Q2 results: earnings up 87%, revenues up 76%
NEWS RELEASE TRANSMITTED BY CANADIAN CORPORATE NEWS
FOR: CGI GROUP INC.
TSE;ME SYMBOL: GIB.A
APRIL 30, 1997
CGI - Growth of 87 Percent in Earnings and 76 Percent in
Revenues for the Second Quarter of the Fiscal Year
MONTREAL, QUEBEC--For the three months ended March 31, 1997, CGI
once again turned in a solid financial performance, with a 76.1
percent increase in its revenues, which climbed to $46.6 million
from $26.4 million for the same quarter in 1996. Operating income
grew by 114.7 percent, rising to $4.7 million. The operating
profit margin thus improved from 8.3 percent for the second
quarter of 1996 to 10.1 percent for the same quarter of the
current fiscal year. Depreciation and amortization expenses were
up by $1 million, mainly due to the increase in assets recoverable
under outsourcing contracts following CGI's strong expansion in
this sector. The Company posted net earnings of $1,462,000, up
87.2 percent over $781,000 in 1996. The net profit margin thus
grew from 2.95 percent to 3.14 percent. Earnings per share
amounted to $0.16 on a weighted average of 9,365,793 shares
outstanding, compared with $0.09 on 8,764,662 shares outstanding
in 1996.
These results bring year-to-date revenues for the first six months
of the fiscal year to $88.7 million, up 73.4 percent over the
revenues of $51.1 million recorded for the same period one year
earlier. Operating income more than doubled, rising from $3.8
million in 1996 for a profit margin of 7.4 percent to $8.3 million
in 1997 for a margin of 9.3 percent. CGI posted net earnings of
$2,495,000, compared with $1,279,000, an increase of 95.1 percent.
The Company recorded earnings per share of $0.27, up from $0.16
for the same period in 1996. Considering the more substantial
depreciation and amortization expenses, cash flow increased by
more than 136 percent, climbing to $6.2 million or $0.67 per
share.
For the 12 months ended March 31, 1997, CGI turned in net earnings
of $3,934,000 or $0.43 per share and cash flow of $11,447,000 or
$1.27 per share on revenues of $159.6 million.
In addition to the alliance with Bell Canada and acquisitions made
over the past 12 months, the strong growth in CGI's revenues and
profitability in the past four quarters can be attributed to major
value-added outsourcing and business solution contracts.
Management estimates that the contribution of the Company's
outsourcing operations to consolidated revenues will top the 40
percent mark for fiscal 1997, up from approximately 25 percent
over the past year. During the last four months alone, CGI has
garnered contracts totalling $8.4 million to adapt information
systems for a dozen organizations for the year 2000, including one
$4.7 million contract with the Societe de l'assurance automobile
du Quebec (SAAQ).
CDSL Holdings Limited: A key springboard for CGI's growth
On April 1, 1997, at the beginning of the third quarter, CGI
acquired from The Cooperators Group Limited insurance company all
the shares of its subsidiary CDSL Holdings Limited, a company with
nearly $80 million in annual revenues which specializes in
information technology outsourcing services. As part of this
transaction, CGI was awarded a five-year $100 million contract
renewable for another five years to provide The Cooperators Group
with information technology services.
Pointing out that this is CGI's largest acquisition ever, Serge
Godin, Chairman of the Board and Chief Executive Officer, stated
that the integration of CDSL gives CGI an order book totalling
over $400 million and an asset base capable of generating more
than $260 million in annual revenues. "This acquisition confirms
CGI's leadership as the largest independent end-to-end service
provider in the Canadian information technology industry. It
positions us to maintain an accelerated pace of growth across
Canada, particularly in outsourcing. With our current market
share and strong financial position, we pursue our growth through
internal development and acquisitions."
With the purchase of CDSL, CGI has some 2,600 professionals
offering the full range of information technology services. The
Company serves over 1,800 clients across Canada and around the
world.
THE CGI GROUP INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(in thousands of dollars, except earnings per share)
(unaudited)
Three months ended
March 31
1997 1996
________ _________
Revenue $46,564 $26,444
________ ________
Operating expenses
Direct costs, selling and
administration expenses 41,123 23,545
Research and development 719 700
Depreciation and amortization of
fixed assets 356 244
Amortization of amounts recoverable
under long-term outsourcing contracts 741 85
Amortization of development costs 107 11
Amortization of goodwill 206 63
Interest on long-term debt 28 70
Other interest expenses 164 14
________ ________
43,444 24,732
________ ________
Earnings before income taxes
and equity in an entity subject
to significant influence 3,120 1,712
Income taxes 1,508 770
_________ ________
Earnings before equity in an entity
subject to significant influence 1,612 942
Share in the results of an entity
subject to significant influence (150) (161)
________ ________
NET EARNINGS $1,462 $781
________ _______
________ _______
Weighted average number of outstanding
Class A subordinate shares, Class B
shares and first preferred shares,
Series 1 and Series 2 9,365,793 8,764,662
_________ _________
Earnings per Share $0.16 $0.09
_________ _________
_________ _________
Six months ended
March 31
1997 1996
________ _________
Revenue $88,682 $51,141
________ ________
Operating expenses
Direct costs, selling and
administration expenses 79,175 46,270
Research and development 1,225 1,085
Depreciation and amortization of
fixed assets 666 491
Amortization of amounts recoverable
under long-term outsourcing
contracts 1,397 175
Amortization of development costs 213 23
Amortization of goodwill 409 128
Interest on long-term debt 61 132
Other interest expenses 309 190
________ ________
83,455 48,494
________ ________
Earnings before income taxes
and equity in an entity subject
to significant influence 5,227 2,647
Income taxes 2,459 1,207
_________ ________
Earnings before equity in an entity
subject to significant influence 2,768 1,440
Share in the results of an entity
subject to significant influence (273) (161)
________ ________
NET EARNINGS $2,495 $1,279
________ ________
________ ________
Weighted average number of outstanding
Class A subordinate shares, Class B
shares and first preferred shares,
Series 1 and Series 2 9,342,782 8,142,769
_________ _________
Earnings per Share $0.27 $0.16
_________ _________
FOR FURTHER INFORMATION PLEASE CONTACT:
CGI Group Inc.
Serge Godin
Chairman of the Board and Chief Executive Officer
(514) 841-3200
or
CGI Group Inc.
Andre Imbeau, Executive V.-P. and Chief Financial Officer
(514) 841-3200
or
CGI Group Inc.
Paule Dore
Senior Vice-President, Corporate Affairs
(514) 841-3200 |
