Titan Earnings Decrease 56% on Acquisition and Legal Costs

Titan Corp., a provider of information technology and translators to the U.S. government, said Monday that its first-quarter profit fell 56% because of costs associated with its pending acquisition by Lockheed Martin Corp. and from legal costs to resolve a criminal probe.

Net income for the San Diego-based defense contractor dropped to $3.1 million, or 3 cents a share, from $7 million, or 9 cents, a year earlier. Titan’s sales rose 21% to $458.8 million, up from $377.9 million a year earlier, buoyed by contracts to provide translators for the Army. Titan also does design work on a high-speed aluminum catamaran for the Navy.

“Our employees remained focused on providing and expanding the vital services we deliver to key national security customers,” Titan Chairman, President and Chief Executive Gene W. Ray said in a statement Monday.

Titan has sent translators to Iraq and Afghanistan to help the U.S. military. Since last summer, 14 Titan employees have been killed in Iraq.

In recent days there have been widespread reports on allegations of abusive treatment of Iraqis at a prison outside Baghdad. The Times has reported that Titan is one of at least two private contractors that helped in the interrogations of prisoners.

Titan has denied that its employees are involved in the interrogation of Iraqi prisoners.

Titan also is trying to resolve a federal investigation into whether the company’s consultants bribed foreign officials to win contracts. The Lockheed deal has been delayed twice because of the federal probe.

Titan said the costs related to its pending sale to Lockheed and the bribery investigation were $17.6 million, or 13 cents a share, in the quarter.

Bethesda, Md.-based Lockheed, the largest U.S. defense contractor, last month cut by $200 million -- to $2.2 billion -- its offer to buy Titan. And the revised deal is contingent on the criminal investigation being resolved.

Titan also said it saw no need to raise the $3-million reserve it established in March to cover potential fines from the investigation.

Analysts said they expected the merger to proceed.

Titan shares fell 1 cent Monday to $19.19 on the New York Stock Exchange.

The stock has fallen 12% this year.