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Press release from Marketwire

Stantec announces strong third quarter 2012 results and dividend

Thursday, November 01, 2012

Stantec announces strong third quarter 2012 results and dividend09:00 EDT Thursday, November 01, 2012EDMONTON, ALBERTA--(Marketwire - Nov. 1, 2012) - Today, Stantec (TSX:STN) (NYSE:STN) announced strong third quarter 2012 results, with several key items to highlightGross revenue increased 12.4% to C$483.7 million in Q3 12 from C$430.4 million in Q3 11. Net income increased 18.0% to C$34.1 million in Q3 12 from C$28.9 million in Q3 11. Diluted earnings per share increased 17.5% to C$0.74 in Q3 12 from C$0.63 in Q3 11. The Company declared a quarterly dividend of C$0.15 per share, payable on January 17, 2013, to shareholders of record on December 31, 2012. "Our positive results in the third quarter of 2012 speak to the strength of our business model where the diversity of our services allows us to take advantage of the changing market conditions," says Bob Gomes, Stantec president and chief executive officer. "With a strong team and a long-term commitment to the clients and communities we serve, we will continue to execute on our objectives for the remainder of the year."Organic revenue growth was 6.1% in Q3 12 compared to Q3 11. This is the fifth consecutive quarter where Stantec has achieved positive organic revenue growth. The Company's results were positively impacted by an increase in revenue due to organic growth in the mining, oil and gas, and urban development sectors as well as acquisitions completed in 2011 and 2012.Stantec results have shown positive momentum over the last few quarters. Compared to Q3 11, the Company's gross revenue increased 12.4% from C$430.4 million to C$483.7 million, EBITDA increased 14.2% from C$53.5 million to C$61.1 million and net income increased 18.0% from C$28.9 million to C$34.1 million. In addition, Stantec achieved record diluted earnings per share with an increase of 17.5% from C$0.63 to C$0.74.Focus on Client Relationships and Market OpportunitiesStantec's focus on building strong client relationships and capitalizing on market opportunities together with its depth and breadth of expertise continues to result in securing new projects with new and existing clients. With demonstrated experience in the public-private partnership (P3) delivery model, the Company secured a project to design 12 new schools in Alberta. Implementing the P3 model for this project will accelerate work on the schools being built across Alberta, resulting in completion two years sooner than conventional project delivery methods would have provided.Stantec remains well positioned to secure projects due to its strong local relationships along with those opportunities resulting from a more stringent regulatory environment. As an example of local relationships, the Company is working as part of a team on the expansion of the metro Vancouver Annacis Wastewater Treatment Plant upgrade, one of the largest wastewater treatment plants in Canada. Stantec also continues to secure work in the transit/rail sector. The Company was recently selected by the Dallas Area Rapid Transit to provide professional services and be responsible for managing the Trinity Railway Express Positive Train Control project. Positive train control is a US federal requirement mandated by the Federal Railroad Safety Improvement Act.Stantec continues to secure projects in the US residential market. Stantec was recently awarded a project in Sarasota, Florida, to provide design services, from initial site planning through construction phase services, for 600 to 800 units to be built on 500 acres (202 hectares) added to the Country Club East Golf Course Community in Lakewood Ranch.Continued GrowthIn August, Stantec completed the acquisition of Calgary-based Cimarron Engineering Ltd., a 290-person engineering consulting company specializing in the development, design, installation, and integrity maintenance of oil and gas pipeline systems and station facilities. Cimarron also has a power division that specializes in the design of medium to high-voltage electrical systems for utility and oil and gas clients. This addition will enhance Stantec's oil and gas and power practices throughout North America.Additional Company ActivityStantec declared a quarterly dividend of C$0.15 per share, payable on January 17, 2013, to shareholders of record on December 31, 2012.Conference Call and Company InformationStantec's third quarter conference call, to be held Thursday, November 1, at 3:00 PM MDT (5:00 PM EDT), will be broadcast live and archived in the Investors section of www.stantec.com. Financial analysts who wish to participate in the earnings conference call are invited to call 1-800-820-0231 and provide the confirmation code 1348295 to the first available operator.Stantec provides professional consulting services in planning, engineering, architecture, interior design, landscape architecture, surveying, environmental sciences, project management, and project economics for infrastructure and facilities projects. We support public and private sector clients in a diverse range of markets at every stage, from the initial conceptualization and financial feasibility study to project completion and beyond. Our services are provided on projects around the world through approximately 12,000 employees operating out of more than 190 locations in North America and 4 locations internationally. Stantec is One Team providing Integrated Solutions.Cautionary StatementsStantec's EBITDA is a non-IFRS measure, and gross revenue and net revenue are additional IFRS measures. For a definition and explanation of non-IFRS measures and additional IFRS measures, refer to the Critical Accounting Estimates, Developments, and Measures section of the Company's 2011 Financial Review.This press release contains forward-looking statements concerning Stantec's future financial performance, future growth, and future acquisitions activities. By their nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties. We caution readers of this press release not to place undue reliance on our forward-looking statements since a number of factors could cause actual future results to differ materially from the expectations expressed in these forward-looking statements. These factors include, but are not limited to the risk of an economic downturn, changing market conditions for Stantec's services, disruptions in government funding, the risk that Stantec will not meet its growth or revenue targets and the risk that the contemplated transactions will not close when expected or at all. Investors and the public should carefully consider these factors, other uncertainties, and potential events as well as the inherent uncertainty of forward-looking statements when relying on these statements to make decisions with respect to our Company.For more information on how other material factors and other factors could affect our results, refer to the Risk Factors section and Caution Regarding Forward-Looking Statements in our 2011 Financial Review. You may obtain these documents by visiting EDGAR on the SEC website at www.sec.gov or on the CSA website at www.sedar.com.One Team. Integrated Solutions.Consolidated Statements of Financial Position(Unaudited)September 30 2012December 31 2011(In thousands of Canadian dollars)$$ASSETSCurrentCash and short-term deposits18,12036,111Trade and other receivables361,891310,669Unbilled revenue164,540133,881Income taxes recoverable8,45616,800Prepaid expenses14,34513,908Other financial assets16,08914,612Other assets4,4023,172Total current assets587,843529,153Non-currentProperty and equipment107,351107,853Goodwill550,526509,028Intangible assets79,37072,047Investments in associates3,0652,365Deferred tax assets39,12843,647Other financial assets62,02661,606Other assets3,9381,657Total assets1,433,2471,327,356LIABILITIES AND EQUITYCurrentTrade and other payables225,077191,859Billings in excess of costs55,12249,441Current portion of long-term debt49,58859,593Provisions14,80416,373Other financial liabilities3,1405,042Other liabilities6,8475,208Total current liabilities354,578327,516Non-currentLong-term debt245,158236,601Provisions41,87442,076Deferred tax liabilities56,53454,564Other financial liabilities2,2362,257Other liabilities38,14137,191Total liabilities738,521700,205Shareholders' equityShare capital236,516226,744Contributed surplus14,54114,906Retained earnings467,015397,847Accumulated other comprehensive loss(23,449)(12,449)Total equity attributable to equity holders of the Company694,623627,048Non-controlling interests103103Total equity694,726627,151Total liabilities and equity1,433,2471,327,356Consolidated Statements of Income (Unaudited) For the quarter ended September 30For the three quarters ended September 302012201120122011(In thousands of Canadian dollars, except per share amounts)$$$$Gross revenue483,687430,3541,398,9811,251,357Less subconsultant and other direct expenses85,55979,156233,363221,010Net revenue398,128351,1981,165,6181,030,347Direct payroll costs178,983156,313529,358458,882Gross margin219,145194,885636,260571,465Administrative and marketing expenses157,928140,346470,447420,797Depreciation of property and equipment7,0277,17320,20320,521Amortization of intangible assets5,0904,15014,67613,481Net interest expense2,2472,5376,9017,510Other net finance expense6416962,1352,099Share of income from associates(526)(104)(1,331)(452)Foreign exchange loss10648213390Other (income) expense(65)-125(41)Income before income taxes46,69739,605122,971107,460Income taxesCurrent9,3248,94628,64025,979Deferred3,2841,7484,5623,036Total income taxes12,60810,69433,20229,015Net income for the period34,08928,91189,76978,445Weighted average number of shares outstanding - basic45,788,73445,662,08745,694,80545,703,009Weighted average number of shares outstanding - diluted45,800,85345,726,93145,694,80545,812,925Shares outstanding, end of the period45,879,74845,380,25245,879,74845,380,252Earnings per shareBasic0.740.631.961.72Diluted0.740.631.961.71FOR FURTHER INFORMATION PLEASE CONTACT: Contact Information: Stantec Inc.Sherry BrownleeMedia Relations(780) 917-7264sherry.brownlee@stantec.comStantec Inc.Crystal VerbeekInvestor Relations(780) 969-3349crystal.verbeek@stantec.comwww.stantec.com