TTN still cheap. Mentioned 2 wks ago around $14. News from 11/2:
Website: www.titan.com
Titan Reports Record Third Quarter Revenues of $106 Million
San Diego (November 02, 1999) -- The Titan Corporation (NYSE:TTN) today reported revenues of $106 million and net income of $6 million, or $.13 per share(diluted), for the third quarter of fiscal year 1999. This represents an increase in net income from continuing operations of 44% over third quarter 1998 results adjusted for special acquisition related charges, net of taxes. Revenues in the third quarter of fiscal 1999 increased 35% over revenues of $79 million for the yearago quarter. This revenue increase was due to strong growth across all of Titan's business units, most notably Cayenta.com, Titan's e-business solutions subsidiary which continues to enjoy the benefits of strong demand for front and back end enterprise application integration services. The e-business solutions and wireless businesses were also the largest contributors to operating profit growth.
"We are very encouraged by the progress of each of our commercial business units in contributing to Titan's record third quarter revenues and operating income. The growth rate experienced by our commercial business units is strong, the operating margin contribution of these businesses to the total operating performance of Titan
is increasing rapidly, and our diversification strategy is proving successful," said Gene W. Ray, Chairman, President, and CEO of Titan. "Other important milestones reached by Titan this quarter in addition to our financial performance include: our exclusive multi-year agreement with Tyson for the electronic pasteurization of
chicken, the formation of the Soliance Networks joint venture by Cayenta.com which enables the Company to penetrate the vertical utility market for e-business integration services and rentable applications, and a new wireless contract in Guatemala for more than 1500 telephone lines," said Ray. "We continue to be optimistic
about our ability to spin-out one or more of our commercial businesses in the near future and unlock hidden value for Titan shareholders," Ray concluded.
Highlights of Financial Performance by Business Unit
E-Business Solutions
Revenues in Titan's software systems subsidiary, Cayenta.com, increased 88% to $10.5 million in the third quarter of fiscal 1999 from $5.6 million in fiscal 1998. Increased revenues were primarily driven by the growth of Cayenta.com's enterprise application integration business, which was acquired in January 1999, with
contracts from Sempra Energy contributing significantly in the third quarter. Additionally, Cayenta.com continued to expand its presence during the quarter in its three target markets - utilities, telecommunications, and transportation.
Cayenta.com's operating profit for the third quarter of fiscal 1999 increased 82% to $2.7 million compared to $1.5 million in fiscal 1998.
Medical Sterilization and Food Pasteurization
Revenues in Titan's medical sterilization and food pasteurization subsidiary, Titan Scan, increased 36% to $3.3 million in the third quarter of fiscal 1999 from $2.4 million in fiscal 1998. The increase was due primarily to revenues generated by Titan's contract sterilization facilities, including Titan's newest contract facility in the Dominican Republic. This system, located at a Baxter International plant is initially being operated by Titan, with a planned future transfer of operations to Baxter.
Titan Scan's operating profit for the third quarter of fiscal 1999 increased 403% to $679,000 compared to $135,000 in fiscal 1998. Significant margin improvement in the medical product sterilization business over the third quarter of fiscal 1998 was primarily the result of near full utilization of Scan's contract sterilization facilities in San Diego, Denver and the Dominican Republic.
Wireless
Revenues in Titan's communication systems subsidiary, Titan Wireless, increased to $5 million in the third quarter of fiscal 1999 from $619,000 in fiscal 1998. Continued shipments of hardware to Benin, and to a lesser extent, the launching of long distance service by Titan's alliance with Sakon in El Salvador and Cameroon, resulted in substantial revenue increases in the third quarter of fiscal 1999 over the same period a year ago. Titan Wireless' operating profit for the third quarter of fiscal 1999 increased to $2 million compared to a loss of $906,000 during the same period in fiscal 1998. Included in 1999 operating income is $2.1 million, resulting from a planned cash collection of receivables for which the Company had previously provided a valuation allowance.
Information Technologies
Revenues in Titan's information technologies subsidiary, Titan Systems, increased 24% to $85.6 million in the third quarter of fiscal 1999 from $69.0 million in fiscal 1998. Increased revenues primarily resulted from the acquisitions of System Resources Corporation in June of 1999 and Atlantic Aerospace Electronics Corporation in July of 1999. Titan Systems' operating profit for the third quarter of fiscal 1999 was $8.5 million compared to $8.8 million in fiscal 1998. One-time credits in the third quarter of fiscal 1998 resulted in higher than normal operating profit margins. In addition, a change in product and service revenue mix, an increase in revenue volume requiring a greater utilization of subcontractors, and increased investment in research and development for certain imaging products, were the primary causes of reduced operating margins in the third quarter of fiscal 1999. The impact of the change in revenue mix and increased investment was partially offset by credits related to favorable determinations from certain government agencies.
Headquartered in San Diego, California, The Titan Corporation develops and deploys communications and information technology solutions and services. In addition, Titan markets the leading technology for the electronic pasteurization of food products. Titan's strategy is to maximize internal growth of its government and commercial businesses while at the same time acquiring businesses that can be readily integrated into its existing core business units. The Company has annualized sales of approximately $400 million with a total backlog in excess of $1 billion and has 3,100 employees.
"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. Contact: Rochelle Bold Vice President Investor Relations (858) 552-9400 or invest@titan.com
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