffic and cities and is a key part of the NextCity vision to link mobility payments to both predictive, personalized information and regional congestion management, which clearly involves intersections. Also as these businesses led the transition to smart infrastructure that will support the increased use of connected and autonomous cars. They will also open up further adjacent applications such as road usage charging and other smart city applications. We are pleased with the integration and early progress of these acquisitions, which I'll discuss further in a moment, and we remain very confident in the long-term value this will bring to our customers and shareholders.