CGI expands Q3 2008 Net earnings from continuing operations by 28% fueled by growth in revenue and bookings
July 29 2008 - 6:30AM
PR Newswire (US)
Stock Market Symbols GIB.A (TSX) GIB (NYSE) MONTREAL, July 29
/PRNewswire-FirstCall/ -- CGI Group Inc. (TSX: GIB.A; NYSE: GIB)
reported fiscal 2008 third quarter revenue today of $950.5 million
which excludes $19.8 million of revenue from discontinued
operations. Year-over-year revenue growth on a constant currency
basis was 6.5%. Relative to the same year ago period, foreign
exchange fluctuations negatively impacted the Company's revenue by
$23.3 million, or 2.5% of revenue. Earnings before taxes from
continuing operations were $106.0 million or 11.2% of revenue
representing an improvement of 10.1% compared with $96.3 million in
the third quarter of 2007. Net earnings from continuing operations
in Q3 2008 were $81.7 million or 8.6% of revenue compared with
$64.0 million or 7.0% of revenue in the same quarter last year.
This represents a 27.7% year-over-year increase. Diluted earnings
per share from continuing operations in the third quarter were 25
cents. This compares with 19 cents in the same period last year.
Net earnings from continuing operations in Q3 included $10.8
million which was previously provisioned for income taxes and is no
longer required. Excluding this, the net earnings margin from
continuing operations was 7.5% and diluted EPS from continuing
operations was 22 cents per share. The Company generated $106.3
million in cash from its continuing operating activities, or 11.2%
of revenue.
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In millions of Canadian dollars except when noted Nine Nine Figures
presented are from months months continuing operations ended ended
Q3 Q3 June 30, June 30, F2008 F2007 2008 2007
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Revenue $ 950.5 $ 914.0 $ 2,777 $ 2,730
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Adjusted EBIT $ 111.0 $ 103.8 $ 324.8 $ 304.5 Margin 11.7% 11.4%
11.7% 11.2%
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Earnings before taxes (EBT) $ 106.0 $ 96.3 $ 306.2 $ 253.6 Margin
11.2% 10.5% 11.0% 9.3%
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Net earnings $ 81.7 $ 64.0 $ 222.7 $ 169.6 Margin 8.6% 7.0% 8.0%
6.8%
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Earnings per share (diluted) - in $ $ 0.25 $ 0.19 $ 0.68 $ 0.55
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Weighted average number of outstanding shares (diluted) 320,745,197
335,529,373 325,850,193 333,414,858
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Interest on long-term debt $ 6.4 $ 9.4 $ 20.9 $ 33.5
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Net debt to capitalization ratio 15.6% 17.7% 15.6% 17.7%
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Days of sales outstanding (DSO) 48 42 48 42
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Bookings $ 1,005 $ 807 $ 3,216 $ 2,435
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During the quarter, the Company booked $1.01 billion in new
contract wins, extensions and renewals, resulting in a book-to-bill
of 104% in the quarter. After nine months of fiscal 2008, the
Company has reached booking levels of more than $3.2 billion,
equivalent to the total bookings realized in fiscal 2007. Backlog
at the end of Q3 stood at $12.03 billion or 3.1 times annual
revenue. "Our focus on fundamentals and on the execution of our
profitable growth business plan continues to yield positive results
for all stakeholders," said Michael E. Roach, President and Chief
Executive Officer. "We are in pursuit of numerous opportunities in
our targeted geographies and verticals which will contribute to
profitable growth and the global expansion of CGI." The Company
continues to enhance its financial flexibility by investing in its
Build and Buy profitable growth strategy, share buy backs and debt
reduction. As part of its Normal Course Issuer Bid, the Company
repurchased for cancellation 9.0 million subordinate class A shares
during the third quarter for a total investment of $97.8 million.
After nine months, more than 16.7 million shares have been
repurchased and cancelled representing an investment of $181.6
million. In addition, long-term debt decreased by $11.5 million
during the quarter. At the end of June 2008, net debt was reduced
to $369.9 million, improving the Company's net debt to
capitalization ratio to 15.6%. Subsequent Event On July 21, 2008,
the Company announced the divestiture of a Canadian business
process unit providing claims adjustment and risk management
services to the Canadian property and casualty (P&C) insurance
industry. With approximately $70 million in annual revenue, the
transaction is expected to close in early August 2008. This
business unit had been reclassified as discontinued operations, and
the Company's results include a net impairment of $3.0 million
taken during the quarter, bringing diluted EPS on a GAAP-basis to
24 cents. The results of this operation have been removed from both
the Q3-2008 results as well as CGI's historical figures in order to
accurately reflect the comparative performance of our continuing
operations. Third Quarter F2008 Results Conference Call Management
will host a conference call to discuss results at 8:00 a.m. Eastern
time this morning. Participants may access the call by dialing
1-866-225-0198 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 podcast and copy of the slides will
be archived for download at http://www.cgi.com/. 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 27,000
professionals in over 100 offices across 16 countries. 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 annual revenue run rate stands at $3.8 billion and at
June 30th, 2008, CGI's order backlog was $12.03 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/. 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. 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 IT industry; general
economic and business conditions, foreign exchange and other risks
identified in the MD&A, in CGI's Annual Report on 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, 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. 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: Lorne Gorber, Vice-President,
Global Communications and Investor Relations, (514) 841-3355
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