SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For the month of July 2002
CGI Group Inc.
(Translation of Registrant's Name Into English)
1130 Sherbrooke Street West
5th Floor
Montreal, Quebec
Canada H3A 2M8
(Address of Principal Executive Offices)
(Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.)
Form 20-F Form 40-F |X|
(Indicate by check mark whether the registrant by furnishing the
information contained in this form is also thereby furnishing the information to
the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.)
Yes No |X|
(If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b): 82-___.
Enclosure: Press Release dated July 23, 2002 and Financial Statements for the
period ending June 30, 2002.
This Form 6-K shall be deemed incorporated by reference in the Registrant's
Registration Statement on Form S-8, Reg. Nos. 333-13350, 333-66044 and
333-74932.
FOR IMMEDIATE RELEASE
CGI Reports Solid Growth in Third Quarter of Fiscal 2002
Montreal, July 23, 2002 - CGI Group Inc. (NYSE: GIB; TSX: GIB.A), a leading
provider of end-to-end information technology and business processing services,
today reported unaudited results for its third quarter ended June 30, 2002. All
figures are in Canadian dollars unless otherwise indicated.
Third Quarter Highlights
o Revenue of $553.4 million was 38.9% higher than the comparable period
one year ago and 4.0% higher sequentially. Year-over-year organic
growth was 9.0% in the third quarter.
o Net earnings of $36.5 million were 50.0% higher than last year's third
quarter comparable cash earnings. Net earnings per share increased to
$0.10 from comparable cash net earnings per share of $0.08 in last
year's third quarter, notwithstanding a 31.0% increase in weighted
average number of shares outstanding.
o The EBITDA margin improved to 14.4%; the EBIT margin improved to 11.3%
and the net margin improved to 6.6%.
o Cash provided by operating activities totaled $69.8 million, compared
with $101.9 million in the third quarter of fiscal 2001, and $28.6
million in the second quarter.
o The current backlog of signed contracts stands at $10.4 billion with a
weighted average remaining contract term of 7.8 years.
o The current pipeline of bids for large outsourcing contracts being
reviewed by potential clients remains robust at $5 billion.
3 months | Compared to
In millions of $ except per share amount ended | 3 months ended
6/30/02 | 6/30/01 3/31/02
CDN$ | CDN$ CDN$
----------------------------------------------------------|---------------------
|
Revenue $553.4 | $398.5 $531.9
----------------------------------------------------------|---------------------
Earnings before amortization of goodwill |
(cash earnings) $36.5 | $24.3 $33.2
----------------------------------------------------------|--------------------
Net earnings $36.5 | $17.3 $33.2
----------------------------------------------------------|--------------------
Cash net earnings per share $0.10 | $0.08 $0.09
----------------------------------------------------------|--------------------
Net earnings per share $0.10 | $0.06 $0.09
----------------------------------------------------------|--------------------
Order backlog $10,400 | $8,800 $9,100
================================================================================
Note: In accordance with CICA recommendations, CGI stopped recording
amortization of goodwill on October 1, 2001, rendering earnings before
amortization of goodwill (cash net earnings) and net earnings equivalent
starting FY02. Numbers reflect modified presentation based on EITF 01-9 of the
Financial Accounting Standards Board. CDN$/ 1.56 =1 US$
CGI Reports 3Q FY02 Results
July 23, 2002
Page 2
"CGI achieved solid top and bottom line growth during the third quarter, despite
a tough operating environment," said Serge Godin, chairman and CEO. "Business
was strong across all practices and across all verticals in Canada and the UK.
Our leading position and the deep client partnerships that we have built over
many years as our clients' preferred IT services provider allowed us to secure a
healthy combination of new contract wins, add-on projects, renewals and
extensions."
Mr. Godin added, "In the US and in France, the market for systems integration
and consulting remains challenging. However, with a return to the SI&C business
not expected before the second half of 2003 in these markets, we manage our
situation very closely and expect a gradual increase in profitability, despite
slow top line growth. Our IT and business process outsourcing contracts in the
US are performing very well. Additionally, we have made steady inroads in
growing our market presence. Contract bids and proposals we have initiated since
the fall are progressing well and the elapsed time in signing new contracts in
the US reflects the natural progression of CGI's efforts to build a presence and
brand as a full IT and business process outsourcer. With our focus on contracts
between $20 million and $250 million per year, we still see a lot of interest
and activity in IT and BPS outsourcing and remain optimistic about our prospects
for growth."
Preparation of Consolidated Financial Statements
In an ongoing review of new or more precise interpretation of various accounting
pronouncements and to maintain its conservative accounting practices, CGI has
made modifications or revisions to its financial statements and accompanying
notes. As a result of these modifications or revisions, there was no impact on
the net earnings or cash flow from operations of the Company.
Stock-based compensation and other stock-based payments
On April 1, 2002, the Company decided to early adopt the Canadian
Institute of Chartered Accountants ("CICA") Handbook section 3870
retroactively to October 1, 2001. The Company has chosen to use the new
standard that requires pro forma disclosure relating to net earnings
and earnings per share figures as if the fair value method of expensing
options had been used. The Company's pro forma net earnings per share
would have been reduced by $0.01 for the nine-month period ended June
30, 2002 on a weighted average share basis.
Amortization of incentives related to outsourcing contracts
During the three months ended June 30, 2002, CGI modified the
presentation of the amortization related to incentives granted on
outsourcing contracts based on EITF 01-9, "Accounting for consideration
given by a vendor to a customer", issued in January 2002 by the
Financial Accounting Standards Board. The amortization is now presented
as a reduction of revenue as opposed to being shown as amortization of
contract costs and other long-term assets. This modification has no
impact on net earnings of the Company. For comparative purposes,
revenue for the three-month and nine-month periods ended June 30, 2001
was reduced by $5.6 million and $13.8 million respectively and
amortization of contract costs has been reduced by the equivalent
amount for both periods. For the three-month and nine-month periods
ended June 30, 2002, revenue and amortization of contract costs were
both reduced by $7.3 million and $22.8 million, respectively, or less
than 1.4% of revenue. The current backlog reflects this change.
CGI Reports 3Q FY02 Results
July 23, 2002
Page 3
Accounts receivable and Deferred revenue
During the three months ended June 30, 2002, CGI changed the
presentation related to Accounts receivable and Deferred revenue for
the month-end advance billing on outsourcing contracts. Accordingly,
Accounts receivable and Deferred revenue were both reduced by $43.8
million and $34.5 million as at June 30, 2002 and September 30, 2001
respectively to conform to the presentation adopted during the current
quarter.
Goodwill and integration liability
Following a review of the interpretation of the accounting treatment
for the integration liability related to business acquisitions, the
Company revised its initial purchase price allocation of IMRglobal as
of July 27, 2001. Original estimates for the effort and cost that would
be required to integrate various support structures between IMRglobal
and CGI were scaled back as a result of greater than expected synergies
that existed. This revision resulted in a decrease of Goodwill of $17.0
million, a decrease of Accounts payable and accrued liabilities of
$20.8 million and a decrease of Future income tax asset of $3.8 million
for the period ended September 31, 2001.
Foreign currency translation adjustment
For the quarter ended December 31, 2001, CGI revised the calculation of
the Foreign currency translation adjustment for the goodwill conversion
of its self-sustained foreign subsidiaries in order to use the current
exchange rate as opposed to the historical rate. This revision has been
applied to the Currency translation adjustment for the year ended
September 30, 2001 to be consistent with the method used as of December
31, 2001. This modification has no impact on net earnings of the
Company. As such, Foreign currency translation adjustment and Goodwill
were both increased by $21.2 million on the Consolidated Balance Sheet
as at September 30, 2001.
Third Quarter Results
Third quarter results and all comparisons reflect the aforementioned
modifications or revisions, which had no impact on the net earnings of the
Company. Revenue for the third quarter ended June 30, 2002 increased 38.9% to
$553.4 million, from $398.5 million in the same quarter last year, and was up
4.0% sequentially over second quarter revenue of $531.9 million. The
year-over-year organic growth of 9.0% was driven by a combination of new client
wins, renewals, and meaningful add-on projects from existing clients.
In the third quarter, revenue from long-term outsourcing contracts represented
71% of the Company's total revenue, including 15% from business processing
services, while project oriented consulting and systems integration work
represented 29%. Geographically, contribution to revenue was similar to last
quarter, with clients in Canada representing 74%; clients in the US representing
20%; and all other regions, 6%. Revenue from clients in the financial services
sector remained strong, representing 41% of revenue; while telecom represented
26%; government, 16%; manufacturing, retail and distribution, 14%; utilities and
services, 2%; and healthcare, 1%.
Earnings before Depreciation and amortization of fixed assets, and Amortization
of contract costs and other long-term assets, Interest and Income taxes
(EBITDA)1 for the third quarter
________
1 EBITDA is equal to operating earnings before depreciation and amortization.
EBITDA is presented because it is a widely accepted financial indicator of a
company's ability to service and incur debt. EBITDA should not be considered
CGI Reports 3Q FY02 Results
July 23, 2002
Page 4
increased 43.6% to $79.7 million, compared with $55.5 million in the same
quarter a year ago, and increased 9.3% on a sequential basis compared with $72.9
million reported in the second quarter. The EBITDA margin improved to 14.4% in
the third quarter, compared with 13.9% in last year's third quarter and 13.7% at
the end of the second quarter. EBIT, Earnings Before Interest and Taxes, was
$62.4 million in the third quarter, up 42.2% over last year's third quarter EBIT
of $43.9 million and up 9.3% over second quarter EBIT of $57.1 million. The EBIT
margin improved to 11.3% for the quarter, compared with 10.7% in the second
quarter and 11.0% in last year's third quarter. EBIT is meaningful because it
more accurately reflects earnings after operating costs, including costs related
to the amortization and depreciation of fixed assets and amortization of
contract costs and other long-term assets.
Net earnings in the third quarter increased 50.0% to $36.5 million, against
comparable cash net earnings of $24.3 million in the same quarter a year ago,
and were 9.9% higher sequentially, compared with $33.2 million reported in the
second quarter. Net earnings per share of $0.10 for the quarter were up over
cash net earnings per share of $0.08 reported in last year's third quarter, and
up over $0.09 reported in the second quarter of fiscal 2002. The net margin
improved to 6.6%, compared with 6.2% in the second quarter and cash net margin
of 6.1% in the third quarter of fiscal 2001. In accordance with recommendations
of the Canadian Institute of Chartered Accountants (CICA), effective October 1,
2001 CGI stopped recording the amortization of goodwill. As such, net earnings
and earnings before amortization of goodwill (cash net earnings) are equivalent.
For purposes of clarity and ease of comparison, CGI compares net earnings
results to cash net earnings figures provided in year-over-year comparisons.
CGI continues to maintain a strong balance sheet and cash position, which
together with bank lines are sufficient to support the Company's growth strategy
and represent a competitive strength when proposing on outsourcing contracts. At
June 30, 2002, the total credit facility available amounted to $218.4 million.
As of June 30, 2002, CGI had cash and cash equivalents of $122.9 million,
compared with $152.5 million as of March 31, 2002.
Cash provided by operating activities in the third quarter was $69.8 million, up
$41.2 million from the previous quarter. The increase reflects an improvement in
working capital items and the increased profitability of the company for the
quarter. Working capital was driven by a six-day improvement in the days of
sales outstanding (DSO), including the collection of the refundable tax credit
on salaries, as well as an increase in the current income taxes payable
resulting from this collection of the tax credit. Offsetting the improvement in
working capital was cash used for purchasing the annual software licenses.
Excluding the impact of the net change in working capital items, the cash
provided by operations was relatively flat from the previous quarter.
Serge Godin said, "We are very proud of what our management team and members
have achieved this quarter. Our continued focus on executing our business model
has resulted in one of the highest growth rates and highest net margins in the
industry. We realized more synergies from the ongoing integration of our
outsourcing contracts and improved efficiencies in many business units. The
adjustments made to our operational structure over the last three
___________
by an investor as an alternative to operating income or net income, as an
indicator of operating performance or to the statement of cash flows or as a
measure of liquidity. EBITDA as presented may not be comparable to similarly
titled measures of other companies.
CGI Reports 3Q FY02 Results
July 23, 2002
Page 5
months are allowing us to take our BPO and IT operations in the US to a greater
level of efficiency as well, by integrating them into our global delivery
structure."
Nine-month Highlights
For the first nine months of fiscal 2002 ended June 30, 2002, revenue increased
45.5% to $1,597.8 million, from $1,098.5 million in the corresponding period of
2001. For the first nine months of fiscal 2002, EBITDA increased 54.5% to $221.2
million, from $143.2 million in the same period one year ago. Net earnings in
the first nine months increased 60.1% to $100.3 million, from comparable cash
net earnings of $62.7 million in the same period one year ago. Basic net
earnings per share of $0.27 in the period were up over $0.22 reported in the
first nine months of 2001.
Operating Highlights
CGI's growth prospects and solid backlog were improved during the quarter with
$2.15 billion in new contract bookings, renewals and extensions, as well as
several niche acquisitions made at the business level, which enhanced a vertical
offering or geographical presence. Some of the highlights included:
o The signing of a shareholders' agreement which finalized the terms and
conditions of a new jointly-owned information technology (IT) services
company, Innovapost, with Canada Post Corporation as the majority
owner (51%) and CGI owning 49%. Innovapost will provide all IT
services to The Canada Post Group as well as to other postal
organizations worldwide. The company has retained 150 employees to
date and expects to begin generating revenue by September and to
achieve total revenue of $200 million in its first year, ending April
2003, $400.0 million by year three and approximately $3.5 billion over
ten years. This contract added approximately $1.75 billion to CGI's
backlog over a ten-year period.
o A signed memorandum of understanding for a ten-year outsourcing
agreement valued at $80 million with IT services provider League Data.
CGI plans to manage League Data's banking environment and build a new
browser-based front-end solution. Shareholders of League Data are
expected to vote on this agreement by September 1, 2002.
o The signing of an $11.5 million, three-year contract extension with
Air Canada for enterprise resource planning support and maintenance.
o The acquisition of electronic solutions provider Myriap, which
provides CGI with deeper knowledge in the transactional Web space.
Myriap added approximately 60 Toronto and Montreal-based professionals
to CGI.
o The acquisition of Netplex Systems' Retail Division, which served over
240 retail customers including Macy's, Toys "R" Us and Value City with
retail solutions that focus on warehouse management, store system
integration and distribution. Netplex added 40 professionals located
in Oklahoma.
o The acquisition of Stewart & Stewart Consulting Inc., with revenues of
approximately $4.0 million. The Edmonton-based company adds geographic
information systems and resource-based systems knowledge with its 35
professionals supplying services primarily to the Alberta government,
under an existing outsourcing contract.
o The signing of a five-year information technology contract with Domtar
Inc. valued at $18.5 million whereby CGI will manage and support its
mainframe and mid-range environment including hosting the
infrastructure for some 42 servers, providing server management
services as well as managing the hardware.
CGI Reports 3Q FY02 Results
July 23, 2002
Page 6
Initiatives and Outlook
Mr. Godin added, "CGI's growth will continue to be driven by a disciplined
financial approach to our four pillars of growth - niche acquisitions; large
acquisitions; contracts, renewals and add-on projects; and large IT & BPO
outsourcing contracts. Our pipeline of $5 billion in outstanding proposals
represents large and mid-sized contracts, with at least a third of these
opportunities from US-based clients. Our strong financial position, flexible
client partnerships, unique global delivery model, and entrenched quality system
give us confidence in the ability to turn this pipeline into backlog and deliver
even stronger results going forward."
Guidance
Based on information known today about current market conditions and demand, as
well as seasonality typical of the summer quarter, the company has narrowed its
guidance for the fiscal year ending September 30, 2002. Base revenue for the
year is expected to be between $2.13 billion and $2.15 billion, representing
between 36% and 38% growth over fiscal 2001 results. Net earnings per share
should be in the range of $0.36 to $0.37.
Margin improvement remains among CGI's most important financial objectives.
Improvements during coming quarters will be driven by further synergies from
large outsourcing contracts, ongoing integration of acquisitions and a gradual
reduction in SG&A expenses.
CGI will provide guidance for fiscal 2003 when reporting its fourth quarter
results. Although still in the planning process for its fiscal year 2003, CGI
expects to achieve double-digit rates of growth in the next year. This growth
objective is before the effect of potential large outsourcing contracts or large
acquisitions.
Quarterly Conference Call
A conference call for the investment community will be held today, July 23, at
10:00 am (Eastern Daylight Time). Participants may access the call by dialing
888-799-1759 or through the Internet at www.cgi.com. Supporting slides for the
call will also be available at www.cgi.com. For those unable to participate on
the live call, a webcast and copy of the slides will be archived at 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. These statements represent CGI Group Inc.'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.
These factors include and are not restricted to the timing and size of
contracts, acquisitions and other corporate developments; the ability to attract
and retain qualified employees; market competition in the rapidly-evolving
information technology industry; general economic and business conditions,
foreign exchange and other risks identified in the Management's Discussion and
Analysis (MD&A) in CGI Group Inc.'s Annual Report or Form 40-F filed with the
SEC, the Company's Annual Information Form filed with the Canadian securities
authorities, 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, which speak only as of the date on which they are
made. In particular, statements relating to future growth are forward-looking
statements. CGI disclaims any intention or obligation to publicly update or
revise any forward-looking statements,
CGI Reports 3Q FY02 Results
July 23, 2002
Page 7
whether as a result of new information, future events or otherwise. Readers are
cautioned not to place undue reliance on these forward-looking statements.
For more information:
CGI Investor Relations
Julie Creed
Vice-president, investor relations
(312) 201-4803 or (514) 841-3200
Ronald White
Director, investor relations
(514) 841-3230
CGI Media Relations
Eileen Murphy
Director, media relations
(514) 841-3430
There are 10 pages of financial tables and notes that accompany this release.
Please call us at 514-841-3217 if you would like a faxed copy or visit our
website at www.cgi.com.
Consolidated Financial Statements of
CGI Group Inc.
For the nine months ended June 30, 2002
Consolidated Financial Statements of CGI Group Inc.
For the nine months ended June 30, 2002
Consolidated Statements of Earnings
(in thousands of Canadian dollars, except per share amounts) (unaudited)
Three months ended June 30, Nine months ended June 30,
------------------------------------------------------------------------------------------------------------------------------------
2002 2001 | 2002 2001
------------------------------------------------------------------------------------------------------|-----------------------------
|
$ $ | $ $
Revenue 553,355 398,495 | 1,597,753 1,098,484
------------------------------------------------------------------------------------------------------|-----------------------------
Operating expenses |
Costs of services, selling and administrative expenses 469,273 339,656 | 1,363,525 946,426
Research 4,413 3,362 | 12,995 8,881
------------------------------------------------------------------------------------------------------|-----------------------------
473,686 343,018 | 1,376,520 955,307
------------------------------------------------------------------------------------------------------|-----------------------------
Earnings before the under-noted: 79,669 55,477 | 221,233 143,177
------------------------------------------------------------------------------------------------------|-----------------------------
Depreciation and amortization of fixed assets 9,683 8,239 | 29,094 23,013
Amortization of contract costs and other long-term |
assets (Note 5) 7,591 3,368 | 20,100 7,010
------------------------------------------------------------------------------------------------------|-----------------------------
17,274 11,607 | 49,194 30,023
------------------------------------------------------------------------------------------------------|-----------------------------
Earnings before the following items: 62,395 43,870 | 172,039 113,154
------------------------------------------------------------------------------------------------------|-----------------------------
Interest |
Long-term debt (696) (1,114) | (2,013) (2,948)
Other 1,030 975 | 1,712 2,097
------------------------------------------------------------------------------------------------------|-----------------------------
334 (139) | (301) (851)
------------------------------------------------------------------------------------------------------|-----------------------------
Earnings before income taxes, entity subject to significant |
influence and amortization of goodwill 62,729 43,731 | 171,738 112,303
Income taxes 26,253 19,419 | 71,463 49,658
------------------------------------------------------------------------------------------------------|-----------------------------
Earnings before entity subject to significant influence and |
amortization of goodwill 36,476 24,312 | 100,275 62,645
Entity subject to significant influence -- -- | -- 7
------------------------------------------------------------------------------------------------------|-----------------------------
Earnings before amortization of goodwill 36,476 24,312 | 100,275 62,652
Amortization of goodwill, net of income taxes -- 6,972 | -- 19,684
------------------------------------------------------------------------------------------------------|-----------------------------
Net earnings 36,476 17,340 | 100,275 42,968
======================================================================================================|=============================
Weighted average number of outstanding Class A subordinate |
shares and Class B shares 380,103,092 290,069,819 | 376,338,350 284,618,900
======================================================================================================|=============================
Basic earnings per share before amortization of goodwill (Note 3) 0.10 0.08 | 0.27 0.22
======================================================================================================|=============================
Diluted earnings per share before amortization of goodwill (Note 3) 0.10 0.08 | 0.26 0.22
======================================================================================================|=============================
Basic earnings per share (Note 3) 0.10 0.06 | 0.27 0.15
======================================================================================================|=============================
Diluted earnings per share (Note 3) 0.10 0.06 | 0.26 0.15
====================================================================================================================================
Consolidated Statements of Retained Earnings
(in thousands of Canadian dollars) (unaudited)
Three months ended June 30, | Nine months ended June 30,
------------------------------------------------------------------------------------------------------|-----------------------------
2002 2001 | 2002 2001
------------------------------------------------------------------------------------------------------|-----------------------------
$ $ | $ $
Retained earnings, beginning of period 305,944 208,784 | 245,945 183,156
Share issue costs (Note 3) -- -- | (3,800) --
Net earnings 36,476 17,340 | 100,275 42,968
------------------------------------------------------------------------------------------------------|-----------------------------
Retained earnings, end of period 342,420 226,124 | 342,420 226,124
======================================================================================================|=============================
2
Consolidated Financial Statements of CGI Group Inc.
For the nine months ended June 30, 2002
Consolidated Balance Sheets
(in thousands of Canadian dollars) (unaudited) Restated
As at June 30, 2002 As at September 30, 2001
------------------------------------------------------------------------------------------------------------------------------------
$ | $
Assets |
Current assets |
Cash and cash equivalents 122,927 | 46,008
Accounts receivable 262,505 | 286,156
Income taxes -- | 979
Work in progress 89,851 | 84,838
Prepaid expenses and other current assets 74,665 | 48,931
Future income taxes 14,009 | 17,998
--------------------------------------------------------------------------------------------------|---------------------------------
563,957 | 484,910
|
Fixed assets 132,548 | 123,391
Contract costs and other long-term assets 413,978 | 272,403
Future income taxes 25,201 | 29,002
Goodwill 1,102,855 | 1,118,963
--------------------------------------------------------------------------------------------------|---------------------------------
2,238,539 | 2,028,669
==================================================================================================|=================================
|
Liabilities |
Current liabilities |
Accounts payable and accrued liabilities 265,074 | 295,092
Deferred revenue 38,332 | 50,652
Income taxes 19,249 | --
Future income taxes 19,478 | 21,013
Current portion of long-term debt 5,676 | 7,528
--------------------------------------------------------------------------------------------------|---------------------------------
347,809 | 374,285
|
Future income taxes 81,358 | 43,705
Long-term debt 36,379 | 32,752
Deferred credits and other long-term liabilities 61,747 | 74,813
--------------------------------------------------------------------------------------------------|---------------------------------
527,293 | 525,555
--------------------------------------------------------------------------------------------------|---------------------------------
|
Shareholders' equity |
Capital stock (Note 3) 1,331,246 | 1,198,096
Contributed surplus 211 | 211
Warrants and stock options (Note 3) 33,835 | 35,101
Retained earnings 342,420 | 245,945
Foreign currency translation adjustment 3,534 | 23,761
--------------------------------------------------------------------------------------------------|---------------------------------
1,711,246 | 1,503,114
--------------------------------------------------------------------------------------------------|---------------------------------
2,238,539 | 2,028,669
====================================================================================================================================
3
Consolidated Financial Statements of CGI Group Inc.
For the nine months ended June 30, 2002
Consolidated Statements of Cash Flows
(in thousands of Canadian dollars) (unaudited)
Three months ended June 30, Nine months ended June 30,
------------------------------------------------------------------------------------------------------------------------------------
2002 2001 | 2002 2001
--------------------------------------------------------------------------------------------------------|---------------------------
$ $ | $ $
Operating activities |
Net earnings 36,476 17,340 | 100,275 42,968
Adjustments for: |
Depreciation and amortization of fixed assets 9,683 8,239 | 29,094 23,013
Amortization of contract costs and other long-term assets |
including amount presented as a reduction of revenue (Note 5) 14,855 9,009 | 42,948 20,823
Amortization of goodwill -- 7,335 | -- 20,779
Deferred credits and other long-term liabilities (15,500) -- | (37,812) --
Future income taxes 4,054 8,295 | 18,463 6,423
Foreign exchange loss 3,194 2,511 | 477 4,609
Entity subject to significant influence -- -- | -- (7)
Net change in working capital items 17,047 49,134 | (27,497) 39,760
--------------------------------------------------------------------------------------------------------|---------------------------
Cash provided by operating activities 69,809 101,863 | 125,948 158,368
--------------------------------------------------------------------------------------------------------|---------------------------
|
Financing activities |
Net variation of credit facility (926) 35,000 | 5,434 55,000
Decrease of other long-term debts (1,815) (12,240) | (3,746) (43,934)
Issuance of shares 340 5 | 129,623 490
Share issue costs -- -- | (5,500) --
--------------------------------------------------------------------------------------------------------|---------------------------
Cash (used for) provided by financing activities (2,401) 22,765 | 125,811 11,556
--------------------------------------------------------------------------------------------------------|---------------------------
|
Investing activities |
Business acquisitions (net of cash) (Note 4) (15,363) (61,669) | (16,664) (108,792)
Investment in a joint venture (Note 4) (26,000) -- | (26,000) --
Purchase of fixed assets (12,699) (10,450) | (40,888) (21,027)
Proceeds from sale of subsidiary (Note 4) 10,365 -- | 10,365 --
Contract costs and other long-term assets (54,580) (25,885) | (104,079) (36,260)
--------------------------------------------------------------------------------------------------------|---------------------------
Cash used for investing activities (98,277) (98,004) | (177,266) (166,079)
--------------------------------------------------------------------------------------------------------|---------------------------
Foreign exchange gain (loss) on cash held in foreign currencies 1,247 (1,500) | 2,426 128
--------------------------------------------------------------------------------------------------------|---------------------------
Net (decrease) increase in cash and cash equivalents (29,622) 25,124 | 76,919 3,973
Cash and cash equivalents at beginning of period 152,549 28,190 | 46,008 49,341
--------------------------------------------------------------------------------------------------------|---------------------------
Cash and cash equivalents at end of period 122,927 53,314 | 122,927 53,314
========================================================================================================|===========================
|
Interest paid 652 1,291 | 1,509 4,040
Income taxes paid 14,967 897 | 33,570 31,515
====================================================================================================================================
4
Notes to the Consolidated Financial Statements
(tabular amounts only are in thousands of Canadian dollars, except share data)
(unaudited)
Note 1 - Summary of significant accounting policies
These interim Consolidated Financial Statements should be read in conjunction
with the Consolidated Financial Statements of the Company and notes thereto for
the year ended September 30, 2001.
These interim Consolidated Financial Statements have been prepared in accordance
with Canadian generally accepted accounting principles, using the same
accounting policies as outlined in Note 2 to the Consolidated Financial
Statements for the year ended September 30, 2001, except as noted below. Certain
comparative figures in the Consolidated Financial Statements have been
reclassified to conform to the current period presentation.
On October 1, 2001, the Company adopted the new recommendations of the Canadian
Institute of Chartered Accountants ("CICA") Handbook Sections 1581, Business
Combinations, and 3062, Goodwill and Other Intangible Assets. Under the revised
Section 1581, all business combinations are accounted for using the purchase
method. Additionally, under Section 3062, goodwill and intangible assets with an
indefinite life are no longer amortized to earnings and are assessed for
impairment on an annual basis, including a transitional impairment test whereby
any resulting impairment is charged to opening retained earnings. In fiscal
2002, the effect of the non-amortization of goodwill will result in an increase
in the consolidated net earnings of approximately $28,800,000. The Company has
completed the transitional impairment test and concluded that no goodwill
impairment charge needs to be recorded.
The CICA also issued Handbook Section 3870, Stock-based Compensation and Other
Stock-based Payments. This new section which is effective for fiscal years
commencing on or after January 1, 2002, establishes standards for the
recognition, measurement and disclosure of stock-based compensation made in
exchange for goods and services. The section requires the use of the fair value
method to account for awards to non-employees and direct awards of stock to
employees and encourages, but does not require, the use of the fair value method
to account for stock-based compensation costs arising from awards to employees.
The new standard requires pro forma disclosure relating to net earnings and
earnings per share figures as if the fair value method of accounting had been
used. On April 1, 2002, the Company decided to early adopt the Handbook Section
3870 retroactively to October 1, 2001. The Company has chosen not to use the
fair value method to account for stock-based compensation cost arising from
awards to employees. The pro forma disclosure is presented in Note 3.
Note 2 - Preparation of Consolidated Financial Statements
Amortization of incentives related to outsourcing contracts
During the three months ended June 30, 2002, the Company modified the
presentation of the amortization related to incentives granted on outsourcing
contracts based on recently issued EITF 01-9, Accounting for consideration given
by a vendor to a customer, by the Financial Accounting Standards Board. The
amortization is now presented as a reduction of revenue as opposed to be shown
as amortization of contract costs and other long-term assets. This modification
has no impact on the net earnings of the Company. For comparative purposes,
revenue of the three-month and the nine-month period ended June 30, 2001 were
reduced by $5,641,000 and $13,813,000 respectively and amortization of contract
costs has been reduced by an equivalent amount for both periods. Also the
adoption of this presentation resulted in a reduction of revenue for the
three-month and nine-month period ended June 30, 2002 of $7,264,000 and
$22,848,000 respectively.
Foreign currency translation adjustment
During the three months ended December 31, 2001, the Company revised the
calculation of the Foreign currency translation adjustment in order to use the
current rate as opposed to the historical rate for the goodwill conversion of
its self-sustained foreign subsidiaries. This revision has no impact on the net
earnings of the Company. The effect of the change on the Foreign currency
translation adjustment and Goodwill was to increase both accounts by $21,197,000
in the Consolidated Balance Sheet as of September 30, 2001.
Accounts receivable and Deferred revenue
During the three months ended June 30, 2002, the Company's management changed
the presentation related to Accounts receivable and Deferred revenue for the
month-end advance billing on outsourcing contracts. Accordingly, Accounts
receivable and Deferred revenue were reduced by respectively $43,781,000 and
$34,511,000 as at June 30, 2002 and September 30, 2001 to conform to the
presentation adopted during the current period.
Goodwill and integration liability
Following a review of the interpretation of the accounting treatment for the
integration liability related to business acquisitions, the Company revised its
initial purchase price allocation of IMRglobal Corp. ("IMR") as of July 27,
2001, as follows: decreases in Goodwill of $17,027,000, in Future income tax
asset of $3,783,000 and in integration liability of $20,810,000.
5
Note 3 - Capital stock, stock options and warrants
Capital stock - Class A subordinate shares carrying one vote per share,
participating equally with Class B shares with respect to the payment of
dividends and convertible into Class B shares under certain conditions in the
event of certain takeover bids on Class B shares.
Class B shares, carrying 10 votes per share, participating equally with Class A
subordinate shares with respect to the payment of dividends and convertible at
any time at the option of the holder into Class A subordinate shares.
Stock options - Under a Stock option plan for certain employees and directors of
the Company and its subsidiaries, the Board of Directors may grant, at its
discretion, options to purchase company stock to certain employees and directors
of the Company and of its subsidiaries. The exercise price is established by the
Board of Directors but may not be lower than the average closing price for Class
A subordinate shares over the five business days preceding the date of grant.
Options generally vest one to three years from the date of the grant and must be
exercised within a 10-year period, except in the event of retirement,
termination of employment or death.
Had compensation cost been determined using the fair value method at the day of
grant for awards granted since October 1, 2001 under this stock option plan, the
Company's pro forma net earnings, basic and diluted earnings per share would
have been $35,301,000, $0.09 and $0.09, respectively, for the three-month period
ended June 30, 2002 and would have been $97,189,000, $0.26 and $0.25
respectively for the nine-month period ended June 30, 2002. These pro forma
amounts include a compensation cost based on a weighted-average grant date fair
value of $4.47 per stock option for 1,051,267 stock options granted during the
nine-month period ended June 30, 2002, as calculated using the Black-Scholes
option pricing model with the following assumptions: risk-free interest rate of
4.65%, dividend yield of 0.0%, expected volatility of 48.3% and expected life of
five years. The pro forma disclosure omits the effect of awards granted before
October 1, 2001.
In connection with a business acquisition where outstanding stock options of the
acquiree became options to acquire CGI Class A subordinate shares, the Company
recorded 3,357,962 out of 8,424,502 options for a consideration of $16,519,000
representing the estimated fair value of the outstanding vested stock options of
the acquiree at the date of acquisition.
Warrants - In connection with the signing of a strategic outsourcing contract
and of a business acquisition, the Company granted warrants entitling the
holders to subscribe to up to 5,118,210 Class A subordinate shares. The exercise
prices were determined using the average closing price for Class A subordinate
shares at a date and for a number of days around the respective transaction
dates. The warrants vest upon signature of the contracts or date of business
acquisition and have an exercise period of five years. As at June 30, 2002,
there were 5,118,210 warrants issued and outstanding, 4,000,000 of which are
exercisable at a price of $6.55 per share and expire April 30, 2006 and
remaining 1,118,210 are exercisable at a price of $8.88 per share expiring June
13, 2006. The fair values of the warrants were estimated at their respective
grant dates at $19,655,000 using the Black-Scholes option pricing model with the
following assumptions: risk-free interest rate of 4.9%, dividend yield of 0.0%,
expected volatility of 57.7% and expected life of five years.
In addition to the warrants to purchase up to 5,118,210 Class A subordinate
shares referred to above and issued in connection with the signing of a
strategic outsourcing contract and of a business acquisition the "Initial
Warrants", CGI issued to the Majority Shareholders and BCE warrants (the
"Pre-emptive Rights Warrants") to subscribe in the aggregate up to 3,865,014
Class A subordinate shares and 697,044 Class B shares pursuant to the exercise
of their pre-emptive rights contained in the articles of incorporation of CGI,
with substantially similar terms and conditions as those of the Initial
Warrants. The Pre-emptive Rights Warrants may be exercised by BCE and the
Majority Shareholders only to the extent that the holders of the Initial
Warrants exercise such Initial Warrants.
Furthermore, subject to regulatory approval, the Company has undertaken in
favour of a holder of Initial Warrants to purchase up to 4,000,000 Class A
subordinate shares to issue promptly after April 30, 2006 (the "Expiration
Date") replacing warrants (the "Extended Warrants") to purchase Class A
subordinate shares equal to the number of Class A subordinate shares not
purchased by such holder under terms of the Initial Warrants on the Expiration
Date. The Extended Warrants will have substantially similar terms and conditions
as those of the Initial Warrants, except for the exercise price which will be
based upon the closing price of the Class A subordinate shares on the TSE on the
date preceding the issuance of the Extended Warrants.
The following table presents information concerning capital stock issued and
paid, stock options and warrants as at June 30, 2002:
Number of shares issued and paid Number
----------------------------------------------------------------------------------------------------------------------------------
Class A subordinate shares 339,369,130
Class B shares 40,799,774
----------------------------------------------------------------------------------------------------------------------------------
Total capital stock 380,168,904
Number of stock options (Class A subordinate shares) - Accounted for 2,882,526
Number of stock options (Class A subordinate shares) - Not accounted for 20,232,824
Number of warrants (Class A subordinate shares) - Accounted for 5,118,210
Number of warrants (Class A subordinate shares and Class B shares) - Not accounted for 4,562,058
----------------------------------------------------------------------------------------------------------------------------------
Number of shares reflecting the potential exercise of stock options and warrants 412,964,522
==================================================================================================================================
6
Note 3 - Capital stock, stock options and warrants (cont'd)
As at June 30, 2002 and September 30, 2001, (after giving retroactive effect of
the subdivision of the Company's shares that occured on August 12, 1997,
December 15, 1997, May 21, 1998 and January 7, 2000), the Class A subordinate
shares and the Class B shares changed as follows:
June 30, 2002
------------------------------------------------------------------------------------------------------------------------------------
Class A subordinate shares | Class B shares
-----------------------------------------------------------------------------------------------------|------------------------------
Number Amount | Number Amount
-----------------------------------------------------------------------------------------------------|------------------------------
$ | $
Balance, beginning of period 327,032,717 1,143,891 | 40,799,774 54,205
Issued for cash (1) 11,110,000 124,988 | -- --
Issued as consideration for business acquisitions (Note 4) 210,739 2,261 | -- --
Options exercised 1,015,674 5,901 | -- --
-----------------------------------------------------------------------------------------------------|------------------------------
Balance, end of period 339,369,130 1,277,041 | 40,799,774 54,205
====================================================================================================================================
September 30, 2001
------------------------------------------------------------------------------------------------------------------------------------
Class A subordinate shares | Class B shares
-----------------------------------------------------------------------------------------------------|------------------------------
Number Amount | Number Amount
-----------------------------------------------------------------------------------------------------|------------------------------
$ | $
Balance, beginning of period 240,755,667 490,645 | 34,846,526 1,162
Issued for cash (1) -- -- | 5,953,248 53,043
Issued as consideration for business acquisitions (Note 4) 85,835,178 651,010 | -- --
Options exercised 441,872 2,236 | -- --
-----------------------------------------------------------------------------------------------------|------------------------------
Balance, end of period 327,032,717 1,143,891 | 40,799,774 54,205
====================================================================================================================================
(1) On December 20, 2001, the Company issued 11,110,000 Class A subordinate shares to the public for cash proceeds of $124,987,500
before share issue costs of $3,800,000 (net of income taxes of $1,700,000).
The following table presents information concerning stock options and warrants
accounted for as at June 30, 2002 and September, 2001:
June 30, 2002
------------------------------------------------------------------------------------------------------------------------------------
Stock options | Warrants
-----------------------------------------------------------------------------------------------------|------------------------------
Number Amount | Number Amount
-----------------------------------------------------------------------------------------------------|------------------------------
$ | $
Balance, beginning of period 3,139,943 15,446 | 5,118,210 19,655
Granted as consideration for business acquisitions -- -- | -- --
Exercised (257,417) (1,266) | -- --
-----------------------------------------------------------------------------------------------------|------------------------------
Balance, end of period 2,882,526 14,180 | 5,118,210 19,655
====================================================================================================================================
September 30, 2001
------------------------------------------------------------------------------------------------------------------------------------
Stock options | Warrants
-----------------------------------------------------------------------------------------------------|------------------------------
Number Amount | Number Amount
-----------------------------------------------------------------------------------------------------|------------------------------
$ | $
Balance, beginning of period -- -- | -- --
Granted as consideration for business acquisitions 3,357,962 16,519 | 5,118,210 19,655
Exercised (218,019) (1,073) | -- --
-----------------------------------------------------------------------------------------------------|------------------------------
Balance, end of period 3,139,943 15,446 | 5,118,210 19,655
====================================================================================================================================
The following table presents information concerning all stock options granted to
certain employees and directors by the Company as at June 30, 2002 and September
30, 2001:
June 30, 2002 September 30, 2001
------------------------------------------------------------------------------------------------------------------------------------
Number of options |
Outstanding, beginning of period 21,083,909 | 6,413,181
Granted 1,051,267 | 10,643,930
Granted as consideration for business acquisitions -- | 5,066,540
Exercised (758,257) | (223,853)
Forfeited and expired (1,144,095) | (815,889)
------------------------------------------------------------------------------------------------------------------------------------
Outstanding, end of period 20,232,824 | 21,083,909
====================================================================================================================================
7
Note 3 - Capital stock, stock options and warrants (cont'd)
Earnings per share
The following table sets forth the computation of basic and diluted earnings per
share for the three and nine months ended June 30, 2002 and 2001:
Three months ended June 30,
------------------------------------------------------------------------------------------------------------------------------------
2002 | 2001
---------------------------------------------------------------------------------|--------------------------------------------------
Net earnings Number of shares Per share | Net earnings Number of shares Per share
(numerator) (denominator) amount | (numerator) (denominator) amount
---------------------------------------------------------------------------------|--------------------------------------------------
$ $ | $ $
Net earnings available to common |
shareholders 36,476 380,103,092 0.10 | 17,340 290,069,819 0.06
---------------------------------------------------------------------------------|--------------------------------------------------
Dilutive options 1,646,211 | 969,315
Dilutive warrants 1,547,793 | 518,130
---------------------------------------------------------------------------------|--------------------------------------------------
Net earnings available to common |
shareholders and assumed conversions 36,476 383,297,096 0.10 | 17,340 291,557,264 0.06
====================================================================================================================================
Nine months ended June 30,
------------------------------------------------------------------------------------------------------------------------------------
2002 | 2001
---------------------------------------------------------------------------------|--------------------------------------------------
Net earnings Number of shares Per share | Net earnings Number of shares Per share
(numerator) (denominator) amount | (numerator) (denominator) amount
---------------------------------------------------------------------------------|--------------------------------------------------
$ $ | $ $
Net earnings available to common |
shareholders 100,275 376,338,350 0.27 | 42,968 284,618,900 0.15
---------------------------------------------------------------------------------|--------------------------------------------------
Dilutive options 3,192,112 | 881,941
Dilutive warrants 2,829,265 | 151,453
---------------------------------------------------------------------------------|--------------------------------------------------
Net earnings available to common |
shareholders and assumed conversions 100,275 382,359,727 0.26 | 42,968 285,652,294 0.15
====================================================================================================================================
Note 4 - Investments in subsidiairies and a joint venture
During the nine months ended June 30, 2002 the Company made four acquisitions
for considerations ranging between $3,000,000 and $7,000,000 for a grand total
of $21,838,000. The Company began recording the results of operations of these
entities at their respective effective acquisition dates. In all cases the
Company acquired 100% of the outstanding shares, except in one case where the
assets were acquired. Also during the nine months ended June 30, 2002 the
Company divested from one of its investments.
The acquisitions were accounted for using the purchase method and the total
initial purchase price allocation is as follows:
--------------------------------------------------------------------------------
$
Non cash working capital items (314)
Future income taxes 349
Fixed assets 1,109
Contract costs and other long-term assets 1,279
Goodwill (1) 19,297
--------------------------------------------------------------------------------
21,720
Cash position at acquisition 118
--------------------------------------------------------------------------------
Net assets acquired 21,838
================================================================================
Consideration
Cash (including acquisition cost) 16,782
Balance of purchase price 2,795
Issuance of 210,739 Class A subordinate shares (2) 2,261
--------------------------------------------------------------------------------
21,838
================================================================================
(1) Of the $19,297,000 allocated as goodwill, $7,437,000 is deductible for tax
purposes. Of the total goodwill amount, $10,838,000 is included in the US and
Asia Pacific segment and the remaining $8,459,000 is included in the Canada and
Europe segment.
(2) The per share value of the shares issued as consideration for one of the
business acquisitions was determined using the average closing share price for a
number of days before and after the announcement date of the agreement.
8
Note 4 - Investments in subsidiairies and a joint venture (cont'd)
In addition, AGTI Consulting Services Inc., in which the Company holds a 49%
interest, increased its interest in one of its own subsidiaries.
During the three months ended June 30, 2002, the Company finalized the purchase
price allocation of assets and liabilities of Confederation des caisses
populaires et d'economie Desjardins du Quebec used in data and micro-computing
of Mouvement des caisses Desjardins operations acquired on May 1, 2001. From the
initial purchase price allocation as per Note 9 to the Consolidated Financial
Statements of the Company for the year ended September 30, 2001, this assessment
resulted in a decrease of the direct costs accrual of $2,864,000, a decrease of
Goodwill of $1,805,000 and a decrease of Future income taxes asset of
$1,059,000.
Furthermore, in the three months ended March 31, 2002, the Company reviewed the
purchase price allocation of IMR acquired on July 27, 2001. From the initial
purchase price allocation as per Note 9 to the Consolidated Financial Statements
of the Company for the year ended September 30, 2001, the reclassification
resulted in an increase of Contract costs and other long-term assets of
$7,577,000, a decrease of Goodwill of $4,925,000 and a decrease of Future income
taxes asset of $2,652,000.
Continuity of acquisition and integration liability for IMR
Restated
Balance as at Paid during the nine months Balance as at
September 30, 2001 ended June 30, 2002 June 30, 2002
------------------------------------------------------------------------------------------------------------------------------------
$ $ $
Professional fees 2,834 2,576 258
Consolidation and closure of facilities 12,446 3,159 9,287
Severance 11,700 8,071 3,629
Other 1,655 159 1,496
------------------------------------------------------------------------------------------------------------------------------------
28,635 13,965 14,670
====================================================================================================================================
On April 17, 2002, the Company sold its Japanese operations for a cash
consideration of $10,365,000 (previously reported at $9,449,000, as per Note 5 -
Subsequent event of the interim Consolidated Financial Statements for the
quarter ended March 31, 2002), with no resulting gain.
In May 2002, the Company acquired, for a cash consideration of $26,000,000, a
49% interest in a newly created joint venture, Innovapost. The Company also
made, through Innovapost, an incentive payment of $26,000,000 in favor of Canada
Post for the signing of a 10-year outsourcing contract. The aggregate
consideration paid out of $52,000,000 by the Company was treated as contract
costs for accounting purposes and will be amortized over the length of the
contract.
Note 5 - Supplementary contract costs and other long-term assets information
The following table presents information concerning the amortization of Contract
costs and other long-term assets including the amortization presented as a
reduction of revenue as described in Note 2:
Three months ended June 30, Nine months ended June 30,
----------------------------------------------------------------------------------------------------------------------------
2002 2001 | 2002 2001
------------------------------------------------------------------------------------------------|---------------------------
$ $ | $ $
Amortization presented as a reduction of revenue 7,264 5,641 | 22,848 13,813
Amortization presented as an expense 7,591 3,368 | 20,100 7,010
------------------------------------------------------------------------------------------------|---------------------------
Total amortization of contract costs and other long-term assets 14,855 9,009 | 42,948 20,823
============================================================================================================================
9
Note 6 - Segmented information
Effective October 1, 2001, the Company changed its organizational structure. The
Company has three strategic business units ("SBU"), organized according to the
following breakdown: Canada and Europe, US and Asia Pacific, and Business
Process Services ("BPS"). The Company evaluates each SBU's performance under
this structure and reports segmented information on that basis.
The following presents information on the Company's operations based on its new
organizational structure.
Corporate
As at and for the Canada and US and expenses and Intersegment
three months ended June 30, 2002 Europe Asia Pacific BPS programs elimination Total
------------------------------------------------------------------------------------------------------------------------------------
$ $ $ $ $ $
Revenue 465,901 72,104 23,453 -- (8,103) 553,355
Operating expenses 371,168 74,804 18,758 17,059 (8,103) 473,686
------------------------------------------------------------------------------------------------------------------------------------
Earnings before the under-noted: 94,733 (2,700) 4,695 (17,059) -- 79,669
Depreciation and amortization 13,488 1,732 1,297 757 -- 17,274
------------------------------------------------------------------------------------------------------------------------------------
Earnings before interest, income taxes and
amortization of goodwill 81,245 (4,432) 3,398 (17,816) -- 62,395
====================================================================================================================================
Total assets 1,260,898 721,932 94,149 161,560 -- 2,238,539
====================================================================================================================================
As at and for the
three months ended June 30, 2001
------------------------------------------------------------------------------------------------------------------------------------
Revenue 347,044 37,184 19,456 -- (5,189) 398,495
Operating expenses 282,005 42,307 14,797 9,098 (5,189) 343,018
------------------------------------------------------------------------------------------------------------------------------------
Earnings before the under-noted: 65,039 (5,123) 4,659 (9,098) -- 55,477
Depreciation and amortization 9,984 351 715 557 -- 11,607
------------------------------------------------------------------------------------------------------------------------------------
Earnings before interest, income taxes and
amortization of goodwill 55,055 (5,474) 3,944 (9,655) -- 43,870
====================================================================================================================================
Total assets 1,012,348 129,215 80,719 83,541 -- 1,305,823
====================================================================================================================================
As at and for the
nine months ended June 30, 2002
------------------------------------------------------------------------------------------------------------------------------------
Revenue 1,329,568 245,694 65,944 -- (43,453) 1,597,753
Operating expenses 1,086,596 239,949 51,161 42,267 (43,453) 1,376,520
------------------------------------------------------------------------------------------------------------------------------------
Earnings before the under-noted: 242,972 5,745 14,783 (42,267) -- 221,233
Depreciation and amortization 38,637 5,526 3,142 1,889 -- 49,194
------------------------------------------------------------------------------------------------------------------------------------
Earnings before interest, income taxes and
amortization of goodwill 204,335 219 11,641 (44,156) -- 172,039
====================================================================================================================================
Total assets 1,260,898 721,932 94,149 161,560 -- 2,238,539
====================================================================================================================================
As at and for the
nine months ended June 30, 2001
------------------------------------------------------------------------------------------------------------------------------------
Revenue 957,785 111,587 56,113 -- (27,001) 1,098,484
Operating expenses 786,224 126,646 43,197 26,241 (27,001) 955,307
------------------------------------------------------------------------------------------------------------------------------------
Earnings before the under-noted: 171,561 (15,059) 12,916 (26,241) -- 143,177
Depreciation and amortization 25,672 1,033 2,204 1,114 -- 30,023
------------------------------------------------------------------------------------------------------------------------------------
Earnings before interest, income taxes,
entity subject to significant influence
and amortization of goodwill 145,889 (16,092) 10,712 (27,355) -- 113,154
====================================================================================================================================
Total assets 1,012,348 129,215 80,719 83,541 -- 1,305,823
====================================================================================================================================
Note 7 - Subsequent event
On July 9, 2002, the Company acquired the assets of IMPLETECH International Inc.
for a total consideration of $2,100,000.
10
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
CGI GROUP INC.
(Registrant)
Date: July 23, 2002 By /s/ Paule Dore
Name: Paule Dore
Title: Executive Vice President
and Chief Corporate Officer
and Secretary