EX-99 2 d385119dex99.htm EXHIBIT 99.1

Exhibit 99.1

Exhibit 99.1

News Release

For Immediate Release

Stantec announces strong second quarter 2012 results and dividend

EDMONTON, AB (August 2, 2012) TSX, NYSE:STN

  Today, Stantec announced strong second quarter 2012 results, with several key items to highlight

• Gross revenue increased 15.5% to C$476.2 million in Q2 12 from C$412.3 million in Q2 11.

• EBITDA increased 13.5% to C$56.2 million in Q2 12 from C$49.5 million in Q2 11.

• Net income increased 19.8% to C$30.8 million in Q2 12 from C$25.7 million in Q2 11.

• Diluted earnings per share increased 19.6% to C$0.67 in Q2 12 from C$0.56 in Q2 11.

• The Company declared a quarterly dividend of C$0.15 per share, payable on October 18, 2012 to shareholders of record on September 28, 2012.

“Our strong performance in the second quarter of 2012 speaks to the strength of our business model and resilience in the face of mixed economic conditions,” says Bob Gomes, Stantec president and chief executive officer. “Thanks to the support of our clients and hardworking staff, we continue to stay the course and remain focused on achieving our objectives for the remainder of the year.”

Stantec’s revenue growth in Q2 12 was strong compared to Q2 11 with gross revenue increasing 15.5% to C$476.2 million from C$412.3 million. EBITDA increased 13.5% to C$56.2 million from C$49.5 million. The Company’s net income for Q2 12 increased 19.8% to C$30.8 million from C$25.7 million in Q2 11, and diluted earnings per share increased 19.6% to C$0.67 in Q2 12 from C$0.56 in Q2 11. Net income was positively impacted by organic revenue growth and from acquisitions completed in 2011 and 2012, and by a decrease in administrative and marketing expenses as a percentage of net revenue. This is the fourth consecutive quarter where Stantec has achieved positive organic growth on a gross and net revenue basis.

Focus on Building Client Relationships and Offering Integrated Services

Stantec’s focus on client relationships has resulted in significant new projects with new and existing clients. For example, the Company’s relationships with the world’s top global energy and resource companies resulted in winning a project in northeast British Columbia at the proposed Suska and Sukunka mines, where Stantec will be providing environmental baseline and impact assessment, permitting, regional monitoring, engineering, and First Nations’ support services. As well, the breadth of Stantec’s portfolio and integrated services approach enable the Company to continue to win public-private partnership (P3) projects. For example, Stantec is part of the project team selected for the northeast expansion of Anthony Henday Drive, a 27-kilometer (17-mile), six- and eight-lane divided ring road in Edmonton, Alberta.

Stantec continues to secure projects in key sectors despite a softer market in 2012. For example, in the healthcare sector, Stantec recently secured a commission at the Cleveland Clinic in Cleveland, Ohio, to perform programming, architectural, and interior design services for a major expansion for the Taussig Cancer Institute, which was rated in the top ten among cancer programs in the United States by US News and World Report. The Company also continues to win new work in the industrial buildings and facilities sector, and was selected to provide integrated engineering and architectural services for infrastructure upgrades to Seaspan’s Vancouver, British Columbia shipyards. In the urban development sector, Stantec continues to successfully pursue opportunities in both the residential and nonresidential markets in Canada and the United States. For example, the Company secured a project with the Green Infrastructure Program in Philadelphia, Pennsylvania for the development of various stormwater best management practices that will reduce combined sewer overflows.

Continued Growth

In May, Stantec completed the acquisition of architecture and interior design firm PHB Group. Based in St. John’s, Newfoundland, the 35-person PHB Group will be Stantec’s first architectural presence in Atlantic Canada. PHB Group’s architectural services, provided on projects across Canada, will complement Stantec’s existing buildings engineering, geotechnical engineering, and environmental services presence in the Atlantic region. In May, Stantec also completed the acquisition of transportation consulting firm ABMB Engineers. Based in Baton Rouge, Louisiana, this 130-person firm also has offices in Jackson, Vicksburg, and Madison, Mississippi; and New Orleans, Louisiana. The addition of ABMB will help grow Stantec’s transportation practice in the US Southeast while providing a new presence for Stantec in Mississippi.

Additional Company Activity

In June, Stantec signed a letter of intent to acquire oil and gas and power consulting firm Cimarron Engineering Ltd. Based in Calgary, Alberta, with an additional office in Edmonton, Alberta, this 290-person firm will significantly enhance Stantec’s oil and gas and power practices throughout North America. The transaction is expected to close in August.

Stantec further strengthened its capital structure by successfully extending the maturity of its C$350 million revolving credit facility to 2016 and reducing its rates of borrowing. This facility also allows the Company access to an additional C$150 million under the same terms and conditions on approval from its lenders.

In addition, Stantec declared a quarterly dividend of C$0.15 per share, payable on October 18, 2012 to shareholders of record on September 28, 2012, reflecting the Company’s financial strength and ability to continue to grow revenue, complete strategic acquisitions, and generate cash flow from operations while providing enhanced shareholder returns.

Conference Call and Company Information

Stantec’s second quarter conference call, to be held Friday, August 3, at 8:00 AM MDT (10:00 AM 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 the confirmation code 2600407 to the first available operator.

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 190 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 2011 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 Caution Regarding Forward-Looking Statements in our 2011 Financial Review. You may obtain these documents by visiting EDGAR on the SEC website at www.sec.gov or on the CSA website at www.sedar.com.

Media Contact Danny Craig Stantec Media Relations Tel: (949) 923-6085 danny.craig@stantec.com Investor Contact Crystal Verbeek Stantec Investor Relations Tel: (780) 969-3349 crystal.verbeek@stantec.com

One Team. Integrated Solutions.        

- Continued, Income Statement and Balance Sheet attached -

Consolidated Statements of Financial Position

(Unaudited)

(In thousands of Canadian dollars)		June 30 2012 $				December 31 2011 $
ASSETS
Current
Cash and short-term deposits			12,253				36,111
Trade and other receivables			333,592				310,669
Unbilled revenue			170,779				133,881
Income taxes recoverable			12,269				16,800
Prepaid expenses			11,287				13,908
Other financial assets			16,568				14,612
Other assets			4,455				3,172
Total current assets			561,203				529,153
Non-current
Property and equipment			106,859				107,853
Goodwill			520,841				509,028
Intangible assets			74,054				72,047
Investments in associates			2,739				2,365
Deferred tax assets			43,597				43,647
Other financial assets			59,738				61,606
Other assets			4,070				1,657
Total assets			1,373,101				1,327,356
LIABILITIES AND EQUITY
Current
Bank indebtedness			7,129				-
Trade and other payables			188,173				191,859
Billings in excess of costs			49,771				49,441
Current portion of long-term debt			34,912				59,593
Provisions			15,626				16,373
Other financial liabilities			1,670				5,042
Other liabilities			6,143				5,208
Total current liabilities			303,424				327,516
Non-current
Long-term debt			256,109				236,601
Provisions			41,677				42,076
Deferred tax liabilities			55,163				54,564
Other financial liabilities			2,515				2,257
Other liabilities			38,808				37,191
Total liabilities			697,696				700,205
Shareholders’ equity
Share capital			232,040				226,744
Contributed surplus			14,962				14,906
Retained earnings			439,808				397,847
Accumulated other comprehensive loss			(11,508	)			(12,449	)
Total equity attributable to equity holders of the Company			675,302				627,048
Non-controlling interests			103				103
Total equity			675,405				627,151
Total liabilities and equity			1,373,101				1,327,356

Consolidated Statements of Income

(Unaudited)

		For the quarter ended June 30								For the two quarters ended June 30
(In thousands of Canadian dollars, except per share amounts)		2012 $				2011 $				2012 $				2011 $
Gross revenue			476,243				412,347				915,294				821,003
Less subconsultant and other direct expenses			79,633				69,990				147,804				141,854
Net revenue			396,610				342,357				767,490				679,149
Direct payroll costs			181,216				153,675				350,375				302,569
Gross margin			215,394				188,682				417,115				376,580
Administrative and marketing expenses			158,634				138,426				312,519				280,451
Depreciation of property and equipment			6,728				6,881				13,176				13,348
Amortization of intangible assets			4,915				4,647				9,586				9,331
Net interest expense			2,441				2,756				4,654				4,973
Other net finance expense			644				727				1,494				1,403
Share of income from associates			(515	)			(161	)			(805	)			(348	)
Foreign exchange loss (gain)			306				199				27				(392	)
Other expense (income)			77				(6	)			190				(41	)
Income before income taxes			42,164				35,213				76,274				67,855
Income taxes
Current			10,098				8,687				19,316				17,033
Deferred			1,286				820				1,278				1,288
Total income taxes			11,384				9,507				20,594				18,321
Net income for the period			30,780				25,706				55,680				49,534
Weighted average number of shares outstanding – basic			45,727,219				45,736,514				45,647,581				45,753,235
Weighted average number of shares outstanding – diluted			45,727,219				45,856,614				45,647,581				45,909,137
Shares outstanding, end of the period			45,751,251				45,691,852				45,751,251				45,691,852
Earnings per share
Basic			0.67				0.56				1.22				1.08
Diluted			0.67				0.56				1.22				1.08