Welcome to Cubic Corporation’s Third Quarter Fiscal Year 2015 Earnings Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] As a reminder, this conference is being recorded. At this time, I would like to turn the conference over to Diane Dyer, Director of Investor Relations.

Good afternoon, everyone, and welcome to Cubic’s fiscal year 2015 third quarter conference call and webcast. We encourage everyone to refer to the company’s press release issued earlier today, as well as the company’s reports filed with the SEC. For anyone who has not yet seen a copy of these documents, you can access them on the Investor Relations tab of Cubic’s website at www.cubic.com or on the SEC’s website. On today’s call are Bradley Feldmann, Cubic’s President and CEO; and John Thomas, Chief Financial Officer. Mark Harrison, Cubic’s Senior Vice President and Corporate Controller, will join the call for the Q&A session. Now, I will turn the call over to Jim Edwards, Cubic’s Senior Vice President and General Counsel for the Safe Harbor disclosure.

Thank you, Diane. Please note that certain information discussed on the call today is covered under the Safe Harbor provisions of the Private Securities Litigation Reform Act. I caution listeners that during this call Cubic management will be making forward-looking statements about future events or Cubic’s future financial and operating performance. Actual results could differ materially from those stated or implied by these forward-looking statements, due to risks and uncertainties associated with the company’s business. These forward-looking statements should be considered in conjunction with and are qualified by the cautionary statements contained in Cubic’s earning press release and SEC filings, including its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. This conference call contains time-sensitive information that is accurate only as of the date of this broadcast, August 6, 2015. Cubic undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call. This conference call will also include a discussion of non-GAAP financial measures as that term is defined in Regulation G. Cubic believes this information is useful to investors because it provides a basis for measuring the company’s available capital resources, the actual and forecasted operating performance of the company’s business and the company’s cash flow. A reconciliation between the GAAP financial measures that correspond to these non-GAAP financial measures is contained in our earnings press release and our SEC Form 10-K report for the fiscal year ended September 30, 2014. Any discussion of non-GAAP measures does not intend to detract from the importance of comparable GAAP measures. With that said, let me turn the call over to Bradley Feldmann, our President and Chief Executive Officer.

Thank you, Jim. Good afternoon, everyone. Thanks for joining us on the call today. This afternoon, we reported our financial results for the third quarter and nine months ended June 30, 2015. Our third quarter results were mixed, reflecting slightly lower than expected sales resulting from ongoing foreign exchange headwinds and delays in contract awards. Operating profits this year have been impacted by a number of one-off costs related to improvements we are making to take cost out of the company, including upgrading our ERP system, as well as the impact of a stronger US dollar and cost issues on two major projects for which we are working to resolve with our customers. Jay will discuss the details later in the call. We expect to close out the fiscal year with a very strong fourth quarter, led by our defense systems business. We continue to have a robust opportunity pipeline across all of our business segments and total backlog of more than $3 billion. In addition, we have strong resources such as balance sheet capacity, talented employees, a long track record of innovation and state of the art technology that encourage us to be optimistic about our future growth. We are currently in the midst of updating our strategic plan. As part of this process, we are performing a comprehensive portfolio analysis. This evaluation includes looking at transformative actions to greatly accelerate the growth of the company, particularly in the next city and C4ISR domains. In addition, we, like many in the defense space, are carefully evaluating the performance and structure of our defense services business given the poor market conditions. We have refined and rolled out our One Cubic vision as a hybrid structure consisting of decentralized, agile, customer-facing functions to ensure speed, reinforced by centralized shared services and…

Thanks, Brad. Consolidated sales for the quarter increased 2% to $347.8 million from last year. Year to date sales were just over $1 billion, up slightly over last year. Recent acquisitions contributed $25.5 million in the quarter and $66.3 million year to date compared to $14.7 million and $32.8 million in the comparable periods last year. The strong dollar negatively impacted our sales in the quarter by $14.2 million and $32.8 million year to date. Adjusted EBITDA was $18.9 million in the quarter, down from $26.7 million last year or 29%. Year to date adjusted EBITDA was $69.4 million compared to $76 million last year, due to a number of unusual charges that I will discuss later. Operating income was $10.3 million in the third quarter and $40.7 million year to date compared to $19.2 million and $53.2 million in the comparable periods last year. Operating income this year has been impacted by a number of charges, including expenses related to a new ERP system implementation totaling $7.8 million, cost related to an audit committee investigation totaling $3 million, costs related to a restructuring in the second quarter totaling $5.4 million, and higher stock-based compensation totaling $1.7 million related to the retirement of our former CEO. Also impacting operating income this year were lower operating income from our two defense businesses totaling $15.1 million, operating losses from recent acquisitions inclusive of transaction costs, retention and earn out payments totaling $7.6 million, and the impact of unfavorable exchange rates totaling $4.6 million. Partially offsetting these declines in operating income was an increase of $15.6 million in operating income at our transportation business. For the quarter, we had earnings per share of $0.33 and year to date earnings per share are $0.11. Earnings per share this year has been significantly lower than…

Thank you, Jay. Both of our business segments share a common mission of providing integrated systems that increase situational awareness and understanding for our customers worldwide. We are proud of our rich technological heritage and continue to place a strong emphasis on innovation to generate future growth for the corporation. We are very optimistic as we expand into new markets and geographies and remain fully committed to increasing shareholder value. Now, let’s proceed to the Q&A session.

[Operator Instructions] We do have a question just came in from the line of Josephine Millward with Benchmark.

Brad, can you just give us an update on your guidance, are you reaffirming your guidance for the year?

Yes, we are reaffirming our guidance.

So the strength in Q4, is it primarily from defense systems or do you expect strength across all three segments?

It’s primarily in defense systems and it’s shipment-related. All three businesses will have a good fourth quarter, but it will be particularly strong there.

You mentioned on the call about bidding on KC-46. Can you expand on that?

So the KC-46 is obviously a tanker that the US has bought and they need a maintenance trainer, an operation and maintenance trainer, and we bid that and we think we have a very strong offering. We are in the middle of the proposals being evaluated and we expect an answer next calendar year.

Can you give us roughly a potential size of the program?

It’s hundreds of millions of dollars, Josephine.

Fantastic. Thank you, good luck.

We hope we win.

I hope so too.

[Operator Instructions] Gentlemen, there are no additional questions at this time. Would you like to make some further comments?

Thank you for joining us this afternoon. As always, we appreciate your continued support and interest in our company. We are available if you have any further questions. Thanks again.