Ciber, Inc. (NYSE:CBR), a leading global information technology consulting, services and outsourcing company, today reported results for the third quarter of 2016.

“Ciber is continuing its efforts to become a more competitive and profitable enterprise. We are investing in selected areas for growth, exiting non-strategic businesses, and reducing our cost structure,” said President and Chief Executive Officer Michael Boustridge.

Mr. Boustridge added, “Ciber’s Board of Directors has hired Houlihan Lokey, a global investment bank, to assist in exploring strategic alternatives for the company that enhance shareholder value.”

“We are pleased to have reached an agreement with Wells Fargo to waive the previously existing events of default under our current credit facility and to have established a new credit facility agreement with Faunus Group International,” said Christian Mezger, Chief Financial Officer.

Three Months Ended September 30, 2016

Revenue of $144.3 million fell 24% in constant currency and 25% in U.S. dollars compared with last year’s third quarter. The North America segment posted revenue of $97.6 million, down 11% from the year-ago third quarter and up 3% compared to the second quarter of 2016. Revenue in the International segment was $46.7 million for the third quarter of 2016, down 42% in constant currency and 44% in U.S. dollars compared to the year-ago third quarter. Compared to the second quarter of 2016, International revenue was down 32% in constant currency and 34% in U.S. dollars. Overall company gross margin was 20.6%, down from 26.8% in the prior year, but up from 20.5% in the prior quarter. Excluding revenues from Norway and the Netherlands, Ciber revenues fell 13% in constant currency and 14% in U.S. dollars compared with last year’s third quarter, while revenue in the International segment fell 18% in constant currency and 20% in U.S. dollars. Sequentially, excluding revenues from Norway and the Netherlands, Ciber revenue was down 2% in constant currency and 3% in U.S. dollars, and International revenue fell 12% in constant currency and 15% in U.S. dollars.

GAAP operating loss from continuing operations was $20.7 million for the third quarter. Adjusted operating loss was $15.5 million before amortization, litigation settlements and restructuring charges. These adjustments totaled $5.2 million.

GAAP net loss from continuing operations was $18.8 million in the quarter, or $0.23 per share. Adjusted net loss from continuing operations for the third quarter of 2016, before gain on sale, amortization, litigation settlements and restructuring charges was $19.2 million, or $0.23 per share, compared to adjusted net income of $0.9 million, or $0.01 per share, in the third quarter of 2015. Reconciliations of non-GAAP financial measures to GAAP operating results and diluted EPS are included at the end of this release.

Nine Months Ended September 30, 2016

Revenue of $485.3 million fell 17% in constant currency and 18% in U.S. dollars compared with last year’s nine months ended September 30, 2015. The North America segment posted revenue of $292.2 million, down 10% from the year-ago nine month period. Revenue in the International segment was $193.7 million for the first nine months of 2016, down 26% in constant currency and 28% in U.S. dollars compared to the year-ago nine month period. Overall company gross margin was 21.5%, down from 26.2% in the prior year first nine months. Excluding revenues from Norway and the Netherlands, Ciber revenues fell 12% in constant currency and 13% in U.S. dollars compared with the year-ago nine month period, while revenue in the International segment fell 17% in constant currency and 19% in U.S. dollars.

GAAP operating loss from continuing operations was $169.3 million for the first nine months of 2016. Adjusted operating loss was $43.6 million before goodwill impairment, bad debt allowance adjustment, amortization, litigation settlements and restructuring charges. These adjustments totaled $125.7 million.

GAAP net loss from continuing operations was $167.5 million for the first nine months of 2016, or $2.07 per share. GAAP results include a non-cash goodwill impairment charge in the first nine months of 2016 of $115.5 million. Adjusted net loss from continuing operations for the first nine months of 2016, before goodwill impairment, gain on sale, bad debt allowance adjustment, amortization, litigation settlements and restructuring charges was $51.4 million, or $0.64 per share, compared to adjusted net income of $5.9 million, or $0.08 per share in the first nine months of 2015. Reconciliations of non-GAAP financial measures to GAAP operating results and diluted EPS are included at the end of this release.

Ciber recorded a non-cash goodwill impairment charge of $115.5 million, or $1.43 per diluted share in the first half of 2016, for the write-down of goodwill related to its International segment.  The Company performed its annual impairment test during the second quarter of 2016. Additionally, the Company experienced a sustained decrease in the Company’s stock price, lower than expected earnings and the sale of Ciber Nederland B.V. during the first half of 2016 resulted in a potential indicator of goodwill impairment. Ciber compared the carrying value of its segments versus fair value as of March 31, 2016 and June 30, 2016. The analysis concluded that the fair value of Ciber’s International segment was below its carrying value.  The non-cash impairment charge impacts neither the Company’s future performance nor compliance with debt covenants under its revolving credit agreement. Ciber’s balance sheet after the 2016 impairment charge includes no goodwill in its International segment.

Sale of Ciber Norge AS

On August 26, 2016 (the “Closing Date”), the Company completed a sale of Ciber Norge AS., which has been reported as part of the Company’s International segment, for a cash purchase price of $7.0 million, (the “Purchase Price”) which includes $0.7 million to be held in escrow (the “Escrow Amount”), to be released in equal parts at 12 and 18 months from the Closing Date. The current portion of the Escrow Amount is $0.35 million and is recorded on the Consolidated Balance Sheets as Restricted cash. The long-term restricted portion of the Escrow Amount is $0.35 million and is recorded on the Consolidated Balance Sheets as Other assets. The Purchase Price was adjusted by $3.4 million for working capital, resulting in proceeds of $10.4 million. The Purchase Price also is subject to a purchase price adjustment twelve months after closing with respect to the retention of certain Ciber Norge customers, which adjustment is capped at $1.75 million. Until the resolution of contingencies, the $1.75 million has been excluded from gain calculations. The gain on the sale of assets was $5.0 million for the nine months ended September 30, 2016 and will be adjusted after resolution of contingencies in the purchase price, allowing for the potential release of amounts in escrow.

Sale of Consultants in Business, Engineering and Research Sweden AB

On September 19, 2016, the Company completed a sale of certain assets and liabilities of Consultants in Business, Engineering and Research Sweden AB, (“Ciber Sweden”), which has been reported as a part of the Company’s International segment, for a cash purchase price of $1.0 million (the “Purchase Price”). The Purchase Price was subject to a purchase price adjustment on or prior to the closing with respect to the retention of certain Ciber Sweden consultants, which adjustment is capped at 15% of the Purchase Price. Subsequent to quarter end, the Purchase Price was adjusted downward by $0.1 million, resulting in proceeds of $0.9 million. The gain on the sale of assets was $0.9 million for the nine months ended September 30, 2016 and will be adjusted after resolution of contingencies in the purchase price.

Capital Deployment and Liquidity

Ciber’s cash balance at the end of the third quarter of 2016 was $6.4 million. The outstanding balance on the credit facility was $39.7 million. At the end of the second quarter of 2016, Ciber’s cash balance was $11.3 million and the outstanding balance on the credit facility was $40.7 million.

Ciber filed an 8-K on November 2, 2016 regarding a revised agreement with Wells Fargo on the company’s existing credit facility and a new agreement to establish a credit facility for international operations with Faunus Group International.

Cash flow used in operating activities (continuing operations) in the third quarter was $17.3 million and year-to-date through September 30, 2016 was $52.8 million, compared with cash provided by continuing operations of $5.2 million in the year-ago quarter and cash usage of $31.9 million in the first nine months of 2015. Days Sales Outstanding were 77 days, an increase of 10 days versus the prior year quarter and an increase of 6 days versus the second quarter of 2016. Capital expenditures totaled $9.1 million for year-to-date 2016 compared to $6.3 million in the year-earlier period. In the third quarter capital expenditures were $0.8, down from $2.7 million in the year-ago quarter.

Continuing Operations

For a recap of historical comparisons, please refer to Ciber’s SEC filings on forms 10-Q and 8-K. These filings may be found in the Investor Relations section of the Company’s website at http://www.ciber.com.

Investor and Analyst Conference Call

Ciber President and Chief Executive Officer Michael Boustridge and Executive Vice President and Chief Financial Officer Christian Mezger invite you to participate in a conference call or audio-cast today at 8:30 a.m. Eastern Time to discuss the Company’s financial results.

The press release and live audio-cast of the conference call will be available on the Events & Presentations section of the corporate website. To participate in the conference call, dial 877-407-8293 (U.S.) or +1-201-689-8349 (outside the U.S.) ten minutes prior to the start of the call.

A replay of the call and webcast will be available one hour after the call ends through September 30, 2016. To access the telephone replay, dial 877-660-6853 (U.S.) or +1-201-612-7415 (outside the U.S.) and enter conference ID: 13647488.

The webcast replay will be available on the Events & Presentations section of the corporate website.

About Ciber, Inc.

Ciber is a global IT consulting company with approximately 5,500 employees in North America, Europe and Asia/Pacific. Ciber partners with organizations to develop technology strategies and solutions that deliver tangible business value. Founded in 1974, the company trades on the New York Stock Exchange (NYSE:CBR). For more information, visit www.ciber.com and follow us on Twitter, LinkedIn, Facebook, Google Plus and our blog.