CGI (NYSE: GIB) (TSX: GIB.A) today announced higher-than-expected revenue generation by the California Franchise Tax Board (FTB) as a result of an ongoing modernization project supported by the company’s solutions and technology.
Surpassing an earlier target of $685 million, FTB revenue in 2015 reached $744 million, driven by the CGI-led Enterprise Data to Revenue (EDR) initiative that has generated $1.7 billion for the state since 2011. For the 2015 fiscal year which ended June 30, the total exceeded previous revenue targets by 8.6 percent, or $59 million.
“EDR’s results extend beyond its financial achievements,” said Cathy Cleek FTB’s CIO and Chief of their Technology Services Division. “Developed in tandem with our partner CGI, EDR is improving our ability to serve our customers, increasing the effectiveness of our enforcement abilities, building a stronger organization, and improving our operational excellence.”
“We are proud of our partnership with the Franchise Tax Board and the performance of our EDR solution, which has generated critical revenue for the State of California and the citizens it serves,” said CGI Senior Vice President Dave Delgado. “Through this vital modernization, the FTB will continue to benefit from an automated, web-based system that is the industry standard for government agencies across the country.”
Currently in year four of a multi-year contract with the FTB, CGI is on track to deploy solutions that will generate $2.9 billion for the state through December 2016. Culminating in the fundamental improvement of the Board’s customer service, revenue generation capacity and organizational transparency, improvements will include a simplified view of FTB folders and systems that enable taxpayer self-service, and strengthened data management and business rules management will support the accurate processing of more than 16 million personal income tax forms each year.
With CGI in the role of lead contractor, FTB modernization has consistently surpassed revenue projections. Just 15 months after work began, the project generated more than $128 million – 81 percent above target. In July 2014, EDR recoveries topped $1 billion, a milestone achieved 10 months ahead of schedule. When complete, EDR is expected to deliver revenue increases of $1 billion annually for the State of California.
Utilizing CGI’s unique and highly successful “benefits-funding” model, California’s FTB modernization is a fixed-price, performance-based project in which no monies are paid to CGI until state revenue is generated. In 2012, CGI received the Center for Digital Government “Best Fit Integrator” Performance and Modernization Award for its work on behalf of the FTB, and in 2014 it was announced that six U.S. states had certified more than $2 billion in additional revenues as a result of CGI-led collections and tax modernization projects.
“CGI’s innovative yet practical solutions are allowing state governments to become more responsive to their legislatures and other key constituencies,” said Delgado. “With improved workflows and greater system flexibility, state tax agencies are realizing their full potential in terms of revenue generation and taxpayer service.”
Founded in 1976, CGI Group Inc. is the fifth largest independent information technology and business process services firm in the world. Approximately 68,000 professionals serve thousands of global clients from offices and delivery centers across the Americas, Europe and Asia Pacific, leveraging a comprehensive portfolio of services including high-end business and IT consulting, systems integration, application development and maintenance, infrastructure management as well as a wide range of proprietary solutions. With annual revenue in excess of C$10 billion and an order backlog of approximately C$20 billion, CGI shares are listed on the TSX (GIB.A) and the NYSE (GIB).Website: www.cgi.com.
All statements in this press release that do not directly and exclusively relate to historical facts constitute “forward-looking statements” within the meaning of that term in Section 27A of the United States Securities Act of 1933, as amended, and Section 21E of the United States Securities Exchange Act of 1934, as amended, and are “forward-looking information” within the meaning of Canadian securities laws. These statements and this information represent CGI’s intentions, plans, expectations and beliefs, and are subject to risks, uncertainties and other factors, of which many are beyond the control of the Company. These factors could cause actual results to differ materially from such forward-looking statements or forward-looking information. These factors include but are not restricted to: the timing and size of new contracts; acquisitions and other corporate developments; the ability to attract and retain qualified members; market competition in the rapidly evolving IT industry; general economic and business conditions; foreign exchange and other risks identified in the press release, in CGI’s annual and quarterly Management’s Discussion and Analysis (“MD&A”), in CGI’s Annual Report, in CGI’s Annual Report on Form 40-F filed with the U.S. Securities and Exchange Commission (filed on EDGAR at www.sec.gov), and in the Company’s Annual Information Form filed with the Canadian securities authorities (filed on SEDAR at www.sedar.com), as well as assumptions regarding the foregoing. The words “believe,” “estimate,” “expect,” “intend,” “anticipate,” “foresee,” “plan,” and similar expressions and variations thereof, identify certain of such forward-looking statements or forward-looking information, which speak only as of the date on which they are made. In particular, statements relating to future performance are forward-looking statements and forward-looking information. CGI disclaims any intention or obligation to publicly update or revise any forward-looking statements or forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable law. Readers are cautioned not to place undue reliance on these forward-looking statements or on this forward-looking information.
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