<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended: Commission file number:
JUNE 30, 2000 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 June 30, 2000, there were 59,553,353 shares of the Registrant's common
stock ($0.01 par value) outstanding.
<PAGE>
CIBER, INC.
FORM 10-Q
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited):
Consolidated Statements of Operations
Three and six months ended June 30, 2000 and 1999 3
Consolidated Balance Sheets
June 30, 2000 and December 31, 1999 4
Consolidated Statements of Cash Flows
Six months ended June 30, 2000 and 1999 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 9
Item 3. Quantitative and Qualitative Disclosures About Market Risk 12
PART II. OTHER INFORMATION 12
SIGNATURES 13
</TABLE>
2
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CIBER, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
-------------------------- --------------------------
IN THOUSANDS, EXCEPT PER SHARE DATA 1999 2000 1999 2000
-------- --------- -------- ---------
<S> <C> <C> <C> <C>
Consulting services $183,775 $ 148,685 $357,231 $ 305,092
Other revenues 11,271 8,672 22,716 18,571
-------- --------- -------- ---------
Total revenues 195,046 157,357 379,947 323,663
-------- --------- -------- ---------
Cost of consulting services 118,099 101,041 228,471 207,695
Cost of other revenues 7,002 5,489 14,955 11,496
Selling, general and administrative expenses 43,338 39,569 83,720 81,400
Nonrecurring and other expenses -- 323 -- 2,598
Amortization of intangible assets 3,055 4,041 5,369 8,087
-------- --------- -------- ---------
Operating income 23,552 6,894 47,432 12,387
Interest and other income, net 666 346 1,310 851
Interest expense -- (44) -- (264)
-------- --------- -------- ---------
Income before income taxes 24,218 7,196 48,742 12,974
Income tax expense 10,043 3,216 19,684 5,669
-------- --------- -------- ---------
Net income $ 14,175 $ 3,980 $ 29,058 $ 7,305
======== ========= ======== =========
Earnings per share - basic $ 0.24 $ 0.07 $ 0.51 $ 0.13
Earnings per share - diluted $ 0.24 $ 0.07 $ 0.49 $ 0.12
Weighted average shares - basic 58,665 58,012 57,410 57,929
Weighted average shares - diluted 59,895 58,780 58,958 58,996
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE>
CIBER, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
IN THOUSANDS, EXCEPT PER SHARE DATA 1999 2000
----------- ---------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 2,858 $ 5,851
Accounts receivable 139,418 143,624
Prepaid expenses and other assets 7,595 8,734
Deferred income taxes 2,960 4,498
--------- ---------
Total current assets 152,831 162,707
--------- ---------
Property and equipment, at cost 55,510 55,182
Less accumulated depreciation and amortization (26,947) (30,669)
--------- ---------
Net property and equipment 28,563 24,513
--------- ---------
Intangible assets, net 233,975 220,526
Deferred income taxes 1,773 1,445
Other assets 5,426 4,580
--------- ---------
Total assets $ 422,568 $ 413,771
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Trade payables 18,102 13,814
Acquisition costs payable 15,268 2,982
Accrued compensation and payroll taxes 31,841 32,237
Deferred revenues 874 1,246
Other accrued expenses and liabilities 4,945 7,885
Income taxes payable 3,751 --
Deferred income taxes 67 --
--------- ---------
Total current liabilities 74,848 58,164
Bank line of credit 5,355 --
--------- ---------
Total liabilities 80,203 58,164
--------- ---------
Commitments and contingencies
Minority interest 109 1,160
Contingent redemption value of put options -- 2,055
Shareholders' equity:
Preferred stock, $0.01 par value, 5,000,000 shares
authorized, no shares issued -- --
Common stock, $0.01 par value, 100,000,000 shares authorized,
59,414,000 and 59,553,000 shares issued and outstanding 594 596
Additional paid-in capital 230,615 229,819
Retained earnings 139,312 146,617
Treasury stock, 1,717,000 and 1,486,000 shares, at cost (28,265) (24,640)
--------- ---------
Total shareholders' equity 342,256 352,392
--------- ---------
Total liabilities and shareholders' equity $ 422,568 $ 413,771
========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE>
CIBER, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
--------------------------
IN THOUSANDS 1999 2000
-------- --------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 29,058 $ 7,305
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 9,735 12,751
Deferred income taxes 593 (1,277)
Other 358 4
Changes in operating assets and liabilities,
net of the effects of acquisitions:
Accounts receivable (4,342) (5,892)
Other current and long-term assets (833) (2,422)
Trade payables (5,316) (2,161)
Accrued compensation and payroll taxes 7,331 954
Deferred revenues 390 865
Other accrued expenses and liabilities (4,192) 2,940
Income taxes payable 1,453 (3,364)
-------- --------
Net cash provided by operating activities 34,235 9,703
-------- --------
INVESTING ACTIVITIES:
Acquisitions, net of cash acquired (22,362) (12,389)
Reduction of advances to Agilera, Inc. -- 9,908
Purchases of property and equipment (9,607) (3,269)
-------- --------
Net cash used in investing activities (31,969) (5,750)
-------- --------
FINANCING ACTIVITIES:
Proceeds from sales of common stock, net 8,768 6,899
Proceeds from sale of put options -- 304
Net payments on bank line of credit -- (5,355)
Purchases of treasury stock (11,191) (2,808)
-------- --------
Net cash used in financing activities (2,423) (960)
-------- --------
Net increase (decrease) in cash and
cash equivalents (157) 2,993
Cash and cash equivalents, beginning of period 62,108 2,858
-------- --------
Cash and cash equivalents, end of period $ 61,951 $ 5,851
======== ========
</TABLE>
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-KT for the year ended
December 31, 1999. 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 six-month period ended June 30, 2000 are
not necessarily indicative of operating results for the full year.
MINORITY INTEREST. CIBER owns approximately 88% of Neovation, Inc.
("Neovation"). The minority stockholders' proportionate share of the equity of
Neovation is reflected as minority interest in the consolidated balance sheet.
The minority stockholders' proportionate share of the net loss of Neovation is
included in interest and other income, net in the consolidated statement of
operations. The minority interest in the net loss of Neovation was $4,000 and
$101,000 for the three and six months ended June 30, 2000, respectively.
EARNINGS 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 CIBER's
stock options and put 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 1,768,178 and 4,077,103 for the three months ended June 30, 1999 and
2000, respectively, and 1,584,490 and 2,746,770 for the six months ended June
30, 1999 and 2000, respectively.
(2) SHAREHOLDERS' EQUITY
Changes in shareholders' equity during the six months ended June 30, 2000 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 JANUARY 1, 2000 59,414 $ 594 $230,615 $139,312 $(28,265) $ 342,256
Employee stock purchases and
options exercised 137 2 464 -- 6,433 6,899
Tax benefit from exercise of
stock options -- -- 387 -- -- 387
Proceeds from sale of put options 304 304
Contingent liability of put options (2,055) (2,055)
Compensation expense related to
stock and stock options 2 -- 104 -- -- 104
Purchases of treasury stock -- -- -- -- (2,808) (2,808)
Net income -- -- -- 7,305 -- 7,305
------ ------- -------- -------- -------- ---------
BALANCES AT JUNE 30, 2000 59,553 $ 596 $229,819 $146,617 $(24,640) $ 352,392
====== ======= ======== ======== ======== =========
</TABLE>
6
<PAGE>
CIBER, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(3) REVOLVING LINE OF CREDIT
CIBER has a $35 million unsecured revolving line of credit with a bank.
Outstanding borrowings bear interest at the three month London Interbank Offered
Rate ("LIBOR") plus 2%. The credit agreement expires on January 31, 2001, and
accordingly, the outstanding balance was classified as a long-term liability at
December 31, 1999. There were no outstanding borrowings under this bank line at
June 30, 2000.
(4) AGILERA INVESTMENT
In March 2000, CIBER's wholly-owned subsidiary, Agilera, Inc. ("Agilera"),
formerly CIBER Enterprise Outsourcing, Inc., sold 13,846,154 shares of its $.001
par value Series A Convertible Preferred Stock for $45 million to new investors.
In connection with the preferred stock sale, Agilera paid CIBER $9.9 million in
repayment of its advances to Agilera as of December 31, 1999, reducing CIBER's
historical cost basis in its remaining ownership in Agilera to zero. As a result
of participating rights obtained by the preferred stockholders in connection
with their investment, CIBER, which owns approximately 95% of the outstanding
common shares of Agilera, retained an approximate 41% voting interest in
Agilera. Accordingly, effective January 1, 2000, for financial reporting
purposes, CIBER no longer consolidates the results and accounts of Agilera and
accounts for its interest in Agilera using the equity method of accounting.
In August 2000, Agilera obtained $80 million of additional equity financing.
This transaction reduced CIBER's voting interest in Agilera to approximately
24%.
CIBER has provided and will continue to provide software implementation and
other services to Agilera as a subcontractor under Agilera customer contracts.
CIBER's revenue attributable to services provided to Agilera was $2,209,000 and
3,646,000 during the three and six months ended June 30, 2000, respectively.
(5) NONRECURRING AND OTHER EXPENSES
In March 2000, CIBER announced its intent to sell less than 20% of the common
stock of its wholly-owned subsidiary, DigiTerra, Inc. ("DigiTerra"), in an
initial public offering ("IPO"). CIBER intends to distribute the balance of the
shares of DigiTerra to CIBER shareholders following the IPO ("Spin-off"),
subject to receiving Board approval and a favorable tax ruling, as well as
favorable market conditions. CIBER incurred $323,000 for professional fees
related to the Spin-off during the quarter ended June 30, 2000 that are included
in nonrecurring and other expenses in the consolidated statement of operations.
Direct costs of the IPO, such as underwriters' commissions and legal and
accounting fees, will be deducted from the proceeds of the offering.
Nonrecurring charges incurred during the quarter ended March 31, 2000 were for
employee severance costs as well as an asset write-down resulting from CIBER's
planned separation of DigiTerra. All of the severance costs were paid during the
quarter ended March 31, 2000.
(6) NEOVATION, INC.
In April 2000, CIBER merged the assets and business operations acquired from
Waterstone Consulting, Inc. in October 1999 with its subsidiary Interactive
Papyrus, Inc. ("IPI"). As a result, CIBER's ownership percentage in IPI
increased from 78% to 88%. In addition, CIBER recorded additional goodwill and
minority interest of $1.2 million. The additional goodwill will be amortized
over 6 years. IPI subsequently changed its name to Neovation, Inc.
7
<PAGE>
CIBER, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(7) SEGMENT INFORMATION
CIBER has identified its segments by products and services offered. CIBER
evaluates each of its segments based on operating income before nonrecurring and
other expenses and amortization of intangible assets and without allocation of
corporate costs. CIBER's segments are CIBER operations, DigiTerra, Neovation
and, through December 31, 1999, Agilera. CIBER operations provides application
support, data warehousing consulting, middleware and systems integration, IT
outsourcing, networking solutions and products and management consulting.
DigiTerra provides enterprise software selection, implementation and integration
services, including Commerce One, PeopleSoft, SAP, Oracle, J. D. Edwards,
Lawson, LogisticsPRO and Siebel Systems, among others, as well as related
hardware sizing and procurement. Neovation develops interactive web sites to
build online business ventures and provides consulting services specializing in
supply chain and customer relationship management solutions. Agilera provides
enterprise application hosting or application service provider ("ASP") services
and was consolidated with CIBER through December 31, 1999. The following
presents certain financial information about CIBER's reportable segments:
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1999 2000 1999 2000
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues:
CIBER operations $ 144,811 $ 116,288 $ 282,862 $ 237,423
DigiTerra 51,423 38,675 98,547 81,219
Neovation -- 3,684 -- 7,255
Agilera 900 -- 1,591 --
Inter-segment (2,088) (1,290) (3,053) (2,234)
--------- --------- --------- ---------
Total $ 195,046 $ 157,357 $ 379,947 $ 323,663
========= ========= ========= =========
Income (loss) from operations:
CIBER operations $ 20,135 $ 13,148 $ 40,453 $ 27,780
DigiTerra 10,819 2,302 20,320 5,197
Neovation -- (535) -- (940)
Agilera (670) -- (765) --
Corporate (3,677) (3,657) (7,207) (8,965)
--------- --------- --------- ---------
Total 26,607 11,258 52,801 23,072
Nonrecurring and other expenses -- (323) -- (2,598)
Amortization of intangibles (3,055) (4,041) (5,369) (8,087)
Net interest and other income 666 302 1,310 587
--------- --------- --------- ---------
Income before income taxes $ 24,218 $ 7,196 $ 48,742 $ 12,974
========= ========= ========= =========
</TABLE>
8
<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. 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. WITHOUT LIMITING THE FOREGOING, THE WORDS "BELIEVES," "ANTICIPATES,"
"PLANS," "EXPECTS" AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY
FORWARD-LOOKING STATEMENTS. 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, COMPETITION, POTENTIAL FLUCTUATIONS IN QUARTERLY OPERATING
RESULTS, PRICE VOLATILITY, AND INTERNATIONAL EXPANSION. 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-KT 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.
THREE MONTHS ENDED JUNE 30, 2000 AS COMPARED TO THREE MONTHS ENDED JUNE 30, 1999
CIBER's revenues for the three months ended June 30, 2000 decreased 19% to
$157.4 million from $195.0 million for the quarter ended June 30, 1999. This
represents a 19% decrease in consulting services revenues and a planned decrease
in other revenues, primarily sales of computer hardware products, which
decreased to $8.7 million for the three months ended June 30, 2000 from $11.3
million for the same quarter last year. Management expects that other revenues
will likely continue to decline in the future due, in part, to the sale of
CIBER's software business in September 1999. CIBER operations revenues decreased
20% while DigiTerra revenues decreased 25%, when compared to the same period
last year.
Gross margin percentage decreased to 32.3% of revenues for the three months
ended June 30, 2000 from 35.9% of revenues for the same quarter of last year.
This decrease is due to declining gross margins on both consulting services and
other revenues. Consulting services gross margins declined primarily due to a
decrease in the utilization levels of professional staff.
Selling, general and administrative expenses ("SG&A") decreased to $39.6 million
for the three months ended June 30, 2000 from $43.3 million for the same quarter
last year, while as a percentage of sales, SG&A increased to 25.1% for the three
months ended June 30, 2000 compared to 22.2% for the same quarter last year.
This reflects the semi-variable nature of SG&A. CIBER incurred additional SG&A
in 2000 related to marketing and plans to increase its branding and marketing
related costs during the remainder of 2000.
The June 2000 quarter continued to reflect an industry-wide shift in IT
spending, principally resulting from the resolution of the Y2K issue and ERP
curtailments. Many companies lessened IT expenditures beginning mid 1999 due to
completion of Y2K and ERP specific projects and a general tendency to minimize
new IT initiatives during the end of 1999. This adversely impacted CIBER,
particularly in its mainframe staffing and ERP related service offerings. There
is a significant industry trend towards new IT services driven by the internet
and increased bandwidth availability. These new services include web-designed,
e-business technologies, customer relationship management ("CRM") and supply
chain software, among others. CIBER has focused its efforts to deliver these
newer IT services. These efforts include new alliances with independent software
vendors, such as Commerce One and Siebel, and the realignment of the Company's
professional and sales personnel toward a greater focus on e.business services.
CIBER believes it will be able to grow revenues from newer IT services and this
growth will offset declining revenues from traditional services.
Nonrecurring and other expenses of $323,000 were incurred during the three
months ended June 30, 2000 due to professional fees resulting from CIBER's
planned separation of its newly created subsidiary, DigiTerra, Inc.
9
<PAGE>
("DigiTerra"). Management expects that additional expense of approximately $1.2
million related to the planned separation of DigiTerra will be incurred during
the remainder of 2000.
Amortization of intangible assets increased to $4.0 million for the three months
ended June 30, 2000 from $3.1 million for the same quarter last year. This
increase was due to the additional intangible assets resulting from acquisitions
during the past year.
Net other income, including interest income and interest expense, decreased to
$302,000 for the three months ended June 30, 2000 from $666,000 for the same
quarter last year. Fluctuations in net other income are primarily based on
average balances invested or borrowed under the line of credit during the
period.
CIBER's effective tax rate was 44.7% for the three months ended June 30, 2000
and 41.5% for the same quarter of last year. CIBER's effective tax rate for the
three months ended June 30, 2000 has increased due to increased nondeductible
amortization resulting from nontaxable acquisitions.
SIX MONTHS ENDED JUNE 30, 2000 AS COMPARED TO SIX MONTHS ENDED JUNE 30, 1999
CIBER's revenues for the six months ended June 30, 2000 decreased 15% to $323.7
million from $379.9 million for the six months ended June 30, 1999. This
represents a 15% decrease in consulting services revenues and a planned decrease
in other revenues, primarily sales of computer hardware products, which
decreased to $18.6 million for the six months ended June 30, 2000 from $22.7
million for the six months ended June 30, 1999. Management expects that other
revenues will likely continue to decline in the future due, in part, to the sale
of CIBER's software business in September 1999. CIBER operations revenues
decreased 16% while DigiTerra revenues decreased 18%, when compared to the same
period last year.
Gross margin percentage decreased to 32.3% of revenues for the six months ended
June 30, 2000 from 35.9% of revenues for the six months ended June 30, 1999.
This decrease is due to declining gross margins on consulting services offset by
improved gross margins on other revenues. Consulting services gross margins
declined primarily due to a decrease in the utilization levels of professional
staff.
Selling, general and administrative expenses ("SG&A") decreased to $81.4
million for the six months ended June 30, 2000 from $83.7 million for the
same period last year, while as a percentage of sales, SG&A increased to
25.1% for the six months ended June 30, 2000 compared to 22.0% for the same
period last year. This reflects the semi-variable nature of SG&A. CIBER
incurred additional SG&A in 2000 related to marketing and plans to increase
its branding and marketing related costs during the remainder of 2000.
Nonrecurring and other expenses of $2.6 million were incurred during the six
months ended June 30, 2000. Of this charge, $2.3 million was incurred during the
quarter ended March 31, 2000, of which $1.3 million was due to severance costs
resulting from involuntary terminations related to personnel realignment and
$975,000 was due to an asset write-down. The remaining $323,000 was due to
professional fees resulting from CIBER's planned separation of its newly created
subsidiary, DigiTerra, Inc. and was incurred during the quarter ended June 30,
2000.
Amortization of intangible assets increased to $8.1 million for the six months
ended June 30, 2000 from $5.4 million for the six months ended June 30, 1999.
This increase was due to the additional intangible assets resulting from
acquisitions during the past year.
Net other income, including interest income and interest expense, decreased to
$587,000 for the six months ended June 30, 2000 from $1.3 million for the six
months ended June 30, 1999. Fluctuations in net other income are primarily based
on average balances invested or borrowed under the line of credit during the
period.
CIBER's effective tax rate was 43.7% for the six months ended June 30, 2000 and
40.4% for the same period of last year. CIBER's effective tax rate for the six
months ended June 30, 2000 has increased due to increased nondeductible
amortization resulting from nontaxable acquisitions.
10
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 2000, CIBER had $104.5 million of working capital and had a current
ratio of 2.8:1. The Company has primarily used its operating cash flow and the
net proceeds from public offerings to finance working capital needs and
acquisitions. CIBER believes that its cash and cash equivalents on hand, its
operating cash flow and its available line of credit will be sufficient to
finance working capital needs through at least the next year.
In June 1999, CIBER's Board of Directors authorized the repurchase of up to 10%
of CIBER's outstanding stock. CIBER may use significant amounts of cash for
repurchases of its stock or to purchase businesses. As a result, CIBER may
borrow to finance such activities. Future borrowings may include bank, private
or public debt. CIBER has a $35 million revolving line of credit with a bank.
There were no outstanding borrowings under this bank line at June 30, 2000. The
credit agreement expires in January 2001, but is expected by management to be
renewed on similar terms.
Net cash provided by operating activities was $9.7 million and $34.2 million for
the six months ended June 30, 2000 and 1999, respectively, which is reflective
primarily of the reduced net income in the six months ended June 30, 2000.
Net cash used in investing activities was $5.8 million and $32.0 million during
the six months ended June 30, 2000 and 1999, respectively. CIBER used cash of
$12.4 million and $22.4 million during the six months ended June 30, 2000 and
1999, respectively, for acquisitions. CIBER received $9.9 million from Agilera
in 2000 as repayment of advances (see Note 4). CIBER purchased property and
equipment of $3.3 million and $9.6 million during the six months ended June 30,
2000 and 1999, respectively.
Net cash used in financing activities was $960,000 and $2.4 million during the
six months ended June 30, 2000 and 1999, respectively. CIBER obtained net cash
proceeds from sales of common stock to employees of $6.9 million and $8.8
million during the six months ended June 30, 2000 and 1999, respectively. CIBER
purchased treasury stock for $2.8 million and $11.2 million during the six
months ended June 30, 2000 and 1999, respectively.
11
<PAGE>
RECENT AND PROPOSED ACCOUNTING PRONOUNCEMENTS
In December 1999, the Securities and Exchange Commission ("SEC") issued Staff
Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition in Financial
Statements", which provides guidance on the recognition, presentation and
disclosure of revenue in financial statements filed with the SEC. SAB 101, as
amended, is effective no later than CIBER's quarter ending December 31, 2000.
CIBER has not assessed the impact, if any, that SAB 101 might have on its
financial position or results of operations.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
CIBER has no activities in derivative financial or commodity instruments.
CIBER'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.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None
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
Exhibit 3(ii) Amended and Restated Bylaws of the Company as adopted
December 2, 1999
Exhibit 27.1 Financial Data Schedule
12
<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 August 11, 2000 By /s/ Mac J. Slingerlend
----------------------------------
Mac J. Slingerlend
Chief Executive Officer and President
Date August 11, 2000 By /s/ Richard A. Montoni
----------------------------------
Richard A. Montoni
Chief Financial Officer and Executive
Vice President
13
