CGI 6K November 14, 2006
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 November 2006
Commission
File Number 1-14858
CGI
Group Inc.
(Translation
of Registrant’s
Name Into English)
1130
Sherbrooke Street West
5th
Floor
Montréal,
Québec
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
o
Form
40-F x
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by check mark if the registrant is submitting the Form 6-K in paper as permitted
by Regulation S-T Rule 101(b)(1): ____
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6-K
if submitted solely to provide an attached annual report to security
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Indicate
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6-K
if submitted to furnish a report or other document that the registrant foreign
private issuer must furnish and make public under the laws of the jurisdiction
in which the registrant is incorporated, domiciled or legally organized (the
registrant's "home country"), or under the rules of the home country exchange
on
which the registrant's securities are traded, as long as the report or other
document is not a press release, is not required to be and has not been
distributed to the registrant's security holders, and, if discussing a material
event, has already been the subject of a Form 6-K submission or other Commission
filing on EDGAR.
Indicate
by check mark whether the registrant by furnishing the information contained
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this form is also thereby furnishing the information to the Commission pursuant
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o
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x
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“Yes”
is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): 82-___.
Enclosure:
Press Release dated November 14, 2006.
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, 333-74932 and
333-112021.
PRESS
RELEASE
Stock
Market Symbols
GIB.A
(TSX)
GIB
(NYSE)
CGI
FINISHES THE LAST QUARTER OF FISCAL 2006 WITH STRONG EARNINGS
PERFORMANCE
Montreal
(Quebec), November 14, 2006
- 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.
CGI
Reports 4Q and Year End 2006 Results
November
14, 2006
Page
2
|
In
$ millions except margin and share data
amounts
|
|
|
|
|
|
|
Q4-2006
|
FY2006
|
Q4-2005
|
FY2005
|
|
Revenue
|
$845.8
|
$3,477.6
|
$904.8
|
$3,686.0
|
| |
|
|
|
|
|
Currency
impact (y-o-y)
|
($22.9)
|
($106.4)
|
|
|
|
Net
earnings from continuing operations before restructuring costs
related to
specific items
|
$53.1
|
$191.3
|
$56.4
|
$219.7
|
|
Margin
|
6.3%
|
5.5%
|
6.2%
|
6.0%
|
|
Basic
and diluted earnings per share from continuing operations before
restructuring costs related to specific items
|
$0.16
|
$0.53
|
$0.13
|
$0.50
|
|
Restructuring
costs related to specific items
|
$13.6
|
$44.8
|
-
|
-
|
| |
|
|
|
|
|
Net
earnings from continuing operations
|
$39.5
|
$146.5
|
$56.4
|
$219.7
|
|
Margin
|
4.7%
|
4.2%
|
6.2%
|
6.0%
|
|
Basic
and diluted earnings per share from continuing
operations
|
$0.12
|
$0.40
|
$0.13
|
$0.50
|
|
Weighted
average number of outstanding shares
|
336,941,173
|
362,783,618
|
433,788,490
|
439,349,210
|
|
Number
of shares outstanding at end of period
|
331,693,044
|
331,693,044
|
431,220,497
|
431,220,497
|
| |
|
|
|
|
|
Total
long-term debt
|
$813.3
|
|
$249.7
|
|
|
Interest
on long-term debt
|
$13.4
|
$43.3
|
$4.8
|
$24.0
|
|
Net
debt to capitalization
|
27.2%
|
|
0.3%
|
|
|
Days
of sales outstanding (DSO)
|
52
|
|
48
|
|
|
Order
backlog
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$12,722
|
|
$12,863
|
|
Note:
Complete audited 2006 Annual Financial Statements are available on 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.
CGI
Reports 4Q and Year End 2006 Results
November
14, 2006
Page
3
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 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 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:
www.cgi.com.
CGI
Reports 4Q and Year End 2006 Results
November
14, 2006
Page
4
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 www.sec.gov), the Company’s Annual Information Form filed
with the Canadian securities authorities (filed on SEDAR at 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.
-30-
For
more information:
Investors:
Lorne
Gorber
Vice-President,
Global Communications and
Investor
Relations
(514)
841-3355
lorne.gorber@cgi.com
Media:
Philippe
Beauregard
Director,
Public Affairs
(514)
841-3218
philippe.beauregard@cgi.com
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.
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CGI
Group Inc.
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(Registrant)
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Date:
November 14, 2006
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By
/s/
David G. Masse
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Name:
David G. Masse
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Title:
Assistant Corporate Secretary
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