Brisbane, Queensland, Australia-based Cardno Ltd’s (ASX: CDD, OTC: COLDF) Cardno USA unit is the fastest-growing engineering and environmental consulting firms in the US and actually earned the No. 1 ranking on The Zweig Letter Hot Firm List for 2011.

It’s also been wrapped up in a couple high-profile, politically charged media events in the States, though only because of the unique set of skills, services and expertise its professionals are able to provide to highly specialized projects.

The Zweig Letter, published by architecture and engineering consulting firm ZweigWhite, has ranked architecture, engineering, planning and environmental consulting firms in the US and Canada since 2000, looking for those that have outperformed the economy and competitors.

Cardno expanded into the US in 2007 with establishment of company headquarters in

Portland, Ore. In four years Cardno USA’s staff numbers have grown from eight to more than 2,000. Overall Cardno now employs more than 4,300 staff in 160 offices working on projects in 85 countries.

The Zweig Letter ranking follows Cardno’s recent debut on a number of the US-based Engineering News-Record lists, including No. 35 on the Top 200 International Firms, No. 17 on the Top 100 Pure Designers and No. 6 on the Top 100 Environmental Sciences Firms.

Another Cardno unit, Cardno ENTRIX, has made news recently because of its involvement in the ongoing saga over the approval of TransCanada Corp’s (TSX: TRP, NYSE: TRP) Keystone XL extension to the Keystone Pipeline System spanning Canada and the US. At the root of this phony controversy is the fact that Cardno ENTRIX is among a limited number of firms that specialize in the type of work required to satisfy the State Dept review process, Cardno ENTRIX among them.

There have been allegations of “conflict of interest” because TransCanada has engaged Cardno ENTRIX in the past. As I note in this week’s Canadian Edge Weekly, it’s not in Cardno’s interest to submit compromised work. To believe Cardno ENTRIX is in the tank for TransCanada is to believe it, its managers and its shareholders don’t care about its business.

It was involvement in another US-based spectacle, in fact, that drove first-half fiscal 2011 results for Cardno and keyed a solid full-year outcome. Cardno worked extensively to help manage and remediate the impact of BP Plc’s (London: BP, NYSE: BP) Gulf of Mexico oil spill, providing technical expertise on clean-up activities as well as contributing to the management of what was also an enormous social and environmental disaster. Among other engagements Cardno ENTRIX was contracted by BP to provide scientific research services, focusing on coral reefs that may have been damaged during the Deepwater Horizon spill.

Cardno generated a company-record net profit after tax (NPAT) for fiscal 2010-11 (ended Jun. 30, 2011) of AUD58.8 million, a 56.4 percent increase over the 2009-10 financial year, despite difficult macroeconomic conditions.

Revenue was AUD831.2 million, a 74 percent increase over 2010 and reflective of several significant acquisitions during the year. Organic revenue growth was a less gaudy but perhaps more important 18 percent. EBITDA–or earnings before interest, taxation, depreciation and amortization–was up 81.2 percent to AUD100.16 million.

Cardno generated strong operating cash flow of AUD73.53 million in 2011, an increase of 57.3 percent over 2010, and had cash of AUD84.04 million as of Jun. 30, 2011. The company’s balance sheet remains strong, with low net debt.

Along with its Aug. 16 report on fiscal 2011 results the board of directors declared a final dividend of AUD0.17 per share that was paid Oct. 14 to shareholders of record on Sept. 16. Combined with the interim dividend paid in March 2011 Cardno paid shareholders AUD0.34 per share in fiscal 2010-11, up from AUD0.29 per share the previous year.

2010-11 was the seventh consecutive year of record profit, earnings per share growth and a distribution increase since Cardno went public in 2004. The second half of fiscal 2011 was impacted by a stronger Australian dollar and wet weather, including cyclones, but remained robust relative to 2010. As of July 2011 Cardno had “work in hand” of AUD516 million.

During 2010-11 Cardno made three acquisitions, a lineup that demonstrates its diversification strategy in geographic as well as capability terms:

• JFNew, now known as Cardno JFNew, is a 150-person consulting firm with expertise in natural resources management, environmental permitting, habitat restoration, mitigation banking, native plant materials and cultural resources consulting. Cardno JFNew is based in the Great Lakes area of the US and has eight offices and a 130-acre nursery.
• Roadtest, now known as Cardno Roadtest, a 60-person construction materials testing and geotechnical engineering firm based in Central Queensland with offices in Rockhampton, Emerald, Gladstone and the Whitsundays.
• BEC, now Cardno BEC, is a 100-person electrical engineering services firm based in Perth with offices in Brisbane and Tanzania. Cardno BEC provides services to the mining, mineral processing, industrial, petrochemical and utility sectors.

The key to its acquisition strategy has been the ability to retain the people who built the businesses it’s bought, which lays a foundation for consistent growth. Cardno’s culture and prospects–important elements in services businesses, where the assets leave the building every night–are attractive to merger partners, obviously those that have already come into the fold but potential targets as well.

Cardno has parlayed its people skills internally into a successful track record of cross-selling services to generate organic growth, another key point that was demonstrated in its most recent annual results.

Although growth has concentrated in the US and North America in recent years, diversity of earnings across business sectors, clients and geographic locations mitigates risk and leaves Cardno with plenty of opportunity to continue to grow.

Cardno has generated compound annual earnings growth from 2005 to 2011 of 21.8 percent. on the same terms and over the same time frame dividend growth is 18.3 percent. Cardno set records for net profit, earnings per share and boosted its payout in 2010-11–all for the seventh consecutive year.

The company has completed another three acquisitions thus far in fiscal 2012. It has a strong balance sheet to fund further acquisition-led growth, which it’s demonstrated capable of turning into organic growth.

Cardno Ltd–currently yielding more than 6 percent, with no dividend cuts since first declaring one more than seven years ago–is a buy under USD6 and a new addition to the AE Portfolio Conservative Holdings.