Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Oct. 21, 2013 | |
Document and Entity Information | ||
Entity Registrant Name | CIBER INC | |
Entity Central Index Key | 918581 | |
Document Type | 10-Q | |
Document Period End Date | 30-Sep-13 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -19 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 75,448,076 | |
Document Fiscal Year Focus | 2013 | |
Document Fiscal Period Focus | Q3 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
REVENUES | ||||
Consulting services | $202,780 | $200,211 | $620,606 | $613,058 |
Other revenue | 12,277 | 11,005 | 34,387 | 33,002 |
Total revenues | 215,057 | 211,216 | 654,993 | 646,060 |
OPERATING EXPENSES | ||||
Cost of consulting services | 153,597 | 151,671 | 469,611 | 459,983 |
Cost of other revenue | 7,398 | 6,125 | 20,056 | 19,817 |
Selling, general and administrative | 53,531 | 48,966 | 154,021 | 149,737 |
Amortization of intangible assets | 157 | 482 | ||
Restructuring charges | 14,000 | 14,953 | ||
Total operating expenses | 228,526 | 206,919 | 658,641 | 630,019 |
OPERATING INCOME (LOSS) FROM CONTINUING OPERATIONS | -13,469 | 4,297 | -3,648 | 16,041 |
Interest income | 208 | 109 | 700 | 495 |
Interest expense | -450 | -1,096 | -1,970 | -5,163 |
Other expense, net | -264 | -614 | -89 | -549 |
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | -13,975 | 2,696 | -5,007 | 10,824 |
Income tax expense (benefit) | -462 | 2,501 | 4,122 | 8,921 |
NET INCOME (LOSS) FROM CONTINUING OPERATIONS | -13,513 | 195 | -9,129 | 1,903 |
Loss from discontinued operations, net of income tax | -952 | -9,510 | -5,489 | -9,890 |
CONSOLIDATED NET LOSS | -14,465 | -9,315 | -14,618 | -7,987 |
Net income attributable to noncontrolling interests | 4 | 134 | 4 | 400 |
NET LOSS ATTRIBUTABLE TO CIBER, INC. | ($14,469) | ($9,449) | ($14,622) | ($8,387) |
Basic and diluted earnings (loss) per share attributable to Ciber, Inc.: | ||||
Continuing operations (in dollars per share) | ($0.18) | ($0.12) | $0.02 | |
Discontinued operations (in dollars per share) | ($0.01) | ($0.13) | ($0.08) | ($0.13) |
Basic and diluted loss per share attributable to Ciber, Inc. | ($0.19) | ($0.13) | ($0.20) | ($0.11) |
Weighted average shares outstanding: | ||||
Basic (in shares) | 75,070 | 73,276 | 74,611 | 73,008 |
Diluted (in shares) | 75,070 | 73,647 | 74,611 | 73,498 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (Loss) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Consolidated Statements of Comprehensive Income (Loss) | ||||
Consolidated net loss | ($14,465) | ($9,315) | ($14,618) | ($7,987) |
Foreign currency translation adjustments | 7,104 | 8,216 | -834 | 4,811 |
Comprehensive loss | -7,361 | -1,099 | -15,452 | -3,176 |
Comprehensive income attributable to noncontrolling interests | 4 | 134 | 4 | 400 |
Comprehensive loss attributable to Ciber, Inc. | ($7,365) | ($1,233) | ($15,456) | ($3,576) |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $32,890 | $58,849 |
Accounts receivable, net of allowances of $1,567 and $1,752, respectively | 194,660 | 200,257 |
Prepaid expenses and other current assets | 23,324 | 24,054 |
Total current assets | 250,874 | 283,160 |
Property and equipment, net of accumulated depreciation of $50,069 and $47,859, respectively | 13,048 | 13,683 |
Goodwill | 278,815 | 276,599 |
Other assets | 6,679 | 7,029 |
TOTAL ASSETS | 549,416 | 580,471 |
Current liabilities: | ||
Current portion of long-term debt | 3,236 | 6,337 |
Accounts payable | 25,642 | 30,775 |
Accrued compensation and related liabilities | 56,805 | 68,900 |
Deferred revenue | 22,232 | 21,872 |
Income taxes payable | 1,157 | 4,331 |
Other accrued expenses and liabilities | 44,694 | 45,477 |
Total current liabilities | 153,766 | 177,692 |
Long-term debt | 14,385 | 19,790 |
Deferred income taxes | 24,021 | 21,848 |
Other long-term liabilities | 10,720 | 2,188 |
Total liabilities | 202,892 | 221,518 |
Commitments and contingencies | ||
Ciber, Inc. shareholders' equity: | ||
Preferred stock, $0.01 par value, 1,000 shares authorized, no shares issued | ||
Common stock, $0.01 par value, 100,000 shares authorized, 75,457 and 74,487 shares issued, respectively | 755 | 745 |
Treasury stock, at cost, 96 and 708 shares, respectively | -324 | -4,057 |
Additional paid-in capital | 340,267 | 337,639 |
Retained earnings | 5,914 | 24,032 |
Accumulated other comprehensive income (loss) | -626 | 208 |
Total Ciber, Inc. shareholders' equity | 345,986 | 358,567 |
Noncontrolling interests | 538 | 386 |
Total equity | 346,524 | 358,953 |
TOTAL LIABILITIES AND EQUITY | $549,416 | $580,471 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, except Per Share data, unless otherwise specified | ||
Consolidated Balance Sheets | ||
Accounts receivable, allowances (in dollars) | $1,567 | $1,752 |
Property and equipment, accumulated depreciation (in dollars) | $50,069 | $47,859 |
Preferred stock, par value (in dollars per share) | $0.01 | $0.01 |
Preferred stock, shares authorized | 1,000 | 1,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized | 100,000 | 100,000 |
Common stock, shares issued | 75,457 | 74,487 |
Treasury stock, shares | 96 | 708 |
Consolidated_Statement_of_Chan
Consolidated Statement of Changes in Equity (USD $) | Total | Total Ciber, Inc. Shareholders' Equity | Common Stock | Treasury Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests |
In Thousands, unless otherwise specified | ||||||||
BALANCES at Dec. 31, 2012 | $358,953 | $358,567 | $745 | ($4,057) | $337,639 | $24,032 | $208 | $386 |
BALANCES (in shares) at Dec. 31, 2012 | 74,487 | -708 | ||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Consolidated net loss | -14,618 | -14,622 | -14,622 | 4 | ||||
Foreign currency translation | -834 | -834 | -834 | |||||
Change in noncontrolling interest | -6,607 | -6,755 | -6,755 | 148 | ||||
Shares issued under employee share plans, net | 661 | 661 | 10 | 3,733 | 414 | -3,496 | ||
Shares issued under employee share plans, net (in shares) | 970 | 612 | ||||||
Share-based compensation | 8,969 | 8,969 | 8,969 | |||||
BALANCES at Sep. 30, 2013 | $346,524 | $345,986 | $755 | ($324) | $340,267 | $5,914 | ($626) | $538 |
BALANCES (in shares) at Sep. 30, 2013 | 75,457 | -96 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Consolidated net loss | ($14,618) | ($7,987) |
Adjustments to reconcile consolidated net loss to net cash used in operating activities: | ||
Loss from discontinued operations | 5,489 | 9,890 |
Depreciation | 4,396 | 5,739 |
Amortization of intangible assets | 482 | |
Deferred income tax expense | 2,429 | 3,699 |
Provision for (recovery on) doubtful receivables | 680 | -192 |
Share-based compensation expense | 8,969 | 4,534 |
Amortization of debt costs | 656 | 2,385 |
Other, net | 340 | 630 |
Changes in operating assets and liabilities: | ||
Accounts receivable | -392 | -30,186 |
Other current and long-term assets | -694 | -3,773 |
Accounts payable | -5,105 | -6,629 |
Accrued compensation and related liabilities | -11,436 | -1,629 |
Other current and long-term liabilities | 8,527 | -8,102 |
Income taxes payable/refundable | -3,632 | -1,618 |
Cash used in operating activities - continuing operations | -4,391 | -32,757 |
Cash used in operating activities - discontinued operations | -2,865 | -2,361 |
Cash used in operating activities | -7,256 | -35,118 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchases of property and equipment, net | -4,079 | -2,574 |
Cash used in investing activities - continuing operations | -4,079 | -2,574 |
Cash provided by (used in) investing activities - discontinued operations | -313 | 30,076 |
Cash provided by (used in) investing activities | -4,392 | 27,502 |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Borrowings on long-term debt | 234,022 | 269,633 |
Payments on long-term debt | -242,572 | -294,698 |
Employee stock purchases and options exercised | 1,949 | 1,157 |
Credit facility fees paid | -3,547 | |
Payment of initial fair value of acquisition-related contingent consideration | -3,428 | |
Other, net | -1,380 | |
Cash used in financing activities - continuing operations | -11,409 | -27,455 |
Effect of foreign exchange rate changes on cash and cash equivalents | -2,902 | 2,532 |
Net decrease in cash and cash equivalents | -25,959 | -32,539 |
Cash and cash equivalents, beginning of period | 58,849 | 65,567 |
Cash and cash equivalents, end of period | $32,890 | $33,028 |
Basis_of_Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2013 | |
Basis of Presentation | |
Basis of Presentation | (1) Basis of Presentation |
The accompanying unaudited interim consolidated financial statements of Ciber, Inc. and its subsidiaries (together, “Ciber,” “the Company,” “we,” “our” or “us”) have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for quarterly reports on Form 10-Q and do not include all of the information and note disclosures required by U.S. generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. These consolidated financial statements should therefore be read in conjunction with the consolidated financial statements and notes thereto for the fiscal year ended December 31, 2012, included in our Annual Report on Form 10-K filed with the SEC. The accompanying unaudited interim consolidated financial statements have been prepared in accordance with U.S. GAAP and include all adjustments of a normal, recurring nature that are, in the opinion of management, necessary to present fairly the financial position and results of operations for the interim periods presented. The results of operations for an interim period are not necessarily indicative of the results of operations for a full fiscal year. | |
Recently Issued Accounting Pronouncements — In March 2013, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2013-05, Foreign Currency Matters (Topic 830)-Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity, (“ASU 2013-05”). This amendment clarifies the applicable guidance for the release of cumulative translation adjustment into net earnings. When an entity ceases to have a controlling financial interest in a subsidiary or group of assets within a foreign entity, the entity is required to apply the guidance in FASB Accounting Standards Codification Topic 830-30 to release any related cumulative translation adjustment into net earnings. ASU 2013-05 is effective prospectively for fiscal years, and interim reporting periods within those years, beginning after December 15, 2013. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements. | |
In July 2013, the FASB issued Accounting Standards Update No. 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists, (“ASU 2013-11”). The objective of this update is to eliminate the diversity in practice in the presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss or a tax credit carryforward exists. The amendments in this update require an entity to present an unrecognized tax benefit in the financial statements as a reduction to a deferred tax asset for those instances described above, except in certain situations discussed in the update. ASU 2013-11 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements. | |
Fair Value — The carrying value of the outstanding borrowings under the ABL Facility, as defined in Note 5, approximates its fair value as (1) it is based on a variable rate that changes based on market conditions and (2) the margin applied to the variable rate is based on Ciber’s credit risk, which has not changed since entering into the facility in May 2012. If Ciber’s credit risk were to change, we would estimate the fair value of our borrowings using a discounted cash flow analysis based on current rates expected to be available from the lender for similar types of debt. The inputs used to establish the fair value of the Credit Agreement are considered to be Level 2 inputs, which include inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Within our goodwill impairment analysis, as discussed in Note 4, the discounted cash flow method (income approach) and market approach incorporates various level 3 inputs including projected revenue growth rates, earnings margins, and the present value, based on the discount rate and terminal growth rate, of forecasted cash flows. Restructuring liabilities for office closures are initially recorded at estimated fair value utilizing level 3 assumptions, including an estimate of sublease income which is subject to adjustment in future periods if assumptions change. | |
Acquisition Consideration — On May 31, 2013, we paid $7.1 million for the final amount of the previously agreed to deferred consideration related to our 2010 acquisition of Segmenta A/S in Denmark. | |
Noncontrolling interests — In June 2013, we entered into an agreement to purchase all of the noncontrolling interests of one of our foreign subsidiaries for future cash payments of approximately $7.3 million. The payments are scheduled to occur in the fourth quarter of 2013 and 2014, and the second quarter of 2015. Effective with the date of entering into this agreement, we derecognized the previously recorded noncontrolling interests relating to this subsidiary and recorded a liability for the present value of future cash payments on our consolidated balance sheet. We recorded the excess of the present value of future cash payments over the book value of noncontrolling interests as a reduction to Ciber, Inc. shareholders’ equity. | |
Discontinued_Operations
Discontinued Operations | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Discontinued Operations | ||||||||||||||
Discontinued Operations | (2) Discontinued Operations | |||||||||||||
2013 — During the second quarter of 2013, we closed down our Russian operations and met the criteria for this business to be reported as a discontinued operation. Accordingly, the operations and cash flows were removed from our consolidated operating results. | ||||||||||||||
2012 — On March 9, 2012, we sold substantially all of the assets and certain liabilities of our Federal division. Also, on October 15, 2012, we sold certain contracts and related property and equipment and certain other assets associated with our information technology outsourcing practice. Effective with meeting the discontinued operations criteria, the operations and cash flows of these sold businesses were removed from our consolidated operating results. | ||||||||||||||
The following table summarizes the operating results of the discontinued operations during the three and nine months ended September 30, 2013 and 2012. | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
(In thousands) | ||||||||||||||
Total revenues | $ | — | $ | 21,348 | $ | 5,424 | $ | 82,165 | ||||||
Operating expenses | 952 | 23,345 | 10,731 | 84,467 | ||||||||||
Operating loss from discontinued operations | (952 | ) | (1,997 | ) | (5,307 | ) | (2,302 | ) | ||||||
Interest and other expense | — | — | — | 90 | ||||||||||
Loss from discontinued operations before income taxes | (952 | ) | (1,997 | ) | (5,307 | ) | (2,392 | ) | ||||||
Income tax expense | — | 202 | 230 | 907 | ||||||||||
Loss from discontinued operations, net of taxes | (952 | ) | (2,199 | ) | (5,537 | ) | (3,299 | ) | ||||||
Loss on sale | — | (8,361 | ) | 48 | (7,441 | ) | ||||||||
Income tax benefit | — | (1,050 | ) | — | (850 | ) | ||||||||
Loss on sale, net of income taxes | — | (7,311 | ) | 48 | (6,591 | ) | ||||||||
Total loss from discontinued operations, net of income taxes | $ | (952 | ) | $ | (9,510 | ) | $ | (5,489 | ) | $ | (9,890 | ) |
Earnings_Loss_Per_Share
Earnings (Loss) Per Share | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Earnings (Loss) Per Share | ||||||||||||||
Earnings (Loss) Per Share | (3) Earnings (Loss) Per Share | |||||||||||||
Our computation of earnings (loss) per share — basic and diluted is as follows: | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
(In thousands, except per share amounts) | ||||||||||||||
Numerator: | ||||||||||||||
Net income (loss) from continuing operations | $ | (13,513 | ) | $ | 195 | $ | (9,129 | ) | $ | 1,903 | ||||
Net income attributable to noncontrolling interests | 4 | 134 | 4 | 400 | ||||||||||
Net income (loss) attributable to Ciber, Inc. from continuing operations | (13,517 | ) | 61 | (9,133 | ) | 1,503 | ||||||||
Loss from discontinued operations, net of income tax | (952 | ) | (9,510 | ) | (5,489 | ) | (9,890 | ) | ||||||
Net loss attributable to Ciber, Inc. | $ | (14,469 | ) | $ | (9,449 | ) | $ | (14,622 | ) | $ | (8,387 | ) | ||
Denominator: | ||||||||||||||
Basic weighted average shares outstanding | 75,070 | 73,276 | 74,611 | 73,008 | ||||||||||
Dilutive effect of employee stock plans | — | 371 | — | 490 | ||||||||||
Diluted weighted average shares outstanding | 75,070 | 73,647 | 74,611 | 73,498 | ||||||||||
Basic and diluted earnings (loss) per share attributable to Ciber, Inc.: | ||||||||||||||
Continuing operations | $ | (0.18 | ) | $ | — | $ | (0.12 | ) | $ | 0.02 | ||||
Discontinued operations | (0.01 | ) | (0.13 | ) | (0.08 | ) | (0.13 | ) | ||||||
Basic and diluted loss per share attributable to Ciber, Inc. | $ | (0.19 | ) | $ | (0.13 | ) | $ | (0.20 | ) | $ | (0.11 | ) | ||
Anti-dilutive securities omitted from the calculation | 6,541 | 8,103 | 6,088 | 8,217 | ||||||||||
Dilutive securities, including stock options and restricted stock units, are excluded from the diluted weighted average shares outstanding computation in periods in which they have an anti-dilutive effect, such as when we report a net loss attributable to Ciber, Inc. from continuing operations, or when stock options have an exercise price that is greater than the average market price of Ciber common stock during the period. |
Goodwill
Goodwill | 9 Months Ended | ||||||||||
Sep. 30, 2013 | |||||||||||
Goodwill | |||||||||||
Goodwill | (4) Goodwill | ||||||||||
We perform our annual impairment analysis of goodwill as of June 30 each year or more often if there are indicators of impairment present. We test each of our reporting units for goodwill impairment. Our reporting units are the same as our operating divisions and reportable segments. The goodwill impairment test requires a two-step process. The first step consists of comparing the estimated fair value of each reporting unit with its carrying amount, including goodwill. If the estimated fair value of a reporting unit exceeds its carrying value, then it is not considered impaired and no further analysis is required. If step one indicates that the estimated fair value of a reporting unit is less than its carrying value, then impairment potentially exists and the second step is performed to measure the amount of goodwill impairment. Goodwill impairment exists when the estimated implied fair value of a reporting unit’s goodwill is less than its carrying value. | |||||||||||
We compared the carrying values of our International and North America reporting units to their estimated fair values at June 30, 2013. We estimated the fair value of each reporting unit based on a weighting of both the income approach and the market approach. The discounted cash flows for each reporting unit serve as the primary basis for the income approach, and were based on discrete financial forecasts developed by management. Cash flows beyond the discrete forecast period of five years were estimated using the perpetuity growth method calculation. The annual average revenue growth rates forecasted for our reporting units for the first five years of our projections were approximately 4%. We have projected a minor amount of operating profit margin improvement based on expected margin benefits from certain internal initiatives. The terminal value was calculated assuming projected growth rates of 3% after five years, which reflects our estimate of minimum long-term growth in IT spending. The income approach valuations also included each reporting unit’s estimated weighted average cost of capital, which were 13.0% and 14.5% for International and North America, respectively. The market approach applied pricing multiples derived from publicly-traded companies that are comparable to the respective reporting units to determine their values. For our International and North America reporting units, we used enterprise value/revenue multiples of 0.3 and 0.35, respectively, and enterprise value/EBITDA multiples of 5.5 and 5, respectively, in order to value each of our reporting units under the market approach. In addition, the fair value under the market approach included a control premium of 35%. The control premium was determined based on a review of comparative market transactions. Publicly-available information regarding our market capitalization was also considered in assessing the reasonableness of the cumulative fair values of our reporting units. | |||||||||||
As a result of the first step of our goodwill impairment test as of June 30, 2013, we estimated that the fair values for our International and North America reporting units exceeded their carrying amounts by 16% and 19%, respectively, thus no impairment was indicated. We have updated our cash flow forecasts and our other assumptions used to calculate the estimated fair value of our reporting units to account for our beliefs and expectations of the current business environment. While we believe our estimates are appropriate based on our view of current business trends, no assurance can be provided that impairment charges will not be required in the future. | |||||||||||
The changes in the carrying amount of goodwill during the nine months ended September 30, 2013, were as follows: | |||||||||||
International | North America | Total | |||||||||
(In thousands) | |||||||||||
Balance at January 1, 2013 | $ | 142,918 | $ | 133,681 | $ | 276,599 | |||||
Effect of foreign exchange rate changes | 1,460 | — | 1,460 | ||||||||
Other | 756 | — | 756 | ||||||||
Balance at September 30, 2013 | $ | 145,134 | $ | 133,681 | $ | 278,815 |
Borrowings
Borrowings | 9 Months Ended |
Sep. 30, 2013 | |
Borrowings | |
Borrowings | (5) Borrowings |
On May 7, 2012, we entered into a Credit Agreement (the “Credit Agreement”) with Wells Fargo Bank, N.A. The Credit Agreement initially provided for (1) an asset-based revolving line of credit of up to $60 million (the “ABL Facility”), with the amount available for borrowing at any time under such line of credit determined according to a borrowing base valuation of eligible account receivables (the borrowing base was $50.5 million at September 30, 2013), and (2) a $7.5 million term loan (the “Term Loan”). On March 29, 2013, we used funds available under the ABL Facility to pay down the Term Loan in full and therefore, as of September 30, 2013, only the ABL Facility was outstanding. Because the Term Loan was paid off, we are no longer required to comply with any specific financial covenants. The ABL Facility provides for borrowings in the United States, the Netherlands, the United Kingdom and Germany and matures on May 7, 2017. Under the ABL Facility, Wells Fargo will have dominion over the cash receipts related to any U.K., Dutch and German borrowings. At September 30, 2013, we had $3.2 million of foreign borrowings that were subject to the bank’s dominion and are classified as a current liability on our balance sheet. As of September 30, 2013, we had a total of $17.6 million outstanding under the ABL Facility. | |
Income_Taxes
Income Taxes | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Income Taxes | ||||||||||||||
Income Taxes | (6) Income Taxes | |||||||||||||
Current period U.S. and foreign income (loss) before income taxes as well as income tax expense (benefit) were as follows: | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
(In thousands) | ||||||||||||||
Income (loss) from continuing operations before income taxes: | ||||||||||||||
U.S. | $ | (5,667 | ) | $ | (358 | ) | $ | (3,672 | ) | $ | (7,714 | ) | ||
Foreign | (8,308 | ) | 3,054 | (1,335 | ) | 18,538 | ||||||||
Total | $ | (13,975 | ) | $ | 2,696 | $ | (5,007 | ) | $ | 10,824 | ||||
Income tax expense (benefit): | ||||||||||||||
U.S. | $ | 550 | $ | 1,509 | $ | 2,930 | $ | 4,296 | ||||||
Foreign | (1,012 | ) | 992 | 1,192 | 4,625 | |||||||||
Total | $ | (462 | ) | $ | 2,501 | $ | 4,122 | $ | 8,921 | |||||
Due to our history of domestic losses, in 2011 we recorded a full valuation allowance for all U.S. net deferred tax assets, including our net operating loss and tax credit carryforwards. As a result, we cannot record any tax benefits for additional U.S. incurred losses and any U.S. income is offset by a reduction in valuation allowance. Irrespective of our income or loss levels, we continue to record U.S. deferred tax expense related to tax-basis goodwill amortization. | ||||||||||||||
The effective rate on our foreign tax expense varies with the mix of income and losses across multiple tax jurisdictions with most statutory tax rates varying from 23% to 33%. The reduction of foreign pre-tax income from continuing operations from 2012 to 2013 is related to an overall decrease in profitability of the business, including the impact of restructuring costs, and the implementation of new transfer pricing practices. The foreign tax expense through the third quarter of 2013 is primarily a result of the mix of income and losses across jurisdictions including losses in certain countries where no tax benefit can be recognized due to full valuation allowances. | ||||||||||||||
Restructuring_Charges
Restructuring Charges | 9 Months Ended | ||||||||||
Sep. 30, 2013 | |||||||||||
Restructuring Charges | |||||||||||
Restructuring Charges | (7) Restructuring Charges | ||||||||||
On July 30, 2013, we approved a restructuring plan primarily focused on our International operations (“the 2013 Plan”). The goal of the 2013 Plan is to improve utilization, strategically engage our lower-cost off-shore and near-shore resources, and centralize management of administrative functions in key markets to leverage shared services functions. We expect the restructuring to impact approximately 220 employees. The 2013 Plan began in the third quarter of 2013 and is expected to be completed in the first half of 2014. We estimate the total amount of the restructuring charges for the 2013 Plan will be approximately $13 million (of which approximately $12 million has been incurred to date), substantially all of which will be settled in cash. The charges associated with the 2013 Plan are substantially all related to personnel severance and related employee benefit costs. | |||||||||||
The changes in our 2013 Plan restructuring liabilities, which are recorded in other accrued expenses, during the three months ended September 30, 2013 are as follows: | |||||||||||
2013 Plan | |||||||||||
(In thousands) | |||||||||||
Restructuring liability, as of July 1, 2013 | $ | — | |||||||||
Restructuring charges | 11,786 | ||||||||||
Non-cash items | (137 | ) | |||||||||
Cash paid | (1,865 | ) | |||||||||
Foreign exchange rate changes | 187 | ||||||||||
Restructuring liability, as of September 30, 2013 | $ | 9,971 | |||||||||
Restructuring charges by segment are as follows: | |||||||||||
Three Months | Total | ||||||||||
Ended | Anticipated | ||||||||||
September 30, | Charges | ||||||||||
2013 | |||||||||||
(In thousands) | |||||||||||
North America | $ | 660 | $ | 700 | |||||||
International | 10,484 | 11,645 | |||||||||
Other | 54 | 55 | |||||||||
Corporate | 588 | 600 | |||||||||
Total | $ | 11,786 | $ | 13,000 | |||||||
On November 5, 2012, we approved a company restructuring plan (“the 2012 Plan”). The restructuring activities commenced in the fourth quarter of 2012 and relate primarily to the consolidation of our real estate footprint, as well as organizational changes designed to simplify business processes, move decision-making closer to the marketplace, and create operating efficiencies. As of September 30, 2013, all restructuring actions associated with this plan have been completed. Total restructuring charges associated with the 2012 Plan are $11 million, of which approximately $1 million are non-cash charges related to stock compensation and lease-related expenses. The total restructuring expenses for the 2012 Plan include approximately $7 million related to personnel severance and related benefits primarily in our International segment, and approximately $4 million related to the closure of 17 offices and the consolidation of those locations into other existing Ciber locations, mostly in North America. | |||||||||||
The changes in our restructuring liabilities, which are recorded in other accrued expenses, during the nine months ended September 30, 2013 are as follows: | |||||||||||
Employee | Office Closures | Total | |||||||||
Severance and | |||||||||||
Termination | |||||||||||
(In thousands) | |||||||||||
Restructuring liability, as of January 1, 2013 | $ | 3,556 | $ | 1,532 | $ | 5,088 | |||||
Restructuring charges | 411 | 2,756 | 3,167 | ||||||||
Non-cash items | — | 510 | 510 | ||||||||
Cash paid | (3,746 | ) | (1,443 | ) | (5,189 | ) | |||||
Foreign exchange rate changes | (75 | ) | 13 | (62 | ) | ||||||
Restructuring liability, as of September 30, 2013 | $ | 146 | $ | 3,368 | $ | 3,514 | |||||
Restructuring charges by segment are as follows: | |||||||||||
Three Months | Nine Months | Plan to Date (1) | |||||||||
Ended | Ended | ||||||||||
September 30, | September 30, | ||||||||||
2013 | 2013 | ||||||||||
(In thousands) | |||||||||||
North America | $ | 262 | $ | 158 | $ | 1,622 | |||||
International | 161 | 1,091 | 6,865 | ||||||||
Corporate (2) | 1,791 | 1,918 | 2,661 | ||||||||
Total | $ | 2,214 | $ | 3,167 | $ | 11,148 | |||||
(1) Our restructuring charges, particularly lease-related office closure costs, are subject to estimate. If we are unable to find tenants for vacated offices or sub-lease terms are different from our estimates, our actual restructuring charges will differ from our current estimates. | |||||||||||
(2) 2012 corporate restructuring charges consist of share-based compensation expenses associated with severance for employees in our International division. Share-based compensation is not charged to operating divisions, but rather is recorded as part of our corporate expenses. 2013 corporate restructuring charges include costs for administrative facility consolidation. | |||||||||||
Segment_Information
Segment Information | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Segment Information | ||||||||||||||
Segment Information | (8) Segment Information | |||||||||||||
The following presents financial information about our reportable segments: | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
(In thousands) | ||||||||||||||
Revenues: | ||||||||||||||
International | $ | 110,879 | $ | 102,227 | $ | 337,489 | $ | 321,740 | ||||||
North America | 104,865 | 109,346 | 318,793 | 325,319 | ||||||||||
Other | 833 | 802 | 2,575 | 2,309 | ||||||||||
Inter-segment | (1,520 | ) | (1,159 | ) | (3,864 | ) | (3,308 | ) | ||||||
Total revenues | $ | 215,057 | $ | 211,216 | $ | 654,993 | $ | 646,060 | ||||||
Operating income (loss) from continuing operations: | ||||||||||||||
International | $ | 4,577 | $ | 3,890 | $ | 15,528 | $ | 16,798 | ||||||
North America | 8,506 | 7,825 | 25,104 | 22,443 | ||||||||||
Other | 44 | 196 | 162 | 326 | ||||||||||
Corporate expenses | (12,596 | ) | (7,517 | ) | (29,489 | ) | (22,482 | ) | ||||||
Unallocated results of discontinued operations | — | 60 | — | (562 | ) | |||||||||
Earnings before interest, taxes, amortization, and restructuring | 531 | 4,454 | 11,305 | 16,523 | ||||||||||
Amortization of intangible assets | — | (157 | ) | — | (482 | ) | ||||||||
Restructuring charges | (14,000 | ) | — | (14,953 | ) | — | ||||||||
Total operating income (loss) from continuing operations | $ | (13,469 | ) | $ | 4,297 | $ | (3,648 | ) | $ | 16,041 |
Contingencies
Contingencies | 9 Months Ended |
Sep. 30, 2013 | |
Contingencies | |
Contingencies | (9) Contingencies |
We are subject to various claims and litigation that are in the ordinary course of business. The litigation process is inherently uncertain. Therefore, the outcome of such matters is not predictable. | |
We are engaged in legal proceedings in Germany in connection with our acquisition of a controlling interest in Novasoft AG (now known as Ciber AG) in 2004. In August 2006, we completed a buy-out of the remaining minority shareholders of Novasoft. Certain of those former minority shareholders challenged the adequacy of the buy-out consideration by initiating a review by the district court in Mannheim, Germany. The court-appointed independent experts have evaluated the consideration and claims of the minority shareholders. In June 2013, the district court rendered its decision to increase the consideration by an aggregate of €525 thousand. The minority shareholders have appealed that decision. If the appellate court upholds an award of additional consideration, such consideration will increase the goodwill associated with the acquisition and we will be liable for that additional consideration as well as the costs associated with these proceedings. We are unable to predict the outcome of this matter. | |
CamSoft, Inc., a Louisiana corporation, claims that it had a role in an alleged joint venture that developed a wireless network for video camera surveillance systems to be deployed to municipal governments. The lawsuit, CamSoft Data Systems, Inc. v. Southern Electronics, et al., was filed initially in October 2009 in Louisiana state court against numerous defendants, including Ciber. The lawsuit was subsequently removed to federal court in the Middle District of Louisiana and the complaint was amended to include additional defendants and causes of action including antitrust claims, civil RICO claims, unfair trade practices, trade secret, fraud, unjust enrichment, and conspiracy claims. The suit includes many of the same parties involved in related litigation in the state court in New Orleans that was concluded in 2009 when Ciber settled the New Orleans suit with the plaintiffs, Active Solutions and Southern Electronics, who are now co-defendants in the current lawsuit and CamSoft’s former alleged joint venturers. Ciber is vigorously defending the allegations. The matter is ongoing in the Fifth Circuit Court of Appeals. We are unable to predict the outcome of this litigation. | |
On October 28, 2011, a putative securities class action lawsuit, Weston v. Ciber, Inc. et al., was filed in the United States District Court for the District of Colorado against Ciber, its current Chief Executive Officer David C. Peterschmidt, former Executive Vice President and Chief Financial Officer (“CFO”) Claude J. Pumilia, and former CFO Peter H. Cheesbrough (the “Class Action”). The Class Action purports to have been filed on behalf of all holders of Ciber common stock between December 15, 2010, and August 3, 2011, by alleged stockholder and plaintiff, Burt Weston. The Class Action generally alleges that defendants Ciber, Mr. Peterschmidt, Mr. Pumilia and Mr. Cheesbrough violated Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 10b-5 thereunder. Specifically, the complaint alleges that the defendants disseminated or approved alleged false statements concerning the Company’s outlook and forecast for fiscal year 2011 in: (1) the Company’s 8-K filed with the SEC and press conference held with investors on December 15, 2010; (2) the Company’s press release and earnings conference call on February 22, 2011; (3) the Company’s 10-K for fiscal year 2010 filed with the SEC on February 25, 2011; and (4) the Company’s press release, earnings conference call, and Form 10-Q for first quarter 2011 filed with the SEC on May 3, 2011. The complaint also generally alleges that the defendants violated Section 20(a) of the Exchange Act. Specifically, the complaint alleges that the defendants acted as controlling persons of Ciber within the meaning of Section 20(a) of the Exchange Act by reason of their positions with the Company. The Class Action seeks, among other things: (1) an order from the Court declaring the complaint to be a proper class action pursuant to Rule 23 of the Federal Rules of Civil Procedure and certifying plaintiff as a representative of the purported class; (2) awarding plaintiff and the members of the class damages, including interest; (3) awarding plaintiff reasonable costs and attorneys’ fees; and (4) awarding such other relief as the Court may deem just and proper. The Court appointed Mr. Weston and City of Roseville Employees’ Retirement System as lead plaintiffs and the law firms of Robbins, Geller Rudman & Dowd LLP and Robbins Umeda LLP as lead plaintiffs’ counsel on January 31, 2012. Lead plaintiffs filed an amended complaint in early April 2012. The defendants have filed a motion to dismiss, which is currently pending. The Company believes that the Class Action is without merit and intends to defend against it vigorously. We are unable to predict the outcome of this litigation. | |
On February 7, 2012, a purported verified shareholder derivative lawsuit, Seni v. Peterschmidt. et al., was filed in the United States District Court for the District of Colorado (the “Derivative Action”) against Messrs. Peterschmidt, Pumilia, and Cheesbrough, and Ciber’s then-current board of directors: Messrs. Bobby G. Stevenson, Jean-Francois Heitz, Paul A. Jacobs, Stephen S. Kurtz, Kurt J. Lauk, Archibald J. McGill, and James C. Spira. Ciber is named as a nominal defendant. The Derivative Action is largely based on the same alleged facts as the Class Action. The complaint in the Derivative Action generally alleges that the individual defendants breached their fiduciary duties of good faith, fair dealing, loyalty, due care, reasonable inquiry, oversight, and supervision by approving the issuance of allegedly false statements that misrepresented material information about the finances and operations of the Company. The Derivative Complaint also alleges that the individual defendants were unjustly enriched as a result of the compensation they received while breaching their fiduciary duties to the Company. The complaint seeks, among other things: (1) damages for losses sustained by the Company as a result of the individual defendants’ breaches; (2) directives to “reform and improve” the company’s governance; (3) restitution to the Company from the individual defendants; (4) an award to plaintiff of reasonable costs and attorneys’ fees; and (5) such other relief as the Court may deem just and proper. On April 30, 2012, the Court granted Ciber’s Motion to Stay Discovery and Vacate the Scheduling Conference and Related Deadlines. The defendants filed a motion to dismiss, which was granted in March 2013. Pursuant to the dismissal order, the plaintiffs were allowed to amend the complaint, the defendants then filed a new motion to dismiss, and the matter is ongoing. The Company believes this litigation is without merit and intends to defend against it vigorously. We are unable to predict the outcome of this litigation. | |
Basis_of_Presentation_Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Basis of Presentation | |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements — In March 2013, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2013-05, Foreign Currency Matters (Topic 830)-Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity, (“ASU 2013-05”). This amendment clarifies the applicable guidance for the release of cumulative translation adjustment into net earnings. When an entity ceases to have a controlling financial interest in a subsidiary or group of assets within a foreign entity, the entity is required to apply the guidance in FASB Accounting Standards Codification Topic 830-30 to release any related cumulative translation adjustment into net earnings. ASU 2013-05 is effective prospectively for fiscal years, and interim reporting periods within those years, beginning after December 15, 2013. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements. |
In July 2013, the FASB issued Accounting Standards Update No. 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists, (“ASU 2013-11”). The objective of this update is to eliminate the diversity in practice in the presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss or a tax credit carryforward exists. The amendments in this update require an entity to present an unrecognized tax benefit in the financial statements as a reduction to a deferred tax asset for those instances described above, except in certain situations discussed in the update. ASU 2013-11 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements. | |
Fair Value | Fair Value — The carrying value of the outstanding borrowings under the ABL Facility, as defined in Note 5, approximates its fair value as (1) it is based on a variable rate that changes based on market conditions and (2) the margin applied to the variable rate is based on Ciber’s credit risk, which has not changed since entering into the facility in May 2012. If Ciber’s credit risk were to change, we would estimate the fair value of our borrowings using a discounted cash flow analysis based on current rates expected to be available from the lender for similar types of debt. The inputs used to establish the fair value of the Credit Agreement are considered to be Level 2 inputs, which include inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Within our goodwill impairment analysis, as discussed in Note 4, the discounted cash flow method (income approach) and market approach incorporates various level 3 inputs including projected revenue growth rates, earnings margins, and the present value, based on the discount rate and terminal growth rate, of forecasted cash flows. Restructuring liabilities for office closures are initially recorded at estimated fair value utilizing level 3 assumptions, including an estimate of sublease income which is subject to adjustment in future periods if assumptions change. |
Goodwill_Policies
Goodwill (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Goodwill | |
Goodwill | We perform our annual impairment analysis of goodwill as of June 30 each year or more often if there are indicators of impairment present. We test each of our reporting units for goodwill impairment. Our reporting units are the same as our operating divisions and reportable segments. The goodwill impairment test requires a two-step process. The first step consists of comparing the estimated fair value of each reporting unit with its carrying amount, including goodwill. If the estimated fair value of a reporting unit exceeds its carrying value, then it is not considered impaired and no further analysis is required. If step one indicates that the estimated fair value of a reporting unit is less than its carrying value, then impairment potentially exists and the second step is performed to measure the amount of goodwill impairment. Goodwill impairment exists when the estimated implied fair value of a reporting unit’s goodwill is less than its carrying value. |
Discontinued_Operations_Tables
Discontinued Operations (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Discontinued Operations | ||||||||||||||
Schedule of operating results of the discontinued operations | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
(In thousands) | ||||||||||||||
Total revenues | $ | — | $ | 21,348 | $ | 5,424 | $ | 82,165 | ||||||
Operating expenses | 952 | 23,345 | 10,731 | 84,467 | ||||||||||
Operating loss from discontinued operations | (952 | ) | (1,997 | ) | (5,307 | ) | (2,302 | ) | ||||||
Interest and other expense | — | — | — | 90 | ||||||||||
Loss from discontinued operations before income taxes | (952 | ) | (1,997 | ) | (5,307 | ) | (2,392 | ) | ||||||
Income tax expense | — | 202 | 230 | 907 | ||||||||||
Loss from discontinued operations, net of taxes | (952 | ) | (2,199 | ) | (5,537 | ) | (3,299 | ) | ||||||
Loss on sale | — | (8,361 | ) | 48 | (7,441 | ) | ||||||||
Income tax benefit | — | (1,050 | ) | — | (850 | ) | ||||||||
Loss on sale, net of income taxes | — | (7,311 | ) | 48 | (6,591 | ) | ||||||||
Total loss from discontinued operations, net of income taxes | $ | (952 | ) | $ | (9,510 | ) | $ | (5,489 | ) | $ | (9,890 | ) |
Earnings_Loss_Per_Share_Tables
Earnings (Loss) Per Share (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Earnings (Loss) Per Share | ||||||||||||||
Schedule of computation of earnings (loss) per share - basic and diluted | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
(In thousands, except per share amounts) | ||||||||||||||
Numerator: | ||||||||||||||
Net income (loss) from continuing operations | $ | (13,513 | ) | $ | 195 | $ | (9,129 | ) | $ | 1,903 | ||||
Net income attributable to noncontrolling interests | 4 | 134 | 4 | 400 | ||||||||||
Net income (loss) attributable to Ciber, Inc. from continuing operations | (13,517 | ) | 61 | (9,133 | ) | 1,503 | ||||||||
Loss from discontinued operations, net of income tax | (952 | ) | (9,510 | ) | (5,489 | ) | (9,890 | ) | ||||||
Net loss attributable to Ciber, Inc. | $ | (14,469 | ) | $ | (9,449 | ) | $ | (14,622 | ) | $ | (8,387 | ) | ||
Denominator: | ||||||||||||||
Basic weighted average shares outstanding | 75,070 | 73,276 | 74,611 | 73,008 | ||||||||||
Dilutive effect of employee stock plans | — | 371 | — | 490 | ||||||||||
Diluted weighted average shares outstanding | 75,070 | 73,647 | 74,611 | 73,498 | ||||||||||
Basic and diluted earnings (loss) per share attributable to Ciber, Inc.: | ||||||||||||||
Continuing operations | $ | (0.18 | ) | $ | — | $ | (0.12 | ) | $ | 0.02 | ||||
Discontinued operations | (0.01 | ) | (0.13 | ) | (0.08 | ) | (0.13 | ) | ||||||
Basic and diluted loss per share attributable to Ciber, Inc. | $ | (0.19 | ) | $ | (0.13 | ) | $ | (0.20 | ) | $ | (0.11 | ) | ||
Anti-dilutive securities omitted from the calculation | 6,541 | 8,103 | 6,088 | 8,217 |
Goodwill_Tables
Goodwill (Tables) | 9 Months Ended | ||||||||||
Sep. 30, 2013 | |||||||||||
Goodwill | |||||||||||
Schedule of changes in the carrying amount of goodwill | |||||||||||
International | North America | Total | |||||||||
(In thousands) | |||||||||||
Balance at January 1, 2013 | $ | 142,918 | $ | 133,681 | $ | 276,599 | |||||
Effect of foreign exchange rate changes | 1,460 | — | 1,460 | ||||||||
Other | 756 | — | 756 | ||||||||
Balance at September 30, 2013 | $ | 145,134 | $ | 133,681 | $ | 278,815 |
Income_Taxes_Tables
Income Taxes (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Income Taxes | ||||||||||||||
Schedule of U.S. and foreign income (loss) before income taxes as well as income tax expense (benefit) | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
(In thousands) | ||||||||||||||
Income (loss) from continuing operations before income taxes: | ||||||||||||||
U.S. | $ | (5,667 | ) | $ | (358 | ) | $ | (3,672 | ) | $ | (7,714 | ) | ||
Foreign | (8,308 | ) | 3,054 | (1,335 | ) | 18,538 | ||||||||
Total | $ | (13,975 | ) | $ | 2,696 | $ | (5,007 | ) | $ | 10,824 | ||||
Income tax expense (benefit): | ||||||||||||||
U.S. | $ | 550 | $ | 1,509 | $ | 2,930 | $ | 4,296 | ||||||
Foreign | (1,012 | ) | 992 | 1,192 | 4,625 | |||||||||
Total | $ | (462 | ) | $ | 2,501 | $ | 4,122 | $ | 8,921 |
Restructuring_Charges_Tables
Restructuring Charges (Tables) | 9 Months Ended | ||||||||||
Sep. 30, 2013 | |||||||||||
2013 Plan | |||||||||||
Restructuring Charges | |||||||||||
Schedule of changes in the restructuring liabilities, which are recorded in other accrued expenses | |||||||||||
2013 Plan | |||||||||||
(In thousands) | |||||||||||
Restructuring liability, as of July 1, 2013 | $ | — | |||||||||
Restructuring charges | 11,786 | ||||||||||
Non-cash items | (137 | ) | |||||||||
Cash paid | (1,865 | ) | |||||||||
Foreign exchange rate changes | 187 | ||||||||||
Restructuring liability, as of September 30, 2013 | $ | 9,971 | |||||||||
Schedule of restructuring charges by segment | |||||||||||
Three Months | Total | ||||||||||
Ended | Anticipated | ||||||||||
September 30, | Charges | ||||||||||
2013 | |||||||||||
(In thousands) | |||||||||||
North America | $ | 660 | $ | 700 | |||||||
International | 10,484 | 11,645 | |||||||||
Other | 54 | 55 | |||||||||
Corporate | 588 | 600 | |||||||||
Total | $ | 11,786 | $ | 13,000 | |||||||
2012 Plan | |||||||||||
Restructuring Charges | |||||||||||
Schedule of changes in the restructuring liabilities, which are recorded in other accrued expenses | |||||||||||
Employee | Office Closures | Total | |||||||||
Severance and | |||||||||||
Termination | |||||||||||
(In thousands) | |||||||||||
Restructuring liability, as of January 1, 2013 | $ | 3,556 | $ | 1,532 | $ | 5,088 | |||||
Restructuring charges | 411 | 2,756 | 3,167 | ||||||||
Non-cash items | — | 510 | 510 | ||||||||
Cash paid | (3,746 | ) | (1,443 | ) | (5,189 | ) | |||||
Foreign exchange rate changes | (75 | ) | 13 | (62 | ) | ||||||
Restructuring liability, as of September 30, 2013 | $ | 146 | $ | 3,368 | $ | 3,514 | |||||
Schedule of restructuring charges by segment | |||||||||||
Three Months | Nine Months | Plan to Date (1) | |||||||||
Ended | Ended | ||||||||||
September 30, | September 30, | ||||||||||
2013 | 2013 | ||||||||||
(In thousands) | |||||||||||
North America | $ | 262 | $ | 158 | $ | 1,622 | |||||
International | 161 | 1,091 | 6,865 | ||||||||
Corporate (2) | 1,791 | 1,918 | 2,661 | ||||||||
Total | $ | 2,214 | $ | 3,167 | $ | 11,148 | |||||
(1) Our restructuring charges, particularly lease-related office closure costs, are subject to estimate. If we are unable to find tenants for vacated offices or sub-lease terms are different from our estimates, our actual restructuring charges will differ from our current estimates. | |||||||||||
(2) 2012 corporate restructuring charges consist of share-based compensation expenses associated with severance for employees in our International division. Share-based compensation is not charged to operating divisions, but rather is recorded as part of our corporate expenses. 2013 corporate restructuring charges include costs for administrative facility consolidation. |
Segment_Information_Tables
Segment Information (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Segment Information | ||||||||||||||
Schedule of financial information about reportable segments | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
(In thousands) | ||||||||||||||
Revenues: | ||||||||||||||
International | $ | 110,879 | $ | 102,227 | $ | 337,489 | $ | 321,740 | ||||||
North America | 104,865 | 109,346 | 318,793 | 325,319 | ||||||||||
Other | 833 | 802 | 2,575 | 2,309 | ||||||||||
Inter-segment | (1,520 | ) | (1,159 | ) | (3,864 | ) | (3,308 | ) | ||||||
Total revenues | $ | 215,057 | $ | 211,216 | $ | 654,993 | $ | 646,060 | ||||||
Operating income (loss) from continuing operations: | ||||||||||||||
International | $ | 4,577 | $ | 3,890 | $ | 15,528 | $ | 16,798 | ||||||
North America | 8,506 | 7,825 | 25,104 | 22,443 | ||||||||||
Other | 44 | 196 | 162 | 326 | ||||||||||
Corporate expenses | (12,596 | ) | (7,517 | ) | (29,489 | ) | (22,482 | ) | ||||||
Unallocated results of discontinued operations | — | 60 | — | (562 | ) | |||||||||
Earnings before interest, taxes, amortization, and restructuring | 531 | 4,454 | 11,305 | 16,523 | ||||||||||
Amortization of intangible assets | — | (157 | ) | — | (482 | ) | ||||||||
Restructuring charges | (14,000 | ) | — | (14,953 | ) | — | ||||||||
Total operating income (loss) from continuing operations | $ | (13,469 | ) | $ | 4,297 | $ | (3,648 | ) | $ | 16,041 |
Basis_of_Presentation_Details
Basis of Presentation (Details) (Segmenta, USD $) | 0 Months Ended |
In Millions, unless otherwise specified | 31-May-13 |
Segmenta | |
Acquisitions | |
Deferred consideration | $7.10 |
Basis_of_Presentation_Details_
Basis of Presentation (Details 2) (Foreign Subsidiary, Scenario Forecast, USD $) | 9 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2013 |
Foreign Subsidiary | Scenario Forecast | |
Noncontrolling Interest | |
Future payments to purchase the noncontrolling interests of a foreign subsidiary | $7.30 |
Discontinued_Operations_Detail
Discontinued Operations (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Operating results of the discontinued operations included in the consolidated statements of operations | ||||
Total loss from discontinued operations, net of income taxes | ($952) | ($9,510) | ($5,489) | ($9,890) |
Federal division, IT Outsourcing Practice and Russian operations | ||||
Operating results of the discontinued operations included in the consolidated statements of operations | ||||
Total revenues | 21,348 | 5,424 | 82,165 | |
Operating expenses | 952 | 23,345 | 10,731 | 84,467 |
Operating loss from discontinued operations | -952 | -1,997 | -5,307 | -2,302 |
Interest and other expense | 90 | |||
Loss from discontinued operations before income taxes | -952 | -1,997 | -5,307 | -2,392 |
Income tax expense | 202 | 230 | 907 | |
Loss from discontinued operations, net of taxes | -952 | -2,199 | -5,537 | -3,299 |
Loss on sale | -8,361 | 48 | -7,441 | |
Income tax benefit | -1,050 | -850 | ||
Loss on sale, net of income taxes | -7,311 | 48 | -6,591 | |
Total loss from discontinued operations, net of income taxes | ($952) | ($9,510) | ($5,489) | ($9,890) |
Earnings_Loss_Per_Share_Detail
Earnings (Loss) Per Share (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Numerator: | ||||
Net income (loss) from continuing operations | ($13,513) | $195 | ($9,129) | $1,903 |
Net income attributable to noncontrolling interests | 4 | 134 | 4 | 400 |
Net income (loss) attributable to Ciber, Inc. from continuing operations | -13,517 | 61 | -9,133 | 1,503 |
Loss from discontinued operations, net of income tax | -952 | -9,510 | -5,489 | -9,890 |
NET LOSS ATTRIBUTABLE TO CIBER, INC. | ($14,469) | ($9,449) | ($14,622) | ($8,387) |
Denominator: | ||||
Basic weighted average shares outstanding | 75,070 | 73,276 | 74,611 | 73,008 |
Dilutive effect of employee stock plans (in shares) | 371 | 490 | ||
Diluted weighted average shares outstanding | 75,070 | 73,647 | 74,611 | 73,498 |
Basic and diluted earnings (loss) per share attributable to Ciber, Inc.: | ||||
Continuing operations (in dollars per share) | ($0.18) | ($0.12) | $0.02 | |
Discontinued operations (in dollars per share) | ($0.01) | ($0.13) | ($0.08) | ($0.13) |
Basic and diluted loss per share attributable to Ciber, Inc. | ($0.19) | ($0.13) | ($0.20) | ($0.11) |
Anti-dilutive securities omitted from the calculation (in shares) | 6,541 | 8,103 | 6,088 | 8,217 |
Goodwill_Details
Goodwill (Details) | 6 Months Ended |
Jun. 30, 2013 | |
Fair value assumptions | |
Discrete forecast period | 5 years |
Annual average revenue growth rate (as a percent) | 4.00% |
Projected growth rates after discrete forecast period (as a percent) | 3.00% |
Control premium (as a percent) | 35.00% |
International | |
Fair value assumptions | |
Weighted average cost of capital (as a percent) | 13.00% |
Enterprise value/revenue multiples | 0.3 |
Enterprise value/EBITDA multiples | 5.5 |
Percentage of excess of fair value of goodwill over carrying value | 16.00% |
North America | |
Fair value assumptions | |
Weighted average cost of capital (as a percent) | 14.50% |
Enterprise value/revenue multiples | 0.35 |
Enterprise value/EBITDA multiples | 5 |
Percentage of excess of fair value of goodwill over carrying value | 19.00% |
Goodwill_Details_2
Goodwill (Details 2) (USD $) | 9 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 |
International | North America | North America | ||
Changes in the carrying amount of goodwill | ||||
Balance at the beginning of the period | $276,599 | $142,918 | $133,681 | $133,681 |
Effect of foreign exchange rate changes | 1,460 | 1,460 | ||
Other | 756 | 756 | ||
Balance at the end of the period | $278,815 | $145,134 | $133,681 | $133,681 |
Borrowings_Details
Borrowings (Details) (USD $) | Sep. 30, 2013 |
In Millions, unless otherwise specified | |
Revolving credit facilities | |
Borrowings | |
Maximum borrowing capacity | $60 |
Amount of borrowing subject to the bank's dominion | 3.2 |
Amount outstanding | 17.6 |
Line of Credit Facility, Current borrowing base | 50.5 |
Term loans | |
Borrowings | |
Term Loan, face amount | $7.50 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Income (loss) from continuing operations before income taxes: | ||||
U.S. | ($5,667) | ($358) | ($3,672) | ($7,714) |
Foreign | -8,308 | 3,054 | -1,335 | 18,538 |
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | -13,975 | 2,696 | -5,007 | 10,824 |
Income tax expense (benefit): | ||||
U.S. | 550 | 1,509 | 2,930 | 4,296 |
Foreign | -1,012 | 992 | 1,192 | 4,625 |
Total | -462 | 2,501 | 4,122 | 8,921 |
Income Taxes | ||||
Foreign tax benefit recognized in certain countries | $0 | |||
Minimum | ||||
Income Taxes | ||||
Effective rate on foreign tax expense (as a percent) | 23.00% | |||
Maximum | ||||
Income Taxes | ||||
Effective rate on foreign tax expense (as a percent) | 33.00% |
Restructuring_Charges_Details
Restructuring Charges (Details) (USD $) | 3 Months Ended | 9 Months Ended | 2 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 11 Months Ended | 3 Months Ended | 9 Months Ended | 11 Months Ended | 3 Months Ended | 9 Months Ended | 11 Months Ended | 3 Months Ended | 9 Months Ended | 11 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | |
2013 Plan | 2013 Plan | 2013 Plan | 2013 Plan | 2013 Plan | 2013 Plan | 2013 Plan | 2013 Plan | 2013 Plan | 2013 Plan | 2013 Plan | 2012 Plan | 2012 Plan | 2012 Plan | 2012 Plan | 2012 Plan | 2012 Plan | 2012 Plan | 2012 Plan | 2012 Plan | 2012 Plan | 2012 Plan | 2012 Plan | 2012 Plan | 2012 Plan | 2012 Plan | |||
item | North America | North America | International | International | Other | Other | Corporate | Corporate | North America | North America | North America | International | International | International | Corporate | Corporate | Corporate | Employee Severance and Termination | Employee Severance and Termination | Office Closures | ||||||||
International | item | |||||||||||||||||||||||||||
Restructuring Charges | ||||||||||||||||||||||||||||
Expected number of employees to be impacted by the restructuring | 220 | |||||||||||||||||||||||||||
Total restructuring charges | $11,000,000 | $7,000,000 | $4,000,000 | |||||||||||||||||||||||||
Non-cash items related to stock compensation and lease | 1,000,000 | |||||||||||||||||||||||||||
Number of offices closed | 17 | |||||||||||||||||||||||||||
Changes in restructuring liabilities, recorded in other accrued expenses | ||||||||||||||||||||||||||||
Restructuring liability at the beginning of period | 5,088,000 | 3,556,000 | 1,532,000 | |||||||||||||||||||||||||
Restructuring charges | 14,000,000 | 14,953,000 | 11,786,000 | 660,000 | 10,484,000 | 54,000 | 588,000 | 2,214,000 | 3,167,000 | 262,000 | 158,000 | 161,000 | 1,091,000 | 1,791,000 | 1,918,000 | 411,000 | 2,756,000 | |||||||||||
Non-cash items | -137,000 | 510,000 | 510,000 | |||||||||||||||||||||||||
Cash paid | -1,865,000 | -5,189,000 | -3,746,000 | -1,443,000 | ||||||||||||||||||||||||
Foreign exchange rate changes | 187,000 | -62,000 | -75,000 | 13,000 | ||||||||||||||||||||||||
Restructuring liability at the end of period | 9,971,000 | 9,971,000 | 9,971,000 | 3,514,000 | 3,514,000 | 3,514,000 | 146,000 | 3,368,000 | ||||||||||||||||||||
Total Anticipated Charges | 13,000,000 | 700,000 | 11,645,000 | 55,000 | 600,000 | |||||||||||||||||||||||
Restructuring charges, incurred to date | $12,000,000 | $11,148,000 | $1,622,000 | $6,865,000 | $2,661,000 |
Segment_Information_Details
Segment Information (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Segment Information | ||||
Total revenues | $215,057 | $211,216 | $654,993 | $646,060 |
Earnings before interest, taxes, amortization, and restructuring | 531 | 4,454 | 11,305 | 16,523 |
Amortization of intangible assets | -157 | -482 | ||
Restructuring charges | -14,000 | -14,953 | ||
OPERATING INCOME (LOSS) FROM CONTINUING OPERATIONS | -13,469 | 4,297 | -3,648 | 16,041 |
Operating segment | International | ||||
Segment Information | ||||
Total revenues | 110,879 | 102,227 | 337,489 | 321,740 |
Earnings before interest, taxes, amortization, and restructuring | 4,577 | 3,890 | 15,528 | 16,798 |
Operating segment | North America | ||||
Segment Information | ||||
Total revenues | 104,865 | 109,346 | 318,793 | 325,319 |
Earnings before interest, taxes, amortization, and restructuring | 8,506 | 7,825 | 25,104 | 22,443 |
Operating segment | Other | ||||
Segment Information | ||||
Total revenues | 833 | 802 | 2,575 | 2,309 |
Earnings before interest, taxes, amortization, and restructuring | 44 | 196 | 162 | 326 |
Intersegment | ||||
Segment Information | ||||
Total revenues | -1,520 | -1,159 | -3,864 | -3,308 |
Corporate expenses | ||||
Segment Information | ||||
Earnings before interest, taxes, amortization, and restructuring | -12,596 | -7,517 | -29,489 | -22,482 |
Unallocated results of discontinued operations | ||||
Segment Information | ||||
Earnings before interest, taxes, amortization, and restructuring | $60 | ($562) |
Contingencies_Details
Contingencies (Details) (Legal proceedings in connection with acquisition of minority shareholders interest of Novasoft, EUR €) | 1 Months Ended |
In Thousands, unless otherwise specified | Jun. 30, 2013 |
Legal proceedings in connection with acquisition of minority shareholders interest of Novasoft | |
Contingencies | |
Increase in buy-out consideration awarded by district court | € 525 |