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Gold/Mining/Energy : CGI Group (GIB.A) - -- Ignore unavailable to you. Want to Upgrade?

To: toccodolce who wrote (227)	1/29/1998 5:19:00 PM
From: BM	Read Replies (1) \| Respond to of 1673

Q1 results: Rev +175%, Earnings +379%, CFlow +452% JANUARY 29, 1998 CGI Reports 175 Percent Revenue Growth 379 Percent Earnings Growth, for Q1 Fiscal 1998 MONTREAL, QUEBEC--CGI today announced results for the first quarter ended December 31, 1997. Revenue increased by 175 percent to $115.8 million compared with $42.1 million in the first quarter of fiscal 1997, reflecting acquisitions and internal growth. Net earnings increased by 379 percent to $5.0 million ($0.09 per share) from $1.0 million ($0.03 per share) in the first quarter of fiscal 1997, on 43.4 percent more shares outstanding. The net profit margin increased to 4.3 percent, from 2.5 percent a year ago. Increasing margins primarily result from the continuing shift in business mix toward large outsourcing contracts, and efficiencies related to the application of ISO 9001 processes throughout the company. Cash flow increased 452 percent to $14.6 million ($0.27 per share) from $2.6 million ($0.07 per share) a year ago. The balance sheet at quarter end was strong, with a 472 percent increase in shareholders' equity to $241 million, no bank debt and $9.9 million cash. Working capital increased to $48.6 million, from $19.6 million a year ago. At the end of the quarter, and including the acquisition of the Insurance Systems group of Teleglobe Inc. which was completed October 22, 1997, CGI had an annual revenue run rate in excess of $550 million and an order backlog of $1.5 billion. As previously announced, CGI on January 5, 1998 signed an agreement with BCE and Bell Canada whereby Bell and CGI will strengthen and extend for an additional 10 years their business partnership first entered into in November 1995. There are three main components to this agreement. First, CGI will manage Bell Canada's IT systems development and maintenance - the largest IT services outsourcing contract ever in Canada, worth more than $3 billion over 10 years. Second, CGI will continue to partner with Bell in IT contracts for their respective clientele. Third, CGI will acquire Bell Sygma International, which has worldwide systems integration and outsourcing revenue of $100 million. When Bell Sygma is included, CGI will have a revenue run rate of approximately $1 billion, and an order backlog of $4.5 billion. This agreement is expected to close June 30, 1998, pending regulatory approvals and a CGI shareholder vote on certain aspects of the agreement. "Our growth is driven by new contracts and acquisitions. We are proposing, and bidding on, an increasing number of larger contracts," said Serge Godin, Chairman and Chief Executive Officer. "We are strongly positioned to continue our growth in the IT services industry, which is undergoing rapid consolidation." "Through acquisitions this past year, we gained coast to coast infrastructure, prominence as a major provider to the financial services industry, a strong base in the U.S. and a presence in the U.K. The planned, major transaction with Bell Canada will provide CGI with the expertise, critical mass and resources to become a world class IT player in international telecommunications markets." CGI is the largest Canadian-owned independent information technology consulting firm, providing end-to-end IT services and business solutions to some 2,000 clients throughout North America and internationally. CGI has more than 4,000 professionals, a revenue-run rate of approximately $550 million and an order backlog of more than $1.5 billion. CGI's shares (GIB.A) are included in The Toronto Stock Exchange's TSE 300 and TSE 200 Composite indexes. Website address: www.cgi.ca. /T/ CGI GROUP INC. CONSOLIDATED FINANCIAL STATEMENTS for the three-month period ended December 31, 1997 CONSOLIDATED STATEMENT OF EARNINGS for the three-month periods ended December 31 (in thousands of dollars,except earnings per share) 1997 1996 Revenue 115,796 $ 42,118 $ ---------- ---------- Operating expenses Direct costs,selling and administration expenses 99,058 $ 38,052 $ Research and development 1,154 $ 506 $ Depreciation and amortization of fixed assets 3,160 $ 310 $ Amortization of costs related to outsourcing contracts 1,871 $ 656 $ Amortization of software and development costs 319 $ 106 $ Amortization of goodwill 1,419 $ 203 $ Interest on long-term debt 174 $ 33 $ Other interest expenses 66 $ 145 $ ---------- ---------- 107,221 $ 40,011 $ ---------- ---------- Earnings before following items 8,575 $ 2,107 $ Income taxes 3,786 $ 951 $ ---------- ---------- Earnings before share in the results of an entity subject to significant influence and share of non-controlling interest 4,789 $ 1,156 $ Share in the results of an entity subject to significant influence (123 $) Share of non-controlling interest 161 $ ---------- ---------- Net earnings 4,950 $ 1,033 $ ---------- ---------- ---------- ---------- Weighted average number of outstanding Class A subordinate shares, Class B shares and first preferred shares 53,474,593 37,279,252 ---------- ---------- ---------- ---------- Earnings per Class A subordinate share, Class B and first preferred share $0.09 $0.03 ---------- ---------- ---------- ---------- CGI GROUP INC. CONSOLIDATED STATEMENTS OF RETAINED EARNINGS for the three-month periods ended December 31 (in thousands of dollars) 1997 1996 Balance at beginning $20,436 $12,671 Net earnings $4,950 $1,033 --------- -------- Balance at end $25,386 $13,704 --------- -------- --------- -------- CGI GROUP INC. CONSOLIDATED BALANCE SHEETS as at December 31 (in thousands of dollars) ASSETS 1997 1996 Current assets Cash and short-term investments 9,916 $ Accounts receivable 93,795 $ 41,505 $ Income taxes 200 $ 322 $ Work in progress 13,987 $ 10,470 $ Prepaid expenses 5,887 $ 1,872 $ 123,785 $ 54,169 $ --------- -------- INVESTMENT IN AN ENTITY SUJECT TO SIGNIFICANT INFLUENCE 1,584 $ FIXED ASSETS 30,672 $ 3,738 $ COSTS RELATED TO OUTSOURCING CONTRACTS 24,927 $ 3,538 $ SOFTWARE AND DEVELOPMENT COSTS 3,660 $ 1,173 $ DEFERRED INCOME TAXES 10,025 $ GOODWILL 128,220 $ 14,990 $ --------- -------- 321,289 $ 79,192 $ --------- -------- --------- -------- CGI GROUP INC. CONSOLIDATED BALANCE SHEETS as at December 31 (in thousands of dollars) 1997 1996 LIABILITIES Current liabilities Bank indebtedness 10,810 $ Accounts payable and accrued liabilities 66,896 $ 20,650 $ Imp“ts sur le revenu 0 $ 0 $ Deferred income taxes 5,215 $ 1,835 $ Current portion of long-term debt 3,053 $ 1,251 $ --------- -------- 75,164 $ 34,546 $ --------- -------- LONG-TERM DEBT 4,786 $ 1,275 $ --------- -------- DEFERRED INCOME TAXES 1,227 $ --------- -------- SHARE OF NON-CONTROLLING INTEREST 339 $ SHAREHOLDERS' EQUITY Capital stock 215,403 $ 28,229 $ Contributed surplus 211 $ 211 $ Retained earnings 25,386 $ 13,704 $ --------- -------- 241,000 $ 42,144 $ --------- -------- 321,289 $ 79,192 $ --------- -------- --------- -------- CGI GROUP INC. CONSOLIDATED STATEMENT OF CHANGES IN FINANCIAL POSITION for the three-month periods ended December 31 (in thousands of dollars) 1997 1996 OPERATING ACTIVITIES Net earnings 4,950 $ 1,033 $ Items not affecting cash Depreciation and amortization of fixed assets 3,160 $ 310 $ Amortization of goodwill 1,419 $ 203 $ Amortization of software and development costs 319 $ 106 $ Amortization of costs related to outsourcing contracts 1,871 $ 656 $ Deferred income taxes 3,014 $ 210 $ Share in the results of an entity subject to significant influence 123 $ Share of non-controlling interest (161 $) --------- -------- 14,572 $ 2,641 $ Changes in non-cash operating working capital items 3,373 $ (2,892 $) --------- -------- 17,945 $ (251 $) --------- -------- FINANCING ACTIVITIES Increase in long-term debt 294 $ Repayment of long-term debt (21,202 $) (250 $) Issue of shares 163,779 $ 322 $ --------- -------- 142,577 $ 366 $ --------- -------- INVESTING ACTIVITIES Acquisitions of fixed assets (5,591 $) (451 $) Proceeds on disposal of fixed assets 8 $ Investment in an entity subject to significant influence (44 $) Costs related to outsourcing contracts (3,197 $) (174 $) Business acquisitions (126,996 $) (1,606 $) --------- -------- (135,784 $) (2,267 $) --------- -------- INCREASE (DECREASE) IN CASH POSITION 24,738 $ (2,152 $) CASH POSITION AT BEGINNING (14,822 $) (8,658 $) --------- -------- CASH POSITION AT END 9,916 $ (10,810 $) --------- -------- --------- -------- disclaimer FOR FURTHER INFORMATION PLEASE CONTACT: CGI Group Inc. Andre Imbeau Executive Vice-President and CFO (514) 841-3200 or CGI Group Inc. Paule Dore Executive Vice-President, Corporate Affairs (514) 841-3200 NEWS RELEASE TRANSMITTED BY CANADIAN CORPORATE NEWS FOR: CGI GROUP INC. TSE, ME SYMBOL: GIB.A

To: toccodolce who wrote (227)	1/29/1998 10:45:00 PM
From: BM	Respond to of 1673

AGM speaking notes - Part 1 [Tom, here you go. Note - I scanned this material from a handout made available at the meeting, typos may have been introduced. Also, any emphasis is mine] Serge Godin, Chairman of the Board and Chief Executive Officer I will now review the highlights of the past year, and our objectives and strategy for 1998 and beyond. Jean Brassard will update you on our operations, and Andre Imbeau will review our financials for fiscal 1997 and the first quarter of this year which we have released today. I am pleased to report the CGI team delivered outstanding results in fiscal 1997 - with growth by all measures well beyond our expectations. Growth was divided evenly between internal operations with major new contracts, which Jean Brassard will outline, and acquisitions. CGI has become the fastest growing public IT services company in North America according to analysts' comparative data. In fiscal 1997, we increased revenue by 90%, net earnings by 186% and our order backlog by 7.7 times compared with 1996. When major transactions since year end are included, our growth is significantly greater. The acquisition in October of the Insurance Systems group of Teleglobe Inc., which we refer to as TIS, puts our revenue run rate at more than double fiscal 1997 revenue, at $550 million. The agreement earlier this month to merge Bell Canada's Bell Sygma operations into CGI, scheduled to close June 30, will almost double our run rate again to $1 billion and triple our order back log to $4.5 billion. The Bell Sygma transaction represents the largest IT outsourcing contract ever in Canada, a minimum of $3 billion of business over 10 years. And it positions us for additional business within the BCE group of companies. This most recent transaction, when completed, will solidify our position as the largest IT services company in Canada, and elevate CGI to the 6th largest in North America. Reflecting events over the past year, CGI shares have undergone a fundamental revaluation and been the top performing stock on the TSE and ME this past year. As you know, the shares have been split two for one in August, and again in December, to increase trading liquidity. Earlier this month, CGI Class A subordinate shares were included in the TSE 300 and 200 indexes. This is an important milestone which will further broaden our investor following. Even after this appreciation, the A shares are valued at only the mid range of U.S. IT services companies that are closest to our business profile. Our multiple of market capitalization to revenue is 1.8 times based on our revenue run rate when Bell Sygma is included, vs an average of 3.8 times for those companies which analysts designate as our peers. Some analysts identify CGI as a defensive stock because of our solid position in our industry and given our guaranteed levels of business over the coming years. Our growth is being driven by the strong demand for IT services and the trend to outsourcing these services. Ten years ago we anticipated this growth, and developed our strategy to capitalize on it. We forecast that the IT outsourcing business in Canada will grow at a rate of 30% annually but faster for CGI because there are few firms qualified to win this business. In addition, the cost of infrastructure is high -- $70 million plus for a national network of data centres and call centres -- and this provides a barrier to entry from the market. Globally, the overall IT services business is expanding 15% to 20% annually, and this will also drive our growth as we build on our niche markets in the U.S. and Europe. Through strategic acquisitions, CGI has become the largest independent end to end IT services provider in Canada. This end to end capability enables us to form partnerships with our outsourcing customers to meet their full IT services needs - including consulting, large scale systems integration, business solutions and IT infrastructure management. In April 1997, we acquired CDSL, Canada's largest independent IT provider of retail banking services and electronic commerce switching services. This acquisition had a number of strategic benefits. First, CGI became the largest independent IT services company with infrastructure of efficient data centres coast to coast. This national presence positions us for major national contracts and diversifies our client base. Second, by acquiring CDSL, we became a significant player in the financial services industry. We now provide IT solutions and services to over 300 financial institutions, with switching services through some 20,000 devices including 900 automated teller machines. Third, we have become the first non financial institution member of Interac with the ability to provide Interac's electronic funds transfer services to clients. This presents significant growth potential. TIS, which we acquired from Teleglobe in October, is the third largest outsourcer and provider of business solutions to the property and casualty insurance industry in North America and the largest in Canada. This acquisition provides a number of strategic benefits. TIS further strengthens our position in the financial services industry. It has a client base of over 100 property and casualty insurance companies in Canada, and over 440 insurance companies in the US including 14 of the top 25, and in excess of 20 insurance companies in the UK. It provides a solid base to build on in the U.S., and its presence in the UK provides a window on European markets on which we intend to capitalize. The increasing deregulation of the financial services industry will enable us to cross market our retail banking and insurance business solutions and thereby generate more outsourcing and systems integration contracts. These acquisitions further diversified our business geographically across Canada, which represents 75% of our business. International business accounts for approximately 25% of revenue, including 20% in the US and 5% offshore. Through these two acquisitions, we have increased outsourcing as a percentage of our overall revenue, to approximately 60% based on current business. The long-term nature of outsourcing contracts guarantees the level of revenue and contributes to earnings stability. I will provide more background on the major Bell Sygma transaction in a few minutes. This transaction will increase outsourcing to 75% of the total, and maintain our international business at 25% of revenue, evenly split between the U.S. and offshore. We are very pleased with the progress to date, but even more excited about the outlook for continuing strong growth. The theme of our 1997 annual report is <<successfully managing growth>> and this is a very important message. We have the people, the infrastructure, the end to end services, relationships and discipline of process to manage and indeed sustain this growth.

To: toccodolce who wrote (227)	1/29/1998 10:47:00 PM
From: BM	Respond to of 1673

AGM speaking notes - Part 2 Jean Brassard, Vice-Chairman, President and COO Thank you, Serge. Through the dynamism of our CGI team, this past year was one of tremendous internal growth and progress for GGI. - In 1997, 50% of our growth was from existing operations and 50% from acquisitions. We are now proposing, and bidding on, more and larger contracts. - We increased our market share in each of our targeted industry sectors. In each of these sectors, we provide both industry expertise and business solutions as well as our IT technical expertise. - We successfully integrated the operations of CDSL and began integration of TIS, doubling the number of CGI members to 4,000. The merger of the Bell Sygma operations will increase our members by an additional 3,000, to a total of 7,000. - We also successfully integrated the infrastructure of CDSL, and now have data centres and call centres coast to coast. Internal growth was driven by a number of major new systems integration and outsourcing contracts and a 100% renewal rate for existing outsourcing contracts. I will highlight some of our strategic contracts and then explain how our quality program driven by strong values enables us to effectively manage our rapid growth. Our April 1997 acquisition of CDSL enabled us to secure a five-year, $100 million contract to provide IT services to The Go-operators' Group, renewable for an additional five years. In May 1997, we concluded a 10-year, $250 million contract with the distribution giant Westburne to manage the delivery of all their IT services. This past year, we also signed a five-year $25 million partnership with Spar Aerospace, through which we will handle this technology leader's IT functions. We concluded a strategic, $10 million agreement with the Interac Association for the management of its Central Network Management Facility. This project enables us to showcase our leading financial switching and transaction processing capabilities to Canada's major financial institutions. In December, we announced a memorandum of understanding with the Mouvement Desjardins. Through this $150 million agreement over 10 years, we will partner with Desjardins to build a major pay services operation serving their client base. Throughout fiscal 1997, we continued to build on our strategic alliance with Bell Canada. The important role telecommunications plays in most IT organizations, representing 15% to 25% of a company's IT budget, makes this alliance a major competitive advantage with strong benefits for both parties, and for our clients. We also made excellent progress with our business solutions which we market as a value added service leading to large scale systems integration and outsourcing contracts. Year 2000 IT conversions are gaining priority worldwide and we have exclusive rights to one of the leading business solutions. We are focusing on our main target markets and currently are working with 25 of our major clients. In December we announced a $4.4 million Year 2000 contract with Public Works Government Services Canada. We expect Year 2000 contracts will represent about 10% of CGI's revenue in the next few years. CGI's AMICUS business solution is recognized as one of the world's most advanced software solutions for managing large collections, initially targeted at libraries. In July 1997, the British Library acquired AMICUS for its new Corporate Bibliographic System. Just last week, the National Library of Australia also acquired AMICUS. In financial services, we now have the leading software used for personal banking by credit unions and some banks. Importantly, our software integrates the functionality of home banking and via the Internet. We also have the leading software for property and casualty insurance companies for reducing costs, improving service and re-engineering business processes. We are able to successfully manage our rapid growth through our absolute commitment to a quality vision. Our vision is to be a total quality company, providing quality in all aspects of our relationship with our three primary stakeholders - our clients, our members and our shareholders. This vision is supported by a deeply rooted corporate culture and strong values. We benefit from clear methodologies, which spell out how to conduct business activities at the strategic level, and at the project management level. In 1994, we became the first IT services company in North America to receive ISO 9001 certification for our project management framework and we have since introduced our IT management framework for outsourcing activities, and our member management framework. Our certified quality approach forms the basis of a continuous improvement process which is embedded into all of our management processes. Certification helps to improve performance by formalizing processes and documenting their various steps. It is supported by a rigorous assessment process which allows us to evaluate the satisfaction level of our target stakeholder groups. This quality approach has contributed significantly to our ability to manage growth. First, the ISO 9001 certified management framework has been an important factor supporting the integration of new members following an acquisition or the start-up of a new outsourcing contract. The framework defines our approach to doing business and ensures that everyone operates in the same ISO-certified manner. Our ISO standards are a source of pride for our members, and we find that one of the first questions asked by employees of the company or IT department being integrated is when they will become ISO certified. I should add that the high proportion of new outsourcing contracts has been a big factor in our ability to gain qualified IT people. We hire the client's IT people and this immediately provides qualified staff with the knowledge of the particular systems. Second, to attract and retain people, we strive to be recognized as the best employer in the industry. We have established a series of policies to ensure the satisfaction of our members within the work environment. These include training, recognition and communications. Part of remuneration of managers is tied to member satisfaction, which is measured through surveys. Our strong growth and leadership in the industry are important factors in attracting highly qualified and dedicated candidates. We hire a specific type of professional who identifies with CGI's values and is comfortable in an environment characterized by ongoing training, professional development and team spirit. The efficiencies resulting from application of the ISO certified management framework have been an important factor in our ability to steadily increase profit margins. All of our strategic business units are managed by dedicated CGI members, many of whom have more than 15 years' experience with our company. These individuals have a full understanding of our corporate culture and in-depth knowledge of our business environment. The presence of this stable management team helps explain the success of both our large outsourcing and systems integration contracts and our recent acquisitions. In summary, we enter 1998 excited about the new business and growth opportunities, and highly confident in our ability to deliver. Andre will now review our financial performance.

To: toccodolce who wrote (227)	1/29/1998 10:49:00 PM
From: BM	Read Replies (2) \| Respond to of 1673

AGM speaking notes - part 3 Andre Imbeau, EVP and CFO Thank you, Jean. The total quality approach discussed by Jean also applies to our financial management, which emphasizes a strong balance sheet. Balance sheet strength has become particularly important with the increasing percentage of outsourcing business, as these clients look to partnering with us for five to 10 years or more. This past year, concurrent with our outstanding growth, we basically eliminated all debt and achieved a balance sheet which ranks with the best in the industry. I'll provide a brief overview of fiscal 1997, and then provide first quarter 1998 results released today. Fiscal 1997 marked the 21st consecutive year of revenue growth - and the strongest, growing 90% to $231.9 million. Net earnings increased 186% to $7.8 million or 20 cents per share, adjusted for the 2-for1 stock split last month and based on 13% more shares outstanding than a year ago. Cash flow increased 177% to $21.8 million or 56 cents per share. Our net profit margin increased to 3.3% from 2.2% in 1996. In the fourth quarter, it increased to 3.9%. We have provided a pro forma balance sheet to reflect the TIS acquisition and the additional $43.7 million invested by Bell Canada in CGI to maintain its interest at 23.8%. On this basis, shareholders' equity increased 226% to $236 million; we eliminated debt and had $12.7 million cash. Results for the first quarter ended December 31, which we released earlier this morning, continue strong. Revenue increased 175% to $115.8 million from a year ago, reflecting acquisitions and internal growth. Net earnings increased 379% to $5.0 million, with earnings per share increasing 234% to 9 cents. This resulted in a net margin of 4.3%, compared with 2.5% a year ago. Cash flow increased 452% to $14.6 million, or 27 cents per share. Looking ahead, continuing growth is virtually guaranteed by our much expanded order backlog, and we plan to continue to gradually increase profit margins thanks to our business mix and economies of scale. Serge will now conclude with an outlook. Serge.

To: toccodolce who wrote (227)	1/29/1998 10:52:00 PM
From: BM	Read Replies (3) \| Respond to of 1673

AGM speaking notes - Part 4 Serge Godin Thanks, Andre. Last year at this time, we set what we considered to be ambitious but realistic financial and operating objectives for 1999. Opportunities since then have very significantly exceeded our expectations, and by capitalizing on them we have already surpassed those objectives by a wide margin. We set a revenue target for 1999 of $300 million. Yet by late October 1997, we already had a revenue run rate of $550 million, and the merger of Bell Sygma into CGI will increase our run rate at mid-year to $1 billion - more than triple that objective. A year ago, we set a target for international business of $50 million per year. The Bell Sygma International transaction plus TIS will provide international revenue, including the U.S., of close to $250 million. [i.e. 5 times the objective] Last year, we said that we would increase our presence in each of our targeted industry sectors. Well, this past year in financial services we completed two acquisitions making us a leading player in Canada and a significant one in the U.S. We also made significant inroads in the telecommunications sector, with the Bell Sygma transaction. With Bell Sygma, telecommunications will represent 39% of revenue and financial services, 37%. We are now in the process of revising our strategic plan to reflect these major developments. What I can say is that we expect our organic growth to at least match the 15 to 20% annual growth of the IT services industry worldwide, with gradually increasing margins. Large scale systems integration and outsourcing contracts and acquisitions will mean higher growth. We foresee rapid consolidation and plan to continue to be one of the prime beneficiaries. Our performance and outlook, together with our increased market capitalization, are attracting a broader investor audience. We are committed to carrying out a professional investor relations program not only in Canada but also the U.S., to achieve a higher valuation in line with our U.S. peers. The recent agreement with BCE and Bell Canada which will be completed by the end of June is very significant to CGI. Shareholders will be asked to vote on certain aspects of the agreement at a special shareholders meeting to be held in the spring. We have agreed to merge Bell Sygma and Bell Sygma International into CGI in return for 8.6 million Series 6 preferred shares, convertible into Class A shares, for a total of $197.6 million. As an important part of this transaction, Bell and CGI have agreed to strengthen our business partnership first entered into in November 1995 and extend it for an additional 10 years. There are three main components to this agreement. ú First, CGI will manage Bell's IT systems development and maintenance, worth more than $3 billion over 10 years at commercial rates. ú Second, CGI will continue to partner with Bell in IT contracts for their respective clientele . ú And third, CGI will acquire Bell Sygma International, with worldwide systems integration and outsourcing revenue of$100 million. Additionally, BCE has completed purchase of6 million issued and outstanding CGI Class A shares from Teleglobe Inc. When the Bell Sygma merger is completed, the combined holding of BCE and Bell Canada will be 43% and Bell's voting interest will remain at 17.9%, vs 66% for the holders of CGI Class B multiple voting shares. BCE has indicated its interest in raising its interest at 56% in six years, consistent with the terms of the agreement. BCE will realize this when the Class B shares become single voting and when the shares of the majority shareholders are converted into BCE shares. As part of the agreement, BCE at that time will have the opportunity to gain a 56% voting interest in the company, derived from these shares, but this will not take place before the end of the sixth year, or in 2004. The acquisition of Bell Sygma and the strengthened relationship with BCE and Bell provide CGI with the expertise, critical mass and resources to become a world class IT player in international telecommunications markets. In general terms, our strategy going forward is to continue to strengthen our position in each of our targeted industry sectors, with emphasis on large scale systems integration and outsourcing contracts. Our focus will be on Canada, the U.S. and beginning this year, in Europe as well. We will build on our niche markets by cross selling business solutions to leverage our outsourcing and large scale systems integration practices. Since we founded CGI 21 years ago, we've had the dream of developing a total quality IT services company, a benchmark for quality in the industry. We have been convinced that quality is the cornerstone for growth, and as we've grown we have broadened our horizons beyond Canada to set our sites on being the benchmark for quality in North America - and beyond. The combination of quality, size, blue chip partnerships and contracts have enabled CGI to mature into among the most solid and stable companies in our industry. We intend to deliver superior performance, and so continue to reward you our shareholders. I would like to thank each of you for your confidence in CGI. In closing, I would like to pay tribute to CGI's team of talented and dedicated professionals who set the standard of excellence in our industry through a process of continuous improvement. This record of achievement has ensured CGI's success in winning an increasing share of contracts, and in retaining and attracting top quality people who will ensure the company's ongoing high performance. I would also like to thank our client partners for their continuing confidence and support, and our trusted suppliers. We are committed to providing high quality IT services that help maintain our clients' competitive advantage in a fast evolving business environment. Our clients are responsible for our success, and in closing I would like to give them the last word. You will recognize their testimonials from the annual report. Robert Chevrier, Chairman, President and CEO, Westburne Inc. "Westburne was seeking a long-term partner capable of realizing its business vision and one with the ability to service its five product groups across North America. Since CGI is a full service provider, it was capable of delivering end to end business solutions to meet our needs." Jean-Pierre Leger, President and CEO, St-Hubert Bar-B-Q Limited. "CGI specialists maintain St Hubert Bar-B-Q restaurants' home delivery system, which ensures that our customers benefit from an efficient service. We are pleased to do business with a company whose total dedication to quality is recognized by international ISO standards." Joanne De Laurentis, President, Interac Association : "Interac Association need an IT partner to manage its mission-critical Central Network Management Facility operations that enable member transactions. We wanted to associate ourselves with leaders in the Canadian financial services market and suppliers committed to high service and reliability levels. We chose CGI." Thanks to our clients, after all, it is because of them that we exist. Thank you ladies and gentlemen. We would now be pleased to answer any questions. I would ask you to please use one of the microphones and identify yourself and say whether you are a shareholder or if you represent a shareholder before asking a question. [I'll try to add some personal notes on Q&As when I have more time]