UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x                  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2007

or

o                     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                to               

Commission file number 0-23488

CIBER, INC.

(Exact name of Registrant as specified in its charter)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

x Yes    o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

o Large accelerated filer          x Accelerated filer          o Non-accelerated filer

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

o Yes    x No

There were 61,005,294 shares of the registrant’s Common Stock outstanding as of September 30, 2007.

CIBER, Inc. and Subsidiaries

Table of Contents

2

CIBER, Inc. and Subsidiaries

Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

See accompanying notes to unaudited consolidated financial statements.

3

CIBER, Inc. and Subsidiaries

Consolidated Balance Sheets

(In thousands, except per share data)

(Unaudited)

See accompanying notes to unaudited consolidated financial statements.

4

CIBER, Inc. and Subsidiaries

Consolidated Statement of Shareholders’ Equity

(In thousands)

(Unaudited)

See accompanying notes to unaudited consolidated financial statements.

5

CIBER, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

See accompanying notes to unaudited consolidated financial statements.

6

CIBER, Inc. and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

(1)  Basis of Presentation

The accompanying unaudited interim consolidated financial statements of CIBER, Inc. and subsidiaries (together, “CIBER,” “the Company,” “we,” “our,” or “us”) have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for quarterly reports on Form 10-Q and do not include all of the information and note disclosures required by U.S. generally accepted accounting principles for complete financial statements. These consolidated financial statements should therefore be read in conjunction with the consolidated financial statements and notes thereto for the fiscal year ended December 31, 2006, included in our Annual Report on Form 10-K filed with the SEC. The accompanying unaudited interim consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles and include all adjustments of a normal, recurring nature that are, in the opinion of management, necessary to present fairly the financial position and results of operations for the interim periods presented. The results of operations for an interim period are not necessarily indicative of the results of operations for a full fiscal year. Certain prior period amounts have been reclassified to conform to the current period presentation.

Income Taxes. We adopted the provisions of Financial Accounting Standards Board (“FASB”) Interpretation No. 48, “Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109” (“FIN 48”) on January 1, 2007, and there was no impact to our financial statements. FIN 48 clarifies the accounting for uncertainty in income tax positions. FIN 48 provides that the tax affects from an uncertain tax position can be recognized in our financial statements, only if the position is more-likely-than-not of being sustained on audit, based on the technical merits of the position. Tax positions that meet the recognition threshold are reported at the largest amount that is more-likely-than-not to be realized. This determination requires a high degree of judgment and estimation.

As of adoption, the total gross amount of unrecognized tax benefits for uncertain tax positions was $2.5 million. At September 30, 2007, the balance of this accrued liability was $3.0 million. Most of our unrecognized tax benefits would affect our effective tax rate if recognized. Furthermore, we do not reasonably expect the total amounts of unrecognized tax benefits to significantly increase or decrease within the next 12 months.

We file a U.S. Federal income tax return and tax returns in nearly all U.S. states, as well as in numerous foreign jurisdictions. We routinely have tax examinations in process. Currently, our U.S. Federal income tax returns dating back to 2004 are open to possible examination. Our most significant foreign operations are in the U.K., the Netherlands and Germany, where we are no longer subject to tax examination for years prior to 2004, 2001 and 1997, respectively.

We record interest expense related to income taxes in interest expense, and we record tax penalties in selling, general and administrative expenses. Tax-related interest and penalties are not material.

(2)  Earnings Per Share

Basic and diluted earnings per share were calculated as follows:

7

Dilutive securities are not included in the calculation during periods in which they have an antidilutive effect. The number of antidilutive options (options whose exercise price is greater than the average market price of CIBER common stock during the respective periods) excluded from the calculation of diluted weighted average common shares outstanding was 5,809,000 and 3,534,000 for the three months ended September 30, 2006 and 2007, respectively, and 6,289,000 and 3,783,000 for the nine months ended September 30, 2006 and 2007, respectively.

(3)  Comprehensive Income

The components of comprehensive income were as follows:

(4)  Acquisitions

On September 4, 2007, we acquired California-based Metamor Enterprise Solutions LLC (“Metamor”). Metamor provides SAP software implementation services and is also a reseller of SAP products. At the time of the acquisition, Metamor had approximately 100 SAP consultants. We expect the acquisition to provide scale to our domestic SAP activities, where we previously had difficulty in locating SAP skilled employee resources. The results of the acquired operation have been included in our U.S. ERP Solutions segment (formerly referred to as our U.S. Package Solutions segment) since the date of the acquisition. The preliminary purchase price paid was approximately $16.7 million, including expenses, and is subject to adjustment based upon the final net tangible worth of the operation. The preliminary purchase price was allocated as follows: $2.5 million to net tangible assets acquired, $1.3 million to other intangibles and $12.9 million to goodwill.

(5)  Goodwill

The changes in the carrying amount of goodwill for the nine months ended September 30, 2007, were as follows:

(6)  Convertible Senior Subordinated Debentures

On December 2, 2003, in a private placement, we issued $175 million of 2.875% Convertible Senior Subordinated Debentures (“Debentures”) due to mature in December 2023.  The Debentures are general unsecured obligations and are subordinated in right of payment to all of our indebtedness and other liabilities.  The Debentures accrue interest at a rate of 2.875% per year.  Interest is payable semi-annually in arrears on June 15 and December 15 of each year.

The Debentures are convertible at the option of the holder into shares of our common stock at an initial conversion rate of 73.3138 shares per $1,000 principal amount of Debentures, which is equivalent to an initial conversion price of approximately $13.64 per share, subject to adjustments, prior to the close of business on the final maturity date only under the following circumstances: (1) during any fiscal quarter if the closing sale price of our common stock exceeds 120% of the conversion price for at least 20 trading days in the 30 consecutive trading day period ending on the last trading day of the preceding fiscal quarter; (2) during the five business days after any ten consecutive trading day period in which the trading price per $1,000 principal amount of Debentures for each day of such period was less than 98% of the product of the closing sale price of our common stock and the number of shares issuable upon

8

conversion of $1,000 principal amount of the Debentures; (3) if the Debentures have been called for redemption; or (4) upon the occurrence of certain specified corporate transactions. The conversion price is subject to adjustment in certain circumstances. In 2005, we made irrevocable elections to settle in cash and not in shares, 100% of the principal amount of the Debentures surrendered for conversion. As a result, upon conversion we will deliver cash in lieu of our common stock.

Debenture holders may require us to repurchase their Debentures on December 15, 2008, 2010, 2013 and 2018, or at any time prior to their maturity in the case of certain events, at a repurchase price of 100% of their principal amount plus accrued interest. From December 20, 2008, to, but not including December 15, 2010, we may redeem any of the Debentures if the closing price of our common stock exceeds 130% of the conversion price for at least 20 trading days in any 30 consecutive trading day period. Beginning December 15, 2010, we may, by providing at least 30-days’ notice to the holders, redeem any of the Debentures at a redemption price of 100% of their principal amount, plus accrued interest.

(7)  Bank Line of Credit

Bank Line of Credit – We have a $60 million revolving line of credit with Wells Fargo Bank, N.A. that expires on September 30, 2009. The line of credit will remain unsecured, unless borrowings exceed $40 million for two consecutive fiscal quarters or if certain financial covenant thresholds are exceeded, in which case, substantially all of CIBER’s assets would secure the line of credit. The interest rate charged on borrowings under the agreement ranges from the prime rate of interest (“prime”) less 1.25% to prime less 0.30%, depending on CIBER’s Pricing Ratio and changes, as required, on the first day of each quarter. CIBER’s Pricing Ratio is defined as the ratio of CIBER’s Senior Funded Indebtedness at the end of each quarter, divided by CIBER’s earnings before interest, taxes, depreciation and amortization (“EBITDA”) for the prior four fiscal quarters then ended. Senior Funded Indebtedness means the sum of our liabilities for borrowed money, excluding our Debentures and any liabilities under any swap contract. On September 30, 2007, the bank’s prime rate was 7.75% and our rate for borrowing was 6.50%. We are also required to pay a fee per annum on the unused portion of the line of credit. This fee ranges from 0.125% to 0.40%, depending on CIBER’s Pricing Ratio and changes, as required, on the first day of each quarter. The line of credit agreement contains certain financial covenants including: a maximum senior leverage ratio, a minimum fixed charge coverage ratio, a maximum leverage ratio and a maximum asset coverage ratio. We were in compliance with these financial covenants as of September 30, 2007. The terms of the credit agreement also contain, among other provisions, specific limitations on additional indebtedness, liens and acquisitions, purchases of treasury stock, investment activity and prohibit the payment of any dividends. The line of credit provides for the issuance of up to $15 million in letters of credit. Any outstanding letters of credit reduce the maximum available borrowings under the line of credit. At September 30, 2007, we had $1.2 million of outstanding letters of credit securing certain financial performance obligations and borrowings of $19.1 million, leaving approximately $39.7 million of remaining borrowing availability under the line of credit.

(8)  Financial Instruments

Net Investment Hedges

Periodically, we enter into cross-currency swap arrangements with a financial institution to partially hedge the net assets of certain foreign operations (“net investment hedges”) and offset the foreign currency translation and economic exposures related to our investments in these foreign operations. We consider the net investment hedges to be effective hedges with gains/losses recorded as part of shareholders’ equity. Increases and decreases in the net investment in our subsidiaries due to foreign exchange volatility will be partially offset by foreign exchange losses and gains from the net investment hedge, both of which are recorded within “accumulated other comprehensive income” on the consolidated balance sheet. During the nine months ended September 30, 2006 and 2007, we recorded a net loss in shareholders’ equity of $2.4 million and $2.3 million from changes in the value of our hedges, net of tax effects.

At September 30, 2007, we had net investment hedges in Great British Pounds (“GBP”) and in Euros. The fair value of our GBP hedges was a loss of $605,000 at September 30, 2007. We did not have a GBP hedge outstanding as of September 30, 2006. As of September 30, 2007, the GBP investment hedges had a notional amount of $30.1 million and a weighted average exchange rate of 0.4990 GBP for each United States dollar (“USD”). The fair value of our Euro hedges was a loss of $2.8 million at September 30, 2007. As of September 30, 2007, the Euro investment hedges had a notional amount of $54.2 million and a weighted average exchange rate of 0.7384 Euros for each USD. The hedges mature at varying dates up to September 2009.

9

 (9)  Shareholder’s Equity

Repurchase Program – In December 2005, the Board of Directors revised the Company’s share repurchase program to authorize the Company’s management to repurchase either our common stock or our Debentures, whichever is determined to be more advantageous. Through September 30, 2007, the Board had approved up to $22.5 million for repurchases under the revised program. During the nine months ended September 30, 2007, we repurchased approximately 1.6 million common shares under this program at a cost of $11.8 million. We have not repurchased any of our Debentures as of September 30, 2007. At September 30, 2007, there was approximately $1.9 million remaining for future repurchases under this program.

(10)  Segment Information

Our operating segments are organized internally primarily by the nature of their services, client base and geography, and they consist of Commercial Solutions, European Operations, State & Local Government Solutions, Federal Government Solutions, and U.S. ERP Solutions (formerly U.S. Package Solutions).

The following presents financial information about our reportable segments:

10

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with our Unaudited Consolidated Financial Statements and related Notes included elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2006, and with the information under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2006. References to “we,” “our,” “us” or “CIBER” in this Quarterly Report on Form 10-Q refer to CIBER, Inc. and its subsidiaries.

Disclosure Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 relating to our operations, results of operations and other matters that are based on our current expectations, estimates, forecasts and projections. Words, such as “anticipate,” “believe,” “could,” “expect,” “estimate,” “intend,” “may,” “opportunity,” “plan,” “potential,” “project,” “should,” and “will” and similar expressions are intended to identify forward-looking statements. These statements are not guarantees and involve risks, uncertainties and assumptions that are difficult to predict. Actual outcomes and results may differ materially from such forward-looking statements due to a number of factors, including without limitation, the factors set forth in our Annual Report on Form 10-K under the caption “Item 1A. Risk Factors.”  Forward-looking statements are not guarantees of performance and speak only as of the date they are made, and we undertake no obligation to publicly update any forward-looking statements in light of new information or future events. Undue reliance should not be placed on such forward-looking statements.

Comparison of the Three Months Ended September 30, 2007 and 2006 - Consolidated

The following table sets forth certain consolidated statement of operations data in dollars and expressed as a percentage of total revenue:

Revenue. Total revenue for the three months ended September 30, 2007, increased approximately 8% compared to total revenue for the three months ended September 30, 2006. We are a global company; therefore our revenue is denominated in multiple currencies and may be significantly affected by currency exchange-rate fluctuations. Throughout 2007, the U.S. dollar weakened against many currencies, resulting in favorable currency translation and greater reported U.S. dollar revenues. For the third quarter of 2007, the weakening of the U.S. dollar resulted in an additional $6.0 million of reported revenue over the same period of 2006. Additionally, we completed a small acquisition in September 2007, which contributed $1.0 million of incremental revenue to the current quarter. Excluding the favorable currency translation effects and the recent acquisition from our current quarter results, our total revenue increased 5% for the three months ended September 30, 2007, compared to the same period of 2006. Increased SAP software-related services, primarily in Europe, contributed most to the increase in revenue. Other revenue decreased 19% quarter over quarter primarily due to reduced software sales in Europe.

11

Revenue by segment was as follows:

n/m = not meaningful

•                  Our Commercial segment revenue improved between the comparable quarters primarily due to a couple of new, large clients and engagement wins led by growth in our Boston, Washington D.C. and Seattle offices. Headcount was stable in the current quarter, which was an improvement from modest decreases over the last year.

•                  Our European segment benefited from a weak U.S. dollar that added $6.0 million of incremental revenue to our current quarter, compared to the same quarter of 2006. Excluding the favorable currency translation, our European segment revenue grew 18% in the third quarter of 2007, compared to the same quarter of 2006, due to strong sales of SAP implementation services across all of Europe’s major operating territories, including Australia. As a result, our European segment experienced significant headcount growth between the comparable three month periods. In the current quarter, Europe represents approximately 29% of our consolidated revenue, compared to 24% of consolidated revenue in the same quarter of 2006.

•                  The quarter over quarter decrease in total revenue for our State & Local segment was partially due to a reduction in services being performed for the City of New Orleans related to Hurricane Katrina in 2005. During 2007, our services to the City of New Orleans have begun tapering off; especially during the third quarter as compared to a year ago.

•                  The continued revenue decrease in our Federal segment is due to a very difficult governmental spending environment, illustrated by funding delays for information technology initiatives and a continued shift in spending toward war-related efforts. Although total revenue for the current quarter is lower than the same quarter of the prior year, the current decrease equated to just over 1%, which represents a significant slowdown from the revenue decreases in earlier quarters of 2007, especially the first quarter, which declined over 6% compared to the first quarter of 2006.

•                  Excluding a small acquisition that added $1.0 million to our U.S. ERP segment’s current quarter revenue, the segment still managed to grow nearly 5%. This growth was primarily the result of increased sales of our domestic SAP-related services.

Gross profit. Our total gross profit margin improved 70 basis points during the three months ended September 30, 2007, compared to the same period of 2006, due entirely to a 180 basis point improvement in our services gross profit margin. All of our segments, with the exception of our State & Local segment, showed considerable improvement in margins on consulting services. Our European and U.S. ERP segments showed the greatest improvement with increases of 400 basis points or more quarter over quarter. Our Commercial segment had a 140 basis point improvement. Additionally, Europe’s consulting services projects typically have higher gross profit margins compared to similar domestic projects. With Europe delivering a higher percentage of our consolidated revenues, our gross profit margins increase more than if the same revenue was generated domestically. Gross profit on other revenue was down substantially due to reduced sales of higher margin products during the quarter.

Selling, general and administrative. As a percentage of revenue, selling, general and administrative expenses (“SG&A”) decreased by approximately 30 basis points to 21.6% for the three months ended September 30, 2007, compared to 21.9% for the three months ended September 30, 2006. Our Europe and U.S. ERP segments led the improvement. As we have grown revenue during the quarter, we have been able to keep SG&A growth to a lower level. Domestic SG&A spending increased approximately $500,000 in the third quarter of 2007 from the third

12

quarter of last year . Although Europe showed a sizable percentage decrease in SG&A expenses, their higher gross margin business carries inherently higher SG&A costs. With Europe representing a greater percentage of our overall revenue, SG&A expense as a percentage of revenue on a total company basis is driven upward. Europe’s third quarter SG&A costs increased by $2.9 million from last year due to expansion to support increased operations and changes in foreign currency exchange rates.

Operating income. As a result of the improved total gross profit margin and reduced SG&A expenses as a percentage of revenue, our operating income improved 100 basis points to 5.2% for the three months ended September 30, 2007, compared to 4.2% for the three months ended September 30, 2006.

Operating income by segment was as follows:

* Segments calculated as a % of segment revenue, all other calculated as a % of total revenue

•                  Commercial segment operating income percentage increased as a large, low-margin fixed-price project ended in late 2006 and our newer engagements have been yielding slightly better margins.

•                  European segment operating income increased due to improved gross profit margin on consulting services revenue related to strong demand, as well as improvements in our operations in the Netherlands, Denmark, Sweden and Norway, among others. Additionally, the decrease in Europe’s SG&A expense as a percentage of revenue, resulting from operating leverage achieved on higher revenue volumes, contributed to the operating income margin improvement.

•                  State & Local segment operating income declined primarily related to additional costs on a fixed-price project, but was partially offset by a reduction in SG&A expense due to better expense controls.

•                  Federal segment operating income decreased due to the difficult governmental spending environment, coupled with an increase in SG&A costs for the third quarter of 2007 related to new business initiatives that are directed at repositioning this business.

•                  U.S. ERP segment operating income increased primarily due to improved gross profit margin on consulting services, which was the result of improved project execution efforts continuing into the current quarter from earlier quarters of 2007, and the completion of several low gross profit projects earlier this year that caused a drag on operating income during the third quarter of 2006. Additionally, SG&A expenses held constant, which contributed to the significantly improved operating income margin.

Other income (expense). Other expense, net was $494,000 during the three months ended September 30, 2007, compared to other income, net of $353,000 during the three months ended September 30, 2006, for a total decrease in other income of $847,000. Foreign currency losses offset by gains on foreign currency forward contracts in the current quarter accounted for approximately $413,000 of the decrease when compared with the foreign currency gains from the third quarter of 2006. Additionally, minority interest expense increased $454,000 between the comparable quarters.

Income taxes. Our effective tax rate was 36.2% for the three months ended September 30, 2007, and was 31.0% for the same period in 2006. As we typically complete our tax returns for the prior year during the second half of the current year, our third and fourth quarter tax provisions usually reflect adjustments to true-up prior period estimates.

13

Prior to any such adjustments, CIBER’s effective tax rate would have been approximately 38% and 39% for the three month periods ended September 30, 2007 and 2006, respectively.

Comparison of the Nine Months Ended September 30, 2007 and 2006 – Consolidated

The following table sets forth certain consolidated statement of operations data in dollars and expressed as a percentage of total revenue: