Mr. Bob Gomes reports
STANTEC REPORTS STRONG RESULTS FOR 2012 YEAR-END AND AN INCREASED DIVIDEND
Today, Stantec Inc. released strong results for 2012, with several key items to highlight:
Gross revenue increased 11.9 per cent year over year to $1,882.9-million from
- Net income increased 17.7 per cent year over year to $120.9-million from
$102.7-million, and diluted earnings per share increased 17.3 per cent to $2.64
from $2.25, excluding the impact of a $90.0-million goodwill impairment
charge in 2011.
- The company completed seven acquisitions, adding approximately 1,170
staff and expanding its geographic reach.
- The company declared a quarterly dividend of 16.5 cents, an increase of 10 per cent.
"The year 2012 marked our 59th year of uninterrupted profitability at Stantec, demonstrating the results of effectively executing our strategy," says Bob Gomes, Stantec president and chief executive officer. "We achieved strong growth and exceeded our expectations for the year thanks to the excellence demonstrated by our employees in their commitment to the clients and communities they work with every day."
Stantec's revenue growth in the fourth quarter of 2012 was strong compared with the fourth quarter of 2011. Gross revenue increased 12.0 per cent to $483.9-million from $432.0-million, and EBITDA (earnings before interest, taxes, depreciation and amortization) increased 20.3 per cent to $56.3-million from $46.8-million. Excluding the impact of a $90.0-million non-cash goodwill impairment charge in 2011, the company's net income increased 28.0 per cent to $31.1-million from $24.3-million, and diluted earnings per share increased 26.4 per cent to 67 cents from 53 cents. Net income during the fourth quarter of 2012 was positively impacted by an increase in gross revenue and an increase in gross margin as a percentage of net revenue from 55.1 per cent in the fourth quarter of 2011 to 56.1 per cent in the fourth quarter of 2012.
Focus on executing on strategy and market opportunities
In 2012, Stantec focused on executing its long-term strategy and capitalizing on market opportunities. Because of Stantec's depth and breadth of expertise, leveraging this focus resulted in securing projects with new and existing clients across geographic regions and practice areas.
Stantec strengthened its capacity in the mining, oil and gas, and power sectors through both organic growth and strategic acquisitions. This increased capacity led to securing work in Eagle Ford, Tex., providing construction management oversight and regulatory support to the gas industry, as well as working on a pipeline expansion project. Stantec continued to leverage client relationships and capitalize on its integrated presence across North America, resulting in multiple pipeline projects providing services such as overall technical co-ordination of environmental assessments and leading emergency response planning. Stantec also provided consulting services to two liquefied-natural-gas projects and associated port facilities.
Stantec's ability to develop strong, long-lasting client relationships meant new opportunities. This included work with the North Carolina Department of Transportation for a large multiyear project completing studies for proposed improvements to a section of NC 150 northeast of Charlotte, N.C. Strategic acquisitions also increased the company's market presence, leading to significant new projects. For example, Stantec was selected for a design-build project in Louisville, Ky., where the company will provide a cross-section of services, including roadway and bridge design, lighting, landscaping, permitting, and geotechnical engineering services for new Ohio River bridge and system interchanges.
Stantec also continued to pursue market opportunities in both residential and non-residential markets, particularly in areas where markets showed signs of recovery. This effort resulted in securing design work for the Lakewood Ranch Country Club East Golf Course community expansion in Sarasota, Fla. In addition, despite the softening of some markets, Stantec continued to secure work in key sectors such as health care, including a project for the Cleveland Clinic in Cleveland, Ohio, to perform programming, architectural and interior design services for a major expansion to the Taussig Cancer Institute.
Stantec is well positioned for 2013 to take advantage of continued opportunities in Canada and an emerging recovery in United States markets. The company completed seven acquisitions in 2012 -- four of those in the fourth quarter -- which expanded the depth and breadth of its expertise in the oil and gas industry, in particular in Western Canada, and its transportation and urban development expertise in the United States. This continued growth reinforces the company's goal of being a top 10 global design firm while also expanding its position in North America and strengthening its diverse service offerings and relationships with both local/regional and global/national clients.
Additional company activity
Today, Stantec's board of directors declared a quarterly dividend of 16.5 cents per share, an increase of 10 per cent. It is payable on April 18, 2013, to shareholders of record on March 29, 2013.
Stantec would like to recognize the contributions of former board member Robert Bradshaw. In the fourth quarter of 2012, Mr. Bradshaw stepped down from his position on Stantec's board of directors. He has been associated with the company since 1993 and was part of the team that took the company public in 1994. He was appointed chairman of the board from 1994 to 1998. During his time with Stantec, Mr. Bradshaw demonstrated exemplary dedication and leadership.
The Stantec board of directors is pleased to announce that on Feb. 20, 2013, it passed a resolution appointing Donald Lowry of Edmonton, Alta., to the board. This appointment will take effect May 8, 2013. Mr. Lowry is currently the president and chief executive officer of EPCOR Utilities Inc. and will be stepping down from this role later this year. He is also the non-executive chair of Capital Power Corp. and Canadian Oil Sands Ltd. and is a member of the board of directors of Hydrogenics Corp. Mr. Lowry brings leadership and industry expertise to the Stantec board.
Conference call and company information
Stantec's fourth-quarter and year-end conference call, to be held Thursday, Feb. 21, 2013, at 2 p.m. MST (4 p.m. EST), will be broadcast live and archived in the investors section of the company's website. Financial analysts who wish to participate in the earnings conference call are invited to call 1-800-820-0231 and provide confirmation code 8780489 to the operator.
Stantec's annual meeting of shareholders will be held on May 9, 2013, at 10:30 a.m. MDT (12:30 p.m. EDT) at MacEwan University's Alberta College Campus in Edmonton, Alta., 10050 MacDonald Dr.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands of dollars, except per-share amounts)
Years ended Dec. 31,
Gross revenue $1,882,900 $1,683,403
Less subconsultant and other direct expenses 326,506 304,856
Net revenue 1,556,394 1,378,547
Direct payroll costs 700,853 615,136
Gross margin 855,541 763,411
Administrative and marketing expenses 633,171 565,164
Depreciation of property and equipment 27,875 27,933
Impairment of goodwill - 90,000
Amortization of intangible assets 20,008 18,395
Net interest expense 8,658 9,723
Other net finance expense 2,773 2,848
Share of income from associates (1,765) (793)
Foreign exchange loss 181 501
Other expense (income) 147 (36)
Income before income taxes 164,493 49,676
Current 44,661 32,733
Deferred (1,070) 4,281
Total income taxes 43,591 37,014
Net income for the year 120,902 12,662
Earnings per share
Basic 2.64 0.28
Diluted 2.64 0.28
We seek Safe Harbor.