EDMONTON, ALBERTA
-- (MARKET WIRE)
-- 08/02/12
Today, Stantec (TSX:STN) (NYSE:STN) announced strong second quarter 2012 results, with several key items to highlight
-- Gross revenue increased 15.5% to C$476.2 million in Q2 12 from C$412.3
million in Q2 11.
-- EBITDA increased 13.5% to C$56.2 million in Q2 12 from C$49.5 million in
Q2 11.
-- Net income increased 19.8% to C$30.8 million in Q2 12 from C$25.7
million in Q2 11.
-- Diluted earnings per share increased 19.6% to C$0.67 in Q2 12 from
C$0.56 in Q2 11.
-- The Company declared a quarterly dividend of C$0.15 per share, payable
on October 18, 2012 to shareholders of record on September 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 hardworking 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 Q2 12 was strong compared to Q2 11 with gross revenue increased 15.5% to C$476.2 million from C$412.3 million. EBITDA increased 13.5% to C$56.2 million from C$49.5 million. The Company's net income for Q2 12 increased 19.8% to C$30.8 million from C$25.7 million in Q2 11, and diluted earnings per share increased 19.6% to C$0.67 in Q2 12 from C$0.56 in Q2 11. 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 Nations' support services. As well, the breadth of Stantec's portfolio and integrated services approach enable the Company to continue to win public-private partnership (P3) projects. For example, Stantec is part of the project team selected for the northeast expansion of Anthony Henday Drive, a 27-kilometer (17-mile), six- and eight-lane divided ring road in Edmonton, Alberta.
Stantec continues to secure projects in key sectors despite a softer market in 2012. For example, in the healthcare 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 ten among cancer programs in the United States by US 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, British Columbia shipyards. In the urban development sector, Stantec continues to successfully pursue opportunities in both the residential and nonresidential markets in Canada and the United States. For example, the Company secured a project with the Green Infrastructure Program in Philadelphia, Pennsylvania 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, Newfoundland, 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, Louisiana, this 130-person firm also has offices in Jackson, Vicksburg, and Madison, Mississippi; and New Orleans, Louisiana. The addition of ABMB will help grow Stantec's transportation practice in the US Southeast while providing a new presence for Stantec in Mississippi.
Additional Company Activity
In June, Stantec signed a letter of intent to acquire oil and gas and power consulting firm Cimarron Engineering Ltd. Based in Calgary, Alberta, with an additional office in Edmonton, Alberta, 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 successfully extending the maturity of its C$350 million revolving credit facility to 2016 and reducing its rates of borrowing. This facility also allows the Company access to an additional C$150 million under the same terms and conditions on approval from its lenders.
In addition, Stantec declared a quarterly dividend of C$0.15 per share, payable on October 18, 2012 to shareholders of record on September 28, 2012, reflecting the Company's financial strength and ability to continue to grow revenue, complete strategic 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 Friday, August 3, at 8:00 AM MDT (10:00 AM 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 2600407 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 Statements
Stantec'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)
June 30 December 31
2012 2011
(In thousands of Canadian dollars) $ $
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ASSETS
Current
Cash and short-term deposits 12,253 36,111
Trade and other receivables 333,592 310,669
Unbilled revenue 170,779 133,881
Income taxes recoverable 12,269 16,800
Prepaid expenses 11,287 13,908
Other financial assets 16,568 14,612
Other assets 4,455 3,172
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Total current assets 561,203 529,153
Non-current
Property and equipment 106,859 107,853
Goodwill 520,841 509,028
Intangible assets 74,054 72,047
Investments in associates 2,739 2,365
Deferred tax assets 43,597 43,647
Other financial assets 59,738 61,606
Other assets 4,070 1,657
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Total assets 1,373,101 1,327,356
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LIABILITIES AND EQUITY
Current
Bank indebtedness 7,129 -
Trade and other payables 188,173 191,859
Billings in excess of costs 49,771 49,441
Current portion of long-term debt 34,912 59,593
Provisions 15,626 16,373
Other financial liabilities 1,670 5,042
Other liabilities 6,143 5,208
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Total current liabilities 303,424 327,516
Non-current
Long-term debt 256,109 236,601
Provisions 41,677 42,076
Deferred tax liabilities 55,163 54,564
Other financial liabilities 2,515 2,257
Other liabilities 38,808 37,191
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Total liabilities 697,696 700,205
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Shareholders' equity
Share capital 232,040 226,744
Contributed surplus 14,962 14,906
Retained earnings 439,808 397,847
Accumulated other comprehensive loss (11,508) (12,449)
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Total equity attributable to equity holders of
the Company 675,302 627,048
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Non-controlling interests 103 103
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Total equity 675,405 627,151
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Total liabilities and equity 1,373,101 1,327,356
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Consolidated Statements of Income
(Unaudited)
For the quarter ended For the two quarters ended
June 30 June 30
--------------------------------------------------
(In thousands of Canadian
dollars, except per share 2012 2011 2012 2011
amounts) $ $ $ $
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Gross revenue 476,243 412,347 915,294 821,003
Less subconsultant and
other direct expenses 79,633 69,990 147,804 141,854
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Net revenue 396,610 342,357 767,490 679,149
Direct payroll costs 181,216 153,675 350,375 302,569
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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)
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Income before income taxes 42,164 35,213 76,274 67,855
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Income taxes
Current 10,098 8,687 19,316 17,033
Deferred 1,286 820 1,278 1,288
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Total income taxes 11,384 9,507 20,594 18,321
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Net income for the period 30,780 25,706 55,680 49,534
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Weighted average number of
shares
outstanding - basic 45,727,219 45,736,514 45,647,581 45,753,235
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Weighted average number of
shares
outstanding - diluted 45,727,219 45,856,614 45,647,581 45,909,137
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Shares outstanding, end of
the period 45,751,251 45,691,852 45,751,251 45,691,852
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Earnings per share
Basic 0.67 0.56 1.22 1.08
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Diluted 0.67 0.56 1.22 1.08
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Contacts:
Stantec
Danny Craig
Media Relations
(949) 923-6085
danny.craig@stantec.com
Stantec
Crystal Verbeek
Investor Relations
(780) 969-3349
crystal.verbeek@stantec.com
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