CGI Reports Continued Strong Growth In The Third Quarter.MONTREAL--(BUSINESS WIRE)--Aug. 5, 1998--CGI Group Inc. (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.) Revenue increased by 123 percent, net earnings by 218 percent and cash flow by 156 percent 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. today announced continuing strong growth for the third quarter and nine months ended June June: see month. 30, 1998 compared with the same periods of fiscal 1997. In the third quarter of fiscal 1998, revenue increased by 123 percent to $157.8 million, net earnings by 218 percent to $7.7 million and cash flow by 156 percent to $16.7 million, compared with the same period a year ago. The net profit margin increased to 4.9 percent, from 3.4 percent a year ago. On a per share basis, reflecting a 47 percent increase in shares outstanding on a weighted average basis to 114.9 million, net earnings per share were 7 cents, compared with 3 cents the previous year. Cash flow was 14.5 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. vs 8 cents in the same period a year ago. The increase in revenue, earnings and cash flow reflects a balance of external and internal growth. Since March 1997, CGI has completed the acquisition of two major information technology (IT) services companies and has been awarded a number of major systems integration and 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. During the period, CGI further strengthened its position in its six target markets, in particular in 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 retail and distribution. For the nine months ended June 30, 1998, revenue increased by 161 percent to $416.4 million, net earnings by 281 percent to $18.7 million, and cash flow by 259 percent to $45.8 million. The net profit margin for the first nine months of fiscal 1998 was 4.5 percent compared with 3.1 percent in the same period of fiscal 1997. On a per share basis, reflecting a 48 percent increase in shares outstanding on a weighted average basis to 112.0 million, net earnings were 17 cents compared with 6 cents a year ago, and cash flow was 41 cents per share compared with 17 cents a year ago. Shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. increased 286 percent to $259.4 million from a year ago, reflecting higher retained earnings Retained Earnings The percentage of net earnings not paid out in dividends, but retained by the company to be reinvested in its core business or to pay debt. It is recorded under shareholders equity on the balance sheet. , and shares issued as part payment for acquisitions. The company has practically no debt and $20.3 million cash. "We continue to strengthen our position in our target markets and to further increase profitability," 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 Godin is a French surname, one that is especially common in French Canada. People with the surname Godin
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. to $6 billion with the completion of the multi-faceted transaction with BCE BCE abbr. 1. Bachelor of Chemical Engineering 2. Bachelor of Civil Engineering BCE Abbreviation for before the Common Era. Inc. and Bell Canada Bell Canada Enterprises (TSX: BCE, NYSE: BCE), legally BCE Inc., is a major Canadian telecommunications company. Through its subsidiaries including Bell Canada, Bell Aliant, Northwestel, Télébec, and NorthernTel, it is the incumbent local exchange carrier for . We are currently focused on successfully integrating the acquired operations while continuing to grow our business organically and through acquisitions." Third Quarter Highlights Bell Sygma SYGMA - A symbolic generator and macro assembler by A.P. Ershov et al of Novosibirsk. For the BESM-6, M-220 and Minsk-22. ["SYGMA, A Symbolic Generator and Macroassembler", A.P. Ershov et al, in Symbol Manipulation Languages and Techniques, D.G. Bobrow ed, N-H 1968, pp.226- 246]. Transaction Completed and Integration Underway On June 29, 1998, CGI shareholders approved changes enabling CGI's acquisition of Bell Sygma Telecom Solutions and Bell Sygma International operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. from Bell Canada in exchange for 17.2 million Series 6 preferred shares Preferred shares Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. of CGI at $11.49 per share, converted one-for-one into Class A subordinate shares. Concluded as of July 1, 1998, the transaction includes a 10-year outsourcing contract valued at more than $4.5 billion for CGI to develop and maintain Bell Canada's internal information systems. This is the largest outsourcing contract ever in Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of , and one of the largest 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. . CGI also acquired Bell Sygma International, with $80 million annual revenue. Additionally, CGI's partnership with Bell Canada to bid jointly on contracts was extended 10 years to 2008. The integration of Bell Sygma's operations is well underway and is proceeding smoothly. Over the course of numerous acquisitions in recent years, the Years, The the seven decades of Eleanor Pargiter’s life. [Br. Lit.: Benét, 1109] See : Time company has developed business processes which represent best practices in integrating the members and facilities that come with outsourcing contracts and corporate acquisitions. CGI has experienced a 100 percent renewal rate of contracts of acquired companies and a high retention rate of new members. Backlog Evolution The order backlog has increased from $1.3 billion in October 1997 to $1.5 billion at June 30, 1998 to more than $6 billion currently. New Contracts In June 1998, CGI entered into a five year partnership with ING Canada valued at $15 to $20 million, to provide consulting services Noun 1. consulting service - service provided by a professional advisor (e.g., a lawyer or doctor or CPA etc.) service - work done by one person or group that benefits another; "budget separately for goods and services" to support their competitive position in the Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. insurance market. In July 1998, CGI announced the renewal of its contract with Industrial-Alliance Group valued at $20 million over five years to operate and manage their IT environment. CGI announced a $20 million contract with the National Research Council (NRC NRC abbr. 1. National Research Council 2. Nuclear Regulatory Commission Noun 1. NRC - an independent federal agency created in 1974 to license and regulate nuclear power plants ) to implement and support the day to day operations of NRC's 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. system. CGI also announced a five-year agreement to provide electronic commerce and electronic funds transfer See EFT. (application, communications) electronic funds transfer - (EFT, EFTS, - system) Transfer of money initiated through electronic terminal, automated teller machine, computer, telephone, or magnetic tape. services to the Laurentian Bank of Canada The Laurentian Bank of Canada (Banque Laurentienne du Canada) TSX: LB is a Schedule I bank in the province of Quebec. (It also has one branch in Ottawa, Ontario). , estimated at $20 million. Corporate profile 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. It provides end-to-end end-to-end a pattern of anastomosis in which severed ends are matched and united, in contrast with other patterns such as end-to-side or side-to-side. Usually applied to anastomosis of the intestine. IT services and business solutions to some 2,000 clients in Canada, 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. and 20 countries around the world. CGI has more than 7,500 professionals, 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 more than $1.2 billion and an order backlog totalling approximately $6 billion. CGI's shares (GIB.A) are included in The Toronto Stock Exchange's TSE 300 Composite and TSE 200 indexes. Website address: www.cgi.ca. -0-
CGI GROUP INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(in thousands of dollars, except earnings per share) (unaudited)
Three months ended Nine months ended
June 30 June 30
1998 1997 1998 1997
---------------------------------------------------------------
$ $ $ $
Revenue 157,757 70,815 416,434 159,497
---------------------------------------------------------------
Operating expenses
Direct costs,
selling and
administration
expenses 132,688 61,705 353,711 140,880
Research and
development 1,624 917 4,200 2,142
Depreciation and
amortization of
fixed assets 3,556 1,395 9,846 2,061
Amortization of
costs related to
outsourcing
contracts 2,974 1,220 8,286 2,617
Amortization of
software and
development costs 649 107 1,287 320
Amortization of
goodwill 1,672 624 4,763 1,033
Interest on
long-term debt 202 259 566 320
Other interest
expenses 305 107 614
---------------------------------------------------------------
143,365 66,532 382,766 149,987
---------------------------------------------------------------
Earnings before
following items 14,392 4,283 33,668 9,510
Income taxes 6,735 1,869 15,221 4,328
---------------------------------------------------------------
Earnings before share
in the results of
an entity
subject to
significant
influence and
share
of non-controlling
interest 7,657 2,414 18,447 5,182
Share in the results
of an entity subject
to significant
influence - (37) - (310)
Share of non-controlling
interest - 30 253 30
---------------------------------------------------------------
Net earnings 7,657 2,407 18,700 4,902
---------------------------------------------------------------
Weighted average number
of outstanding Class A
subordinate shares,
Class B shares and
first preferred
shares 114,884,330 78,118,896 111,979,285 75,867,800
---------------------------------------------------------------
Earnings per Class A
subordinate share,
Class B and first
preferred share 0.07 0.03 0.17 0.06
---------------------------------------------------------------
CGI GROUP INC.
CONSOLIDATED BALANCE SHEETS
(in thousands of dollars) (unaudited)
As at June 30 1998 1997
---------------------------------------------------------------
$ $
Assets
---------------------------------------------------------------
Current assets
Cash and short-term investments 20,255 -
Accounts receivable 125,159 53,719
Work in progress 10,435 11,877
Prepaid expenses 6,210 2,425
--------------------------------------------------------------
162,059 68,021
Investment in an entity subject
to significant influence 579 -
Fixed assets 33,870 14,783
Costs related to outsourcing
contracts 33,026 13,279
Software and development costs 2,692 4,247
Deferred income taxes 11,734 2,055
Goodwill 124,876 42,121
--------------------------------------------------------------
368,836 144,506
--------------------------------------------------------------
CGI GROUP INC.
CONSOLIDATED BALANCE SHEETS
(in thousands of dollars) (unaudited)
As at June 30 1998 1997
---------------------------------------------------------------
$ $
Liabilities
--------------------------------------------------------------
Current liabilities
Bank indebtedness - 13,777
Accounts payable and accrued
liabilities 81,568 30,049
Deferred revenue - 817
Income taxes 9,664 279
Deferred income taxes 7,190 3,111
Current portion of long-term
debt 4,908 4,039
--------------------------------------------------------------
103,330 52,072
Long-term debt 6,062 24,820
Share of non-controlling interest - 456
--------------------------------------------------------------
109,392 77,348
--------------------------------------------------------------
Shareholders'equity
Capital stock 220,097 49,374
Contributed surplus 211 211
Retained earnings 39,136 17,573
--------------------------------------------------------------
259,444 67,158
--------------------------------------------------------------
368,836 144,506
--------------------------------------------------------------
CGI GROUP INC.
CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION
---------------------------------------------------------------
for the nine-month periods ended June 30
(in thousands of dollars) (unaudited)
1998 1997
--------------------------------------------------------------
$ $
Operating activities
Net earnings 18,700 4,902
Items not affecting cash
Depreciation and amortization
of fixed assets 9,846 2,061
Amortization of costs related
to outsourcing contracts 8,286 2,617
Amortization of software and
development costs 1,287 320
Amortization of goodwill 4,763 1,033
Deferred income taxes 3,164 1,547
Share in the results of an
entity subject to significant
influence - 310
Share of non-controlling
interest (253) (30)
---------------------------------------------------------------
45,793 12,760
Changes in non-cash working
capital items 1,082 (10,984)
---------------------------------------------------------------
46,875 1,776
---------------------------------------------------------------
Financing activities
Issue of shares 168,473 21,467
Increase in long-term debt 6,103 21,478
Repayment of long-term debt (24,174) (1,491)
---------------------------------------------------------------
150,402 41,454
---------------------------------------------------------------
Investing activities
Business acquisitions
(net of cash acquired) (129,043) (40,995)
Investment in an entity subject
to significant influence (577) (44)
Acquisitions of fixed assets (15,140) (3,029)
Proceeds on disposal of fixed
assets - 21
Costs related to outsourcing
contracts (17,440) (4,302)
---------------------------------------------------------------
(162,200) (48,349)
---------------------------------------------------------------
Increase(decrease)in cash
position 35,077 (5,119)
Cash position at beginning (14,822) (8,658)
---------------------------------------------------------------
Cash position at end 20,255 (13,777)
---------------------------------------------------------------
CONTACT: CGI Group Inc.
Andre Imbeau, 514/841-3200
or
CGI Group Inc.
Paule Dore, 514/841-3200
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