CIBER Inc. (CBR, Financial) filed Quarterly Report for the period ended 2012-09-30.
Ciber, Inc. has a market cap of $223.8 million; its shares were traded at around $3.18 with a P/E ratio of 38.3 and P/S ratio of 0.2.
On July 28, 2012, we entered into an agreement to sell certain contracts and the related fixed assets and to transfer the personnel associated with our information technology outsourcing practice to Savvis Communications Corporation (Savvis) and accordingly, our financial position, results of operations and cash flows have been reclassified for all periods to conform to the current period presentation as a discontinued operation. The transaction closed on October 15, 2012, for an initial purchase price of $6 million in cash. In addition, we may receive additional future consideration of up to $14 million, which is mainly dependent upon the post-closing success of the transferred customer contracts to be measured based on December 2013 results, with the final amount, if any, to be determined and paid during the first quarter of 2014. We cannot estimate the amount of the additional future consideration or its potential impact on our results of operations or financial position. Under the agreement, we are required to indemnify Savvis for certain losses, if any, incurred by them following the closing under the customer contracts being transferred. Cash proceeds from the sale, after estimated transaction-related costs, are expected to be approximately $3 million. The carrying value of the tangible assets included in the transaction is approximately $7 million, and relates predominantly to property and equipment in both our North America and International segments. Additionally, we allocated $3 million of goodwill to the assets being disposed and recorded a $7 million pre-tax loss to write-down the net assets to fair value less estimated costs to sell. This loss is included in our loss from discontinued operations for the three months and nine months ended September 30, 2012. The fair value is based on the sales price and is considered a level 2 non-recurring fair value measurement. The annualized revenue related to the contracts sold under the agreement was approximately $60 million.
On March 9, 2012, we sold substantially all of the assets and certain liabilities of our Federal division to CRGT Inc. for an aggregate sales price of $40 million, subject to adjustment based on the final determination of the working capital of the Federal division at the time of closing. Based upon our current estimates of related working capital, we estimate the total cash proceeds will be reduced to approximately $38 million, subject to the resolution of CRGTs proposed working capital adjustments. In June 2012, CRGT proposed certain working capital adjustments to reduce the purchase price by approximately $6 million. We disagreed with such adjustments and invoked the dispute resolution mechanism under the sale agreement. As a result of our ongoing negotiations with CRGT and our current expectation of total cash proceeds of $38 million, we reduced our receivable due from CRGT by approximately $1 million. At this time, the dispute has not been resolved, but we expect a resolution during the fourth quarter of 2012. We will record the impact of any additional adjustments on the determination of the loss on sale when such amount, if any, is probable and estimable. We have recorded an estimated pre-tax loss on sale for the nine months ended September 30, 2012, of approximately $0.4 million. We received net cash of approximately $35 million from CRGT in March 2012. In connection with the sale we incurred transaction costs of $3.8 million and estimated lease exit costs of $1.6 million related to certain Federal division office space we vacated.
On July 28, 2012, we entered into an agreement to sell certain contracts and the related fixed assets and to transfer the personnel associated with our information technology outsourcing practice to Savvis Communications Corporation (Savvis) and accordingly, our financial position, results of operations and cash flows have been reclassified for all periods to conform to the current period presentation as a discontinued operation. The transaction closed on October 15, 2012, for an initial purchase price of $6 million in cash. In addition, we may receive additional future consideration of up to $14 million, which is mainly dependent upon the post-closing success of the transferred customer contracts to be measured based on December 2013 results, with the final amount, if any, to be determined and paid during the first quarter of 2014. We cannot estimate the amount of the additional future consideration or its potential impact on our results of operations or financial position. Under the agreement, we are required to indemnify Savvis for certain losses, if any, incurred by them following the closing under the customer contracts being transferred. Cash proceeds from the sale, after estimated transaction-related costs, are expected to be approximately $3 million. The carrying value of the tangible assets included in the transaction is approximately $7 million, and relates predominantly to property and equipment in both our North America and International segments. Additionally, we allocated $3 million of goodwill to the assets being disposed and recorded a $7 million pre-tax loss to write-down the net assets to fair value less estimated costs to sell. This loss is included in our loss from discontinued operations for the three months and nine months ended September 30, 2012. The fair value is based on the sales price and is considered a level 2 non-recurring fair value measurement. The annualized revenue related to the contracts sold under the agreement was approximately $60 million.
Operating activities. Cash used in operating activities from continuing operations was $33.4 million during the nine months ended September 30, 2012, compared with $14.0 million for the nine months ended September 30, 2011. Changes in normal short-term working capital items, partially offset by an improvement in earnings, contributed to the overall reduction in cash from continuing operations during the current nine month period as compared to the same period of the prior year. Our working capital fluctuates significantly due to changes in accounts receivable (discussed below), as well as due to the timing of our domestic payroll and accounts payable processing cycles with regard to month-end dates and other seasonal factors. During the nine months ended September 30, 2012 and 2011, our domestic operations used $18.4 million and $9.7 million, respectively, of cash from continuing operations while our International operations used $15.0 million and $4.3 million, respectively. Typically, the seasonality of our business in many European countries results in negative cash from operations in the early part of the year with improvements in the second half of the year. Cash flow from European receivables and payables are typically maximized in the fourth quarter.
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Ciber, Inc. has a market cap of $223.8 million; its shares were traded at around $3.18 with a P/E ratio of 38.3 and P/S ratio of 0.2.
Highlight of Business Operations:
On March 9, 2012, we sold substantially all of the assets and certain liabilities of our Federal division to CRGT Inc. for an aggregate sales price of $40 million, subject to adjustment based on the final determination of the working capital of the Federal division at the time of closing. Based upon our current estimates of related working capital, we estimate the total cash proceeds will be reduced to approximately $38 million, subject to the resolution of CRGTs proposed working capital adjustments. In June 2012, CRGT proposed certain working capital adjustments to reduce the purchase price by approximately $6 million. We disagreed with such adjustments and invoked the dispute resolution mechanism under the sale agreement. As a result of our ongoing negotiations with CRGT and our current expectation of total cash proceeds of $38 million, in the third quarter of 2012 we reduced our receivable due from CRGT by approximately $1 million. At this time, the dispute has not been resolved, but we expect a resolution during the fourth quarter of 2012. We will record the impact of any additional adjustments on the determination of the loss on sale when such amount, if any, is probable and estimable. We have recorded an estimated pre-tax loss on sale for the nine months ended September 30, 2012, of approximately $0.4 million. We received net cash of approximately $35 million from CRGT in March 2012. In connection with the sale we incurred transaction costs of $3.8 million and estimated lease exit costs of $1.6 million related to certain Federal division office space we vacated.On July 28, 2012, we entered into an agreement to sell certain contracts and the related fixed assets and to transfer the personnel associated with our information technology outsourcing practice to Savvis Communications Corporation (Savvis) and accordingly, our financial position, results of operations and cash flows have been reclassified for all periods to conform to the current period presentation as a discontinued operation. The transaction closed on October 15, 2012, for an initial purchase price of $6 million in cash. In addition, we may receive additional future consideration of up to $14 million, which is mainly dependent upon the post-closing success of the transferred customer contracts to be measured based on December 2013 results, with the final amount, if any, to be determined and paid during the first quarter of 2014. We cannot estimate the amount of the additional future consideration or its potential impact on our results of operations or financial position. Under the agreement, we are required to indemnify Savvis for certain losses, if any, incurred by them following the closing under the customer contracts being transferred. Cash proceeds from the sale, after estimated transaction-related costs, are expected to be approximately $3 million. The carrying value of the tangible assets included in the transaction is approximately $7 million, and relates predominantly to property and equipment in both our North America and International segments. Additionally, we allocated $3 million of goodwill to the assets being disposed and recorded a $7 million pre-tax loss to write-down the net assets to fair value less estimated costs to sell. This loss is included in our loss from discontinued operations for the three months and nine months ended September 30, 2012. The fair value is based on the sales price and is considered a level 2 non-recurring fair value measurement. The annualized revenue related to the contracts sold under the agreement was approximately $60 million.
On March 9, 2012, we sold substantially all of the assets and certain liabilities of our Federal division to CRGT Inc. for an aggregate sales price of $40 million, subject to adjustment based on the final determination of the working capital of the Federal division at the time of closing. Based upon our current estimates of related working capital, we estimate the total cash proceeds will be reduced to approximately $38 million, subject to the resolution of CRGTs proposed working capital adjustments. In June 2012, CRGT proposed certain working capital adjustments to reduce the purchase price by approximately $6 million. We disagreed with such adjustments and invoked the dispute resolution mechanism under the sale agreement. As a result of our ongoing negotiations with CRGT and our current expectation of total cash proceeds of $38 million, we reduced our receivable due from CRGT by approximately $1 million. At this time, the dispute has not been resolved, but we expect a resolution during the fourth quarter of 2012. We will record the impact of any additional adjustments on the determination of the loss on sale when such amount, if any, is probable and estimable. We have recorded an estimated pre-tax loss on sale for the nine months ended September 30, 2012, of approximately $0.4 million. We received net cash of approximately $35 million from CRGT in March 2012. In connection with the sale we incurred transaction costs of $3.8 million and estimated lease exit costs of $1.6 million related to certain Federal division office space we vacated.
On July 28, 2012, we entered into an agreement to sell certain contracts and the related fixed assets and to transfer the personnel associated with our information technology outsourcing practice to Savvis Communications Corporation (Savvis) and accordingly, our financial position, results of operations and cash flows have been reclassified for all periods to conform to the current period presentation as a discontinued operation. The transaction closed on October 15, 2012, for an initial purchase price of $6 million in cash. In addition, we may receive additional future consideration of up to $14 million, which is mainly dependent upon the post-closing success of the transferred customer contracts to be measured based on December 2013 results, with the final amount, if any, to be determined and paid during the first quarter of 2014. We cannot estimate the amount of the additional future consideration or its potential impact on our results of operations or financial position. Under the agreement, we are required to indemnify Savvis for certain losses, if any, incurred by them following the closing under the customer contracts being transferred. Cash proceeds from the sale, after estimated transaction-related costs, are expected to be approximately $3 million. The carrying value of the tangible assets included in the transaction is approximately $7 million, and relates predominantly to property and equipment in both our North America and International segments. Additionally, we allocated $3 million of goodwill to the assets being disposed and recorded a $7 million pre-tax loss to write-down the net assets to fair value less estimated costs to sell. This loss is included in our loss from discontinued operations for the three months and nine months ended September 30, 2012. The fair value is based on the sales price and is considered a level 2 non-recurring fair value measurement. The annualized revenue related to the contracts sold under the agreement was approximately $60 million.
Operating activities. Cash used in operating activities from continuing operations was $33.4 million during the nine months ended September 30, 2012, compared with $14.0 million for the nine months ended September 30, 2011. Changes in normal short-term working capital items, partially offset by an improvement in earnings, contributed to the overall reduction in cash from continuing operations during the current nine month period as compared to the same period of the prior year. Our working capital fluctuates significantly due to changes in accounts receivable (discussed below), as well as due to the timing of our domestic payroll and accounts payable processing cycles with regard to month-end dates and other seasonal factors. During the nine months ended September 30, 2012 and 2011, our domestic operations used $18.4 million and $9.7 million, respectively, of cash from continuing operations while our International operations used $15.0 million and $4.3 million, respectively. Typically, the seasonality of our business in many European countries results in negative cash from operations in the early part of the year with improvements in the second half of the year. Cash flow from European receivables and payables are typically maximized in the fourth quarter.
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