CGI Group Inc. (TSE: GIB.A; NYSE: GIB) announced today its financial results for the nine months and third quarter ended June 30, 2000. Results are in line with the pre-announcement of June 22, 2000. All figures are in Canadian dollars.
For the first nine months of the year, CGI recorded revenue of $1.1 billion, compared with $1.0 billion for the same period one year earlier. Revenue from projects related to the BCE Inc. group of companies amounted to $359 million or 32.2% of the total, compared with $392 million or 38.6% of the total a year ago.
Earnings before interest, taxes, depreciation and amortization (EBITDA) totalled $146.9 million, compared with $157.7 million in the first nine months of 1999. CGI recorded earnings before amortization of goodwill of $66.4 million, or $0.25 per share, compared with $72.6 million, or $0.27 per share, in the first nine months of fiscal 1999. Net earnings for the nine months totalled $53.2 million, or $0.20 per share, compared with $61.2 million, or $0.23 per share, the previous year.
For the three-month period ended June 30, 2000, CGI's revenue totalled $330.7 million, compared with $342.3 million in the third quarter a year ago. EBITDA in the third quarter was $28.9 million, compared with $56.5 million in 1999. Earnings before amortization of goodwill for the period were $11.3 million, or $0.04 per share, compared with $25.6 million, or $0.10 per share, a year ago. Net earnings were $6.9 million, or $0.03 per share on a fully diluted basis, compared with $21.7 million, or $0.08 per share fully diluted, in the third quarter of fiscal 1999.
During the quarter, CGI signed $100 million in new contracts. As of the third quarter, CGI's e-business revenue has grown to 25% of total revenue and represents $330 million on an annualized basis. Today, most of CGI's new projects have an e-business component. The Company's order backlog totalled $7.0 billion at June 30, 2000, compared with $7.2 billion at March 31, 2000.
The Company's balance sheet remains strong, with cash and cash equivalents of $33.3 million and working capital of $180.3 million.
"During the third quarter, we have been supporting some of our key clients in their cost reduction programs," said Serge Godin, chairman and CEO of CGI. "As part of the normal course of business for outsourcing contracts, we commit to helping our clients reduce their IT costs. Normally, this reduction is offset by the signing of additional new business with other clients. In the third quarter, however, CGI did not sign large IT outsourcing contracts because of delays in the awarding of contracts in the industry, and this has impacted our results," he added.
"But while experiencing delays in IT systems integration and consulting work, CGI continues to sign a growing number of e-business projects," said Mr. Godin. "Also, the need for major IT services in our targeted economic sectors should translate into solid demand in fiscal 2001. The North American IT industry seems to be resuming growth and we are confident of realizing part of our $4 billion in proposals outstanding over the mid-term," he added.
CGI's $50 million e-business strategic investment program is already generating new contracts. For example, CGI recently signed application service provider (ASP) contracts using an SAP platform. Also, the Company has submitted several bids to clients for Internet Data Centre (IDC) services that include a Web-hosting, database management and call centre offering. The Company's technology infrastructure provides it with a competitive edge in this area.
Founded in 1976, CGI is the largest Canadian information technology consulting firm and the fifth largest independent in North America, based on its revenue run rate of CDN$1.3 billion. CGI's order backlog totals CDN$7.0 billion. CGI has 9,000 professionals and provides end-to-end IT services and business solutions to 2,500 clients in Canada, the United States and more than 23 countries around the world. CGI's shares are listed on the New York Stock Exchange (GIB), as well as on the Toronto Stock Exchange (GIB.A). The Company is included in the TSE 300 Composite and TSE 100 indices. 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 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.
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For more information:
CGI
André Imbeau
Executive Vice-President and CFO
Paule Doré
Executive Vice-President, Corporate Affairs
(514) 841-3200
