EX-99.1 2 d17228dex991.htm EXHIBIT 99.1

Exhibit 99.1

Exhibit 99.1

Stantec reports second quarter 2015 results and dividend

EDMONTON, AB; NEW YORK, NY (August 6, 2015) TSX, NYSE:STN

Today, Stantec announced that it continued to perform well in the second quarter of 2015, with several key items to highlight:

• Gross revenue increased 12.1% to C$710.3 million in Q2 15 from C$633.8 million in Q2 14

• Both Stantec’s Buildings and Infrastructure business operating units had strong organic revenue growth in Q2 15, partly offsetting a retraction in its Energy & Resources business operating unit

• EBITDA increased 5.1% to C$82.2 million in Q2 15 from C$78.2 million in Q2 14

• Net income decreased 2.7% to C$43.1 million in Q2 15 from C$44.3 million in Q2 14

• Diluted earnings per share decreased 2.1% to C$0.46 in Q2 15 from C$0.47 in Q2 14

• Stantec declared a cash dividend of C$0.105 per share to shareholders of record on September 30, 2015

• Subsequent to the quarter, Stantec acquired 30-person VI Engineering, LLC, based in Houston, Texas

Stantec demonstrated strength in key areas in the second quarter of 2015, despite the challenging economic conditions in the oil and gas industry. The Company experienced strong revenue growth in its Buildings and Infrastructure business operating units, which partly offset the retraction in its Energy & Resources business operating unit.

“With both our Buildings and Infrastructure businesses demonstrating strong performance, our diverse business model is providing a solid foundation for managing our Company through the economic factors impacting the oil and gas industry,” says Bob Gomes, Stantec president and chief executive officer. “We thank our talented staff for once again demonstrating their resourcefulness and their commitment to working with our clients to design with community in mind.”

Designing with Community in Mind

Stantec’s Buildings business operating unit achieved strong revenue growth in Q2 15. In the United States, gross revenue significantly increased due to acquisitions completed in 2014 and 2015. In Canada, Stantec benefited from strong activity in the healthcare market, continuing strength in its Education sector, and steady activity in its Commercial sector. For example, due to Dessau’s well-recognized position in the Quebec market, during the quarter, Stantec secured work to provide the mechanical and electrical engineering services for building a mental health pavilion at Saint-Jérôme Regional Hospital and to expand the Montreal Sacré-Cœur Hospital to include an integrated tertiary trauma center.

The revenue retraction in Stantec’s Oil & Gas sector results from the sharp decline in oil prices and corresponding market conditions year to date compared to the first two quarters of 2014. Environmental Services organic revenue in sectors that are non-resource related remained stable in Canada and achieved overall strong growth in the United States year to date in 2015, in contrast to the slow start in 2014 caused by harsh winter conditions.

Stantec’s Infrastructure business operating unit achieved strong revenue growth in Q2 15. Its Community Development, Transportation, and Water sectors all experienced strong organic gross revenue growth year to date compared to 2014.

In Transportation, a rebounding US economy and Stantec’s North American strategic market position led to increased organic growth opportunities. To illustrate, during the quarter, Stantec was selected as the independent engineer for the New Champlain Bridge Corridor design-build project in Montreal, Quebec.

Community Development achieved strong organic revenue growth in Q2 15 compared to Q2 14 in the United States and stable growth in Canada. In the United States, Stantec continued to secure major non-residential projects such as the design of streets, sidewalks, sewers, water mains, and streetscape and plaza areas to support the Coney Island redevelopment in Brooklyn, New York, in the area affected by Hurricane Sandy.

Strategic Growth

In July 2015, Stantec acquired certain assets and liabilities, and the business of VI Engineering, LLC, based in Houston, Texas. This 30-person firm’s strong background in the design of high-voltage electrical substations, transmission and distribution lines, and electric power systems adds to Stantec’s platform to better serve its clients across all of its regions.

Additional Company Activity

On August 5, 2015, the Company declared a cash dividend of C$0.105 per share, payable on October 15, 2015, to shareholders of record on September 30, 2015.

Conference Call and Company Information

Stantec’s second quarter conference call, to be held Thursday, August 6, 2015, at 2:00 PM MDT (4:00 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 1-800-524-8950 and provide confirmation code 2173217 to the operator.

About Stantec

We’re active members of the communities we serve. That’s why at Stantec, we always design with community in mind.

The Stantec community unites more than 15,000 employees working in over 250 locations. We collaborate across disciplines and industries to bring buildings, energy and resource, and infrastructure projects to life. Our work—professional consulting in planning, engineering, architecture, interior design, landscape architecture, surveying, environmental sciences, project management, and project economics—begins at the intersection of community, creativity, and client relationships.

Since 1954, our local strength, knowledge, and relationships, coupled with our world-class expertise, have allowed us to go anywhere to meet our clients’ needs in more creative and personalized ways. With a long-term commitment to the people and places we serve, Stantec has the unique ability to connect to projects on a personal level and advance the quality of life in communities across the globe. Stantec trades on the TSX and the NYSE under the symbol STN.

Cautionary Statements

Stantec’s EBITDA is a non-IFRS measure and gross revenue is an additional IFRS measure. 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 2014 Annual Report. Diluted earnings per share for 2014 was adjusted from amounts previously reported for the two-for-one share split that occurred on November 14, 2014.

Certain statements contained in this news release constitute forward-looking statements. Any such statements represent the views of management only as of the date hereof and are presented for the purpose of assisting the Company’s shareholders in understanding Stantec’s operations, objectives, priorities, and anticipated financial performance as at and for the periods ended on the dates presented, and may not be appropriate for other purposes. By their nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties.

We caution readers of this news 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 client funding, the risk that Stantec will not meet its growth or revenue targets, and the risk that the projects contemplated in this news release will not be completed 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 risk factors could affect our results, refer to the Risk Factors section and Cautionary Note Regarding Forward-Looking Statements in our 2014 Annual Report. You may obtain our 2014 Annual Report by visiting EDGAR on the SEC website at www.sec.gov or on the CSA website at www.sedar.com, or at www.stantec.com. Alternatively, you may obtain a hard copy of the 2014 Annual Report free of charge from our Investor Contact noted below.

Media Contact		Investor Contact
Sherry Brownlee		Sonia Kirby
Stantec Media Relations		Stantec Investor Relations
Ph: (780) 917-7264		Ph: (780) 616-2785
sherry.brownlee@stantec.com		sonia.kirby@stantec.com

Design with community in mind

- Continued, Consolidated Statements of Financial Position and Consolidated Statements of Income attached –

Consolidated Statements of Financial Position

(Unaudited)

		June 30 2015				December 31 2014
(In thousands of Canadian dollars)		$				$
ASSETS
Current
Cash and deposits			20,973				153,704
Cash in escrow			6,000				-
Trade and other receivables			553,069				431,751
Unbilled revenue			234,156				192,310
Income taxes recoverable			23,228				11,171
Prepaid expenses			25,983				23,425
Other financial assets			30,316				31,526
Other assets			545				530
Total current assets			894,270				844,417
Non-current
Property and equipment			157,028				152,707
Goodwill			856,066				760,631
Intangible assets			122,429				97,243
Investments in joint ventures and associates			5,141				4,975
Deferred tax assets			74,063				58,801
Other financial assets			108,241				90,667
Other assets			836				1,029
Total assets			2,218,074				2,010,470
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current
Bank indebtedness			3,677				-
Trade and other payables			289,493				300,293
Billings in excess of costs			84,854				96,082
Current portion of long-term debt			133,967				53,172
Provisions			14,501				10,796
Other financial liabilities			2,031				2,773
Other liabilities			11,953				11,953
Total current liabilities			540,476				475,069
Non-current
Long-term debt			259,266				256,093
Provisions			59,415				51,596
Deferred tax liabilities			92,610				74,602
Other financial liabilities			2,293				2,547
Other liabilities			66,543				64,318
Total liabilities			1,020,603				924,225
Shareholders’ equity
Share capital			284,086				276,698
Contributed surplus			14,364				13,490
Retained earnings			797,294				735,917
Accumulated other comprehensive income			101,727				60,140
Total shareholders’ equity			1,197,471				1,086,245
Total liabilities and shareholders’ equity			2,218,074				2,010,470

Consolidated Statements of Income

(Unaudited)

		For the quarter ended June 30								For the two quarters ended June 30
		2015				2014				2015				2014
(In thousands of Canadian dollars, except per share amounts)		$				$				$				$
Gross revenue			710,254				633,819				1,415,977				1,207,712
Less subconsultant and other direct expenses			116,336				103,568				229,775				196,206
Net revenue			593,918				530,251				1,186,202				1,011,506
Direct payroll costs			273,138				240,229				538,271				459,851
Gross margin			320,780				290,022				647,931				551,655
Administrative and marketing expenses			244,968				211,803				496,426				411,715
Depreciation of property and equipment			11,162				9,175				22,004				17,999
Amortization of intangible assets			8,679				5,788				18,906				11,152
Net interest expense			2,863				2,172				5,529				3,697
Other net finance expense			739				758				1,577				1,416
Share of income from joint ventures and associates			(516	)			(581	)			(1,155	)			(1,386	)
Foreign exchange loss (gain)			94				(179	)			(34	)			89
Other income			(6,749	)			(24	)			(7,217	)			(390	)
Income before income taxes			59,540				61,110				111,895				107,363
Income taxes
Current			17,103				17,495				31,204				27,821
Deferred			(730	)			(690	)			(433	)			1,704
Total income taxes			16,373				16,805				30,771				29,525
Net income for the period			43,167				44,305				81,124				77,838
Weighted average number of shares outstanding – basic			94,037,462				93,409,806				93,950,055				93,328,828
Weighted average number of shares outstanding – diluted			94,645,377				94,303,814				94,495,416				94,272,502
Shares outstanding, end of the period			94,186,720				93,504,332				94,186,720				93,504,332
Earnings per share
Basic			0.46				0.47				0.86				0.83
Diluted			0.46				0.47				0.86				0.83

Shares outstanding and earnings per share for 2014 have been adjusted for the November 14, 2014, two-for-one share split.