-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IoL0l1iqZ0AUEnLnomfAI2w/emFQyGD60YF1vkvdG8vC+gru6kYO4ENy1D2Ezep7 vpsO4U76X33ofO5Kn05DiQ== 0000908737-02-000014.txt : 20020413 0000908737-02-000014.hdr.sgml : 20020413 ACCESSION NUMBER: 0000908737-02-000014 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020118 FILED AS OF DATE: 20020122 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CGI GROUP INC CENTRAL INDEX KEY: 0001061574 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MANAGEMENT CONSULTING SERVICES [8742] FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 6-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-29716 FILM NUMBER: 02514159 BUSINESS ADDRESS: STREET 1: 1130 SHERBROOKE ST WEST STREET 2: 5TH FL CITY: MONTREAL QUEBEC CANA STATE: E6 BUSINESS PHONE: 5148413200 MAIL ADDRESS: STREET 1: 1130 SHERBROOKE ST WEST STREET 2: 5TH FLOOR CITY: MONTREAL QUEBEC STATE: E6 6-K 1 cgi6k_financials.txt 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 January 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: First quarter report of fiscal 2002 - January 18, 2002 This Form 6-K shall be deemed incorporated by reference in the Registrant's Registration Statements on Form S-8, Reg. Nos. 333-13350, 333-66044 and 333-74932. Consolidated financial statements of CGI Group Inc. For the three months ended December 31, 2001
CGI Group Inc. Consolidated statements of earnings (in thousands of Canadian dollars, except per share amounts) (unaudited) ======================================================================================================================= Three months ended December 31, 2001 2000 - ----------------------------------------------------------------------------------------------------------------------- $ $ Revenue 520,783 334,179 - ----------------------------------------------------------------------------------------------------------------------- Operating expenses Costs of services, selling and administrative expenses 439,535 289,821 Research 4,305 2,490 - ----------------------------------------------------------------------------------------------------------------------- 443,840 292,311 - ----------------------------------------------------------------------------------------------------------------------- Operating earnings before: 76,943 41,868 - ----------------------------------------------------------------------------------------------------------------------- Depreciation and amortization of fixed assets 11,144 6,837 Amortization of contract costs 13,240 5,467 - ----------------------------------------------------------------------------------------------------------------------- 24,384 12,304 - ----------------------------------------------------------------------------------------------------------------------- Earnings before the following items 52,559 29,564 - ----------------------------------------------------------------------------------------------------------------------- Interest Long-term debt (826) (862) Other 50 (38) Income 362 545 - ----------------------------------------------------------------------------------------------------------------------- (414) (355) - ----------------------------------------------------------------------------------------------------------------------- Earnings before income taxes, entity subject to significant influence and amortization of goodwill 52,145 29,209 Income taxes 21,533 13,074 - ----------------------------------------------------------------------------------------------------------------------- Earnings before entity subject to significant influence and amortization of goodwill 30,612 16,135 Entity subject to significant influence -- 7 - ----------------------------------------------------------------------------------------------------------------------- Earnings before amortization of goodwill 30,612 16,142 Amortization of goodwill, net of income taxes -- 5,720 - ----------------------------------------------------------------------------------------------------------------------- Net earnings 30,612 10,422 ======================================================================================================================= Weighted average number of outstanding Class A subordinate shares and Class B shares 369,406,415 275,663,540 ======================================================================================================================= Basic and diluted earnings per share before amortization of goodwill (Note 2) 0.08 0.06 ======================================================================================================================= Basic and diluted earnings per share (Note 2) 0.08 0.04 ======================================================================================================================= Consolidated statements of retained earnings (in thousands of Canadian dollars) (unaudited) ======================================================================================================================= Three months ended December 31, 2001 2000 - ----------------------------------------------------------------------------------------------------------------------- $ $ Retained earnings, beginning of period 245,945 183,156 Share issue costs (Note 2) (3,800) -- Net earnings 30,612 10,422 - ----------------------------------------------------------------------------------------------------------------------- Retained earnings, end of period 272,757 193,578 ======================================================================================================================= 2
CGI Group Inc. Consolidated balance sheets (in thousands of Canadian dollars) (unaudited) - --------------------------------------------------------------------------------------------------- As at December 31, As at September 30, 2001 2001 - --------------------------------------------------------------------------------------------------- $ $ Assets Current assets Cash and cash equivalents 155,830 46,008 Accounts receivable 313,388 320,667 Income taxes 7,020 979 Work in progress 83,708 84,838 Prepaid expenses and other current assets 66,389 48,931 Future income taxes 15,297 17,998 - --------------------------------------------------------------------------------------------------- 641,632 519,421 Fixed assets 132,563 123,391 Contract costs and other long-term assets 322,947 272,403 Future income taxes 35,954 32,785 Goodwill 1,142,066 1,114,793 - --------------------------------------------------------------------------------------------------- 2,275,162 2,062,793 =================================================================================================== Liabilities Current liabilities Accounts payable and accrued liabilities 312,673 315,902 Deferred revenue 87,896 85,163 Future income taxes 21,489 21,013 Current portion of long-term debt 5,857 7,528 - --------------------------------------------------------------------------------------------------- 427,915 429,606 Future income taxes 45,512 43,705 Long-term debt 54,740 32,752 Deferred credits 84,955 74,813 - --------------------------------------------------------------------------------------------------- 613,122 580,876 - --------------------------------------------------------------------------------------------------- Shareholders' equity Capital stock (Note 2) 1,341,135 1,213,542 Contributed surplus 211 211 Warrants (Note 2) 19,655 19,655 Retained earnings 272,757 245,945 Foreign currency translation adjustment 28,282 2,564 - --------------------------------------------------------------------------------------------------- 1,662,040 1,481,917 - --------------------------------------------------------------------------------------------------- 2,275,162 2,062,793 =================================================================================================== 3
CGI Group Inc. Consolidated statements of cash flows (in thousands of Canadian dollars) (unaudited) ================================================================================================================== Three months ended December 31, 2001 2000 - ------------------------------------------------------------------------------------------------------------------ $ $ Operating activities Net earnings 30,612 10,422 Adjustments for: Depreciation and amortization of fixed assets 11,144 6,837 Amortization of contract costs and other long-term assets 13,240 5,467 Amortization of goodwill -- 6,086 Deferred credits (13,679) -- Future income taxes 1,815 942 Foreign exchange loss 187 1,129 Entity subject to significant influence -- (7) - ------------------------------------------------------------------------------------------------------------------ 43,319 30,876 - ------------------------------------------------------------------------------------------------------------------ Changes in non-cash operating working capital items: Accounts receivable 7,284 9,356 Work in progress 1,118 16,751 Prepaid expenses and other current assets (17,441) (3,380) Accounts payable and accrued liabilities (3,308) (3,941) Income taxes (6,052) (11,306) Deferred revenue 2,634 2,017 - ------------------------------------------------------------------------------------------------------------------ (15,765) 9,497 - ------------------------------------------------------------------------------------------------------------------ Cash provided by operating activities 27,554 40,373 - ------------------------------------------------------------------------------------------------------------------ Financing activities Net variation of credit facility 21,363 20,000 Increase (Decrease) of other long-term debts (1,046) (1,173) Issuance of shares 127,593 174 Share issue costs (5,500) -- - ------------------------------------------------------------------------------------------------------------------ Cash used for financing activities 142,410 19,001 - ------------------------------------------------------------------------------------------------------------------ Investing activities Business acquisitions (net of cash) -- (54,471) Purchase of fixed assets (20,287) (2,987) Contract costs and other long-term assets (39,806) (134) - ------------------------------------------------------------------------------------------------------------------ Cash provided by (used for) investing activities (60,093) (57,592) - ------------------------------------------------------------------------------------------------------------------ Foreign exchange (loss) gain on cash held in foreign currencies (49) 330 - ------------------------------------------------------------------------------------------------------------------ Net (decrease) increase in cash and cash equivalents 109,822 2,112 Cash and cash equivalents at beginning of period 46,008 49,341 - ------------------------------------------------------------------------------------------------------------------ Cash and cash equivalents at end of period 155,830 51,453 ================================================================================================================== Interest paid 450 900 Income taxes paid and received 6,504 18,596 ================================================================================================================== 4
CGI Group Inc. 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 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. On October 1, 2001, the Company adopted the new recommendations of the Canadian Institute of Chartered Accountants ("CICA") Handbook sections 1581, Business Combinaisons, and 3062, Goodwill and Other Intangible Assets. Under the revised section 1581, all business combinations are accounted for using the purchase method. Additionally, under the revised section 3062, goodwill and intangible assets with an indefinite life will no longer be amortized to earnings and will be assessed for impairment on an annual basis in accordance with the new standards, including a transitional impairment test whereby any resulting impairment will be 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 is currently evaluating the impact of the transitional impairment test, and therefore has not yet assessed its effect on the Company's future consolidated net earnings and financial position. On October 1, 2001, the Company reclassified its UK subsidiary company from integrated foreign operations to self-sustained foreign operations as a result of changes in the economic facts and cirumstances. Consequently, this subsidiary was accounted for using the current-rate method, which change was applied prospectively. Note 2 - Capital Stock 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 ten 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. 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 preceeding the date of grant. Each option must be exercised within a ten-year period, except in the event of retirement, termination of employment or death. Warrants In connection with the signing of 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 September 30, 2001, 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 5 years. In addition to the warrants to purchase up to 5,118,210 Class A 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 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 Shares to issue promptly after April 30, 2006 (the "Expiration Date") replacing warrants (the "Extended Warrants") to purchase Class A Shares equal to the number of Class A 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 Shares on the TSE on the date preceding the issuance of the Extended Warrants. 5 CGI Group Inc. Notes to the consolidated financial statements (tabular amounts only are in thousands of Canadian dollars, except share data)(unaudited) Note 2 - Capital Stock and Warrants (cont'd) The following table presents information concerning capital stock issued and paid and all stock options and warrants as at December 31, 2001 :
Number of shares issued and paid Number - ------------------------------------------------------------------------------------------------------------------- Class A subordinate shares 338,624,036 Class B shares 40,799,774 - ------------------------------------------------------------------------------------------------------------------- Total capital stock 379,423,810 Number of stock options (Class A subordinate shares) 23,675,032 Number of warrants (Class A subordinate shares) 9,680,268 - ------------------------------------------------------------------------------------------------------------------- Number of shares reflecting the potential exercise of stock options and warrants 412,779,110 ===================================================================================================================
As at December 31, 2001 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 :
December 31, 2001 - ------------------------------------------------------------------------------------------------------------------------------------ Class A subordinate shares Class B shares - ------------------------------------------------------------------------------------------------------------------------------------ Number Amount Number Amount - ------------------------------------------------------------------------------------------------------------------------------------ $ $ Balance, beginning of period 327,032,717 1,159,337 40,799,774 54,205 Issued for cash (1) 11,110,000 124,988 -- -- Issued as consideration for business acquisitions -- -- -- -- Fair value of options issued as consideration for business acquisitions -- -- -- -- Options exercised 481,319 2,605 -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Balance, end of period 338,624,036 1,286,930 40,799,774 54,205 ==================================================================================================================================== September 30, 2001 - ------------------------------------------------------------------------------------------------------------------------------------ Class A subordinate shares Class B shares - ------------------------------------------------------------------------------------------------------------------------------------ Number Amount Number Amount - ------------------------------------------------------------------------------------------------------------------------------------ $ $ Balance, beginning of period Issued for cash (1) 240,755,667 490,645 34,846,526 1,162 Issued as consideration for business acquisitions -- -- 5,953,248 53,043 Fair value of options issued as consideration for business acquisitions 85,835,178 651,010 -- -- Options exercised -- 16,519 -- -- 441,872 1,163 -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Balance, end of period 327,032,717 1,159,337 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 all stock options granted to certain employees and directors by the Company as at December 31, 2001 and September 30, 2001.
December 31, 2001 September 30, 2001 - ------------------------------------------------------------------------------------------------------- Number of options Outstanding, beginning of period 24,223,852 6,413,181 Granted 407,446 10,643,930 Granted as consideration for business acquisitions -- 8,424,502 Exercised (481,319) (441,872) Forfeited and expired (474,947) (815,889) - ------------------------------------------------------------------------------------------------------- Outstanding, end of period 23,675,032 24,223,852 ======================================================================================================= 6
CGI Group Inc. Notes to the consolidated financial statements (tabular amounts only are in thousands of Canadian dollars, except share data)(unaudited) Note 2 - Capital Stock and Warrants (cont'd) Earnings per share The following table sets forth the computation of basic and diluted earnings per share for the three months ended December 31, 2001 and December 31, 2000.
- ----------------------------------------------------------------------------------------------------------- Three months ended December 31, - ----------------------------------------------------------------------------------------------------------- 2001 - ----------------------------------------------------------------------------------------------------------- Net earnings Number of shares Per share (numerator) (denominator) amount - ----------------------------------------------------------------------------------------------------------- $ $ Net earnings available to common shareholders 30,612 369,406,415 0.08 - ----------------------------------------------------------------------------------------------------------- Dilutive options 4,246,841 Dilutive warrants 3,291,477 - ----------------------------------------------------------------------------------------------------------- Net earnings available to common shareholders and assumed conversions 30,612 376,944,733 0.08 =========================================================================================================== - ----------------------------------------------------------------------------------------------------------- Three months ended December 31, - ----------------------------------------------------------------------------------------------------------- 2000 - ----------------------------------------------------------------------------------------------------------- Net earnings Number of shares Per share (numerator) (denominator) amount - ----------------------------------------------------------------------------------------------------------- $ $ Net earnings available to common shareholders 10,422 275,663,540 0.04 - ----------------------------------------------------------------------------------------------------------- Dilutive options 919,344 Dilutive warrants -- - ----------------------------------------------------------------------------------------------------------- Net earnings available to common shareholders and assumed conversions 10,422 276,582,884 0.04 ===========================================================================================================
Note 3 - Segmented information The Company provides information technology services. Effective October 1, 2001, the Company changed it's 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.
===================================================================================================== As at and for the three months Canada and US and BPS ended December 31, 2001 Europe Asia Pacific - ----------------------------------------------------------------------------------------------------- $ $ $ Revenue 430,698 94,496 20,104 Operating expenses 355,366 89,593 14,751 - ----------------------------------------------------------------------------------------------------- Operating earnings before: 75,332 4,903 5,353 Depreciation and amortization 19,132 4,159 770 - ----------------------------------------------------------------------------------------------------- Earnings before interest, income taxes and amortization of goodwill 56,200 744 4,583 ===================================================================================================== Total assets 1,193,032 809,821 72,985 ===================================================================================================== As at and for the three months ended December 31, 2000 Revenue 294,027 37,977 18,160 Operating expenses 246,147 40,475 14,527 - ----------------------------------------------------------------------------------------------------- Operating earnings before: 47,880 (2,498) 3,633 Depreciation and amortization 10,682 588 759 - ----------------------------------------------------------------------------------------------------- Earnings before interest, income taxes and amortization of goodwill 37,198 (3,086) 2,874 ===================================================================================================== Total assets 709,832 99,510 84,435 ===================================================================================================== As at and for the three months Corporate Intersegment Total ended December 31, 2001 expenses and elimination programs - ----------------------------------------------------------------------------------------------------- $ $ $ Revenue -- (24,515) 520,783 Operating expenses 8,645 (24,515) 443,840 - ----------------------------------------------------------------------------------------------------- Operating earnings before: (8,645) -- 76,943 Depreciation and amortization 323 -- 24,384 - ----------------------------------------------------------------------------------------------------- Earnings before interest, income taxes and amortization of goodwill (8,968) -- 52,559 ===================================================================================================== Total assets 199,324 == 2,275,162 ===================================================================================================== As at and for the three months ended December 31, 2000 Revenue -- (15,985) 334,179 Operating expenses 7,147 (15,985) 292,311 - ----------------------------------------------------------------------------------------------------- Operating earnings before: (7,147) -- 41,868 Depreciation and amortization 275 -- 12,304 - ----------------------------------------------------------------------------------------------------- Earnings before interest, income taxes and amortization of goodwill (7,422) -- 29,564 ===================================================================================================== Total assets 63,635 == 957,412 =====================================================================================================
Note 4 - Comparative figures Certain comparative figures have been reclassified in order to conform to the presentation adopted in 2002. 7 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: January 18, 2002 By /s/ Paule Dore Name: Paule Dore Title: Executive Vice President and Chief Corporate Officer and Secretary -----END PRIVACY-ENHANCED MESSAGE-----