Positive start to the year: Stantec announces first quarter 2013 results and dividend

EDMONTON, ALBERTA--(Marketwired - May 9, 2013) -

Today, Stantec (TSX:STN) (NYSE:STN) announced solid first quarter 2013 results, with several key items to highlight

• Gross revenue increased 17.7% to C$513.2 million in Q1 13 from C$436.2 million in Q1 12
• Net income increased 13.6% to C$28.4 million in Q1 13 from C$25.0 million in Q1 12
• Diluted earnings per share increased 10.9% to C$0.61 in Q1 13 from C$0.55 in Q1 12
• The Company declared a quarterly dividend of C$0.165 per share

"With a continued focus on our strategy and a commitment to the success of the clients and communities we engage with every day, we saw a positive start to 2013," says Bob Gomes, Stantec president and chief executive officer. "Thanks to the hard work of our staff we continue to achieve the results we set for the Company."

Stantec achieved solid results for the first quarter of 2013. Compared to Q1 12, Stantec's gross revenue increased by 17.7% to C$513.2 million from C$436.2 million, EBITDA increased 15.1% to C$54.8 million from C$47.6 million, net income increased 13.6% to C$28.4 million from C$25.0 million, and diluted earnings per share increased 10.9% to C$0.61 from C$0.55.

In Q1 13, Stantec's gross revenue grew organically by 5.2%, demonstrating a sustained ability to generate organic growth within the diversity of the business model. The Company's positive results were due to acquisitions completed in 2012 and organic revenue growth spurred by activity in the oil and gas and transportation sectors.

Executing our Strategy Results in Market Opportunities

With the strength of its recent acquisitions and its depth of expertise, Stantec is well-positioned to respond to market opportunities across its practice areas. Stantec's expertise in providing front-end and design services to clients interested in moving energy and resources to market continues to generate opportunities for pipelines and associated facilities, such as providing the coordination, management, and engineering analysis for the geotechnical aspects of the Kitimat LNG Export Facility in British Columbia.

Strategic acquisitions continue to increase Stantec's presence in local markets, particularly in the United States, allowing the Company to secure more design-build opportunities. One such recent project is the I- 75MM 63 rest area design-build in Collier County, Florida, where services include design, ecological permitting, and landscape architecture.

As the residential market in the United States shows signs of recovery Stantec continues to diversify its expertise and ability to provide a variety of services to different segments in the urban development market, resulting in steady wins of new projects. For example, Stantec recently secured a project for the campus master plan for the Delaware Valley College in Doylestown, Pennsylvania. Services include facilities assessment, space utilization, and campus planning recommendations.

Additional Company Activity

On May 8, 2013, Stantec's board of directors declared a quarterly dividend of C$0.165 per share, payable on July 18, 2013, to shareholders of record on June 28, 2013.

Conference Call and Company Information

Stantec's first quarter conference call, to be held Thursday, May 9, 2013, at 2:00 PM MDT (4:00 PM 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 confirmation code 1763207 to the operator.

Stantec's Annual Meeting of Shareholders will be held today at 10:30 AM MDT (12:30 PM EDT) at MacEwan University's Alberta College Campus in Edmonton, Alberta, 10050 MacDonald Drive.

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 200 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 is an additional IFRS measure. 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 2012 Financial Review. Figures for 2012 have been restated for the adoption of IFRS 10, "Consolidated Financial Statements" and IFRS 11 "Joint Arrangements" as further described in note 4 of our Q1 13 unaudited interim consolidated financial statements.

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 Cautionary Note Regarding Forward-Looking Statements in our 2012 Financial Review. You may obtain our 2012 Financial Review by visiting EDGAR on the SEC website at www.sec.gov or on the CSA website at www.sedar.com or at www.stantec.com. Alternatively, you may obtain a hard copy of the Financial Review free of charge upon request to our Investor Contact noted below.

Consolidated Statements of Financial Position
(Unaudited)
	March 31		December 31		January 1
	2013		2012*		2012*
(In thousands of Canadian dollars)	$		$		$
ASSETS
Current
Cash and cash equivalents	25,659		40,708		34,898
Trade and other receivables	362,167		353,451		308,518
Unbilled revenue	173,637		148,908		133,434
Income taxes recoverable	12,341		3,840		16,825
Prepaid expenses	16,045		14,283		13,882
Other financial assets	17,666		17,670		13,833
Other assets	6,268		4,106		3,172
Total current assets	613,783		582,966		524,562
Non-current
Property and equipment	119,679		114,994		107,763
Goodwill	572,726		566,784		509,028
Intangible assets	83,576		85,748		72,047
Investments in joint ventures and associates	5,223		5,286		3,980
Deferred tax assets	41,461		40,975		43,639
Other financial assets	63,113		63,691		61,606
Other assets	1,261		3,791		1,657
Total assets	1,500,822		1,464,235		1,324,282
LIABILITIES AND EQUITY
Current
Trade and other payables	197,856		211,726		188,929
Billings in excess of costs	70,103		60,822		49,441
Income taxes payable	-		159		-
Current portion of long-term debt	45,253		42,888		59,593
Provisions	14,118		14,863		16,373
Other financial liabilities	3,325		1,672		5,042
Other liabilities	8,964		8,650		5,208
Total current liabilities	339,619		340,780		324,586
Non-current
Long-term debt	254,700		256,408		236,601
Provisions	37,983		36,959		42,076
Deferred tax liabilities	58,840		57,840		54,561
Other financial liabilities	2,713		2,342		2,257
Other liabilities	44,332		42,778		37,191
Total liabilities	738,187		737,107		697,272
Shareholders' equity
Share capital	246,228		240,369		226,744
Contributed surplus	13,525		14,291		14,906
Retained earnings	512,063		491,227		397,706
Accumulated other comprehensive loss	(9,284	)	(18,862	)	(12,449	)
Total equity attributable to equity holders of the Company	762,532		727,025		626,907
Non-controlling interests	103		103		103
Total equity	762,635		727,128		627,010
Total liabilities and equity	1,500,822		1,464,235		1,324,282

* Figures for 2012 have been restated for the adoption of IFRS 10 and IFRS 11.

Consolidated Statements of Income
(Unaudited)
	For the quarter ended
	March 31
	2013		2012*
(In thousands of Canadian dollars, except per share amounts)	$		$
Gross revenue	513,207		436,196
Less subconsultant and other direct expenses	86,355		65,726
Net revenue	426,852		370,470
Direct payroll costs	196,525		168,931
Gross margin	230,327		201,539
Administrative and marketing expenses	175,388		153,686
Depreciation of property and equipment	7,282		6,442
Amortization of intangible assets	5,804		4,671
Net interest expense	2,319		2,217
Other net finance expense	598		850
Share of income from joint ventures and associates	(208	)	(396	)
Foreign exchange loss (gain)	106		(279	)
Other (income) expense	(308	)	113
Income before income taxes	39,346		34,235
Income taxes
Current	10,886		9,214
Deferred	13		(8	)
Total income taxes	10,899		9,206
Net income for the period	28,447		25,029
Weighted average number of shares outstanding - basic	46,054,787		45,557,235
Weighted average number of shares outstanding - diluted	46,361,858		45,557,235
Shares outstanding, end of the period	46,136,982		45,717,418
Earnings per share
Basic	0.62		0.55
Diluted	0.61		0.55

* Figures for 2012 have been restated for the adoption of IFRS 10 and IFRS 11.