Canadian Tire Corporation, Limited reported
2001 first quarter consolidated net earnings of $28.7 million, compared to the
$24.2 million recorded in the first quarter of 2000, an 18.9 per cent
increase. First quarter consolidated net earnings per share were $0.37, up
18.2 per cent compared to $0.31 per share recorded in the first quarter of

“We are pleased with our ability to deliver double digit earnings growth
in a difficult operating environment,” said Wayne C. Sales, president and
chief executive officer, Canadian Tire Corporation, Limited. “We had strong
sales performance in hardware, housewares and home improvement; however, the
timing of the start of the Spring selling season can cause variation in our
seasonal business. In March, we experienced a significant impact in our
seasonal business compared to 2000. April consumer spending on seasonal goods
reversed this trend and increased nicely,” added Sales.
The increase in earnings was primarily due to strong contributions from
Financial Services — including a total positive earnings impact of $8 million
from the divestiture of Hamilton Discount Corporation Limited and a third-
party portfolio of receivables — and from Petroleum. During the first quarter
the Corporation’s retail business was negatively impacted by the shift of
consumer spending in the Spring selling season into the second quarter, and by
incremental expenses compared to the same quarter last year associated with
the continued development of growth initiatives including PartSource and the
Corporation’s consumer online business. As a result, Canadian Tire Retail
total and comparable store sales, and earnings contributions, were impacted.
Consolidated gross operating revenue for the first quarter of 2001 was
$1,135.3 million, up 2.8 per cent from the $1,104.3 million recorded in the
first quarter of 2001. The increase in gross operating revenue was due to
growth in all three business units, led by an increase of 14.6 per cent in
Financial Services. Petroleum experienced a 3.7 per cent increase in gross
operating revenue in spite of an industry volume decline during the quarter,
while Canadian Tire Retail gross operating revenues were up only 1.5 per cent
from the same quarter last year, due to the unseasonable weather conditions
described previously.

– Four new-format stores were opened, bringing to 237 the total number of
new-format stores that have been opened since the rebuilding program
was initiated in 1994.

– “Next Generation” merchandising, offering improved sightlines,
navigation and expanded assortments, was introduced in those four new-
format stores and retrofitted in 16 existing stores.

– For the first time in the Corporation’s history, direct shopping via
phone or online from the annual catalogue was introduced.

– The product assortment available to shoppers visiting was expanded to 12,000
products, including 4,000
available from the catalogue.

– PartSource, the Corporation’s standalone specialty automotive parts
chain, opened one new store bringing the total to 29. PartSource also
progressed significantly in completing the conversion of recently
acquired Auto Village/Drivers stores to the PartSource format.

– Financial Services continued its strategic progress in simplifying its
business structure including the divestiture of Hamilton Discount
Corporation Limited, while increasing performance from its continued
investments in Canadian Tire-branded products and services.

“Our focus on building shareholder value and in investing in our future
growth and leadership remains unchanged. I am pleased with our progress on our
strategic agenda and have great confidence in our ability to drive our
organization to a new level of performance,” added Sales.

The Corporation reaffirms its outlook for an increase in consolidated net
earnings in the range of seven to nine per cent in 2001 and to increase gross
operating revenues in the range of six to eight per cent.

On March 1, 2001 the Board of Directors declared a dividend of $0.10 per
share on each Common and Class A Non-Voting share. The dividend is payable on
June 1, 2001 to shareholders of record on April 30, 2001.

Canadian Tire Corporation, Limited (TSE CTR.A, CTR) — the country’s
most shopped retailer — offers a unique mix of products and services through
three distinct, yet inter-related businesses. Canadian Tire Retail and the
Associate Dealers together form one of Canada’s best-known and most successful
retailers, offering customers the convenience and leadership of three
specialty stores under one roof — Automotive, Sports and Leisure, and Home
Products. Since the launch of its webstore at and phone
order at 1-866-SHOP-CTR, Canadian Tire has become one of a few retailers in
Canada to offer customers an integrated shopping experience using all of the
key shopping channels available today, including stores, online, by phone and
from the catalogue. Canadian Tire Financial Services manages related financial
products and services for retail and petroleum customers, and also markets
other value-added products to our customers. Canadian Tire Petroleum is one of
the country’s largest independent retailers of gasoline, with 207 outlets.
With 443 Canadian Tire Associate Stores serving communities nationwide,
Canadian Tire Corporation, Limited and the Associate Dealers together employ
more than 38,000 Canadians.

2001 First Quarter Report to Shareholders


Dear Fellow Shareholder,

The business and operating environment we entered in the first quarter of
2001 had a high degree of uncertainty about both economic growth and the
impact of anticipated weather patterns on seasonal retail businesses.
Within this environment, we are pleased to deliver consolidated net
earnings of $28.7 million, an improvement of 18.9 per cent in the first
quarter compared to the same period last year. Earnings per share were $0.37
per share in the first quarter, up 18.2 per cent from $0.31 per share in the
first quarter of 2000. Our earnings improvement was driven primarily by
contributions from our Petroleum and Financial Services businesses, including
a gain on the divestiture of Hamilton Discount Corporation Limited.
Gains in these two businesses more than compensated for reduced earnings
and modest revenue growth in our Canadian Tire Retail business. We are pleased
with our sales performance in hardware, housewares and home improvement;
however, the timing of the start of the Spring selling season can cause
variation in our seasonal business. In March, we experienced a significant
impact in our retail business compared to 2000. April consumer spending on
seasonal goods reversed this trend and increased nicely. Earnings in our
retail business were also impacted by incremental expenses compared to the
first quarter in 2000 associated with the continued development of growth
initiatives including PartSource and our consumer online business.
While we are pleased with our continued progress in delivering net
earnings improvement, our results also clearly demonstrate the need to
continue our focus of driving higher levels of performance and growth in our
core retail business.

Looking forward

As you will read in the following pages, Canadian Tire is making solid
progress on our strategic agenda. We are working on two distinct initiatives
(i) delivering superior operating performance while driving down costs in the
short-term, and (ii) designing our strategic growth roadmap for the future.
Your management team is committed to success on both fronts. Canadian Tire
will continue to be an organization that shapes the landscape in North
American retailing.


Wayne C. Sales
President & Chief Executive Officer

Management’s Discussion and Analysis

Canadian Tire Corporation, Limited (“Canadian Tire” or the “Corporation”)
comprises three business units Canadian Tire Retail (“CTR”), Canadian Tire
Petroleum (“Petroleum”) and Canadian Tire Financial Services (“Financial

The 2.8 per cent increase in consolidated gross operating revenue during
the quarter was due to growth in all three of the business units, led by a
14.6 per cent increase in Financial Service’s gross operating revenue.
Consolidated net earnings year-over-year increased by 18.9 per cent as a
result of strong earnings contributions by Financial Services and Petroleum
that more than offset the decline in operating earnings recorded by CTR. On a
per share basis, the rise in consolidated net earnings was only slightly less
at 18.2 per cent as the weighted average number of shares outstanding
increased to 78.6 million from 78.2 million a year earlier.

Review of Operations

This discussion of the Corporation’s business units reviews their
operational and financial performance in the first quarter of 2001 compared to
the same period of 2000.

Canadian Tire Associate Dealers reported first quarter retail sales that
were relatively flat compared to the same period last year. This performance
derives from a 5.2 per cent reduction in comparable store sales, offset by
sales increases attributable to new stores. Comparable store sales were
impacted by the shift in consumer seasonal spending into the second quarter
because of unseasonable weather.

CTR’s gross operating revenue increased 1.5 per cent reflecting quarterly
shipments that were 1.9 per cent higher than in the first quarter of last

Operating earnings were 24.0 per cent lower in the quarter than in the
same quarter of 2000 as a result of higher expenses associated with the
continued investment in CTR’s growth initiatives, which are designed to
enhance future earnings. Increased expenses associated with these growth
initiatives comprise $7 million associated with the 2001 expansion of CTR’s e-
commerce offering and $4 million for PartSource, including the amortization of
previously capitalized expenses and higher operating costs that reflect the
large number of new stores.

During the first quarter, CTR opened four additional new-format stores,
bringing to 237 the total number of new-format stores that have been opened
since the rebuilding program was initiated in 1994. The total store network
increased to 443 stores at the end of the first quarter.
“Next Generation” merchandising, which offers customers improved sight
lines, easier navigation and expanded assortments in hardware, home
improvement, housewares and tires, was incorporated in the four stores opened
to date in 2001 and retrofitted in 15 existing new-format stores. Since the
launch of this program, 108 stores have incorporated the Next Generation
merchandising innovations.

CTR offers customers an integrated shopping experience using all the key
shopping channels available today, including stores, online, phone and, for
the first time in the Corporation’s history, national direct shopping via
phone or online from the annual catalogue. The e-commerce offering on has been expanded to 12,000
products and now includes
4,000 products from the catalogue.

PartSource, the Corporation’s stand-alone automotive parts retail chain,
also opened one new store in the first quarter, bringing the total to 29 of
these specialty stores in operation. Complete conversion of the six acquired
Auto Village/Drivers stores to the PartSource format is expected by mid-2001.

Petroleum’s quarterly gross operating revenue rose by 3.7 per cent as
gasoline prices across the industry were on average higher over last year,
reflecting the higher cost of crude oil. Industry gasoline litre sales volume
declined by 3 per cent in the quarter, while Petroleum’s volume sales were
down 0.9 per cent, indicating a further gain in market share.

Operating earnings increased 14.1 per cent as expenses continued to be
well managed.

Financial Services’ gross operating revenue increased primarily due to
growth in credit charge receivables balances during 1999 and 2000 attributable
to portfolio conversions of Canadian Tire retail cards to the Options
MasterCard, a higher number of new accounts and the introduction of Canadian
Tire ‘Money’ on the Card. Also, the larger base of cardholders created in 2000
allowed for significant growth in revenues from the sale of insurance products
to credit card holders in the first quarter.

Operating earnings increased 65.0 per cent in the first quarter. A major
factor contributing to this performance was a total positive impact of $8.0
million from the sale of $135.0 million in non-securitized third-party credit
portfolios, including the sale of Hamilton Discount, a stand alone subsidiary
dedicated to the third-party credit business. These sales reflect Financial
Services’ continued initiative to simplify its business structure and
processes to reduce operating expenses and focus its resources on building its
Canadian Tire branded credit card and MasterCard portfolios. First quarter
operating earnings also benefited from earlier investments in the re-launch of
Canadian Tire branded credit cards under the new Canadian Tire ‘Money’ on the
card loyalty program. First quarter operating earnings, before the benefit of
the sale of non-securitized third-party credit portfolios, were strong, up
$3.6 million or 20.1 per cent.

Strategic Review

In the quarter, Canadian Tire continued its comprehensive strategic
review of the Corporation’s businesses and the opportunities for long-term
growth. While the strategic priorities and the timetable for their
implementation are being developed, management is committed to improving near-
term earnings by continuing to invest in existing programs designed to
increase total and comparable store sales and to significantly drive down
costs. The strategic review will result in the development of a long-term
strategic plan, which will include the identification of new business
opportunities. The review will also ensure that the Corporation has the
capital structure and competencies to realize appropriate returns from any
such opportunities.

Financial Condition

A primary objective of Canadian Tire is to maintain consistently strong
earnings and cash flows, as well as a strong capital structure. This is
essential to ensure that the Corporation maintains its ability to fund future
growth at competitive rates and to build long-term shareholder value.

Capital Structure

Canadian Tire’s objectives in selecting appropriate funding alternatives
includes managing its capital structure in such a way as to diversify its
funding sources, minimize its funding costs and risk and optimize its credit
rating. Canadian Tire continues to have ready access to debt markets at
competitive interest rates.

Equity – The book value of Common and Class A Non-Voting Shares at the
end of the quarter was $18.98 per share compared to $17.58 at the end of the
first quarter of 2000.

During the first quarter of 2001, the Corporation issued 286,852 Class A
Non-Voting Shares under various corporate and Dealer employee profit-sharing
programs as well as under the Corporation’s stock-purchase, stock-option and
dividend-reinvestment plans. In 2000, 1.8 million shares were issued under
these plans.
The issuance of Class A Non-Voting Shares during the quarter was offset
by the purchase of 200,000 of these shares under the Corporation’s Normal
Course Issuer Bid Program (“Issuer Bid Program”) on the Toronto Stock

During 2001, the Corporation proposes to purchase up to 2.7 million Class
A Non-Voting Shares through its Issuer Bid Program to offset the expected
dilutive effect on earnings per share of various programs. A further 3.4
million of these shares may be purchased through the Issuer Bid Program if the
purchases can be made on terms that serve the best interests of the
Corporation and its shareholders.

Shares Outstanding – At March 31, 2001 there were 75,216,186 Class A Non-
Voting Shares and 3,423,366 Common Shares outstanding; this compares to
75,129,333 Class A Non- Voting Shares and 3,423,366 Common Shares outstanding
at December 30, 2000.
Dividends – Dividends declared on Common and Class A Non-Voting Shares
were $8 million in the quarter, unchanged from the same period of 2000.
Short-term Debt – The Corporation has a Commercial Paper program with an
$800 million authorized limit. At the end of the quarter, $412.7 million of
commercial paper was outstanding. No commercial paper was outstanding at
December 30, 2000.

Credit ratings for the Corporation’s commercial paper at the end of the
quarter were “R-1(low)” from Dominion Bond Rating Service Limited (“DBRS”) and
“A-1(low)” from Standard & Poor’s harmonized Canadian national scale
commercial paper rating.

The Corporation also has committed lines of credit that are equal to or
greater than the maximum projected amount of outstanding commercial paper
balances; none of these lines has been drawn upon. Undrawn committed lines of
credit were $800 million as at March 31, 2001.

Long-term Debt – In order to gain access to debt markets in a timely
manner as required, Canadian Tire has filed a shelf prospectus with provincial
securities commissions for the issuance of $500 million of Medium Term Notes.
This program is evaluated every two years. The last renewal was completed in
December 2000. Long-term debt, including the current portion, was $1,115
million at March 31, 2001, unchanged from December 30, 2000.
The Corporation’s long-term debt is currently rated “A(low)” from DBRS
and “BBB+” under Standard & Poor’s harmonized corporate debt rating program.
Like most issuers, Canadian Tire has provided covenants to certain of its
lenders. All of the covenants were complied with during 2001 and 2000.

Funding Program

Funding Requirements
The Corporation’s capital expenditures, working capital needs, dividend
payments and other financing needs, such as debt repayments and share
purchases under the Issuer Bid Program, are funded from a combination of
sources. In the first quarter of 2001, funding was comprised of $413 million
from the issuance of commercial paper, $80 million of cash generated from
operations, and $135 million from the sale of Hamilton Discount Corporation
Limited (HDCL), of which $75 million was used to extinguish HDCL’s debt to the

2001 Capital Program
Canadian Tire’s 2001 capital requirements, which are determined on a
consolidated basis, are still expected to total just over $422 million.
Of the $70 million of capital invested in the first quarter of 2001, $56
million was spent on Real Estate projects associated with the roll-out of new-
format stores and $8 million was spent on CustomerLink.

Sources of Liquidity
The Corporation has access to funding well in excess of its 2001
In 2001 it intends to fund its capital program through a combination of
cash flow from operations, improvements in working capital, the use of both
commercial paper (up to $800 million available) and medium-term note ($500
million available) programs and additional credit card receivable
securitization. The Corporation is also exploring the potential for a real
estate based financing transaction.

Working Capital – The Corporation’s commitment to better manage working
capital resulted in a reduction in net working capital of $150 million in
2000. In the first quarter of 2001, as usually happens in the first quarter of
each year, seasonal patterns in Canadian Tire’s business resulted in an
increase in net working capital. In this quarter, while over $72 million in
cash was generated from operations, net working capital increased by $500
million and, as a result, $428 million of cash was used to fund net operating
activities. The first-quarter change in working capital included a $340
million ($227 million in 2000) reduction in accounts payable, an $85 million
($60 million in 2000) increase in accounts receivable and a $56 million ($2
million in 2000) increase in inventory as the Spring selling season was
delayed due to weather.

Cash and Short-term Investments – As at March 31, 2001 Canadian Tire’s
cash and short-term investments totaled $236 million, an 80 per cent increase
from the $131 million held at December 30, 2000. Short-term investments held
at the end of the quarter included Canadian and United States’ government-
guaranteed securities and high-quality commercial paper.
During the first quarter of 2001, cash generated from operations totalled
$72 million the same level as in the first quarter of 2000. First quarter cash
flow from operations in both years was $0.92 per share.

Canadian Tire Financial Services Receivables – The objective of the
Corporation’s credit charge receivables securitization program is to provide
Financial Services, and the Corporation, with a cost-effective, alternative
source of funding. The securitization of credit charge receivables is an
integral part of the program for funding growth.

In the first quarter of 2001, gross credit charge receivables were 17.1
per cent lower than at December 30, 2000 reflecting the sale of the third-
party credit portfolios during the quarter. Financial Services owned $265
million of the net credit charge receivables at the end of the quarter. The
balance of the credit charge receivables is securitized through the sale of
ownership interests in the credit charge receivables to the Canadian Tire
Receivables Trust(R) (the “Trust”). During 2001, the Corporation expects its
gross credit charge receivables to grow by approximately $200 million. The
majority of this growth will be funded from the sale of additional receivables
and from the sale of HDCL.
The success of these programs is due primarily to the Trust’s ability to
obtain funds by issuing debt instruments of the highest credit rating. As of
December 30, 2000 the Trust’s asset-backed Commercial Paper program had a
rating of “A-1 (high)” from CBRS and “R-1(high)” from DBRS. The Senior Notes
received a rating of “AAA” from CBRS and “AAA” from DBRS. In all cases, these
are the rating services’ highest categories. The Subordinated Notes have a
rating of “AA” from CBRS and “A(high)” from DBRS. The harmonized ratings on
these debt instruments from the combined operations of Standard & Poor’s and
CBRS has yet to be announced.

Financial Ratios

Canadian Tire continues to have a strong balance sheet and financial
ratios. These allow the Corporation relatively easy access to funding from
financial markets. It is the Corporation’s long-standing policy that the ratio
of long-term debt to total capitalization not exceed 50 per cent. Long-term
debt as a percentage of total capital decreased to 36.8 per cent from 42.9 per
cent at the end of 2000.

The current ratio at the end of the quarter was 1.31 compared to 1.41
at December 30, 2000. At the end of the quarter interest coverage on a cash-
flow basis, after adjusting earnings from operations for depreciation and
amortization, was 5.1 times compared to 4.5 times a year earlier.

Canadian Accounting Guideline 12

In the second half of 2001, Canadian issuers will adopt Canadian
Accounting Guideline 12, which establishes new conditions applicable to
accounting for securitized credit charge receivables. Canadian Tire is
reviewing the impact of the provisions of Canadian Accounting Guideline 12 and
expects to continue to account for its securitizations as sales of
receivables. Accordingly, gains would have to be recognized on the sale of new
securitizations. As the Corporation has already established an allowance for
uncollectible accounts related to the entire credit charge receivables
portfolio, management expects no material impact on earnings in 2001 from the
adoption of this new accounting standard.



Gemplus International S.A., a global provider of smart card solutions, has
named the undisputed leader in the smart card industry, according to the
market survey conducted by Gartner Dataquest. Gemplus tops the smart card
market with 35% market share for memory and micro-processor cards in 2000, 3%
ahead of its nearest competitor. In all, the company shipped 623 million units
last year, according to Gartner Dataquest estimates. Gemplus is even further
ahead in the crucial microprocessor segment where it is 5% ahead of its

This new study ratifies Gemplus’ long standing leadership in an industry that
has experienced significant and rapid restructuring in the past year. Gemplus
remains the world’s most prolific smart card solutions provider for
telecommunications, financial services and e-business security offering
integrated and tailor-made smart card-based systems.
“We are very proud to be recognized by a body as well respected as Gartner
Dataquest as the leader in every segment of our industry,” said Antonio Perez,
CEO of Gemplus International SA. “We will continue to develop our product
offerings, software and services to better serve our clients and to reinforce
our position. Our recent listing and strong financial position allow us to
further our ambitions in a market, which in spite of the slow-down in mobile
telephony, continues to experience significant growth.”
2000 was a record year for Gemplus with the highest revenue growth amongst the
major players in the industry (57% up from 1999) demonstrating its strong
business model, technological leadership and powerful market position.
This research is published by Gartner Dataquest, the recognized leader in
market intelligence for the hi-tech industry

About Gemplus

Gemplus The World’s Leading Smart Card Solutions Provider

Since its creation in 1988, Gemplus International S.A.(Euronext Sicovam 5768
and NASDAQGEMP) has driven the global marketing and deployment of smart
card-based applications for telecommunications, financial services and
e-business security.
Gemplus is instrumental throughout the value chain — chip design, card
management systems, software development, and consulting — delivering
integrated custom-made solutions for the security, personalization and privacy
management needs of clients and partners worldwide.
Gemplus technology has played a defining role in the development of wireless
telephony since the introduction of SIM cards into the GSM standard in 1990.
For more than a decade, Gemplus has pioneered applications that enable network
operators around the world to answer the changing needs of their customers.
Gemplus was first to market with a 3G card and supplies a product range
compliant with new and emerging transmission standards – 2.5G, 3G.
In 2000, revenue was 1.205 billion Euros, up 57% from the previous year’s 767
million Euros. Net income was 99 million Euros. Gemplus employs more than 7800
people in 37 countries worldwide.
Since December 11, 2000, Gemplus shares have been trading on Euronext Paris
S.A. First Market and on Nasdaq Stock Market(TM) at GEMP in the form of ADSs.


Concord & PPP

Concord EFS, Inc., a leading electronic commerce provider, announced it has expanded the deposit risk management services it offers through its majority-owned subsidiary, Primary Payment Systems, Inc. In April 2001 Concord increased its ownership position in Primary Payment Systems to 85% through the purchase of newly issued shares, which largely funded Primary Payment Systems’ acquisition of Wally Industries, Inc. (doing business as WJM Technologies), the industry leader in new account fraud detection systems. The combined company’s risk management products will provide the financial services and retail industries with comprehensive tools to reduce deposit account and securities account fraud and its related expense. Primary Payment Systems’ products are marketed to financial institutions directly and through Concord’s STAR(SM) network, the largest PIN-secured debit network in the U.S. The incremental investment was not material to Concord’s financial statements.

![][1] Primary Payment Systems operates and safeguards a national financial institution-owned database, currently composed of 145 million deposit accounts, which provides participating financial institutions with information on potentially fraudulent checks or high-risk accounts. WJM provides front-end tools to help financial services and other firms identify potentially fraudulent accounts before they are opened and activated. Through its Early Warning(R) software product, WJM currently screens over 70% of all new banking customer relationships in the U.S. With the addition of WJM’s systems and information, Primary Payment Systems now offers the three types of database information important to fraud reduction: accounts, transactions, and people. “Deposit account fraud creates enormous expense for the financial services industry, but most risk management services have traditionally focused on loan risk rather than deposit risk,” said Edward A. Labry III, Concord president. “Primary Payment Systems compiles, protects, and facilitates access to financial institutions’ pooled account information to help them avoid fraud losses. With WJM’s systems, this service becomes even more proactive, providing participants with the most complete information available to help them manage their account risk. These enhancements are part of our ongoing initiatives in Concord Network Services to bring new and improved deposit-based services to financial institutions nationwide.”

About Concord EFS, Inc.

Concord is a vertically-integrated electronic transaction processor, providing transaction authorization, data capture, settlement and funds transfer services to financial institutions, supermarkets, petroleum retailers, convenience stores, and other independent retailers. Concord’s primary activities include Payment Services, providing credit, debit, check authorization, and electronic benefits transfer (EBT) processing services to selected retail segments; and Network Services, providing gateway processing, ATM driving, online and signature debit card processing, risk management, and network access to the financial services industry under the STAR(SM) brand. Concord currently provides processing services and network access to approximately 6,500 financial institutions nationwide. Concord holds a majority interest in Primary Payment Systems, Inc., which provides risk management services to financial institutions, credit card issuers, securities and brokerage firms, and retailers. Concord acquired an initial 74% interest in Primary Payment Systems through its acquisitions of Cash Station, Inc. in 2000 and Star Systems, Inc. in 2001. Concord news releases, links to SEC filings, and other information are available on its corporate web site at [][2].

[1]: /graphic/primarypayment/pps.gif



Gemplus International S.A. reported results for the first quarter ended March
31, 2001. Revenue for the first quarter was 294 million Euros, up 27% from the
same quarter a year ago. Operating loss was 2.5 million Euros, compared
with an
operating profit of 14 million Euros for the same quarter a year ago. Net loss
for the first quarter was 7 million Euros, or 0.01 Euros per diluted share.
“Our 27% revenue growth this quarter was very solid in what clearly have been
challenging business conditions,” said Antonio Perez, president and chief
executive officer. “Dataquest’s recent industry summary for the year 2000
clearly shows Gemplus as the market share leader for both the entire smartcard
market and the SIM card segment. Moreover, the report showed a 3 percentage
point gain in our overall marketshare. We believe this trend continued into
first quarter.”

Gemplus noted that it was also pleased with the performance of the smart card
portion of its Financial Services business which grew 48%. “I believe this
business is beginning to demonstrate its potential as another source of growth
for the company,” said Perez.
The company also announced plans to restructure its operations and
forecasted a
35 million Euro charge in the second quarter. The restructuring includes a
project to close its Seebach, Germany facility and a rebalancing of its
worldwide production facilities. The company also said it would
organizationally combine its Financial Services business with its E-business
Security business while continuing to maintain a distinct focus on each of
these important market segments. The move is expected to leverage technology
trends, overlapping market requirements and partnerships. It will also better
integrate company resources to capitalize on the rapidly emerging Financial
Services opportunity. The Company stated that it expects these actions to
result in an annual savings of approximately 40 million Euros and that the
positive impacts would begin to manifest themselves in the second half of the

“These actions are absolutely necessary,” added Perez. “They will enable
Gemplus to be much more financially competitive and better align our resources
to capitalize on exciting market opportunities.”
Looking forward, Gemplus indicated that it expects revenue for its second
quarter to increase 7% from the same quarter a year ago with operating income
at about the breakeven level before restructuring. For the year 2001, the
company expects revenue growth to be approximately 12-14% with operating
profit, before restructuring, at about 90-100 million Euros.
“Given all that is happening in the macro-economic environment and our
ecosystem in particular, we feel that conservative guidance is appropriate,”
Perez said.

As a result, the company was reducing their expectation for worldwide
demand of
GSM SIM modules. While new subscriber growth remained relatively strong from a
unit growth perspective, the company indicated that demand would continue
to be
impacted by operator inventory corrections in the second quarter. The company
also noted that it expects its Financial Services business to continue the
strong performance of the first quarter.
Cash and cash equivalents were 505 million Euros at March 31, 2001. The
company’s financial results were derived from its consolidated financial
statements which have been prepared in accordance with International
Standards (IAS).

About Gemplus

GEMPLUS the world’s leading smart card solutions provider

Since its creation in 1988, Gemplus International S.A. (Euronext Sicovam 5768
and NASDAQGEMP) has driven the global marketing and deployment of smart
card-based applications for telecommunications, financial services and
e-business security.

Gemplus is instrumental throughout the value chain – chip design, card
management systems, software development, and consulting – delivering
integrated custom-made solutions for the security, personalization and privacy
management needs of clients and partners worldwide.

Gemplus technology has played a defining role in the development of wireless
telephony since the introduction of SIM cards into the GSM standard in 1990.
For more than a decade, Gemplus has pioneered applications that enable network
operators around the world to answer the changing needs of their customers.
Gemplus was first to market with a 3G card and supplies a product range
compliant with new and emerging transmission standards – 2.5G, 3G.
In 2000, revenue was 1.205 BE, up 57% from the previous year’s 767ME. Net
income was 99 ME. Gemplus employs more than 7800 people in 37 countries
worldwide. Since 11 December 2000, Gemplus shares have been trading on
Paris S.A. First Market and on Nasdaq in the form of ADSs.



To accelerate international growth in
its card issuing services business, First Data Corp., a global
leader in electronic commerce and payment services, announced it has
closed on a definitive agreement to acquire PaySys International. PaySys is a
leader in licensing financial transaction processing software applications.
Financial terms were not disclosed. The transaction is expected to have no
material impact on First Data’s 2001 earnings.
The acquisition provides First Data a new product offering primarily in
the international marketplace for bankcard, retail, private label and
acquiring processing systems.

“This gives us a global competitive advantage by adding flexible and cost
effective card processing applications currently running in more than 35
countries,” said Ric Duques, chairman and chief executive officer for First
Data Corp. “By adding the PaySys software applications to the First Data
arsenal of leading-edge payment services, we are taking a significant step to
accelerate our worldwide card processing expansion plans.”
PaySys has offices around the world in the United States, England,
Ireland, Singapore, China, Costa Rica and Australia.

“Combining the software application strengths of PaySys with the payment
systems expertise of First Data will provide huge opportunities for card
processing clients across the globe,” said Stephen B. Grubb, chairman,
president and chief executive officer of PaySys. “The platform complements
and expands the services First Data offers.”

About First Data

Atlanta-based First Data Corp. (NYSE FDC) helps move the world’s money.
As the leader in electronic commerce and payment services, First Data serves
nearly 2.5 million merchant locations, 1,400 card issuers and millions of
consumers, making it easier, faster and more secure for people and businesses
to buy goods and services using virtually any form of payment. With more than
27,000 employees worldwide, the company provides credit, debit and stored-
value card issuing and merchant transaction processing services; Internet
commerce solutions; money transfers and money orders; and check processing and
verification services throughout the United States, United Kingdom, Australia,
Mexico, Spain and Germany. In addition, its Western Union(R) network includes
approximately 104,000 agent locations with operations in 186 countries and



CIBC announced a new co-branded VISA card
to coincide with the launch of Hudson’s Bay Company’s new loyalty rewards
program, HBC Rewards.
The new credit card – the CIBC HBC Rewards VISA card – will expand and
enhance CIBC’s popular existing Club Z VISA card by offering cardholders the
opportunity to collect HBC Rewards points while shopping at over 20 million
merchants worldwide.

Effective May 2, 2001, the CIBC Club Z VISA card will automatically act
as the CIBC HBC Rewards VISA card which will offer cardholders all of the
existing benefits of the Zellers’ Club Z loyalty program as well as the
expanded benefits of the new HBC Rewards Program. In the coming months, new
cards featuring the CIBC HBC Rewards VISA name will be issued to new
cardholders, and as existing CIBC Club Z VISA cards naturally expire.
Earning HBC Rewards points is easy. The new CIBC HBC Rewards VISA will
reward cardholders with fifteen points for every dollar spent on the card at
more than 20 million merchants worldwide.

As an exclusive benefit, CIBC Club Z/HBC Rewards VISA cardholders will
automatically receive HBC Rewards Gold status. This means that cardholders
will earn double the points for their purchases at any of the Hudson’s Bay
Company family of stores – the Bay, Zellers, Home Outfitters and – for
a total of 50 base points plus 50 bonus points. HBC Rewards Gold members will
also receive up to 20 per cent off the regular number of HBC Rewards points
required for reward redemption in the catalogue.

“Today’s announcement is exciting and great news for CIBC Club Z VISA
cardholders,” said Ernie Johannson, vice president of marketing and business
development, CIBC card products division. “This new VISA card program enables
our customers to earn more HBC Rewards points faster, and adds more value to
their shopping experience at all of the HBC family of stores.”

“The CIBC HBC Rewards VISA card is a critical component to the new HBC
Rewards program,” added George Heller, president and CEO, Hudson’s Bay
Company. “This enhanced relationship between HBC, Canada’s largest department
store retailer, and CIBC, the Canadian leader in the co-branded credit card
industry, builds on our past success to extend the reach of Canada’s biggest
rewards program.”

The Zellers Club Z program was launched in 1986 and the CIBC Club Z VISA
card was introduced in 1995 by CIBC. CIBC currently has over 500,000 CIBC Club
Z VISA cardholders.

About Hudson’s Bay Company

Hudson’s Bay Company, established in 1670, is Canada’s largest department
store retailer and oldest corporation. The Company provides Canadians with the
widest selection of goods and services available through numerous retail
channels including more than 500 stores led by the Bay and Zellers chains.
Hudson’s Bay Company is Canada’s fifth largest employer with 70,000 associates
and has operations in every province in Canada.

About CIBC

CIBC is a leading North American financial institution offering more than
eight million personal banking and business customers a full range of products
and services through its comprehensive electronic banking network, branches
and offices across Canada, in the United States and around the world. CIBC is
also Canada’s number one credit card issuer, offering the most successful co-
branded and loyalty concept cards in the country. To find other news releases
and information about CIBC, visit our Media Centre at


Accesspoint Expansion

Accesspoint Corp. announced a major expansion of their check services platform, including access to a fraud prevention “check verification” database to assist merchants in determining whether or not to accept a check or ACH transaction, and the immediate cash conversion of checks for the company’s merchant clients.

The market opportunities in check processing are almost three times larger then the size of the credit and debit market with an estimated 68 billion checks written annually by Americans. The majority of these drafts are processed through labor intensive and costly methods.

Accesspoint’s services will now provide merchants the same fraud security they enjoy in accepting credit cards, with the ability to immediately turn their checks into cash. It will also help them to avoid the unnecessary fees associated with the receipt of bad checks, which continues to be a material cost and drain upon merchants.

“Security and cash flow are two of the prime concerns for our merchant customers,” said Tom Djokovich, CEO of Accesspoint. “These Accesspoint solutions serve as another logical step in the expansion of our mainstream business services. The integration of Internet payment technologies with retail payment solutions is the cornerstone of our business model.

“The addition of these services serves our brand well at establishing Accesspoint as a market leader in the payment processing industry.” This new function will pass data through a database of more than 10 million records to make acceptance recommendations based upon a consumer’s check writing history, check return rates, and velocity scoring (determining if a transaction is likely to be fraudulent based upon existing open transactions). Access to the fraud prevention database will be made available through the use of Accesspoint’s Transaction Manager and Merchant Manager Enterprise products for MO/TO (mail order/telephone order) and Internet merchants, as well as through the use of electronic check readers at retail locations and should be available within one to two weeks.

In addition to Accesspoint’s current credit card and other non-cash processing services, is Accesspoint’s new check conversion/truncation service. This service will allow a merchant to take a paper check at retail or any off-line business location, and have it converted into an electronic draft instantly. This reduces merchant processing costs, decreases processing times, and improves clients’ cash flows. Check readers and terminals will dial into Accesspoint’s processing center and submit the check for electronic settlement from the point of sale.

This transaction can then be tracked from within Accesspoint’s Transaction Manager online interface making the management of all non-cash transactions more efficient and less costly for the merchant.

About Accesspoint

Accesspoint has been serving thousands of merchants nationwide since 1995 and has combined its mature Application Services technology platform with its unique relationships with Chase Merchant Services LLC and First National Bank of Omaha to provide bundled payment acceptance and business management services. These programs provide customers with multiple payment acceptance capabilities including credit card and check transaction, a fully operational e-commerce and business management Web site, and a central Web-based management system for servicing both the brick-and-mortar and Web-based sides to each business.



Scotiabank and Citibank Canada announced that they have joined forces to offer
businesses the convenience of one-window
access to Visa and MasterCard clearing. This new service will enable Citibank
and Scotiabank merchants to process both MasterCard and Visa credit card
charges through a single bank account.

“At Scotiabank, we are always looking for ways to make it easier for our
business customers to do business,” said Albert Wahbe, Chairman and CEO of e-
Scotia and Scotiabank’s Executive Vice-President Electronic Banking. “This new
service offers the convenience and simplicity of one stop shopping for
merchants to process both MasterCard and Visa credit cards with just one bank

Scotiabank and Citibank Canada will provide a simplified financial
settlement service to enable all Visa and MasterCard funds to be delivered
into merchants’ Scotiabank deposit accounts. Scotiabank Visa merchants who
also wish to obtain MasterCard status will further benefit by receiving fast
tracked approvals and favourable rates from Citibank Canada.

“This program is another example of Citibank’s commitment to offering new
and innovative products to our customers,” said Tom Jones, President, Citibank
Canada Bankcards. “By making the clearing process easier for merchants, we’re
helping Canadian businesses save time so that they can focus more on doing

Today’s announcement also included the sale of Citibank’s merchant Visa
portfolio to Scotiabank. Citibank was required to divest its Visa portfolio
due to last year’s acquisition of Canada Trust’s MasterCard credit portfolio.
It will remain business as usual for the Citibank Visa merchants being
transferred to Scotiabank.

Scotiabank (TSEBNS) is one of North America’s premier financial
institutions, with more than $273 billion in assets and approximately 52,000
employees world-wide, including affiliates. It is also Canada’s most
international bank with more than 2,000 branches and offices in over 50
countries. Scotiabank is on the World Wide Web at

Citibank Canada is Canada’s second largest Schedule II bank and is part
of Citigroup (NYSE C), the premier global financial services company.
Citigroup provides some 100 million consumers, corporations, governments and
institutions in 100 countries with a broad range of financial products and
services, including consumer banking and credit, corporate and investment
banking, insurance, securities brokerage and asset management. The 1998 merger
of Citicorp and Travelers Group brought together such brand names as Citibank,
Travelers, Salomon Smith Barney, CitiFinancial and Primerica under Citigroup’s
trademark red umbrella. Additional information about Citigroup can be found at



Home Capital Group Inc. announced results for the first quarter. These
were generated by the
Company’s wholly owned subsidiary, Home Trust Company.

Home Capital Group’s strong earnings momentum continued in the first
quarter of 2001 with exceptional growth in earnings, earnings per share and
total assets. This represents the 23rd consecutive quarter in which earnings
exceeded those of the previous three months. These results were generated by
the Company’s wholly-owned subsidiary Home Trust Company.
For the period ended March 31, 2001, net earnings rose 38.6% to
$3,218,215. Earnings per share were $0.22, a substantial growth of 37.5% over
the first quarter of 2000. Return on equity climbed to 25.3% in the first
quarter, up from 22.4% recorded last year. Total assets were $947,698,088, an
increase of 26.6%.

Net impaired mortgage loans as at March 31, 2001 represented 0.48%
compared to 0.39% at December 31, 2000 and 0.26% at March 31, 2000. Although
there has been an increase in impaired loans, actual charge-offs during the
first quarter of 2001 were $41,000 compared to $135,000 at March 31, 2000. We
have increased the General Reserve from $3,249,000 at March 31, 2000 to
$4,530,000 at the end of the first quarter 2001.
Each element of the Company’s business has performed very well during the
period under review. Expense control was a key factor in the quarter, as our
productivity ratio was an extraordinary 40.3%.
Our core residential first mortgage business recorded strong and steady
growth. The demand for housing remained strong, and our interest rate spreads

Shareholder value was further enhanced during the first quarter by the
issuance of our second Mortgage-Backed Security in the amount of $14.5
million. Securitization provides a capital-efficient means of increasing our
mortgage lending activity and generating additional earnings.
Subsequent to the end of the first quarter the number of Home Trust VISA
accounts passed the 10,000 mark. In March 2001, Home Trust entered into a
credit card referral agreement with the Royal Bank of Canada whereby certain
applicants declined for a Royal Bank VISA will be offered a Home Trust VISA
product. We expect that this arrangement will assist the Company in continuing
the growth of our credit card portfolio.

The Board of Directors declared a quarterly dividend of $0.02 per share
payable on May 10, 2001 to shareholders of record at the close of business on
April 13, 2001.

Canada is experiencing somewhat softer economic conditions and we are
managing our business with this in mind. However, we have not seen any
negative effects on the growth or profitability of the Company to date. We
remain vigilant and are confident that our well regarded underwriting
techniques and risk management procedures will serve us well in any downturn.

We expect our robust earnings momentum in the first quarter to continue
throughout the balance of 2001. It is clear that there is a strong demand in
the marketplace for a national alternative to traditional financial
institutions and our continued success reflects this marketplace need. We are
on track to meet or exceed our stated goals for the year.

On behalf of the Board of Directors, I am pleased to invite all
shareholders to attend the Company’s Annual General Meeting to be held at the
Design Exchange, Trading Floor, Second Floor, 234 Bay Street, Toronto, Ontario
on Wednesday, June 6, 2001 at 1100 a.m. local time. Shareholders and guests
are also invited to join Directors and Management for lunch and refreshments


H&S Promotes Meyer

Hamilton and Sullivan, Ltd., an industry leading software solutions company for Internet financial services, announced today its appointment of Steven Meyer as Senior Vice President.

Mr. Meyer has been serving as Hamilton and Sullivan, Ltd.’s vice president of online banking since 1998. As senior vice president, he will direct the operational and administrative aspects of Hamilton and Sullivan, Ltd.’s online banking system as well as its mobile finance and electronic commerce.

Prior to joining Hamilton and Sullivan, Ltd., he directed software development programs for Boeing, CAP Gemini and bioMerieux. Before his technological career, Mr. Meyer served as an officer and fighter pilot in the U.S. Air Force.

“Steve in an integral part of the executive management team,” said Rick Hamilton, chief executive officer of Hamilton and Sullivan, Ltd. “His broad experience in the technology sector enables Hamilton and Sullivan, Ltd. to continue providing functional, secure and quality products to customers.”

Hamilton and Sullivan, Ltd. delivers solid business features and functionality to support web-enabled and wireless applications for Internet financial services. Hamilton and Sullivan, Ltd. is the only company in the market to offer both a native OFX online banking system for the retail, corporate and small business markets and a companion product, a comprehensive account analysis billing system, which provides commercial customers with detailed analysis statements delivered by traditional printed statements or via the Internet. Founded in 1985, Hamilton and Sullivan, Ltd. is headquartered in St. Louis, MO.

To learn more about Hamilton and Sullivan, Ltd., visit our Web site at [][1].




First Card cardholders can now look at their transactions and print out
invoices, bills and the like by themselves.
Resco has created a self-service solution which consists of a website and an
interactive voice response function, both with direct links to First Card’s
critical business systems. Travel expense accounts can now be put together
in a
much more flexible way.

First Card is a product of Nordbanken Finans. The bank has now raised the
of service for its card customers by launching a self-service solution. The
solution is both an office on the Internet (the First Card Internet office) as
well as an interactive voice response function with services and information.
The purpose of the solution is to simplify everyday business for First Card
customers. Many of them travel a lot with their jobs and need to be able to be
in contact by accessing information about their card and its transactions
around the clock. The next step will be in June when the website is expanded
with a travel bookings function.
“We were keen to create a solution that gives the greatest possible benefit to
First Card’s customers, but also a solution that is simple and cost-effective
for Nordbanken Finans themselves to develop further,” says Jan-Olof Engstrom,
the Nordbanken Finans Account Manager at Resco.

The solution that Resco has put together consists of application logic as well
as links from the web interface and interactive voice response system to First
Card’s critical business systems. Resco has constructed the web interface to
the Internet office and Telia is responsible for the interface to the
interactive voice response system. Resco is also behind the work that went
the concept now expressed by this self-service solution, where BEA Systems
products have been featured.

From you can go into the Internet
office where cardholders can get a summary of their card purchases, can
find the services they want to use and can get some tips about what First Card
can offer. The possibility of checking transactions back in time, sorting card
purchases by type of purchase, getting details about each purchase and
out bills are examples of the functions available. Instead of calling customer
service the First Card cardholder gets his or her tasks performed directly.
Encryption is taken care of when you first log in.

About Resco AB

RESCO is an ideas company based on a coming together of the most experienced
people from several lines of business. We offer technology, which integrates
business systems and the web, and communication, which strengthens
relationships and builds up brand names. What all the people who work at Resco
have in common is that they are committed to what they are doing and would
to challenge their clients to go down new paths. We are specialists with a
special feeling for context. This means that we can see the big picture. We
have long experience. Resco started in 1982 and is currently listed on the
Stockholm Stock Exchange. We have offices in Sweden, Finland and Germany. With
550 specialists in business development, business systems, web technology,
design, architecture and market communications we occupy a unique position in
the market. We want to contribute towards lifting business to a higher plane,
making all business into business for people. Visit our website at