CGI Group Reports Continuing Strong Growth.MONTREAL--(BUSINESS WIRE)--Dec. 2, 1998-- -- Fiscal 1998 revenue more than tripled, earnings per share tripled -- Q4 revenue ahead 4.5 times, earnings per share more than tripled -- Order backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. increased to $6.5 billion, from $1.3 billion a year ago CGI Group CGI Group Inc. (TSX: GIB.A, NYSE: GIB) is a Canadian-based information technology (IT) management and business process services (BPS) company. Founded in 1976 as Conseillers en Gestion et Informatique (TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :GIB See NIST binary. .A.) (ME:GIB.A.) (NYSE NYSE See: New York Stock Exchange :GIB) today announced results for the fiscal year ended September 30, 1998, the 22nd consecutive year of revenue growth. All dollar amounts are in Canadian dollars Noun 1. Canadian dollar - the basic unit of money in Canada; "the Canadian dollar has the image of loon on one side of the coin" loonie dollar - the basic monetary unit in many countries; equal to 100 cents . Revenue increased by 219 percent to $741.0 million in fiscal 1998, from $231.9 million in fiscal 1997. Earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: . Net earnings increased 349 percent to $34.8 million in fiscal 1998 from $7.8 million a year ago. Earnings per share tripled to $0.30 in fiscal 1998 from $0.10 in fiscal 1997, based on a weighted average number of shares 50.8 percent higher than a year ago. Cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses increased 248 percent to $75.8 million ($0.65 per share). Shares were issued during the year primarily as currency in payment for acquisitions, all of them accretive to earnings. The net profit margin increased to 4.7 percent from 3.3 percent the previous year, reflecting further efficiencies resulting from applying ISO (1) See ISO speed. (2) (International Organization for Standardization, Geneva, Switzerland, www.iso.ch) An organization that sets international standards, founded in 1946. The U.S. member body is ANSI. 9001 certified See certification. business processes, synergies from the integration of acquisitions, and increasing economies of scale. In the fourth quarter ended September 30, 1998, revenue increased 348 percent to $324.5 million from $72.4 million in the same quarter of fiscal 1997, resulting in an annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. revenue run rate of $1.3 billion. EBITDA increased to $42.8 million in the fourth quarter of fiscal 1998 from $8.6 million the previous year. Net earnings increased 462 percent to $16.1 million ($0.13 per share) from $2.9 million ($0.03 per share) in fiscal 1997. At September 30, 1998, the order backlog was $6.5 billion compared with $1.3 billion a year earlier, and the balance sheet was strong with a cash position of $121.4 million. "We consider a large and growing order backlog to be an important strength in all economic environments," said Serge serge 1 n. A twilled cloth of worsted or worsted and wool, often used for suits. [Middle English sarge, from Old French, from Vulgar Latin *s Godin, Chairman and Chief Executive Officer. "It provides not only guaranteed revenue into the future, but also contributes to stability and predictability of performance. Outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. contracts additionally provide access to a large pool of talented IT professionals. "This past year, we achieved a number of milestones which significantly strengthen our position in the information technology (IT) services industry in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. and internationally," Mr. Godin continued. "We have entered fiscal 1999 a much larger company than a year ago, with continuing strong growth momentum." Based on U.S. generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ), CGI CGI in full Common Gateway Interface. Specification by which a Web server passes data between itself and an application program. Typically, a Web user will make a request of the Web server, which in turn passes the request to a CGI application program. reported earnings of $32.8 million or $0.28 per share in fiscal 1998. The variance The discrepancy between what a party to a lawsuit alleges will be proved in pleadings and what the party actually proves at trial. In Zoning law, an official permit to use property in a manner that departs from the way in which other property in the same locality from fiscal 1998 earnings per share based on Canadian GAAP reflects the difference in the method used for foreign exchange translation, research and development expenses, and the treatment for tax benefits not accounted for at the acquisition of an enterprise. Directors The Board of Directors today announced the nomination of Charles Sirois Charles Sirois (born 1954) is a Canadian businessman. He is the founder, controlling shareholder, Chairman and CEO of Telesystem Ltd., a Canadian private equity company. , Chairman and Chief Executive Officer of Teleglobe Inc., as a Director of CGI and the resignation from the Board of Guy Laberge, Executive Vice President and General Manager, Quebec, of CGI. 1998 Milestones CGI achieved a number of milestones this past year. The company: -- Gained the critical mass that qualifies it to propose on the major IT services outsourcing and systems integration contracts in North America. -- Through its two largest acquisitions to date, became a leading provider to the telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. industry of IT outsourcing services in North America and systems integration internationally, and became the third largest IT services provider to the property and casualty insurance industry in North America and the largest in Canada. CGI also gained IT services operations outside of North America, focused on the financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. and telecommunications sectors in the United Kingdom and other countries. -- In October 1998, listed its Class A subordinate voting shares Voting Shares Shares that give the stockholder the right to vote on matters of corporate policy making as well as who will compose the members of the board of directors. Notes: Different classes of shares, such as preferred stock, sometimes don't allow for voting rights. on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. as part of its strategy to broaden its business and investor base, and to provide a local currency for acquisitions in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . -- Signed systems integration and outsourcing contracts of increasing average size, and strategic contracts requiring leading edge technology. CGI additionally established alliances with three major providers of Enterprise Resource Planning See ERP. (application, business) Enterprise Resource Planning - (ERP) Any software system designed to support and automate the business processes of medium and large businesses. (ERP (Enterprise Resource Planning) An integrated information system that serves all departments within an enterprise. Evolving out of the manufacturing industry, ERP implies the use of packaged software rather than proprietary software written by or for one customer. ) systems. CGI is the largest independent information technology consulting Information technology consulting (IT consulting or business and technology services) is a field that focuses on advising businesses on how best to use information technology to meet their business objectives. firm in Canada and the sixth largest in North America, based on its revenue run rate of $1.3 billion. CGI has 8,000 professionals and provides end-to-end IT services and business solutions to some 2,000 clients in Canada, the United States and in 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 Montreal Exchange A Canadian derivatives exchange that facilitates the trading of stock options, interest rate futures and options, as well as index options and futures. Located in Montreal, Quebec, it is the country's main financial derivative market, while the Winnipeg (GIB.A). They are included in the Toronto Stock Exchange's TSE 300 Composite and TSE 200 indexes. Website address: 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 An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called 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 or Form 40F filed with the SEC and its Annual Information Form filed with Canadian securities commissions, which important factors are included here by reference. -0-
CGI GROUP INC.
QUARTERLY REPORT
For the periods ended September 30
CGI GROUP INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(in thousands of dollars,except earnings per share)
Three months ended Year ended
September 30 September 30
1998 1997 1998 1997
Revenue $ 324,529 $ 72,419 $ 740,963 $ 231,916
Operating expenses
Direct costs,
selling and
administration
expenses 279,905 62,797 633,616 203,677
Research and
development 1,780 973 5,980 3,115
281,685 63,770 639,596 206,792
Operating earnings
(EBITDA) before: 42,844 8,649 101,367 25,124
Depreciation and
amortization of
fixed assets 7,005 1,522 16,851 3,583
Amortization of
costs related to
outsourcing
contracts 3,035 1,368 11,321 3,985
Amortization of
software and
development costs 818 271 2,105 591
Amortization of
goodwill 3,671 484 8,434 1,517
14,529 3,645 38,711 9,676
Earnings before the
following items 28,315 5,004 62,656 15,448
Interest
Long-term debt (250) (327) (816) (647)
Other 0 (294) (107) (908)
Revenue 1,987 - 1,987 -
1,737 (621) 1,064 (1,555)
Earnings before income
taxes, entity subject
to significant
influence and
non-cotrolling
interest 30,052 4,383 63,720 13,893
Income taxes 13,968 1,357 29,189 5,685
Earnings before
entity subject to
significant
influence and
non-cotrolling
interest 16,084 3,026 34,531 8,208
Entity subject to
significant
influence 44 - 44 (310)
Non-controlling
interest - (163) 253 (133)
Net earnings 16,128 2,863 34,828 7,765
Weighted average
number of outstanding
Class A subordinate
shares, Class B
shares and first
preferred shares,
Series 1 128,509,960 81,566,952 117,307,162 77,802,808
Earnings per share 0.13 0.04 0.30 0.10
-0-
CGI GROUP INC.
Consolidated balance sheets
as at September 30
(in thousands of dollars)
1998 1997
Assets
Current assets
Cash $ 121,418 $ -
Accounts receivable 184,566 54,924
Income taxes - 1,133
Work in progress 12,209 13,952
Prepaid expenses 10,716 3,402
328,909 73,411
Investment in an entity subject
to significant influence 621 -
Fixed assets 54,231 15,539
Costs related to outsourcing contracts 58,839 18,601
Software and development costs 1,874 3,979
Deferred income taxes 12,391 1,937
Goodwill 288,065 40,676
744,930 154,143
Liabilities
Current liabilities
Bank indebtedness - 14,822
Accounts payable and
accrued liabilities 213,912 33,032
Income taxes 26,395 -
Deferred revenues 11,313 -
Deferred income taxes 7,772 5,113
Current portion of long-term debt 5,561 3,509
264,953 56,476
Long-term debt 5,730 24,896
Non-controlling interest - 500
270,683 81,872
Shareholders' equity
Capital stock 418,772 51,624
Contributed surplus 211 211
Retained earnings 55,264 20,436
474,247 72,271
744,930 154,143
-0-
CGI GROUP INC.
Consolidated statements of changes in financial position
years ended September 30
(in thousands of dollars)
1998 1997
Operating activities
Net earnings $ 34,828 $ 7,765
Items not affecting cash
Depreciation and amortization
of fixed assets 16,851 3,583
Amortization of costs related
to outsourcing contracts 11,321 3,985
Amortization of software
and development costs 2,105 591
Amortization of goodwill 8,434 1,517
Deferred income taxes 2,526 3,883
Entity subject to significant
influence (44) 310
Non-controlling interest (253) 133
75,768 21,767
Changes in non-cash operating
working capital items 75,886 (13,353)
151,654 8,414
Financing activities
Issue of shares 367,148 23,717
Share issue expenses - -
Increase in long-term debt 6,479 22,640
Repayment of long-term debt (25,321) (3,107)
348,306 43,250
Investing activities
Business acquisitions (317,708) (43,684)
Investment in an entity subject
to significant influence upon
acquisition of control - 1,301
Investment in an entity subject
to significant influence (577) (44)
Acquisitions of fixed assets (25,481) (5,359)
Proceeds on disposal of fixed assets 1,334 73
Costs related to outsourcing
contracts (21,288) (10,115)
Software and development costs - -
(363,720) (57,828)
Net cash inflow (outflow) 136,240 (6,164)
Cash position at beginning (14,822) (8,658)
Cash position at end 121,418 (14,822)
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