8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of
The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 18, 2011

CIBER, INC.

(Exact name of registrant as specified in its charter)

Delaware	001-13103	38-2046833
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)

6363 South Fiddler’s Green Circle, Suite 1400, Greenwood Village, Colorado	80111
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (303) 220-0100

 (Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01.              Entry into a Material Definitive Agreement.

On February 18, 2011, CIBER, Inc. (“CIBER”, the “Company” or “we”) amended its senior credit agreement with several financial institutions as lenders and Bank of America, N.A. as administrative agent (the “Senior Credit Facility”).  The Senior Credit Facility was amended to: 1) change the definition of Consolidated Adjusted EBITDA to exclude up to $5 million of capital expenditures to be made during the 2011 fiscal year in connection with the expansion of our India operations; 2) change the definition of Consolidated EBITDA to exclude up to $10 million of charges taken during the quarter ended December 31, 2010, primarily related to accounts receivable and unbilled revenue balances, as well as several other legal settlement items; 3) change the definition of Consolidated Fixed Charges to give no effect to any adjustment resulting from the goodwill impairment charge taken during the quarter ended June 30, 2010, and the up to $10 million of charges taken during the quarter ended December 31, 2010, in determining our Consolidated Tax Expenses; 4) change the Consolidated Leverage Ratio to 2.50 to 1.00 on March 31, 2011, reducing to 2.25 to 1.00 on December 31, 2011, and reducing to 2.00 to 1.00 on June 30, 2012; and 5) require twelve-month Consolidated EBITDA of $44 million on December 31, 2010, $40 million on March 31, 2011 and June 30, 2011, and $45 million thereafter.  Certain other provisions of the Senior Credit Facility were also modified.

The foregoing summary is qualified in its entirety by reference to the full text of the Third Amendment to Amended and Restated Credit Agreement attached hereto as Exhibit 10.1, which is incorporated herein by reference.

Item 2.02.              Results of Operations and Financial Condition.

On February 22, 2011, CIBER issued a press release in which we announced our financial results for the three months and full year ended December 31, 2010, and provided guidance for the 2011 fiscal year.  The full text of the press release issued in connection with the announcement is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

Item 9.01(d).        Exhibits.

10.1	Third Amendment to Amended and Restated Credit Agreement, by and among CIBER, Inc., as borrower, Bank of America, N.A., as administrative agent, lender, swing line lender and L/C issuer, and the other lender parties thereto, dated February 18, 2011.
99.1	Press release dated February 22, 2011.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

	CIBER, Inc.
Date: February 22, 2011	By:	/s/ Peter H. Cheesbrough
	Peter H. Cheesbrough
	Chief Financial Officer, Executive Vice President and Treasurer

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EXHIBIT INDEX

Exhibit No.	Description
10.1	Third Amendment to Amended and Restated Credit Agreement, by and among CIBER, Inc., as borrower, Bank of America, N.A., as administrative agent, lender, swing line lender and L/C issuer, and the other lender parties thereto, dated February 18, 2011.
99.1	Press release dated February 22, 2011.

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EX-10.1

Exhibit 10.1

THIRD AMENDMENT TO AMENDED AND

RESTATED CREDIT AGREEMENT

THIS THIRD AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT dated as of February 18, 2011 (the “Agreement”) is entered into among CIBER, Inc., a Delaware corporation (the “Borrower”), the Guarantors, the Lenders party hereto and Bank of America, N.A., as Administrative Agent.  All capitalized terms used herein and not otherwise defined herein shall have the meanings given to such terms in the Credit Agreement (as defined below).

RECITALS

WHEREAS, the Borrower, the Guarantors, the Lenders and the Administrative Agent entered into that certain Amended and Restated Credit Agreement dated as of August 20, 2009 (as amended or modified from time to time, the “Credit Agreement”);

WHEREAS, the Borrower has requested and the Lenders have agreed to amend certain terms of the Credit Agreement subject to the terms and conditions set forth below;

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.Reaffirmation.  The Loan Parties acknowledge and confirm that as of the date hereof (a) the Administrative Agent, on behalf of the Lenders, has a valid and enforceable first priority security interest in the Collateral, (b) the Borrower’s obligation to repay the outstanding principal amount of the Loans and reimburse the L/C Issuer for any drawing on a Letter of Credit is unconditional and not subject to any offsets, defenses or counterclaims and (c) the Administrative Agent and the Lenders have performed fully all of their respective obligations under the Credit Agreement and the other Loan Documents.   The Loan Parties also acknowledge and confirm that by entering into this Agreement, the Lenders do not waive or release any term or condition of the Credit Agreement or any of the other Loan Documents or any of their rights or remedies under such Loan Documents or applicable Law or any of the obligations of any Loan Party thereunder.

2.Amendments to Credit Agreement.  The Credit Agreement is hereby amended as follows:

(a)The following definition of “Third Amendment Effective Date” is hereby added to Section 1.01 of the Credit Agreement in the appropriate alphabetical order to read as follows:

“Third Amendment Effective Date” means February 18, 2011.

(b)The definition of “Consolidated Adjusted EBITDA” in Section 1.01 of the Credit Agreement is hereby amended to read as follows:

“Consolidated Adjusted EBITDA” means an amount equal to the difference between (a) Consolidated EBITDA for the period consisting of the four consecutive Fiscal Periods ending on such date minus (b) Capital Expenditures (other than those certain Capital Expenditures of up to an aggregate amount of $5,000,000 made in the fiscal year ending December 31, 2011 in connection with the expansion of operations in India) for such period.

(c)Clause (f) in the definition of “Consolidated EBITDA” in Section 1.01 of the Credit Agreement is hereby amended to read as follows:

(f) for the fiscal quarter ending December 31, 2010, up to $10,000,000 of non-recurring charges in the aggregate primarily relating to several accounts receivable balances or unbilled revenue balances where the Borrower’s ability to collect is questionable due to either the customers’ ability to pay or disagreements regarding the work performed, net of any provision previously established, retiree health care benefits, anticipated litigation settlement costs and costs relating to a pledge for a donation;

(d)The proviso in the definition of “Consolidated Total Debt” in Section 1.01 of the Credit Agreement is hereby amended to read as follows:

provided, it being understood that the following does not constitute Debt for purposes of this definition:  (a) Debt under Swap Agreements, (b) surety and performance bonds permitted under Section 7.03(i), (c) any Debt under the IBM Credit Agreement but only to the extent that (i) such Debt is repaid within the earlier of (x) forty-five days of incurrence and (y) the due date therefor, (ii) the equipment purchased that gave rise to the incurrence of such Debt is subject to a valid, binding and enforceable purchase contract requiring a third party purchaser to purchase such equipment within 45 days of such incurrence and (iii) the obligations of the purchaser under such purchase contract are absolute and not contingent on any matter whatsoever (other than cancellation rights of such purchaser in the ordinary course, but only if, under such circumstances, Borrower shall have an absolute and unconditional right to cancel (and shall promptly so cancel) the affected order or return the affected equipment in each case for full credit against the Debt associated therewith) and (d) any letter of credit or bank guarantee in which a Foreign Subsidiary (and not any Loan Party) is the obligor issued to support an obligation of any Foreign Subsidiary in the ordinary course of business; provided that such letter of credit or bank guarantee is secured by cash of such Foreign Subsidiary (and not by any cash of any Loan Party) in an amount equal to 100% of the amount of such letter of credit or bank guarantee.

(e)The definition of “Consolidated Fixed Charges” in Section 1.01 of the Credit Agreement is hereby amended to read as follows:

“Consolidated Fixed Charges” means, for any period, for Borrower and its Subsidiaries on a consolidated basis, an amount equal to the sum of (i) Consolidated Tax Expenses (calculated without giving effect to any adjustment resulting from the goodwill impairment charge taken in the fiscal quarter ended June 30, 2010 and the up to $10,000,000 non-recurring charge taken in the fiscal quarter ended December 31, 2010) for such period plus (ii) Consolidated Interest Expense for such period plus (iii) Consolidated Scheduled Funded Debt Payments for such period plus (iv) for only those periods ending prior to the Third Amendment Effective Date, the amount of cash Restricted Payments in any such period permitted by Section 7.06(d) as in effect prior to the Third Amendment Effective Date, all as determined in accor dance with GAAP.

(f)Section 6.12(b) of the Credit Agreement is hereby amended to read as follows:

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(b)Consolidated Leverage Ratio.  Maintain, as of the last day of each Fiscal Period set forth below, a Consolidated Leverage Ratio not greater than the corresponding ratio for such day set forth below:

December 31, 2010	2.25:1.00
March 31, 2011	2.50:1.00
June 30, 2011	2.50:1.00
September 30, 2011	2.50:1.00
December 31, 2011	2.25:1.00
March 31, 2012	2.25:1.00
June 30, 2012 and thereafter	2.00:1.00

(g)Section 6.12(c) of the Credit Agreement is hereby amended to read as follows:

(c)Consolidated EBITDA.  Maintain Consolidated EBITDA for the twelve-month period ending as of the end of each fiscal quarter of the Borrower of at least (i) $44,000,000 for the twelve month period ending December 31, 2010, (ii) $40,000,000 for each of the twelve month periods ending March 31, 2011 and June 30, 2011 and (iii) from September 30, 2011 and thereafter, $45,000,000.

(h)Section 7.02(e) of the Credit Agreement is hereby amended to read as follows:

(e)Borrower or any Subsidiary Guarantor may consummate any Permitted Acquisition and may make good faith deposits in connection with prospective Permitted Acquisitions; provided, however, notwithstanding any term to the contrary contained herein or in any other Loan Document, no cash or Cash Equivalents of the Borrower or any Domestic Subsidiary shall be permitted to be used as consideration for, or as a good faith deposit in connection with, any Permitted Acquisition;

(i)Section 7.06 of the Credit Agreement if hereby amended to read as follows:

Section 7.06Restricted Payments.

Declare or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except that:  (a) each Subsidiary may make Restricted Payments to Borrower and to wholly owned Subsidiary Guarantors (and, in the case of a Restricted Payment by a non wholly owned Subsidiary, to Borrower and any Subsidiary Guarantor and to each other owner of Equity Interests of such Subsidiary on a pro rata basis based on their relative ownership interests); (b) Borrower and each Subsidiary may declare and make dividend payments or other distributions payable solely in (x) common Equity Interests of such Person or (y) preferred equity of Borrower that is not redeemable for cash in connection with a “poison pill” so long as no Change of Control could reasonably be expected to occur as a result of the issuance of any such preferred stock or conversion of any thereof; (c) Borrower and each Subsidiary may purchase, redeem or otherwise acquire shares of its (and, solely with respect to Borrower, its Subsidiaries’) common Equity Interests or warrants or options to acquire any such common Equity Interests with the proceeds received from the substantially concurrent issue of new shares of its common Equity Interests; and (d) the Foreign Subsidiaries (other than Exempt Foreign Subsidiaries) may purchase Equity Interests of

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its direct Foreign Subsidiaries from third parties that own minority Equity Interests in such direct Foreign Subsidiaries for cash, so long as the aggregate consideration paid for all such purchases by all such Foreign Subsidiaries shall not exceed $5,750,000.00 during the term of this Agreement.

(j)Section 7.09 of the Credit Agreement is hereby amended to read as follows:

Section 7.09Use of Proceeds.

Use the proceeds of any Credit Extension, whether directly or indirectly, and whether immediately, incidentally or ultimately, to purchase or carry Margin Stock or to extend credit to others for the purpose of purchasing or carrying Margin Stock or to refund indebtedness originally incurred for such purpose.

3.Conditions Precedent.  This Agreement shall be effective upon satisfaction of the following conditions precedent:

(a)Receipt by the Administrative Agent of counterparts of this Agreement duly executed by the Borrower, the Guarantors, the Required Lenders and Bank of America, N.A., as Administrative Agent; and

(b)The Administrative Agent shall have received for the account of each Lender executing this Agreement on or before 5 p.m. (EST) on February 18, 2011, a fee of 0.15% on the aggregate amount of such Lender’s outstanding Term Loan and Revolving Credit Commitment.

4.Miscellaneous.

(a)The Credit Agreement and the obligations of the Loan Parties thereunder and under the other Loan Documents, are hereby ratified and confirmed and shall remain in full force and effect according to their terms, as amended hereby.

(b)Each Guarantor (a) acknowledges and consents to all of the terms and conditions of this Agreement, (b) affirms all of its obligations under the Loan Documents and (c) agrees that this Agreement and all documents executed in connection herewith do not operate to reduce or discharge its obligations under the Credit Agreement or the other Loan Documents.

(c)The Borrowers and the Guarantors hereby represent and warrant as follows:

(i)Each Loan Party has taken all necessary action to authorize the execution, delivery and performance of this Agreement.

(ii)This Agreement has been duly executed and delivered by the Loan Parties and constitutes each of the Loan Parties’ legal, valid and binding obligations, enforceable in accordance with its terms, except as such enforceability may be subject to (A) bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium or similar laws affecting creditors’ rights generally and (B) general principles of equity (regardless of whether such enforceability is considered in a proceeding at law or in equity).

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(iii)          No consent, approval, authorization or order of, or filing, registration or qualification with, any court or governmental authority or third party is required in connection with the execution, delivery or performance by any Loan Party of this Agreement.

(d)           The Loan Parties represent and warrant to the Lenders that (i) the representations and warranties of the Loan Parties set forth in Article V of the Credit Agreement and in each other Loan Document are true and correct in all material respects as of the date hereof with the same effect as if made on and as of the date hereof, except to the extent such representations and warranties expressly relate solely to an earlier date and (ii) no event has occurred and is continuing which constitutes a Default or an Event of Default.  The Loan Parties hereby represent and warrant that the Borrower has not purchased, redeemed or otherwise acquired shares of its Equity Interests or warrants, rights or options to acquire any such Equity Interests for cash after December 31, 2010.

(e)           This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall constitute one and the same instrument.  Delivery of an executed counterpart of this Agreement by telecopy shall be effective as an original and shall constitute a representation that an executed original shall be delivered.

(f)            THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

BORROWER:	CIBER, INC.,
	a Delaware corporation
	By:	/s/ Peter H. Cheesbrough
	Name:	Peter H. Cheesbrough
	Title:	Chief Financial Officer and Executive Vice President
GUARANTORS:	CIBER ASSOCIATES, LLC,
	a Delaware limited liability company
	By:	/s/ Peter H. Cheesbrough
	Name:	Peter H. Cheesbrough
	Title:	Chief Financial Officer and Executive Vice President
	CIBER INTERNATIONAL, INC.,
	a Delaware corporation
	By: :	/s/ Peter H. Cheesbrough
	Name:	Peter H. Cheesbrough
	Title:	Chief Financial Officer and Executive Vice President

ADMINISTRATIVE
AGENT:	BANK OF AMERICA, N.A.,
	as Administrative Agent
	By:	/s/ Linda Lov
	Name:	Linda Lov
	Title:	AVP
LENDERS:	BANK OF AMERICA, N.A.,
	as a Lender, Swing Line Lender and L/C Issuer
	By:	/s/ David R. Barney
	Name:	David R. Barney
	Title:	Senior Vice President
	COMPASS BANK, an Alabama banking corporation
	(herein referred to as “BBVA COMPASS”),
	as a Lender
	By:	/s/ Joseph W. Nimmons
	Name:	Joseph W. Nimmons
	Title:	Vice President
	U.S. BANK NATIONAL ASSOCIATION,
	as a Lender
	By:	/s/ Jeff Benedix
	Name:	Jeff Benedix
	Title:	Assistant Vice President
	KEY BANK NATIONAL ASSOCIATION,
	as a Lender
	By:	/s/ David A. Wild
	Name:	David A. Wild
	Title:	Vice President
	UNION BANK, N.A.,
	as a Lender
	By:	/s/ Michael Ball
	Name:	Michael Ball
	Title:	Vice President

PNC BANK, NATIONAL ASSOCIATION,
as a Lender
By:	/s/ Philip K. Liebscher
Name:	Philip K. Liebscher
Title:	Senior Vice President
IBM CREDIT LLC,
as a Lender
By:	/s/ Steven A. Flanagan
Name:	Steven A. Flanagan
Title:	Global Credit Officer

EX-99.1

Exhibit 99.1

CIBER, Inc.

6363 S. Fiddler’s Green Circle, Suite 1400

Greenwood Village, CO  80111

www.ciber.com

Contact:	Gary Kohn	Robin Caputo
	Investor Relations	Media Relations
	303-625-5256	303-267-3876
	gkohn@ciber.com	rcaputo@ciber.com

CIBER REPORTS FOURTH QUARTER AND FULL-YEAR RESULTS

Reaffirms 2011 Outlook

GREENWOOD VILLAGE, Colo., Feb. 22, 2011— CIBER, Inc. (NYSE: CBR), a global information technology consulting, services and outsourcing company, today reported results for the fourth quarter and full year 2010.

Financial highlights for the fourth quarter 2010 included:

·Revenue increased 6% to $277.4 million, the largest year-over-year increase in 8 quarters

·Constant currency adjusted revenue increased 8%

·Operating loss of $6.3 million, including $9.9 million (pre-tax) of bad debt expense and project write-off charges

·Excluding the charges, operating income of $3.6 million

·Net loss of $3.3 million, or $0.05 per share

·Excluding the charges, net income of $2.6 million, or $0.04 per share

Financial highlights for the Full Year 2010:

·Revenue increased 3% to $1.1 billion

·Constant currency adjusted revenue increased 4%

·Operating loss of $103.2 million, including $9.9 million (pre-tax) of bad debt and project write-off charges, and the $118.1 million (pre-tax) second quarter goodwill impairment and executive transition charges

·Excluding the charges, operating income of $24.8 million

·Net loss of $77.2 million, or $1.11 per share

·Excluding the charges, net income of $13.6 million, or $0.20 per share

·Cash flow from operations of $35 million

Strategic and operational highlights from 2010:

·Developed comprehensive strategic plan

·Unified sales and delivery organizations across North America

·Strengthened and added significant operating regimens

·Added complementary strength to management and board

·Invested in offshore delivery

President and Chief Executive Officer Dave Peterschmidt said, “We are undergoing an important transformation at CIBER.  This past year we set into motion a detailed and focused strategic plan and put in place the operational regimens necessary to achieve sustained and predictable performance and to increase shareholder value.  We have

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entered 2011with a tighter focus, increased discipline, a more efficient model and we continue to see general economic improvements in many markets.”

Consolidated Results

Fourth quarter revenue of $277.4 million increased 6%, or 8% on a constant currency basis, compared to last year’s fourth quarter.  Driving the revenue growth in the quarter was the performance of CIBER’s two largest divisions.  The International division, which totaled 41% of consolidated revenue, achieved revenue growth of 17%, or 24% adjusted for currency, while the Custom Solutions division, which comprised 33% of consolidated revenue, delivered 6% revenue growth.  The Segmenta acquisition completed in 2010 added 2% to consolidated and 6% to International revenue growth in the quarter.

Full year revenue exceeded expectations totaling $1.1 billion, an increase of 3% or 4% on a constant currency basis.  Full-year revenue growth was driven by the International division’s revenue growth of 10%, or 13% adjusted for currency.  The International division represented 36% of full-year consolidated revenue.  The Segmenta acquisition added 1% to consolidated and 3% to International revenue growth for the year.  The U.S. ERP division totaled 12% of full-year revenue and posted growth of 6% compared to 2009.

Gross margin for the quarter was 23.4% compared to 24.2% in last year’s fourth quarter.  International and Custom Solutions, CIBER’s two largest divisions, each improved gross margin from last year’s fourth quarter.  On a consolidated basis, the majority of the year-over-year decrease in gross margin was a result of the project charges taken in the fourth quarter 2010.  Additionally, gross margin was impacted in the fourth quarter of 2010 by project overruns on a small number of fixed-price contracts as well as CIBER ceasing to recognize revenue for services being delivered to a single financially distressed client.  Gross margin also included investments for future revenue growth, higher than normal use of subcontractors utilized to fill demand, and problematic legacy engagements which will come to closure in future periods.  Full-year 2010 gross margin of 24.5% was down 50 basis points from last year.

Fourth quarter operating loss was $6.3 million.  Excluding the bad debt expense and project write-off charges operating income was $3.6 million, and operating income margin was 1.3%.  In the same period last year, operating income was $6.2 million and operating income margin was 2.4%.  Full-year 2010 operating loss was $103.2 million including the bad debt and project write-off charges, and the $118.1 million second quarter goodwill impairment and executive transition charges.  Excluding these items, 2010 operating income was $24.8 million and operating margin was 2.3%.  Fourth quarter and full-year 2010 operating income included additional expenses from the organizational transition items resulting from the newly adopted strategy including combining of the North American branch offices, consolidation of the sales and delivery organizations, investments in sales training and infrastruct ure; expansion of India delivery capabilities; as well as senior leadership changes.

Fourth quarter net loss was $3.3 million or a $0.05 per share.  Excluding the bad debt expense and project write-off charges net income was $2.6 million or $0.04 per share.  Full-year 2010 net loss was $77.2 million, or $1.11 per share including the bad debt and project write-off charges, and the second quarter goodwill impairment and executive transition charges.  Excluding these items, 2010 net income was $13.7 million or $0.20 per share.

The fourth quarter tax rate included a $1.0 million benefit resulting from the utilization of net operating loss carry forwards within Europe.  For the full-year 2010 the Company had a net tax benefit driven primarily by the tax deductable portion of the goodwill impairment charge which significantly reduced U.S. taxable income.

Capital Deployment and Liquidity

CIBER’s total cash balance at year end was $69.3 million.  Cash provided by operating activities for the year was $35 million.  Capital expenditures for the year totaled $14 million.

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Management has been focused on improving its days sales outstanding, or DSO’s.   At year end, DSO’s were reduced to 62 days compared with 71 days one quarter ago.  DSO’s were 61 days at December 31, 2009.

The total outstanding balance on the senior credit facility at year end was $87 million, a reduction of $10 million from December 31, 2009.

Outlook

Management reaffirmed its long-term outlook and its expectations for 2011.

Long term outlook:

·Double-digit revenue growth

·Gross profit margin exceeding 30%

·Operating margin exceeding 8%

·Double-digit EPS growth

·Cash flow from operations to approximate net income

2011 expectations:

·Revenue growth exceeding 4%

·Gross profit margin exceeding 25.5%

·Operating margin exceeding 3.5%

·EPS exceeding $0.30

·Tax rate in the mid thirties

·Cash flow from operations of approximately $30 million

·Capital expenditures of approximately $20 million, mostly to fund IT infrastructure improvements and the India build-out

2011 Key Success Factors

·Higher quality deal wins in key verticals

·Improved DSO and cash collection

·Gross and operating margin improvement

·Expanded India delivery

·Enhanced operational execution

Peterschmidt noted, “Our goal is to improve financial performance utilizing a refined strategic approach, improved operational regimens, and increased as well as narrowed focus on higher margin, well developed offerings.”

Significant Charges

In the fourth quarter 2010, the Company incurred higher than usual bad debt expense and project write-off charges totaling $5.9 million after tax ($9.9 million pre-tax) or $0.09 per share.  The charges stemmed primarily from a small number of projects.

In the second quarter of 2010, the Company incurred two significant, primarily non-cash, charges.  The significant charges totaled $84.9 million after-tax ($118.1 million pre-tax), or $1.22 per share, of which $112.5 million were non-cash.  The items were:

·An $81.2 million after-tax ($112.0 million pre-tax), or $1.17 per share, non-cash charge for impairment of goodwill.  Testing of goodwill as of June 30, 2010, using discounted cash flow analysis supported by comparative market multiples to determine the estimated fair values, indicated that the book values of Federal and Custom Solutions divisions’ goodwill were impaired. The goodwill impairment charge for these divisions was primarily driven by adverse equity market conditions that caused a sustained depression in

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CIBER’s stock price and the financial performance of these divisions.  The charge reduces goodwill recorded in connection with acquisitions made in previous years and does not impact the Company’s business operations or cash flow.

·A $3.7 million after-tax ($6.1 million pre-tax), or $0.05 per share, charge for the departure of the former chief executive officer in April 2010 and the transition expenses related to the recruitment and hiring of the new chief executive officer, as well as expenses resulting from the former chairman of the board stepping down from that position.  This “executive change” charge includes separation payments, legal fees, search firm fees and other costs related to the transition and recruitment of the Company’s new chief executive officer.

Investor and Analyst Conference Call

CIBER President and Chief Executive Officer Dave Peterschmidt invites you to participate in a conference call today at 11:00 a.m. Eastern Time to discuss the Company’s financial results and outlook.

To participate in the conference call, dial 866-804-6928 (U.S.) or +1-857-350-1674 (outside the U.S.) ten minutes prior to the start of the call and provide the operator with the pass code 21202807.  This conference call will also be available via webcast at www.ciber.com/cbr.

A replay of the call and webcast will be available one hour after the call ends through March 22, 2011.  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 59391008.  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 revenue change constant currency adjusted; International revenue change adjusted for currency; fourth quarter operating income, operating income margin, net income and earnings per share excluding the fourth quarter bad debt expense and project write-offs; and full year operating income, operating income margin, net income and earnings per share excluding the fourth quarter bad debt expense and project write-offs and the second quarter goodwill impairment and executive transition charges.

Reconciliations of non-GAAP to comparable GAAP measures are available in the accompanying schedules and 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,” “potential,” “project,” “should,” and “will” and similar expressions, are intended to identify forward-looking statements. For example, we make certain forward-looking statements regarding our current estimates for revenue and profitability for certain of our business units for 2011. These statements reflect a number of risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by our forward-looking statements. These risks include, without limitation, risks that: (1) economic and political conditions, including regulatory or legislative action, adversely affect us or our clients’ businesses and levels of business activity; (2) we cannot expand and develop our services and solutions in response to changes in technology and client demand; (3) we cannot compete effectively in the highly competitive consulting, systems integration and technology and outsourcing markets; (4) our work in the government contracting environment exposes us to additional risks; (5) our clients may terminate their contracts with us or they may be unable or unwilling to pay us for our services, which may impact our accounting assumptions; (6) our outsourcing services subject us to operational and financial risk; (7) the type and level of technology spending by our clients may change; (8) we cannot maintain favorable pricin g and utilization rates; (9) legal liability may result from solutions or services we provide; (10) we cannot anticipate the cost and complexity of performing our work or we are not able to control our costs; (11)

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our global operations are subject to complex risks, some of which might be beyond our control, including, but not limited to, fluctuations in foreign exchange rates; (12) we cannot balance our resources with client demand or hire sufficient employees with the required skills and background; (13) we may incur liability from our subcontractors’ or other third parties’ failure to deliver their project contributions on time or at all; (14) we cannot manage the organizational challenges associated with our size or our business strategy; (15) consolidation in the industries that we serve could adversely affect our business; (16) our ability to attract and retain business depends on our reputation in the marketplace; (17) our share price could fluctuate due to numerous factors, including variability in revenues, operating results and profitability; and/or (18) other factors discussed from time to time in the Company’s news releases and public statements, as well as the risks, uncertainties and other factors discussed under the “Risk Factors” heading in our Form 10-K and other documents filed with or furnished to the Securities and Exchange Commission. Most of these factors are beyond our ability to predict or control. Forward looking statements are not guarantees of performance and speak only as of the date they are made, and 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, Inc. is a global information technology consulting, services and outsourcing company applying practical innovation through services and solutions that deliver tangible results for both commercial and government clients. Services include application development and management, ERP implementation, change management, project management, systems integration, infrastructure management and end-user computing, as well as strategic business and technology consulting. Founded in 1974 and headquartered in Greenwood Village, Colorado, CIBER has more than 8,500 employees and subcontractors and operates in 18 countries, serving clients in North America, Europe and Asia/Pacific. Annual revenue in 2010 was $1.1 billion. CIBER trades on the New York Stock exchange (NYSE: CBR), and is included in the Russell 2000 Index and the S&P Small Cap 600 Index. For more information, visit www.ciber.com.

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CIBER, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

	Three Months Ended December 31,						Year Ended December 31,
	2010			2009			2010			2009
REVENUES
Consulting services	$	263,642		$	249,609		$	1,025,056		$	992,779
Other revenue	13,736			12,645			46,287			44,921
Total revenues	277,378			262,254			1,071,343			1,037,700
OPERATING EXPENSES
Cost of consulting services	204,229			191,043			780,355			750,164
Cost of other revenue	8,134			7,686			28,368			28,243
Selling, general and administrative	70,232			55,764			249,341			225,643
Goodwill impairment	—			—			112,000			—
Amortization of intangible assets	1,068			1,520			4,429			5,891
Total operating expenses	283,663			256,013			1,174,493			1,009,941
OPERATING INCOME (LOSS)	(6,285		)	6,241			(103,150		)	27,759
Interest income	423			350			617			994
Interest expense	(1,956		)	(1,822		)	(7,044		)	(6,180		)
Other income (expense), net	51			(446		)	65			338
INCOME (LOSS) BEFORE INCOME TAXES	(7,767		)	4,323			(109,512		)	22,911
Income tax expense (benefit)	(4,475		)	1,772			(31,822		)	7,795
CONSOLIDATED NET INCOME (LOSS)	(3,292		)	2,551			(77,690		)	15,116
Net income (loss) attributable to noncontrolling interests	22			19			(530		)	158
NET INCOME (LOSS) ATTRIBUTABLE TO CIBER, INC.	$	(3,314	)	$	2,532		$	(77,160	)	$	14,958
Earnings (loss) per share:
Basic	$	(0.05	)	$	0.04		$	(1.11	)	$	0.22
Diluted	$	(0.05	)	$	0.04		$	(1.11	)	$	0.22
Weighted average shares outstanding:
Basic	70,029			69,530			69,626			67,996
Diluted	70,029			69,707			69,626			68,107

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CIBER, Inc.

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts)

(Unaudited)

	December 31, 2010			December 31, 2009
ASSETS
Current assets:
Cash and cash equivalents	$	69,329		$	67,424
Accounts receivable, net of allowances of $9,413 and $3,192, respectively	239,214			213,100
Prepaid expenses and other current assets	25,396			22,727
Deferred income taxes	11,373			6,627
Total current assets	345,312			309,878
Property and equipment, net of accumulated depreciation of $60,732 and $57,958, respectively	26,443			24,830
Goodwill	338,908			450,739
Other intangible assets, net	2,357			5,159
Other assets	9,344			12,650
TOTAL ASSETS	$	722,364		$	803,256
LIABILITIES AND EQUITY
Liabilities:
Current liabilities:
Current portion of long-term debt	$	10,473		$	10,697
Accounts payable	49,835			33,981
Accrued compensation and related liabilities	72,918			65,747
Deferred revenue	21,194			17,634
Income taxes payable	9,760			10,402
Other accrued expenses and liabilities	48,768			34,563
Total current liabilities	212,948			173,024
Long-term debt	77,879			87,500
Deferred income taxes	6,159			36,486
Other long-term liabilities	5,878			—
Total liabilities	302,864			297,010
Commitments and contingencies
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, 74,487 shares issued	745			745
Treasury stock, at cost, 4,363 and 5,005 shares, respectively	(25,003		)	(30,069		)
Additional paid-in capital	325,177			322,999
Retained earnings	118,113			199,668
Accumulated other comprehensive income	661			12,193
Total CIBER, Inc. shareholders’ equity	419,693			505,536
Noncontrolling interests	(193		)	710
Total equity	419,500			506,246
TOTAL LIABILITIES AND EQUITY	$	722,364		$	803,256

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CIBER, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Year Ended December 31,
	2010			2009
CASH FLOWS FROM OPERATING ACTIVITIES
Consolidated net income (loss)	$	(77,690	)	$	15,116
Adjustments to reconcile consolidated net income (loss) to net cash provided by operating activities:
Goodwill impairment	112,000			—
Depreciation	11,673			11,719
Amortization of intangible assets	4,429			5,891
Deferred income tax expense (benefit)	(38,876		)	1,462
Provision for doubtful receivables	8,423			2,260
Share-based compensation expense	4,090			3,763
Other, net	4,332			2,329
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable	(37,282		)	24,775
Other current and long-term assets	(1,580		)	(520		)
Accounts payable	16,564			(1,967		)
Accrued compensation and related liabilities	6,561			1,035
Other current and long-term liabilities	18,140			8,441
Income taxes payable/refundable	4,337			7,243
Net cash provided by operating activities	35,121			81,547
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions, net of cash acquired	(3,580		)	(4,330		)
Purchases of property and equipment, net	(13,990		)	(9,059		)
Net cash used in investing activities	(17,570		)	(13,389		)
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings on long-term debt	385,481			569,619
Payments on long-term debt	(396,618		)	(639,135		)
Sale of common stock, net of $194 of issuance costs	—			23,220
Employee stock purchases and options exercised	2,384			2,404
Purchases of treasury stock	(2,444		)	(4,998		)
Excess tax benefits from share-based compensation	61			—
Credit facility origination/amendment fees paid	(685		)	(3,471		)
Acquisition of noncontrolling interest	(1,558		)	—
Other, net	—			(222		)
Net cash used in financing activities	(13,379		)	(52,583		)
Effect of foreign exchange rate changes on cash and cash equivalents	(2,267		)	3,000
Net increase in cash and cash equivalents	1,905			18,575
Cash and cash equivalents, beginning of period	67,424			48,849
Cash and cash equivalents, end of period	$	69,329		$	67,424

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CIBER, Inc.

SUMMARY SEGMENT DATA

(Dollars in thousands)

(Unaudited)

Summary Segment Analysis

	Three Months Ended December 31,								Year Ended December 31,
	2010			2009			Change		2010			2009			Change
Revenues:
International	$	112,559		$	96,580		17	%	$	385,155		$	349,834		10	%
Custom Solutions	91,248			86,070			6	%	368,682			372,168			(1	)%
U.S. ERP	29,225			31,857			(8	)%	133,662			126,443			6	%
Federal	26,162			29,736			(12	)%	117,545			117,613			(0	)%
IT Outsourcing	21,056			19,428			8	%	76,947			76,341			1	%
Total segment revenues	280,250			263,671			6	%	1,081,991			1,042,399			4	%
Corporate/Inter-segment	(2,872		)	(1,417		)			(10,648		)	(4,699		)
Total revenues	$	277,378		$	262,254		6	%	$	1,071,343		$	1,037,700		3	%
Operating income (loss):
International	$	7,268		$	6,110		19	%	$	19,842		$	20,107		(1	)%
Custom Solutions	4,349			3,621			20	%	25,002			24,125			4	%
U.S. ERP	(4,047		)	2,789			(245	)%	3,445			9,764			(65	)%
Federal	(2,054		)	1,190			(273	)%	1,979			5,994			(67	)%
IT Outsourcing	(700		)	(668		)	(5	)%	(1,407		)	(1,823		)	23	%
Total segment operating income	4,816			13,042			(63	)%	48,861			58,167			(16	)%
Corporate expenses	(10,033		)	(5,281		)			(35,582		)	(24,517		)
Goodwill impairment	—			—					(112,000		)	—
Amortization of intangible assets	(1,068		)	(1,520		)			(4,429		)	(5,891		)
Total operating income (loss)	$	(6,285	)	$	6,241				$	(103,150	)	$	27,759

Segments as Percent of Total Segment Revenue and Total Segment Operating Income

(excluding Corporate/Inter-segment and corporate expenses, goodwill impairment and amortization)

	Three Months Ended December 31,				Year Ended December 31,
	2010		2009		2010		2009
Revenues:
International	40	%	37	%	36	%	34	%
Custom Solutions	33	%	33	%	34	%	36	%
U.S. ERP	10	%	12	%	12	%	12	%
Federal	9	%	11	%	11	%	11	%
IT Outsourcing	8	%	7	%	7	%	7	%
Total segment revenues	100	%	100	%	100	%	100	%
Operating income:
International	151	%	47	%	41	%	35	%
Custom Solutions	90	%	28	%	51	%	41	%
U.S. ERP	(84	)%	21	%	7	%	17	%
Federal	(43	)%	9	%	4	%	10	%
IT Outsourcing	(14	)%	(5	)%	(3	)%	(3	)%
Total segment operating income	100	%	100	%	100	%	100	%

Segment Operating Margins

(excluding corporate expenses, goodwill impairment and amortization)

	Three Months Ended December 31,				Year Ended December 31,
	2010		2009		2010		2009
Operating margin:
International	6	%	6	%	5	%	6	%
Custom Solutions	5	%	4	%	7	%	6	%
U.S. ERP	(14	)%	9	%	3	%	8	%
Federal	(8	)%	4	%	2	%	5	%
IT Outsourcing	(3	)%	(3	)%	(2	)%	(2	)%
Total segment operating income	2	%	5	%	5	%	6	%

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CIBER, Inc.

NON-GAAP FINANCIAL INFORMATION

(Dollars in millions, except per share amounts)

(Unaudited)

CIBER reports its financial results in accordance with 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 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 December 31, 2010
	Constant Currency Revenue Growth		Foreign Exchange Impact		GAAP Reported  Revenue Growth
Revenues:
Consolidated	8	%	(2	)%	6	%
International	24	%	(7	)%	17	%

	Year Ended December 31, 2010
	Constant Currency Revenue Growth		Foreign Exchange Impact		GAAP Reported Revenue Growth
Revenues:
Consolidated	4	%	(1	)%	3	%
International	13	%	(3	)%	10	%

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CIBER, Inc.

NON-GAAP FINANCIAL INFORMATION (CONTINUED)

(Dollars in millions, except per share amounts)

(Unaudited)

Operating Income Excluding Bad Debt Expense and Project Write-Off Charges, Goodwill Impairment and Executive Transition Charges

	Three Months Ended			Year Ended
	December 31, 2010			December 31, 2010
GAAP operating income (loss)	$	(6.3	)	$	(103.2	)
Goodwill impairment and executive transition, pre-tax	—			118.1
Bad debt expense and project write-offs, pre-tax	9.9			9.9
Operating income, excluding bad debt expense, project write-offs, goodwill impairment and executive transition	$	3.6		$	24.8
GAAP operating margin	(2.3		)%	(9.6		)%
Operating margin, excluding bad debt expense, project write-offs, goodwill impairment and executive transition	1.3		%	2.3		%

Net Income Excluding Bad Debt Expense and Project Write-Off Charges, Goodwill Impairment and Executive Transition Charges

	Three Months Ended			Year Ended
	December 31, 2010			December 31, 2010
GAAP net income (loss)	$	(3.3	)	$	(77.2	)
Goodwill impairment and executive transition, after tax	—			84.9
Bad debt expense and project write-offs, after tax	5.9			5.9
Net income, excluding bad debt expense, project write-offs, goodwill impairment and executive transition	$	2.6		$	13.6

Earnings (Loss) Per Share Excluding Bad Debt Expense and Project Write-Off Charges, Goodwill Impairment and Executive Transition Charges

	Three Months Ended			Year Ended
	December 31, 2010			December 31, 2010
GAAP earnings (loss) per share	$	(0.05	)	$	(1.11	)
Goodwill impairment and executive transition	—			1.22
Bad debt expense and project write-offs	0.09			0.09
Earnings per share, excluding bad debt expense, project write-offs, goodwill impairment and executive transition	$	0.04		$	0.20

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