Well when they do release earning's will be as good as the last report or better: Wednesday April 28, 7:58 am Eastern Time
Company Press Release
CGI Reports Continuing Strong Growth in Second
Quarter and First Half of Fiscal 1999
Revenue Increased 137.1%, EBITDA 170.3% and Earnings 248.8% in
Second Quarter
MONTREAL--(BUSINESS WIRE)--April 28, 1999--CGI (NYSE:GIB - news; TSE, ME:GIB.A - news) posted strong
revenue and earnings growth in the second quarter ended March 31, 1999 and maintained its momentum in the first half of fiscal
1999. All dollar amounts are in Canadian dollars.
For the three months ended March 31, 1999, CGI reported a 137.1% increase in revenue to $338.8 million, compared with
$142.9 million in the same quarter of fiscal 1998. Earnings before interest, taxes, depreciation and amortization (EBITDA)
increased 170.3% to $52.7 million, from $19.5 million a year ago.
Net earnings increased 248.8% to $21.3 million or $0.16 per share, from $6.1 million ($0.05 per share) the previous year. The
weighted average number of shares outstanding increased 17% to 134.0 million, primarily reflecting shares issued for
acquisitions. Cash flow from operations increased 172.6% to $39.6 million, up from $14.5 million for the same period in 1998.
For the six-month period ended March 31, 1999, CGI posted revenue of $673.1 million, up 160.2% from revenue of $258.7
million achieved the previous year. EBITDA increased 188.7% to $101.3 million, from $35.1 million for the first half of 1998.
Net earnings for the first half of fiscal 1999 totalled $39.5 million, an increase of 257.6% over net earnings of $11.0 million for
the same period in 1998.
On a per share basis, reflecting a 21.0% increase in the average weighted number of shares outstanding to 133,731,843, net
earnings were $0.30 compared with $0.10 one year ago. Cash flow from operations increased 123.7% to $65.1 million ($0.49
per share) from $29.1 million ($0.26 per share) in the first half of fiscal 1998.
The net profit margin increased to 6.3%, from 4.3% in the second quarter of fiscal 1998 and 5.5% in the first quarter of fiscal
1999. The increase reflects the company's growing economies of scale and additional efficiencies realized from the application
of ISO 9001 certified management frameworks.
''In the second quarter, CGI continued to post strong growth, both internal and external, and we expect to remain a long-term
high-growth company,'' said Serge Godin, chairman and CEO of CGI. ''In recent months, CGI signed letters of intent for
several large systems integration and outsourcing contracts, several of which will begin contributing to our revenue base in the
third quarter. As a result, in fiscal 1999 we remain confident of doubling our revenue year over year.''
''Over the coming quarters, we plan to leverage our critical mass to further develop our competitive position as a leading
end-to-end IT services provider in North America and internationally,'' said Godin.
Second Quarter Highlights:
During the quarter ended March 31, 1999, CGI announced the signing of several significant agreements, including:
-- Jan. 5, 1999 -- IT outsourcing agreement with Telebec, a wholly
owned subsidiary of BCE which offers integrated
telecommunications services in outlying regions of Quebec. CGI
forecasts that the 10-year IT outsourcing contract will generate
annual revenues of $8 million, as well as an additional $3.5
million per year for IT development projects. CGI recently
announced the closing of this transaction.
-- Jan. 26, 1999 -- Closing of a transaction based on which CGI
acquired the assets and all contracts of Technologie Desjardins
Laurentienne (TDL), for a cash consideration of $23.2 million.
When the transaction was announced, TDL's annual revenue totalled
$40 million. The contracts initially are worth $155 million over
five years.
-- March 1, 1999 -- Agreement under which CGI will provide Bell
Mobility with its information technology services. The 10-year
agreement is expected to generate revenue in the order of $100
million for CGI in the first 12 months. Annual revenue in
subsequent years will be dependent on Bell Mobility's growth and
specific future requirements. The transaction is expected to
become effective May 1, 1999.
-- March 5, 1999 -- Portugal Telecom Group selected CGI and two
other partners to negotiate a long-term, full IS/IT service
agreement. As part of the agreement, possibly extending over 10
years, CGI, with IBM Global Services and Portuguese-based IS
company Case, will provide Portugal Telecom Group with full IS/IT
services and work with the client to address the needs of the
Portugal market at large. The agreement, for which a dollar value
was not disclosed, is expected to be signed by June 1, 1999.
Building U.S. base
CGI is committed to becoming a major IT services player in the U.S. market, where it targets the financial services and
telecommunications sectors. Last fall, as part of its strategy to increase its presence in U.S. markets, CGI listed its shares on the
New York Stock Exchange.
After the end of the second quarter, CGI announced it had signed a letter of intent with Deloitte Consulting, to acquire its DRT
Systems International division. This acquisition, expected to become effective by June 1, 1999, will provide CGI with a
network of 12 additional offices, 10 of which are in the U.S., and will double the company's U.S. revenue base to 18% of its
total revenue.
Evolution of Revenue Run-Rate, Backlog and Cash Position
At March 31, 1999, CGI's order backlog was $7 billion. Once the preceding acquisitions and contracts have been completed,
as at June 1, 1999, CGI's revenue run-rate will stand at $1.7 billion and its order backlog will total more than $8 billion. The
company also has proposals outstanding on potential large contracts with an estimated value of $4 billion. The balance sheet
remains strong: after accounting for the $23.2 million cash acquisition of TDL, CGI has a cash position of $107.0 million and
minimal debt.
Board Appointment
The chairman of the board and CEO of CGI, Serge Godin, is pleased to announce that William D. Anderson, CFO of BCE
Inc. and Bell Canada, has joined the company's board of directors, effective immediately. Anderson will be replacing Louis A.
Tanguay, president and COO of Bell Canada International, who has stepped down from CGI's board.
CGI is the largest independent information technology consulting firm in Canada and the fifth largest in North America, based on
its revenue run rate of $1.4 billion. The company's order backlog totals approximately $7 billion.
CGI has 9,000 professionals and provides end-to-end IT services and business solutions to 2,000 clients in Canada, the United
States and 20 countries around the world. CGI's shares are listed on the New York Stock Exchange (GIB), as well as on the
Toronto and Montreal exchanges (GIB.A). They are included in the Toronto Stock Exchange's TSE 300 Composite and TSE
100 indexes. Web site: www.cgi.ca.
All statements contained in this or any other press release of CGI Group Inc., or in any document filed by the company with the
U.S. Securities and Exchange Commission, or in any other written or oral communication by or on behalf of the company, that
do not directly and exclusively relate to historical facts, constitute ''forward looking statements'' within the meaning of the U.S.
Private Securities Litigation Report Act of 1995. These statements represent the company's expectations and beliefs, and no
assurance can be given that the results described in such statements will be achieved.
This press release may contain forward looking statements that involve a number of risks and uncertainties, including statements
regarding the outlook for the company's business and results of operations. There are a number of factors that could cause
actual results to differ materially from those indicated. Such factors include, without limitation, the various factors set forth in the
company's annual report.
CGI GROUP INC.
Consolidated statements of earnings
(in thousands of dollars, except earnings per share) (unaudited)
---------------------------------------------------------------
Three months ended Six months ended
March 31 March 31
1999 1998 1999 1998
---------------------------------------------------------------
$ $ $ $
Revenue 338,790 142,881 673,138 258,677
---------------------------------------------------------------
Operating expenses
Direct costs,
selling and
administration
expenses 283,809 121,965 567,497 221,023
Research and
development 2,296 1,422 4,368 2,576
---------------------------------------------------------------
286,105 123,387 571,865 223,599
---------------------------------------------------------------
Operating earnings
(EBITDA) before: 52,685 19,494 101,273 35,078
---------------------------------------------------------------
Depreciation and
amortization of
fixed assets 6,741 3,130 13,659 6,290
Amortization of
costs related to
outsourcing
contracts 3,993 3,441 8,071 5,312
Amortization of
software and
development costs 468 319 937 638
Amortization of
goodwill 3,883 1,672 7,643 3,091
---------------------------------------------------------------
15,085 8,562 30,310 15,331
---------------------------------------------------------------
Earnings before the
following items 37,600 10,932 70,963 19,747
---------------------------------------------------------------
Interest
Long-term debt (291) (190) (470) (364)
Other -- (41) -- (107)
Revenue 1,977 -- 3,479 --
---------------------------------------------------------------
1,686 (231) 3,009 (471)
---------------------------------------------------------------
Earnings before income
taxes, entity subject
to significant
influence and
non-controlling
interest 39,286 10,701 73,972 19,276
Income taxes 18,051 4,700 34,519 8,486
---------------------------------------------------------------
Earnings before
equity subject to
significant
influence and
non-controlling
interest 21,235 6,001 39,453 10,790
Entity subject to
significant
influence 18 -- 37 --
Non-controlling
interest -- 92 -- 253
---------------------------------------------------------------
Net earnings 21,253 6,093 39,490 11,043
===============================================================
Weighted average
number of
outstanding Class A
subordinate shares,
Class B shares and
for 1997, first
preferred shares,
Series 1 134,034,594 114,192,046 133,731,843 110,530,494
=================================================================
Earnings per share 0.16 0.05 0.30 0.10
=================================================================
CGI GROUP INC.
Consolidated statements of retained earnings
(in thousands of dollars) (unaudited)
---------------------------------------------------------------
Three months ended Six months ended
March 31 March 31
1999 1998 1999 1998
---------------------------------------------------------------
$ $ $ $
Balance at beginning 73,501 25,386 55,264 20,436
Net earnings 21,253 6,093 39,490 11,043
---------------------------------------------------------------
Balance at end 94,754 31,479 94,754 31,479
===============================================================
CGI GROUP INC.
Consolidated balance sheets
as at March 31
(in thousands of dollars) (unaudited)
---------------------------------------------------------------
1999 1998
---------------------------------------------------------------
$ $
Assets
Current assets
Cash and short-term investments 107,044 16,148
Accounts receivable 216,961 107,693
Work in progress 18,926 10,346
Prepaid expenses 9,312 7,215
------------------------------------------------------------
352,243 141,402
Investment in an
entity subject to
significant influence 658 577
Fixed assets 58,202 32,428
Costs related to outsourcing contracts 65,934 28,166
Software and development costs 937 3,341
Deferred income taxes 15,287 10,967
Goodwill 298,963 126,548
------------------------------------------------------------
792,224 343,429
============================================================
Liabilities
Current liabilities
Accounts payable and accrued
liabilities 235,915 76,129
Income taxes 15,003 3,869
Deferred revenues 4,533 --
Deferred income taxes 5,967 6,104
Current portion of long-term debt 6,800 3,850
------------------------------------------------------------
268,218 89,952
Long-term debt 5,984 5,984
Non-controlling interest -- 247
------------------------------------------------------------
274,202 96,183
------------------------------------------------------------
Shareholders' equity
Capital stock 423,057 215,556
Contributed surplus 211 211
Retained earnings 94,754 31,479
------------------------------------------------------------
518,022 247,246
------------------------------------------------------------
792,224 343,429
============================================================
CGI GROUP INC.
Consolidated statements of changes in financial position
for the six-month periods ended March 31
(in thousands of dollars) (unaudited)
------------------------------------------------------------
1999 1998
------------------------------------------------------------
$ $
Cash flow from operating activities
Net earnings 39,490 11,043
Items not affecting cash
Depreciation and amortization of
fixed assets 13,659 6,290
Amortization of costs related to
outsourcing contracts 8,071 5,312
Amortization of software and
development costs 937 638
Amortization of goodwill 7,643 3,091
Deferred income taxes (4,701) 2,961
Entity subject to significant influence (37) --
Non-controlling interest -- (253)
------------------------------------------------------------
65,062 29,082
Changes in non-cash operating working
capital items (32,805) 5,090
------------------------------------------------------------
32,257 34,172
------------------------------------------------------------
Cash flow from financing activities
Issue of shares 4,285 43,932
Increase (decrease) of long-term debt 1,493 (19,207)
------------------------------------------------------------
5,778 24,725
------------------------------------------------------------
Cash flow from investing activities
Business acquisitions (23,182) (6,996)
Investment in an entity subject
to significant influence -- (577)
Acquisitions of fixed assets (15,114) (10,477)
Costs related to outsourcing contracts (14,113) (9,877)
------------------------------------------------------------
(52,409) (27,927)
------------------------------------------------------------
Net cash (outflow) inflow (14,374) 30,970
Cash position at beginning 121,418 (14,822)
------------------------------------------------------------
Cash position at end 107,044 16,148
============================================================
Contact:
CGI Group Inc.
Andre Imbeau or Paule Dore, 514/841-3200
What I cannot understand is why we are now under $30.00 a share, it just seem's to go down day after day after day, WHY? |
