CGI Finishes the Last Quarter of Fiscal 2006 with Strong Earnings Performance
November 14 2006 - 7:30AM
PR Newswire (US)
Stock Market Symbols GIB.A (TSX) GIB (NYSE) MONTREAL, Nov. 14
/PRNewswire-FirstCall/ -- CGI Group Inc. (TSX: GIB.A; NYSE: GIB)
reported fiscal 2006 revenue today of $3.48 billion. This is $208
million lower than fiscal 2005, driven by the negative impact of a
strengthening Canadian dollar ($106.4 million) as well as lower BCE
work volumes ($114.7 million). For the same period, net earnings
from continuing operations were $191.3 million before restructuring
costs or 5.5% of revenue. This compares with $219.7 million in
fiscal 2005, for a net earnings margin of 6.0%. On an earnings per
share basis, before restructuring costs, EPS was 53 cents from
continuing operations compared with 50 cents in fiscal 2005. Net
earnings, including $67.3 million in pre-tax restructuring costs
related to specific items, were $146.5 million in fiscal 2006. This
compares with net earnings of $216.5 million in 2005. On an
earnings per share basis, EPS was 40 cents in fiscal 2006 compared
with 49 cents in fiscal 2005. The Company repurchased more than
$900 million of its own stock during fiscal 2006, reducing the
number of outstanding shares by nearly 25%. In addition, long-term
debt was reduced by $174 million from its peak in January, 2006.
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In $ millions except margin and share data amounts Q4-2006 FY2006
Q4-2005 FY2005
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Revenue $ 845.8 $ 3,477.6 $ 904.8 $ 3,686.0
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Currency impact (y-o-y) ($ 22.9) ($ 106.4)
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Net earnings from continuing operations before restructuring costs
related to specific items $ 53.1 $ 191.3 $ 56.4 $ 219.7
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Margin 6.3% 5.5% 6.2% 6.0%
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Basic and diluted earnings per share from continuing operations
before restructuring costs related to specific items $ 0.16 $ 0.53
$ 0.13 $ 0.50
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Restructuring costs related to specific items $ 13.6 $ 44.8 - -
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Net earnings from continuing operations $ 39.5 $ 146.5 $ 56.4 $
219.7 Margin 4.7% 4.2% 6.2% 6.0%
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Basic and diluted earnings per share from continuing operations $
0.12 $ 0.40 $ 0.13 $ 0.50
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Weighted average number of outstanding shares 336,941,173
362,783,618 433,788,490 439,349,210
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Number of shares outstanding at end of period 331,693,044
331,693,044 431,220,497 431,220,497
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Total long-term debt $ 813.3 $ 249.7
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Interest on long-term debt $ 13.4 $ 43.3 $ 4.8 $ 24.0
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Net debt to capitalization 27.2% 0.3%
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Days of sales outstanding (DSO) 52 48
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Order backlog $ 12,722 $ 12,863 Note: Complete audited 2006 Annual
Financial Statements are available on http://www.cgi.com/ and will
be filed with both SEDAR and EDGAR by end of day. All dollar
figures are in Canadian dollars, unless otherwise specified.
"Overall, 2006 was a year of repositioning for our next wave of
growth," said Michael E. Roach, President and Chief Executive
Officer. "Despite the revenue challenges posed by the continued
strength of the Canadian dollar as well as the reduction in BCE
work volumes, we kept focused on the fundamentals, gradually
improving our bottom line throughout the year and finishing 2006
with Q4 profit margins among the industry leaders." "We remain
focused on driving our full offering strategy, systematically
meeting existing clients and targeting new ones, cross-selling and
introducing our capabilities in business transformation, allowing
our clients to benefit from state-of-the-art technologies,
practices and solutions," added Roach. "To date, we have
successfully renewed contracts ahead of schedule with some clients
and added new services to others. Moving into 2007, we're
well-positioned for profitable growth, given our stable revenue
foundation, supported by a deep backlog and healthy sales funnel."
Fourth Quarter 2006 Results The fourth quarter of 2006 was focused
on improving profitability as outlined in the competitive position
strengthening program announced on March 29, 2006. Accordingly, a
pre-tax charge totaling $20.9 million was taken in the fourth
quarter. As previously announced the Company expects the remaining
cost of completing the program by the end of the first quarter of
fiscal 2007 to be approximately $23 million. Revenue in the fourth
quarter was lower compared with the fourth quarter of 2005 due to a
decrease in revenue from one of the company's largest customers,
BCE, as well as the negative impact of currency. The impact of
currency compared with the fourth quarter of 2005 was $22.9 million
while BCE work volumes were $40.9 million lower than Q4 2005. On a
sequential basis, BCE work volumes were flat compared with the
third quarter of 2006. In the fourth quarter, the Company reported
net earnings of $53.1 million before restructuring costs or a
margin of 6.3%. This compares with net earnings of $56.4 million
before restructuring costs in the fourth quarter of 2005 for a
margin of 6.2%, $46.4 million for a 5.4% margin in the third
quarter of 2006 and from a low of $34.8 million or 4.0% of revenue
in the second quarter of 2006. Earnings per share before
restructuring costs were 16 cents per share in the fourth quarter,
compared with 13 cents per share in the fourth quarter of 2005 and
14 cents per share in the third quarter of 2006, representing
improvements of 23% and 14%, respectively. Net earnings were $39.5
million or 12 cents per share for the fourth quarter. This compares
with $55.8 million or 13 cents a share in the fourth quarter of
2005 and $35.9 million or 11 cents a share in the third quarter of
2006. In the fourth quarter, the Company generated $54.4 million in
cash from operating activities and ended fiscal 2006 with long-term
debt of $813.3 million and $115.7 million in cash and cash
equivalents on hand, for a net debt of $697.6 million. During the
quarter, as part of its Normal Course Issuer Bid, the Company
repurchased 8.4 million shares for an investment of $59.6 million.
"We maintain our long-term commitment to maximize shareholder value
by using our cash to fuel profitable growth, reduce debt and buy
back shares," concluded Roach. Quarterly Conference Call Senior
management will host a conference call to discuss results at 8:30
am Eastern time this morning. Participants may access the call by
dialing (866) 542-4236 or on the Web at http://www.cgi.com/.
Supporting slides for the call will also be available. For those
unable to participate on the live call, a webcast and copy of the
slides will be archived at http://www.cgi.com/. Use of Non-GAAP
Financial Information CGI reports its financial results in
accordance with GAAP. However, management believes that certain
non-GAAP measures provide useful information to investors regarding
the Company's financial condition and results of operations as they
provide additional measures of its performance. Explanations as
well as a reconciliation of these non-GAAP measures with GAAP
financial statements are provided in the MD&A which is posted
on CGI's website, and filed with SEDAR and EDGAR. About CGI Founded
in 1976, CGI Group Inc. is one of the largest independent
information technology and business process services firms in the
world. CGI and its affiliated companies employ approximately 24,500
professionals. CGI provides end-to-end IT and business process
services to clients worldwide from offices in Canada, the United
States, Europe, Asia Pacific as well as from centers of excellence
in North America, Europe and India. CGI's fiscal 2006 revenue was
$3.5 billion (US$3.1 billion) and at September 30, 2006, CGI's
order backlog was $12.7 billion (US$11.3 billion). CGI shares are
listed on the TSX (GIB.A) and the NYSE (GIB) and are included in
the S&P/TSX Composite Index as well as the S&P/TSX Capped
Information Technology and MidCap Indices. Website:
http://www.cgi.com/. Forward-Looking Statements 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 sections 138.3
and following of the Ontario Securities Act. 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 and 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 information technology industry; general
economic and business conditions, foreign exchange and other risks
identified in the MD&A, in CGI's Annual Report or Form 40-F
filed with the U.S. Securities and Exchange Commission (filed on
EDGAR at http://www.sec.gov/), the Company's Annual Information
Form filed with the Canadian securities authorities (filed on SEDAR
at http://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. Readers are cautioned
not to place undue reliance on these forward-looking statements or
on this forward-looking information. You will find more information
about the risks that could cause our actual results to
significantly differ from our current expectations in the Risks and
Uncertainties section. DATASOURCE: CGI GROUP INC. CONTACT:
Investors: Lorne Gorber, Vice-President, Global Communications and
Investor Relations, (514) 841-3355, ; Media: Philippe Beauregard,
Director, Public Affairs, (514) 841-3218,
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