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San Diego: Perfecting Paradise, Copyright 1999 by Heritage Media Corporation


Titan Corporation, established in 1981, is a leading provider of satellite communications, information technology solutions, and sterilization systems and services for commercial and government customers worldwide. The publicly held company (listed under the symbol TTN in the New York Stock Exchange) is located in San Diego and employs more than 2,200 employees. In 1998, Titan's revenues were $340 million.

The driving force behind the explosive growth of Titan has been Dr. Gene W. Ray, founder, president and chief executive officer. Prior to launching Titan, Dr. Ray served in a number of senior executive management positions with leading defense industry companies. He also spent two years as chief of the Strategic Division of the U.S. Air Force.

Titan's core business is defense information and communications systems. The company's strategy continues to focus on communication and information systems markets offering high growth potential and a strong contract backlog.

Titan's defense business is focused on two categories: design, development and delivery of specialized information technology products to U.S. and international defense customers; and providing on-site and off-site engineering and technical services requiring an in-depth understanding of defense operations and requirements. A significant strength is the company's knowledge of customer needs as employees frequently work side-by-side with military personnel providing technical support at locations in the United States and abroad.

Titan has four wholly owned subsidiaries:

  • Titan Technologies & Information Systems (TTIS) - In 1997, Titan consolidated its defense information technology businesses into TTIS. TTIS provides innovative information technology systems and services to defense-related government agencies via information systems design, engineering and integration services, development of specialized products and prototypes, as well as systems installation, testing and maintenance.

  • Titan Scan - This subsidiary focuses on developing and applying electron beam technology to sterilize disposable medical devices. Titan Scan provides turnkey systems and contract sterilization services to customers using SureBeam™, a patented sterilization process. SureBeam is a safe and reliable sterilization alternative to existing radioactive sources and hazardous chemical-based systems. SureBeam uses commercial electrical power to accelerate electrons and is as safe as a microwave oven.

    It's anticipated that this technology will soon be used consistently to eradicate food-borne pathogens from foods, particularly for eliminating the E.coli threat in hamburger. Once the United States Department of Agriculture rule making process is complete, it will be legal in the United States to eliminate the E.coli threat with radiation. There are only two viable sources of radiation to accomplish this - Cobalt-60, a radioactive material imported from Canada, and Titan's SureBeam.

    Titan Scan also provides other technical services needed to define, evaluate and assist in the application of electron beam technology. These include product testing and dose mapping, conversion to electron beam processing, project feasibility analysis and system design development. For medical products, Titan Scan delivers turnkey sterilization systems for integration into the production process of the customer's plant and also operates its own contract service facilities.

  • Titan Software Systems (TSS) - TSS is a systems integrator delivering state-of-the-art technology and business software to commercial and nondefense government clients. Customers include large corporations in the telecommunications and financial areas, the Federal Aviation Administration, and other entities with large and often complicated system integration and data management needs.

    TSS focuses on Enterprise Information Portals (EIP), e-Commerce, Enterprise Resource Planning (ERP) and Enterprise Infrastructures. EIP solutions, for example, help unlock information stored in ERP systems, Internet and Intranet Web sites, databases, legacy mainframe and client-server systems. Data from multiple sources is aggregated in data warehouses or data "marts," then made available across the enterprise in an organized, secure and searchable fashion. In 1998, TSS also began delivering e-Commerce solutions to companies in the areas of Internet Web site marketing and sales, electronic publishing and call center automation.

    Other TSS services include:

    Emerging technologies - Provides a range of design, development, integration, implementation and support services for Internet/Intranet/Extranet technologies for PointCast™, electronic commerce and electronic publishing solutions;

    Custom software applications - Delivers custom and integrated software solutions, work-flow management, client-server development and executive information systems;

    Data management - Offers clients data administration, warehousing, and mining, and interface architecture;

    Systems management - Provides hosting operation and system administration of mission - critical applications such as network management, data warehouses and software distribution.

  • Linkabit Wireless - This subsidiary specializes in developing and producing advanced satellite ground terminals, satellite voice/data modems, networking systems and other products incorporating Demand Assigned Multiple Access (DAMA) technology used to provide bandwidth-efficient, cost-effective communications for commercial and government clients worldwide. Linkabit Wireless is now a leading provider of DAMA and a key DAMA product is the mini-DAMA terminal, which provides two channels of UHF satellite communication for up to 16 simultaneous users.

    Linkabit Wireless' leading product, Xpress Connection™, provides low-cost voice, facsimile and data services. The product is ideal for remote areas. Linkabit has also joined a consortium led by Alcatel Telspace, a French subsidiary of Alcatel, which is designing a satellite-based alternative to conventional telephone systems. The consortium's Multi Media Asia (M2A) "next generation" system will provide feature-rich telephone, facsimile and high speed Internet access to homes and businesses in suburban and rural areas at a price competitive with wireline services. Unlike traditional wireline systems however, the terminals being developed by Linkabit for this system can be quickly installed without the expense and time required to build out wire systems across vast geographic areas.

    Linkabit continues to leverage its experience in rural telephony to selectively pursue private networking opportunities in developing countries. In Thailand, for example, Linkabit Wireless provided its multiport DAMA modems for use in a national voice, data and facsimile communications network for the Bank of Agriculture and Agricultural Cooperatives.

In addition to the four core subsidiaries, Titan has an "Emerging Technologies" division that identifies promising Titan technologies that don't immediately fit within the company's core businesses. Titan helps these businesses by either licensing their proprietary technology or creating a new company in which Titan retains an interest. In recent years, a number of these companies have been "incubated" by Titan - these spin-offs continue to provide potential for ongoing revenue streams. Examples include:

  • Flash Comm, Inc. - Provides a unique system for tracking trucks, cars and trains to follow location, temperature, security and other key parameters.

  • IPivot - Speeds data flow within Internet environments by reducing computer server blockages. Operating funds for IPivot were raised through venture capital partners.

  • Tomo Therapeutics - Utilizes X-Ray Needle™ technology developed and patented by Titan to deliver energy from the tip of the needle directly into a tumor without damaging the healthy surrounding tissue. Titan retains an equity stake and receives product royalties.

  • Wave Systems - This company acquired its core technology from Titan in 1994. It provides specialized electronic product distribution and metering systems embedded in hardware platforms such as set-top boxes and Internet access devices. Wave Systems provides encryption, decoding, usage monitoring and detailed billing information to its users.

In 1998, Titan made a number of key acquisitions:

  • DBA Systems, Inc. - Founded in 1963, Melbourne, Florida-based DBA is a developer and manufacturer of digital imaging products, electro-optical systems and threat simulation/training systems, primarily for the defense and intelligence communities. Additional commercial markets include law enforcement, medical, transportation and geographic information systems.

  • Validity Corporation - An information services technologies company, Validity provides systems engineering and integration, software engineering, network technologies and test and evaluation services. The company maintains significant operations close to customer facilities in Maryland and Arizona.

  • Horizons Technology, Inc. - Founded in 1977, the company provides systems engineering and program management services, computer systems integration and high-end software. Horizons also developed a commercial software services business which provides digital map information that can be purchased over the Internet. Principal locations are in Billerica, Mass., and Melbourne, Florida.

  • VisiCom, Inc. - Established in 1988, the company is a hardware and software product innovator, value-added reseller and systems engineering company dedicated to providing real-time open architecture computing solutions. Products and services are designed to meet the needs of embedded real-time systems for industrial customers and governmental agencies. Company headquarters is in San Diego, Calif.

  • Delfin Systems - The Santa Clara, Calif. company, launched in 1984, provides systems engineering, program management services, computer systems integration and high-end software primarily for the U.S. Department of Defense. Core strengths are in intelligence analysis, computer forensics, information security, and enterprise communications and connectivity.

  • Transnational Partners II, LLC - Founded in 1995, Transnational Partners provides enterprise infrastructure and ERP solutions for major companies. The company provides the software infrastructure allowing interoperability of ERP system implementations, legacy systems and new software products.

Titan was also awarded a number of significant contracts in 1998 and 1999. The company entered into a joint venture with Afronetwork, located in Cotonou, Benin. Afronetwork has been engaged by the Office of Post and Telecommunications (OPT) of the Republic of Benin to build a communications system that includes fiber optics, VSAT and wireless local loop solutions. Project value is $15 million.

Titan will be deploying a comprehensive network management and central control center adjacent to the OPT's international satellite earth station complex. The Titan-designed and furnished center will also provide national and international connectivity, interurban capacity as well as telephone, Internet, fax and data services in rural areas for the first time. Production of personal computers in Benin will further develop the local skills necessary to take maximum advantage of the latest developments in data communications, electronic messaging and Internet-related technologies.

Titan was selected by the U.S. Army Aviation and Missile Command in Huntsville, Alabama to provide Electro-Optical/Infrared (EO/IR) and Anti-Armor Threat System assessment, modification and enhancement. The $18.2 million contract includes requirements for intelligence analysis/evaluation, design, development, production, testing and deployment of high fidelity threat simulators and simulations for EO/IR air defense missile systems and anti-tank missile systems.

Also awarded to Titan was a $4.6 million option for work on an existing contract with the National Imagery and Mapping Agency (NIMA) in Chantilly, Virginia. The award raises the value of the original NIMA contract to $18.2 million. The agreement calls for Titan's continuation of engineering development and enhancements for a previously delivered government support system, as well as the operation and maintenance of that system located at the government site.

Lastly, Titan won a $2.7 million order for its linear electron accelerator to be used for radiation chemistry research at the Commissariat a l'Energie Atomique (CEA) at Saclay, France. Titan's subsidiary, Titan Scan, will provide the system to test the radiolytic effects in various media. The system utilizes a precisely formed electron beam and precise diagnostic instruments to characterize the beam.

A significant strategic step taken by Titan in 1998 was an investment in Sakon, an international telephone service provider and communications company providing "next generation" telephone and Internet services. Sakon is a North Bergen, N.J. company specializing in providing telecommunications and Internet services in developing countries of Africa, Latin America, Southeast Asia and other areas where fiber-based systems are not feasible or not yet deployed.

Together, Titan and Sakon will provide carrier, direct dial rural telephony and enhanced communication services, including international fax, conference calling, voice over Internet Protocol (IP), virtual communications centers and virtual private network services to developing nations. Sakon will use Titan's satellite communications technology as its primary international telecommunications infrastructure.

Titan is well posed for growth in the 21st century. The company's most valuable assets are the employees - their broad array of skills is paramount to meeting current challenges and achieving future growth. The work force expanded from 1,400 in 1997 to 2,200 at the end of 1998. More than 50 employees also received commendation letters from various government agencies in 1998. Collectively, Titan's employees have contributed not only to the success of the company, but also the customers they serve. Titan's long-term objective has not changed since the company's inception -- provide growth for its shareholders and employees.

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