COGNICASE Comments on Fourth Quarter Results.

Business Editors

MONTREAL--(BUSINESS WIRE)--Oct. 20, 2000

COGNICASE Inc. (Nasdaq:COGI) (TSE:COG.) today commented on its results for the fourth quarter and fiscal year ended September 30, 2000.

Final results are scheduled for release on November 27, 2000.

Fourth quarter 2000 revenues are expected to be in the range of US$54.0-56.0 million, compared to US$37.9 million in the corresponding 1999 period. Cash loss, which excludes foreign exchange gains/losses and goodwill amortization, should be in the range of US$0.08-11 per share fully diluted, compared to cash earnings of US$0.30 per share on a fully diluted basis in the fourth quarter of last year.

For fiscal 2000, the Company expects revenues of US$192.0-194.0 million, compared to US$144.9 million in fiscal 1999. Cash earnings, which exclude foreign exchange gains/losses and goodwill amortization, should be in the US$0.18-21 per share range, compared to US$1.18 per share in 1999.

While revenues increased 33-34% year-over-year and 11-15% sequentially from the third quarter of fiscal 2000, this rate of growth is somewhat below expectations. This revenue shortfall is the main reason for the cash loss in the fourth quarter. The Company has also maintained a high level of investment in R&D, as well as in business development related to its growing e-business integration units and Wireless/Internet initiatives.

The Company attributes the revenue shortfall to tighter demand in the Canadian market and delays in finalizing contracts. In addition, since the Company reports in US dollars, the weakness of the euro has also reduced reported revenues.

Outlook for Fiscal 2001

"Based on current market conditions, we expect a solid first quarter to start fiscal 2001," said Ronald Brisebois, President and Chief Executive Officer. "We are currently operating at high utilization rates and our e-business units are building strong growth momentum. These business units should continue to contribute an increasing proportion of our revenues in the coming quarters."

"We will also benefit from our strategic partnership with National Bank of Canada, a relationship that provides COGNICASE with a firm revenue backlog and excellent opportunities for additional business." Mr. Brisebois noted that the integration of the Bank's former information technology subsidiary has been completed and that business development synergies will be reflected in future quarters.

"Based on current trends in our business and our assumptions for the year as a whole, we are optimistic that the Company will continue to achieve sequential revenue growth in fiscal 2001," concluded Mr. Brisebois.

Conference Call

COGNICASE will host a conference call at 12:00 p.m. EST  today.

About COGNICASE

COGNICASE (TSE : "COG", Nasdaq : "COGI" ) is an innovative e-business integrator and Wireless/Internet electronic solutions provider, with offices in several major North American and European business centers. Based on its results-driven approach, technologies, international IT engineering/hosting center, COGNICASE offers innovative solutions that contribute to the business success of its customers in the digital economy. COGNICASE consists of the following three business units: Outsourcing and Integration, Web and Wireless Integration and Electronic Business Solutions. COGNICASE operates in several countries, including Canada, the United States, France, Spain, Belgium, the Netherlands and Australia.

Forward-looking statements 

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (US), which involve risks and uncertainties. As a result of a number of factors, including factors that the Company may not currently foresee, the Company's actual results could differ materially from those set forth in the forward-looking statements.

Certain other factors that might cause the Company's actual results to differ materially from the forward-looking statements include the Company's ability to (i) successfully develop additional products and services and new applications for its existing products and services and otherwise respond to rapid changes in technology, (ii) successfully compete in its industry for customers and developers and other personnel with expertise in information technology, (iii) successfully identify and consummate acquisitions on favorable terms and integrate acquired businesses, (iv) successfully manage its growth and changing business, (v) be awarded contracts under its IS/IT and Preferred Supplier Agreement with the National Bank of Canada, as well as other risks and uncertainties set forth under the heading "Risk and Risk Management" in its 1999 annual report.