The Titan Corporation Reports Second Quarter Net Income of $4,204,000 - 32% Increase Over The Previous Year
Record Second Quarter Revenues of $89,471,000 Also Second Quarter Earnings Per Share Of $.10 Reported
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Titan also reported record second quarter revenues of $89,471,000, a 19% increase over the second quarter of 1998. The most notable revenue increases in the second quarter of 1999 over the second quarter of 1998 were reported by Titan's information technologies, software systems, and communications systems businesses.
Commenting on the earnings release, Titan's President and Chief Executive Officer, Dr. Gene W. Ray said, "The strong second quarter operating results we reported today continue to demonstrate the successful execution of our strategy to profitably grow our businesses and increase value for Titan's shareholders." Ray continued, "In addition to the strong operating performance in the quarter, we also successfully completed the acquisition of System Resources Corporation and we secured $190 million of financing with a banking syndicate led by The Bank of Nova Scotia." Ray concluded, "We continue to be very excited about the prospects for each of our core businesses and the progress we made during the first half of this year."
The Titan Corporation is a leading provider and integrator of state-of-the-art information technologies, wireless communications systems and services, and medical product sterilization and food pasteurization products and services. In addition to its strategy of maximizing internal growth, Titan employs a strategy of acquiring businesses that can be readily integrated into its existing core businesses in order to increase profitability and grow market share. The firm has annualized sales of about $400 million with a total backlog in excess of $1 billion and has 2,800 employees. The Titan Corporation is headquartered in San Diego, California.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: The statements contained in this release which are not historical facts, including our outlook on the future performance of our core businesses and our growth strategies, are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by forward-looking statements. These risks and uncertainties include the Company's entry into new commercial businesses, dependence on continued funding of U.S. Department of Defense programs, government contract procurement and termination risks, risks associated with acquiring other companies, including integration risks, and other risks described in the Company's Securities and Exchange Commission filings.
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THE TITAN CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except per share data)
(Unaudited)
Three months ended Six months ended
June 30, June 30,
------------------ -------------------
1999 1998 1999 1998
-------- -------- --------- --------
Revenues $ 89,471 $ 75,413 $168,160 $140,043
-------- -------- --------- --------
Costs and expenses:
Cost of revenues 67,950 58,342 129,501 107,809
Selling, general and
administrative expense 11,042 9,305 21,244 17,855
Research and
development expense 2,252 1,164 3,726 2,973
Special acquisition
related charges --- --- --- 1,460
-------- -------- --------- --------
Total costs
and expenses 81,244 68,811 154,471 130,097
-------- -------- --------- --------
Operating profit 8,227 6,602 13,689 9,946
Interest expense - net (2,221) (1,776) (3,810) (3,421)
-------- -------- --------- --------
Income from
continuing operations
before cumulative
effect of change in
accounting principle
and income taxes 6,006 4,826 9,879 6,525
Income tax provision 1,802 1,853 2,963 2,598
-------- -------- --------- --------
Income from
continuing operations
before cumulative
effect of change in
accounting principle 4,204 2,973 6,916 3,927
Cumulative effect of
change in accounting
principle, net of taxes --- --- --- (19,474)
Income from discontinued
operations, net of taxes --- 211 --- 382
-------- -------- --------- --------
Net income (loss) 4,204 3,184 6,916 (15,165)
Dividend requirements
on preferred stock (173) (210) (347) (429)
-------- -------- --------- --------
Net income (loss) applicable
to common stock $ 4,031 $ 2,974 $ 6,569 $(15,594)
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Basic earnings per share:
Income from
continuing operations $ 0.11 $ 0.08 $ 0.18 $ 0.10
Cumulative effect of
change in accounting
principle --- --- --- (0.57)
Income from discontinued
operations --- 0.01 --- 0.01
-------- -------- --------- --------
Net income (loss) $ 0.11 $ 0.09 $ 0.18 $(0.46)
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Weighted average shares 37,508 35,463 36,813 34,228
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Diluted earnings per share:
Income from
continuing operations $ 0.10 $ 0.07 $ 0.16 $ 0.10
Cumulative effect of
change in accounting
principle --- --- --- (0.55)
Income from discontinued
operations --- 0.01 --- 0.01
-------- -------- --------- --------
Net income (loss) $ 0.10 $ 0.08 $ 0.16 $(0.44)
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Weighted average shares 45,605 45,243 45,312 35,774
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THE TITAN CORPORATION
SEGMENT INFORMATION
(in thousands of dollars)
(Unaudited)
Three months ended Six months ended
June 30, June 30,
------------------ ------------------
1999 1998(a) 1999 1998(a)
-------- -------- -------- --------
Revenues:
Information Technologies $ 71,216 $ 65,864 $133,918 $119,397
Software Systems 10,466 4,183 18,860 7,674
Medical Sterilization
and Food Pasteurization 2,948 3,398 6,710 5,649
Communications Systems 2,559 1,205 4,876 5,385
Emerging Technologies
and Businesses 2,282 763 3,796 1,938
-------- -------- -------- --------
$ 89,471 $ 75,413 $168,160 $140,043
======== ======== ======== ========
Operating profit (loss):
Information Technologies $ 7,257 $ 7,571 $ 13,095 $ 13,355
Software Systems 2,071 1,064 3,501 1,767
Medical Sterilization
and Food Pasteurization 648 490 989 368
Communications Systems (191) (1,250) (394) (1,708)
Emerging Technologies
and Businesses 344 (89) 566 (246)
Special acquisition
related charges
and other --- --- --- (1,460)
-------- -------- -------- --------
Segment operating profit
before Corporate 10,129 7,786 17,757 12,076
Corporate (1,902) (1,184) (4,068) (2,130)
-------- -------- -------- --------
$ 8,227 $ 6,602 $ 13,689 $ 9,946
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(a) All segment data for prior years have been restated to conform to
the 1999 presentation.