CGI Group (ME, TSE: GIB.A; NYSE: 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. Revenue increased by 219% to $741.0 million in fiscal 1998, from $231.9 million in fiscal 1997. Earnings before interest, taxes, depreciation and amortization (EBITDA) increased 303% to $101.4 million in fiscal 1998 from $25.1 million in fiscal 1997, reflecting strong revenue growth and increasing operating margins. Net earnings increased 349% 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% higher than a year ago. Cash flow from operations increased 248% 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% from 3.3% the previous year, reflecting further efficiencies resulting from applying ISO 9001 certified business processes, synergies from the integration of acquisitions, and increasing economies of scale. In the fourth quarter ended September 30, 1998, revenue increased 348% to $324.5 million from $72.4 million in the same quarter of fiscal 1997, resulting in an annualized 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% 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 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 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 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 (GAAP), CGI reported earnings of $32.8 million or $0.28 per share in fiscal 1998. The variance 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, 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 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 and telecommunications sectors in the United Kingdom and other countries.
- In October 1998, listed its Class A subordinate voting shares on the New York Stock Exchange as part of its strategy to broaden its business and investor base, and to provide a local currency for acquisitions in the United States.
- 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 (ERP) systems.
CGI is the largest independent information technology consulting 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 (GIB.A). They are included in the Toronto Stock Exchange's TSE 300 Composite and TSE 200 indexes. 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 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. For further information, contact: André Imbeau Executive Vice-President & CFO Paule Doré Executive Vice-President, Corporate Affairs
