Oct. 27, 2009 (PR Newswire) -- GREENWOOD VILLAGE, Colo., Oct. 27 /PRNewswire-FirstCall/ -- Today CIBER, Inc. (NYSE: CBR), a leading international IT outsourcing and software services consultancy, reported its financial results for the third quarter of 2009. We will hold a conference call on October 27, 2009 at 11:00 a.m. EST to discuss this information; the conference call and webcast information can be found later in this release.
Management Comments:
CIBER posted positive cash flow for the 63rd consecutive quarter, continuing its 100% track record of generating quarterly positive cash flow as a public company. Additionally, CIBER's new $155 million credit facility gives the company ample liquidity to support growth with reasonable covenants that allow for operational flexibility.
CIBER's diversified global operations in 18 countries on 4 continents have served as a strategic bulwark in mitigating the global economic recession. With an average of 20 years of industry experience, the Company's seasoned management team continues to effectively provide the leadership required during this challenging economic environment. Well versed in difficult decision making, the company has weathered the economic storm by lowering SG&A costs until recovery signs are evident, while at the same time taking advantage of opportunities to add quality employees that become available during these periods.
"Our third quarter results continued to reflect the global economic malaise. However, beginning in September we have seen more customer activity, stable headcounts and new contracts, particularly in the U.S. Federal Government Division and our international operations," said Mac Slingerlend, CIBER's President and Chief Executive Officer. "Cash collections were strong in 3Q09 and our new 3-year bank facility is a solid underpinning to our financial resources. Although we were frustrated to settle a non-substantiated legal action in late September, we assured ourselves of no greater negative consequences. We are now focused on sequential quarterly improvements in overall business levels."
Sequential Quarterly Results: 3Q09 as Compared to 2Q09
-- Revenue of $256.4 million for 3Q09 compares to $260.6 million for 2Q09.
This 1.6% sequential decrease primarily reflects seasonal holidays and
vacations.
-- Operating income (net of $2.5 million of one-time charges; discussed
below) of $7.0 million for 3Q09 compares to $7.5 million for 2Q09.
Prior to the one-time charges, operating income actually increased by
approximately $2.0 million, or 27%, from the second quarter to the third
quarter.
-- 3Q09 GAAP EPS of $0.05 per share, net of $0.03 per share of non
recurring charges, compares to $0.07 per share for 2Q09. Before the
charges, the $0.01 per share sequential improvement reflects the cost
savings undertaken by the Company and improved results in the U.S. ERP
and European Divisions.
-- EBITDA for 3Q09 of $12.3 million, or $14.8 million prior to the non
recurring charges, compares to $13.0 million for 2Q09.
Non Recurring 3Q09 Charges
-- The Company was compelled to settle a lawsuit in the quarter that had
previously been considered not meaningful. The 2 1/2 year old suit from
a 5 year ago matter was expected to be dismissed against the Company.
The Company's request to be released from all charges only achieved a
partial dismissal. In mid-September, the trial commenced. Given the
sizable sums sought by the Plaintiffs and joint liability of the
multiple defendants, the Company concluded it was appropriate to avoid
any further inclusion in this matter. The Company paid $2-2.25 million
in total settlement and legal fees to be dismissed, admitting no fault.
-- In securing a new, improved three-year credit facility, the Company
accelerated unamortized fees and costs of the prior facility by
approximately $0.3 million.
On a combined basis these two non recurring charges adversely impacted Q309 by approximately $0.03 per share.
3Q09 Operational Highlights
Custom Solutions Division (Including Indian Operations)
-- Efforts to pursue larger wins by combining teams from branch offices and
Strategic Practices are now a more organized focus.
-- Most new IT spending has been business intelligence and maintenance
oriented, with new development generally on hold at corporate clients.
That said, a few clients have commented that they are just now
commencing new development.
-- Indian operations continue to build headcount and utilization.
IT Outsourcing Division
-- Vibrancy in our longer-term contracts IT Outsourcing Division continued
in the quarter, with the signing of a new $48.0 million, 6-year
contract, in addition to several smaller wins. The large contract
covers full IT operations and service desk solutions for a major
quasi-governmental financial institution. This Division also shared in
wins in Europe during the quarter and early in the fourth quarter.
U.S. ERP Division
-- The Oracle ERP Practice remains stable, with public sector clients more
active now than higher education work.
-- The U.S. SAP Practice had smaller wins in the quarter, but has a
sizeable, diversified pipeline and it is kicking-off joint lead
activities with specific verticals with its SAP partnership.
-- Our Lawson Practice remains positive in their healthcare and public
sector verticals pipeline.
Federal Government Division
-- After a slow contract start to the third quarter, this Division finished
the quarter with a flurry, which continued into October.
-- Renewals, recompetes and extensions support this revenue base while
incremental prime contractor wins are being sought.
European Division
-- The July-August summer holiday combination was a greater challenge in
2009, as utilization levels were already under greater pressure.
However, beginning September, utilization improved meaningfully.
-- Wins in Norway, Germany and the UK led the quarterly activity, with
European IT Outsourcing wins commencing in September and the current
quarter.
Eastern Asia & Pacific Operations
-- Australia/New Zealand operations remained profitable while material
projects continued to be pipeline-oriented.
-- China operations saw greater offshore support activity for European and
U.S. customers as it builds its domestic base.
Balance Sheet Highlights (September 30, 2009)
-- In August, the Company completed its refinancing of an intermediate term
credit support with a new three-year, $155 million facility led by Bank
of America, a new lender to our lender group. The syndicated bank group
included all of the former participants, except the agent, plus an
additional bank. The new facility extended the maturity and is more
flexible in its covenant structure.
-- Cash was $56.2 million and long-term debt was $92.9 million.
-- DSOs for services were 65 days, a one day sequential improvement.
Bookings Data
Bookings for the third quarter were $265 million, representing a 1.1:1 book-to-bill ratio.
Outlook
The Company currently believes that the fourth quarter will be sequentially better than the September quarter, and now anticipates 2009 fiscal revenue of $1.0351.040 billion and, net of the current quarter's $0.03/share nonrecurring charges, fiscal GAAP EPS of $0.25-0.26/share.
Conference Call and Webcast
A webcast to discuss the Company's financial results and outlook will be held at 11:00 a.m.
