News Column

Ciber, Inc: CIBER REPORTS SECOND QUARTER 2014 RESULTS

July 29, 2014

Ciber, Inc.6363 S. Fiddler's Green Circle, Suite 1400 Greenwood Village, CO  80111 www.ciber.com CIBER REPORTS SECOND QUARTER 2014 RESULTS GREENWOOD VILLAGE, Colo., July 29, 2014- Ciber, Inc. (NYSE: CBR), a leading global information technology consulting, services and outsourcing company, today reported results for the second quarter of 2014. Highlights From Continuing Operations for the Second Quarter 2014 Include: * Revenue of $214.6 million, a 3% decrease in U.S. dollars and a 5% decrease in constant currency versus the prior year * Operating income before amortization, restructuring charges and management transition costs, of $4.1 million, representing an operating income margin of 1.9% * Net loss from continuing operations of $5.2 million, or net income from continuing operations of $1.3 million before amortization, restructuring charges and management transition costs, or $0.02 per share * Operating cash flow from continuing operations of $3.3 million President and Chief Executive Officer Michael Boustridge said, "Despite progress in North America, our second-quarter results were below internal expectations. Challenges in International have been an ongoing area of management focus, diluting the significant opportunity Ciber is uniquely positioned to capture. These issues require immediate action and we have begun implementation of a plan to accelerate the move to global practice areas and substantively change our global delivery mix.  These changes will be executed methodically and with a sense of urgency." Christian Mezger, Chief Financial Officer, commented, "We announced a $24 million restructuring program focused on the implementation of a go-to-market model, realigning the organization and improving our offshore delivery mix.  The program will begin in the third quarter of 2014 and is expected to be completed in the next twelve months.  Finally, our cash position and growth in our operating cash flow, permit us the flexibility to execute our plans." Market Highlights in the Second Quarter Include: * Berry Bros. & Rudd, a wine and spirits merchant in the U.K., has chosen Ciber to implement an SAP ERP system to support retail operations as well as the company's online wine trading platform. Founded in 1698, Berry Bros. and Rudd is one of Britain's oldest, most respected wine merchants. * The City of Philadelphia picked Ciber to support system modernization efforts with implementation of an Oracle ERP system. * A leading global hospitality company chose Ciber's Business Consulting practice to manage the company's new Enterprise Quality Assurance Center to drive quality through all facets of the IT lifecycle. * A leading global financial services company engaged Ciber's Application Development and Management practice to create a next-generation client reporting platform. Second Quarter Financial Results from Continuing Operations Revenue of $214.6 million decreased 3% in U.S. dollars and 5% in constant currency, compared with last year's second quarter.  Sequentially from the first quarter of 2014, revenue was down 2% in both U.S. dollars and constant currency. Gross margin for the second quarter was 25.4%, compared with 25.4% in last year's second quarter and 25.9% in the first quarter of 2014. Selling, general and administrative expenses (SG&A), in the second quarter were $55.4 million.  Excluding management transition costs, SG&A in the second quarter was $50.4 million, flat compared to the second quarter of last year, and an increase of 1.6% sequentially. Second quarter 2014 operating income from continuing operations of $4.1 million, before amortization, restructuring charges and management transition costs, yielded an operating margin of 1.9%, compared to 2.6% in the prior-year second quarter, and 3.2% in the first quarter of 2014.  Including amortization, restructuring charges and management transition costs, operating loss from continuing operations was $2.4 million. Net income from continuing operations, before amortization, restructuring charges and management transition costs, for the second quarter of 2014 was $1.3 million, or $0.02 per share. Including amortization, restructuring charges and management transition costs, net loss from continuing operations was $5.2 million in the quarter.  Last year's second quarter net income from continuing operations, before restructuring, was $3.4 million, or $0.04 on a per share basis.  For the first quarter of 2014, net income from continuing operations, before restructuring, was $4.0 million, or $0.05 per share. Revenue in the International division was $109.8 million for the second quarter of 2014, which was down 4% compared to the year-ago second quarter, and down 8% in constant currency. Compared to the first quarter of 2014, International revenue was down 5% in both U.S. dollars and constant currency.  Operating margin of 2.9% was down 240 basis points compared to the second quarter of 2013 and down 300 basis points from the first quarter of 2014. The North American division posted revenue of $105.2 million, down 2% from the year-ago second quarter and up 2% compared to the first quarter of 2014. Operating margin of 8.7% improved 70 basis points from the year-ago second quarter and 50 basis points from the first quarter of 2014. Capital Deployment and Liquidity Ciber's cash balance at the end of the second quarter of 2014 was $20.4 million. The outstanding balance on the credit facility was $7.4 million. Cash flow used in operating activities (continuing operations) year-to-date through June 30 was $27.3 million, an increase of $10.1 million versus the prior year.  Days Sales Outstanding (DSO) were 67 days. Capital expenditures totaled $2.9 million in the quarter. Restructuring On July 25, 2014, we approved a restructuring plan focused on the implementation of a go-to-market model, realigning the organization and improving our offshore delivery mix ("the 2014 Plan"). The 2014 Plan will commence in the third quarter of 2014 and is expected to be completed in the next twelve months. We estimate the total amount of the restructuring charges for the 2014 Plan will be approximately $24 million, substantially all of which will be cash. 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 www.ciber.com/cbr. Investor and Analyst Conference Call Ciber President and Chief Executive Officer Michael Boustridge invites you to participate in a conference call or audiocast today at 8:30 a.m. Eastern Time to discuss the Company's financial results. The live audiocast of the conference call will be available to the public at www.ciber.com/cbr.  To participate in the conference call, dial 866-318-8613 (U.S.) or +1-617-399-5132 (outside the U.S.) ten minutes prior to the start of the call and provide the operator with the pass code 75328445. A replay of the call and webcast will be available one hour after the call ends through August 29, 2014.  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 36238985. 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: second quarter 2014 revenue change year- over-year adjusted for currency; second quarter year to date 2014 revenue change year-over-year adjusted for currency; second quarter 2014 sequential revenue change adjusted for currency; international second quarter 2014 revenue change year-over-year adjusted for currency; international second quarter year to date 2014 revenue change year-over-year adjusted for currency;  international second quarter 2014 sequential revenue change adjusted for currency; second quarter 2014 SG&A expenses excluding management transition costs; second quarter 2014 operating income from continuing operations and operating margin adjusted for restructuring, amortization, and management transition costs; first quarter 2014 operating income from continuing operations and operating margin adjusted for restructuring charges, amortization and management transition costs; second quarter 2013 operating income from continuing operations and operating margin adjusted for restructuring charges, amortization and management transition costs; second quarter 2014 net income from continuing operations and net income per share from continuing operations adjusted for restructuring charges, amortization and management transition costs; first quarter 2014 net income from continuing operations and net income per share from continuing operations adjusted for restructuring charges, amortization and management transition costs; and second quarter 2013 net income from continuing operations and net income per share from continuing operations adjusted for restructuring charges, amortization and management transition costs. Reconciliations of non-GAAP to comparable 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 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," "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, risks that: our results of operations may be adversely affected if we are unable to execute on the key elements of our strategic plan or our strategic plan proves to be less successful than anticipated; if we are not able to anticipate and keep pace with rapid changes in technology, our business may be negatively affected;  a data security or privacy breach could adversely affect our business; we may experience declines in revenue and profitability if we do not accurately estimate the cost of engagements conducted on a fixed-price basis; our business could be adversely affected if our clients are not satisfied with our services, and we could face damage to our professional reputation and/or legal liability; termination of a contract by a significant client and/or cancellation with short notice could adversely affect our results of operations; our results of operations can be adversely affected by economic conditions and the impacts of economic conditions on our clients' operations and technology spending; if we do not continue to improve our operational, financial and other internal controls and systems to manage our growth and size or if we are unable to enter, operate and compete effectively in new geographic markets, our results of operations may suffer and the value of our business may be harmed; our brand and reputation are key assets and competitive advantages of our Company and our business may be affected by how we are perceived in the marketplace; our future success depends on our ability to continue to retain and attract qualified sales, delivery and technical employees; we cannot guarantee that we are in compliance with all applicable laws and regulations; if we are unable to protect our intellectual property rights from unauthorized use or infringement by third parties, our business could be adversely affected; our services or solutions could infringe upon the intellectual property rights of others, or we might lose our ability to utilize rights we claim in intellectual property or the intellectual property of others; if we are unable to collect our receivables, our results of operations and cash flows could be adversely affected; our credit agreement, an asset-based loan facility, limits our operational and financial flexibility; our revenues, operating results and profitability may vary from quarter to quarter and may result in increased volatility in the price of our stock; our international operations expose us to additional risks that could have adverse effects on our business and operating results; the IT services industry, in the U.S. and internationally, is highly competitive, with increased focus on offshore capability and we may not be able to compete effectively in this evolving marketplace; our operations are vulnerable to disruptions that may impact our results of operations and from which we may not recover; we might not be successful at identifying, acquiring, or integrating businesses or entering into joint ventures; we could incur additional losses due to further impairment in the carrying value of our goodwill; we depend on contracts with various public sector agencies for a significant portion of our revenue and, if the spending policies or budget priorities of these agencies change, we could lose revenue; unfavorable government audits could require us to adjust previously reported operating results, to forego anticipated revenue and subject us to penalties and sanctions; we have adopted 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, thus affecting the market price of our securities.  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, 2013 and other documents filed with or furnished to the Securities and Exchange Commission. 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 leading global IT consulting company with some 6,500 consultants and contractors in North America, Europe and Asia/Pacific, and approximately $1 billion of annual business. Client focused and results driven, 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. ### Contact: Christian Mezger Investor Relations 303-267-3857 cmezger@ciber.comBetsy Loeff Media Relations 303-967-1304 bloeff@ciber.com CBR Q2 2014 Earnings Release Tables: http://hugin.info/150999/R/1840870/640580.pdf This announcement is distributed by GlobeNewswire on behalf of GlobeNewswire clients. The owner of this announcement warrants that: (i) the releases contained herein are protected by copyright and other applicable laws; and (ii) they are solely responsible for the content, accuracy and originality of the information contained therein. Source: Ciber, Inc via GlobeNewswire [HUG#1840870]


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