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CIBER Reports Strong Second Quarter 2008 ResultsRevenue Up 19% (12% Organic); Outlook Raised
GREENWOOD VILLAGE, Colo., July 24 /PRNewswire-FirstCall/ -- CIBER, Inc. (NYSE: CBR) , an emerging global leader in IT services, reported results for the second quarter and first half of 2008, ended June 30th, exceeding or at the high-end of its expectations. (Logo: http://www.newscom.com/cgi-bin/prnh/20010927/CBRLOGO)
Financial Highlights:
-- Second Quarter of 2008
-- Revenue of $317.6 million increased $51.1 million (19%, 12% of which
was organic) as compared to $266.5 million for the second quarter of
2007. This is the highest quarterly revenue ever for CIBER and its
first ever $300 million quarter.
-- Operating income of $17.4 million was a $2.7 million (18%) increase
over 2Q07.
-- EBITDA (see appended table) was $23.1 million, compared to
$19.7 million for 2Q07, a 17% increase.
-- Cash Flow from Operations was $16.0 million, an increase of
$2.8 million (21%) as compared to the second quarter of 2007.
-- Net income of $8.9 million was a $1.1 million increase (14%) on a
quarter-over-quarter basis.
-- GAAP EPS of $0.15 per share was 15% greater than $0.13 per share for
2007's second quarter.
-- First Half of 2008
-- Revenue of $612.0 million was a $86.3 million increase (16%, 9% of
which was organic) as compared to the first half for 2007 of
$525.7 million.
-- Operating income for the first half of 2008 was $32.3 million, an
18% year-over-year increase.
-- EBITDA of $43.4 million was a $6.1 million (16%) improvement over
2007's first half.
-- Cash Flow from Operations (see statement below) for the first six
months of 2008 at $40.9 million was a very strong nine times the
$4.4 million of 2007's like period.
-- Net Income of $16.1 million for 1H08 was a $1.7 million (12%)
increase over the first half of 2007.
-- GAAP EPS of $0.27 per share compares to $0.23 per share, an increase
of 17% on a year-over-year basis.
Management Comments: "Another good quarter, fueled by accelerated organic growth, helped second quarter and first half 2008 revenue exceed expectations and set a new CIBER high. More importantly, we continued to invest in our project solutions transition and achieved earnings growth over 2007's similar period," said Mac Slingerlend, CIBER's President and Chief Executive Officer. "We are encouraged that the U.S. Commercial Division is showing revenue vitality, that Europe continues to perform robustly, and that our Federal Division was able to sequentially improve its results for the first time in several quarters. These positives overcame a mixed quarter from our US ERP group, where some projects have been concluding successfully, while others have had some struggles and new starts have been delayed. That said, with challenged industry growth, our operational leadership and technical talent are matching up very well and taking share from our domestic and international competitors. We have upgraded our expectations for all of 2008 in the Outlook section below."
2Q08 Operational Highlights
US Commercial and IT Outsourcing (ITO) Divisions
-- Organic revenue growth in this Division of 11% was its highest growth
rate since 1999.
-- Year-over-year results were fueled by stable headcounts, higher
productivity and bill rates.
European Division
-- Revenue grew a robust 53% (30% of which was organic growth) to
$116.0 million for 2Q08, the first time its revenue exceeded
$100 million in a quarter in our history.
-- Improved results in most every country helped European operations
achieve an 8.6% EBITA margin and its highest ever quarterly result.
-- An acquisition of a smaller, high-end SAP consultancy in Norway further
enhances CIBER's Nordic SAP competency.
-- Contract wins remained strong and geographically broad-based.
State & Local Government Division
-- Gross profit margins, a targeted area for progress, improved
sequentially 120 basis points to 24.9% for 2Q08 and are positioned to
improve further as the year proceeds.
-- The pipeline of opportunities for this division continues to be very
solid.
Federal Government Division
-- Improved operating results were driven by higher productivity and
contract renewals.
-- We are continuing to prepare and submit bids as a prime contractor,
while adding to our capture leadership this quarter also. We are
hopeful the second half of 2008 will begin to bear fruit in this
regard, and we continue to believe 2009-2011 will be a meaningful
growth period.
CIBER Enterprise Solutions Division (CES) (US ERP)
-- Improved results in our Oracle Practice activity led CES this quarter.
-- The SAP Practice experienced reduced contributions, but was buoyed by
prospects of its enhanced sales and delivery teams and its pipeline of
opportunities.
Eastern Asia-Pacific Operations
-- Australia and New Zealand continued to post solid operating results.
-- China will be assisting the UK in an international SAP retail sector
client new rollout.
Pipeline and Wins Data The pipeline of opportunities (excluding Europe) being tracked at June 30th was approximately $3.1 billion. Contract wins in the quarter totaled approximately $300 million, and the year-to-date book-to-bill ratio was circa 1.15:1.
Balance Sheet Highlights
-- Working capital increased $0.7 million to $175.5 million.
-- DSOs on services improved four days to 66 days, contributing nicely to
cash flow from operations.
-- CIBER purchased 300,000 shares into treasury at an average cost of
$5.81 per share.
-- The Company also purchased $10.0 million of its debentures at a modest
gain, and now owns $94 million of the $175 million issued.
3Q08 and 2008 Outlook
-- Third Quarter 2008
CIBER believes revenue of the third quarter of 2008 will be
$300-310 million and that GAAP EPS will be $0.13-0.15 per share.
-- Fiscal 2008
Annual expectations for revenue are increased to $1.215-1.230 billion
and GAAP EPS estimates are increased to $0.55-0.57 per share.
Conference Call and Webcast A webcast to discuss the company's financial results and outlook will be held at 11:00 a.m. ET on July 24, 2008 and may be heard live by visiting the Investor Relations portion of the company website at http://www.ciber.com/cbr/. To participate in the call, dial 800-218-8862 within the United States, and 303-262-2142 internationally, using the conference ID number 11116495. A replay of the conference call will be available through August 23, 2008 by dialing 800-405-2236 within the United States, and 303-590-3000 internationally, using the ID number 11116495. The replay will also be available on CIBER's website. About CIBER, Inc. CIBER, Inc. (NYSE: CBR) is a pure-play international system 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 60 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 approximately $1.2 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. http://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(C) 2008.
CIBER, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
In thousands, except per Three Months Ended Six Months Ended
share data June 30, June 30,
2007 2008 2007 2008
Consulting services $251,272 $300,317 $496,230 $581,480
Other revenue 15,271 17,262 29,498 30,563
Total revenue 266,543 317,579 525,728 612,043
Cost of consulting services 184,611 218,176 364,489 423,296
Cost of other revenue 8,047 12,301 17,326 20,680
Selling, general and
administrative expenses 57,759 68,045 113,739 132,536
Amortization of intangible
assets 1,409 1,648 2,800 3,219
Operating income 14,717 17,409 27,374 32,312
Other expense, net (1,957) (2,901) (4,110) (6,038)
Income before income taxes 12,760 14,508 23,264 26,274
Income tax expense 4,912 5,580 8,851 10,169
Net income $7,848 $8,928 $14,413 $16,105
Earnings per share - diluted $0.13 $0.15 $0.23 $0.27
Weighted average shares -
diluted 62,268 60,344 62,171 60,334
For the three months ended June 30, 2007 and 2008, respectively, earnings per share - basic were $0.13 and $0.15 and weighted average shares - basic were 61,287 and 60,000. For the six months ended June 30, 2007 and 2008, respectively, earnings per share - basic were $0.23 and $0.27 and weighted average shares - basic were 61,404 and 60,132.
CIBER, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)
In thousands December 31, June 30,
2007 2008
Assets
Current assets:
Cash and cash equivalents $31,717 $38,721
Accounts receivable, net 269,070 275,636
Prepaid expenses and other current assets 24,032 21,853
Deferred income taxes 9,384 11,194
Total current assets 334,203 347,404
Property and equipment, net 27,297 29,573
Intangible assets, net 475,677 487,534
Other assets 11,936 11,028
Total assets $849,113 $875,539
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $35,538 $38,626
Accrued compensation and related liabilities 54,837 56,850
Current portion of long-term bank debt 9,108 3,136
Other accrued expenses and liabilities 53,493 67,440
Income taxes payable 5,447 5,831
Total current liabilities 158,423 171,883
Long-term bank debt 49,810 109,124
Debentures 152,000 80,985
Deferred income taxes 31,857 35,652
Total liabilities 392,090 397,644
Minority interest 2,464 4,400
Shareholders' equity 454,559 473,495
Total liabilities and shareholders'
equity $849,113 $875,539
CIBER, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Six Months Ended
June 30,
In thousands 2007 2008
Operating activities:
Net income $14,413 $16,105
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 5,775 6,260
Amortization of intangible assets 2,800 3,219
Other, net (18,546) 15,364
Net cash provided by operating
activities 4,442 40,948
Investing activities:
Acquisitions, net of cash acquired (1,465) (7,267)
Purchases of property and equipment, net (5,569) (8,135)
Other - 233
Net cash used in investing activities (7,034) (15,169)
Financing activities:
Employee stock purchases and options
exercised 3,415 1,131
Purchases of treasury stock (8,592) (5,809)
Borrowings (payments) on long-term bank
debt, net (3,863) 53,124
Retirement of debentures - (68,779)
Other, net 196 (150)
Net cash used in financing activities (8,844) (20,483)
Effect of foreign exchange rate changes on
cash 454 1,708
Net decrease in cash and cash
equivalents (10,982) 7,004
Cash and cash equivalents, beginning of
period 33,319 31,717
Cash and cash equivalents, end of period $22,337 $38,721
Selected Financial Information
Unaudited Reconciliation of Non-GAAP and Segment Financial Measures
I. Reconciliation of Revenue Growth Components ($ in Millions)
Three Months Ended
June 30, Foreign June 30,
Divisions 2007 Organic Acquired Exchange Total 2008
Commercial/ITO $89.8 11.2% -% -% 11.2% $99.9
Europe 75.9 30.4 3.3 19.1 52.8 116.0
State & Local 35.4 4.2 - - 4.2 36.9
Federal 34.0 -2.1 - - -2.1 33.3
CES (US ERP) 31.4 -10.8 11.1 - 0.3 31.5
$266.5 11.5% 2.3% 5.4% 19.2% $317.6
Six Months Ended
June 30, Foreign June 30,
Divisions 2007 Organic Acquired Exchange Total 2008
Commercial/ITO $181.0 6.7% -% -% 6.7% $193.1
Europe 147.1 25.3 3.1 18.2 46.6 215.7
State & Local 70.9 5.6 - - 5.6 74.9
Federal 68.1 -4.1 - - -4.1 65.3
CES (US ERP) 58.6 -5.3 12.8 - 7.5 63.0
$525.7 9.0% 2.3% 5.1% 16.4% $612.0
II. Segment Operating Results Analysis ($ In millions)
Three Months Ended Six Months Ended
By Division June 30, 2007 June 30, 2008 June 30, 2007 June 30, 2008
% of % of % of % of
Amount Revenue Amount Revenue Amount Revenue Amount Revenue
Revenue
Commercial/ITO* $89.8 34% $99.9 31% $181.0 34% $193.1 32%
Europe* 75.9 28 116.0 37 147.1 28 215.7 35
State & Local 35.4 13 36.9 12 70.9 14 74.9 12
Federal 34.0 13 33.3 10 68.1 13 65.3 11
CES (US ERP) 31.4 12 31.5 10 58.6 11 63.0 10
Total $266.5 100% $317.6 100% $525.7 100% $612.0 100%
% % % %
of Div. of Div. of Div. of Div.
Operating Income Revenue Revenue Revenue Revenue
Commercial/ITO* $7.2 8% $9.2 9% $15.0 8% $18.6 10%
Europe* 4.3 6 9.9 9 8.0 5 16.4 8
State & Local 3.6 10 3.7 10 7.2 10 6.9 9
Federal 3.3 10 3.0 9 5.8 9 4.4 7
CES (US ERP) 3.7 12 0.2 1 5.7 10 1.8 3
Corporate (6.0) (2) (6.9) (2) (11.5) (2) (12.6) (2)
EBITA 16.1 6% 19.1 6% 30.2 6% 35.5 6%
Amort. Expense (1.4) (-) (1.7) (-) (2.8) (1) (3.2) (1)
Operating
Income $14.7 6% $17.4 6% $27.4 5% $32.3 5%
*U.S. Commercial includes India's results and domestic eliminations; Europe includes Eastern Asia & Australia/NZ results.
III. EBITDA Reconciliation to Net Income (000's omitted)
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
2007 2008 2007 2008
Net Income $7,848 $8,928 $14,413 $16,105
Income Tax 4,912 5,580 8,851 10,169
Pre-Tax Income 12,760 14,508 23,264 26,274
Other Expense, net 1,957 2,901 4,110 6,038
Operating Income 14,717 17,409 27,374 32,312
Share Based Comp. 682 791 1,337 1,560
Amortization 1,409 1,648 2,800 3,219
Depreciation 2,929 3,205 5,775 6,260
EBITDA $19,737 $23,053 $37,286 $43,351
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