Stantec Inc.

Stantec Inc.

February 21, 2008 11:56 ET

Stantec Marks 54th Consecutive Year of Profitability With Strong Fourth Quarter and Year End Results

EDMONTON, ALBERTA--(Marketwire - Feb. 21, 2008) - Stantec Inc. (TSX:STN) (NYSE:SXC):

- For the full year 2007, Stantec generated gross revenue of C$954.6 million, a 17.0% increase from C$816.1 million last year. Net revenue was C$830.9 million up 17.4% compared to C$707.9 million in 2006 and net income increased 15.1% to C$69.3 million from C$60.2 million. Diluted earnings per share were 14.5% higher at C$1.50 compared to C$1.31 in 2006.

- In the fourth quarter 2007, gross revenue increased to C$258.3 million from C$211.8 million in 2006, an increase of 22.0%. Net revenue increased 19.5% to C$215.9 million compared to C$180.6 million in the fourth quarter of 2006 and net income was up 21.8% to C$19.0 million compared to C$15.6 million. Diluted earnings per share were up 20.6% to C$0.41 compared to C$0.34 in the fourth quarter last year.

- In 2007, Stantec added eleven companies; Vancouver, British Columbia architecture firm, Nicolson Tamaki Architects Inc. with 10 employees; New York City based Vollmer Associates, a 600-person design firm with offices throughout the northeastern United States; Land Use Consultants, Inc., a planning and landscape architecture firm in Portland, Maine with approximately 20 employees; Geller DeVellis Inc. of Boston which added about 50 employees specializing in landscape architecture, planning, and civil engineering; 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; Trico Engineering Consultants, Inc, a North Charleston, South Carolina firm with about 130 employees specializing in civil engineering, surveying, landscape architecture, and planning; Chong Partners Architecture, Inc., one of San Francisco, California's most recognized architecture firms with approximately 175 employees and additional offices in Sacramento and San Diego; Stantec also added Toronto, Ontario's Murphy Hilgers Architects Inc., a 55-person firm specializing in healthcare, justice, and retail/commercial facilities and Moore Paterson Architects Inc., a 17-person firm in Victoria, British Columbia; at the end of 2007, Fuller, Mossbarger, Scott & May Engineers of Lexington, Kentucky joined Stantec adding over 300 employees specializing in civil, environmental, geotechnical, structural, and water resources engineering as well as specialized and targeted areas in Geographic Information Systems (GIS), particularly in floodplain mapping.

- Complete Financial Statements, Notes to the Financial Statements, and Management's Discussion and Analysis will be filed on Sedar ( and Edgar ( on February 21, 2008 and are available to download from the investor relations section on You may also contact Stantec for a copy of the documents.

"Our 54th year was among the busiest in the history of Stantec and we're pleased to report solid growth in our fourth quarter and annual results," says Tony Franceschini, Stantec President & CEO. "We're encouraged by the way the many new employees that have joined Stantec in 2007 have quickly begun to team with other professionals and locations to share knowledge and add their talents to our strong North American network."

The strength of Stantec's growing, integrated network is reflected in the types of projects the firm worked on in 2007. For example, the firm secured a contract to provide architecture; planning; landscape architecture; and structural, mechanical, electrical, civil, and transportation engineering services for the development of a new 300-bed acute care hospital in Grand Prairie, Alberta. The firm was also awarded an assignment to provide design solutions for a renovation of the Sheraton New York Hotel and Towers in New York City. Stantec's Industrial group is designing facilities and infrastructure for the Athabasca Upgrader in northern Alberta for Total E&P Canada Ltd. In addition Stantec was selected as one of six companies to complete various projects for the Department of National Defence across Canada over the next five years and in the fourth quarter Stantec was awarded an assignment to complete the preliminary design and planning of the C-17 hanger at Canadian Forces Base Trenton in Ontario. During the year, the firm's expertise in transit systems resulted in contracts to provide system integration analysis and planning services for several light rail transit projects in the southern United States. In addition, work was completed on the improvements to the TransCanada Highway through the challenging terrain of Kicking Horse Canyon in British Columbia.

"It is great to see our staff across the continent putting together integrated teams to provide our clients with a full suite of services for their projects," says Franceschini. "This was the main goal of our vision we set in 1998 to be a top 10 global design firm. We now have the resources, expertise, and depth and breadth of services of a top 10 firm and it is because of the efforts of our employees the past nine years that Stantec has been able to grow and successfully compete with the largest firms in our industry every day."

Stantec's Annual Meeting of Shareholders will be held on May 1, 2008, at 11:00 AM MDT (1:00 PM EDT) at University of Alberta's Enterprise Square in Edmonton, Alberta, 10230 - Jasper Avenue. The Fourth Quarter and Year-End Conference Call, being held today at 2:00 PM MST (4:00 PM EST), will be broadcast live and archived in the Investor Relations section at . Financial analysts who wish to participate in the earnings conference call are invited to call 1-866-322-2356 and provide the confirmation code 5564365 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 8,500 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

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

Cash and cash equivalents 14,175 28,363
Restricted cash - 1,545
Accounts receivable, net of allowance for
doubtful accounts of $10,508 in 2007
($6,303 - 2006) 206,063 164,968
Costs and estimated earnings in excess of
billings 65,064 41,152
Income taxes recoverable 5,019 3,993
Prepaid expenses 6,617 6,591
Future income tax assets 13,308 9,711
Other assets 13,002 8,228

Total current assets 323,248 264,551
Property and equipment 88,156 65,009
Goodwill 332,922 251,491
Intangible assets 32,288 22,819
Future income tax assets 12,074 9,984
Other assets 24,873 20,616

Total assets 813,561 634,470

Accounts payable and accrued liabilities 155,020 107,132
Billings in excess of costs and estimated
earnings 34,423 28,721
Income taxes payable 9,955 7,425
Current portion of long-term debt 21,549 4,181
Future income tax liabilities 11,750 12,236

Total current liabilities 232,697 159,695
Long-term debt 74,539 12,046
Future income tax liabilities 20,718 18,273
Other liabilities 42,909 33,561

Total liabilities 370,863 223,575

Commitments, contingencies, and guarantees

Shareholders' equity
Share capital 218,790 212,781
Contributed surplus 6,266 5,458
Deferred stock compensation (110) (250)
Retained earnings 286,780 217,750
Accumulated other comprehensive income
(AOCI) (69,028) (24,844)

Total shareholders' equity 442,698 410,895

Total liabilities and shareholders' equity 813,561 634,470

On behalf of the Board of Directors:

Director Director

Consolidated Statements of Income

Years ended December 31
(In thousands of Canadian dollars, except per 2007 2006 2005
share amounts) $ $ $

Gross revenue 954,619 816,133 618,020
Less subconsultant and other direct expenses 123,731 108,206 93,468

Net revenue 830,888 707,927 524,552
Direct payroll costs 360,101 304,677 234,553

Gross margin 470,787 403,250 289,999
Administrative and marketing expenses 351,346 292,064 212,992
Depreciation of property and equipment 19,038 15,604 12,389
Amortization of intangible assets 3,702 6,132 2,542
Net interest expense 1,594 1,892 571
Share of income from associated companies (292) (285) (187)
Foreign exchange gains (2,480) (74) (449)
Other income (1,235) (1,507) (359)

Income before income taxes 99,114 89,424 62,500

Income taxes
Current 34,994 31,484 21,735
Future (5,159) (2,242) 143

Total income taxes 29,835 29,242 21,878

Net income for the year 69,279 60,182 40,622

Earnings per share
Basic 1.52 1.34 1.02
Diluted 1.50 1.31 0.99

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