Exhibit 99.1
CIBER, Inc.
6363 S. Fiddler’s Green Circle, Suite 1400
Greenwood Village, CO 80111
www.ciber.com
For Immediate Release | Contact: | Doug Eisenbrandt |
| | Director/Investor Relations |
| | 303-220-0100 |
| | deisenbrandt@ciber.com |
CIBER REPORTS THIRD QUARTER AND NINE MONTHS 2009 RESULTS
GREENWOOD VILLAGE, Colorado – October 27, 2009 – Today CIBER, Inc. (NYSE: CBR), a leading international IT outsourcing and software services consultancy, reported its financial results for the third quarter of 2009. We will hold a conference call on October 27, 2009 at 11:00 a.m. EST to discuss this information; the conference call and webcast information can be found later in this release.
Management Comments:
CIBER posted positive cash flow for the 63rd consecutive quarter, continuing its 100% track record of generating quarterly positive cash flow as a public company. Additionally, CIBER’s new $155 million credit facility gives the company ample liquidity to support growth with reasonable covenants that allow for operational flexibility.
CIBER’s diversified global operations in 18 countries on 4 continents have served as a strategic bulwark in mitigating the global economic recession. With an average of 20 years of industry experience, the Company’s seasoned management team continues to effectively provide the leadership required during this challenging economic environment. Well versed in difficult decision making, the company has weathered the economic storm by lowering SG&A costs until recovery signs are evident, while at the same time taking advantage of opportunities to add quality employees that become available during these periods.
“Our third quarter results continued to reflect the global economic malaise. However, beginning in September we have seen more customer activity, stable headcounts and new contracts, particularly in the U.S. Federal Government Division and our international operations,” said Mac Slingerlend, CIBER’s President and Chief Executive Officer. “Cash collections were strong in 3Q09 and our new 3-year bank facility is a solid underpinning to our financial resources. Although we were frustrated to settle a non-substantiated legal action in late September, we assured ourselves of no greater negative consequences. We are now focused on sequential quarterly improvements in overall business levels.”
Sequential Quarterly Results: 3Q09 as Compared to 2Q09
· Revenue of $256.4 million for 3Q09 compares to $260.6 million for 2Q09. This 1.6% sequential decrease primarily reflects seasonal holidays and vacations.
· Operating income (net of $2.5 million of one-time charges; discussed below) of $7.0 million for 3Q09 compares to $7.5 million for 2Q09. Prior to the one-time charges, operating income actually increased by approximately $2.0 million, or 27%, from the second quarter to the third quarter.
· 3Q09 GAAP EPS of $0.05 per share, net of $0.03 per share of non recurring charges, compares to $0.07 per share for 2Q09. Before the charges, the $0.01 per share sequential improvement reflects the cost savings undertaken by the Company and improved results in the U.S. ERP and European Divisions.
· EBITDA for 3Q09 of $12.3 million, or $14.8 million prior to the non recurring charges, compares to $13.0 million for 2Q09.
Non Recurring 3Q09 Charges
· The Company was compelled to settle a lawsuit in the quarter that had previously been considered not meaningful. The 2½ year old suit from a 5 year ago matter was expected to be dismissed against the Company. The Company’s request to be released from all charges only achieved a partial dismissal. In mid-September, the trial commenced. Given the sizable sums sought by the Plaintiffs and joint liability of the multiple defendants, the Company concluded it was appropriate to avoid any further inclusion in this matter. The Company paid $2-2.25 million in total settlement and legal fees to be dismissed, admitting no fault.
· In securing a new, improved three-year credit facility, the Company accelerated unamortized fees and costs of the prior facility by approximately $0.3 million.
On a combined basis these two non recurring charges adversely impacted Q309 by approximately $0.03 per share.
3Q09 Operational Highlights
Custom Solutions Division (Including Indian Operations)
· Efforts to pursue larger wins by combining teams from branch offices and Strategic Practices are now a more organized focus.
· Most new IT spending has been business intelligence and maintenance oriented, with new development generally on hold at corporate clients. That said, a few clients have commented that they are just now commencing new development.
· Indian operations continue to build headcount and utilization.
IT Outsourcing Division
· Vibrancy in our longer-term contracts IT Outsourcing Division continued in the quarter, with the signing of a new $48.0 million, 6-year contract, in addition to several smaller wins. The large contract covers full IT operations and service desk solutions for a major quasi-governmental
2
financial institution. This Division also shared in wins in Europe during the quarter and early in the fourth quarter.
U.S. ERP Division
· The Oracle ERP Practice remains stable, with public sector clients more active now than higher education work.
· The U.S. SAP Practice had smaller wins in the quarter, but has a sizeable, diversified pipeline and it is kicking-off joint lead activities with specific verticals with its SAP partnership.
· Our Lawson Practice remains positive in their healthcare and public sector verticals pipeline.
Federal Government Division
· After a slow contract start to the third quarter, this Division finished the quarter with a flurry, which continued into October.
· Renewals, recompetes and extensions support this revenue base while incremental prime contractor wins are being sought.
European Division
· The July-August summer holiday combination was a greater challenge in 2009, as utilization levels were already under greater pressure. However, beginning September, utilization improved meaningfully.
· Wins in Norway, Germany and the UK led the quarterly activity, with European IT Outsourcing wins commencing in September and the current quarter.
Eastern Asia & Pacific Operations
· Australia/New Zealand operations remained profitable while material projects continued to be pipeline-oriented.
· China operations saw greater offshore support activity for European and U.S. customers as it builds its domestic base.
Balance Sheet Highlights (September 30, 2009)
· In August, the Company completed its refinancing of an intermediate term credit support with a new three-year, $155 million facility led by Bank of America, a new lender to our lender group. The syndicated bank group included all of the former participants, except the agent, plus an additional bank. The new facility extended the maturity and is more flexible in its covenant structure.
· Cash was $56.2 million and long-term debt was $92.9 million.
· DSOs for services were 65 days, a one day sequential improvement.
Bookings Data
Bookings for the third quarter were $265 million, representing a 1.1:1 book-to-bill ratio.
3
Outlook
The Company currently believes that the fourth quarter will be sequentially better than the September quarter, and now anticipates 2009 fiscal revenue of $1.035-1.040 billion and, net of the current quarter’s $0.03/share nonrecurring charges, fiscal GAAP EPS of $0.25-0.26/share.
Conference Call and Webcast
A webcast to discuss the Company’s financial results and outlook will be held at 11:00 a.m. EST on Tuesday, October 27, 2009 and may be heard live by visiting the Investor Relations portion of the Company website at www.ciber.com/cbr/. To participate in the call, dial 877-941-0843 within the United States, and 480-629-9644 internationally, using the conference ID number 4170518. A replay of the conference call will be available for 30 days by dialing 800-406-7325 within the United States, and 303-590-3030 internationally, using the ID number 4170518. The replay will also be available on CIBER’s website.
About CIBER, Inc.
CIBER, Inc. (NYSE: CBR) is a pure-play international IT outsourcing and software implementation and integration consultancy with superior value-priced services and reliable delivery for both private and government sector clients. CIBER’s services are offered globally on a project- or strategic-staffing basis, in both custom and enterprise resource planning (ERP) package environments, and across all technology platforms, operating systems and infrastructures. Founded in 1974 and headquartered in Greenwood Village, Colo., CIBER now serves client businesses from over 40 U.S. offices, 25 European offices and seven offices in Asia/Pacific. Operating in 18 countries, with more than 8,500 employees and annual revenue of $1.1 billion, CIBER and its IT specialists continuously build and upgrade clients’ systems to “competitive advantage status.” CIBER is included in the Russell 2000 Index and the S&P Small Cap 600 Index. CIBER, the Reliable Global IT Services Partner. www.ciber.com.
Forward-Looking and Cautionary Statements
Statements contained in this release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially, as discussed in the Company’s filings with the Securities and Exchange Commission. CIBER undertakes neither intention nor obligation to publicly update or revise any forward-looking statements. CIBER and the CIBER logo are trademarks or registered trademarks of CIBER, Inc. Copyright© 2009.
4
CIBER, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
| | Three Months Ended
Sept. 30, | | Nine Months Ended
Sept. 30, | |
In thousands, except per share data | | 2008 | | 2009 | | 2008 | | 2009 | |
Consulting services | | $ | 286,004 | | $ | 245,113 | | $ | 867,484 | | $ | 743,170 | |
Other revenue | | 13,962 | | 11,254 | | 44,525 | | 32,276 | |
Total revenue | | 299,966 | | 256,367 | | 912,009 | | 775,446 | |
| | | | | | | | | |
Cost of consulting services | | 209,515 | | 184,028 | | 632,811 | | 559,121 | |
Cost of other revenue | | 8,170 | | 7,382 | | 28,850 | | 20,557 | |
Selling, general and administrative expenses | | 67,464 | | 56,417 | | 200,000 | | 169,879 | |
Amortization of intangible assets | | 1,604 | | 1,506 | | 4,823 | | 4,371 | |
Operating income | | 13,213 | | 7,034 | | 45,525 | | 21,518 | |
Other expense, net | | 2,778 | | 2,074 | | 11,510 | | 2,930 | |
Income before income taxes | | 10,435 | | 4,960 | | 34,015 | | 18,588 | |
Income tax expense | | 3,003 | | 1,401 | | 11,844 | | 6,023 | |
Consolidated net income | | 7,432 | | 3,559 | | 22,171 | | 12,565 | |
Net income noncontrolling interests | | 197 | | 54 | | 824 | | 139 | |
Net income attributable to CIBER, Inc. | | $ | 7,235 | | $ | 3,505 | | $ | 21,347 | | $ | 12,426 | |
| | | | | | | | | |
Earnings per share – diluted | | $ | 0.12 | | $ | 0.05 | | $ | 0.35 | | $ | 0.18 | |
| | | | | | | | | |
Weighted average shares – diluted | | 60,791 | | 69,809 | | 60,485 | | 67,573 | |
For the three months ended September 30, 2008 and 2009, respectively, earnings per share – basic were $0.12 and $0.05 and weighted average shares – basic were 60,032 and 69,664.
For the nine months ended September 30, 2008 and 2009, respectively, earnings per share – basic were $0.36 and $0.18 and weighted average shares – basic were 60,098 and 67,484.
5
CIBER, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)
In thousands | | December 31,
2008 | | September 30,
2009 | |
| | | | | |
Assets | | �� | | | |
Current assets: | | | | | |
Cash and cash equivalents | | $ | 48,849 | | $ | 56,247 | |
Accounts receivable, net | | 235,066 | | 216,658 | |
Prepaid expenses and other current assets | | 20,633 | | 24,177 | |
Deferred income taxes | | 4,883 | | 7,189 | |
Total current assets | | 309,431 | | 304,271 | |
| | | | | |
| | | | | |
Property and equipment, net | | 27,372 | | 26,710 | |
Intangible assets, net | | 449,813 | | 457,965 | |
Other assets | | 10,904 | | 13,011 | |
Total assets | | $ | 797,520 | | $ | 801,957 | |
| | | | | |
Liabilities and Shareholders’ Equity | | | | | |
Current liabilities: | | | | | |
Accounts payable | | $ | 35,373 | | $ | 27,301 | |
Accrued compensation and related liabilities | | 62,437 | | 66,275 | |
Other accrued expenses and liabilities | | 44,514 | | 63,656 | |
Income taxes payable | | 1,874 | | 11,299 | |
Total current liabilities | | 144,198 | | 168,531 | |
| | | | | |
Long-term bank debt | | 165,710 | | 92,865 | |
Deferred income taxes | | 34,288 | | 36,400 | |
Total liabilities | | 344,196 | | 297,796 | |
| | | | | |
Total shareholders’ equity | | 453,324 | | 504,161 | |
Total liabilities and shareholders’ equity | | $ | 797,520 | | $ | 801,957 | |
6
CIBER, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| | Nine Months Ended
September 30, | |
In thousands | | 2008 | | 2009 | |
| | | | | |
Operating activities: | | | | | |
Net income | | $ | 22,171 | | $ | 12,565 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | |
Depreciation | | 9,513 | | 9,007 | |
Amortization of intangible assets | | 4,823 | | 4,371 | |
Other, net | | 27,492 | | 35,399 | |
Net cash provided by operating activities | | 63,999 | | 61,342 | |
| | | | | |
Investing activities: | | | | | |
Acquisitions, net of cash acquired | | (7,790 | ) | (4,258 | ) |
Purchases of property and equipment, net | | (10,837 | ) | (7,960 | ) |
Other | | 233 | | — | |
Net cash used in investing activities | | (18,394 | ) | (12,218 | ) |
| | | | | |
Financing activities: | | | | | |
Employee stock purchases and options exercised | | 3,559 | | 1,871 | |
Purchases of treasury stock | | (7,519 | ) | (3,877 | ) |
Borrowings (payments) on long-term bank debt, net | | 42,155 | | (63,882 | ) |
Retirement of debentures | | (68,779 | ) | — | |
Sales of common stock | | — | | 23,220 | |
Other, net | | (5,558 | ) | (3,687 | ) |
Net cash used in financing activities | | (36,142 | ) | (46,355 | ) |
| | | | | |
Effect of foreign exchange rate changes on cash | | (1,839 | ) | 4,629 | |
Net increase in cash and cash equivalents | | 7,624 | | 7,398 | |
Cash and cash equivalents, beginning of period | | 31,717 | | 48,849 | |
Cash and cash equivalents, end of period | | $ | 39,341 | | $ | 56,247 | |
7
Selected Financial Information
Unaudited Reconciliation of Non-GAAP and Segment Financial Measures
I. Reconciliation of Revenue Growth Components ($ in millions)
Sequential Three Months Ended
Divisions | | June 30,
2009 | | Organic | | Acquired | | Foreign
Exchange | | Total | | Sept. 30,
2009 | |
| | | | | | | | | | | | | |
Custom Sols & ITO | | $ | 113.1 | | -5.8 | % | — | % | — | % | -5.8 | % | $ | 106.5 | |
| | | | | | | | | | | | | |
U.S. ERP | | 32.3 | | -3.1 | | — | | — | | -3.1 | | 31.3 | |
| | | | | | | | | | | | | |
Federal | | 29.9 | | -2.7 | | — | | — | | -2.7 | | 29.1 | |
| | | | | | | | | | | | | |
Europe | | 85.3 | | -1.3 | | — | | 6.2 | | 4.9 | | 89.5 | |
| | | | | | | | | | | | | |
| | $ | 260.6 | | -3.6 | % | — | % | 2.0 | % | -1.6 | % | $ | 256.4 | |
Three Months Ended
Divisions | | Sept. 30,
2008 | | Organic | | Acquired | | Foreign
Exchange | | Total | | Sept. 30,
2009 | |
| | | | | | | | | | | | | |
Custom Sols & ITO | | $ | 133.2 | | -21.0 | % | 1.0 | % | — | % | -20.0 | % | $ | 106.5 | |
| | | | | | | | | | | | | |
U.S. ERP | | 30.1 | | 4.0 | | — | | — | | 4.0 | | 31.3 | |
| | | | | | | | | | | | | |
Federal | | 31.4 | | -7.3 | | — | | — | | -7.3 | | 29.1 | |
| | | | | | | | | | | | | |
Europe | | 105.3 | | -7.3 | | — | | -7.7 | | -15.0 | | 89.5 | |
| | | | | | | | | | | | | |
| | $ | 300.0 | | -12.2 | % | 0.4 | % | -2.7 | % | -14.5 | % | $ | 256.4 | |
Nine Months Ended
Divisions | | Sept. 30,
2008 | | Organic | | Acquired | | Foreign
Exchange | | Total | | Sept. 30,
2009 | |
| | | | | | | | | | | | | |
Custom Sols & ITO | | $ | 401.2 | | -17.0 | % | 0.9 | % | — | % | -16.1 | % | $ | 336.6 | |
| | | | | | | | | | | | | |
U.S. ERP | | 93.1 | | -0.2 | | — | | — | | -0.2 | | 92.9 | |
| | | | | | | | | | | | | |
Federal | | 96.7 | | -9.1 | | — | | — | | -9.1 | | 87.9 | |
| | | | | | | | | | | | | |
Europe | | 321.0 | | -3.4 | | 0.2 | | -16.4 | | -19.6 | | 258.0 | |
| | | | | | | | | | | | | |
| | $ | 912.0 | | -9.7 | % | 0.5 | % | -5.8 | % | -15.0 | % | $ | 775.4 | |
8
II. EBITDA Reconciliation to Net Income ($ in thousands)
| | Three Months Ended | | Nine Months Ended | |
| | Sept. 30,
2008 | | June 30,
2009 | | Sept. 30,
2009 | | Sept. 30,
2008 | | Sept. 30,
2009 | |
| | | | | | | | | | | |
Net Income Attributable to CIBER | | $ | 7,235 | | $ | 4,656 | | $ | 3,505 | | $ | 21,347 | | $ | 12,426 | |
Net Income Noncontrolling Interest | | 197 | | 53 | | 54 | | 824 | | 139 | |
Consolidated Net Income | | 7,432 | | 4,709 | | 3,559 | | 22,171 | | 12,565 | |
Income Tax | | 3,003 | | 2,206 | | 1,401 | | 11,844 | | 6,023 | |
Pre-Tax Income | | 10,435 | | 6,915 | | 4,960 | | 34,015 | | 18,588 | |
Other Expense, net | | 2,778 | | 553 | | 2,074 | | 11,510 | | 2,930 | |
Operating Income | | 13,213 | | 7,468 | | 7,034 | | 45,525 | | 21,518 | |
Share Based Comp. | | 977 | | 1,093 | | 817 | | 2,537 | | 2,986 | |
Amortization | | 1,604 | | 1,457 | | 1,506 | | 4,823 | | 4,371 | |
Depreciation | | 3,253 | | 3,000 | | 2,982 | | 9,513 | | 9,007 | |
EBITDA | | $ | 19,047 | | $ | 13,018 | | $ | 12,339 | | $ | 62,398 | | $ | 37,882 | |
9
III. Segment Operating Results Analysis
Operating Results Analysis
($ in millions)
| | Three Months Ended | | Nine Months Ended | |
| | Sept. 30, 2008 | | Sept. 30, 2009 | | Sept. 30, 2008 | | Sept. 30, 2009 | |
| | $ | | % | | $ | | % | | $ | | % | | $ | | % | |
Revenue | | | | | | | | | | | | | | | | | |
Custom Sols & ITO (1) | | | | | | | | | | | | | | | | | |
Commercial/ITO | | $ | 107.3 | | 36 | | $ | 83.9 | | 33 | | $ | 308.5 | | 34 | | $ | 267.1 | | 35 | |
State & Local | | 25.9 | | 8 | | 22.6 | | 9 | | 92.7 | | 10 | | 69.5 | | 9 | |
Sub | | 133.2 | | 44 | | 106.5 | | 42 | | 401.2 | | 44 | | 336.6 | | 44 | |
U.S. ERP (2) | | | | | | | | | | | | | | | | | |
Commercial | | 16.4 | | 5 | | 11.9 | | 5 | | 41.9 | | 5 | | 37.2 | | 5 | |
State & Local | | 13.7 | | 5 | | 19.3 | | 7 | | 51.2 | | 5 | | 55.7 | | 7 | |
Sub | | 30.1 | | 10 | | 31.3 | | 12 | | 93.1 | | 10 | | 92.9 | | 12 | |
| | | | | | | | | | | | | | | | | |
Federal | | 31.4 | | 11 | | 29.1 | | 11 | | 96.7 | | 11 | | 87.9 | | 11 | |
| | | | | | | | | | | | | | | | | |
Europe (3) | | 105.3 | | 35 | | 89.5 | | 35 | | 321.0 | | 35 | | 258.0 | | 33 | |
| | | | | | | | | | | | | | | | | |
Total | | $ | 300.0 | | 100 | % | $ | 256.4 | | 100 | % | $ | 912.0 | | 100 | % | $ | 775.4 | | 100 | % |
| | Three Months Ended | | Nine Months Ended | |
| | Sept. 30, 2008 | | Sept. 30, 2009 | | Sept. 30, 2008 | | Sept. 30, 2009 | |
| | $ | | % | | $ | | % | | $ | | % | | $ | | % | |
EBITA | | | | | | | | | | | | | | | | | |
Custom Sols & ITO (1) | | | | | | | | | | | | | | | | | |
Commercial/ITO | | — | | | | — | | | | — | | | | — | | | |
State & Local | | — | | | | — | | | | — | | | | — | | | |
Sub | | $ | 13.5 | | 10 | | $ | 7.0 | | 7 | | $ | 40.3 | | 10 | | $ | 22.5 | | 7 | |
U.S. ERP (2) | | | | | | | | | | | | | | | | | |
Commercial | | — | | | | — | | | | — | | | | — | | | |
State & Local | | — | | | | — | | | | — | | | | — | | | |
Sub | | (1.7 | ) | (6 | ) | 2.8 | | 9 | | 0.1 | | 0 | | 6.4 | | 7 | |
| | | | | | | | | | | | | | | | | |
Federal | | 2.8 | | 9 | | 1.5 | | 5 | | 7.1 | | 7 | | 4.9 | | 5 | |
| | | | | | | | | | | | | | | | | |
Europe (3) | | 7.3 | | 7 | | 4.8 | | 5 | | 23.7 | | 8 | | 13.2 | | 5 | |
| | | | | | | | | | | | | | | | | |
Corporate | | (7.1 | ) | (2 | ) | (7.6 | ) | (3 | ) | (20.9 | ) | (2 | ) | (21.1 | ) | (3 | ) |
EBITA | | 14.8 | | 5 | | 8.5 | | 3 | | 50.3 | | 6 | | 25.9 | | 3 | |
Amortization | | (1.6 | ) | (1 | ) | 1.5 | | — | | (4.8 | ) | (1 | ) | 4.4 | | — | |
Operating Income | | $ | 13.2 | | 4 | % | $ | 7.0 | | 3 | % | $ | 45.5 | | 5 | % | $ | 21.5 | | 3 | % |
Note: India operations are in Custom Solutions and Asia Pacific operations are in Europe; Custom Solutions also includes domestic eliminations.
(1) These Divisions have been combined and prior revenue partially reclassified, accordingly, margins cannot be accurately separated.
(2) This activity has always been operated together; highlighting State & Local revenue will assist the overall view of CIBER’s public sector emphasis.
(3) Public sector business also exists in the European Division, both national and local; it is approximately 5% of these revenues.
###
10
