EDMONTON, ALBERTA, Nov. 5, 2009 (Marketwire) --
EDMONTON, ALBERTA -- (Marketwire) -- 11/05/09 -- Stantec Inc. (TSX: STN) (NYSE: STN)
The third quarter of 2009 resulted in strong operating results for Stantec as gross revenue increased 10.5% to C$384.2 million and net revenue increased 6.1% to C$306.7 million compared to the third quarter of 2008. Gross margin increased from 56.0% to 56.5% and cash from operating activities increased from C$54.6 million in the third quarter of 2008 to C$62.9 million in 2009.
During the quarter, the Company recorded a C$35.0 million goodwill impairment charge due to fluctuations and continuing uncertainty from economic conditions related to the US West operations. The goodwill impairment charge is non-cash in nature and does not affect Stantec's liquidity, cash flows from operating activities, or debt covenants, and does not impact future operations.
Excluding the impact of the goodwill impairment charges in the third quarter of 2008 and 2009, financial results improved quarter over quarter with net income increasing 8.7% to C$25.0 million compared to C$23.0 million in 2008 and diluted earnings per share increased 10.0% to C$0.55 in third quarter 2009 compared to C$0.50 one year ago.
"Despite a difficult market and continuing weakness in some of our areas we have been able to post solid third quarter results because of the strength and diversity of our business model," says Bob Gomes, Stantec president and CEO. "Although current market conditions have necessitated the write-down of a portion of our goodwill, these non-cash charges do not impact current or future operations."
Reported results for the third quarter of 2009 are as follows:
- In the third quarter of 2009 gross revenue increased 10.5% to C$384.2 million compared to C$347.6 million for the same period in 2008. Net revenue increased 6.1% to C$306.7 million compared to C$289.2 million. After a goodwill impairment charge of C$35.0 million related to Stantec's US West operations, net loss was C$10.0 million compared to a loss of C$30.0 million (after a goodwill impairment charge of C$53.0 million) in the third quarter of 2008 and diluted earnings per share were a loss of C$0.22 compared to a loss of C$0.66 in the same period last year.
- Year-to-date 2009 gross revenue increased 19.8% to C$1.18 billion compared to C$982.7 million over the first nine months of 2008. Net revenue increased 16.2% to C$968.1 million compared to C$833.1 million. Net income for 2009 was C$33.0 million compared to C$9.0 million in the first nine months of 2008. Diluted earnings per share increased to C$0.72 compared to C$0.20 for the same period in 2008.
- Stantec recently announced that it plans to acquire the assets of Granary Associates, subject to certain conditions, in early November. Granary Associates is a Philadelphia based firm, with approximately 100 staff, specializing in project management and design of healthcare facilities.
- During the third quarter Stantec announced that Rich Allen, current senior vice president of the US East region will be taking on the role of chief operating officer (COO), effective January 1, 2010, taking over from Mark Jackson who will be retiring at the end of 2009. In addition, Stantec's board of directors announced Paul Cellucci, former governor of Massachusetts and former US ambassador to Canada, was named a director of the Company.
- Complete Financial Statements, Notes to the Financial Statements, and Management's Discussion and Analysis will be filed on Sedar (www.sedar.com) and Edgar (www.sec.gov) on November 5, 2009. The documents are also available free of charge by downloading them from the Investors section on www.stantec.com or you may contact Stantec for a copy of the documents.
Project awards during the quarter demonstrate Stantec's ability to differentiate itself in the marketplace by offering specialty services and providing services from multiple practices delivered as one team. Stantec was awarded a contract with the U.S. Department of Transportation Federal Transit Administration (FTA) to provide project management oversight services for work completed by transportation and transit agencies across the United States over the next five years. Responsibilities will include reviewing, auditing, monitoring, and reporting on project implementation plans and processes to ensure that FTA-funded projects are adequately staffed and managed and efficiently and effectively executed. Stantec also obtained a contract to complete the surveying, site and civil engineering, and geotechnical investigations required for developing vacant lots owned by the Philadelphia Housing Authority as part of the Mantua Revitalization Phases I and II project. Together, the two phases of this brownfield redevelopment, which is funded by the American Recovery and Reinvestment Act (ARRA), will contain 101 accessible rental units, including walk-up apartments, duplexes, and triplexes, for low- and moderate-income individuals and families. In addition, Stantec secured several indefinite delivery/indefinite quantity contracts to conduct multidiscipline engineering inspections of levees in Arkansas, Indiana, Kansas, Missouri, Oklahoma, West Virginia, and Kentucky for the U.S. Army Corps of Engineers (USACE). Also funded in part by the ARRA package, these long-term, multimillion-dollar contracts are part of the USACE's Levee Safety Program, which involves the independent inspection and evaluation of approximately 1,400 federally authorized levee systems. New assignments in the Buildings area showcase Stantec's expertise in the design of health care and educational facilities and in sustainable design consulting. In Toronto, Ontario, the Company is part of a team selected as the preferred proponent for Phase 1B of a redevelopment project at the Centre for Addiction and Mental Health (CAMH). Stantec is providing full integrated design services-architecture; mechanical, electrical, structural, and civil engineering; sustainable design consulting; and transportation engineering for this public-private partnership project.
