Cubic Corp. (NYSE: CUB) Reports Higher Sales and Earnings for the Quarter Ended March 31, 2010

SAN DIEGO, Calif. - May 5, 2010 - Cubic Corporation (NYSE: CUB) today reported higher earnings on higher sales for the quarter ended March 31, 2010. Sales for the second fiscal quarter were $264.5 million compared to $242.8 million last year, and net income increased by 22 percent to $17.4 million or 65 cents per share this year from $14.2 million or 53 cents per share last year.

Operating income increased in the second quarter to $26.1 million this year from $21.8 million last year. Cash flow from operations was $34.9 million in the quarter.

Six-month Results

For the six months ended March 31, 2010, sales increased to $515.2 million from $487.7 million last year. Net income increased to $31.1 million for the six-month period, or $1.16 per share, compared to last year’s net income of $28.4 million, or $1.06 per share. Operating income for the first six months increased to $46.5 million this year from $42.9 million in 2009. Cash flow from operations was $46.2 million in the six-month period.

Transportation Systems Segment

Cubic Transportation Systems (CTS) sales increased 33 percent from $68.6 million in the second quarter last year to $91.2 million this year. Sales increased from contracts in North America and from the PRESTIGE contract in London. Nearly $5 million of the sales increase also came from the consolidation, for the first time, of the company’s 50 percent owned subsidiary in the United Kingdom, called TranSys, due to the repayment of private finance debt by the customer and a restructuring of the subsidiary’s ownership that made Cubic the primary beneficiary of the venture.

Operating income from CTS increased in the second quarter from $12.5 million last year to $15.1 million this year. Higher profits resulted from higher sales on contracts in North America, spare parts sales and a favorable contract modification on a European contract that resolved an uncertainty, adding $1.6 million. The consolidation of TranSys had no impact on operating income.

For the first half of the year, CTS sales increased from $143.0 million last year to $165.5 million this year, and operating income improved from $22.5 million to $26.1 million. In addition to the second quarter results described above, the completion of a contract in Florida during the first quarter added to operating income for the six-month period.

Defense Systems Segment

Sales from Cubic Defense Systems (CDS) decreased to $63.4 million from $68.9 million in last year’s second quarter. Sales were higher from the communications business while sales were lower from training systems. Operating income from CDS was $5.3 million compared to $5.0 million last year. Lower operating income on lower training systems sales was more than offset by a partial recovery this year of a bad debt which was expensed in last year’s second quarter.

For the first half of the year CDS sales increased from $134.9 million to $139.0 million due to increased sales from the communications business. Operating income increased from $10.2 million last year to $12.0 million in the first six months of this year due to the bad debt recovery mentioned above.

Mission Support Services Segment

Mission Support Services (MSS) sales increased to $109.4 million from $104.8 million in last year’s second quarter. Sales were higher from live combat training support and other training support contracts. Operating income from MSS also increased to $7.1 million compared to $6.3 million last year, due primarily to higher sales.

For the first half of the year, MSS sales increased from $208.6 million to $209.6 million. Operating income decreased from $13.8 million last year to $11.1 million in the first six months of this year, due primarily to a provision in the first quarter of $2.0 million for a dispute with a customer over contract terms.

Backlog

Total backlog was $2.182 billion at March 31, 2010 compared to $2.183 billion at September 30, 2009.

Financial Condition

The company continues to maintain a strong liquidity position, ending the period with $328.0 million in cash and short-term investments, and total debt of only $20.6 million.

Cubic Corporation is the parent company of three major business segments: defense systems, mission support services and transportation systems. Cubic Defense Systems is a leading provider of realistic combat training systems and defense electronics. Mission Support Services is a leading provider of training, operations, maintenance, technical and other support services. Cubic Transportation Systems is the world’s leading provider of automated fare collection systems and services for public transit authorities. For more information about Cubic, see the company's Web site at www.cubic.com.

In addition to historical matters, this release contains forward-looking statements which are made pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995. These forward-looking statements involve predictions of future results. Investors are cautioned that forward-looking statements involve risks and uncertainties which may affect the Company's business and prospects. These include the effects of politics on negotiations and business dealings with government entities, economic conditions in the various countries in which the Company does or hopes to do business, competition and technology changes in the defense and transit industries, and other competitive and technological factors.

Any statements about the Company’s expectations, beliefs, plans, objectives, assumptions or future events or future financial and/or operating performance are not historical and may be forward-looking. 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 estimates, assumptions and uncertainties.

Since actual results or outcomes may differ materially from those expressed in any forward-looking statements made by the Company, investors should not place undue reliance on any forward-looking statements. In addition, past financial and/or operating performance is not necessarily a reliable indicator of future performance and investors should not use the Company’s historical performance to anticipate results or future period trends. Further, any forward-looking statement speaks only as of the date on which it is made, and the Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for the Company to predict which factors will arise. In addition, the Company cannot assess the impact of each factor on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

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