CGI continued to post strong revenue and earnings growth in the third quarter ended June 30, 1999. All dollar amounts are in Canadian dollars.
For the three months ended June 30, 1999, CGI reported a 117.0% increase in revenue to $342.3 million, compared with $157.8 million in the same quarter one year prior. Earnings before interest, taxes, depreciation and amortization (EBITDA) increased 140.8% to $56.5 million, from $23.4 million in 1998. Net earnings increased 184.0% to $21.7 million or $0.16 per share, from $7.7 million or $0.07 per share the previous year. The weighted average number of shares outstanding increased 16.8% to 134.2 million, compared with 114.9 million in the same period of 1998.
For the nine-month period ended June 30, 1999, CGI reported revenue of $1,015.5 million, up 143.8% over revenue of $416.4 million posted in the same period of 1998. EBITDA totalled $157.7 million, compared with $58.5 million in 1998, an increase of 169.5%. Net earnings increased 227.5% year over year to $61.2 million, up from $18.7 million in 1998. On a per share basis, reflecting a 19.6% increase in the weighted average number of shares outstanding to 133.9 million, net earnings were $0.46, compared with $0.17 one year ago. Cash flow from operations increased 132.4% to $106.4 million ($0.79 per share) in the first nine months of 1999, compared with $45.8 million ($0.41 per share) in 1998.
In the third quarter, the net profit margin increased to 6.4%, compared with 4.9% in the third quarter of 1998, as the Company continues to benefit from growing economies of scale and efficiencies realized through the application of ISO 9001 certified management frameworks.
"In the third quarter, we continued to achieve strong growth while increasing our net margin," said Serge Godin, Chairman and CEO of CGI. "We will concentrate on further consolidating our position as a leading IT services provider in North America and internationally and are confident that we will continue delivering strong long term growth. Our recent acquisition of DRT Systems International, which closed on July 1, 1999, represents a first step in this growth strategy."
In the third quarter and after, CGI finalized several transactions, including:
- May 19, 1999 - Closing of a ten-year, renewable agreement with BCE Mobile Communications Inc. (Bell Mobility), under which CGI will provide Bell Mobility with the wireless carrier's information technology services. The full IT outsourcing services agreement, effective May 1, 1999, is expected to generate $100 million for CGI in the first 12 months, with revenue totalling approximately $750 million over the ten-year term.
- July 1, 1999 - Acquisition of DRT Systems International from Deloitte Consulting, effective July 1, 1999. DRT Systems International has annual revenue approaching US$100 million and provides IT consulting services to clients in the U.S. and Canada.
- July 15, 1999 - Signing of a memorandum of understanding with Brazilian-based telephone services provider Mirror S.A., according to which CGI will provide Mirror S.A. with IS/IT systems integration services worth $57 million over a 12-month period.
Building U.S. base
CGI is committed to becoming a major IT services player in the U.S. market, where it plans to offer full IT services to its six key industry sectors. Last fall, as part of its strategy to increase its presence in the U.S. market, CGI listed its shares on the New York Stock Exchange. The recent acquisition of DRT Systems International provides CGI with a network of 12 additional offices, ten of which are in the U.S., and doubles its U.S. revenue base to 18% of its total revenue on a run-rate basis.
Evolution of revenue run-rate, backlog and cash position
CGI now has a revenue run-rate $1.5 billion and an order backlog of more than $7.5 billion. The Company also has proposals outstanding on potential large contracts with an estimated value of $4 billion. CGI has a cash position net of bank indebtness of $63.4 million.
Board appointment
The Chairman of the Board and CEO of CGI, Serge Godin, is pleased to announce the appointment of Mr. Thomas E. Kierans, President & CEO of the C.D. Howe Institute, and Mr. Yvan Allaire, Executive Vice President, Bombardier Inc. and Chairman of the Board of Bombardier Capital, to the Board of CGI. Their appointment, effective June 26, 1999, is in replacement of Mr. Keith Gray and Mr. John A. MacDonald, who have stepped down from the Board.
About CGI
CGI is the largest independent information technology consulting firm in Canada and the fifth largest in North America, based on its revenue run rate. CGI has 10,000 professionals and provides end-to-end IT services and business solutions to 2,000 clients in Canada, the United States and some 23 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 100 indexes. Web site: www.cgi.ca.
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.
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For information:
CGI
André Imbeau
Executive Vice-President and CFO
(514) 841-3200
Paule Doré
Executive Vice-President, Corporate Affairs
(514) 841-3200
