COGNICASE Reports 33% Revenue Increase for Fiscal 2000.Business Editors MONTREAL--(BUSINESS WIRE)--Nov. 27, 2000 Fourth Quarter Revenues Up 42% Year-Over-Year COGNICASE Inc. (Nasdaq:COGI COGI Coalition on Government Information (also known as the Minnesota Coalition on Government Information, or MNCOGI; promotes open access to public records) )(TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :COG.) announced today its financial results for the fourth quarter and fiscal year ended September September: see month. 30, 2000. Revenues increased 33% to US$192.1 million for fiscal year 2000 compared to US$144.9 million for fiscal 1999. Cash earnings (excluding foreign exchange losses and goodwill amortization) were US$3.0 million (US$0.15 per share fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. ) for fiscal 2000 compared to US$17.5 million (US$1.18 per share) for the previous year. For the fourth quarter of fiscal 2000, revenues increased 42% to $53.9 million compared to $37.9 million for the same 1999 period. Cash loss (excluding foreign exchange losses and goodwill amortization) was US$2.0 million (US$0.08 per share) compared to cash earnings of US$4.7 million (US$0.30 per share) for the same period last year. As previously announced, fourth quarter revenues were affected by tighter market conditions 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 delays in finalizing contracts. In addition, since the Company reports in US dollars, the weakness of the euro reduced reported revenues. Furthermore, throughout fiscal 2000, the Company maintained a high level of investment in R&D, which increased by more than 2.5 times to $8.8 million in fiscal 2000, and in business development related to its growing e-business (Electronic-BUSINESS) Doing business online. The term is often used synonymously with e-commerce, but e-business is more of an umbrella term for having a presence on the Web. integration units and Wireless/Internet initiatives. "During the past year, we have successfully established COGNICASE as a leading e-business integrator (1) In electronics, a device that combines an input with a variable, such as time, and provides an analog output; for example, a watt-hour meter. (2) See systems integrator. and provider of innovative Wireless/Internet solutions, two rapidly-growing areas worldwide," said Ronald Brisebois, President and Chief Executive Officer. "Among significant e-business projects, the Company has completed the development and implementation of one of the largest transactional Web sites in Canada for the Societe des alcools du Quebec Quebec, city, Canada Quebec, Fr. Québec, city (1991 pop. 167,517), provincial capital, S Que., Canada, at the confluence of the St. Lawrence and St. Charles rivers. ." Added Mr. Brisebois: "Through focused R&D investment, we have developed breakthrough technology - called Watch4me - that allows the delivery of personalized per·son·al·ize tr.v. per·son·al·ized, per·son·al·iz·ing, per·son·al·iz·es 1. To take (a general remark or characterization) in a personal manner. 2. To attribute human or personal qualities to; personify. electronic information services See Information Systems. and transactions on demand through Internet-enabled devices. Response to Watch4me technology has been enthusiastic from financial institutions and potential licensees."
Financial Highlights
(US$000 except EPS)
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Twelve months ended September 30, 2000
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Outsour- W/W
cing & Integra- E-
Integra- tion Commerce Consoli-
tion (CII) (CIT) Adj. dated
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Revenues 151,690 10,031 30,351 - 192,072
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Earnings from
Operations (1) 11,185 (1,631) (403) (1,101) 8,050
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Cash Net
Earnings (2) 7,418 (1,761) (1,667) (1,029) 2,961
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Cash EPS (2) 0.37 (0.09) (0.08) (0.05) 0.15
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Twelve months ended September 30, 1999
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Outsour- W/W
cing & Integra- E-
Integra- tion Commerce Consoli-
tion (CII) (CIT) Adj. dated
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Revenues 128,218 671 16,028 - 144,917
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Earnings from
Operations (1) 27,719 30 4,273 (2,850) 29,172
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Cash Net
Earnings (2) 16,908 21 2,378 (1,826) 17,481
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Cash EPS (2) 1.14 0.00 0.16 (0.12) 1.18
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Three months ended September 30, 2000
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Outsour- W/W
cing & Integra- E-
Integra- tion Commerce Consoli-
tion (CII) (CIT) Adj. dated
---------------------------------------------------------------------
Revenues 37,937 3,860 12,062 - 53,859
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Earnings from
Operations (1) 22 (1,854) 1,499 (589) (922)
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Cash Net
Earnings (Loss) (2) (771) (1,876) 1,092 (475) (2,030)
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Cash EPS (2) (0.03) (0.07) 0.04 (0.02) (0.08)
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Three months ended September 30, 1999
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Outsour- W/W
cing & Integra- E-
Integra- tion Commerce Consoli-
tion (CII) (CIT) Adj. dated
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Revenues 33,159 671 4,043 - 37,873
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Earnings from
Operations (1) 6,843 30 353 731 7,957
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Cash Net
Earnings (Loss) (2) 3,767 21 428 464 4,680
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Cash EPS (2) 0.24 0.00 0.03 0.03 0.30
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(1) Before amortization of capital assets
(2) U.S. GAAP, fully diluted, excluding FX losses and
amortization of goodwill
Outlook For fiscal 2001 as a whole, the Company has a firm revenue 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. under its strategic partnership with National Bank of Canada This article is about a commercial bank. For Canada's central bank, see Bank of Canada. National Bank of Canada (Banque Nationale du Canada) TSX: NA is the sixth largest bank in Canada, and so is one of the Big Six banks. and excellent prospects in e-business. Management is targeting revenue growth from current operations of 25-35% over fiscal 2000. "COGNICASE is now recognized as an 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. e-solutions provider, from digital strategy development all the way to Web and Wireless integration. The significant R&D investment we made in fiscal 2000 has allowed us to develop a powerful core technology that differentiates our capabilities and provides an important competitive edge. We have the tools and infrastructure to successfully undertake the largest Web projects and we will increasingly leverage our position in this rapidly growing market," concluded Mr. Brisebois. Conference Call COGNICASE will host a conference call at 10:00 a.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT today. About COGNICASE COGNICASE (TSE: "COG", Nasdaq: "COGI") is an innovative company specialized spe·cial·ize v. spe·cial·ized, spe·cial·iz·ing, spe·cial·iz·es v.intr. 1. To pursue a special activity, occupation, or field of study. 2. in the development and integration of e-commerce e-commerce, commerce conducted over the Internet, most often via the World Wide Web. E-commerce can apply to purchases made through the Web or to business-to-business activities such as inventory transfers. solutions using the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the and Wireless technologies. Based on its results-driven approach, software and technologies, as well as its international Internet engineering A person responsible for developing and maintaining the infrastructure that supports the public Web site, intranet and associated LANs and WANs. May be involved in developing transaction-based applications for e-commerce. See e-commerce engineer. , ASP asp, popular name for several species of viper, one of which, the European asp (Vipera aspis), is native to S Europe. It is also a name for the Egyptian cobra (Naja haja). applications development and IT hosting centre, COGNICASE offers innovative solutions that contribute to the business success of its customers in the digital economy. The Company is active in several countries, including 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. , France, Spain Spain, Span. España (āspä`nyä), officially Kingdom of Spain, constitutional monarchy (2005 est. pop. 40,341,000), 194,884 sq mi (504,750 sq km), including the Balearic and Canary islands, SW Europe. , Belgium Belgium (bĕl`jəm), Du. België, Fr. La Belgique, officially Kingdom of Belgium, constitutional kingdom (2005 est. pop. 10,364,000), 11,781 sq mi (30,513 sq km), NW Europe. , the Netherlands Netherlands (nĕth`ərləndz), Du. Nederland or Koninkrijk der Nederlanden, officially Kingdom of the Netherlands, constitutional monarchy (2005 est. pop. 16,407,000), 15,963 sq mi (41,344 sq km), NW Europe. and Australia Australia (ôstrāl`yə), smallest continent, between the Indian and Pacific oceans. With the island state of Tasmania to the south, the continent makes up the Commonwealth of Australia, a federal parliamentary state (2005 est. pop. . Forward-Looking Statement forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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 fore·see tr.v. fore·saw , fore·seen , fore·see·ing, fore·sees To see or know beforehand: foresaw the rapid increase in unemployment. , 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 To carry into completion; to fulfill; to accomplish. A Common-Law Marriage is consummated when the parties live in a manner intended to bring about public recognition of their relationship as Husband and Wife. acquisitions on favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. 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.
COGNICASE Inc.
Consolidated Statements of Earnings
(In thousands of U.S. dollars, except share and per share data)
Three Three
Year Year Months Months
Ended Ended Ended Ended
September September September September
30 2000 30 1999 30 2000 30 1999
---------------------------------------------------------------------
(Unaudited) (Unaudited) (Unaudited)
Revenues $192,072 $144,917 $53,859 $37,873
-------- -------- ------- -------
Operating expenses
Direct costs and
selling and admi-
nistrative expenses 175,255 112,425 52,759 29,787
Research and deve-
lopment - net of
tax credits 8,767 3,320 2,022 129
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Total operating
expenses 184,022 115,745 54,781 29,916
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Earnings (loss) from
operations before
the undernoted 8,050 29,172 (922) 7,957
------ ------ ------ ------
Financial expenses (income) 72 (974) (64) (463)
Loss (gain) on foreign
exchange 1,143 1,195 326 (400)
Other expenses (income) (52) 129 (93) 125
Amortization of capital
assets and other long
term assets 3,460 2,507 833 942
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4,623 2,857 1,002 204
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Earnings (loss) before
income taxes and
amortization of goodwill 3,427 26,315 (1,924) 7,753
Provision for income
taxes 1,208 9,593 188 2,813
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Earnings (loss) before
amortization of goodwill 2,219 16,722 (2,112) 4,940
Amortization of goodwill
(net of taxes of 480;
0 in 1999) 10,007 3,423 2,895 1,003
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Net earnings (loss) $(7,788) $13,299 $(5,007) $3,937
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Net earnings (loss) per share, excluding net impact of loss (gain) on
foreign exchange and amorti- zation of goodwill (US
GAAP - in US dollars) $0.15 $1.18 $(0.08) $0.30
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Net earnings (loss) per
share (in U.S. dollars)
CDN GAAP:
---------
Basic $(0.41) $0.93 $(0.20) $0.26
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Fully diluted $(0.41) $0.87 $(0.20) $0.24
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U.S. GAAP:
----------
Basic $(0.44) $0.93 $(0.22) $0.26
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Fully diluted $(0.44) $0.90 $(0.22) $0.25
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Weighted average number
of shares outstanding
CDN GAAP:
---------
Basic 19,172,817 14,375,498 25,480,014 15,377,200
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Fully diluted 20,871,015 15,835,368 27,178,212 16,837,070
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U.S. GAAP:
----------
Basic 19,172,817 14,375,498 25,480,014 15,377,200
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Fully diluted 19,645,574 14,795,831 25,746,813 15,600,816
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COGNICASE Inc.
Consolidated Balance Sheets
(In thousands of U.S. dollars)
September September
30 2000 30 1999
---------------------------------------------------------------------
(Unaudited)
ASSETS
Current assets
Cash and cash equivalents $11,540 $8,290
Accounts receivable 46,028 39,551
Work in process 9,920 6,283
Income taxes receivable 10,528 -
Tax credits receivable 3,437 6,470
Prepaid expenses 2,073 785
Future income taxes 797 279
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84,323 61,658
Capital assets 14,233 6,416
Future income taxes - 2,379
Investments, at cost 8,663 208
Goodwill 233,604 104,300
Other long term assets 6,185 211
---------------------------------------------------------------------
$347,008 $175,172
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LIABILITIES
Current liabilities
Bank advances $865 $-
Accounts payable and accruals 37,696 27,786
Income taxes payable - 328
Deferred revenue 4,066 3,540
Current portion of long-term debt 1,567 1,286
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44,194 32,940
Long-term debt 740 597
Future income taxes 132 -
Non-controlling interests 785 -
---------------------------------------------------------------------
45,851 33,537
------ ------
SHAREHOLDERS' EQUITY
Capital stock 295,568 121,903
Retained earnings 16,034 23,822
Cumulative translation adjustment (10,445) (4,090)
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301,157 141,635
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$347,008 $175,172
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COGNICASE Inc.
Consolidated Statements of Cash Flows
(In thousands of U.S. dollars)
Three Three
Year Year Months Months
Ended Ended Ended Ended
September September September September
30 2000 30 1999 30 2000 30 1999
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(Unaudited) (Unaudited) (Unaudited)
CASH FLOWS FROM
OPERATING ACTIVITIES
Net earnings (loss) $(7,788) $13,299 $(5,007) $3,937
Adjustments for:
Loss on disposal of
capital assets 122 129 83 125
Amortization of
capital assets and
other long term assets 3,460 2,507 833 942
Amortization of
goodwill 10,487 3,423 3,015 1,003
Future income taxes 1,806 4,033 793 2,947
Share of earnings from
a company subject
to significant
influence 10 - 10 -
Non controlling
interests (184) - (185) -
Decrease (increase)
in assets:
Accounts receivable 5,017 6,323 2,096 10,630
Income taxes recei-
vable (8,398) - (2,952) -
Tax credits
receivable 3,324 (5,428) 4,962 (3,217)
Work in process and
prepaid expenses (3,352) (3,585) (2,807) (1,101)
Increase (decrease) in
liabilities:
Accounts payable and
accrued liabilities (5,358) (9,194) (5,777) (5,015)
Income taxes payable (449) (3,688) (100) (3,528)
Deferred revenue (652) (1,956) 563 (528)
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Net cash flows from
(used in) operating
activities (1,955) 5,863 (4,473) 6,195
------- ----- ------- -----
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchase of capital
assets (6,153) (2,788) (2,758) (1,242)
Proceeds on disposal of
capital assets 177 40 165 (61)
Business acquisitions -
net of cash and cash
equivalents acquired (4,133) (56,272) (73) (25,926)
Investments (1,378) - (542) -
Other 99 2,373 72 1,069
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Net cash flows used in
investing activities (11,388) (56,647) (3,136) (26,160)
-------- -------- ------- --------
CASH FLOWS FROM FINANCING
ACTIVITIES
Repayment of bank
advances (838) (2,684) (773) (1,915)
Repayment of long-term
debt (1,940) (3,308) (829) (1,361)
Issuance of capital
stock 19,190 50,795 564 455
Expenditures related
to issuance of capital
stock - (2,367) - (177)
Other - (174) - (174)
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Net cash flows from
(used in) financing
activities 16,412 42,262 (1,038) (3,172)
---------------------------------------------------------------------
Increase (decrease) in
cash and cash
equivalents 3,069 (8,522) (8,647) (23,137)
Effect of exchange rate
changes on cash and
cash equivalents 181 (2,162) 1,100 5
Cash and cash equivalents
- beginning of period 8,290 18,974 19,087 31,422
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Cash and cash equivalents
- end of period $11,540 $8,290 $11,540 $8,290
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COGNICASE Inc.
Notes to consolidated financial statements
Note 1: Outstanding shares data
-------------------------------
As of November 21, 2000 the Company had 25 955 200 common share
and 1 719 762 options outstanding.
Note 2: Goodwill
----------------
Effective June 1, 2000, goodwill amortization includes goodwill
resulting from the acquisition of the National Bank of Canada IT
business.
Effective April 1, 2000, the Company reassessed the expected
useful life of goodwill related to certain acquisitions to a straight
line basis over five years. Goodwill was previously amortized on a
straight line basis over 20 years.
Note 3: Segmented information
-----------------------------
(In thousands of US dollars, except per share data)
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Year ended September 30, 2000
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Outsour-
cing &
Integra CII CIT Consoli-
tion (W/W (e-commerce) dation Consoli-
* ** *** Entries dated
---------------------------------------------------------------------
Revenues 151,690 10,031 30,351 - 192,072
---------------------------------------------------------------------
Earnings (loss)
from Operations
(1) 11,185 (1,631) (403) (1,101) 8,050
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Cash Net Earnings
(Loss) (2) 7,418 (1,761) (1,667) (1,029) 2,961
---------------------------------------------------------------------
Cash EPS (3) 0.37 (0.09) (0.08) (0.05) 0.15
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Year ended September 30, 1999
---------------------------------------------------------------------
Outsour-
cing &
Integra CII CIT Consoli-
tion (W/W (e-commerce) dation Consoli-
* ** *** Entries dated
---------------------------------------------------------------------
Revenues 128,218 671 16,028 - 144,917
---------------------------------------------------------------------
Earnings (loss)
from Operations
(1) 27,719 30 4,273 (2,850) 29,172
---------------------------------------------------------------------
Cash Net Earnings
(Loss) (2) 16,908 21 2,378 (1,826) 17,481
---------------------------------------------------------------------
Cash EPS (3) 1.14 0.00 0.16 (0.12) 1.18
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Three months ended September 30, 2000
---------------------------------------------------------------------
Outsour-
cing &
Integra CII CIT Consoli-
tion (W/W (e-commerce) dation Consoli-
* ** *** Entries dated
---------------------------------------------------------------------
Revenues 37,937 3,860 12,062 - 53,859
---------------------------------------------------------------------
Earnings (loss)
from Operations
(1) 22 (1,854) 1,499 (589) (922)
---------------------------------------------------------------------
Cash Net Earnings
(Loss) (2) (771) (1,876) 1,092 (475) (2,030)
---------------------------------------------------------------------
Cash EPS (3) (0.03) (0.07) 0.04 (0.02) (0.08)
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Three months ended September 30, 1999
---------------------------------------------------------------------
Outsour-
cing &
Integra CII CIT Consoli-
tion (W/W (e-commerce) dation Consoli-
* ** *** Entries dated
---------------------------------------------------------------------
Revenues 33,159 671 4,043 - 37,873
---------------------------------------------------------------------
Earnings (loss)
from Operations
(1) 6,843 30 353 731 7,957
---------------------------------------------------------------------
Cash Net Earnings
(Loss) (2) 3,767 21 428 464 4,680
---------------------------------------------------------------------
Cash EPS (3) 0.24 0.00 0.03 0.03 0.30
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(1) Earnings (loss) from operations before amortization of capital
assets.
(2 Net earnings excluding loss (gain) on foreign exchange and
amortization of goodwill.
(3) In US dollars, fully diluted, calculated on weighted average
number of shares outstanding as per US GAAP.
(4) On October 1, 1999, the Company reorganized its corporate
structure and segmented its activities in three principal business
sectors. Therefore, management identified three reportable
segments, being Outsourcing & Integration, COGNICASE Internet
Innovations ("CII") anc COGNICASE Internet Technologies ("CIT").
Consequently, comparative figures have been reclassified in order
to comply with this new reporting basis.
* Outsourcing & Integration includes project management and
consulting services in the areas of business process improvement,
re-engineering, systems integration, as well as IT outsourcing and
training.
** CII is an e-Business unit which focuses on providing Web and
Wireless solutions and services ("W/W Integration") as well as
creating and promoting new Internet companies. It includes
interactive integration, portal hosting and security and portal
performance management.
*** CIT is an e-Business unit which comprises COGNICASE's e-commerce
business and software assets related to the Internet and
artificial intelligence. It includes electronic transaction
processing solutions and services, personalized software, Internet
catalog software and e-services Internet applications.
Note 4: Comparative figures
----------------------------
Certain comparative figures have been reclassified in order to
comply with the new basis of presentation.
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