Connecting to LinkedIn...

Blank

Ciber reports Q2 2014 results

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.

Tags:

Articles similar to

Articles similar to