Attached files

file filename
8-K - 8-K - CMTSU Liquidation, Inc.a11-25800_38k.htm

Exhibit 99.1

 

GRAPHIC

 

 

Contact:

Gary Kohn

Robin Caputo

 

 

Investor Relations

Media Relations

 

 

303-625-5256

303-267-3876

 

 

gkohn@ciber.com

rcaputo@ciber.com

 

CIBER REPORTS THIRD QUARTER RESULTS

 

GREENWOOD VILLAGE, Colo., Nov. 1, 2011— CIBER, Inc. (NYSE: CBR), a global information technology consulting, services and outsourcing company, today reported results for the third quarter of 2011.

 

Highlights for the third quarter 2011 include:

 

·                  Revenue increased 2% to $270.7 million

·                  Gross margin of 25.4%

·                  Operating income of $7.9 million, with an operating margin of 2.9%

·                  Net income of $3.1 million, or $0.04 per share

·                  Cash on hand at quarter end of $52.8 million

 

Operational highlights for the quarter include:

 

·                  A new 3-year agreement with a NASDAQ-100 biotechnology company to provide Informatica and Business Objects platform support and development services.  This is a fully outsourced managed services agreement which will utilize CIBER’s offshore capabilities at go live.

·                  A multi application deployment of Lawson software for the City of Boise that includes human resource management, enterprise financial management, and supply chain management.  The project, Vision 2020, will streamline operations, reduce redundant systems, and make operations more cost effective.

·                  A new relationship with one of the largest and most respected investment management companies to support their SharePoint environment.

·                  CIBER was named a preferred IT service provider for German-based Deutsche Bahn, one of the world’s largest passenger and logistics service providers.

 

President and Chief Executive Officer Dave Peterschmidt said, “We continue to see progress in our operations as a result of the rigorous disciplines and fundamentals we have put in place.  Through these fundamentals, we protected our bottom line and grew operating profit 11% in the quarter, despite revenue softness.  We are a much more efficient company, with a lower risk profile, than we were just 18 months ago.  We remain hard at work on continuing to turn around our company and building value for CIBER’s shareholders.”

 

Claude Pumilia, Executive Vice President and Chief Financial Officer, commented, “We are pleased with the financial performance in the third quarter given where we are in our turnaround.  We believe that the disciplined approach we are taking across all aspects of our business is beginning to show results and will drive improved financial performance for the company going forward.  Additionally, we have brought to closure several of the problematic fixed-price contracts, and are managing the others within our expectations.”

 

Third Quarter Financial Results

 

Revenue of $270.7 million increased 2%, or declined 2% on a constant currency basis.  The International and ITO segments, which together comprised half of consolidated revenue, contributed to the revenue growth.

 

1



 

Gross margin for the third quarter was 25.4% compared to 24.8% in the same period last year.  Selling, general and administrative expenses (SG&A) in the quarter were 22.4% of revenue compared with 21.7% in the third quarter last year.

 

Third quarter operating income was $7.9 million, with an operating margin of 2.9%.  Operating income and margin improved compared to last year’s third quarter results of $7.1 million and 2.7%.

 

Net income for the third quarter was $3.1 million or $0.04 per share compared to $3.4 million or $0.05 per share in Q3 2010.  The year-over-year change was driven by higher tax and interest expense in Q3 2011.

 

The International division, the Company’s largest operating segment at 42% of consolidated revenue, delivered another quarter of solid results.  Revenue growth for the quarter was 23%, or 12% on a constant currency basis over the third quarter 2010.  Success within CIBER Managed Services and client wins, particularly within SAP, across Europe contributed to the revenue growth.  Operating margin for the segment was 5.2%, a 27 basis point improvement from last year’s third quarter.

 

The North American division saw revenue decline 15%.  Operating margin of 6.9% was down compared to last year’s third quarter mostly as a result of lower revenue.  The company has prudent initiatives underway within this division to optimizing the cost structure while continuing to fund growth initiatives.

 

Capital Deployment and Liquidity

 

CIBER’s total cash balance at September 30, 2011 was $52.8 million, most of which is in the International division.  Cash used by operating activities for the first nine months was $9.1 million.  Capital expenditures this year through September 30 totaled $8.5 million.

 

Days sales outstanding as of September 30, 2011 were 61 days, significantly reduced from last year’s third quarter of 75 days.

 

The total outstanding balance on the Senior Credit Facility at quarter end was $80.7 million.

 

Investor and Analyst Conference Call

 

CIBER President and Chief Executive Officer Dave Peterschmidt invites you to participate in a conference call today at 11:00 a.m. Eastern Time to discuss the Company’s financial results and outlook.

 

To participate in the conference call, dial 866-730-5766 (U.S.) or +1-857-350-1590 (outside the U.S.) ten minutes prior to the start of the call and provide the operator with the pass code 79983386.  This conference call will also be available via webcast at www.ciber.com/cbr.

 

A replay of the call and webcast will be available one hour after the call ends through December 1, 2011. To access the telephone replay, dial 888-286-8010 (U.S.) or +1-617-801-6888 (outside the U.S.) and use the pass code 67466310.  The webcast replay will be available at www.ciber.com/cbr.

 

Non-GAAP Financial Information

 

CIBER presents a number of non-GAAP measurements because management believes that these metrics provide meaningful supplemental information in addition to the GAAP metrics and provide comparability and consistency to prior periods.  These non-GAAP measurements include: change in revenue constant currency adjusted; and International revenue change adjusted for currency.

 

2



 

Reconciliations of non-GAAP to comparable GAAP measures are available in the body of this release as well as the accompanying schedules.  These reconciliations may also be found in the Investor Relations section of the Company’s website at www.ciber.com/cbr.

 

Forward-Looking Statements

 

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 relating to our operations, results of operations and other matters that are based on our current expectations, estimates, forecasts and projections.  Words, such as “anticipate,” “believe,” “could,” “expect,” “estimate,” “intend,” “may,” “opportunity,” “plan,” “potential,” “project,” “should,” and “will” and similar expressions, are intended to identify forward-looking statements.  For example, we make certain forward-looking statements regarding our current estimates for revenue and profitability for certain of our business units for 2011.  These statements reflect a number of risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by our forward-looking statements.  These risks include, without limitation, risks that: (1) economic and political conditions, including regulatory or legislative action, adversely affect us or our clients’ businesses and levels of business activity; (2) we cannot expand and develop our services and solutions in response to changes in technology and client demand; (3) we cannot compete effectively in the highly competitive consulting, systems integration and technology and outsourcing markets; (4) our work in the government contracting environment exposes us to additional risks; (5) our clients may terminate their contracts with us or they may be unable or unwilling to pay us for our services, which may impact our accounting assumptions; (6) our outsourcing services subject us to operational and financial risk; (7) the type and level of technology spending by our clients may change; (8) we cannot maintain favorable pricing and utilization rates; (9) our business is restricted by our current level of indebtedness and we could breach our financial covenants, and/or be unable to amend, extend or replace our current debt facility under favorable terms; (10) legal liability may result from solutions or services we provide; (11) we cannot anticipate the cost and complexity of performing our work or we are not able to control our costs; (12) our global operations are subject to complex risks, some of which might be beyond our control, including, but not limited to, fluctuations in foreign exchange rates; (13) we cannot balance our resources with client demand or hire sufficient employees with the required skills and background; (14) we may incur liability from our subcontractors’ or other third parties’ failure to deliver their project contributions on time or at all; (15) we cannot manage the organizational challenges associated with our size or our business strategy; (16) consolidation in the industries that we serve could adversely affect our business; (17) our ability to attract and retain business depends on our reputation in the marketplace; (18) our share price could fluctuate due to numerous factors, including variability in revenues, operating results and profitability; and/or (19) other factors discussed from time to time in the Company’s news releases and public statements, as well as the risks, uncertainties and other factors discussed under the “Risk Factors” heading in the Company’s Form 10-Q and most recent Annual Report on Form 10-K and other documents filed with or furnished to the Securities and Exchange Commission.  Most of these factors are beyond CIBER’s ability to predict or control.  Forward-looking statements are not guarantees of performance and speak only as of the date they are made, and CIBER undertakes no obligation to publicly update any forward-looking statements in light of new information or future events.  Readers are cautioned not to put undue reliance on forward-looking statements.

 

About CIBER, Inc.

 

CIBER, Inc. is a global information technology consulting, services and outsourcing company applying practical innovation through services and solutions that deliver tangible results for both commercial and government clients. Services include application development and management, ERP implementation, change management, project management, systems integration, infrastructure management and end-user computing, as well as strategic business and technology consulting. Founded in 1974 and headquartered in Greenwood Village, Colorado, CIBER has more than 8,500 employees and subcontractors and operates in 18 countries, serving clients in North America, Europe and Asia/Pacific. Annual revenue in 2010 was $1.1 billion. CIBER trades on the New York Stock Exchange (NYSE: CBR), and is included in the Russell 2000 Index and the S&P Small Cap 600 Index. For more information, visit www.ciber.com.

 

3



 

CIBER, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

 

2011

 

2010

 

2011

 

2010

 

REVENUES

 

 

 

 

 

 

 

 

 

Consulting services

 

$

256,624

 

$

252,619

 

$

778,490

 

$

750,992

 

Other revenue

 

14,102

 

13,263

 

42,528

 

42,973

 

Total revenues

 

270,726

 

265,882

 

821,018

 

793,965

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

Cost of consulting services

 

192,543

 

190,245

 

596,953

 

564,774

 

Cost of other revenue

 

9,425

 

9,772

 

27,140

 

30,517

 

Selling, general and administrative

 

60,707

 

57,637

 

189,851

 

180,178

 

Goodwill impairment

 

 

 

16,300

 

112,000

 

Amortization of intangible assets

 

131

 

1,087

 

1,648

 

3,361

 

Total operating expenses

 

262,806

 

258,741

 

831,892

 

890,830

 

 

 

 

 

 

 

 

 

 

 

OPERATING INCOME (LOSS)

 

7,920

 

7,141

 

(10,874

)

(96,865

)

 

 

 

 

 

 

 

 

 

 

Interest income

 

203

 

70

 

408

 

194

 

Interest expense

 

(2,159

)

(1,624

)

(5,769

)

(5,088

)

Other income (expense), net

 

468

 

(608

)

(3,005

)

14

 

 

 

 

 

 

 

 

 

 

 

INCOME (LOSS) BEFORE INCOME TAXES

 

6,432

 

4,979

 

(19,240

)

(101,745

)

Income tax expense (benefit)

 

3,268

 

1,615

 

31,665

 

(27,347

)

 

 

 

 

 

 

 

 

 

 

CONSOLIDATED NET INCOME (LOSS)

 

3,164

 

3,364

 

(50,905

)

(74,398

)

Net income (loss) attributable to noncontrolling interests

 

24

 

(38

)

205

 

(552

)

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS) ATTRIBUTABLE TO CIBER, INC.

 

$

3,140

 

$

3,402

 

$

(51,110

)

$

(73,846

)

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per share:

 

 

 

 

 

 

 

 

 

Basic and diluted

 

$

0.04

 

$

0.05

 

$

(0.71

)

$

(1.06

)

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

72,209

 

69,734

 

71,613

 

69,492

 

Diluted

 

72,609

 

69,929

 

71,613

 

69,492

 

 

4



 

CIBER, Inc.

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts)

(Unaudited)

 

 

 

September 30,
2011

 

December 31,
2010

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

52,803

 

$

69,329

 

Accounts receivable, net of allowances of $6,585 and $9,413, respectively

 

221,155

 

239,214

 

Prepaid expenses and other current assets

 

31,113

 

24,608

 

Deferred income taxes

 

3,133

 

12,161

 

Total current assets

 

308,204

 

345,312

 

 

 

 

 

 

 

Property and equipment, net of accumulated depreciation of $70,459 and $60,732, respectively

 

24,629

 

26,443

 

Goodwill

 

323,719

 

338,908

 

Other intangible assets, net

 

765

 

2,357

 

Other assets

 

7,934

 

9,344

 

 

 

 

 

 

 

TOTAL ASSETS

 

$

665,251

 

$

722,364

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

Liabilities:

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Current portion of long-term debt

 

$

30,400

 

$

10,473

 

Accounts payable

 

32,528

 

49,835

 

Accrued compensation and related liabilities

 

62,714

 

72,918

 

Deferred revenue

 

19,492

 

21,194

 

Income taxes payable

 

12,676

 

9,760

 

Other accrued expenses and liabilities

 

47,327

 

48,768

 

Total current liabilities

 

205,137

 

212,948

 

 

 

 

 

 

 

Long-term debt

 

51,222

 

77,879

 

Deferred income taxes

 

23,284

 

6,159

 

Other long-term liabilities

 

7,014

 

5,878

 

Total liabilities

 

286,657

 

302,864

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

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, 74,487 shares issued

 

745

 

745

 

Treasury stock, at cost, 2,216 and 4,363 shares, respectively

 

(12,700

)

(25,003

)

Additional paid-in capital

 

328,453

 

325,177

 

Retained earnings

 

61,725

 

118,113

 

Accumulated other comprehensive income

 

354

 

661

 

Total CIBER, Inc. shareholders’ equity

 

378,577

 

419,693

 

Noncontrolling interests

 

17

 

(193

)

Total equity

 

378,594

 

419,500

 

 

 

 

 

 

 

TOTAL LIABILITIES AND EQUITY

 

$

665,251

 

$

722,364

 

 

5



 

CIBER, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

 

Nine Months Ended September 30,

 

 

 

2011

 

2010

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

Consolidated net loss

 

$

(50,905

)

$

(74,398

)

Adjustments to reconcile consolidated net loss to net cash provided by (used in) operating activities:

 

 

 

 

 

Goodwill impairment

 

16,300

 

112,000

 

Depreciation

 

9,085

 

8,998

 

Amortization of intangible assets

 

1,648

 

3,361

 

Deferred income tax expense (benefit)

 

25,924

 

(31,197

)

Provision for doubtful receivables

 

308

 

2,085

 

Share-based compensation expense

 

3,276

 

3,239

 

Other, net

 

5,153

 

3,462

 

Changes in operating assets and liabilities, net of acquisitions:

 

 

 

 

 

Accounts receivable

 

18,057

 

(37,068

)

Other current and long-term assets

 

(4,808

)

(4,485

)

Accounts payable

 

(17,690

)

735

 

Accrued compensation and related liabilities

 

(8,411

)

7,216

 

Other current and long-term liabilities

 

(8,057

)

12,651

 

Income taxes payable/refundable

 

1,008

 

525

 

Net cash provided by (used in) operating activities

 

(9,112

)

7,124

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

Acquisitions, net of cash acquired

 

(895

)

(3,527

)

Purchases of property and equipment, net

 

(8,517

)

(9,646

)

Net cash used in investing activities

 

(9,412

)

(13,173

)

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

Borrowings on long-term debt

 

278,138

 

283,644

 

Payments on long-term debt

 

(285,274

)

(288,366

)

Employee stock purchases and options exercised

 

7,025

 

1,665

 

Purchases of treasury stock

 

 

(2,444

)

Excess tax benefits from share-based compensation

 

 

58

 

Credit facility origination/amendment fees paid

 

(808

)

(685

)

Acquisition of noncontrolling interest

 

 

(1,558

)

Net cash used in financing activities

 

(919

)

(7,686

)

Effect of foreign exchange rate changes on cash and cash equivalents

 

2,917

 

(2,193

)

Net decrease in cash and cash equivalents

 

(16,526

)

(15,928

)

Cash and cash equivalents, beginning of period

 

69,329

 

67,424

 

Cash and cash equivalents, end of period

 

$

52,803

 

$

51,496

 

 

6



 

CIBER, Inc.

SUMMARY SEGMENT DATA

(Dollars in thousands)

(Unaudited)

 

Summary Segment Analysis

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

 

2011

 

2010

 

Change

 

2011

 

2010

 

Change

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

International

 

$

113,546

 

$

91,977

 

23

%

$

354,684

 

$

272,596

 

30

%

North America

 

107,080

 

125,392

 

(15

)%

317,803

 

371,361

 

(14

)%

Federal

 

28,561

 

28,913

 

(1

)%

82,953

 

91,383

 

(9

)%

IT Outsourcing

 

23,885

 

22,325

 

7

%

71,482

 

64,184

 

11

%

Total segment revenues

 

273,072

 

268,607

 

2

%

826,922

 

799,524

 

3

%

Corporate/Inter-segment

 

(2,346

)

(2,725

)

 

 

(5,904

)

(5,559

)

 

 

Total revenues

 

$

270,726

 

$

265,882

 

2

%

$

821,018

 

$

793,965

 

3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income:

 

 

 

 

 

 

 

 

 

 

 

 

 

International

 

$

5,950

 

$

4,568

 

30

%

$

21,976

 

$

12,574

 

75

%

North America

 

7,436

 

9,836

 

(24

)%

3,853

 

30,042

 

(87

)%

Federal

 

1,985

 

1,046

 

90

%

4,029

 

2,577

 

56

%

IT Outsourcing

 

399

 

(363

)

210

%

341

 

(279

)

222

%

Total segment operating income

 

15,770

 

15,087

 

5

%

30,199

 

44,914

 

(33

)%

Corporate expenses

 

(7,719

)

(6,859

)

 

 

(23,125

)

(26,418

)

 

 

Goodwill impairment

 

 

 

 

 

(16,300

)

(112,000

)

 

 

Amortization of intangible assets

 

(131

)

(1,087

)

 

 

(1,648

)

(3,361

)

 

 

Total operating income (loss)

 

$

7,920

 

$

7,141

 

 

 

$

(10,874

)

$

(96,865

)

 

 

 

Segments as Percent of Total Segment Revenue and Total Segment Operating Income (Loss)

(excluding Corporate/Inter-segment and corporate expenses and amortization)

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

 

2011

 

2010

 

2011

 

2010

 

Revenues:

 

 

 

 

 

 

 

 

 

International

 

42

%

34

%

43

%

34

%

North America

 

39

%

47

%

38

%

47

%

Federal

 

10

%

11

%

10

%

11

%

IT Outsourcing

 

9

%

8

%

9

%

8

%

Total segment revenue

 

100

%

100

%

100

%

100

%

 

 

 

 

 

 

 

 

 

 

Operating income:

 

 

 

 

 

 

 

 

 

International

 

38

%

30

%

73

%

28

%

North America

 

47

%

65

%

13

%

67

%

Federal

 

13

%

7

%

13

%

6

%

IT Outsourcing

 

2

%

(2

)%

1

%

(1

)%

Total segment operating income (loss)

 

100

%

100

%

100

%

100

%

 

Segment Operating Margins

(excluding corporate expenses and amortization)

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

 

2011

 

2010

 

2011

 

2010

 

Operating margin:

 

 

 

 

 

 

 

 

 

International

 

5.2

%

5.0

%

6.2

%

4.6

%

North America

 

6.9

%

7.8

%

1.2

%

8.1

%

Federal

 

7.0

%

3.6

%

4.9

%

2.8

%

IT Outsourcing

 

1.7

%

(1.6

)%

0.5

%

(0.4

)%

Total segment operating margin

 

5.8

%

5.6

%

3.7

%

5.6

%

 

7



 

CIBER, Inc.

NON-GAAP FINANCIAL INFORMATION

(Unaudited)

 

CIBER reports its financial results in accordance with generally accepted accounting principles (“GAAP”).  However, management believes that certain non-GAAP financial measures used in managing our business may provide users of this financial information with additional meaningful comparisons between current results and prior reported results.  Certain of the information set forth in this press release constitutes non-GAAP financial measures within the meaning of Regulation G adopted by the Securities and Exchange Commission.  We have presented below a reconciliation of these measures to the most directly comparable GAAP financial measure.  The presentation of this additional information is not meant to be considered in isolation or as a substitute for comparable amounts determined in accordance with GAAP in the United States.

 

Components of Revenue

 

 

 

Three Months Ended September 30, 2011

 

 

 

Constant Currency
Revenue Growth
(Decline)

 

Foreign Exchange
Impact

 

GAAP Reported
Revenue Growth

 

Revenues:

 

 

 

 

 

 

 

Consolidated

 

(2

)%

4

%

2

%

 

 

 

 

 

 

 

 

International

 

12

%

11

%

23

%

 

8