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Technology Stocks : Y2K (Year 2000) Stocks: An Investment Discussion -- Ignore unavailable to you. Want to Upgrade?

To: Nanda who wrote (12795)	9/2/1998 1:51:00 PM
From: Risky Business	Respond to of 13949

COGNICASE ADDING 20% to YESTERDAY'S 10% MOVE IMPORTANT NEWS OUT!!!! A new vice-president, relation with investors has been hired recently. He should start working in 1 or 2 weeks Montreal -- The Quebec government has unveiled its biggest catch yet under its generous new tax credit for high-technology companies, with a promise by Cognicase Inc. to hire 2,000 workers within five years. The Montreal-based company will become the main tenant in a planned $16-million international software engineering centre, Finance Minister Bernard Landry announced yesterday. Cognicase, a high-tech company that has grown rapidly with the need to solve year 2000 computer problems, will receive big tax breaks for each research and development job it creates at the centre. For each person hired between now and June 15, Cognicase will get a tax credit equal to 60 per cent of the employee's salary, up to $25,000. That means the maximum would kick in for a person earning $41,666, and the employee would cost Cognicase only $16,666 when the credit is taken into consideration. After June, the tax credit falls to 40 per cent, up to a maximum of $15,000 for a nine-year period. The government estimates the program will cost it $30-million over five years, if Cognicase creates the full complement of 2,000 jobs, meaning most of the jobs would not qualify for the maximum credit. But Mr. Landry said the provincial coffers will recover about half the $30-million in income taxes on the new employees' salaries. Ronald Brisebois, Cognicase's president and chief executive officer, said the 2,000 workers will be hired in four areas: software design, including Web applications; engineering; the design of multimedia applications; and the development of multiprotocol telecommunications servers. Mr. Brisebois added that the amount saved as a result of the tax credits will be mostly used to train the new employees Cognicase hires. Cognicase, which has annual revenue of about $110-million, currently has 1,500 employees in 12 countries, including 850 in Canada. Chief financial officer Marc Lamy said the tax credits will prompt Cognicase to create new R&D jobs in Montreal, rather than at its subsidiaries outside Canada. For instance, the company expects to relocate about 100 R&D jobs from its recently purchased French subsidiary, NatsystŠmes Inc., in Montreal. "The tax credits allow us to accelerate our development plans and take risks in the development of new software that we might not have taken otherwise," Mr. Lamy said in an interview. Andr‚e Corriveau, a spokeswoman for Mr. Landry, said Cognicase is not obligated to hire all 2,000 workers. But, she added, "if they don't hire them, they won't get the tax credits." To qualify for the tax credit, firms must locate within a rundown part of Old Montreal that the government aims to transform into a high-tech mecca known as la Cit‚ du Multim‚dia. The software engineering centre will stand at the core of the Cit‚ and be built on land owned by the City of Montreal. Construction will be handled by the Caisse de d‚p“t et placement du Qu‚bec's real estate subsidiary, la Soci‚t‚ immobiliŠre trans-Qu‚bec, and a unit of the Fonds de solidarit‚ des travailleurs du Qu‚bec. The Cit‚ du Multim‚dia project is one of three tax credit schemes unveiled last year to draw information technology firms to Montreal. Under a sister program, special effects software maker Discreet Logic Inc. last year announced that it would create 600 new jobs in Montreal over a five-year period. And French computer games designer UbiSoft cited the tax credit scheme in choosing Montreal as the site of its North American operations last year. Cognicase went public last fall by raising $44-million (U.S.) through an initial share offering in Canada and the United States. The company's shares were first listed in October on the Nasdaq stock market at $12.50 and at $17.25 (Canadian) on the Toronto Stock Exchange. Cognicase's shares closed at $14.75 yesterday on the TSE, up $1.75 from Monday. Mr. Brisebois is the company's biggest shareholder, with a 17-per-cent stake. Atlanta-based MCI Communications Corp. owns about 15 per cent through its MCI/Systemhouse division.