CIBER Inc. (CBR, Financial) filed Quarterly Report for the period ended 2010-06-30.
Ciber Inc. has a market cap of $233.2 million; its shares were traded at around $3.37 with a P/E ratio of 14 and P/S ratio of 0.2. Ciber Inc. had an annual average earning growth of 7% over the past 10 years.CBR is in the portfolios of Richard Pzena of Pzena Investment Management LLC, Chuck Royce of Royce& Associates.
After the impairment charge of $112.0 million recorded during the three months ended June, 30, 2010, we had a remaining goodwill balance of $328.6 million at June 30, 2010. The process of evaluating the potential impairment of goodwill is subjective and requires significant judgment at many points during the analysis. In estimating the fair value of the reporting units for the purpose of our annual or periodic goodwill impairment analysis, we make estimates and judgments about the future cash flows of the reporting units, including estimated growth rates and assumptions about the economic environment. Although our cash flow forecasts are based on assumptions that are consistent with the plans and estimates we are using to manage the underlying reporting units, there is significant judgment in determining the cash flows attributable to these reporting units. In addition, we make certain judgments about allocating shared assets such as cash and property and equipment to the balance sheet for the reporting units. We also consider our market capitalization, adjusted for unallocated monetary assets such as cash, debt, a control premium and other factors determined by management. As a result, several factors could result in the impairment of a material amount of our goodwill balance in future periods, including, but not limited to:
Selling, general and administrative. Our SG&A costs increased 250 basis points to 24.4% for the three months ended June 30, 2010, from 21.9% for the three months ended June 30, 2009. $6.1 million or 230 basis points of the increase related to executive charges of $5.0 million accrued in the second quarter pertaining to the retirement of our former Chief Executive Officer and the continuing benefits for our Founder and former non-executive Chairman of the Board, as well as $1.1 million of additional costs incurred related to the leadership change.
Operating income (loss). During the three months ended June 20, 2010, based on a combination of factors, including the current economic environment, our operating results and a sustained decline in our market capitalization, we recorded a $112.0 million non-cash goodwill impairment charge as a result of our annual goodwill impairment test. Following the goodwill impairment charge, CIBER had an operating loss of $111.2 million for the three months ended June 30, 2010, which also included $6.1 million related to the executive charges and leadership transition costs recorded in the current period. Excluding these current period one-time charges, operating income was $7.0 million, or 2.6% of total revenue for the three months ended June 30, 2010, compared with $7.5 million, or 2.9% of total revenue for the three months ended June 30, 2009. The decrease in operating income between the comparable three month periods was primarily due to the 20 basis point reduction in gross profit margin in the current period. Operating income by segment/division was as follows:
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Ciber Inc. has a market cap of $233.2 million; its shares were traded at around $3.37 with a P/E ratio of 14 and P/S ratio of 0.2. Ciber Inc. had an annual average earning growth of 7% over the past 10 years.CBR is in the portfolios of Richard Pzena of Pzena Investment Management LLC, Chuck Royce of Royce& Associates.
Highlight of Business Operations:
Because indicators of impairment existed for our Custom Solutions and Federal reporting units, we performed the second step of the test to determine the implied fair value of goodwill for each reporting unit. The estimated implied fair value of goodwill was determined in a consistent manner utilized to estimate the amount of goodwill recognized in a business combination. As a result, we calculated the estimated fair value of certain non-recorded assets, including customer relationships and trade name. The implied fair value of goodwill was measured as the excess of the estimated fair value of each reporting unit over the amounts assigned to its assets and liabilities. The impairment loss for each reporting unit was measured by the amount that the carrying value of goodwill exceeded the implied fair value of the goodwill. Based on this assessment, we recorded an impairment charge of $112.0 million ($82.0 million for Custom Solutions and $30.0 million for Federal) in the three months ended June 30, 2010, which represented 50% and 40% of the Custom Solutions and Federal reporting units goodwill prior to the impairment charge, respectively.After the impairment charge of $112.0 million recorded during the three months ended June, 30, 2010, we had a remaining goodwill balance of $328.6 million at June 30, 2010. The process of evaluating the potential impairment of goodwill is subjective and requires significant judgment at many points during the analysis. In estimating the fair value of the reporting units for the purpose of our annual or periodic goodwill impairment analysis, we make estimates and judgments about the future cash flows of the reporting units, including estimated growth rates and assumptions about the economic environment. Although our cash flow forecasts are based on assumptions that are consistent with the plans and estimates we are using to manage the underlying reporting units, there is significant judgment in determining the cash flows attributable to these reporting units. In addition, we make certain judgments about allocating shared assets such as cash and property and equipment to the balance sheet for the reporting units. We also consider our market capitalization, adjusted for unallocated monetary assets such as cash, debt, a control premium and other factors determined by management. As a result, several factors could result in the impairment of a material amount of our goodwill balance in future periods, including, but not limited to:
Selling, general and administrative. Our SG&A costs increased 250 basis points to 24.4% for the three months ended June 30, 2010, from 21.9% for the three months ended June 30, 2009. $6.1 million or 230 basis points of the increase related to executive charges of $5.0 million accrued in the second quarter pertaining to the retirement of our former Chief Executive Officer and the continuing benefits for our Founder and former non-executive Chairman of the Board, as well as $1.1 million of additional costs incurred related to the leadership change.
Operating income (loss). During the three months ended June 20, 2010, based on a combination of factors, including the current economic environment, our operating results and a sustained decline in our market capitalization, we recorded a $112.0 million non-cash goodwill impairment charge as a result of our annual goodwill impairment test. Following the goodwill impairment charge, CIBER had an operating loss of $111.2 million for the three months ended June 30, 2010, which also included $6.1 million related to the executive charges and leadership transition costs recorded in the current period. Excluding these current period one-time charges, operating income was $7.0 million, or 2.6% of total revenue for the three months ended June 30, 2010, compared with $7.5 million, or 2.9% of total revenue for the three months ended June 30, 2009. The decrease in operating income between the comparable three month periods was primarily due to the 20 basis point reduction in gross profit margin in the current period. Operating income by segment/division was as follows:
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