CIBER, INC. GREENWOOD VILLAGE, Colo., May 5, 2016 /PRNewswire/ -- Ciber, Inc. (NYSE: CBR), a leading global information technology consulting, services and outsourcing company, today reported results for the first quarter of 2016.
http://photos.prnewswire.com/prnvar/20150708/234002LOGO
"We had a number of positive developments during the first quarter, including one of our strongest year-over-year bookings increases in recent periods, driven by last year's focus on product, sales and marketing investments. Nonetheless, it was a challenging period as weaker bookings during the first half of 2015, as well as our focus on removing poor business and a more rigorous financial review of new deals, resulted in a substantial revenue decline and greater margin pressure early in 2016," said President and Chief Executive Officer Michael Boustridge. "Looking forward, Ciber's booking results are expected to show continued improvement, which we believe will lead to better revenue and margin results in the second half of the year."
Revenue of $175.1 million fell 11% in constant currency and 13% in U.S. dollars compared with last year's first quarter. The North America segment posted revenue of $99.6 million, down 6% from the year-ago first quarter and down 8% compared to the fourth quarter of 2015. Revenue in the International segment was $76.0 million for the first quarter of 2016, down 16% in constant currency and 21% in U.S. dollars compared to the year-ago first quarter. Compared to the fourth quarter of 2015, International revenue was down 12% in constant currency and 13% in U.S. dollars. Overall company gross margin was 23.3%, down from 25.6% in the prior year and 25.3% in the prior quarter.
GAAP loss from continuing operations was $95.3 million for the first quarter. Adjusted operating loss was $8.5 million before goodwill impairment, amortization and restructuring charges of $86.9 million. First quarter profitability reflects investments of approximately $2 million in new growth initiatives, mainly Ciber Momentum, Ciber Transformation Services(TM), and Talent Services.
Adjusted net loss from continuing operations for the first quarter of 2016, before goodwill impairment, amortization and restructuring charges was $10.1 million, or $0.13 per share compared to adjusted net income of $4.1 million, or $0.05 per share in the first quarter of 2015. GAAP net loss from continuing operations was $97.0 million in the quarter or $1.21 per share. GAAP results include a non-cash impairment charge in the first quarter of 2016 of $85.9 million. Reconciliations of non-GAAP financial measures to GAAP operating results and diluted EPS are included at the end of this release.
Christian Mezger, Chief Financial Officer, commented, "We are focused on further reductions to our cost structure and increasing cash flow to improve future results."
Business Highlights
-- Ciber signed a new agreement for an Oracle ERP implementation with the
School District of Manatee County, which provides education to more than
48,000 students and employs over 6,100 people.
-- The Family Health Network signed a contract with Ciber to move their
systems to the Oracle cloud, making it easier for them to advance their
mission to provide access to cost effective quality care for people who
could not otherwise afford it.
-- Ciber signed a new agreement with Interval Leisure Group (ILG), a
leading global provider of membership and leisure services to the
vacation industry. Ciber will lead the ERP transition of ILG's new
subsidiary, Vistana Signature Experiences, from SAP Financials to their
platform of Oracle PeopleSoft Financials to provide shared and common
processes, procedures, and reporting. Vistana is a leading developer,
marketer and manager of high-end vacation ownership resorts.
-- Ciber extended a mobile solution development and support relationship
begun in 2011 with ConnectYourCare (CYC), one of the largest providers
of health benefit account administration in the United States. The
agreement includes Ciber design and development of the CYC mobile
applications for the iTunes App Store, Android Market and Windows Phone
App Store. Ciber currently performs all maintenance and enhancements for
this market-leading solution.
-- A Netherlands-based energy company signed a two-year contract extension
with Ciber for managed services. This contract contains all services
needed to operate two data centers located at power plants and the
network connections to the plants. All services require 24x7 support as
these power plants are a critical part of the Netherlands' utility grid.
-- The world's largest provider of regulatory and ethical review services
in the clinical research space selected Ciber as a strategic partner to
leverage its expertise in Microsoft technologies employed in the areas
of application development and modernization and quality assurance and
testing.
Capital Deployment and Liquidity
Ciber's cash balance at the end of the first quarter of 2016 was $18.4 million. The outstanding balance on the credit facility was $39.5 million. At the end of the fourth quarter of 2015, Ciber's cash balance was $20.4 million and the outstanding balance on the credit facility was $33.5 million.
Cash flow used in operating activities (continuing operations) year-to-date through March 31, 2016 was $3.4 million, compared with cash usage of $33.6 million in the first quarter of 2015. Declining revenue in the first quarter of 2016 led to a decreased debt capacity on our credit facility and the execution of prudent cash management activities. Days Sales Outstanding (DSO) were 71 days, an increase of eight days versus the prior year quarter and an increase of seven days versus the fourth quarter of 2015. Capital expenditures totaled $5.3 million for the first quarter 2016 compared to $1.2 million in the year-earlier quarter.
Goodwill Impairment Charge
Ciber recorded a non-cash goodwill impairment charge in the 2016 first quarter of $85.9 million, or $1.07 per diluted share, for the write-down of goodwill related to its International segment. A sustained decrease in the Company's stock price and lower than expected earnings during the first quarter of 2016 resulted in a potential indicator of goodwill impairment. Ciber compared the carrying value of its segments versus fair value as of March 31, 2016. The analysis concluded that the fair value of Ciber's International segment was below its carrying value. The non-cash impairment charge impacts neither the Company's future performance nor compliance with debt covenants under its revolving credit agreement. Ciber's balance sheet after the impairment charge includes $39.4 million in goodwill in its International segment.
Continuing Operations
For a recap of historical comparisons, please refer to Ciber's SEC filings on forms 10-Q and 8-K. These filings may be found in the Investor Relations section of the Company's website at http://www.ciber.com.
Investor and Analyst Conference Call
Ciber President and Chief Executive Officer Michael Boustridge and Executive Vice President and Chief Financial Officer Christian Mezger invite you to participate in a conference call or audio-cast today at 8:30 a.m. Eastern Time to discuss the Company's financial results.
The press release and live audio-cast of the conference call will be available on the Events & Presentations section of the corporate website. To participate in the conference call, dial 877-407-8293 (U.S.) or +1-201-689-8349 (outside the U.S.) ten minutes prior to the start of the call.
A replay of the call and webcast will be available one hour after the call ends through June 30, 2016. To access the telephone replay, dial 877-660-6853 (U.S.) or +1-201-612-7415 (outside the U.S.) and enter conference ID: 13634137.
The webcast replay will be available on the Events & Presentations section of the corporate website.
Non-GAAP Financial Information
In addition to financial measures presented on the basis of accounting principles generally accepted in the United States of America ("U.S. GAAP"), we also present certain non-GAAP measurements because management believes that these metrics provide meaningful supplemental information useful to investors and other users of our financial statements in evaluating our operating performance because they provide an additional measure to evaluate our performance without regard to special and non-core items, which can vary substantially from company to company and from period to period. These non-GAAP measurements should be viewed as supplements to (not substitutes for) our results of operations presented under U.S. GAAP, and include: "constant currency;" "adjusted operating income," "adjusted operating margin," "adjusted net income/loss from continuing operations," "adjusted net income/loss per share," and "adjusted SG&A expenses." Reconciliations of non-GAAP measures to the nearest comparable U.S. GAAP measures are available in the schedules accompanying this release. These reconciliations may also be found in the Investor Relations section of the Company's website at http://www.ciber.com/.
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," "positioned," "potential," "project," "should," and "will" and similar expressions, are intended to identify these forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Forward-looking statements are based on assumptions as to future events that may not prove to be accurate. Risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by our forward-looking statements include, but are not limited to, related to: our ability to continue to evolve our business model, offerings, products and services, and to execute on the key elements of our strategic plan or the success of our strategic plan; volatile, uncertain or negative economic conditions and the impacts of economic conditions on our clients' operations and technology spending; a data security or privacy breach; fluctuations or lack of growth in the market for IT services; our ability to maintain our utilization rates and control our costs; our ability to keep pace with rapid changes in technology; the termination or cancellation of a contract by a significant client; the highly competitive nature of the U.S. and International IT services industry; quarterly variance in our revenues, operating results and profitability that could impact our stock price; damage to our professional reputation and/or legal liability if our clients are not satisfied with our services; the accuracy of our estimates of the cost of engagements conducted on a fixed-price basis; third party vendors performing our services and the potential for harm to our reputation; our ability to improve our operations, finances and systems; our ability to enter, operate and compete effectively in new geographic markets; the value of our brand and reputation and any damage thereto; an adverse outcome of litigation which could subject us to damage awards; our reliance on a few customers for a large portion of our revenues; our ability to continue to retain and attract qualified sales, delivery and technical employees; our relationships with software vendors and the potential loss of any significant software vendor; our ability to protect our intellectual property rights from unauthorized use or infringement; the potential for infringement by our services or solutions on the intellectual property rights of others or the potential loss of our ability to utilize rights we claim in intellectual property; our ability to collect our receivables; our international operations; operational limitations of our credit facility and our potential need for and the availability of additional capital to support our business; the resources committed to new offerings and the potential impact on our profitability if our business does not grow proportionately; disruptions that may impact our results of operations and from which we may not recover; our compliance with applicable laws and regulations; losses we may incur that may not be fully covered by our insurance policies; our ability to identify, acquire, or integrate businesses or enter into joint ventures; further impairment in the carrying value of our goodwill; contracts with various public sector agencies; our anti-takeover defenses that could make it difficult for another company to acquire control of Ciber or limit the price investors might be willing to pay for our stock; the potentially conflicting interests of our institutional shareholders; and issues that could arise during the implementation of our Enterprise Resource Planning system.
For a more detailed discussion of these factors, see the information under the "Risk Factors" heading in our Annual Report on Form 10-K for the year ended December 31, 2015, our Quarterly Report on Form 10-Q for the three months ended March 31, 2016, when filed with the Securities and Exchange Commission ("SEC") and other documents filed with or furnished to the SEC. Other than as required by law, we undertake 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 is a global IT consulting company with approximately 6,000 employees in North America, Europe and Asia/Pacific, and nearly $1 billion in annual business. Ciber partners with organizations to develop technology strategies and solutions that deliver tangible business value. Founded in 1974, the company trades on the New York Stock Exchange (NYSE: CBR). For more information, visit www.ciber.com and follow us on Twitter, LinkedIn, Facebook, Google Plus and our blog.
Contact:
Scott Kozak
Investor Relations
303-967-1379
skozak@ciber.com
Kelly Butler
Media Relations
972-244-8082
kbutler@ciber.com
Ciber, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended March 31,
2016 2015
---- ----
REVENUES
Consulting
services $166,238 $191,054
Other
revenue 8,813 10,951
----- ------
Total
revenues 175,051 202,005
------- -------
OPERATING EXPENSES
Cost of
consulting
services 129,443 143,795
Cost of
other
revenue 4,864 6,495
Selling,
general
and
administrative 49,223 45,718
Goodwill
Impairment 85,923 -
Amortization
of
intangible
assets 593 -
Restructuring
charges 345 61
--- ---
Total
operating
expenses 270,391 196,069
------- -------
OPERATING
INCOME
(LOSS)
FROM
CONTINUING
OPERATIONS (95,340) 5,936
Interest
expense (544) (314)
Other
expense,
net (132) (153)
---- ----
INCOME
(LOSS)
FROM
CONTINUING
OPERATIONS
BEFORE
INCOME
TAXES (96,016) 5,469
Income tax
expense 948 1,251
--- -----
INCOME
(LOSS)
FROM
CONTINUING
OPERATIONS (96,964) 4,218
Loss from
discontinued
operations,
net of
income tax (36) (42)
--- ---
CONSOLIDATED
NET INCOME
(LOSS) (97,000) 4,176
Net income
attributable
to
noncontrolling
interests 20 2
--- ---
NET
EARNINGS
(LOSS)
ATTRIBUTABLE
TO CIBER,
INC. $(97,020) $4,174
======== ======
Basic and diluted earnings
(loss) per share
attributable to Ciber, Inc.:
Continuing
operations $(1.21) $0.05
Discontinued
operations - -
Basic and
diluted
earnings
(loss) per
share
attributable
to Ciber,
Inc. $(1.21) $0.05
====== =====
Weighted average shares
outstanding:
Basic 80,210 78,727
Diluted 80,210 79,537
Ciber, Inc.
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
(Unaudited)
March 31, December 31,
2016 2015
---- ----
ASSETS
Current assets:
Cash and cash equivalents $18,412 $20,404
Accounts receivable, net of
allowances of $2,438 and
$2,130, respectively 160,616 169,501
Prepaid expenses and other
current assets 26,440 26,340
------ ------
Total current assets 205,468 216,245
Property and equipment, net of
accumulated depreciation of
$35,597 and $37,849,
respectively 21,214 22,447
Goodwill 173,115 256,736
Intangibles, net 2,792 -
Other assets 5,059 6,843
TOTAL ASSETS $407,648 $502,271
======== ========
LIABILITIES AND EQUITY
Liabilities:
Current liabilities:
Current portion of long-term
debt $4,463 $ -
Accounts payable 27,410 34,980
Accrued compensation and
related liabilities 35,831 31,152
Deferred revenue 12,071 14,238
Income taxes payable 957 575
Other accrued expenses and
liabilities 24,977 29,384
------ ------
Total current liabilities 105,709 110,329
Long-term debt 34,437 32,680
Deferred income taxes 31,263 30,571
Other long-term liabilities 7,058 8,794
----- -----
Total liabilities 178,467 182,374
------- -------
Commitments and contingencies (see Note 9)
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,
80,391 and 80,057 shares
issued, respectively 804 801
Treasury stock, at cost, 22
and 32 shares, respectively (47) (113)
Additional paid-in capital 371,317 369,228
Accumulated deficit (115,354) (17,903)
Accumulated other
comprehensive loss (28,145) (32,702)
------- -------
Total Ciber, Inc.
shareholders' equity 228,575 319,311
Noncontrolling interests 606 586
--- ---
Total equity 229,181 319,897
------- -------
TOTAL LIABILITIES AND EQUITY $407,648 $502,271
======== ========
Ciber, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended March 31,
2016 2015
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES
Consolidated net income (loss) $(97,000) $4,176
Adjustments to reconcile consolidated net income (loss) to net
cash used in operating activities:
Loss from discontinued operations 36 42
Goodwill impairment 85,923 -
Depreciation 1,523 1,357
Amortization of intangible assets 593 -
Deferred income tax expense 1,274 1,313
Provision for (recovery of) doubtful receivables 308 (149)
Share-based compensation expense 1,951 1,756
Amortization of debt costs 189 143
Other, net 4 2,728
Changes in operating assets and liabilities:
Accounts receivable 10,052 (5,429)
Other current and long-term assets 666 (3,507)
Accounts payable (7,877) (8,553)
Accrued compensation and related liabilities 4,700 (23,231)
Other current and long-term liabilities (5,396) (4,032)
Income taxes payable/refundable (330) (191)
---- ----
Cash used in operating activities -continuing
operations (3,384) (33,577)
Cash used in operating activities -discontinued
operations (128) (127)
---- ----
Cash used in operating activities (3,512) (33,704)
------ -------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment, net (5,298) (1,215)
Cash used in investing activities -continuing
operations (5,298) (1,215)
------ ------
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings on long-term debt 43,613 91,341
Payments on long-term debt (37,638) (83,563)
Employee stock purchases and options exercised 141 456
Purchase of shares for employee tax withholdings (365) (398)
Purchase of noncontrolling interest - -
Purchase of treasury stock - (762)
--- ----
Cash provided by financing activities -
continuing operations 5,751 7,074
----- -----
Effect of foreign exchange rate changes on cash
and cash equivalents 1,067 (1,298)
----- ------
Net decrease in cash and cash equivalents (1,992) (29,143)
Cash and cash equivalents, beginning of period 20,404 45,858
------ ------
Cash and cash equivalents, end of period $18,412 $16,715
======= =======
Ciber, Inc.
SUMMARY SEGMENT DATA
(Dollars in thousands)
(Unaudited)
Summary Segment Analysis
Three Months Ended March 31,
2016 2015 Change
---- ---- ------
Revenues:
International $75,964 $96,687 (21)%
North America 99,585 105,567 (6)%
Other 764 788 (3)%
Total segment revenues 176,313 203,042 (13)%
Inter-segment (1,262) (1,037) 22%
------ ------
Total revenues $175,051 $202,005 (13)%
======== ========
Operating income (loss) from continuing
operations:
International $(1,036) $6,413 n/m
North America 6,544 9,996 (35)%
Other 125 76 64%
Total segment operating
income 5,633 16,485 (66)%
Corporate expenses (14,112) (10,488) (35)%
------- -------
Operating income from
continuing operations
before amortization and
restructuring charges (8,479) 5,997 n/m
Goodwill impairment (85,923) - 100%
Amortization of
intangible assets (593) - n/m
Restructuring charges (345) (61) n/m
---- ---
Total operating income
(loss) from continuing
operations $(95,340) $5,936 n/m
======== ======
_____________
n/m = not meaningful
Segments as Percent of Total Segment Revenue and Total Segment Operating Income
(excluding Inter-segment, corporate expenses, amortization and restructuring)
Three Months Ended March
31,
2016 2015
---- ----
Revenues:
International 43% 48%
North America 57% 52%
Other - % - %
--- --- --- ---
Total segment
revenues 100% 100%
=== ===
Operating income:
International (18)% 39%
North America 116% 61%
Other 2% - %
--- --- ---
Total segment
operating income 100% 100%
=== ===
Segment Operating Margins
(excluding corporate expenses, amortization and restructuring charges)
Three Months Ended
March 31,
2016 2015
---- ----
Operating margin:
International (1)% 7%
North America 7% 9%
Other 16% 10%
Total segment operating
margin 3% 8%
Ciber, Inc.
NON-GAAP FINANCIAL INFORMATION
(Dollars in millions, except per share amounts)
(Unaudited)
Ciber reports its financial results in accordance with U.S. 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, our quarterly earnings call, and our quarterly report on form 10-Q 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 March 31, 2016
Comparison to
Three Months Ended March 31, 2015
---------------------------------
Constant Foreign GAAP
Currency Exchange Reported
Revenue Impact
Decrease
Revenue
Decrease
--------
Revenues:
Consolidated (10.7)% (2.6)% (13.3)%
====== ===== ======
International (15.8)% (5.6)% (21.4)%
====== ===== ======
Three Months Ended March 31, 2016
Sequential Comparison
to Three Months Ended December 31, 2015
---------------------------------------
Constant Foreign GAAP
Currency Exchange Reported
Revenue Impact
Decrease
Revenue
Decrease
--------
Revenues:
Consolidated (9.5)% (0.5)% (10.0)%
===== ===== ======
International (12.0)% (1.0)% (13.0)%
====== ===== ======
Adjusted Results of Operations
Consolidated*
------------
Three Months Ended March 31, Three Months Ended March Three Months Ended December
2016 31, 2015 31, 2015
----------------------------- ------------------------- ---------------------------
In millions Margin In millions Margin In millions Margin
----------- ------ ----------- ------ ----------- ------
GAAP reported
operating income
(loss) from
continuing
operations (95.3) (54.5)% $5.9 2.9% $1.3 0.7%
Goodwill
impairment 85.9 49.1 - - - -
Restructuring
charges 0.3 0.3 0.1 - 1.9 1.0
Amortization of
intangible assets 0.6 0.2 - - 0.2 0.1
Operating income
(loss) from
continuing
operations before
goodwill
impairment,
restructuring
charges and
amortization $(8.5) 4.8% $6.0 3.0% $3.4 1.8%
===== === ==== === ==== ===
*Columns may not total due to rounding
Consolidated*
------------
Three Months Ended March 31, 2016 Three Months Ended March 31, Three Months Ended December 31,
2015 2015
--------------------------------- ----------------------------- --------------------------------
In millions Per Share In millions Per Share In millions Per Share
----------- ---------- ----------- --------- ----------- ---------
GAAP net income
(loss) from
continuing
operations (97.0) $(1.21) 4.2 $0.05 $(1.6) $(0.02)
Goodwill
impairment 85.9 1.07 - - - -
Restructuring
charges 0.3 - 0.1 - 1.9 0.02
Tax impact of
restructuring
charges - - (0.2) - 0.5 0.01
Amortization of
intangibles 0.6 0.01 - - 0.2 -
--- ---- --- ---
Net income (loss)
from continuing
operations before
goodwill
impairment,
restructuring
charges and
amortization $(10.1) $(0.13) $4.1 $0.05 $0.9 $0.01
====== ====== ==== ===== ==== =====
*Columns may not total due to rounding
Logo - http://photos.prnewswire.com/prnh/20150708/234002LOGO
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/ciber-reports-first-quarter-2016-results-300263392.html
SOURCE Ciber, Inc.
