Delays in legacy projects and uncertainty around the future of European operations plagued Ciber in its most recent quarter, sending its stock price plummeting to a 22-year low.
"Ciber's return to growth and profitability will be painfully slow as it reflects our efforts to offset many years of under-investment in key businesses and new offerings," said Ciber CEO Michael Boustridge during the company's second-quarter earnings call Thursday with financial analysts before the stock market opened. "Corporate recoveries of this scale are rarely achieved in less than two years."
Boustridge started as Ciber's CEO 26 months ago, and has worked to narrow the company's focus to areas where it can achieve high margins and low risk by divesting from non-profitable operations. But the journey has been a rocky one.
The Greenwood Village, Colo.-based company – No. 43 on CRN's Solution Provider 500 list – saw sales fall to $165.9 million in the quarter ended June 30, down16.2 percent from $197.9 million in the same quarter last year.
Net loss from continuing operations was $51.7 million, or a loss of 64 cents per share, compared to a gain of $1.2 million in the second quarter of 2015.
Adjusting for restructuring and amortization costs, Ciber's net loss was $22 million, or 27 cents per share, down from an adjusted net income of $2 million. Seeking Alpha had projected a net loss of just 4 cents per share.
Wall Street reacted very unfavorably to the results, sending Ciber's stock into free-fall, closing down nearly 36 percent at 94 cents per share. That's the lowest price at which Ciber stock has traded since the company went public in March 1994.
Sales in Ciber's North American business fell 13 percent from $108.8 million last year to $95.1 million this year, with weakness in the company's Oracle, SAP and Application Development and Management (ADM) practice partially offset by new transformation services revenue, Metzger said.
Ciber specifically struggled in North America with project delays around a small number of older Oracle projects, Metzger said, resulting in $5 million of lost revenue for the quarter. Additionally, Ciber expected to have $20 million of new business signings in the second quarter that ended up getting delayed until the third quarter, Metzger said.
To add insult to injury, Ciber erroneously issued bonus payments of $760,000 and $100,000 to Boustridge and CFO Christian Metzger, respectively, on June 29, that were not authorized by the Board of Directors' Compensation Committee due to miscommunication at the committee level, according to a filing Thursday with the U.S. Securities and Exchange Commission (SEC).