08:28:04 EDT Fri 29 Mar 2024
Enter Symbol
or Name
USA
CA



Stantec Inc
Symbol STN
Shares Issued 45,751,251
Close 2012-08-02 C$ 28.40
Market Cap C$ 1,299,335,528
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Stantec earns $30.78-million in Q2

2012-08-02 16:57 ET - News Release

Mr. Bob Gomes reports

STANTEC ANNOUNCES STRONG SECOND QUARTER 2012 RESULTS AND DIVIDEND

Stantec Inc. has released second quarter 2012 results, with several key items to highlight:

  • Gross revenue increased 15.5 per cent to $476.2-million in second quarter 2012 from $412.3-million in second quarter 2011.
  • Earnings before interest, taxes, depreciation and amortization increased 13.5 per cent to $56.2-million in second quarter 2012 from $49.5-million in second quarter 2011.
  • Net income increased 19.8 per cent to $30.8-million in second quarter 2012 from $25.7-million in second quarter 2011.
  • Diluted earnings per share increased 19.6 per cent to 67 cents in second quarter 2012 from 56 cents in second quarter 2011.
  • The company declared a quarterly dividend of 15 cents per share, payable on Oct. 18, 2012, to shareholders of record on Sept. 28, 2012.

"Our strong performance in the second quarter of 2012 speaks to the strength of our business model and resilience in the face of mixed economic conditions," says Bob Gomes, Stantec president and chief executive officer. "Thanks to the support of our clients and hard-working staff, we continue to stay the course and remain focused on achieving our objectives for the remainder of the year."

Stantec's revenue growth in second quarter 2012 was strong compared with second quarter 2011, with gross revenue increased by 15.5 per cent to $476.2-million from $412.3-million. Earnings before interest, taxes, depreciation and amortization increased 13.5 per cent to $56.2-million from $49.5-million. The company's net income for second quarter 2012 increased 19.8 per cent to $30.8-million from $25.7-million in second quarter 2011, and diluted earnings per share increased 19.6 per cent to 67 cents in second quarter 2012 from 56 cents in second quarter 2011. Net income was positively impacted by organic revenue growth and from acquisitions completed in 2011 and 2012 and by a decrease in administrative and marketing expenses as a percentage of net revenue. This is the fourth consecutive quarter where Stantec has achieved positive organic growth on a gross and net revenue basis.

Focus on building client relationships and offering integrated services

Stantec's focus on client relationships has resulted in significant new projects with new and existing clients. For example, the company's relationships with the world's top global energy and resource companies resulted in winning a project in northeast British Columbia at the proposed Suska and Sukunka mines, where Stantec will be providing environmental baseline and impact assessment, permitting, regional monitoring, engineering, and first nation support services. As well, the breadth of Stantec's portfolio and integrated services approach enable the company to continue to win public-private partnership projects. For example, Stantec is part of the project team selected for the northeast expansion of Anthony Henday Drive, a 27-kilometre (17-mile), six- and eight-lane divided ring road in Edmonton, Alta.

Stantec continues to secure projects in key sectors despite a softer market in 2012. For example, in the health care sector, Stantec recently secured a commission at the Cleveland clinic in Cleveland, Ohio, to perform programming, architectural and interior design services for a major expansion for the Taussig Cancer Institute, which was rated in the top 10 among cancer programs in the United States by U.S. News and World Report. The company also continues to win new work in the industrial buildings and facilities sector and was selected to provide integrated engineering and architectural services for infrastructure upgrades to Seaspan's Vancouver, B.C., shipyards. In the urban development sector, Stantec continues to pursue opportunities in both the residential and non-residential markets in Canada and the United States. For example, the company secured a project with the green infrastructure program in Philadelphia, Pa., for the development of various stormwater best-management practices that will reduce combined sewer overflows.

Continued growth

In May, Stantec completed the acquisition of architecture and interior design firm PHB Group. Based in St. John's, Nfld., the 35-person PHB Group will be Stantec's first architectural presence in Atlantic Canada. PHB Group's architectural services, provided on projects across Canada, will complement Stantec's existing buildings engineering, geotechnical engineering and environmental services presence in the Atlantic region. In May, Stantec also completed the acquisition of transportation consulting firm ABMB Engineers. Based in Baton Rouge, La., this 130-person firm also has offices in Jackson, Vicksburg and Madison, Miss., and New Orleans, La. The addition of Abmb will help build Stantec's transportation practice in the U.S. southeast while providing a new presence for Stantec in Mississippi.

Additional company activity

In June, Stantec signed a letter of intent to acquire oil-, gas- and power-consulting firm Cimarron Engineering Ltd. Based in Calgary, Alta., with an additional office in Edmonton, Alta., this 290-person firm will significantly enhance Stantec's oil and gas and power practices throughout North America. The transaction is expected to close in August.

Stantec further strengthened its capital structure by extending the maturity of its $350-million revolving credit facility to 2016 and reducing its rates of borrowing. This facility also allows the company access to an additional $150-million under the same terms and conditions on approval from its lenders.

In addition, Stantec declared a quarterly dividend of 15 cents per share, payable on Oct. 18, 2012, to shareholders of record on Sept. 28, 2012, reflecting the company's financial strength and ability to continue to increase revenue, complete acquisitions and generate cash flow from operations while providing enhanced shareholder returns.

Conference call and company information

Stantec's second quarter conference call, to be held Aug. 3, at 8 a.m. MDT (10 a.m. EDT), will be broadcast live and archived in the investors section of Stantec's website. Financial analysts who wish to participate in the earnings conference call are invited to call 1-800-820-0231 and provide the confirmation code 2600407 to the first available operator.

                  CONSOLIDATED STATEMENTS OF INCOME                      
    (in thousands of Canadian dollars, except per-share amounts)

                          For the quarter ended  For the two quarters ended 
                                    June 30,                  June 30,           
                                 2012       2011          2012          2011

Gross revenue                $476,243   $412,347      $915,294      $821,003
Less subconsultant and
other direct expenses          79,633     69,990       147,804       141,854
Net revenue                   396,610    342,357       767,490       679,149
Direct payroll costs          181,216    153,675       350,375       302,569
Gross margin                  215,394    188,682       417,115       376,580
Administrative and
marketing expenses            158,634    138,426       312,519       280,451
Depreciation of property
and equipment                   6,728      6,881        13,176        13,348
Amortization of intangible
assets                          4,915      4,647         9,586         9,331
Net interest expense            2,441      2,756         4,654         4,973
Other net finance expense         644        727         1,494         1,403
Share of income from
associates                       (515)      (161)         (805)         (348)
Foreign exchange loss
(gain)                            306        199            27          (392)
Other expense (income)             77         (6)          190           (41)
Income before income taxes     42,164     35,213        76,274        67,855
Income taxes
Current                        10,098      8,687        19,316        17,033
Deferred                        1,286        820         1,278         1,288
Total income taxes             11,384      9,507        20,594        18,321
Net income for the period      30,780     25,706        55,680        49,534
Earnings per share
Basic                            0.67       0.56          1.22          1.08
Diluted                          0.67       0.56          1.22          1.08

We seek Safe Harbor.

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