Stantec reports fourth quarter and year-end results for 2013 and
increased dividend
EDMONTON, ALBERTA and NEW YORK, NEW YORK--(Marketwired - Feb 27,
2014) - (TSX:STN)(NYSE:STN) -
Today, Stantec announced strong results for 2013, with several
key items to highlight:
- Gross revenue increased 19.6% year over year to C$2,236.4
million from C$1,870.3 million
- The Company achieved strong organic revenue growth of 8.8%,
with momentum every quarter
- Net income increased 20.8% year over year to C$146.2 million
from C$121.0 million
- Diluted earnings per share increased 18.9% to C$3.14 from
C$2.64
- Stantec strengthened its brand strategy and launched a new
visual identity, reinforcing the Company's promise to design with
community in mind
- Stantec implemented its evolution to a more client-focused
structure organized around business operating units and the end
markets in which the Company operates
- Stantec's board of directors declared an increase of 12% to its
quarterly dividend, bringing it to C$0.185 per share
"We exceeded expectations in 2013 with strong growth that
demonstrates our ability to capitalize on market opportunities,"
says Bob Gomes, Stantec president and chief executive officer.
"These results are possible only because of our employees who
deliver every day on our promise to design with community in
mind."
Stantec achieved strong organic gross revenue growth of 8.8% in
2013 compared to 2012. By consistently executing its business
strategy, the Company was able to capitalize on opportunities to
increase project activity in the oil and gas, and transportation
sectors. Stantec ended the year with 19.6% growth in gross revenue,
an 18.1% increase in EBITDA, a 20.8% increase in net income, and an
18.9% increase in diluted earnings per share compared to 2012.
Stantec's revenue growth in Q4 13 was strong compared to Q4 12.
Gross revenue increased 19.5% to C$575.3 million from C$481.4
million, and EBITDA increased 10.9% to C$62.3 million from C$56.2
million. Net income increased 14.8% to C$35.7 million from C$31.1
million, and the Company's diluted earnings per share increased
13.4% to C$0.76 from C$0.67 when comparing Q4 13 to Q4 12.
Designing with Community in Mind
With its focus on communities, creativity, and client
relationships, Stantec collaborates across disciplines and
industries to provide design solutions for buildings, energy and
resource, and infrastructure projects. With more than 13,000
employees in over 200 locations bringing integrated solutions to
communities, Stantec is able to capitalize on mature and emerging
market opportunities.
A key area where Stantec saw the positive results of its
integrated expertise in 2013 was in the energy and resource
sectors. The Company's Environment and Industrial practices
combined their strengths to respond to increased activity in
large-scale projects in Canada's oil and gas sector. The desire to
transport Canadian oil and gas products for export has generated
opportunities for interprovincial pipelines and associated marine
facilities. Robust activity also supported continual assessment,
planning, and permitting work.
During the year, Stantec continued to benefit from long-term
client relationships in Canada and the United States, resulting in
increased opportunities for the Company in alternative project
delivery models, such as design-build and P3s. For a recent
project-resulting from Stantec's reputation with the US federal
government and design-build contractors, the Company's local
presence, and its expertise in the water business-Stantec was the
lead engineer and architect for PCCP Constructors, a joint venture
selected for a contract with the US Army Corps of Engineers, New
Orleans District.
The integration of transportation acquisitions over the past two
years increased Stantec's presence in local US markets, allowing
the Company to secure more project opportunities. Positive results
were evident when Stantec was awarded the Construction Management
Services Contract for the Westside Subway Transit Corridor project
in Los Angeles, California-one of the most regionally significant
infrastructure programs and one of the largest transportation
programs in the United States. Related to this project, the Company
also secured the Construction Management Support Services Contract
renewal with the Los Angeles County Metropolitan Transportation
Authority for certain major capital projects.
Continued Growth
Acquisitions are a key component of Stantec's strategy, and
broadening its capabilities and geographic coverage enables the
Company to better serve its clients and achieve growth. Sourcing
firms that align with the Company's culture and strategy, Stantec
completed five acquisitions in 2013. Acquisitions completed in 2012
and 2013 contributed $180.6 million to the increase in the
Company's gross revenue in 2013 compared to 2012.
In November, Stantec acquired two of these companies: Cambria
Gordon Ltd., and JDA Architects Ltd. Both companies will enhance
the Company's services and reach, with 25-person Cambria Gordon
expanding its environmental services in northwest British Columbia,
and 25-person JDA Architects complementing Stantec's existing
presence in Atlantic Canada.
Subsequent to the end of the year, on January 24, 2014, Stantec
acquired Williamsburg Environmental Group, Inc., and Cultural
Resources, Inc. (WEG), which added approximately 115 staff to the
Company. The addition of WEG will expand Stantec's environmental
services practice in the US Mid-Atlantic.
Additional Company Activity
On February 26, 2014, the Company declared a dividend of $C0.185
per share, payable on April 17, 2014, to shareholders of record on
March 28, 2014, an increase of 12% from last quarter.
In September, Stantec strengthened its brand strategy and
launched a new visual identity to support the Company's ongoing
commitment to community, creativity, and client relationships. The
renewal supports Stantec's primary business objective of being a
top 10 global design firm by reinforcing the Company's strategy to
provide integrated services to clients in various sectors across
many regions.
In 2013, Stantec began the process of realigning its internal
structure to better serve clients. Effective January 1, 2014, the
Company evolved from practice area units to focus on three business
operating units: Buildings, Energy & Resources, and
Infrastructure. The realignment allows Stantec to better support
its clients, create stronger accountability for its leadership
team, and better position the Company for future growth and success
while maintaining the core elements of its strategy.
Conference Call and Company Information
Stantec's fourth quarter and year-end conference call, to be
held Thursday, February 27, 2014, at 2:00 PM MDT (4:00 PM EDT),
will be broadcast live and archived in the Investors section of
www.stantec.com. Interested parties who wish to participate in the
earnings conference call are invited to call 1-800-820-0231 and
provide confirmation code 7828397 to the operator.
Stantec's Annual and Special Meeting of Shareholders will be
held on May 15, 2014, at 10:30 AM MDT (12:30 PM EDT) at MacEwan
University's CN Theatre, Room 5-142, 10500 - 104 Avenue, in
Edmonton, Alberta.
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 13,000 employees
working in over 200 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
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 2013 Annual Report. Figures for
2012 have been restated for the adoption of IFRS 10
Consolidated Financial Statements and IFRS 11 Joint
Arrangements as further described in note 6 of our 2013 audited
consolidated financial statements.
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 government funding, the risk that Stantec
will not meet its growth or revenue targets, and the risk that the
contemplated projects 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 2013
Annual Report. Stantec's 40-F has been filed with the SEC, and you
may obtain this document by visiting EDGAR at the SEC website at
www.sec.gov. Our 2013 Annual Report 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 2013 Annual Report free of charge
from our Investor Contact noted below.
Design with community in mind |
|
Consolidated Statements of Financial Position |
|
|
|
|
|
December 31 |
|
December 31 |
|
|
January 1 |
|
|
|
2013 |
|
2012* |
|
|
2012* |
|
(In thousands of Canadian dollars) |
|
$ |
|
$ |
|
|
$ |
|
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
Current |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
143,030 |
|
40,708 |
|
|
34,898 |
|
Trade and other receivables |
|
384,907 |
|
353,451 |
|
|
308,518 |
|
Unbilled revenue |
|
143,894 |
|
148,908 |
|
|
133,434 |
|
Income taxes recoverable |
|
8,792 |
|
3,840 |
|
|
16,825 |
|
Prepaid expenses |
|
18,959 |
|
14,283 |
|
|
13,882 |
|
Other financial assets |
|
21,418 |
|
17,670 |
|
|
13,833 |
|
Other assets |
|
5,231 |
|
4,106 |
|
|
3,172 |
|
|
|
|
|
|
|
|
|
|
Total current assets |
|
726,231 |
|
582,966 |
|
|
524,562 |
|
Non-current |
|
|
|
|
|
|
|
|
Property and equipment |
|
133,534 |
|
114,994 |
|
|
107,763 |
|
Goodwill |
|
594,826 |
|
566,784 |
|
|
509,028 |
|
Intangible assets |
|
78,857 |
|
85,748 |
|
|
72,047 |
|
Investments in joint ventures and associates |
|
4,996 |
|
5,286 |
|
|
3,980 |
|
Deferred tax assets |
|
45,383 |
|
40,975 |
|
|
43,639 |
|
Other financial assets |
|
83,163 |
|
63,691 |
|
|
61,606 |
|
Other assets |
|
1,188 |
|
3,791 |
|
|
1,657 |
|
|
|
|
|
|
|
|
|
|
Total assets |
|
1,668,178 |
|
1,464,235 |
|
|
1,324,282 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
Current |
|
|
|
|
|
|
|
|
Trade and other payables |
|
259,113 |
|
211,726 |
|
|
188,929 |
|
Billings in excess of costs |
|
77,803 |
|
60,822 |
|
|
49,441 |
|
Income taxes payable |
|
9,127 |
|
159 |
|
|
- |
|
Current portion of long-term debt |
|
37,130 |
|
42,888 |
|
|
59,593 |
|
Provisions |
|
12,047 |
|
14,863 |
|
|
16,373 |
|
Other financial liabilities |
|
1,927 |
|
1,672 |
|
|
5,042 |
|
Other liabilities |
|
9,837 |
|
8,650 |
|
|
5,208 |
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
406,984 |
|
340,780 |
|
|
324,586 |
|
Non-current |
|
|
|
|
|
|
|
|
Long-term debt |
|
200,943 |
|
256,408 |
|
|
236,601 |
|
Provisions |
|
49,539 |
|
36,959 |
|
|
42,076 |
|
Deferred tax liabilities |
|
58,082 |
|
57,840 |
|
|
54,561 |
|
Other financial liabilities |
|
2,041 |
|
2,342 |
|
|
2,257 |
|
Other liabilities |
|
57,955 |
|
42,778 |
|
|
37,191 |
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
775,544 |
|
737,107 |
|
|
697,272 |
|
|
|
|
|
|
|
|
|
|
Shareholders' equity |
|
|
|
|
|
|
|
|
Share capital |
|
262,573 |
|
240,369 |
|
|
226,744 |
|
Contributed surplus |
|
12,369 |
|
14,291 |
|
|
14,906 |
|
Retained earnings |
|
606,056 |
|
491,227 |
|
|
397,706 |
|
Accumulated other comprehensive income (loss) |
|
11,636 |
|
(18,862 |
) |
|
(12,449 |
) |
|
|
|
|
|
|
|
|
|
Total equity attributable to equity holders of the Company |
|
892,634 |
|
727,025 |
|
|
626,907 |
|
|
|
|
|
|
|
|
|
|
Non-controlling interests |
|
- |
|
103 |
|
|
103 |
|
|
|
|
|
|
|
|
|
|
Total equity |
|
892,634 |
|
727,128 |
|
|
627,010 |
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity |
|
1,668,178 |
|
1,464,235 |
|
|
1,324,282 |
|
* Figures for 2012 have been
restated for the adoption of IFRS 10 and IFRS 11. |
|
|
|
|
|
|
|
|
Consolidated Statements of Income |
|
|
Years ended December 31 |
|
2013 |
|
2012* |
|
(In thousands of Canadian dollars, except per share
amounts) |
|
$ |
|
$ |
|
|
|
|
|
|
|
Gross revenue |
|
2,236,410 |
|
1,870,259 |
|
Less subconsultant and other direct expenses |
|
404,031 |
|
316,445 |
|
|
|
|
|
|
|
Net revenue |
|
1,832,379 |
|
1,553,814 |
|
Direct payroll costs |
|
829,926 |
|
699,657 |
|
|
|
|
|
|
|
Gross margin |
|
1,002,453 |
|
854,157 |
|
Administrative and marketing expenses |
|
746,138 |
|
632,086 |
|
Depreciation of property and equipment |
|
32,389 |
|
27,849 |
|
Amortization of intangible assets |
|
21,235 |
|
20,008 |
|
Net interest expense |
|
8,620 |
|
8,681 |
|
Other net finance (income) expense |
|
(1,346 |
) |
2,773 |
|
Share of income from joint ventures and associates |
|
(2,276 |
) |
(2,026 |
) |
Foreign exchange (gain) loss |
|
(184 |
) |
181 |
|
Other (income) expense |
|
(1,035 |
) |
147 |
|
|
|
|
|
|
|
Income before income taxes |
|
198,912 |
|
164,458 |
|
|
|
|
|
|
|
Income taxes |
|
|
|
|
|
Current |
|
60,141 |
|
44,516 |
|
Deferred |
|
(7,430 |
) |
(1,077 |
) |
|
|
|
|
|
|
Total income taxes |
|
52,711 |
|
43,439 |
|
|
|
|
|
|
|
Net income for the year |
|
146,201 |
|
121,019 |
|
|
|
|
|
|
|
Earnings per share |
|
|
|
|
|
Basic |
|
3.16 |
|
2.65 |
|
|
|
|
|
|
|
Diluted |
|
3.14 |
|
2.64 |
|
* Figures for 2012 have been
restated for the adoption of IFRS 10 and IFRS 11. |
Media Contact:Sherry BrownleeStantec Media Relations(780)
917-7264sherry.brownlee@stantec.comInvestor Contact:Crystal
VerbeekStantec Investor Relations(780)
969-3349crystal.verbeek@stantec.com
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