Stantec Inc.
TSX : STN
NYSE : STN

Stantec Inc.

July 31, 2008 09:14 ET

Stantec Announces Strong Second Quarter 2008 Results

The firm's trading symbol on the NYSE changed from SXC to STN

EDMONTON, ALBERTA--(Marketwire - July 31, 2008) - Stantec Inc. (TSX:STN) (NYSE:STN) -

- Gross revenue increased 40.3% to C$343.3 million compared to C$244.7 million in the second quarter of 2007. Net revenue increased 34.0% to C$289.0 million from C$215.7 million, while net income was up 26.3% to C$22.1 million compared to C$17.5 million. Diluted earnings per share were C$0.48 in the second quarter of 2008 compared to C$0.38 in the same period last year, representing an increase of 26.3%.

- Year-to-date 2008 gross revenue increased 37.8% to C$635.1 million compared to C$461.0 million in the same period of 2007, while net revenue increased 33.3% to C$543.9 million from C$408.0 million. Net income increased 18.5% to C$39.0 million from C$32.9 million. Diluted earnings per share were up 19.7% to C$0.85 from C$0.71.

- During the second quarter, Stantec renewed its normal course issuer bid and repurchased 68,300 shares for cancellation. The firm also announced the acquisition of McIntosh Engineering, a 200-person mining engineering firm based primarily in Tempe, Arizona, and Sudbury and North Bay, Ontario, which was completed at the beginning of the third quarter.

- Starting July 31, 2008, Stantec will trade on the New York Stock Exchange under the symbol STN, changing from SXC to match its trading symbol on the Toronto Stock Exchange.

- Complete Financial Statements, Notes to the Financial Statements, and Management's Discussion and Analysis will be filed on Sedar (www.sedar.com) and Edgar (www.sec.gov) on July 31, 2008 and are available to download from the Investors section on www.stantec.com. The documents are also available from Stantec.

"Our performance in the second quarter continues to validate the strength of our business model, which is designed to adapt to changes in market conditions in the geographic regions and practice areas we serve, as well as being a reflection of our employees' ability to execute projects," says Tony Franceschini, Stantec President & CEO. "While we've experienced a decrease in the demand for services in our Urban Land practice in the first half of 2008, we have more than offset this with increased demand for services in our Environment, Industrial, and Buildings practice areas."

Sample projects awarded to Stantec in the second quarter demonstrate the diversity of the organization as well as the firm's ability to integrate its services to provide solutions to clients. In British Columbia, Stantec is providing mechanical, electrical, and sustainability engineering for the development of the Centre for Interactive Research on Sustainability at the University of British Columbia in Vancouver. Once operational, this facility will produce net energy to heat other buildings while reducing the overall carbon footprint of the university campus. The Company is completing the detailed design of an innovative continuous flow process for producing biodiesel fuels at a plant in Nova Scotia. The process can use either vegetable or marine virgin oil feedstock and, when commissioned in the fall of 2008, will be capable of producing 100 tonnes (110 tons) of biodiesel per day. In addition, Stantec is completing the civil, structural, mechanical, and electrical design of the Sustainable Barbados Recycling Centre, the first integrated waste management facility in the Caribbean. The "one-stop" facility is scaled to receive approximately 1,000 tonnes (1,102 tons) of waste material per day upon start-up, 60 percent of which will be diverted from landfill disposal. Part of the waste material will be converted into useful products, including compost, mulch, wood chips, and stone aggregate, for resale or distribution. In Newton County, Georgia, Stantec is designing a 2.2 million-US-gallon-per-day (8.3-megalitre-per-day) advanced wastewater treatment facility for the Newton County Water and Sewerage Authority. And in San Diego, California, the firm is combining services in landscape architecture, civil engineering, and hydrology to design a permeable "green" pavement for infiltrating stormwater runoff from the parking lot at Kellogg Park and the La Jolla Shores Beach, one of the state's 34 areas of special biological significance.

"Our operating philosophy of one team offering integrated services, combined with our geographic and practice area diversity, is what sets Stantec apart and gives us the ability to deliver strong results in difficult general market conditions," says Franceschini. "Our employees have been rising to the challenge, and their efforts are helping Stantec to succeed and grow in a changing market."

"We are also pleased to report that our trading symbol on the NYSE is now STN, making it consistent with our symbol on the TSX and reflecting our single-brand identity and one team philosophy," adds Franceschini.

The second quarter conference call, to be held today at 4:00 PM EDT (2:00 PM MDT), will be broadcast live and archived in the Investors section at www.stantec.com. Financial analysts who wish to participate in the earnings conference call are invited to call 1-866-322-2356 and provide the confirmation code 4648105 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 in the infrastructure and facilities sector at every stage, from initial concept and financial feasibility to project completion and beyond. Our services are offered through approximately 9,000 employees operating out of more than 125 locations in North America. Stantec trades on the TSX and the NYSE under the symbol STN. Stantec is One Team providing Infinite Solutions.

Cautionary note regarding forward-looking statements

This press release contains "forward-looking statements." Some of these statements may involve risks and uncertainties and other factors that may be beyond the control of Stantec and cause actual results to be materially different from those contained in such forward-looking statements. Additional information concerning factors that could cause actual results to materially differ from those in the forward-looking statements is contained in Stantec's filings with the Canadian provincial securities commissions and the United States Securities and Exchange Commission.



Consolidated Balance Sheets

(Unaudited)

June 30 December 31
2008 2007
(In thousands of Canadian dollars) $ $
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ASSETS
Current
Cash and cash equivalents 26,089 14,175
Cash held in escrow 6,630 -
Accounts receivable, net of allowance for doubtful
accounts of $10,224 in 2008 ($10,508 -- 2007) 246,951 206,063
Costs and estimated earnings in excess of billings 91,844 65,064
Income taxes recoverable 9,625 5,019
Prepaid expenses 5,501 6,617
Future income tax assets 15,992 13,308
Other assets 12,670 13,002
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Total current assets 415,302 323,248
Property and equipment 101,988 88,156
Goodwill 415,710 332,922
Intangible assets 41,237 32,288
Future income tax assets 13,578 12,074
Other assets 28,988 24,873
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Total assets 1,016,803 813,561
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities 152,975 155,020
Billings in excess of costs and estimated earnings 35,302 34,423
Income taxes payable - 9,955
Current portion of long-term debt 37,150 21,549
Future income tax liabilities 15,541 11,750
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Total current liabilities 240,968 232,697
Long-term debt 217,778 74,539
Future income tax liabilities 24,072 20,718
Other liabilities 47,584 42,909
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Total liabilities 530,402 370,863
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Shareholders' equity
Share capital 219,310 218,790
Contributed surplus 7,667 6,266
Deferred stock compensation - (110)
Retained earnings 321,377 286,780
Accumulated other comprehensive loss (61,953) (69,028)
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Total shareholders' equity 486,401 442,698
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Total liabilities and shareholders' equity 1,016,803 813,561
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Consolidated Statements of Income

(Unaudited)

For the quarter ended For the two quarters ended
June 30 June 30
---------------------- ----------------------------
2008 2007 2008 2007
(In thousands of
Canadian dollars,
except share and per
share amounts) $ $ $ $
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INCOME
Gross revenue 343,327 244,649 635,130 460,960
Less subconsultant and
other direct expenses 54,268 28,997 91,212 52,961
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Net revenue 289,059 215,652 543,918 407,999
Direct payroll costs 127,485 94,665 242,092 177,672
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Gross margin 161,574 120,987 301,826 230,327
Administrative and
marketing expenses 118,033 90,693 225,002 172,368
Depreciation of
property and
equipment 6,836 4,240 12,203 8,328
Amortization of
intangible assets 2,553 819 5,219 1,758
Net interest expense 2,011 431 3,513 324
Share of (income) loss
from associated companies 54 (25) 160 (94)
Foreign exchange (gains)
losses 380 (918) 21 (1,096)
Other income (400) (314) (630) (592)
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Income before income
taxes 32,107 26,061 56,338 49,331
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Income taxes
Current 14,201 8,181 18,200 15,648
Future (4,199) 453 (904) 828
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Total income taxes 10,002 8,634 17,296 16,476
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Net income for the
period 22,105 17,427 39,042 32,855
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Weighted average number
of shares outstanding
- basic 45,656,377 45,546,046 45,656,836 45,520,017
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Weighted average number
of shares outstanding
- diluted 46,122,311 46,268,733 46,187,313 46,185,706
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Shares outstanding, end
of the period 45,606,823 45,574,038 45,606,823 45,574,038
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Earnings per share
Basic 0.48 0.38 0.86 0.72
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Diluted 0.48 0.38 0.85 0.71
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Contact Information

  • Stantec - Media Contact
    Jay Averill
    Media Relations
    (780) 917-7441
    or
    Stantec - Investor Contact
    Simon Stelfox
    Investor Relations
    (780) 917-7288
    Website: www.stantec.com