CGI HOLDING (fka CGIH)

[abh3vt]

Bob and stockpeeker, CGI breakdown by division (FY04 proforma numbers):

 
  
 Pro Forma Statement of Operations														 
 Twelve Months Ended December 31, 2004														 
 														 
 														 
 			CGI			WebCapades			Pro Forma Adjustments			Total		 
 														 
 														 
 Net Revenue			$	21,473,565		$	4,264,607					$	25,738,172	 
 Cost of Revenue				4,057,843			951,625						5,009,468	 
 														 
 														 
 														 
 Gross Profit			$	17,415,722		$	3,312,982					$	20,728,704	 
 Operating Expenses				12,691,946			1,264,520			(A)163,474			14,119,940	 
 														 
 														 
 														 
 Income From Operations			$	4,723,776		$	2,048,462					$	6,608,764	 
 Other Income(Expense)				2,423			10,978						13,401	 
 														 
 														 
 														 
 Income Before Income Taxes			$	4,726,199		$	2,059,440					$	6,622,165	 
 Provision for Income Taxes				1,786,233			0			(B)719,386			2,505,619	 
  
 

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So, Webcapades has better pretax margins, but Websourced is growing faster on the top line and has provides much more revenue. Organic growth for just these two divisions was tremendous in FY04 (55% for Webcapades and 169% for Websourced).

Stockpeeker, I agree that the growth via acquisition model is not well liked on Wall Street (for good reasons), but the organic growth here is still very strong and showing no signs of slowing down.

I think one of the key things to watch for is if pretax margins can come in higher than 20% of revenues. They slipped a quite a bit there last quarter (Q4) because of doing business with companies that didn't pay their bills. Here's the dropoff:
Quarter - Pretax Margin
=======================
Q1.....25.1%
Q2.....25.7%
Q3.....25.4%
Q4.....15.5% (0uch)

Let's hope they've learned their lesson and have tightened up their credit policies!