UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): June 6, 2006
ABM Industries Incorporated
(Exact name of registrant as specified in its charter)
| Delaware | 1-8929 | 94-1369354 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
| 160 Pacific Avenue, Suite 222, San Francisco, California | 94111 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code (415) 733-4000
Not Applicable
(Former name or former address if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
o
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 Results of Operations and Financial Condition.
On June 6, 2006, ABM Industries Incorporated (the “Company”) issued a press release announcing
financial results related to the second quarter of fiscal year 2006. A copy of the press release is
attached as Exhibit 99.1, which is incorporated into this item by reference.
Item 8.01 Other Events.
On June 6, 2006, the Board of Directors of the Company declared a quarterly dividend of $0.11
per share, payable on August 7, 2006 to stockholders of record on July 7, 2006. A copy of the
press release announcing the declaration of the dividend is attached as Exhibit 99.2, which is
incorporated into this item by reference.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits.
| 99.1 | Press Release of ABM Industries Incorporated dated June 6, 2006, announcing financial results related to the second quarter of fiscal year 2006. | |
| 99.2 | Press Release of ABM Industries Incorporated dated June 6, 2006, announcing the declaration of a dividend. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| ABM INDUSTRIES INCORPORATED |
||||
| Dated: June 6, 2006 | By: | /s/ George B. Sundby | ||
| George B. Sundby | ||||
| Executive Vice President and Chief Financial Officer |
||||
EXHIBIT INDEX
| 99.1 | Press Release of ABM Industries Incorporated dated June 6, 2006, announcing financial results related to the second quarter of fiscal year 2006. | |
| 99.2 | Press Release of ABM Industries Incorporated dated June 6, 2006, announcing the declaration of a dividend. |
EXHIBIT 99.1
ABM Industries Announces Second Quarter Fiscal 2006 Financial Results
Tuesday June 6, 7:25 pm ET
Income from Continuing Operations Increases 17.5% on Revenues of $660.1 Million
Company Reiterates 2006 Fiscal Year Guidance
SAN FRANCISCO—(BUSINESS WIRE)—June 6, 2006—ABM Industries Incorporated (NYSE:ABM — News),
a leading facility services contractor in the United States, today reported income from continuing
operations for the second quarter of fiscal 2006 of $10.4 million ($0.21 per diluted share), up
17.5%, compared to $8.8 million ($0.17 per diluted share) for the prior year second quarter. Sales
and other income for the second quarter of fiscal 2006 were $660.1 million, up 3.2% from $639.6
million in the second quarter of fiscal 2005.
The second quarter of fiscal 2006 had one fewer workday than the comparable period in fiscal 2005,
favorably impacting fixed-priced contracts by approximately $2.4 million. This benefit was offset
by $2.4 million of professional fees for the recently completed Audit Committee’s independent
investigation of the prior year accounting at SSA, LLC, which is a wholly owned subsidiary of ABM
Security.
“Substantially better than the year-before period, ABM’s second quarter results demonstrate
strength in our core business performance and success in recent acquisitions,” commented Henrik
Slipsager, ABM’s president and chief executive officer. “We continue to secure new business, and
expand services to existing customers nationwide through effective deployment of management and
financial resources. Our Janitorial and Engineering businesses have recently added new financial
services customers and expanded services with existing high-tech clients. And we won a significant
job from a major pharmaceutical company, further highlighting our specialty cleaning capabilities.
“Second quarter sales growth was driven by contributions from acquisitions completed in 2005 and
the first half of 2006 and new business in Engineering and Security.” Mr. Slipsager continued, “All
operating segments showed improvements in operating income except Lighting. Although Lighting sales
and profitability were disappointing, the backlog for this business increased dramatically and we
believe Lighting will see improved performance in the coming months.”
The Company’s income from continuing operations during the first six months of fiscal 2006 was
$14.4 million ($0.29 per diluted share), compared to $14.5 million ($0.28 per diluted share) for
the same period last year. Sales and other income for the six months ended April 30, 2006 were
$1.33 billion, up 3.8%, compared to $1.28 billion for the comparable period last year.
Mr. Slipsager concluded, “We repurchased eight hundred thousand shares during the quarter at a cost
of $13.9 million. We ended the quarter with $25 million in cash and cash equivalents, approximately
$242 million in working capital and no debt. We believe that we are well positioned to continue to
expand our existing lines of business in the second half of fiscal 2006 through organic growth and
acquisitions. Guidance for the third quarter is $0.28 to $0.31 per diluted share. For full-year
2006, we continue to anticipate income from continuing operations will be in the range of $0.85 to
$0.95 per diluted share.”
Conference Call
On Wednesday, June 7, 2006 at 6:00 a.m. (PDT), ABM will host a live webcast of remarks by President
and Chief Executive Officer Henrik C. Slipsager, and Executive Vice President and Chief Financial
Officer George
B. Sundby. The webcast will be accessible at www.irconnect.com/primecast/06/q2/abm_2q2006.html.
Listeners are asked to be online at least fifteen minutes early to register, as well as to download
and install any complimentary audio software that might be required. Following the call, the
webcast will be available at this URL for a period of three months.
In addition to the webcast, a limited number of toll-free telephone lines will also be available
for listeners who are among the first to call 877-440-9648 within fifteen minutes before the event.
Telephonic replays will be accessible during the period from two hours to seven days after the call
by dialing 800-642-1687, and then entering ID # 1141428.
About ABM Industries
ABM Industries Incorporated is among the largest facility services contractors listed on the New
York Stock Exchange. With fiscal 2005 revenues in excess of $2.5 billion and more than 73,000
employees, ABM provides janitorial, parking, security, engineering and lighting services for
thousands of commercial, industrial, institutional and retail facilities in hundreds of cities
across the United States and British Columbia, Canada. The ABM Family of Services includes ABM
Janitorial; Ampco System Parking; ABM Security Services, which includes American Commercial
Security Services (ACSS) and Security Services of America (SSA); ABM Facility Services; ABM
Engineering; and Amtech Lighting Services.
Cautionary Statement Under the Private Securities Litigation Reform Act of 1995.
This press release contains forward-looking statements that set forth management’s anticipated
results based on management’s plans and assumptions. Any number of factors could cause the
Company’s actual results to differ materially from those anticipated. These risks and uncertainties
include, but are not limited to: (1) delays in remediating the material weakness in controls
identified in the Company’s security business; (2) a change in the frequency or severity of claims
against the Company, a deterioration in claims management, or the cancellation or non-renewal of
the Company’s primary insurance policies; (3) a change in actuarial analysis that causes an
unanticipated change in insurance reserves; (4) inadequate technology systems that cannot support
the growth of the business; (5) labor disputes that lead to a loss of sales or expense variations;
(6) acquisition activity slows or is unsuccessful; (7) a decline in commercial office building
occupancy and rental rates lowers sales and profitability; (8) weakness in airline travel and the
hospitality industry that affects the results of the Company’s Parking segment; (9) financial
difficulties or bankruptcy of a major customer; (10) the loss of long-term customers; (11) intense
competition that lowers revenue or reduces margins; (12) an increase in costs that the Company
cannot pass on to customers; (13) natural disasters or acts of terrorism that disrupt the Company
in providing services; (14) significant accounting and other control costs that reduce the
Company’s profitability; and (15) other issues and uncertainties that may include: new accounting
pronouncements or changes in accounting policies, labor shortages that adversely affect the
Company’s ability to employ entry level personnel, legislation or other governmental action that
detrimentally impacts the Company’s expenses or reduces sales by adversely affecting the Company’s
customers, unanticipated adverse jury determinations, judicial rulings or other developments in
litigation to which the Company is subject, a reduction or revocation of the Company’s line of
credit that increases interest expense and the cost of capital, and the resignation, termination,
death or disability of one or more of the Company’s key executives that adversely affects customer
retention or day-to-day management of the Company. Additional information regarding these and other
risks and uncertainties the Company faces is contained in the Company’s Annual Report on Form 10-K
and in other reports it files from time to time with the Securities and Exchange Commission. The
Company undertakes no obligation to publicly update forward-looking statements, whether as a result
of new information, future events or otherwise.
BALANCE SHEET SUMMARY
| April 30, | October 31, | |||||||
| 2006 | 2005 | |||||||
| (UNAUDITED) | ||||||||
Assets |
||||||||
Cash and cash equivalents |
$ | 25,006,000 | $ | 56,793,000 | ||||
Trade accounts receivable, net |
365,149,000 | 345,104,000 | ||||||
Other current assets |
120,596,000 | 119,556,000 | ||||||
Total current assets |
510,751,000 | 521,453,000 | ||||||
Goodwill |
246,874,000 | 243,559,000 | ||||||
Other intangibles, net |
26,115,000 | 24,463,000 | ||||||
All other assets |
115,510,000 | 114,235,000 | ||||||
Total assets |
$ | 899,250,000 | $ | 903,710,000 | ||||
Liabilities |
||||||||
Current liabilities |
$ | 268,364,000 | $ | 275,074,000 | ||||
Non-current liabilities |
156,925,000 | 152,710,000 | ||||||
Total liabilities |
425,289,000 | 427,784,000 | ||||||
Stockholders’ Equity |
473,961,000 | 475,926,000 | ||||||
Total liabilities and stockholders’ equity |
$ | 899,250,000 | $ | 903,710,000 | ||||
SELECTED CASH FLOW INFORMATION (UNAUDITED)
| Three Months Ended April 30, | ||||||||
| 2006 | 2005 | |||||||
Net cash flows from continuing operating activities |
$ | 15,212,000 | $ | (1,539,000 | ) | |||
Net operational cash flows from discontinued operations |
— | (351,000 | ) | |||||
Net Cash Provided By (Used In) Operating Activities |
$ | 15,212,000 | $ | (1,890,000 | ) | |||
Net Cash Used In Investing Activities |
$ | (5,548,000 | ) | $ | (5,129,000 | ) | ||
Common stock issued |
$ | 2,610,000 | $ | 5,130,000 | ||||
Common stock purchases |
(13,942,000 | ) | (4,158,000 | ) | ||||
Dividends paid |
(5,421,000 | ) | (5,215,000 | ) | ||||
Net Cash Used In Financing Activities |
$ | (16,753,000 | ) | $ | (4,243,000 | ) | ||
| Six Months Ended April 30, | ||||||||
| 2006 | 2005 | |||||||
Net cash flows from continuing operating activities |
$ | 3,296,000 | $ | 9,711,000 | ||||
Net operational cash flows from discontinued operations |
— | 1,062,000 | ||||||
Net Cash Provided By Operating Activities |
$ | 3,296,000 | $ | 10,773,000 | ||||
Net Cash Used In Investing Activities |
$ | (16,368,000 | ) | $ | (23,798,000 | ) | ||
Common stock issued |
$ | 6,057,000 | $ | 13,725,000 | ||||
Common stock purchases |
(13,942,000 | ) | (4,158,000 | ) | ||||
Dividends paid |
(10,830,000 | ) | (10,398,000 | ) | ||||
Net Cash Used In Financing Activities |
$ | (18,715,000 | ) | $ | (831,000 | ) | ||
INCOME STATEMENT (UNAUDITED)
| Three Months Ended April 30, | Increase | |||||||||||
| 2006 | 2005 | (Decrease) | ||||||||||
Revenues |
||||||||||||
Sales and other income |
$ | 660,108,000 | $ | 639,555,000 | 3.2 | % | ||||||
Gain on insurance claim |
— | 1,195,000 | — | |||||||||
Total revenues |
660,108,000 | 640,750,000 | 3.0 | % | ||||||||
Expenses |
||||||||||||
Operating expenses and cost of goods sold |
592,322,000 | 578,826,000 | 2.3 | % | ||||||||
Selling, general and administrative expenses |
49,530,000 | 50,331,000 | (1.6 | )% | ||||||||
Intangible amortization |
1,493,000 | 1,478,000 | 1.0 | % | ||||||||
Interest expense |
121,000 | 241,000 | (49.8 | )% | ||||||||
Total expenses |
643,466,000 | 630,876,000 | 2.0 | % | ||||||||
Income from continuing operations before income taxes |
16,642,000 | 9,874,000 | 68.5 | % | ||||||||
Income taxes |
6,250,000 | 1,031,000 | 506.2 | % | ||||||||
Income from continuing operations |
10,392,000 | 8,843,000 | 17.5 | % | ||||||||
Income from discontinued operations, net of income taxes |
— | 387,000 | — | |||||||||
Net Income |
$ | 10,392,000 | $ | 9,230,000 | 12.6 | % | ||||||
Net Income Per Common Share — Basic |
||||||||||||
Income from continuing operations |
$ | 0.21 | $ | 0.18 | 16.7 | % | ||||||
Income from discontinued operations |
— | 0.01 | — | |||||||||
| $ | 0.21 | $ | 0.19 | 10.5 | % | |||||||
Net Income Per Common Share — Diluted |
||||||||||||
Income from continuing operations |
$ | 0.21 | $ | 0.17 | 23.5 | % | ||||||
Income from discontinued operations |
— | 0.01 | — | |||||||||
| $ | 0.21 | $ | 0.18 | 16.7 | % | |||||||
Average Common And Common Equivalent Shares |
||||||||||||
Basic |
49,226,000 | 49,730,000 | (1.0 | )% | ||||||||
Diluted |
49,812,000 | 50,702,000 | (1.8 | )% | ||||||||
| Six Months Ended April 30, | Increase | |||||||||||
| 2006 | 2005 | (Decrease) | ||||||||||
Revenues |
||||||||||||
Sales and other income |
$ | 1,326,709,000 | $ | 1,277,720,000 | 3.8 | % | ||||||
Gain on insurance claim |
— | 1,195,000 | — | |||||||||
Total revenues |
1,326,709,000 | 1,278,915,000 | 3.7 | % | ||||||||
Expenses |
||||||||||||
Operating expenses and cost of goods sold |
1,198,498,000 | 1,158,283,000 | 3.5 | % | ||||||||
Selling, general and administrative expenses |
102,423,000 | 98,438,000 | 4.0 | % | ||||||||
Intangible amortization |
3,071,000 | 2,834,000 | 8.4 | % | ||||||||
Interest expense |
244,000 | 493,000 | (50.5 | )% | ||||||||
Total expenses |
1,304,236,000 | 1,260,048,000 | 3.5 | % | ||||||||
Income from continuing operations before income taxes |
22,473,000 | 18,867,000 | 19.1 | % | ||||||||
Income taxes |
8,091,000 | 4,401,000 | 83.8 | % | ||||||||
Income from continuing operations |
14,382,000 | 14,466,000 | (0.6 | )% | ||||||||
Income from discontinued operations, net of income taxes |
— | 248,000 | — | |||||||||
Net Income |
$ | 14,382,000 | $ | 14,714,000 | (2.3 | )% | ||||||
Net Income Per Common Share — Basic |
||||||||||||
Income from continuing operations |
$ | 0.29 | $ | 0.29 | 0.0 | % | ||||||
Income from discontinued operations |
— | 0.01 | — | |||||||||
| $ | 0.29 | $ | 0.30 | (3.3 | )% | |||||||
Net Income Per Common Share — Diluted |
||||||||||||
Income from continuing operations |
$ | 0.29 | $ | 0.28 | 3.6 | % | ||||||
Income from discontinued operations |
— | 0.01 | — | |||||||||
| $ | 0.29 | $ | 0.29 | 0.0 | % | |||||||
Average Common And Common Equivalent Shares |
||||||||||||
Basic |
49,205,000 | 49,461,000 | (0.5 | )% | ||||||||
Diluted |
49,949,000 | 50,552,000 | (1.2 | )% | ||||||||
SALES AND OPERATING PROFIT BY SEGMENT (UNAUDITED)
| Three Months Ended April 30, | Increase | |||||||||||
| 2006 | 2005 | (Decrease) | ||||||||||
Sales and Other Income |
||||||||||||
Janitorial |
$ | 382,604,000 | $ | 381,457,000 | 0.3 | % | ||||||
Parking |
106,063,000 | 99,180,000 | 6.9 | % | ||||||||
Security |
75,278,000 | 72,652,000 | 3.6 | % | ||||||||
Engineering |
68,101,000 | 57,127,000 | 19.2 | % | ||||||||
Lighting |
27,248,000 | 28,787,000 | (5.3 | )% | ||||||||
Corporate |
814,000 | 352,000 | 131.3 | % | ||||||||
| $ | 660,108,000 | $ | 639,555,000 | 3.2 | % | |||||||
Operating Profit |
||||||||||||
Janitorial |
$ | 20,959,000 | $ | 10,198,000 | 105.5 | % | ||||||
Parking |
3,011,000 | 2,448,000 | 23.0 | % | ||||||||
Security |
287,000 | 267,000 | 7.5 | % | ||||||||
Engineering |
3,762,000 | 3,180,000 | 18.3 | % | ||||||||
Lighting |
249,000 | 813,000 | (69.4 | )% | ||||||||
Corporate expenses |
(11,505,000 | ) | (7,986,000 | ) | 44.1 | % | ||||||
Operating Profit From Continuing Operations |
16,763,000 | 8,920,000 | 87.9 | % | ||||||||
Gain on insurance claim |
— | 1,195,000 | — | |||||||||
Interest expense |
(121,000 | ) | (241,000 | ) | (49.8 | )% | ||||||
Income from continuing operations before income taxes |
$ | 16,642,000 | $ | 9,874,000 | 68.5 | % | ||||||
| Six Months Ended April 30, | Increase | |||||||||||
| 2006 | 2005 | (Decrease) | ||||||||||
Sales and Other Income |
||||||||||||
Janitorial |
$ | 768,958,000 | $ | 757,580,000 | 1.5 | % | ||||||
Parking |
211,784,000 | 200,306,000 | 5.7 | % | ||||||||
Security |
153,574,000 | 145,763,000 | 5.4 | % | ||||||||
Engineering |
135,040,000 | 115,175,000 | 17.2 | % | ||||||||
Lighting |
56,144,000 | 58,203,000 | (3.5 | )% | ||||||||
Corporate |
1,209,000 | 693,000 | 74.5 | % | ||||||||
| $ | 1,326,709,000 | $ | 1,277,720,000 | 3.8 | % | |||||||
Operating Profit |
||||||||||||
Janitorial |
$ | 35,655,000 | $ | 22,630,000 | 57.6 | % | ||||||
Parking |
4,650,000 | 4,836,000 | (3.8 | )% | ||||||||
Security |
462,000 | (646,000 | ) | 171.5 | % | |||||||
Engineering |
6,950,000 | 6,181,000 | 12.4 | % | ||||||||
Lighting |
584,000 | 1,494,000 | (60.9 | )% | ||||||||
Corporate expenses |
(25,584,000 | ) | (16,330,000 | ) | 56.7 | % | ||||||
Operating Profit From Continuing Operations |
22,717,000 | 18,165,000 | 25.1 | % | ||||||||
Gain on insurance claim |
— | 1,195,000 | — | |||||||||
Interest expense |
(244,000 | ) | (493,000 | ) | (50.5 | )% | ||||||
Income from continuing operations before income taxes |
$ | 22,473,000 | $ | 18,867,000 | 19.1 | % | ||||||
Contact:
ABM Industries Incorporated
George B. Sundby
Executive Vice President and Chief Financial Officer
415-733-4000
ABM Industries Incorporated
George B. Sundby
Executive Vice President and Chief Financial Officer
415-733-4000
EXHIBIT 99.2
CONTACT:
ABM Industries Incorporated
George B. Sundby
Executive Vice President and Chief Financial Officer
(415) 733-4000
George B. Sundby
Executive Vice President and Chief Financial Officer
(415) 733-4000
ABM INDUSTRIES CONTINUES BEST-EVER QUARTERLY DIVIDEND RATE
SAN FRANCISCO — June 6, 2006 — The Board of Directors of ABM Industries Incorporated (NYSE: ABM)
has declared an all-time-high third quarter cash dividend of $0.11 per common share payable on
August 7, 2006 to stockholders of record on July 7, 2006. This will be ABM’s 161st
consecutive quarterly cash dividend, and is $0.005 (4.8%) above the $0.105 per share quarterly
dividend rate declared and paid for the third quarter of 2005.
About ABM Industries
ABM Industries Incorporated is among the largest facility services contractors listed on the New
York Stock Exchange. With more than 73,000 employees, ABM provides janitorial, parking, security,
engineering and lighting services for thousands of commercial, industrial, institutional and retail
facilities in hundreds of cities across the United States and British Columbia, Canada. The ABM
Family of Services includes ABM Janitorial; Ampco System Parking; ABM Security, which includes
American Commercial Security (ACSS) and Security Services of America (SSA); ABM Facility Services;
ABM Engineering; and Amtech Lighting Services.
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