Stantec Inc.
TSX : STN
NYSE : SXC

Stantec Inc.

November 01, 2007 11:50 ET

Stantec Announces Third Quarter 2007 Results

EDMONTON, ALBERTA--(Marketwire - Nov. 1, 2007) - Stantec Inc. (TSX:STN) (NYSE:SXC):

- In the third quarter of 2007 gross revenue increased 11.9% to C$235.3 million compared to C$210.2 million for the same period in 2006. Net revenue increased 13.7% to C$207.0 million compared to C$182.0 million and net income was up 5.5% to C$17.4 million from C$16.5 million. Diluted earnings per share were up 5.6% to C$0.38 in the third quarter 2007 compared to C$0.36 in 2006.

- Year-to-date 2007 gross revenue increased 15.2% to C$696.3 million compared to C$604.3 million over the first nine months of 2006. Net revenue increased 16.6% to $615.0 million compared to C$527.3 million while net income increased 12.8% to C$50.3 million compared to C$44.6 million. Diluted earnings per share were up 12.4% to C$1.09 compared to C$0.97 for the same period in 2006.

- In the quarter Stantec completed the acquisition of Trico Engineering Consultants, Inc. in North Charleston, South Carolina adding about 130 employees specializing in civil engineering, surveying, landscape architecture, and planning. The Company also acquired San Francisco firm, Chong Partners Architecture with approximately 175 employees and additional offices in Sacramento and San Diego.

- In addition at the beginning of the fourth quarter Stantec completed the acquisitions of Neill and Gunter, a full service consulting engineering firm with approximately 650 employees primarily located in Fredericton, New Brunswick; Halifax, Nova Scotia; and Portland, Maine along with Woodlot Alternatives, a firm with 65 people also in Portland, Maine.

- 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 November 1, 2007 and are available to download from the investor relations section on www.stantec.com. You may also contact Stantec for a copy of the documents.

"The continuing consistency of our results this quarter reflects the ability of our business model to adapt to changing market conditions throughout North America," says Tony Franceschini, Stantec President & CEO. "While we have experienced a slight slowdown in the Urban Land area we are seeing strong growth in our Industrial and Environment areas and we have a positive outlook for our Transportation and Buildings practices."

Projects awarded to Stantec this quarter demonstrate the Company's growing service offering and geographic diversity. Stantec was awarded a contract by the City of Anaheim, California to provide on call design services for water and sewer treatment, pipeline, pump station, and reservoir infrastructure projects through to January 2009. In Manitoba and Colorado the Company is providing annual bridge inspections for hundreds of bridges for Manitoba Infrastructure and Transportation and the Colorado Department of Transportation, respectively. In New York City the Buildings group continues to work on the restoration and rehabilitation of the interior of New York City Hall, a historic landmark originally built in 1811, for the New York City Department of City-Wide Administrative Services. This assignment, which follows various projects we have completed at the building since 1998, brings together our expertise in architecture, structural engineering, preservation/restoration, high-definition scanning (a laser survey technology used to create three-dimensional electronic models), and sustainable design consulting and filing for Leadership in Energy and Environmental Design®-Existing Building (LEED-EB) certification. In Alberta the Industrial group is providing engineering services for the installation of infrastructure at the Athasbasca Upgrader, a bitumen-processing facility owned by Total E&P Canada Ltd. Drawing on expertise from several of our practice areas, the scope of work will include water management planning and studies; raw water intake and pipeline engineering; wastewater treatment and effluent pipeline engineering; environmental impact assessment submission support; rail logistics and materials handling engineering; the design of administration, control, and fire hall buildings; and access road and administration area studies.

"Our employees continue to execute Stantec's business strategy by effectively taking advantage of work sharing opportunities and teaming up with experts throughout the Company to win projects and provide value to our clients," says Franceschini.

The third quarter Conference Call, to be held today at 4:00 PM EDT (2:00 PM MDT), will be broadcast live and archived on Stantec's web site at stantec.com in the Investor Relations section.

Stantec provides professional design and consulting services in planning, engineering, architecture, surveying, economics, and project management. 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 over 7,500 employees operating out of more than 100 locations in North America. Stantec trades on the TSX under the symbol STN and on the NYSE under the symbol SXC. 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)

September 30 December 31
2007 2006
(In thousands of Canadian dollars) $ $
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ASSETS
Current
Cash and cash equivalents 12,021 28,363
Restricted cash - 1,545
Accounts receivable, net of allowance for
doubtful accounts of $13,558 in 2007
($7,379 - 2006) 198,969 168,474
Costs and estimated earnings in excess of
billings 56,318 39,924
Prepaid expenses 5,312 6,591
Future income tax assets 12,016 9,711
Other assets 10,897 8,228
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Total current assets 295,533 262,836
Property and equipment 75,720 65,009
Goodwill 252,334 251,491
Intangible assets 21,503 22,819
Future income tax assets 11,198 9,984
Other assets 21,546 18,338
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Total assets 677,834 630,477
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Bank indebtedness 1,088 -
Accounts payable and accrued liabilities 115,739 107,132
Billings in excess of costs and estimated
earnings 35,338 28,721
Income taxes payable 4,719 3,432
Current portion of long-term debt 6,254 4,181
Future income tax liabilities 12,180 12,236
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Total current liabilities 175,318 155,702
Long-term debt 29,714 12,046
Future income tax liabilities 15,563 18,273
Other liabilities 38,041 33,561
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Total liabilities 258,636 219,582
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Shareholders' equity
Share capital 215,238 212,781
Contributed surplus 5,612 5,458
Deferred stock compensation (118) (250)
Retained earnings 268,080 217,750
Accumulated other comprehensive income (69,614) (24,844)
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Total shareholders' equity 419,198 410,895
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Total liabilities and shareholders' equity 677,834 630,477
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Consolidated Statements of Income

(Unaudited)

For the quarter ended For the three quarters
September 30 ended September 30
------------------------ ------------------------
(In thousands of Canadian
dollars, except shares 2007 2006 2007 2006
outstanding and per
share amounts) $ $ $ $
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INCOME
Gross revenue 235,381 210,147 696,341 604,258
Less subconsultant and
other direct expenses 28,395 28,161 81,356 76,979
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Net revenue 206,986 181,986 614,985 527,279
Direct payroll costs 90,714 78,375 268,386 229,410
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Gross margin 116,272 103,611 346,599 297,869
Administrative and
marketing expenses 85,121 72,927 257,489 213,751
Depreciation of property
and equipment 4,797 4,250 13,125 11,354
Amortization of
intangible assets 800 1,599 2,558 4,833
Net interest expense 387 432 711 1,814
Share of income from
associated companies (93) (48) (187) (212)
Foreign exchange (gains)
losses (194) 99 (1,290) (20)
Other income (334) (147) (926) (1,308)
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Income before income
taxes 25,788 24,499 75,119 67,657
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Income taxes
Current 11,211 9,583 26,859 25,204
Future (2,898) (1,498) (2,070) (2,098)
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Total income taxes 8,313 8,085 24,789 23,106
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Net income for the period 17,475 16,414 50,330 44,551
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Weighted average number
of shares outstanding
- basic 45,578,416 45,115,818 45,542,534 45,048,970
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Weighted average number
of shares outstanding
- diluted 46,252,398 46,011,515 46,168,452 45,960,117
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Shares outstanding, end
of the period 45,602,754 45,076,781 45,602,754 45,076,781
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Earnings per share
Basic 0.38 0.36 1.11 0.99
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Diluted 0.38 0.36 1.09 0.97
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Contact Information

  • Stantec Inc. - Media Contact
    Jay Averill
    Media Relations
    (780) 917-7441
    or
    Stantec Inc. - Investor Contact
    Don Wilson
    Sr. VP & CFO
    (780) 917-7269
    Website: www.stantec.com