Cubic Corp. disclosed that it paid $50 million in cash to acquire a 20 percent stake in a privately held software company based outside Washington, D.C.
Software from Pixia can process large amounts of imagery data for military, intelligence and industrial clients.
Kearny Mesa-based Cubic (NYSE: CUB) bought its 20 percent stake on June 27. It has an option to buy the remainder of the company, but that option expires Dec. 31, according to a securities filing released Aug. 6.
Pixia helps clients handle massive digital imagery files, and it illustrates its website with satellite and surveillance views. Enlightenment Capital of Chevy Chase, Maryland, is one of its investors, according to TechCrunch’s Crunchbase website.
Based in Herndon, Virginia, Pixia developed what is known as the WAMI specification for geospatial imagery. The initials stand for Wide-Area Motion Imagery, which is now an industry standard.
Cubic said the acquisition aligned with its “battlefield cloud strategy of processing and disseminating data-rich, actionable intelligence at the edge of the battlefield in real time.”
Restructuring Means Job Cuts
Separately, Cubic told shareholders it was cutting jobs in its transportation and its global defense businesses, and paying severance. The securities filing did not specify the number of jobs it was cutting nor did it say whether the job cuts affected San Diego.
Cubic reported 1,041 employees in San Diego in July 2018, according to the San Diego Business Journal’s Book of Lists. This month Cubic reported 1,165 full time employees in San Diego, and a total San Diego workforce of 1,550, including contingent workers.
The business took an $8.5 million charge related to restructuring in the quarter that ended June 30, and restructuring charges totaled $12.3 million in the first nine months of the current fiscal year. Such amounts also include money spent to cut costs in the company’s supply chain, Cubic said.
Such news was in the footnotes of Cubic’s quarterly earnings report issued Aug. 6. The company posted net income of $23.9 million on revenue of $382.7 million during its third quarter, which ended on June 30.
Plans to Deploy Capital
Revenue increased by 29% from the same quarter in 2018, when it was $296.2 million. Cubic’s net income in the year-ago quarter was $6.2 million. The spring of 2018 was notable because Cubic was making other major changes. It sold its Cubic Global Defense business then.
Highlights of the recently ended quarter included selling real estate assets, including a parcel in Kearny Mesa for $44.9 million cash.
In a statement, CEO Bradley Feldmann said Cubic planned “to deploy capital into technology leading capabilities.” Bookings for contracts in Cubic’s Mission Solutions segment were “significant,” Feldmann also said. Mission Solutions offers satellite communications for expeditionary troops as well as secure network products.
As of June 30, Cubic has an order backlog of $3.69 billion, with the bulk of that in its Transportation Systems business. Cubic provides fare-collection equipment for mass transit agencies as well as other technology. Backlog has been decreasing. Nine months ago, it was $4.06 billion.
Looking ahead, Cubic said it expected to end the fiscal year with revenue in the range of $1.44 billion to $1.48 billion. Under that scenario, Cubic can expect to grow its revenue year-over-year by at least 20%.