“The close of 2009 marked the end of the most difficult year globally in decades. Because of our refocused IT solutions strategy, CIBER posted profits and positive cash flow every quarter, despite an organic decrease in annual revenue of approximately 10%. We also raised equity and secured new credit arrangements,” said Mac Slingerlend, CIBER’s President and Chief Executive Officer. “We grew most in our offshore India-based operations, which are now a scaling, credible complement to our global business model. The recovery in our U.S. SAP Practice was an exceptional highlight of 2009. Our Federal Division won several multiple award contracts, harbingers of future growth. And, our International Division posted solid top line results in the face of fiscal headwinds, but it was more limited as to labor cost flexibility. Finally, our now separately segmented IT Outsourcing Division made great foundational strides and is positioned for a stronger performance in 2010 and beyond. The challenges of 2009 have become our impetus for 2010.”
Financial Highlights
* Fourth quarter revenue was $262.3 million and fiscal revenue was $1.038 billion. In local currency, revenue was up 1% sequentially, compared to contracting almost 10% for the fiscal year.
* Operating income was $6.2 million for 4Q09, and $27.8 million for fiscal 2009.
* Net income was $2.5 million for 4Q09, and fiscal 2009 net income was $15.0 million.
* GAAP EPS was $0.04/share for 4Q09, after a tax rate of 41%, which compares to $0.09 the year earlier quarter when EPS was aided by our income tax rate of only 4%.
* Fiscal GAAP EPS of $0.22/share compares to $0.45/share a year ago. Fiscal year tax rates increased to 34% from 30% a year earlier.
* Diluted share count of 69.7 million for 4Q09 and 68.1 million for fiscal 2009 include the share issuance in 1Q09. The 4Q09 diluted share count was 16% higher than a year ago. No new share offerings are contemplated and the Company continues to purchase shares, using its cash flow, in open market transactions.
* Free Cash Flow (Net Income + Depreciation + Amortization + Share Based Comp – Cap Ex) for fiscal 2009 was $27.4 million; 4Q09 diluted shares outstanding were 69.7 million. Other changes in working capital added another $45.1 million, or $72.5 million for the year, when diluted shares outstanding were 68.1 million.
Operational Highlights (by Division)
The Company has modified its services segmentation for 2009 to align with how the business will be managed in 2010. CIBER IT Outsourcing (ITO) is now segmented separately; ITO was previously reported within both Custom Solutions and European Divisions, the latter of which is now referred to as “International.” A few other minor reclassifications are part of this reporting, as well.
Custom Solutions
* This Division endured most of Corporate America’s stress. For 2010, this Division has refreshed its go-to-market, revenue acquisition programs and realigned regions to emphasize our complementary offshore global delivery capacity.
India
* CIBER India grew throughout 2009, following the January acquisition of Iteamic in Bangalore. Ending 2009 with its highest headcounts, more growth is anticipated offshore in 2010.
International
Europe
* Operations had surprisingly resilient performances in 2009. Headcounts fell less than 3% for the calendar year and grew after August. Multi-country wins in SAP and ITO solutions underpin their confidence in 2010, and improvements in consultant utilization will improve contribution margins.
Asia Pacific
* Australia/New Zealand had a solid fourth quarter and are positively positioned as 2010 begins.
* Chinese operations have been reorganized with new local leadership and expect growing footholds in 2010.
IT Outsourcing (ITO)
* Now separately reported, this division operates globally and offers solutions from help desks and hosting to software rollouts and security monitoring, to server virtualization and more, in data centers in the U.S., U.K., Netherlands and Spain, and global support centers in the U.S., U.K. and India. After enduring multiple customer financial struggles in late 2008 and 2009, ITO is poised for stronger contributions in 2010.
Federal Government
* Early hopes for 2009 were dashed by the inability of the new Presidency to take action on IT matters, which remained the standard through year-end. However, this Division succeeded in winning the vast majority of its 2009 re-competes and won several new multiple award contracts (ID/IQs, Schedules and GWACs), which position it to have its first “up year” in 2010 since 2004.
U.S. ERP
* This Division had a very strong performance in 2009, growing its revenue by over 3% and operating contributions by over $8.5 million, rebounding tremendously from 2008. The U.S. SAP Practice was profitable for the last three quarters of 2009 and has a solid start to 2010. Our Oracle and Lawson Practices have significant carry-over work into 2010 and our Technology Solutions Group Practice had a good 4Q09. All of its Practices are anticipating better results in 2010.
Balance Sheet Data: (Dec. 31st, 2009)
* The Company reduced its debt by almost $70.0 million (41%) in 2009. This was the result of an equity issuance of $23.2 million, repatriation of $22.3 million, collection of some older receivables and the Company’s cash flow from operations. Debt-to-capital was down to 16%.
* Cash was $67.4 million and net debt was just $30.8 million.
* Working Capital was $136.9 million.
Bookings
Fourth quarter wins were a solid 1.1:1 book-to-bill ratio, and helped the year remain above 1:1. Our Federal Division led the way in 4Q09 multi-year wins at approximately $120 million.
Outlook
* The Company is encouraged that 2010 will reflect the nascent global economic recovery and that it will report organic growth in revenue and earnings. The first calendar quarter, however, is always a challenge in the IT Services industry due to slow budget approvals, global holidays and higher U.S. employment taxes. Based on the recent strength of the U.S. dollar, which is now stronger than the average of all of 2009, management believes 1Q10 revenue will be $252.5-257.5 million and GAAP EPS will be $0.05-0.06/share. For fiscal 2010, the Company projects revenue of $1.025-1.045 billion and GAAP EPS of $0.25-0.29/share. For the year, the Company is projecting the U.S. dollar to be stronger by 2-3% compared to 2009.
Conference Call and Webcast
A webcast to discuss the Company’s financial results and outlook will be held at 4:30 p.m. EST on Monday, February 22, 2010 and may be heard live by visiting the Investor Relations portion of the Company website at www.ciber.com/cbr/. To participate in the call, dial 877-941-6009 within the United States, and 480-629-9771 internationally, using the conference ID number 4205293. A replay of the conference call will be available for 30 days by dialing 800-406-7325 within the United States, and 303-590-3030 internationally, using the ID number 4205293. The replay will also be available on CIBER’s website.
Source:http://www.prnewswire.com/news-releases/ciber-reports-fourth-quarter-and-fiscal-2009-results-84982337.html
