EX-99.1 2 d431678dex991.htm EXHIBIT 99.1

Exhibit 99.1

Exhibit 99.1

News Release

For Immediate Release

Stantec announces strong third quarter 2012 results and dividend

EDMONTON, AB (November 1, 2012) TSX, NYSE:STN

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

• Gross revenue increased 12.4% to C$483.7 million in Q3 12 from C$430.4 million in Q3 11.

• Net income increased 18.0% to C$34.1 million in Q3 12 from C$28.9 million in Q3 11.

• Diluted earnings per share increased 17.5% to C$0.74 in Q3 12 from C$0.63 in Q3 11.

• The Company declared a quarterly dividend of C$0.15 per share, payable on January 17, 2013, to shareholders of record on December 31, 2012.

“Our positive results in the third quarter of 2012 speak to the strength of our business model where the diversity of our services allows us to take advantage of the changing market conditions,” says Bob Gomes, Stantec president and chief executive officer. “With a strong team and a long-term commitment to the clients and communities we serve, we will continue to execute on our objectives for the remainder of the year.”

Organic revenue growth was 6.1% in Q3 12 compared to Q3 11. This is the fifth consecutive quarter where Stantec has achieved positive organic revenue growth. The Company’s results were positively impacted by an increase in revenue due to organic growth in the mining, oil and gas, and urban development sectors as well as acquisitions completed in 2011 and 2012.

Stantec results have shown positive momentum over the last few quarters. Compared to Q3 11, the Company’s gross revenue increased 12.4% from C$430.4 million to C$483.7 million, EBITDA increased 14.2% from C$53.5 million to C$61.1 million and net income increased 18.0% from C$28.9 million to C$34.1 million. In addition, Stantec achieved record diluted earnings per share with an increase of 17.5% from C$0.63 to C$0.74.

Focus on Client Relationships and Market Opportunities

Stantec’s focus on building strong client relationships and capitalizing on market opportunities together with its depth and breadth of expertise continues to result in securing new projects with new and existing clients. With demonstrated experience in the public-private partnership (P3) delivery model, the Company secured a project to design 12 new schools in Alberta. Implementing the P3 model for this project will accelerate work on the schools being built across Alberta, resulting in completion two years sooner than conventional project delivery methods would have provided.

Stantec remains well positioned to secure projects due to its strong local relationships along with those opportunities resulting from a more stringent regulatory environment. As an example of local relationships, the Company is working as part of a team on the expansion of the metro Vancouver Annacis Wastewater Treatment Plant upgrade, one of the largest wastewater treatment plants in Canada. Stantec also continues to secure work in the transit/rail sector. The Company was recently selected by the Dallas Area Rapid Transit to provide professional services and be responsible for managing the Trinity Railway Express Positive Train Control project. Positive train control is a US federal requirement mandated by the Federal Railroad Safety Improvement Act.

Stantec continues to secure projects in the US residential market. Stantec was recently awarded a project in Sarasota, Florida, to provide design services, from initial site planning through construction phase services, for 600 to 800 units to be built on 500 acres (202 hectares) added to the Country Club East Golf Course Community in Lakewood Ranch.

Continued Growth

In August, Stantec completed the acquisition of Calgary-based Cimarron Engineering Ltd., a 290-person engineering consulting company specializing in the development, design, installation, and integrity maintenance of oil and gas pipeline systems and station facilities. Cimarron also has a power division that specializes in the design of medium to high-voltage electrical systems for utility and oil and gas clients. This addition will enhance Stantec’s oil and gas and power practices throughout North America.

Additional Company Activity

Stantec declared a quarterly dividend of C$0.15 per share, payable on January 17, 2013, to shareholders of record on December 31, 2012.

Conference Call and Company Information

Stantec’s third quarter conference call, to be held Thursday, November 1, at 3:00 PM MDT (5:00 PM 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 1348295 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 Sherry Brownlee Stantec Media Relations Tel: (780) 917-7264 sherry.brownlee@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)		September 30 2012 $				December 31 2011 $
ASSETS
Current
Cash and short-term deposits			18,120				36,111
Trade and other receivables			361,891				310,669
Unbilled revenue			164,540				133,881
Income taxes recoverable			8,456				16,800
Prepaid expenses			14,345				13,908
Other financial assets			16,089				14,612
Other assets			4,402				3,172
Total current assets			587,843				529,153
Non-current
Property and equipment			107,351				107,853
Goodwill			550,526				509,028
Intangible assets			79,370				72,047
Investments in associates			3,065				2,365
Deferred tax assets			39,128				43,647
Other financial assets			62,026				61,606
Other assets			3,938				1,657
Total assets			1,433,247				1,327,356
LIABILITIES AND EQUITY
Current
Trade and other payables			225,077				191,859
Billings in excess of costs			55,122				49,441
Current portion of long-term debt			49,588				59,593
Provisions			14,804				16,373
Other financial liabilities			3,140				5,042
Other liabilities			6,847				5,208
Total current liabilities			354,578				327,516
Non-current
Long-term debt			245,158				236,601
Provisions			41,874				42,076
Deferred tax liabilities			56,534				54,564
Other financial liabilities			2,236				2,257
Other liabilities			38,141				37,191
Total liabilities			738,521				700,205
Shareholders’ equity
Share capital			236,516				226,744
Contributed surplus			14,541				14,906
Retained earnings			467,015				397,847
Accumulated other comprehensive loss			(23,449	)			(12,449	)
Total equity attributable to equity holders of the Company			694,623				627,048
Non-controlling interests			103				103
Total equity			694,726				627,151
Total liabilities and equity			1,433,247				1,327,356

Consolidated Statements of Income

(Unaudited)

		For the quarter ended September 30								For the three quarters ended September 30
(In thousands of Canadian dollars, except per share amounts)		2012 $				2011 $				2012 $				2011 $
Gross revenue			483,687				430,354				1,398,981				1,251,357
Less subconsultant and other direct expenses			85,559				79,156				233,363				221,010
Net revenue			398,128				351,198				1,165,618				1,030,347
Direct payroll costs			178,983				156,313				529,358				458,882
Gross margin			219,145				194,885				636,260				571,465
Administrative and marketing expenses			157,928				140,346				470,447				420,797
Depreciation of property and equipment			7,027				7,173				20,203				20,521
Amortization of intangible assets			5,090				4,150				14,676				13,481
Net interest expense			2,247				2,537				6,901				7,510
Other net finance expense			641				696				2,135				2,099
Share of income from associates			(526	)			(104	)			(1,331	)			(452	)
Foreign exchange loss			106				482				133				90
Other (income) expense			(65	)			-				125				(41	)
Income before income taxes			46,697				39,605				122,971				107,460
Income taxes
Current			9,324				8,946				28,640				25,979
Deferred			3,284				1,748				4,562				3,036
Total income taxes			12,608				10,694				33,202				29,015
Net income for the period			34,089				28,911				89,769				78,445
Weighted average number of shares outstanding – basic			45,788,734				45,662,087				45,694,805				45,703,009
Weighted average number of shares outstanding – diluted			45,800,853				45,726,931				45,694,805				45,812,925
Shares outstanding, end of the period			45,879,748				45,380,252				45,879,748				45,380,252
Earnings per share
Basic			0.74				0.63				1.96				1.72
Diluted			0.74				0.63				1.96				1.71