Mr. Michael Roach reports

CGI REPORTS STRONG FINANCIAL PERFORMANCE IN FIRST HALF OF FISCAL 2012

CGI Group Inc. had fiscal 2012 second quarter revenue of $1.07-billion, up 3.3 per cent compared with the first quarter of fiscal 2012 and lower by 4.1 per cent compared with the second quarter of fiscal 2011.

Highlights:

• Revenue of $1.07-billion;
• Backlog of $13.1-billion;
• Adjusted EBIT (earnings before interest and tax) of $156.4-million;
• Adjusted EBIT margin of 14.7 per cent;
• Net earnings of $105.7-million;
• Net earnings margin of 9.9 per cent;
• Diluted EPS (earnings per share) of 40 cents;
• Cash provided by operating activities of $104.2-million or 39 cents per diluted share;
• Investment of $30.0-million in share buyback;
• Reduced debt by $77.3-million;
• Return on equity of 17.4 per cent; return on invested capital of 12.5 per cent;
• Bookings over the last 12 months of $5.1-billion, or 124.0 per cent of revenue.

Adjusted EBIT was $156.4-million, representing a margin of 14.7 per cent, compared with $153.7-million and 13.8 per cent in the same period last year.

Net earnings were $105.7-million or 9.9 per cent of revenue and diluted earnings per share were 40 cents.

For year-over-year comparison purposes, a favourable tax adjustment as well as other previously disclosed items have been removed from second quarter fiscal 2011. As a result, second quarter fiscal 2012 net earnings compare with $111.8-million or 10.1 per cent in the year ago period; and diluted earnings per share were 40 cents.

The company generated $104.2-million in cash from operating activities during the quarter, or 9.8 per cent of revenue. Over the last 12 months CGI generated $532.7-million or $1.97 in cash per diluted share.

                         FINANCIAL RESULTS
  (In millions of dollars except earnings per share and where noted)  
                                     
                                                   Q2 2012        Q2 2011

Revenue                                           $1,065.8       $1,111.7
Adjusted EBIT                                        156.4          153.7
Margin                                               14.7%          13.8%
Net earnings                                         105.7          118.7
Margin                                                9.9%          10.7%
Earnings per share (diluted)                          0.40           0.43
Net finance costs                                      8.9            3.2
Net-debt-to-capitalization ratio                     24.0%          29.2%
Cash provided by operating activities                104.2          192.4
Days of sales outstanding (DSO)                         53             43
Return on equity                                     17.4%          19.0%
Return on invested capital                           12.5%          15.9%
Bookings                                               787            771
Backlog                                             13,118         12,459
 

During the quarter, the company booked $787-million in new contract wins, extensions and renewals, bringing the total bookings over the last 12 months to $5.1-billion, for a book to bill of 124.0 per cent. At the end of March, 2012, the company's backlog of signed orders stood at $13.1-billion, up $659-million compared with the same period last year. The backlog represents approximately 3.2 times revenue on a trailing 12-month basis.

"We delivered solid results in the second quarter and throughout the first half of fiscal 2012, demonstrating sequential revenue growth and industry-leading profitability," said Michael E. Roach, president and chief executive officer. "We continue to identify and shape additional profitable growth opportunities across all our vertical markets. Our strong cash generation continues to enable us to further reducing debt and repurchase our shares."

During the quarter, the company reduced debt by $77.3-million for a net debt of $795.3-million at the end of the quarter, representing a net debt to capitalization of 24.0 per cent. At the end of second quarter fiscal 2012, the company had approximately $1.3-billion in available cash and unused credit facilities.

Normal course issuer bid

The company purchased approximately 1.6 million CGI shares during the quarter for $30.0-million at an average price of $19.30 as part of its program, renewed on Feb. 1, 2012, allowing the purchase of up to 10 per cent of the company's public float of Class A subordinate shares, or approximately 22 million shares over the next year.

During the first half of fiscal 2012, 4.9 million shares have been purchased at an average price of $19.01 for a total investment of $93.4-million.

Second quarter fiscal 2012 results conference call

Management will host a conference call to discuss results at 9 a.m. Eastern Time this morning. Participants may access the call by dialling 866-226-1792 or on the Web at the company's website. Supporting slides for the call will also be available. For those unable to participate on the live call, a podcast and copy of the slides will be archived for download at the company's website.

We seek Safe Harbor.