Hit hard by poor performances in its defense industry simulation systems product line, San Diego-based Cubic Corp. reported third-quarter and nine-month losses of $3 million and $1.4 million, respectively--the first red ink for the high-tech firm since 1974 and only the second unprofitable quarter in 37 years.
Revenues for third quarter dropped 14.5% to $74.8 million; sales for the nine months were flat, at $241.2 million.
Chief Executive Walter Zable said that his company would "bite the bullet" this year because of "poor profit performance" in Cubic's flight training simulator systems for both Boeing Corp. and the U.S. Air Force.
Earlier this year, Cubic established a $4-million reserve to offset "technical problems" that caused delays in delivering the simulator systems.
The training-simulator operation has since been reorganized and a new vice president in charge of that department is expected to be named by month's end, Zable said.
Cubic also said it had secured a $20-million private debt placement, which will double the company's long-term obligations. The funds will be used to cover expenses relating to Cubic's $248-million backlog as of June 30.
At year's end, Cubic reported long-term debt of about $22 million, or only 20% of stockholders' equity.
Cubic's stock closed Wednesday unchanged at 16.