San Diego Business Journal

Stock Exchange Says Cubic Is Out of Compliance

By Mike Allen Thursday, August 23, 2012

Cubic Corp., the San Diego defense contractor and provider of mass transit collection services, said it received notice from the New York Stock Exchange that it’s not in compliance with its listing standards, specifically not filing its quarterly financial report for the June 30 quarter. That is the company’s third quarter for the 2012 fiscal year that ends Sept. 30.

Until further notice, the company’s ticker, CUB, will have the letters LF appended to it.

On Aug. 1, Cubic said its audit committee, after consulting with its auditor, Ernst & Young LLP, determined that its financial statements for the fiscal years ended Sept. 30, 2011, 2010 and 2009, along with quarterly statements for the quarters ended March 31, 2012, Dec. 31, 2011, and each of the prior quarters of 2011, and 2010, can no longer be relied upon as being in compliance with generally accepted accounting principles, and need to be restated.

The company said a review uncovered errors in how the firm accounted for long-term development contracts and certain service contracts.

Cubic said preliminary indications are that the restatement will result in an increase in revenue and net income cumulatively over the period of restatement and an increase in retained earnings for the March 31, 2012 quarter.

In the March 31 quarter, Cubic’s fiscal second quarter, the company reported net income of $24 million on revenue of $341 million, both record numbers.

At the close Aug. 22, shares of Cubic fell $1.17 or 2.3 percent to $48.82. Its 52-week range is $36.71 to $51.92.