EX-99.1 2 a2152209zex-99_1.htm EX-99.1
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Exhibit 99.1

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CIBER, Inc.
5251 DTC Parkway, Suite 1400
Greenwood Village, CO 80111
www.ciber.com

For Immediate Release   Contacts:   Doug Eisenbrandt
Investor Relations
303-220-0100
deisenbrandt@ciber.com
  Jenn Wing
Media Relations
303-220-0100
jwing@ciber.com


CIBER's 2004 REVENUE GROWS 22%, SETS RECORD
Fourth Quarter Revenue up 41% to $235 Million, Also a Record;
Fiscal and Fourth Quarter Earnings Up 49% and 78%, Respectively;
Free Cash Flow Increases 37% to $37 Million

        GREENWOOD VILLAGE, Colo.—February 16, 2005—CIBER, Inc. (NYSE: CBR), a leading international IT consultancy, reported its best revenue year ever and its best year in net income since 1999. Recapping 2004, revenue was $843.0 million, net income was $29.7 million, and (after $0.03 dilution from adopting EITF Issue 04-8 effective as of December 2003, discussed below), Cash EPS (also defined below) was $0.48 per share and GAAP EPS was $0.45 per share.

Overview:

        "2004 was a momentous, record setting year for CIBER. We are hardly at the end of our journey, and this is a very nice mile-marker in our 31-year history. Having gone public (1994) prior to the frenzy of the late 1990's, survived the dotcom episode and reinvented our business model to thriving while others disappeared or languish, is a testimony to the hard work of our great employees. Our shareholders can be very proud of what our employees have done and are doing," said Mac Slingerlend, CIBER's President and Chief Executive Officer. "To increase revenue 22 percent, net income 49 percent, Cash EPS 45 percent, GAAP EPS 45 percent, and Free Cash Flow (defined below) 36 percent for 2004, hardly a robust year economically, was special."

        "In great measure, in 2004 we almost tripled our European end-of-year revenue size, almost doubled our U.S. Federal Government practice, added approximately 30 percent to our U.S. State & Local business, more than doubled our offshore business, and we increased our consolidated operating income margin by 140 basis points at the same time. While we readily admit many of these accomplishments came from accretive mergers and acquisitions joining the CIBER group, there were organic growth accomplishments as well."

Geographic Segments:

        By 'geography', the U.S. represented 83 percent of CIBER's 2004 revenue with Europe and Asia representing 17 percent. A year ago, the U.S. represented 89 percent of CIBER's 2003 revenue. For the December quarter only, European and Asian revenue increased to 23 percent of the total, more than double a year earlier. Some of CIBER's larger competitors have more international revenue than U.S. revenue.

Fourth Quarter and Fiscal 2004 Metrics

Record Revenue:

        Revenue for the fourth quarter of 2004 of $235.2 million was an all-time high for CIBER. This represented an increase of 41 percent year-over-year and 7.2 percent sequentially. Merger and acquisition activity represented the lion's share of the growth, but organic revenue grew approximately 3.0 percent year-over-year and 1.0 percent sequentially, representing the first time in two years that CIBER has achieved both sequential and year-over-year organic growth at the same time.

        "By 'business model' components, our fourth quarter of 2004 saw organic growth of over 100 consultants in our U.S. Custom Solutions Division, which grew revenue per day by approximately 3.0 percent sequentially, but was offset by fewer billing days in the quarter. As expected, profitability of this group was lower sequentially because of seasonal time off. Our ERP Division (CIBER Enterprise Solutions) had lower seasonal consulting revenue, but higher hardware sales commissions to offset this, and it had a very good profitability quarter driven by the commissions. European operations, with the first full quarter of Novasoft AG's operations, increased significantly in revenue and profitability, but were hindered by a Danish project that significantly impacted overall operating results. All together, because U.S. Custom Solutions continues to dominate total operations, revenue for the quarter was above mid-point of the guidance range and earnings were slightly below, mainly due to the previously mentioned Danish project," said Slingerlend

        Calendar 2004 revenue of $843.0 million was also a CIBER record. Aided by acquisitions, but with an organic growth contribution, revenue grew 22 percent from $692.0 million for 2003. A year earlier, 2003 revenue had also improved 14 percent compared to 2002's $608.0 million.

        "Looking at the components of 2004's revenue growth, our biggest fiscal growth was in European operations (84 percent, to $140.8 million). Our U.S. Federal Government business grew over 80 percent year-over-year to $162.2 million. Our U.S. State & Local business grew approximately 30 percent year-over-year to $115.5 million. And, our U.S. Commercial business was off approximately 3.0 percent at $336.5 million. All of these groups were benefited from mergers and acquisitions in varying amounts. Our U.S. ERP business (CIBER Enterprise Solutions) fell 6 percent to $88.0 million. Oracle's protracted hostile efforts upon PeopleSoft were not helpful from June 2003 forward; the recent acquisition may help unlock opportunities," Slingerlend concluded.

Net Income:

        Net income of $7.5 million for the December 2004 quarter increased 78 percent from $4.2 million for the December 2003 quarter. Operating leverage from top-line growth and margin expansion, mainly from cost containment, was the primary benefactor.

        For the year, net income of $29.7 million was the best since 1999 and represented a 49 percent increase over $20.0 million for 2003, which was 41 percent higher than 2002's net income of $14.2 million.

Adoption of EITF Issue 04-8:

        CIBER has adopted EITF Issue 04-8 retroactive to December 2003. This action provides that, because of our contingent convertible debt offering of December 2003, and solely for the sake of calculating FASB's stipulated EPS number, CIBER shall now retroactively add to our 2004 results the potential dilution of the conversion of this debt. For 2004, this increased net income by $3.8 million and added 12.83 million more shares to our fully diluted share count. The affect in tabular form: (In millions, except per share data)

 
  Fourth Quarter—2004
  Fiscal 2004
 
  Before EITF 04-8
  With EITF 04-8
  Before EITF 04-8
  With EITF 04-8
Net Income   $ 7.5   $ 8.5   $ 29.7   $ 33.5
Diluted Shares     63.7     76.6     61.8     74.6
GAAP EPS   $ 0.12   $ 0.11   $ 0.48   $ 0.45

        Please note that bondholders cannot convert their holdings into CIBER stock until our stock trades at least $16.36 per share or higher (it closed February 15, 2005 at $8.02 per share), and there is no cash outlay, no P&L expense and no additional shares outstanding representing this prescribed EPS number. FASB's wisdom apparently is that these shares could become outstanding in the future and should be considered outstanding now, albeit we believe in our case likely misleading to investors in the near term.

        Defensively, CIBER declared irrevocably on January 5, 2005 that it will settle not less than 30 percent of the principal amount of the bonds upon conversion "in cash," a choice CIBER protected when the debt was issued. Consequently, instead of adding 12.83 million shares outstanding for 2005 for EPS purposes, CIBER will be adding 70 percent of this amount (~9.0 million) to its fully diluted shares count to compute FASB's EPS, and instead of adding $3.8 million to net income, CIBER will only add $2.7 million.

        CIBER's results for 2004 and comments on 2005 expectations reflect the addition of these non-outstanding shares, more specifically, 12.83 million for 2004 and 8.94 million for 2005. These entries retroactively reduced 2004's EPS by $0.03/share and 2005's EPS prospectively by approximately $0.04/share.

Cash EPS:

        Cash EPS (net income plus tax adjusted amortization of intangible assets) of $0.12/share for 2004's fourth quarter was 71 percent higher than results a year earlier of $0.07/share. For the year, Cash EPS of $0.48/share increased 45 percent over 2003's results of $0.33/share (restated from $0.34/share for EITF 04-8, see above), which was 65 percent higher than 2002's results of $0.20/share.

GAAP EPS:

        Prior to the EITF Issue 04-8 adjustment, GAAP EPS for the December 2004 quarter was $0.12/share. After the adjustment, GAAP EPS of $0.11 per share for the December 2004 quarter was 57 percent higher than the December 2003 quarter of $0.07/share. Margin expansion, top-line growth and a positive year-to-year comparison with a telecom client that curtailed work in September 2003 all contributed.

        For the year, post-FASB adjusted GAAP EPS of $0.45/share represented a 45 percent increase of $0.31/share for 2003. 2003 had improved 41 percent over $0.22/share for CIBER's 2002.

        Both Cash EPS and GAAP EPS would have been $0.02/share higher for the quarter and year had we not incurred extra project expenses during the fourth quarter.

Free Cash Flow & Net Free Cash Flow:

        Free Cash Flow (defined as net income + depreciation + amortization - capital expenditures) for the quarter and year-to-date was: (In millions, except per share data)

 
  Quarter
  Calendar
 
  Dec 2003
  Dec 2004
  2003
  2004
Net Income   $ 4.2   $ 7.5   $ 20.0   $ 29.7
Depreciation and Amortization     2.5     3.6     11.2     14.2
Capital Expenditures     -1.2     -2.6     -4.4     -7.3
   
 
 
 
Free Cash Flow (FCF)   $ 5.5   $ 8.5   $ 26.8   $ 36.6
Other Operating Activities Changes     14.3     7.7     15.6     0.3
   
 
 
 
Net FCF   $ 19.8   $ 16.2   $ 42.4   $ 36.9
   
 
 
 
FCF/Share   $ 0.09   $ 0.13   $ 0.42   $ 0.59
Shares used in calculations     65.9     63.8     64.0     61.8

        (Our definition of Free Cash Flow includes the line items shown above, but does not include all operational working capital changes as the "timing" of certain payments and receipts unevenly distort quarterly results. For example, the fourth quarter of 2004 and year each had an extra payroll period (~$12 million) compared to the respective 2003 periods. We added above "Other Operating Activities Changes" from the Statement of Cash Flows, which increase or decrease Free Cash Flow, to provide "Net Free Cash Flow".) Net Income and shares used in the above table are without FASB's EITF 04-8, as it would be misleading to add cash flow that did not occur and divide by shares that are not outstanding.

        Compared to the $36.6 million FCF above, Wall Street analysts' current FCF consensus estimate for 2005 is approximately $48-52 million.

Novasoft Update:

        Pursuant to a German government approved offering document, CIBER purchased 26.5 percent of Novasoft AG's outstanding minority shares in November 2004. CIBER proceeded to add 0.6 percent in December. Combined with our 67.0 percent purchased in September 2004, CIBER owned 94.1 percent of Novasoft's net outstanding shares as of December 31, 2004. Subsequent to year-end, CIBER has acquired another 0.7 percent, or 94.8 percent in total. As soon as we acquire the required 95.0 percent level, we will proceed to promptly provide to acquire the remaining publicly-held shares pursuant to mechanisms of German securities laws.

Domestic Bookings and Pipeline:

        "Signed contracts for U.S. operations for the December 2004 quarter were approximately $190 million. For the 2004 year, U.S. bookings were approximately $865 million, representing a U.S. book to bill ratio of 1.2 to 1. Our U.S. pipeline has increased slightly to $1.6 billion at year's end," said Ed Longo, CIBER's Chief Operating Officer.

Sarbanes Oxley:

        The cost for 2004 to CIBER shareholders to comply with this legislation was approximately $1 million, or $0.01/share. We believe CIBER's costs have been lower than those reported by most public companies that have broken them out. Ongoing costs are currently projected at about $500,000 per year. Much higher external accounting fees, because that industry is being asked to defend themselves more than ever, are the main costs to shareholders going forward.

Goals for 2005:

        "CIBER's 2005 is heavily focused on 'organic growth' initiatives. Industry verticals in our ERP services groups are a priority. Public sector growth, both Federal and State & Local, are also high priorities. Continued assimilation of our material 2004 M&A in Europe 2004 is also vital. SAP consulting, now representing well over 10 percent of consolidated annualized revenues, is an area of greater attention for 2005. And, our recently announced "CIBERsites" initiative, our domestic development centers which offer an alternative to sending U.S. jobs offshore, will hopefully gain the traction that we think can be very meaningful," continued Slingerlend.

2005 Outlook

        Please again note that CIBER's guidance for 2005 includes potential dilution from its 27/8 percent of 2003 debenture offering (as though bondholders will convert all of their holdings (not currently possible) into common shares once CIBER's stock trades above $16.36/share). The retroactive dilution from this synthetic calculation was approximately $0.03 per share to 2004 results and will average approximately $0.01 per quarter in 2005.

        Consistent with the Company's more baseline approach to guidance, for the quarter ending March 2005, CIBER now anticipates, under current circumstances, revenue of $235-240 million, Cash EPS of $0.11-0.12 per share and GAAP EPS of $0.10-0.11 per share.

        For calendar 2005, we are guiding revenue to a range of $970-990 million. Cash EPS is anticipated in the $0.60 per share range with GAAP EPS of approximately $0.55 per share, both plus or minus $0.02 per share. These would be representative increases of 15-17 percent in revenue, 21-29 percent in Cash EPS and 18-27 percent in GAAP EPS. Free Cash Flow is forecasted to be $48-52 million, or approximately $0.80/share (without including FASB's additions to income and share count).

About CIBER, Inc.

        CIBER, Inc. (NYSE: CBR) is a pure-play international system integration consultancy with superior value-priced services for both private and government sector clients. CIBER's global delivery services are offered 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, the company's consultants now serve client businesses from over 60 U.S. offices, 22 European offices and three offices in Asia. With offices in 17 countries, annualized revenue run rate of approximately $950 million and approximately 8,000 employees, CIBER's IT specialists continuously build and upgrade our clients' systems to "competitive advantage status." CIBER is included in the Russell 2000 Index and the S&P Small Cap 600 Index. CIBER, ALWAYS ABLE.

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© 2005. All rights reserved.

CIBER, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)

 
  Three Months Ended
December 31,

  Year Ended
December 31,

 
 
  2003
  2004
  2003
  2004
 
 
  In thousands, except per share data

 
Consulting services   $ 161,664   $ 226,043   $ 663,973   $ 809,162  
Other revenue     5,734     9,194     28,014     33,859  
   
 
 
 
 
  Total revenue     167,398     235,237     691,987     843,021  
   
 
 
 
 
Cost of consulting services     119,360     167,302     478,328     589,397  
Cost of other revenue     4,159     5,167     20,369     21,450  
Selling, general and administrative expenses     37,550     48,089     158,163     176,692  
Amortization of intangible assets     641     1,375     2,664     4,214  
   
 
 
 
 
  Operating income     5,688     13,304     32,463     51,268  
Other income (expense), net     (162 )   (1,895 )   (1,028 )   (3,873 )
   
 
 
 
 
  Income before income taxes     5,526     11,409     31,435     47,395  
Income tax expense     1,348     3,958     11,451     17,694  
   
 
 
 
 
  Net income   $ 4,178   $ 7,451   $ 19,984   $ 29,701  
   
 
 
 
 
Earnings per share—diluted   $ .07   $ 0.11   $ .31   $ 0.45  
   
 
 
 
 
Weighted average shares—diluted     67,741     76,573     65,451     74,642  

        For the three months ended December 31, 2003 and 2004, respectively, earnings per share—basic was $0.07 and $0.12, and weighted average shares—basic were 62,228 and 62,540.

        For the year ended December 31, 2003 and 2004, respectively, earnings per share—basic was $0.31 and $0.49, and weighted average shares—basic were 63,505 and 60,701.

CIBER, Inc. and Subsidiaries
Consolidated Balance Sheets
(Unaudited)

 
  December 31,
2003

  December 31,
2004

 
  In thousands

Assets            
Current assets:            
  Cash and cash equivalents   $ 132,537   $ 44,446
  Accounts receivable, net     140,037     206,108
  Prepaid expenses and other current assets     10,521     18,163
  Income taxes refundable     4,616     743
  Deferred income taxes     4,931     5,421
   
 
    Total current assets     292,642     274,881
Property and equipment, net     15,377     26,745
Intangible assets, net     258,223     449,645
Other assets     7,081     7,401
   
 
    Total assets   $ 573,323   $ 758,672
   
 
Liabilities and Shareholders' Equity            
Current liabilities:            
  Accounts payable   $ 17,236   $ 28,200
  Accrued compensation and related liabilities     37,954     46,491
  Other accrued expenses and liabilities     24,399     50,405
  Income taxes payable     501     10,914
   
 
    Total current liabilities     80,090     136,010
Long-term line of credit—bank         48,704
Long-term debentures     175,000     175,000
Other long-term liabilities     13,601     17,418
   
 
    Total liabilities     268,691     377,132
Minority Interest         3,877
Shareholders' equity     304,632     377,663
   
 
    Total liabilities and shareholders' equity   $ 573,323   $ 758,672
   
 

CIBER, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)

 
  Year ended December 31,
 
 
  2003
  2004
 
 
  In thousands

 
Operating activities:              
  Net income   $ 19,984   $ 29,701  
  Adjustments to reconcile net income to net cash provided by (used in) operating activities:              
    Depreciation     8,604     10,006  
    Amortization of intangible assets     2,664     4,214  
    Deferred income taxes     7,653     10,155  
    Provision for doubtful receivables     2,025     1,222  
    Provision for office lease and closure costs     1,267      
    Other, net     (253 )   (27 )
    Changes in operating assets and liabilities, net of the effects of acquisitions:              
      Accounts receivable     6,789     (15,962 )
      Other current and long-term assets     1,459     1,347  
      Accounts payable     1,169     4,685  
      Accrued compensation and related liabilities     271     (12,145 )
      Other accrued expenses and liabilities     (15,592 )   (6,185 )
      Income taxes payable/refundable     6,328     9,914  
   
 
 
        Net cash provided by operating activities     42,368     36,925  
   
 
 
Investing activities:              
  Acquisitions, net of cash acquired     (17,648 )   (120,328 )
  Proceeds from the sale of DigiTerra Broadband, net of expenses     1,986     300  
  Purchases of property and equipment, net     (4,410 )   (7,357 )
  Purchases of investments     (62 )    
  Sales of investments     593      
   
 
 
        Net cash used in investing activities     (19,541 )   (127,385 )
   
 
 
Financing activities:              
  Employee stock purchases and options exercised     7,824     8,629  
  Purchases of treasury stock     (55,348 )   (11,181 )
  Borrowings on long term bank line of credit     367,965     246,448  
  Payments on long term bank line of credit     (389,829 )   (197,744 )
  Line of credit origination fees paid     (250 )   (88 )
  Repayment of debt of acquired companies         (52,628 )
  Proceeds of debenture offering     169,289      
  Borrowing on term note         6,000  
  Payments on term note         (1,800 )
  Cash settlement of put option     (5,832 )    
  Minority contribution         294  
   
 
 
        Net cash provided by (used in) financing activities     93,819     (2,070 )
   
 
 
  Effect of foreign exchange rate changes on cash     992     4,439  
   
 
 
        Net increase (decrease) in cash and cash equivalents     117,638     (88,091 )
  Cash and cash equivalents, beginning of period     14,899     132,537  
   
 
 
  Cash and cash equivalents, end of period   $ 132,537   $ 44,446  
   
 
 

Supplemental Information:

CIBER, Inc.
Operating Results Analysis
For the Quarter and Year Ended December 31, 2004
(unaudited)
($ In millions)

 
  Three Months Ended
  Year Ended
 
  December 31, 2003
  December 31, 2004
  December 31, 2003
  December 31, 2004
 
  Amount
  % of
Revenue

  Amount
  % of
Revenue

  Amount
  % of
Revenue

  Amount
  % of
Revenue

Revenue By Divisions                                        
U.S. Custom                                        
  Commercial*   $ 80.6   48   $ 86.0   37   $ 349.0   50   $ 339.0   40
  Public Sector     43.8   26     73.7   31     174.9   25     277.7   33
U.S. Package     21.1   13     21.9   9     93.8   14     88.0   10
Europe*     22.6   14     53.9   23     76.5   11     140.8   17
Corporate Elims.      -0.7       -0.3       -2.2       -2.5  
   
 
 
 
 
 
 
 
Total   $ 167.4   100   $ 235.2   100   $ 692.0   100   $ 843.0   100
   
 
 
 
 
 
 
 

 

 

 


 

% of Div.
Revenue


 

 


 

% of Div.
Revenue


 

 


 

% of Div.
Revenue


 

 


 

% of Div.
Revenue

Operating Income                                        
U.S. Custom                                        
  Commercial*   $ 4.5   5.6   $ 7.1   8.3   $ 27.5   7.9   $ 28.1   8.3
  Public Sector     4.7   10.7     6.2   8.4     19.3   11.0     29.6   10.7
U.S. Package     1.0   4.7     2.9   13.2     8.9   9.5     8.0   9.1
Europe*     1.5   6.6     2.9   5.4     2.4   3.1     9.1   6.5
Corporate Expense     -5.4   -3.2     -4.4   -1.9     -22.9   -3.3     -19.3   -2.3
   
 
 
 
 
 
 
 
EBITA   $ 6.3   3.8   $ 14.7   6.3   $ 35.2   5.1   $ 55.5   6.6
   
 
 
 
 
 
 
 
Amortization Expense     0.6   0.4     1.4   0.6     2.7   0.4     4.2   0.5
   
 
 
 
 
 
 
 
Operating Income   $ 5.7   3.4   $ 13.3   5.7   $ 32.5   4.7   $ 51.3   6.1
   
 
 
 
 
 
 
 

*
U.S. includes India's results; Europe includes Eastern Asia

Average Headcounts: (~)                          
  Billable     5,100     7,100     5,000     6,400  
  Total     5,800     8,100     5,700     7,300  
Utilization (~)     85 %   87 %   88 %   90 %
Avg. Hourly Bill Rates (~)   $ 72.00   $ 74.00   $ 72.00   $ 71.25  

###



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CIBER's 2004 REVENUE GROWS 22%, SETS RECORD Fourth Quarter Revenue up 41% to $235 Million, Also a Record; Fiscal and Fourth Quarter Earnings Up 49% and 78%, Respectively; Free Cash Flow Increases 37% to $37 Million