COGNICASE Comments on Third Quarter Results
MONTREAL, QUEBEC, CANADA--JULY 4, 2002 - 16:41 EDT
COGNICASE Inc. (TSX: COG, NASDAQ: COGI),
an innovative IT solutions provider specializing in the
development and integration of transactional solutions, today
commented on its results for the third quarter ended June 30,
2002. Final results are scheduled for release on August 6, 2002.
Third quarter 2002 revenues are expected to be in the range of
$135-$140 million, compared to $106.7 million in the corresponding
2001 period. Net income should be in the range of $0.07-$0.09 per
share on a fully diluted basis compared to cash earnings of $0.08
per share on a fully diluted basis in the third quarter of last
year.
For fiscal year 2002, the Company expects revenues to exceed $500
million, compared to $405.5 million in fiscal 2001. Net income is
expected to be between $0.32-$0.39 per share, compared to cash
earnings of $0.34 per share in fiscal 2001.
The Company is revising its earlier guidance as a result of
tighter competition in the Canadian, U.S. and European markets.
Social legislation has also increased the cost of rationalizing
some of the Company's European units. Other contributing factors
include the decision by many of the Company's customers to reduce
IT spending or to defer capital spending decisions until they see
a sustained improvement in their businesses.
Also, during the third quarter, operating margin contribution from
some recently acquired companies was lower than expected and is
not expected to improve until their full integration toward the
end of the fourth quarter. The Company has also maintained a high
level of investment in R&D, as well as business development
expenditures related to its growing processing and products
initiatives.
COGNICASE has also shifted its strategy to a more
product-oriented, ASP-based, business model which is characterized
by longer sales cycles. Software makers have historically booked
their strongest sales in their fourth quarters (calendar), and
their weakest in the first. COGNICASE's business model features a
certain level of stability resulting from recurring revenues,
which is a definite advantage in a turbulent market.
Outlook for Fiscal 2002 and Fiscal 2003
"Based on current market conditions, we expect a soft fourth
quarter but solid first quarter to start fiscal 2003," said Ronald
Brisebois, Chairman of the Board, President and Chief Executive
Officer. "Despite the difficult environment, we believe that our
strategy remains the right one and we are committed to taking
actions to improve our competitiveness. We are exceptionally well
positioned to take advantage of improvements in existing business
conditions."
"Based on current trends in our business sectors and our
assumptions for the year as a whole, we are optimistic that the
Company will continue to achieve sequential revenue and earnings
growth in fiscal 2003," concluded Mr. Brisebois.
About COGNICASE
COGNICASE (TSX: "COG", Nasdaq: "COGI") is an IT products and
services provider specializing in advanced transaction processing
and Internet-based applications. Relying on its results-driven
approach, its software and technology and its Application Services
Technology Centre, COGNICASE offers secure and scalable solutions
that contribute to its customers' economic success in the age of
the new economy. The Company is active in Canada, the United
States, and Europe.
Forward-Looking Statement
This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995
(US), which involve risks and uncertainties. As a result of a
number of factors, including factors that the Company may not
currently foresee, the Company's actual results could differ
materially from those set forth in the forward-looking statements.
Certain other factors that might cause the Company's actual
results to differ materially from the forward-looking statements
include the Company's ability to (i) successfully develop
additional products and services and new applications for its
existing products and services and otherwise respond to rapid
changes in technology, (ii) successfully compete in its industry
for customers and developers and other personnel with expertise in
information technology, (iii) successfully identify and consummate
acquisitions on favorable terms and integrate acquired businesses,
(iv) successfully manage its growth and changing business, (v) be
awarded contracts under its IS/IT and Preferred Supplier Agreement
with the National Bank of Canada, as well as other risks and
uncertainties set forth under the heading "Risk and Risk
Management" in its 2001 annual report. |
