(SAN DIEGO, Calif., December 6, 2007) - Cubic Corporation (AMEX:CUB) today reported record sales and earnings for the fiscal year ended September 30, 2007. Sales in fiscal 2007 grew to $889.9 million from $821.4 million last year, while net income increased 72 percent to $41.6 million or $1.56 per share this year from $24.1 million or 90 cents per share last year. Cash flow from operations was strong again this year, at $69.2 million for the year, following $31.3 million in 2006.

The increase in sales came from the defense segment while the earnings improvement came from both the defense and transportation segments. Operating income doubled from $30.9 million in 2006 to $62.1 million this year. Strong cash flows and currency exchange gains resulted in net investment and other income of $1.3 million this year versus net interest expense of $2.8 million last year, an improvement of $4.1 million, before applicable income taxes.

Defense Segment

Sales from the defense segment increased 14 percent to $641.1 million from $562.8 million in 2006. Both the Mission Support Services and Readiness Systems businesses posted strong increases in sales. Operating income in the defense segment increased to $44.2 million from $31.4 million in 2006, a 41 percent increase. The increase in operating income came from both Mission Support Services and Readiness Systems due to sales growth and improved operating performance.

Transportation Systems Segment

Transportation Systems sales decreased 3 percent from $243.9 million in 2006 to $236.6 million in 2007. Sales in Europe increased, due primarily to the strength of the British Pound versus the US Dollar while sales in North America decreased due to the near completion of several contracts. Operating income from the transportation segment improved from $2.8 million in 2006 to $20.1 million this year. Strong operating income from European operations and settlements reached with several customers contributed to the improvement.

Backlog

Total backlog was $2.034 billion at September 30, 2007 compared to $1.479 billion at September 30, 2006. Funded backlog was $1.389 billion at September 30, 2007 compared to $1.224 billion at September 30, 2006.

Cubic Corporation is the parent company of two major business segments: defense and transportation. The Cubic Defense Applications group is a world leader in realistic combat training systems, mission support services and defense electronics. Cubic Transportation Systems designs and manufactures automatic fare collection systems 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 may contain 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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