(TSX:STN) (NYSE:STN)
Today, Stantec announced strong results for 2012, with several
key items to highlight
-- Gross revenue increased 11.9% year over year to C$1,882.9 million from
C$1,683.4 million
-- Net income increased 17.7% year over year to C$120.9 million from
C$102.7 million and diluted earnings per share increased 17.3% to C$2.64
from C$2.25, excluding the impact of a $90.0 million goodwill impairment
charge in 2011
-- The Company completed seven acquisitions, adding approximately 1,170
staff and expanding its geographic reach
-- The Company declared a quarterly dividend of $C0.165, an increase of 10%
"The year 2012 marked our 59th year of uninterrupted
profitability at Stantec, demonstrating the results of effectively
executing our strategy," says Bob Gomes, Stantec president and
chief executive officer. "We achieved strong growth and exceeded
our expectations for the year thanks to the excellence demonstrated
by our employees in their commitment to the clients and communities
they work with every day."
Stantec's revenue growth in Q4 12 was strong compared to Q4 11.
Gross revenue increased 12.0% to C$483.9 million from C$432.0
million, and EBITDA increased 20.3% to C$56.3 million from C$46.8
million. Excluding the impact of a $90.0 million non-cash goodwill
impairment charge in 2011, the Company's net income increased 28.0%
to C$31.1 million from C$24.3 million, and diluted earnings per
share increased 26.4% to C$0.67 from C$0.53. Net income during Q4
12 was positively impacted by an increase in gross revenue and an
increase in gross margin as a percentage of net revenue from 55.1%
in Q4 11 to 56.1% in Q4 12.
Focus on Executing on Strategy and Market Opportunities
In 2012, Stantec focused on executing its long-term strategy and
capitalizing on market opportunities. Because of Stantec's depth
and breadth of expertise, leveraging this focus resulted in
securing projects with new and existing clients across geographic
regions and practice areas.
Stantec strengthened its capacity in the mining, oil and gas,
and power sectors through both organic growth and strategic
acquisitions. This increased capacity led to securing work in Eagle
Ford, Texas, providing construction management oversight and
regulatory support to the gas industry, as well as working on a
pipeline expansion project. Stantec continued to leverage client
relationships and capitalize on its integrated presence across
North America, resulting in multiple pipeline projects providing
services such as overall technical coordination of environmental
assessments and leading emergency response planning. Stantec also
provided consulting services to two liquefied natural gas projects
and associated port facilities.
Stantec's ability to develop strong, long-lasting client
relationships meant new opportunities. This included work with the
North Carolina Department of Transportation for a large multi-year
project completing studies for proposed improvements to a section
of NC 150 northeast of Charlotte, North Carolina. Strategic
acquisitions also increased the Company's market presence, leading
to significant new projects. For example, Stantec was selected for
a design-build project in Louisville, Kentucky, where the Company
will provide a cross-section of services, including roadway and
bridge design, lighting, landscaping, permitting, and geotechnical
engineering services for a new Ohio River bridge and system
interchanges.
Stantec also continued to pursue market opportunities in both
residential and nonresidential markets, particularly in areas where
markets showed signs of recovery. This effort resulted in securing
design work for the Lakewood Ranch Country Club East Golf Course
community expansion in Sarasota, Florida. In addition, despite
softening of some markets, Stantec continued to secure work in key
sectors such as healthcare, including a project for the Cleveland
Clinic in Cleveland, Ohio, to perform programming, architectural,
and interior design services for a major expansion to the Taussig
Cancer Institute.
Continued Growth
Stantec is well positioned for 2013 to take advantage of
continued opportunities in Canada and an emerging recovery in US
markets. The Company completed seven acquisitions in 2012-four of
those in the fourth quarter-which expanded the depth and breadth of
its expertise in the oil and gas industry, in particular in western
Canada, and its transportation and urban development expertise in
the United States. This continued growth reinforces the Company's
goal of being a top 10 global design firm while also expanding its
position in North America and strengthening its diverse service
offerings and relationships with both local/regional and
global/national clients.
Additional Company Activity
Today, Stantec's board of directors declared a quarterly
dividend of C$0.165 per share, an increase of 10%. It is payable on
April 18, 2013, to shareholders of record on March 29, 2013.
Stantec would like to recognize the contributions of former
board member Mr. Robert Bradshaw. In the fourth quarter of 2012,
Mr. Bradshaw stepped down from his position on Stantec's board of
directors. He has been associated with the Company since 1993 and
was part of the team that took the Company public in 1994. He was
appointed chairman of the board from 1994 to 1998. During his time
with Stantec, Mr. Bradshaw demonstrated exemplary dedication and
leadership.
The Stantec board of directors is pleased to announce that on
February 20, 2013, it passed a resolution appointing Donald Lowry
of Edmonton, Alberta, to the board. This appointment will take
effect May 8, 2013. Mr. Lowry is currently the president and chief
executive officer of EPCOR Utilities Inc., and will be stepping
down from this role later this year. He is also the non-executive
chair of Capital Power Corporation and Canadian Oil Sands Ltd., and
is a member of the board of directors of Hydrogenics Corporation.
Mr. Lowry brings leadership and industry expertise to the Stantec
board.
Conference Call and Company Information
Stantec's fourth quarter and year-end conference call, to be
held Thursday, February 21, 2013, at 2:00 PM MST (4:00 PM EST),
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 8780489 to the operator.
Stantec's Annual Meeting of Shareholders will be held on May 9,
2013, 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 and
net revenue are additional IFRS measures. 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.
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. Stantec's 40-F has been filed with the SEC
and you may obtain this document by visiting EDGAR on the SEC
website at www.sec.gov. Our 2012 Financial Review is also available
at 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.
One Team. Integrated Solutions.
- Continued, Income Statement and Balance Sheet attached -
Consolidated Statements of Financial Position
December 31 December 31
2012 2011
(In thousands of Canadian dollars) $ $
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ASSETS
Current
Cash and cash equivalents 41,753 36,111
Trade and other receivables 355,955 310,669
Unbilled revenue 150,523 133,881
Income taxes recoverable 3,811 16,800
Prepaid expenses 14,336 13,908
Other financial assets 18,701 14,612
Other assets 4,106 3,172
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Total current assets 589,185 529,153
Non-current
Property and equipment 115,086 107,853
Goodwill 566,784 509,028
Intangible assets 85,748 72,047
Investments in associates 3,508 2,365
Deferred tax assets 40,975 43,647
Other financial assets 63,565 61,606
Other assets 3,791 1,657
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Total assets 1,468,642 1,327,356
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LIABILITIES AND EQUITY
Current
Trade and other payables 216,104 191,859
Billings in excess of costs 60,822 49,441
Income taxes payable 159 -
Current portion of long-term debt 42,888 59,593
Provisions 14,863 16,373
Other financial liabilities 1,672 5,042
Other liabilities 8,650 5,208
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Total current liabilities 345,158 327,516
Non-current
Long-term debt 256,408 236,601
Provisions 36,959 42,076
Deferred tax liabilities 57,842 54,564
Other financial liabilities 2,342 2,257
Other liabilities 42,778 37,191
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Total liabilities 741,487 700,205
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Shareholders' equity
Share capital 240,369 226,744
Contributed surplus 14,291 14,906
Retained earnings 491,251 397,847
Accumulated other comprehensive loss (18,859) (12,449)
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Total equity attributable to equity holders of
the Company 727,052 627,048
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Non-controlling interests 103 103
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Total equity 727,155 627,151
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Total liabilities and equity 1,468,642 1,327,356
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Consolidated Statements of Income
Years ended December 31 2012 2011
(In thousands of Canadian dollars, except per
share amounts) $ $
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Gross revenue 1,882,900 1,683,403
Less subconsultant and other direct expenses 326,506 304,856
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Net revenue 1,556,394 1,378,547
Direct payroll costs 700,853 615,136
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Gross margin 855,541 763,411
Administrative and marketing expenses 633,171 565,164
Depreciation of property and equipment 27,875 27,933
Impairment of goodwill - 90,000
Amortization of intangible assets 20,008 18,395
Net interest expense 8,658 9,723
Other net finance expense 2,773 2,848
Share of income from associates (1,765) (793)
Foreign exchange loss 181 501
Other expense (income) 147 (36)
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Income before income taxes 164,493 49,676
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Income taxes
Current 44,661 32,733
Deferred (1,070) 4,281
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Total income taxes 43,591 37,014
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Net income for the year 120,902 12,662
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Earnings per share
Basic 2.64 0.28
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Diluted 2.64 0.28
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Contacts: Media Contact Sherry Brownlee Stantec Media Relations
(780) 917-7264sherry.brownlee@stantec.com Investor Contact Crystal
Verbeek Stantec Investor Relations (780)
969-3349crystal.verbeek@stantec.com
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