Stantec Inc.
TSX : STN
NYSE : SXC

Stantec Inc.

May 03, 2007 09:20 ET

Stantec Announces 16.7% Increase in Gross Revenue in the First Quarter

EDMONTON, ALBERTA--(CCNMatthews - May 3, 2007) - Stantec Inc. (TSX:STN) (NYSE:SXC)

- In the first quarter of 2007 Stantec generated gross revenue of C$216.3 million compared to C$185.3 million in the first quarter of 2006, a 16.7% increase. Net revenue increased 17.9% to C$192.3 million from C$163.1 million and net income increased 35.1% to C$15.4 million compared to C$11.4 million. Diluted Earnings per share were up 32.0% to C$0.33 in the first quarter 2007 from C$0.25 in the first quarter of 2006.

- The increase in net income is due to three factors that combined to deliver better than expected results. Amortization of intangible assets and net interest expense were both lower than in the same period of 2006. Both of these items are expected to increase in future quarters due to the acquisition of Vollmer Associates at the beginning of the second quarter 2007. Gross margin was higher than anticipated because of the mix and type of projects completed in the quarter. Over the year the Company expects that gross margin will be between 55% and 57%.

- During the first quarter Stantec announced its intent to acquire Vollmer Associates of New York City. The transaction closed in early April and added approximately 600 employees and 20 offices to Stantec in the northeast United States.

- 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 May 3, 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.

"We've had a good start to 2007 with strong performances from all of our practice areas," says Tony Franceschini, Stantec President & CEO. "In particular our Environment and Transportation groups performed well capitalizing on public sector spending and winning a number of key projects."

The diverse range of projects awarded to Stantec this quarter reflects the maturing of the Company's practice areas. The Transportation group was awarded two on-call assignments, one from the Ministry of Transportation Ontario for bridge projects in the Central Region over two years and the second from the North Carolina Department of Transportation to provide general railroad engineering, highway/railroad crossing evaluations, and general railroad planning studies over a three year term. The Environment group was awarded a two year contract by SaskPower to provide a variety of environmental assessment services throughout Saskatchewan. In Henry County, Georgia, the team is providing design services to double the capacity of the Tussahaw Water Treatment Plant. In addition, Stantec's Buildings group, in association with another firm, was selected as the architects for the new Peace Country Regional Health Centre located in Grande Prairie, Alberta. The Urban Land practice began the civil engineering, planning, and mapping services for McAllister Ranch in Bakersfield, California. The development will include more than 6,000 residential lots, 14 miles (22.5 kilometers) of arterial roadways, an 18-hole Greg Norman Signature golf course, amenity lakes, parks, schools, and 340 acres (138 hectares) of commercial development.

"Our employees across Stantec have done an exceptional job of developing strong relationships with our clients by continuing to deliver effective solutions time and time again," adds Franceschini. "It is through the efforts of our team, which is now over 6,500 people strong, that we will achieve our goal of becoming a top 10 global design firm."

Stantec's Annual & Special Meeting of Shareholders is being held today, May 3, 2007, at 1:00 PM EDT (11:00 AM MDT) at Stantec's headquarters in Edmonton, Alberta, 10160-112th Street. The First Quarter Conference Call, being 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 6,500 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)

March 31 December 31
2007 2006
(In thousands of Canadian dollars) $ $
----------------------------------------------------------------------------
----------------------------------------------------------------------------

ASSETS
Current
Cash and cash equivalents 42,778 28,363
Restricted cash 749 1,545
Accounts receivable, net of allowance for doubtful
accounts of $8,659 in 2007 ($7,379 - 2006) 164,046 168,474
Costs and estimated earnings in excess of billings 47,972 39,924
Income taxes recoverable 3,217 -
Prepaid expenses 5,041 6,591
Future income tax assets 9,295 9,711
Other assets 11,452 8,228
----------------------------------------------------------------------------

Total current assets 284,550 262,836
Property and equipment 66,228 65,009
Goodwill 250,797 251,491
Intangible assets 20,208 22,819
Future income tax assets 10,497 9,984
Other assets 20,778 18,338
----------------------------------------------------------------------------

Total assets 653,058 630,477
----------------------------------------------------------------------------
----------------------------------------------------------------------------

LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Bank indebtedness 4,613 -
Accounts payable and accrued liabilities 76,863 107,132
Billings in excess of costs and estimated earnings 31,898 28,721
Income taxes payable - 3,432
Current portion of long-term debt 4,589 4,181
Future income tax liabilities 12,836 12,236
----------------------------------------------------------------------------

Total current liabilities 130,799 155,702
Long-term debt 45,079 12,046
Other liabilities 35,236 33,561
Future income tax liabilities 16,370 18,273
----------------------------------------------------------------------------

Total liabilities 227,484 219,582
----------------------------------------------------------------------------
Shareholders' equity
Share capital 214,267 212,781
Contributed surplus 5,139 5,458
Deferred stock compensation (181) (250)
Retained earnings 233,178 217,750
Accumulated other comprehensive income (26,829) (24,844)
----------------------------------------------------------------------------

Total shareholders' equity 425,574 410,895
----------------------------------------------------------------------------

Total liabilities and shareholders' equity 653,058 630,477
----------------------------------------------------------------------------
----------------------------------------------------------------------------


Consolidated Statements of Income

(Unaudited)

For the quarter ended
March 31
(In thousands of Canadian dollars, except per 2007 2006
share amounts) $ $
----------------------------------------------------------------------------

INCOME
Gross revenue 216,311 185,270
Less subconsultant and other direct expenses 23,964 22,132
----------------------------------------------------------------------------

Net revenue 192,347 163,138
Direct payroll costs 83,007 72,209
----------------------------------------------------------------------------

Gross margin 109,340 90,929
Administrative and marketing expenses 81,675 68,377
Depreciation of property and equipment 4,088 3,471
Amortization of intangible assets 939 1,528
Net interest (income) expense (107) 727
Share of income from associated companies (69) (38)
Foreign exchange gains (178) (48)
Other income (278) (129)
----------------------------------------------------------------------------

Income before income taxes 23,270 17,041
----------------------------------------------------------------------------

Income taxes
Current 7,467 7,498
Future 375 (1,874)
----------------------------------------------------------------------------

Total income taxes 7,842 5,624
----------------------------------------------------------------------------

Net income for the period 15,428 11,417
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Weighted average number of shares outstanding
- basic 45,481,764 44,946,790
----------------------------------------------------------------------------

Weighted average number of shares outstanding
- diluted 46,125,051 45,917,882
----------------------------------------------------------------------------

Shares outstanding, end of the period 45,534,408 45,070,346
----------------------------------------------------------------------------

Earnings per share
Basic 0.34 0.25
----------------------------------------------------------------------------

Diluted 0.33 0.25
----------------------------------------------------------------------------


Contact Information

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