<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------
FORM 10-Q/A
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended: Commission file number:
MARCH 31, 1999 0-23488
CIBER, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 38-2046833
(STATE OF INCORPORATION) (I.R.S.EMPLOYER IDENTIFICATION NO.)
5251 DTC PARKWAY
SUITE 1400
ENGLEWOOD, CO 80111
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
Telephone Number: (303) 220-0100
-----------
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No ___
As of March 31, 1999, there were 58,431,112 shares of the Registrant's common
stock ($0.01 par value) outstanding.
<PAGE>
CIBER, INC.
FORM 10-Q/A
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
PAGE
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited):
Consolidated Statements of Operations
Three and nine months ended March 31, 1999 and 1998 3
Consolidated Balance Sheets
March 31, 1999 and June 30, 1998 4
Consolidated Statements of Cash Flows
Nine months ended March 31, 1999 and 1998 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 14
Item 3. Quantitative and Qualitative Disclosures About Market Risk 19
PART II. OTHER INFORMATION 20
SIGNATURES 21
</TABLE>
2
<PAGE>
CIBER, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
MARCH 31, MARCH 31,
---------------------------- -----------------------------
IN THOUSANDS, EXCEPT PER SHARE DATA 1998(1) 1999 1998(1) 1999
------------ ----------- ------------ -----------
<S> <C> <C> <C> <C>
Consulting services $134,482 $173,456 $373,109 $476,609
Other revenues 13,611 11,445 45,979 48,006
------------ ----------- ------------ -----------
Total revenues 148,093 184,901 419,088 524,615
------------ ----------- ------------ -----------
Cost of consulting services 85,136 110,372 241,302 305,032
Cost of other revenues 9,727 7,953 33,719 33,174
Selling, general and administrative expenses 34,020 40,382 98,261 114,621
Amortization of intangible assets 978 2,314 2,886 4,465
Merger costs 504 - 2,691 1,535
------------ ----------- ------------ -----------
Operating income 17,728 23,880 40,229 65,788
Interest and other income 414 644 1,208 1,974
Interest expense (23) - (193) -
------------ ----------- ------------ -----------
Income before income taxes 18,119 24,524 41,244 67,762
Income tax expense 6,732 9,641 17,317 27,442
------------ ----------- ------------ -----------
Net income $ 11,387 $ 14,883 $ 23,927 $ 40,320
------------ ----------- ------------ -----------
------------ ----------- ------------ -----------
Pro forma information (Note 1):
Historical net income $ 11,387 $ 14,883 $ 23,927 $ 40,320
Pro forma adjustment to income tax expense (730) - (211) -
------------ ----------- ------------ -----------
Pro forma net income $ 10,657 $ 14,883 $ 23,716 $ 40,320
------------ ----------- ------------ -----------
------------ ----------- ------------ -----------
Pro forma income per share - basic $ 0.21 $ 0.27 $ 0.46 $ 0.74
Pro forma income per share - diluted $ 0.20 $ 0.26 $ 0.44 $ 0.72
Weighted average shares - basic 51,702 56,154 51,090 54,261
Weighted average shares - diluted 54,294 58,021 53,591 56,223
</TABLE>
(1) Restated for pooling of interests - See Note 3.
See accompanying notes to consolidated financial statements.
3
<PAGE>
CIBER, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
JUNE 30, MARCH 31,
IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA 1998(1) 1999
------------- --------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 38,238 $ 66,062
Accounts receivable 121,538 155,141
Inventories 618 550
Prepaid expenses and other assets 4,792 3,887
Deferred income taxes 1,458 1,913
------------- --------------
Total current assets 166,644 227,553
------------- --------------
Property and equipment, at cost 32,561 42,758
Less accumulated depreciation and amortization (15,219) (20,634)
------------- --------------
Net property and equipment 17,342 22,124
------------- --------------
Intangible assets, net 33,597 152,556
Deferred income taxes 2,068 4,301
Other assets 2,134 3,162
------------- --------------
Total assets $221,785 $409,696
------------- --------------
------------- --------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Trade payables $ 10,989 $ 15,576
Accrued compensation and payroll taxes 25,720 41,286
Deferred revenues 4,097 3,254
Other accrued expenses and liabilities 11,859 11,737
Income taxes payable 3,276 12,674
------------- --------------
Total current liabilities 55,941 84,527
------------- --------------
Commitments and contingencies
Shareholders' equity:
Preferred stock, $0.01 par value, 5,000,000 shares
authorized, no shares issued - -
Common stock, $0.01 par value, 80,000,000 shares authorized,
52,248,000 and 58,431,000 shares issued and outstanding 522 584
Additional paid-in capital 93,889 216,153
Retained earnings 71,433 109,539
Treasury stock, 55,000 shares at cost - (1,107)
------------- --------------
Total shareholders' equity 165,844 325,169
------------- --------------
Total liabilities and shareholders' equity $221,785 $409,696
------------- --------------
------------- --------------
</TABLE>
(1) Restated for pooling of interests - See Note 3.
See accompanying notes to consolidated financial statements.
4
<PAGE>
CIBER, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
MARCH 31,
-------------------------------
IN THOUSANDS 1998(1) 1999
---------- ----------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $23,927 $40,320
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 6,918 9,639
Deferred income taxes (1,094) (3,654)
Other 41 216
Changes in operating assets and liabilities,
net of the effects of acquisitions:
Accounts receivable (24,912) (21,853)
Inventories 130 68
Other current and long-term assets (3,661) 707
Trade payables (3,514) 3,922
Accrued compensation and payroll taxes 9,534 13,912
Deferred revenues 1,955 (843)
Other accrued expenses and liabilities 2,940 (2,735)
Income taxes payable 11,370 10,298
---------- ----------
Net cash provided by operating activities 23,634 49,997
---------- ----------
INVESTING ACTIVITIES:
Acquisitions, net of cash acquired (351) (19,364)
Purchases of property and equipment (7,486) (8,560)
Purchases of investments (905) -
Sales of investments 1,695 -
---------- ----------
Net cash used in investing activities (7,047) (27,924)
---------- ----------
FINANCING ACTIVITIES:
Proceeds from sales of common stock, net 4,607 10,025
Purchases of treasury stock - (4,274)
Net payments on bank lines of credit (1,022) -
Payments on notes payable (2,650) -
Borrowings on notes payable 247 -
Distributions by merged companies (4,675) -
---------- ----------
Net cash provided by (used in) financing activities (3,493) 5,751
---------- ----------
Net increase in cash and cash equivalents 13,094 27,824
Cash and cash equivalents, beginning of period 27,257 38,238
---------- ----------
Cash and cash equivalents, end of period $40,351 $66,062
---------- ----------
---------- ----------
</TABLE>
(1) Restated for pooling of interests - See Note 3.
See accompanying notes to consolidated financial statements.
5
<PAGE>
CIBER, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying consolidated financial statements of CIBER, Inc. and
subsidiaries ("CIBER" or the "Company") have been prepared without audit.
Certain information and note disclosures normally included in consolidated
financial statements prepared in accordance with generally accepted
accounting principles have been omitted. These consolidated financial
statements should be read in conjunction with the audited consolidated
financial statements and notes thereto included in CIBER's Annual Report on
Form 10-K for the fiscal year ended June 30, 1998. In the opinion of
management, these unaudited consolidated financial statements include all
adjustments necessary for a fair presentation of the financial position and
results of operations for the periods presented. Interim results of
operations for the three-month and nine-month periods ended March 31, 1999
are not necessarily indicative of operating results for the full fiscal year.
PRO FORMA NET INCOME. Pro forma net income has been presented because certain
companies, which have merged with CIBER in business combinations accounted
for as poolings of interests, were S corporations and generally not subject
to income taxes. Accordingly, no provision for income taxes has been included
in the historical consolidated financial statements for the operations of
these companies prior to their merger with CIBER. The pro forma adjustment to
income taxes has been computed as if the merged companies had been taxable
entities subject to income taxes for all periods prior to their merger with
CIBER at the marginal rates applicable in such periods. In addition, the pro
forma adjustment to income tax expense eliminates the one-time tax expense or
benefit resulting from changes in the tax status of these merged companies.
PRO FORMA INCOME PER SHARE. Basic EPS is computed by dividing income
available to common shareholders by the weighted average number of common
shares outstanding for the period. Diluted EPS includes the effects of the
potential dilution of the Company's stock options, determined using the
treasury stock method. The computation of weighted average shares includes
the shares and options issued in connection with business combinations
accounted for as poolings of interests as if they had been outstanding for
all periods prior to the merger. The number of antidilutive stock options
omitted from the computation of weighted average shares was 1,400,802 and
986,170 for the three months and nine months ended March 31, 1999,
respectively. There were no antidilutive stock options for the corresponding
periods last year.
COSTS OF DEVELOPING COMPUTER SOFTWARE FOR INTERNAL USE. Direct costs of time
and material incurred for the development of software for internal use are
capitalized as property and equipment. These costs are depreciated using the
straight-line method over the estimated useful life of the software.
(2) CHANGES IN REPORTED AMOUNTS
CIBER has revised its previously issued financial statements for the three
and nine month periods ended March 31, 1999 and 1998 to change the accounting
for the following business combinations from poolings of interests to
acquisitions using the purchase method of accounting:
York & Associates, Inc. ("York") - January 29, 1999
Integration Software Consultants, Inc. ("ISC") - February 2, 1999
Business Impact Systems, Inc. ("BIS") - February 26, 1999
6
<PAGE>
Subsequent to the mergers of York, ISC and BIS, CIBER announced its intention
to repurchase up to 10% of CIBER's outstanding common stock. Pursuant to
current accounting practices, the initiation of a stock repurchase program
precludes CIBER from recording the York, ISC and BIS mergers as poolings of
interests transactions. CIBER's revised financial statements only include the
results of operations of York, ISC and BIS since the date of acquisition. The
following table summarizes the changes to the previously reported amounts.
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31, NINE MONTHS ENDED MARCH 31,
------------------------------ ----------------------------
IN THOUSANDS, EXCEPT PER SHARE DATA 1998 1999 1998 1999
------------ ------------- ----------- -----------
<S> <C> <C> <C> <C>
Total revenues
As previously reported $156,015 $190,017 $441,160 $551,801
As revised 148,093 184,901 419,088 524,615
Net income
As previously reported 12,316 13,451 27,648 41,286
As revised 11,387 14,883 23,927 40,320
Pro forma net income
As previously reported 11,357 14,201 26,318 41,588
As revised 10,657 14,883 23,716 40,320
Pro forma income per share - diluted
As previously reported $ 0.19 $ 0.24 $ 0.46 $ 0.70
As revised $ 0.20 $ 0.26 $ 0.44 $ 0.72
Weighted average shares - diluted
As previously reported 58,524 60,141 57,821 59,760
As revised 54,294 58,021 53,591 56,223
<CAPTION>
JUNE 30, MARCH 31,
1998 1999
------------ -------------
Total assets
As previously reported $ 235,511 $ 310,935
As revised 221,785 409,696
Total equity
As previously reported 175,016 226,408
As revised 165,844 325,169
</TABLE>
(3) POOLINGS OF INTERESTS
From July 1, 1998 to March 31, 1999, the following companies have merged with
CIBER in business combinations accounted for as poolings of interests:
EJR COMPUTER ASSOCIATES ("EJR") - On August 11, 1998, CIBER issued 1,155,516
shares of its common stock and assumed substantially all of EJR's liabilities
in exchange for all of the assets of EJR. EJR, located in Hoboken, New
Jersey, provided data processing consulting and project management services
similar to CIBER. CIBER's consolidated financial statements have been
restated for all periods prior to the merger to include the results of
operations, financial position and cash flows of EJR.
7
<PAGE>
Selected financial data of CIBER and of EJR, prior to its merger with CIBER,
and on a combined basis, were (in thousands, except per share data):
<TABLE>
<CAPTION>
CIBER EJR COMBINED
-------------- --------------- ----------------
<S> <C> <C> <C>
YEAR ENDED JUNE 30, 1998
Revenues $ 550,421 $ 26,067 $ 576,488
Net income (loss) 36,510 (33) 36,477
Pro forma net income (loss) 34,303 (33) 34,270
Pro forma income per share - diluted $ .65 $ .64
YEAR ENDED JUNE 30, 1997
Revenues $ 390,817 $ 22,563 $ 413,380
Net income 20,696 530 21,226
Pro forma net income 19,893 530 20,423
Pro forma income per share - diluted $ .40 $ .40
YEAR ENDED JUNE 30, 1996
Revenues $ 275,576 $ 20,389 $ 295,965
Net income 14,380 401 14,781
Pro forma net income 12,068 401 12,469
Pro forma income per share - diluted $ .26 $ .26
</TABLE>
THE CUSHING GROUP ("CUSHING") - On August 31, 1998, CIBER issued 961,135
shares of its common stock and assumed substantially all of Cushing's
liabilities in exchange for all of the assets of Cushing. Cushing,
headquartered in Nashua, New Hampshire, provided distributed object
technology consulting services. The effects of this merger on CIBER's
revenues, pro forma net income and pro forma income per share would not have
been material. As a result, CIBER's historical financial statements have not
been restated for this business combination.
(4) ACQUISITIONS
From July 1, 1998 to March 31, 1999, CIBER acquired the following companies
in business combinations accounted for as purchases. Accordingly, CIBER's
consolidated financial statements include the results of operations of the
acquired companies since the date of acquisition.
COMPAID CONSULTING SERVICES, INC. ("COMPAID") - On March 2, 1999, CIBER
acquired all of the outstanding capital stock of Compaid for approximately
$9.7 million. The purchase price is subject to adjustment based on
finalization of the Compaid balance sheet at the acquisition date. CIBER has
recorded goodwill of approximately $7.5 million related to this acquisition,
which will be amortized over 15 years. Compaid, headquartered in Atlanta,
Georgia, provided services similar to CIBER.
BUSINESS IMPACT SYSTEMS, INC. ("BIS") - On February 26, 1999, CIBER issued
2,401,028 shares of its common stock and granted options for 3,634 shares of
its common stock (at an aggregate purchase price of $40,000) in exchange for
substantially all of the outstanding assets and liabilities of BIS. The stock
options, which have an exercise price of $11.01 per share, replaced existing
BIS options. The aggregate purchase price was $62.2 million, including
acquisition costs. CIBER has recorded goodwill of $55.6 million related to
this acquisition, which will be amortized over 20 years. BIS, headquartered
in Herndon, Virginia, provided enterprise integration services and will
operate as CIBER's Enterprise Integration Practice.
8
<PAGE>
PARADYME HR TECHNOLOGIES CORPORATION ("PARADYME HRT") - On February 5, 1999,
CIBER acquired certain assets, liabilities and all of the business operations
of Paradyme HRT for $5.0 million. Additionally, the terms of the purchase
provide for additional consideration of up to $3.0 million based on certain
performance criteria during the 12-month periods ending January 31, 2000 and
2001. CIBER has recorded goodwill of $4.4 million related to this
acquisition, which will be amortized over 15 years. Any additional
consideration paid will be accounted for as additional goodwill. Paradyme
HRT, located in Columbia, South Carolina, provided ERP Outsourcing services
and HR/Payroll business services and has become CIBER's Enterprise
Outsourcing Practice.
INTEGRATION SOFTWARE CONSULTANTS, INC. ("ISC") - On February 2, 1999, CIBER
issued 1,280,289 shares of its common stock in exchange for all of the
outstanding common stock of ISC. The aggregate purchase price was $34.0
million, including acquisition costs. CIBER has recorded goodwill of $31.9
million related to this acquisition, which will be amortized over 20 years.
ISC, headquartered in Philadelphia, Pennsylvania, provided SAP software
implementation services.
YORK & ASSOCIATES, INC. ("YORK") - On January 29, 1999, CIBER issued 548,857
shares of its common stock and granted options for 30,643 shares of its
common stock (at an aggregate exercise price of $159,000) in exchange for
substantially all of the outstanding assets and liabilities of York. The
stock options, which have an exercise price of $5.19 per share, replaced
existing York options. The aggregate purchase price was $14.5 million,
including acquisition costs. CIBER has recorded goodwill of $12.2 million
related to this acquisition, which will be amortized over 20 years. York,
headquartered in St. Paul, Minnesota, provided IT consulting and software
implementation services similar to CIBER.
PARAGON SOLUTIONS, INC. ("PARAGON") - On January 8, 1999, CIBER acquired
certain assets, liabilities and all of the business operations of Paragon for
$4.4 million. Additionally, the terms of the purchase provide for additional
consideration of up to $3.3 million based on certain performance criteria
during the 12-month periods ending December 31, 1999 and 2000. CIBER has
recorded goodwill of $4.3 million related to this acquisition, which will be
amortized over 15 years. Paragon, located in Pittsburgh, Pennsylvania,
provided Oracle software implementation services.
THE DORADUS CORPORATION ("DORADUS") - On November 15, 1998, CIBER acquired
all of the outstanding capital stock of Doradus for $4.0 million. Additional
consideration of up to $400,000 may be payable in one year. CIBER has
recorded goodwill of $3.9 million related to this acquisition, which will be
amortized over 15 years. If any additional consideration is paid, it will be
recorded as goodwill. Doradus, located in Minneapolis, Minnesota, provided IT
consulting services similar to CIBER.
The following unaudited pro forma financial information presents the combined
results of operations of CIBER, Compaid, BIS, Paradyme HRT, ISC, York,
Paragon and Doradus as if the acquisitions had occurred as of the beginning
of fiscal years 1998 and 1999, after giving effect to certain adjustments,
including amortization of goodwill and other intangible assets, decreased
interest revenue as a result of the cash paid for the acquisitions, and the
related income tax effects. The pro forma financial information does not
necessarily reflect the results of operations that would have occurred had
CIBER and the seven acquired companies constituted a single entity during
such periods.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
MARCH 31,
-----------------------------------
IN THOUSANDS 1998 1999
-------------- --------------
<S> <C> <C>
Revenues $ 455,373 $ 565,726
Net income 22,558 37,911
Pro forma net income 22,347 37,911
Pro forma income per share - diluted $ .39 $ .65
</TABLE>
For income tax purposes, the acquisitions of Doradus, York, ISC, BIS and Compaid
were non-taxable transactions.
9
<PAGE>
In the current fiscal year, CIBER paid additional cash consideration of
$688,000 to the former owners of Oasys, Inc. related to the March 1996
acquisition. This additional consideration was recorded as additional
goodwill.
CIBER Network Services, Inc. ("CNSI"), which was majority owned by certain
officers of the Company, was acquired in December 1996. The terms of the
agreement provided for additional contingent consideration based on certain
performance objectives of CNSI for the 12-month period ended October 31,
1998. CIBER had recorded additional goodwill and a liability of $1,175,000 at
June 30, 1998 in anticipation of the performance objectives being met. In
October 1998, CIBER offered the sellers the option to receive either 90% of
the additional consideration in the form of CIBER common stock valued at
$16.00 per share or 100% of the additional consideration payable in cash. As
a result, 59,479 shares of CIBER common stock were issued and $118,000 was
paid in cash for total consideration of $1,070,000.
A reconciliation of cash paid for acquisitions during the nine months ended
March 31, 1999 is as follows (in thousands):
<TABLE>
<S> <C>
Fair value of assets acquired $ 136,298
Liabilities assumed (10,403)
Common stock issued in connection with acquisitions (107,337)
Additional cash consideration on previous acquisitions 806
------------
Total cash paid for acquisitions $ 19,364
------------
------------
</TABLE>
(5) SHAREHOLDERS' EQUITY
Changes in shareholders' equity during the nine months ended March 31, 1999
were (in thousands):
<TABLE>
<CAPTION>
Common stock Additional Total
------------------- paid-in Retained Treasury shareholders'
Shares Amount capital earnings stock equity
--------- --------- ---------- ---------- --------- ----------------
<S> <C> <C> <C> <C> <C> <C>
BALANCES AT JULY 1, 1998, AS RESTATED (SEE NOTE 3) 52,248 $522 $ 93,889 $71,433 $ - $165,844
Employee stock purchases and options exercised 941 10 10,015 (2,118) 2,118 10,025
Immaterial pooling of interests 961 10 806 - - 816
Acquisition consideration 4,279 42 106,342 (96) 1,049 107,337
Tax benefit from exercise of stock options - - 4,052 - - 4,052
Compensation expense related to stock 2 - 216 - - 216
Stock options exchanged for accrued compensation - - 833 - - 833
Purchases of treasury stock - - - - (4,274) (4,274)
Net income - - - 40,320 - 40,320
--------------------------------------------------------------------
BALANCES AT MARCH 31, 1999 58,431 $584 $216,153 $109,539 $ (1,107) $325,169
--------------------------------------------------------------------
--------------------------------------------------------------------
</TABLE>
(6) STOCK OPTION PLANS
On September 1, 1998, the Board of Directors authorized a repricing program
for employees who were originally granted options under the Employees' Stock
Option Plan from March 1, 1998 to August 31, 1998 at exercise prices ranging
from $28.88 to $38.00 that repriced all of these outstanding stock options to
an exercise price of $27.06 per share. Options to purchase 537,050 shares of
common stock were repriced. The repriced options follow the vesting schedule
of the original options granted.
10
<PAGE>
On October 9, 1998, the Board of Directors authorized another repricing
program for employees who were originally granted options under the
Employees' Stock Option Plan on October 1, 1998 at an exercise price of
$20.13 that repriced all of these outstanding stock options to an exercise
price of $16.00 per share. Options to purchase 71,200 shares of common stock
were repriced. The repriced options follow the vesting schedule of the
original options granted.
On October 9, 1998, the Board of Directors authorized a program which allowed
certain directors, who were originally granted options under the Directors'
Stock Option Plan from October 1, 1997 to September 30, 1998 at exercise
prices ranging from $21.53 to $40.25, to cancel these stock options and
replace them with options under the Employees' Stock Option Plan at an
exercise price of $16.00 per share. Options to purchase 48,000 shares of
common stock were reissued.
In addition, from July 1, 1998 to March 31, 1999, CIBER granted options for
1,898,375 shares of common stock, at fair market value, to certain employees
under the Employees' Stock Option Plan at exercise prices ranging from $16.00
to $29.44 per share. In connection with the acquisitions of York and BIS,
CIBER granted replacement options for 34,277 shares of common stock at
exercise prices of $5.19 - $11.01 per share. In addition, in connection with
the acquisition of ISC, CIBER granted options for 58,584 shares of common
stock, with an exercise price of $.01, to certain employees. Compensation
expense, measured as the difference between the fair market value of CIBER
stock on the date of grant and $.01, is being recognized over the vesting
periods. Compensation expense of approximately $1.0 million was recognized
during the nine months ended March 31, 1999.
(7) REVOLVING LINE OF CREDIT
The Company has a $35 million unsecured revolving line of credit with a bank.
There were no outstanding borrowings under this bank line at March 31, 1999
and June 30, 1998. Any outstanding borrowings would bear interest at the
three month London Interbank Offered Rate ("LIBOR") plus 2%. The credit
agreement requires a commitment fee of .225% per annum on any unused portion
of the line of credit up to $20 million. The credit agreement expires in
December 1999.
(8) SUBSEQUENT EVENTS
On April 30, 1999, CIBER acquired certain assets, liabilities and all of the
business operations of Digital Software Corporation ("DSC") for approximately
$7.0 million in cash. This acquisition will be accounted for as a purchase.
Accordingly, CIBER's consolidated financial statements will include the
results of operations of DSC after the date of acquisition. CIBER will record
goodwill of approximately $7.0 million related to this acquisition, which
will be amortized over 15 years. DSC, located in Aurora, Colorado provided
software engineering services similar to CIBER.
11
<PAGE>
(9) QUARTERLY FINANCIAL INFORMATION
The following table sets forth certain statements of operations data for each
of the quarters indicated below and, in the opinion of management, contains
all adjustments, consisting only of normal recurring adjustments, necessary
for a fair presentation thereof. All information has been restated for
poolings of interests business combinations through March 31, 1999.
<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
IN THOUSANDS, EXCEPT PER SHARE DATA QUARTER QUARTER QUARTER QUARTER TOTAL
------- ------- ------- ------- -----
<S> <C> <C> <C> <C> <C>
NINE MONTHS ENDED MARCH 31, 1999
Revenues $165,658 $174,056 $184,901 N/A $524,615
Amortization of intangible assets 1,082 1,069 2,314 N/A 4,465
Merger costs 1,535 - - N/A 1,535
Operating income 18,760 23,148 23,880 N/A 65,788
Net income 11,117 14,320 14,883 N/A 40,320
Pro forma net income 11,117 14,320 14,883 N/A 40,320
Pro forma income per share - basic $0.21 $0.27 $0.27 N/A $0.74
Pro forma income per share - diluted $0.20 $0.26 $0.26 N/A $0.72
Supplemental information (1):
Operating income before amortization and
merger costs 21,377 24,217 26,194 N/A 71,788
Adjusted pro forma net income, excluding
amortization and merger costs 13,351 15,007 16,722 N/A 45,080
YEAR ENDED JUNE 30, 1998
Revenues $129,334 $141,661 $148,093 $157,400 $576,488
Amortization of intangible assets 938 970 978 1,050 3,936
Merger costs 614 1,573 504 1,847 4,538
Operating income 10,512 11,989 17,728 17,639 57,868
Net income 6,484 6,056 11,387 12,550 36,477
Pro forma net income 6,208 6,851 10,657 10,554 34,270
Pro forma income per share - basic $0.12 $0.13 $0.21 $0.20 $0.67
Pro forma income per share - diluted $0.12 $0.13 $0.20 $0.19 $0.64
Supplemental information (1):
Operating income before amortization and
merger costs 12,064 14,532 19,210 20,536 66,342
Adjusted pro forma net income, excluding
amortization and merger costs 7,421 9,048 11,785 13,087 41,341
YEAR ENDED JUNE 30, 1997
Revenues $88,990 $96,552 $108,480 $119,358 $413,380
Amortization of intangible assets 602 687 782 1,016 3,087
Merger costs 622 596 - - 1,218
Operating income 6,330 6,164 9,695 11,179 33,368
Net income 3,420 3,960 6,407 7,439 21,226
Pro forma net income 3,786 3,847 5,922 6,868 20,423
Pro forma income per share - basic $0.08 $0.08 $0.12 $0.14 $0.43
Pro forma income per share - diluted $0.08 $0.08 $0.12 $0.13 $0.40
Supplemental information (1):
Operating income before amortization and
merger costs 7,554 7,447 10,477 12,195 37,673
Adjusted pro forma net income, excluding
amortization and merger costs 4,775 4,884 6,420 7,507 23,586
</TABLE>
(1) The supplemental information is provided to enhance the understanding of
CIBER's operating results and are not intended to represent measurements
under generally accepted accounting principles ("GAAP'). Operating income
before amortization and merger costs represents total revenues, less costs of
revenues, less
12
<PAGE>
selling, general and administrative expenses and excludes charges for
amortization of intangible assets and merger costs. Adjusted pro forma net
income, excluding amortization and merger costs adjusts CIBER's reported pro
forma net income to exclude the net of tax affects of amortization of
intangible assets and merger costs. The supplemental data is presented
because these are additional measures by which CIBER internally measures its
operating performance.
13
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THE FOLLOWING DISCUSSION OF THE RESULTS OF OPERATIONS AND FINANCIAL CONDITION
SHOULD BE READ IN CONJUNCTION WITH THE COMPANY'S CONSOLIDATED FINANCIAL
STATEMENTS AND NOTES THERETO INCLUDED ELSEWHERE HEREIN. WITH THE EXCEPTION OF
HISTORICAL MATTERS AND STATEMENTS OF CURRENT STATUS, CERTAIN MATTERS
DISCUSSED BELOW ARE FORWARD-LOOKING STATEMENTS THAT INVOLVE SUBSTANTIAL RISKS
AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM
TARGETS OR PROJECTED RESULTS. FACTORS THAT COULD CAUSE ACTUAL RESULTS TO
DIFFER MATERIALLY INCLUDE, AMONG OTHERS, GROWTH THROUGH BUSINESS COMBINATIONS
AND INTERNAL EXPANSION, THE ABILITY TO ATTRACT AND RETAIN QUALIFIED
CONSULTANTS, DEPENDENCE ON SIGNIFICANT RELATIONSHIPS AND THE ABSENCE OF
LONG-TERM CONTRACTS, MANAGEMENT OF A LARGE AND RAPIDLY GROWING BUSINESS,
PROJECT RISKS, PRICING AND MARGIN PRESSURES, AND COMPETITION. MANY OF THESE
FACTORS ARE BEYOND THE COMPANY'S ABILITY TO PREDICT OR CONTROL. PLEASE REFER
TO A DISCUSSION OF THESE AND OTHER FACTORS IN THE COMPANY'S ANNUAL REPORT ON
FORM 10-K AND OTHER SECURITIES AND EXCHANGE COMMISSION FILINGS. THE COMPANY
DISCLAIMS ANY INTENT OR OBLIGATION TO UPDATE PUBLICLY SUCH FORWARD-LOOKING
STATEMENTS, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR
OTHERWISE. IN ADDITION, AS A RESULT OF THESE AND OTHER FACTORS, THE COMPANY'S
PAST FINANCIAL PERFORMANCE SHOULD NOT BE RELIED ON AS AN INDICATION OF FUTURE
PERFORMANCE.
OVERVIEW
Through March 31, 1999, the Company operated as two major divisions: the
CIBER Information Services ("CIS") Division and the CIBER Solutions
("Solutions") Division. The CIS Division provides application software
development and maintenance services including project management and
transitional and selective outsourcing. The Solutions Division provides
information technology integration services principally in the areas of
management consulting, aligning business/IT solutions (including E-business,
data warehousing and middleware integration), enterprise applications
solutions (EAS/ERP) implementation and outsourcing services, enterprise
integration, and network services consulting and products.
In general, the Solutions Division consulting revenues provide higher gross
margins than the CIS Division. However, the Solutions Division activities
also involve higher selling, general and administrative expenses as a
percentage of revenues. Consequently, fluctuations in gross margin and
selling, general and administrative expenses as a percentage of revenues may
be due to changes in the mix of revenues between the CIS Division and the
Solutions Division. Management believes that operating income before
amortization and merger costs, as a percentage of revenues, is a more
meaningful indicator because it better reflects the effects of revenue mix.
The Company plans that for its fiscal year ended June 30, 2000 it will
recharacterize its business model sales structure to be comprised of groups
and practices rather than divisions and subsidiaries. The "groups" will be:
- Management & Strategic IT Consulting
- Enterprise Application Solutions (EAS/ERP)
- E-Business Solutions
- Custom Delivery Solutions
- Enterprise Systems and Network Integration
This will mean that all of the Company's services will be sold under one
name, CIBER, and will involve a common marketing theme and logo. This
approach will replace the several different names, logos, and marketing
themes of the Company's existing operating subsidiaries. Management believes
the intended new structure will offer several benefits, including branding
and market clarity and a platform that enables greater cross-selling to the
Company's existing customer base.
CIBER's largest customer is IBM, which represented approximately 6% of
revenues for the nine months ended March 31, 1999. The Company's contract
with IBM was renewed in March 1999 and will expire on December 31, 1999 with
an option to extend the contract through March 31, 2000.
14
<PAGE>
BUSINESS COMBINATIONS
The Company has grown significantly through mergers and acquisitions as well
as through internal growth. For purposes of this report, the term
"acquisition" refers to business combinations accounted for as a purchase and
the term "merger" refers to business combinations accounted for as a pooling
of interests. The Company's acquisitions involve the capitalization of
intangible assets, which intangible assets are generally amortized over
periods of up to 20 years for financial reporting purposes. The Company's
consolidated financial statements include the results of operations of an
acquired business since the date of acquisition. Mergers result in a one-time
charge in the period in which the transaction is completed for costs
associated with the business combination. Unless the effects are immaterial,
the Company's consolidated financial statements are restated for all periods
prior to a merger to include the results of operations, financial position
and cash flows of the merged company. In addition, selling, general and
administrative expenses may vary as a percentage of revenues depending on the
fluctuations in the selling, general and administrative expenses of merged
companies, if any, during any given period. As disclosed in the Notes to
Consolidated Financial Statements, included herein, from July 1, 1998 to
March 31, 1999, two companies merged with CIBER in business combinations
accounted for as poolings of interests and CIBER acquired seven companies in
business combinations accounted for as purchases.
THREE MONTHS ENDED MARCH 31, 1999 AS COMPARED TO THREE MONTHS ENDED MARCH 31,
1998.
The Company's revenues for the three months ended March 31, 1999 increased
24.9% to $184.9 million from $148.1 million for the quarter ended March 31,
1998. This represents a 29.0% increase in consulting revenues offset by a
planned decrease in other revenues. For the three months ended March 31,
1999, CIS Division consulting revenues increased 17.7% to $104.5 million from
$88.8 million for the same quarter of last year and the Solutions Division
consulting revenues increased 50.9% to $69.0 million from $45.7 million for
the same quarter of last year. Other revenues decreased to $11.4 million for
the three months ended March 31, 1999 from $13.6 million for the same quarter
last year. CIS Division consulting revenues accounted for 56.5% and 59.9% of
total consulting revenues for the three months ended March 31, 1999 and 1998,
respectively. The increase in revenues is derived primarily from an increase
in hours billed and, to a lesser extent, an increase in average billing rates.
Of the 29.0% increase in consulting revenues for the three months ended March
31, 1999 in comparison to the three months ended March 31, 1998,
approximately 10% was due to revenues from acquired businesses or from
mergers accounted for as immaterial poolings of interests and approximately
19% was due to organic growth of existing operations. Organic growth for the
quarter was lessened due to declining direct Year 2000 service revenues.
Management estimates that organic growth would have been approximately 22%,
or 3% greater, absent this effect.
Gross margin percentage improved slightly to 36.0% of revenues for the three
months ended March 31, 1999 from 35.9% of revenues for the same quarter of
last year. This improvement is due to improved gross margins on consulting
services offset by decreased gross margins on other revenues.
Selling, general and administrative expenses were 21.8% of revenues for the
three months ended March 31, 1999 compared to 23.0% of revenues for the same
quarter last year. The decrease as a percentage of revenues is primarily due
to greater economies of scale, including reduced administrative costs of
certain merged companies.
Amortization of intangible assets increased to $2.3 million for the three
months ended March 31, 1999 from $978,000 for the same quarter last year.
This increase was due to the additional intangible assets resulting from
mergers and acquisitions.
Merger costs, primarily transaction related broker and professional costs, of
$504,000 were incurred during the three months ended March 31, 1998, while no
merger costs were incurred during the three months ended March 31, 1999.
15
<PAGE>
Net interest and other income increased to $644,000 for the three months
ended March 31, 1999 from $391,000 for the same quarter last year due to
increased average cash balances available for investment and the elimination
of borrowings of certain merged companies.
After the pro forma adjustment to income tax expense, if any, the Company's
pro forma effective tax rates for the three months ended March 31, 1999 and
1998 were 39.3% and 41.2%, respectively. The Company's effective tax rate is
higher than its normal effective tax rate for the three months ended March
31, 1998 due to nondeductible merger costs. The pro forma adjustment to
income tax expense reflects the exclusion of the one-time income tax effects
related to changes in the tax status of certain merged companies and imputes
income tax expense for S corporation operations which were not subject to
income taxes.
The Company's pro forma net income increased 39.7% to $14.9 million for the
three months ended March 31, 1999 from $10.7 million for the same quarter
last year.
NINE MONTHS ENDED MARCH 31, 1999 AS COMPARED TO NINE MONTHS ENDED MARCH 31,
1998
The Company's revenues for the nine months ended March 31, 1999 increased
25.2% to $524.6 million from $419.1 million for the nine months ended March
31, 1998. This represents a 27.7% increase in consulting revenues offset by a
planned lesser growth in other revenues. For the nine months ended March 31,
1999, CIS Division consulting revenues increased 20.2% to $300.8 million from
$250.3 million for the same period of last year and the Solutions Division
consulting revenues increased 43.2% to $175.8 million from $122.8 million for
the same period of last year. Other revenues increased 4.4% to $48.0 million
for the nine months ended March 31, 1999 from $46.0 million for the same
period last year. CIS Division consulting revenues accounted for 57.3% and
59.7% of total consulting revenues for the nine months ended March 31, 1999
and 1998, respectively. The increase in revenues is derived primarily from an
increase in hours billed and, to a lesser extent, an increase in average
billing rates.
Of the 27.7 % increase in consulting revenues for the nine months ended March
31, 1999 in comparison to the nine months ended March 31, 1998, approximately
5.0% was due to revenues from acquired businesses or from mergers accounted
for as immaterial poolings of interests. The remainder of the increase was
due to increased revenues from existing operations.
Gross margin percentage improved to 35.5% of revenues for the nine months
ended March 31, 1999 from 34.4% of revenues for the same period of last year.
This improvement is due to improved gross margins on both consulting services
and other revenues.
Selling, general and administrative expenses were 21.8% of revenues for the
nine months ended March 31, 1999 compared to 23.4% of revenues for the same
period last year. The decrease as a percentage of revenues is primarily due
to greater economies of scale, including reduced administrative costs of
certain merged companies.
Amortization of intangible assets increased to $4.5 million for the nine
months ended March 31, 1999 from $2.9 million for the same period last year.
This increase was due to the additional intangible assets resulting from
mergers and acquisitions.
Merger costs, primarily transaction related broker and professional costs, of
$1.5 million were incurred during the nine months ended March 31, 1999
compared to $2.7 million for the same period last year.
Net interest and other income increased to $2.0 million for the nine months
ended March 31, 1999 from $1.0 million for the same period last year due to
increased average cash balances available for investment and the elimination
of borrowings of certain merged companies.
After the pro forma adjustment to income tax expense, if any, the Company's
pro forma effective tax rates for the nine months ended March 31, 1999 and
1998 were 40.5% and 42.5%, respectively. The Company's effective tax rate is
higher than its normal effective tax rate for the nine months ended March 31,
1998 due to nondeductible merger costs. The pro forma adjustment to income
tax expense reflects the exclusion of the
16
<PAGE>
one-time income tax effects related to changes in the tax status of certain
merged companies and imputes income tax expense for S corporation operations
which were not subject to income taxes.
The Company's pro forma net income increased 70.0% to $40.3 million for the
nine months ended March 31, 1999 from $23.7 million for the nine months ended
March 31, 1998.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1999, the Company had $143.0 million of working capital, of
which $66.1 million was cash and cash equivalents, and had a current ratio of
2.7:1. The Company has primarily used its operating cash flow and the net
proceeds from public offerings to finance working capital needs and
acquisitions. The Company believes that its cash and cash equivalents, its
operating cash flow and the availability of credit under its bank revolving
line of credit will be sufficient to finance working capital needs during at
least the next twelve months.
Net cash provided by operating activities was $50.0 million and $23.6 million
for the nine months ended March 31, 1999 and 1998, respectively. This
increase was primarily due to increased net income. Included in net cash
provided by operating activities was $4.1 million and $7.1 million for the
nine months ended March 31, 1999 and 1998, respectively, related to the tax
benefit from the exercise of stock options.
The Company's accounts receivable totaled $155.1 million at March 31, 1999
compared to $121.5 million at June 30, 1998. This increase is primarily a
result of the Company's increase in revenues and also the mix shift to more
solution oriented engagements.
Net cash used in investing activities was $27.9 million and $7.0 million
during the nine months ended March 31, 1999 and 1998, respectively. The
Company used cash of $19.4 million during the nine months ended March 31,
1999 for acquisitions. The Company also purchased property and equipment of
$8.6 million and $7.5 million during the nine months ended March 31, 1999 and
1998, respectively.
Net cash provided by (used in) financing activities was $5.8 million and
($3.5 million) during the nine months ended March 31, 1999 and 1998,
respectively. The Company obtained net cash proceeds from sales of common
stock to employees of $10.0 million and $4.6 million during the nine months
ended March 31, 1999 and 1998, respectively. This increase is primarily due
to increased participation in CIBER's Employee Stock Purchase Plan. During
the nine months ended March 31, 1999, CIBER purchased 206,000 shares of
treasury stock for $4.3 million. Of these treasury shares, 151,000 were
reissued as additional consideration related to the acquisition of CNSI and
as sales of common stock under CIBER's Employee Stock Purchase Plan.
The Company has a $35 million revolving line of credit with a bank. There
were no outstanding borrowings under this bank line at March 31, 1999 and
June 30, 1998.
The Company's subsidiary, CNSI, has a $7.5 million unsecured inventory
financing line of credit with a financial corporation. The amount outstanding
totaled approximately $1.9 million at March 31, 1999 and is included in trade
payables on the Company's balance sheet.
The Company expects, although there can be no assurance, to be able to renew
these lines of credit on similar terms.
17
<PAGE>
YEAR 2000
THE FOLLOWING STATEMENTS ARE "YEAR 2000 READINESS DISCLOSURES" IN CONFORMANCE
WITH THE YEAR 2000 INFORMATION AND READINESS DISCLOSURE ACT OF 1998.
The "Year 2000" issue is the result of computer programs using two digits
rather than four to define the applicable year. Computer software and
hardware and other devices with embedded technology that are date sensitive
may recognize a date using "00" as the year 1900 rather than the year 2000.
This could result in a system failure or miscalculations causing disruptions
of CIBER's operations.
CIBER has instituted various projects to address the Year 2000 issue. CIBER
believes its material internal information technology ("IT") systems,
including payroll, billing and accounting systems, are currently Year 2000
compliant. For significant third-party software applications, CIBER has
obtained confirmation that the software is Year 2000 compliant. CIBER has
completed testing and remediation, if necessary, of all internally developed
software.
CIBER is currently evaluating its non-IT systems, such as building security,
elevators, fire-safety systems, telephones, voice mail and other systems
containing embedded microprocessors as well as evaluating the Year 2000
readiness of its significant suppliers. CIBER relies on the services of the
landlords of its offices, telecommunications companies, banks, utilities,
commercial airlines, and insurance companies, among others. As of March 31,
1999, CIBER has received Year 2000 compliance status information from 87% of
its significant suppliers. Of these, 52% have indicated that they are
currently Year 2000 compliant. The remainder have indicated that they plan to
be Year 2000 compliant by December 31, 1999. If CIBER does not obtain
reasonable assurances from its significant third-party vendors and suppliers
that there will be no interruption of service as a result of the Year 2000
issue, CIBER intends to devise contingency plans. There can be no assurance
that any contingency plans developed by CIBER will prevent such service
interruption on the part of one or more of CIBER's vendors from having a
material adverse affect on CIBER.
CIBER's principal business is providing IT services. Some of CIBER's services
are directly or indirectly related to the Year 2000 issue, including Year
2000 remediation services. CIBER provides services to clients that assist the
client in their Year 2000 projects. In addition, CIBER provides services to
clients directly related to client systems that may or may not be Year 2000
compliant. Due to the potential significance of the Year 2000 issue upon
client operations and upon any failure of critical client systems to which
CIBER has provided services, CIBER may be subject to claims regardless of
whether the failure is related to the services provided by CIBER. If
asserted, the resolution of such claims, including defense costs, could have
a material adverse affect on CIBER. CIBER generally attempts to include
provisions in client contracts that, among other things, disclaim implied
warranties, limit the duration of any express warranties, limit CIBER's
maximum liability and disclaim any warranties for projects managed by the
client. There can be no assurance that CIBER will be able to obtain these
contractual protections in future client contracts, or that such provisions
will protect CIBER from, or limit the amount of, any liability arising from
claims against CIBER.
As a reseller of certain IT products, CIBER only passes to its customers the
applicable vendor's warranties. CIBER makes no warranties regarding Year 2000
compliance of any of the products it resells. CIBER's subsidiary, The Summit
Group, Inc. ("Summit"), has developed and licensed certain warehousing and
traffic software products that have subsequently been modified to be Year
2000 compliant. Year 2000 compliant versions have been tested both internally
and by a third party. Summit is offering the Year 2000 compliant software
versions to its prior and existing customers at no charge. Summit plans to
complete all necessary client upgrades by September 30, 1999.
Many of CIBER's clients needed to repair or replace their legacy systems
because of Year 2000 issues. CIBER believes this favorably impacted the
demand for its services and products. CIBER believes that its direct Year
2000 services, like code renovation, peaked in the quarter ended March 31,
1998 and has been diminishing since then. CIBER also believes that as
companies focused on Year 2000 issues, other less critical projects were
being delayed. In addition, management of CIBER believes that the demand for
certain of its other IT services, particularly those related to the internet,
e-commerce, and networking, may offset any decrease caused by diminishing
Year 2000 revenues. As of March 31, 1999, management estimates approximately
5%
18
<PAGE>
of CIBER's revenues were being derived from Year 2000 services. As a result
of these factors, CIBER does not expect a decrease in the overall demand for
its services as the Year 2000 draws closer. However, given the lack of
precedent for an issue of this nature and magnitude, CIBER's ability to
forecast the impact on future operations is limited. In addition, the
business interruption of any of CIBER's significant clients, resulting from
their Year 2000 issues, could have a material adverse affect on CIBER.
As described above, CIBER has identified various potential issues associated
with the Year 2000 issue. CIBER is devoting internal resources and is working
with its suppliers to help ensure that CIBER's business is not substantially
interrupted as a result of the Year 2000. CIBER believes that the total
amounts spent by it to date and that it expects to spend in 1999 addressing
the Year 2000 issue will be less than $250,000. CIBER currently does not have
a contingency plan in the event of a particular system not being Year 2000
compliant. Such a plan will be developed if it becomes clear that CIBER is
not going to achieve its compliance objectives. Although CIBER expects to
identify and resolve all Year 2000 problems that could materially adversely
affect its business operations, management believes that it is not possible
to determine with certainty that all Year 2000 problems affecting CIBER, its
vendors, or its clients have been identified or corrected. If CIBER is
required to implement any contingency plan, it could have a material adverse
effect on CIBER's operations. This discussion of CIBER's Year 2000 efforts,
management's expectations relating to Year 2000 compliance and the possible
affects on CIBER are forward-looking statements.
RECENT ACCOUNTING PRONOUNCEMENTS
In June 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standard No. 131, "Disclosures about
Segments of an Enterprise and Related Information" ("SFAS 131"). This
standard requires disclosure of financial and descriptive information about
an entity's reportable operating segments. This standard is effective for
fiscal years beginning after December 15, 1997 and requires restatement of
comparative information for prior periods. The Company will provide the
disclosures required by SFAS 131, if any, in its fiscal year 1999 annual
financial statements. In addition, the Company believes that other recent
accounting pronouncements will not have a material affect on its financial
statements.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company has no activities in derivative financial or commodity
instruments. The Company's exposure to market risks, (i.e. interest rate
risk, foreign currency exchange rate risk, equity price risk) through other
financial instruments, including, among others, cash equivalents, accounts
receivable, lines of credit, is not material.
19
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
On August 31, 1998, The Cushing Group ("Cushing") merged with CIBER
in a business combination accounted for as a pooling of interests.
CIBER issued to the former shareholders of Cushing a total of 961,135
shares of its common stock, of which 336,135 shares, having an
aggregate value of $8.4 million, were not registered under the
Securities Act of 1933. The unregistered shares were issued in
reliance upon Section 4(2) of the Securities Act of 1933, as amended,
as a sale by the Company not involving a public offering. No
underwriters were involved with such issuance of common stock.
On January 29, 1999, CIBER acquired York & Associates, Inc. ("York")
in a business combination accounted for as a purchase. CIBER issued
to the former shareholders of York a total of 548,857 shares of its
common stock, of which 111,357 shares, having an aggregate value of
$3.1 million, were not registered under the Securities Act of 1933.
The unregistered shares were issued in reliance upon Section 4(2) of
the Securities Act of 1933, as amended, as a sale by the Company not
involving a public offering. No underwriters were involved with such
issuance of common stock.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
<TABLE>
<CAPTION>
Financial Data Schedules:
<S> <C>
Exhibit 27.1 Restated for the year ended June 30, 1996.
Exhibit 27.2 Restated for: the three months ended September
30, 1996; the six months ended December 31, 1996;
the nine months ended March 31, 1997; and the year
ended June 30, 1997.
Exhibit 27.3 Restated for: the three months ended September
30, 1997; the six months ended December 31, 1997;
the nine months ended March 31, 1998; and the year
ended June 30, 1998.
Exhibit 27.4 Restated for: the three months ended September 30,
1998 and the six months ended December 31, 1998.
Exhibit 27.5 Restated for the nine months ended March 31, 1999.
</TABLE>
A report on Form 8-K was filed on March 5, 1999 that announced the
merger of Business Impact Systems, Inc. with CIBER.
20
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned there unto duly authorized.
CIBER, INC.
(Registrant)
Date July 13, 1999 By /s/ Mac J. Slingerlend
------------------ ---------------------------
Mac J. Slingerlend
President and Chief Executive Officer
Date July 13, 1999 By /s/ Richard A. Montoni
------------------ ---------------------------
Richard A. Montoni
Executive Vice President and
Chief Financial Officer
21
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<CASH> 24,398
<SECURITIES> 604
<RECEIVABLES> 61,243
<ALLOWANCES> 0
<INVENTORY> 2,269
<CURRENT-ASSETS> 90,264
<PP&E> 13,338
<DEPRECIATION> 6,858
<TOTAL-ASSETS> 111,486
<CURRENT-LIABILITIES> 37,306
<BONDS> 0
0
0
<COMMON> 467
<OTHER-SE> 73,253
<TOTAL-LIABILITY-AND-EQUITY> 111,486
<SALES> 0
<TOTAL-REVENUES> 295,965
<CGS> 0
<TOTAL-COSTS> 201,442
<OTHER-EXPENSES> 74,579
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 336
<INCOME-PRETAX> 20,795
<INCOME-TAX> 6,014
<INCOME-CONTINUING> 14,781
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 14,781
<EPS-BASIC> .28<F1>
<EPS-DILUTED> .26<F1>
<FN>
<F1>EPS IS BASED ON PRO FORMA NET INCOME OF 12,469.
</FN>
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<RESTATED>
<MULTIPLIER> 1,000
<S> <C> <C> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS 9-MOS YEAR
<FISCAL-YEAR-END> JUN-30-1997 JUN-30-1997 JUN-30-1997 JUN-30-1997
<PERIOD-START> JUL-01-1996 JUL-01-1996 JUL-01-1996 JUL-01-1996
<PERIOD-END> SEP-30-1996 DEC-31-1996 MAR-31-1997 JUN-30-1997
<CASH> 27,863 17,222 24,477 27,257
<SECURITIES> 1,150 1,124 1,718 1,984
<RECEIVABLES> 62,613 69,918 73,620 79,755
<ALLOWANCES> 0 0 0 0
<INVENTORY> 2,567 2,576 1,703 917
<CURRENT-ASSETS> 96,287 95,984 104,632 117,034
<PP&E> 14,577 16,150 17,947 20,525
<DEPRECIATION> 7,392 7,645 8,396 9,431
<TOTAL-ASSETS> 122,819 128,351 150,861 165,354
<CURRENT-LIABILITIES> 43,103 48,518 42,795 46,665
<BONDS> 0 0 0 0
0 0 0 0
0 0 0 0
<COMMON> 263 472 489 495
<OTHER-SE> 77,755 77,688 106,002 117,119
<TOTAL-LIABILITY-AND-EQUITY> 122,819 128,351 150,861 165,354
<SALES> 0 0 0 0
<TOTAL-REVENUES> 88,990 185,542 294,022 413,380
<CGS> 0 0 0 0
<TOTAL-COSTS> 60,201 125,590 199,106 278,406
<OTHER-EXPENSES> 22,459 47,458 72,727 101,606
<LOSS-PROVISION> 0 0 0 0
<INTEREST-EXPENSE> 69 179 321 434
<INCOME-PRETAX> 6,596 13,069 22,962 34,401
<INCOME-TAX> 3,176 5,689 9,175 13,175
<INCOME-CONTINUING> 3,420 7,380 13,787 21,226
<DISCONTINUED> 0 0 0 0
<EXTRAORDINARY> 0 0 0 0
<CHANGES> 0 0 0 0
<NET-INCOME> 3,420 7,380 13,787 21,226
<EPS-BASIC> .08<F1> .16<F2> .29<F3> .43<F4>
<EPS-DILUTED> .08<F1> .15<F2> .27<F3> .40<F4>
<FN>
<F1>EPS IS BASED ON PRO FORMA NET INCOME OF $3,786
<F2>EPS IS BASED ON PRO FORMA NET INCOME OF $7,633
<F3>EPS IS BASED ON PRO FORMA NET INCOME OF $13,555
<F4>EPS IS BASED ON PRO FORMA NET INCOME OF $20,423
</FN>
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<RESTATED>
<MULTIPLIER> 1,000
<S> <C> <C> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS 9-MOS YEAR
<FISCAL-YEAR-END> JUN-30-1998 JUN-30-1998 JUN-30-1998 JUN-30-1998
<PERIOD-START> JUL-01-1997 JUL-01-1997 JUL-01-1997 JUL-01-1997
<PERIOD-END> SEP-30-1997 DEC-31-1997 MAR-31-1998 JUN-30-1998
<CASH> 31,405 27,685 40,351 38,238
<SECURITIES> 1,381 880 0 0
<RECEIVABLES> 92,369 105,636 110,169 121,538
<ALLOWANCES> 0 0 0 0
<INVENTORY> 989 917 787 618
<CURRENT-ASSETS> 131,469 140,794 157,087 166,644
<PP&E> 23,017 25,458 28,342 32,561
<DEPRECIATION> 11,094 12,453 13,772 15,219
<TOTAL-ASSETS> 180,109 189,967 207,752 221,785
<CURRENT-LIABILITIES> 52,609 52,938 56,572 55,941
<BONDS> 0 0 0 0
0 0 0 0
0 0 0 0
<COMMON> 508 513 519 522
<OTHER-SE> 125,881 136,466 150,661 165,322
<TOTAL-LIABILITY-AND-EQUITY> 180,109 189,967 207,752 221,785
<SALES> 0 0 0 0
<TOTAL-REVENUES> 129,334 270,995 419,088 576,488
<CGS> 0 0 0 0
<TOTAL-COSTS> 86,087 180,158 275,021 375,506
<OTHER-EXPENSES> 32,735 68,336 103,838 143,114
<LOSS-PROVISION> 0 0 0 0
<INTEREST-EXPENSE> 103 170 193 232
<INCOME-PRETAX> 10,784 23,125 41,244 59,403
<INCOME-TAX> 4,300 10,585 17,317 22,926
<INCOME-CONTINUING> 6,484 12,540 23,927 36,477
<DISCONTINUED> 0 0 0 0
<EXTRAORDINARY> 0 0 0 0
<CHANGES> 0 0 0 0
<NET-INCOME> 6,484 12,540 23,927 36,477
<EPS-BASIC> .12<F1> .26<F2> .46<F3> .67<F4>
<EPS-DILUTED> .12<F1> .25<F2> .44<F3> .64<F4>
<FN>
<F1>EPS IS BASED ON PRO FORMA NET INCOME OF $6,208
<F2>EPS IS BASED ON PRO FORMA NET INCOME OF $13,059
<F3>EPS IS BASED ON PRO FORMA NET INCOME OF $23,716
<F4>EPS IS BASED ON PRO FORMA NET INCOME OF $34,270
</FN>
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<RESTATED>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS
<FISCAL-YEAR-END> JUN-30-1999 JUN-30-1999
<PERIOD-START> JUL-01-1998 JUL-01-1998
<PERIOD-END> SEP-30-1998 DEC-31-1998
<CASH> 55,588 62,108
<SECURITIES> 0 0
<RECEIVABLES> 133,532 136,491
<ALLOWANCES> 0 0
<INVENTORY> 605 837
<CURRENT-ASSETS> 196,593 205,515
<PP&E> 34,982 37,214
<DEPRECIATION> 17,071 18,676
<TOTAL-ASSETS> 252,265 265,968
<CURRENT-LIABILITIES> 68,386 65,488
<BONDS> 0 0
0 0
0 0
<COMMON> 536 537
<OTHER-SE> 183,343 199,943
<TOTAL-LIABILITY-AND-EQUITY> 252,265 265,968
<SALES> 0 0
<TOTAL-REVENUES> 165,658 339,714
<CGS> 0 0
<TOTAL-COSTS> 106,997 219,881
<OTHER-EXPENSES> 39,901 77,925
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> 19,372 43,238
<INCOME-TAX> 8,255 17,801
<INCOME-CONTINUING> 11,117 25,437
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 11,117 25,437
<EPS-BASIC> .21<F1> .48<F2>
<EPS-DILUTED> .20<F1> .46<F2>
<FN>
<F1>EPS IS BASED ON PRO FORMA NET INCOME OF $11,117
<F2>EPS IS BASED ON PRO FORMA NET INCOME OF $25,437
</FN>
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> JUL-01-1998
<PERIOD-END> MAR-31-1999
<CASH> 66,062
<SECURITIES> 0
<RECEIVABLES> 155,141
<ALLOWANCES> 0
<INVENTORY> 550
<CURRENT-ASSETS> 227,553
<PP&E> 42,758
<DEPRECIATION> 20,634
<TOTAL-ASSETS> 409,696
<CURRENT-LIABILITIES> 84,527
<BONDS> 0
0
0
<COMMON> 584
<OTHER-SE> 324,585
<TOTAL-LIABILITY-AND-EQUITY> 409,696
<SALES> 0
<TOTAL-REVENUES> 524,615
<CGS> 0
<TOTAL-COSTS> 338,206
<OTHER-EXPENSES> 120,621
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 67,762
<INCOME-TAX> 27,442
<INCOME-CONTINUING> 40,320
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 40,320
<EPS-BASIC> .74<F1>
<EPS-DILUTED> .72<F1>
<FN>
<F1>EPS IS BASED ON PRO FORMA NET INCOME OF $40,320
</FN>
</TABLE>
