Stantec Inc.
TSX : STN
NYSE : SXC

Stantec Inc.

May 01, 2008 09:25 ET

Stantec Announces First Quarter Results

EDMONTON, ALBERTA--(Marketwire - May 1, 2008) - Stantec Inc. (TSX:STN) (NYSE:SXC):

- In the first quarter of 2008 Stantec's gross revenue increased 34.9% to C$291.8 million compared to C$216.3 million in the first quarter of 2007. Net revenue increased 32.6% to C$254.9 million from C$192.3 million, and net income increased 9.7% to C$16.9 million compared to C$15.4 million. Diluted earnings per share were up 12.1% to C$0.37 in the first quarter of 2008 from C$0.33 in the first quarter of 2007.

- Stantec completed four acquisitions in the first quarter. In January, Stantec added The Zande Companies, a civil and environmental engineering firm with approximately 285 employees located principally in Ohio. Also in January, Stantec acquired Rochester Signal, a firm specializing in railway signal systems with approximately 25 people between its two offices in Rochester, New York, and Pittsburgh, Pennsylvania. In February, Secor International, a leading provider of environmental consulting and engineering services to the private sector and one of the largest providers of downstream marketing remedial services to the US energy industry, joined Stantec, adding over 700 employees and 40 offices principally in the United States. In March, Stantec acquired RHL Design Group, a Petaluma, California-based firm with over 170 employees and several offices in the western United States. RHL is a recognized leader in providing full program implementation and comprehensive design services for commercial clients with regional or national multilocation facilities.

- 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 1, 2008, and are available to download from the Investors section on www.stantec.com. You may also contact Stantec for a copy of the documents.

"Our performance in the first quarter of 2008 is continuing validation of the strength of our business model and our ability to execute in a challenging business environment," says Tony Franceschini, Stantec President & CEO. "Decreased demand for services in our Urban Land practice area was offset by increased demand in our Environment and Industrial practice areas."

Projects Stantec worked on during the quarter illustrate the growing diversity of the firm's service capabilities. In Jefferson County, Kentucky, Stantec is serving as the lead geotechnical engineer for the development of over 83 bridges and 38 retaining walls for the Louisville-Southern Indiana Ohio River Bridges Project, one of the largest transportation projects currently under way in the United States. In Columbus, Ohio, the firm is working on the detailed design of a renovation and upgrade of the existing support facilities at the Columbus Southerly Wastewater Treatment Plant. The improvements will address vital operations and maintenance needs. In Calgary, Alberta, the Company is the prime consultant on a fast-track project with the University of Calgary for the development of a 12-megawatt cogeneration facility. In addition, Stantec is providing detailed design and environmental assessment services for the rehabilitation of Highway 21 in Huron County, Ontario, for the Ministry of Transportation of Ontario. The project entails engineering surveys, pavement investigations and design, foundation investigations, bridge structure rehabilitations, highway rehabilitation design, highway signing and pavement marking design, and drainage improvements.

"Our employees have been able to successfully lever the increasing size and scope of Stantec," says Franceschini. "This has occurred while we continue to integrate newly acquired companies and meet the challenges of changing market conditions through effective work sharing across offices."

Stantec's Annual Meeting of Shareholders will be held on May 1, 2008, at 11:00 AM MDT (1:00 PM EDT) at the University of Alberta's Enterprise Square in Edmonton, Alberta, 10230 - Jasper Avenue. The First Quarter Conference Call, being held today at 2:00 PM MDT (4:00 PM EDT), 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 2735427 to the first available operator.

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 9,000 employees operating out of more than 125 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
2008 2007
(In thousands of Canadian dollars) $ $
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ASSETS (note 4)
Current
Cash and cash equivalents 3,671 14,175
Cash held in escrow (note 2) 6,701 -
Accounts receivable, net of allowance for doubtful
accounts of $13,111 in 2008 ($10,508 - 2007) 248,745 206,063
Costs and estimated earnings in excess of billings 94,092 65,064
Income taxes recoverable 8,795 5,019
Prepaid expenses 7,974 6,617
Future income tax assets 13,987 13,308
Other assets (note 3) 15,042 13,002
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Total current assets 399,007 323,248
Property and equipment 97,515 88,156
Goodwill 417,119 332,922
Intangible assets 43,037 32,288
Future income tax assets 13,687 12,074
Other assets (note 3) 25,961 24,873
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Total assets 996,326 813,561
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Bank indebtedness 2,415 -
Accounts payable and accrued liabilities 127,742 155,020
Billings in excess of costs and estimated earnings 38,483 34,423
Income taxes payable - 9,955
Current portion of long-term debt (note 4) 35,410 21,549
Future income tax liabilities 14,459 11,750
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Total current liabilities 218,509 232,697
Long-term debt (note 4) 236,614 74,539
Future income tax liabilities 27,639 20,718
Other liabilities (note 5) 44,120 42,909
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Total liabilities 526,882 370,863
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Shareholders' equity
Share capital 219,240 218,790
Contributed surplus 6,795 6,266
Deferred stock compensation - (110)
Retained earnings 300,795 286,780
Accumulated other comprehensive income (note 10) (57,386) (69,028)
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Total shareholders' equity 469,444 442,698
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Total liabilities and shareholders' equity 996,326 813,561
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See accompanying notes


Consolidated Statements of Income

(Unaudited)
For the quarter ended
March 31
(In thousands of Canadian dollars, 2008 2007
except shares outstanding and per share amounts) $ $
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INCOME
Gross revenue 291,803 216,311
Less subconsultant and other direct expenses 36,944 23,964
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Net revenue 254,859 192,347
Direct payroll costs 114,607 83,007
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Gross margin 140,252 109,340
Administrative and marketing expenses
(notes 7 and 13) 106,969 81,675
Depreciation of property and equipment 5,367 4,088
Amortization of intangible assets 2,666 939
Net interest (income) expense (note 4) 1,502 (107)
Share of (income) loss from associated companies 106 (69)
Foreign exchange gains (359) (178)
Other income (note 3) (230) (278)
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Income before income taxes 24,231 23,270
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Income taxes
Current 3,999 7,467
Future 3,295 375
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Total income taxes 7,294 7,842
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Net income for the period 16,937 15,428
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Weighted average number of shares outstanding
- basic 45,651,391 45,481,764
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Weighted average number of shares outstanding
- diluted 46,231,241 46,125,051
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Shares outstanding, end of the period 45,650,457 45,534,408
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Earnings per share (note 7)
Basic 0.37 0.34
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Diluted 0.37 0.33
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See accompanying notes

Contact Information

  • Stantec - Media Contact
    Jay Averill
    Media Relations
    (780) 917-7441
    or
    Stantec - Investor Contact
    Simon Stelfox
    Investor Relations
    (780) 917-7288