Cubic Corp. reported a net loss of $22.0 million on sales of $361.9 million for its third quarter, which ended June 30.

In the same quarter one year ago, the defense contractor and transit system equipment maker reported net income of $4.5 million on sales of $375.2 million. That works out to a 3.5 percent decrease in sales.

CEO Bradley Feldmann characterized the quarter as one where the company was building new business.

“This quarter, we continued our investments in the future of our transportation business,” Feldmann said in a prepared statement. “We also delivered strong growth in our C4ISR business that has been the focus of our M&A growth in recent quarters.” The term C4ISR is military shorthand for information technology; the initials stand for command, control, communications, computers, intelligence, surveillance and reconnaissance.

“Overall, we expect very good organic growth in the near term,” Feldmann continued. “Our strategy has been validated by a number of recent contract wins and awards.”

Cubic (NYSE: CUB) reported a $2.63 billion order backlog at the end of the quarter, down slightly from the $2.67 billion backlog at the same time last year.

The company said that operating losses in the recent quarter and the first nine months of fiscal 2017 were primarily driven by “significant acceleration” in R&D activity and bid-preparation expense, particularly in the transportation business, and losses on a market-entry contract in the road tolling industry.

There has also been less work with its U.S. Army customer.