Ciber Plans $24M Restructuring Following Q2 Earnings Drop


Following up its second-quarter earnings report Tuesday that showed a decrease in sales and profit, Ciber unveiled a $24 million restructuring plan that it said will push the solution provider toward sustainable growth and profit.

Ciber, Greenwood Village, Colo., Tuesday reported that sales for the second quarter were $214.6 million, a 3 percent decrease over the same period last year. Total loss for the quarter was $5.5 million, compared with a loss of $1.8 million in the same quarter last year.

The $877 million solution provider, which is No. 38 on CRN's 2014 Solution Provider 500 list, saw decreased sales and profit in its international business, with revenue down 4 percent over the same quarter last year to $109.8 million. The Netherlands, in particular, saw a tough quarter, which Ciber CEO Michael Boustridge said on the earnings call primarily was due to employee attrition because of increased competition for SAP talent and a lower number of billable hours in the last quarter.

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"My earliest estimate of the international business is that we must strengthen discipline and improve performance, both top and bottom line. However, this requires urgent action to move to global practice areas and rebalance our workforce plan while utilizing our assets more strategically. We have started those actions today," Boustridge said on the call.

To that end, Ciber's $24 million restructuring plan addresses and realigns the company's operational and organizational models. The charges regarding the restructuring will be booked in the next quarter and the solution provider will release numbers on anticipated savings at that time. 

"I understand these issues require immediate action and we have begun implementation of a plan to accelerate the growth of global practice areas and substantially change our global delivery methods. These changes will be implemented methodically and with a sense of urgency," Boustridge said.

Ciber did not disclose in the earnings call if the restructuring plan would involve layoffs. Ciber told CRN that details would be disclosed at a later date and only that the company is "realigning our organization around global practices, sales and delivery." Ciber has implemented restructuring plans in each of the past two years, with the 2012 restructuring focusing on real estate and 2013 on excess delivery primarily in international markets.

Boustridge, who has only been CEO for 45 days, said that building the company back up will take time, despite an improving IT market. He said he expected it will be mid-2015 before improvement will begin to show. Ciber plans on restructuring the "repairable" business, particularly in the Netherlands, and has no plans to divest the business going forward, he said. 

Strategically, Boustridge said that Ciber plans to push toward sustainable growth through increasing investment and momentum in its core business, expanding the ISV portfolio and continuing growth in managed services.

"It is time to leverage our unique position by managing our service offerings globally, applying best-in-class processes to the business as well as global delivery," Boustridge said. "We are moving quickly and methodically to leverage our unique position in the market. We have the right team in place to get this done and I am confident that these are the right initiatives to take us to our expected overall corporate goal."
 

PUBLISHED JULY 29, 2014