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CIBER Posts Third Quarter 2008 ResultsRevenue and EPS Increase, Outlook Updated
GREENWOOD VILLAGE, Colo., Oct. 23 /PRNewswire-FirstCall/ -- Today CIBER, Inc. (NYSE: CBR) , reports its results for the third quarter and nine months of 2008, ended September 30th. (Logo: http://www.newscom.com/cgi-bin/prnh/20010927/CBRLOGO)
Financial Highlights:
- Third Quarter of 2008
-- Revenue of $300.0 million represented a $34.3 increase (13%, 9%
organic) compared to $265.7 million for the year earlier period.
-- EBITDA (see appended table) was $19.0 million, an increase of $0.2
million quarter-over-quarter.
-- Net income of $7.9 million was $0.4 million, or 6%, higher than
2007's third quarter.
-- GAAP EPS of $0.13 per share was 8% greater than the $0.12 per share
of 2007.
-- Cash flow from operations of $21.8 million was a $3.1 million, or
17%, increase as compared to the third quarter a year ago.
- Nine Months of 2008
-- Revenue of $912.0 million increased $120.5 million (15%, 9% organic)
as compared to the first nine months of 2007.
-- EBITDA of $62.4 million increased 11%, or $6.2 million over the
comparable 2007 period.
-- Net income of $24.0 million increased $2.1 million, or 10%,
year-over-year.
-- GAAP EPS from the first nine months of 2008 was $0.40 per share,
compared to $0.35 per share in the like 2007 period, a 14% increase.
-- Cash flow from operations (see statement below) of $62.8 million was
an increase of $39.6 million, or 171%, more than the comparable 2007
period.
Management Comments: "We overcame some obstacles, including the much stronger U.S. dollar, but still managed to report results at the lower end of the range of the company's outlook for the quarter, while also executing operational achievements that will benefit future quarters. The credit and foreign exchange markets certainly developed hurdles to overcome and our U.S. SAP Practice underperformed severely in the quarter," said Mac Slingerlend, CIBER's President and Chief Executive Officer. "Realigning our U.S. SAP Practice and creating our Global SAP Practice in September were among the achievements of the quarter. Closing the announced and pending Indian acquisition will be helpful to our future. Iteamic Private Limited is strategic to our global business model and we will be very pleased when they have joined CIBER. We achieved our outlook for the quarter despite further increases to our reserves, which were partially offset by a more favorable tax rate. We are encouraged to close the year solidly and further our market traction in 2009."
3Q08 Operational Highlights
U.S. Commercial and IT Outsourcing (ITO) Divisions
-- Announcing the pending acquisition of Iteamic Private Limited
(Bangalore, India), which when closed will greatly boost leadership
and delivery in offshore operations.
-- Operating results through the summer season were steady as our
progress to more solutions based activity continues.
European Division
-- Organic top-line growth of 27% (38% total) continues to lead our
revenue increases.
-- Cross-border wins with marquis clients continue to drive growth.
State & Local Government Division
-- A new five-year, $19 million maintenance agreement for the successful
project for the Pennsylvania Turnpike Commission was awarded and
commenced in August.
Federal Government Division
-- A $9 million win with the Department of Homeland Security and a $10
million win with the Social Security Administration helped the backlog
of this Division.
-- We continue to do the right things to elevate our capability to bid
projects as a prime contractor, evidenced by a dozen pending award
decisions where we have bid as the prime.
-- The activities around a change of U.S. Presidency continue to cause
greater delays in awards of projects that are pending.
CIBER Enterprise Solutions (CES) Division (U.S. ERP)
-- We were excited to establish our Global SAP Practice, which includes
the U.S. SAP Practice, to better coordinate resourcing in
multi-national transactions. In addition, Tom Augustine was hired as
Vice President in October to lead the Public Sector portion of the
U.S. SAP Practice.
-- A $20 million SAP implementation win for a U.S. client with Chinese
operations was awarded and commenced in mid-September.
-- Oracle ERP wins in the quarter included a college in California and
the Oklahoma Department of Transportation.
Eastern Asia-Pacific Operations
-- Australia and New Zealand continue to grow in SAP retail industry
implementations.
-- Chinese operations are assisting both the U.S. and the UK on new
multi-country rollouts.
Pipeline and Wins Data The pipeline of opportunities (excluding Europe) being tracked at September 30th increased $50 million to approximately $3.15 billion. Contract wins in the quarter totaled approximately $260 million, and the year-to-date book-to-bill ratio is approximately 1.1:1.
Balance Sheet Highlights
-- Working capital was $174.8 million.
-- DSOs on services were 68 days.
-- CIBER purchased 250,000 shares into Treasury during the quarter at
$6.84/share.
4Q08 and 2008 Outlook
-- Fourth Quarter 2008
The Company believes revenue will be in the range of $290-300
million and that GAAP EPS will be $0.14-0.15 per share.
-- Calendar 2008
CIBER believes that 2008 revenue will be $1.202-1.212 billion and
GAAP EPS estimates will be $0.54-0.55 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 October 23, 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 800-762-8795 within the United States, and 303-262-2161 internationally, using the conference ID number 11119917. A replay of the conference call will be available through November 22, 2008 by dialing 800-405-2236 within the United States, and 303-590-3000 internationally, using the ID number 11119917. 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)
Three Months Ended Nine Months Ended
In thousands, except per share September 30, September 30,
data 2007 2008 2007 2008
Consulting services $253,496 $286,004 $749,726 $867,484
Other revenue 12,241 13,962 41,739 44,525
Total revenue 265,737 299,966 791,465 912,009
Cost of consulting services 185,423 209,515 549,912 632,811
Cost of other revenue 7,533 8,170 24,859 28,850
Selling, general and
administrative expenses 57,478 67,464 171,217 200,000
Amortization of intangible assets 1,456 1,604 4,256 4,823
Operating income 13,847 13,213 41,221 45,525
Other expense, net 2,147 1,904 6,257 7,942
Income before income taxes 11,700 11,309 34,964 37,583
Income tax expense 4,234 3,432 13,085 13,601
Net income $7,466 $7,877 $21,879 $23,982
Earnings per share - diluted $0.12 $0.13 $0.35 $0.40
Weighted average shares - diluted 61,820 60,791 62,054 60,485
For the three months ended September 30, 2007 and 2008, respectively, earnings per share - basic were $0.12 and $0.13 and weighted average shares - basic were 61,042 and 60,032. For the nine months ended September 30, 2007 and 2008, respectively, earnings per share - basic were $0.36 and $0.40 and weighted average shares - basic were 61,283 and 60,098.
CIBER, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)
In thousands December 31, September 30,
2007 2008
Assets
Current assets: Cash and cash equivalents $31,717 $39,341
Accounts receivable, net 269,070 260,034
Prepaid expenses and other current assets 24,032 21,878
Deferred income taxes 9,384 6,835
Total current assets 334,203 328,088
Property and equipment, net 27,297 27,584
Intangible assets, net 475,677 470,036
Other assets 11,936 11,233
Total assets $849,113 $836,941
Liabilities and Shareholders' Equity Current liabilities: Accounts payable $35,538 $30,615
Accrued compensation and related liabilities 54,837 68,599
Current portion of long-term bank debt 9,108 2,512
Other accrued expenses and liabilities 53,493 47,887
Income taxes payable 5,447 3,690
Total current liabilities 158,423 153,303
Long-term bank debt 49,810 98,542
Debentures 152,000 80,985
Deferred income taxes 31,857 35,909
Total liabilities 392,090 368,739
Minority interest 2,464 4,083
Shareholders' equity 454,559 464,119
Total liabilities and shareholders' equity $849,113 $836,941
CIBER, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Nine Months Ended
September 30,
In thousands 2007 2008
Operating activities:
Net income $21,879 $23,982
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 8,736 9,513
Amortization of intangible assets 4,256 4,823
Other, net (11,757) 24,438
Net cash provided by operating activities 23,114 62,756
Investing activities: Acquisitions, net of cash acquired (17,316) (7,790)
Purchases of property and equipment, net (8,631) (10,837)
Other 1,864 233
Net cash used in investing activities (24,083) (18,394)
Financing activities: Employee stock purchases and options exercised 4,912 3,559
Purchases of treasury stock (11,845) (7,519)
Borrowings on long-term bank debt, net 4,859 42,155
Retirement of debentures - (68,779)
Other, net 100 (4,315)
Net cash used in financing activities (1,974) (34,899) Effect of foreign exchange rate changes on cash 1,653 (1,839) Net increase (decrease) in cash and
cash equivalents (1,290) 7,624
Cash and cash equivalents, beginning of period 33,319 31,717 Cash and cash equivalents, end of period $32,029 $39,341 Selected Financial Information
Unaudited Reconciliation of Non-GAAP and Segment Financial Measures
I. Reconciliation of Revenue Growth Components ($ in Millions)
Three Months Ended
Sept. 30, Foreign Sept. 30,
Divisions 2007 Organic Acquired Exchange Total 2008
Commercial/ITO $90.2 8.9% -% -% 8.9% $98.2
Europe 76.3 26.8 2.6 8.6 38.0 105.3
State & Local 34.0 2.9 - - 2.9 35.0
Federal 34.2 -8.2 - - -8.2 31.4
CES (U.S. ERP) 31.0 -11.0 8.1 - -2.9 30.1
$265.7 8.7% 1.7% 2.5% 12.9% $300.0
Nine Months Ended
Sept. 30, Foreign Sept. 30,
Divisions 2007 Organic Acquired Exchange Total 2008
Commercial/ITO $271.2 7.4% -% -% 7.4% $291.2
Europe 223.4 26.2 2.7 14.8 43.7 321.0
State & Local 105.0 4.8 - - 4.8 110.0
Federal 102.3 -5.5 - - -5.5 96.7
CES (U.S. ERP) 89.6 -7.2 11.1 - 3.9 93.1
$791.5 9.0% 2.0% 4.2% 15.2% $912.0
II. Segment Operating Results Analysis ($ In millions)
Three Months Ended Nine Months Ended
By Division September 30, September 30, September 30, September 30,
2007 2008 2007 2008
% of % of % of % of
Amount Revenue Amount Revenue Amount Revenue Amount Revenue
Revenue
Commercial/ITO* $90.2 34% $98.2 33% $271.2 35% $291.2 32% Europe* 76.3 28 105.3 35 223.4 28 321.0 35 State & Local 34.0 13 35.0 12 105.0 13 110.0 12 Federal 34.2 13 31.4 10 102.3 13 96.7 11 CES (U.S. ERP) 31.0 12 30.1 10 89.6 11 93.1 10 Total $265.7 100% $300.0 100% $791.5 100% $912.0 100%
% % % %
of Div. of Div. of Div. of Div.
Operating Income Revenue Revenue Revenue Revenue Commercial/ITO* $6.9 8% $9.7 10% $21.9 8% $28.3 10%
Europe* 5.1 7 7.3 7 13.1 6 23.7 7
State & Local 2.6 8 3.1 9 9.8 9 10.0 9
Federal 3.0 9 2.8 9 8.8 9 7.2 7
CES (U.S. ERP) 3.1 10 (1.7) (6) 8.8 10 0.1 0
Corporate (5.4) (2) (6.4) (2) (16.9) (2) (19.0) (2)
EBITA 15.3 6% 14.8 5% 45.5 6% 50.3 6%
Amort. Expense (1.5) (1) (1.6) (1) (4.3) (1) (4.8) (1)
Operating Income 13.8 5% $13.2 4% $41.2 5% $45.5 5%
*U.S. Commercial includes India's results and domestic eliminations; Europe includes Eastern Asia & Australia/NZ results. III. EBITDA Reconciliation to Net Income (000s omitted)
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2007 2008 2007 2008
Net Income $7,466 $7,877 $21,879 $23,982
Income Tax 4,234 3,432 13,085 13,601
Pre-Tax Income 11,700 11,309 34,964 37,583
Other Expense, net 2,147 1,904 6,257 7,942
Operating Income 13,847 13,213 41,221 45,525
Share Based Comp. 630 977 1,968 2,537
Amortization 1,456 1,604 4,256 4,823
Depreciation 2,961 3,253 8,736 9,513
EBITDA $18,894 $19,047 $56,181 $62,398
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