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Titan Cuts Profit to Boost Cash

March 11, 2004|From Bloomberg News

Titan Corp., a maker of military communications equipment, said Wednesday that it has reduced its fourth-quarter and 2003 profit to set aside cash for potential fines related to alleged improper payments to foreign officials.

Net income last year was $29.1 million, or 34 cents a share, instead of the $32.1 million, or 38 cents, the San Diego company said in its annual report filed with the Securities and Exchange Commission.

The SEC and Justice Department are investigating whether Titan consultants made the payments after receiving funds from the company. Lockheed Martin Corp., which agreed to buy Titan last year, is reviewing whether payments to the consultants were accurately reflected on Titan's books.

"We may not complete the proposed merger with Lockheed Martin as scheduled or at all," Titan said in the filing.

A reserve of $3 million has been set aside to cover potential fines from the criminal probe, Titan said in the filing. As a result, Titan reduced its fourth-quarter net income to $1.1 million, or 1 cent a share, instead of the $4.1 million, or 5 cents, it had reported. Titan first disclosed the criminal probe Friday.

Titan shares rose 37 cents to $19.52, Lockheed fell 42 cents to $44.56. Both stocks trade on the New York Stock Exchange.

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