UNITED STATES
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

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          

(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 September 6, 2006, ABM Industries Incorporated (the “Company”) issued a press release announcing financial results related to the third 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 September 6, 2006, the Board of Directors of the Company declared a quarterly dividend of $0.11 per share, payable on November 6, 2006 to stockholders of record on October 13, 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 September 6, 2006, announcing financial results related to the third quarter of fiscal year 2006.
99.2		Press Release of ABM Industries Incorporated dated September 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.

EXHIBIT INDEX

99.1		Press Release of ABM Industries Incorporated dated September 6, 2006, announcing financial results related to the third quarter of fiscal year 2006.
99.2		Press Release of ABM Industries Incorporated dated September 6, 2006, announcing the declaration of a dividend.

EXHIBIT 99.1

ABM INDUSTRIES ANNOUNCES THIRD QUARTER FISCAL 2006 FINANCIAL RESULTS

Sales Increase 6.0% to a Quarterly Record of $689.3 Million

SAN FRANCISCO, CA — September 6, 2006 — ABM Industries Incorporated (NYSE:ABM), a leading facility services contractor in the United States, today reported income from continuing operations for the third quarter of fiscal 2006 of $17.3 million ($0.35 per diluted share), down 16.2%, compared to $20.6 million ($0.41 per diluted share) for the prior year third quarter. Sales and other income for the third quarter of fiscal 2006 were $689.3 million, up 6.0% from $650.1 million in the third quarter of fiscal 2005.

During the third quarter, we achieved record revenue and quarterly earnings above our previous guidance,” commented Henrik Slipsager, ABM’s president and chief executive officer. “We delivered positive top-line comparisons across our janitorial, parking, security, engineering and lighting segments. Income from continuing operations for the quarter was solid. Our cash flow from operations was strong, generating $30 million for the quarter.”

There were two items that specifically impacted the quarterly comparison for janitorial operations. The third quarter of fiscal 2006 included one more work day than the comparable period in fiscal 2005, unfavorably impacting janitorial fixed-price contracts by approximately $2.4 million pre-tax. In addition, a gender discrimination lawsuit was settled in the third quarter of 2005 for an amount lower than accrued, which increased income from continuing operations by $1.3 million pre-tax in that quarter.

The 2006 actuarial report covering substantially all of the Company’s self-insurance reserves was completed in the third quarter of 2006. The report showed favorable developments in the Company’s California workers’ compensation and general and auto liability claims, offset in part by adverse development in the Company’s workers’ compensation claims outside of California, which resulted in a $7.9 million pre-tax reduction in the Company’s self-insurance reserve in the third quarter of 2006. This reduction was $1.1 million less than the $9.0 million pre-tax reduction in self-insurance reserves recorded in the third quarter of 2005. Of the $7.9 million pre-tax benefit in 2006, $4.7 million pre-tax was recorded by Corporate while $3.2 million pre-tax was allocated to the operating segments.

The Company reported income from continuing operations during the nine months ended July 31, 2006 of $31.6 million ($0.64 per diluted share) on sales and other income of $2.0 billion, compared to $35.1 million ($0.69 per diluted share) on sales and other income of $1.9 billion for the same period last year. The 9.8% year-over-year decrease in income from continuing operations was primarily due to the $2.6 million pre-tax of share-based compensation costs as a result of the adoption of SFAS 123R, and $2.4 million pre-tax of professional fees for the Audit Committee’s independent investigation of the prior year accounting at SSA. Income from continuing operations in 2005 included a $5.0 million pre-tax litigation loss and a $3.4 million pre-tax charge for the amount the Company believes it overpaid SSA LLC, which reserve was reduced by $1.0 million pre-tax in the third quarter of 2006. Also included in 2005 was $2.7

 1 

EXHIBIT 99.1

million of income tax benefit resulting from a state tax audit settlement and $1.2 million pre-tax gain on the World Trade Center indemnity payment.

ABM’s financial position remains very strong as the Company ended the quarter with $51.5 million in cash and cash equivalents, $261.8 million in working capital and no long term debt.

“Given the strength of our balance sheet and our cash flow from continuing operations, we remain well positioned to expand our business through a combination of acquisitions and organic growth and to repurchase shares. We expect income from continuing operations for fiscal 2006 will be in the range of $1.80 to $1.85 per diluted share, which includes approximately $45 million or $0.90 per diluted share for the settlement of the business interruption insurance claim related to the destruction of the World Trade Center complex in New York City. We are reviewing strategic investments in our information technology infrastructure. Should we decide to implement these programs and enhancements, there will be one-time costs that are not reflected in our guidance,” Slipsager concluded.

Conference Call
On Thursday, September 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/q3/abm  3q2006.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 800-524-4293 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 # 5032449.

About ABM Industries

ABM Industries Incorporated (NYSE:ABM) 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.

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:

 2 

EXHIBIT 99.1

(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

		July 31,				October 31,
		2006				2005
		(UNAUDITED)
Assets
Cash and cash equivalents		$	51,540,000			$	56,793,000
Trade accounts receivable, net			368,903,000				345,104,000
Other current assets			114,199,000				119,556,000
Total current assets			534,642,000				521,453,000
Goodwill			247,869,000				243,559,000
Other intangibles, net			24,759,000				24,463,000
All other assets			113,504,000				114,235,000
Total assets		$	920,774,000			$	903,710,000
Liabilities
Current liabilities		$	272,844,000			$	275,074,000
Non-current liabilities			156,212,000				152,710,000
Total liabilities			429,056,000				427,784,000
Stockholders’ Equity			491,718,000				475,926,000
Total liabilities and stockholders’ equity		$	920,774,000			$	903,710,000

SELECTED CASH FLOW INFORMATION (UNAUDITED)

		Three Months Ended July 31,
		2006				2005
Net cash flows from continuing operating activities		$	30,104,000			$	(2,221,000	)
Net operational cash flows from discontinued operations			—				(690,000	)
Net Cash Provided By (Used In) Operating Activities		$	30,104,000			$	(2,911,000	)
Net Cash (Used In) Provided By Investing Activities		$	(3,546,000	)		$	18,297,000
Common stock issued		$	5,355,000			$	3,662,000
Common stock purchases			—				(27,160,000	)
Dividends paid			(5,379,000	)			(5,199,000	)
Net Cash Used In Financing Activities		$	(24,000	)		$	(28,697,000	)
		Nine Months Ended July 31,
		2006				2005
Net cash flows from continuing operating activities		$	32,556,000			$	7,490,000
Net operational cash flows from discontinued operations			—				372,000
Net Cash Provided By Operating Activities		$	32,556,000			$	7,862,000
Net Cash Used In Investing Activities		$	(19,070,000	)		$	(5,501,000	)
Common stock issued		$	11,412,000			$	17,387,000
Common stock purchases			(13,942,000	)			(31,318,000	)
Dividends paid			(16,209,000	)			(15,597,000	)
Net Cash Used In Financing Activities		$	(18,739,000	)		$	(29,528,000	)

INCOME STATEMENT (UNAUDITED)

		Three Months Ended July 31,								Increase
		2006				2005				(Decrease)
Revenues
Sales and other income		$	689,275,000			$	650,140,000				6.0	%
Gain on insurance claim			—				—				—
Total revenues			689,275,000				650,140,000				6.0	%
Expenses
Operating expenses and cost of goods sold			612,434,000				572,759,000				6.9	%
Selling, general and administrative expenses			48,428,000				44,417,000				9.0	%
Intangible amortization			1,357,000				1,430,000				(5.1	)%
Interest expense			122,000				220,000				(44.5	)%
Total expenses			662,341,000				618,826,000				7.0	%
Income from continuing operations before income taxes			26,934,000				31,314,000				(14.0	)%
Income taxes			9,682,000				10,720,000				(9.7	)%
Income from continuing operations			17,252,000				20,594,000				(16.2	)%
Loss from discontinued operations, net of income taxes			—				(15,000	)			—
Gain on sale of discontinued operations, net of income taxes			—				14,221,000				—
Net Income		$	17,252,000			$	34,800,000				(50.4	)%
Net Income Per Common Share — Basic
Income from continuing operations		$	0.35			$	0.42				(16.7	)%
Loss from discontinued operations			—				(0.01	)			—
Gain on sale of discontinued operations			—				0.29				—
		$	0.35			$	0.70				(50.0	)%
Net Income Per Common Share — Diluted
Income from continuing operations		$	0.35			$	0.41				(14.6	)%
Loss from discontinued operations			—				(0.01	)			—
Gain on sale of discontinued operations			—				0.29				—
		$	0.35			$	0.69				(49.3	)%
Average Common And Common Equivalent Shares
Basic			48,846,000				49,487,000				(1.3	)%
Diluted			49,306,000				50,462,000				(2.3	)%
		Nine Months Ended July 31,								Increase
		2006				2005				(Decrease)
Revenues
Sales and other income		$	2,015,984,000			$	1,927,860,000				4.6	%
Gain on insurance claim			—				1,195,000				—
Total revenues			2,015,984,000				1,929,055,000				4.5	%
Expenses
Operating expenses and cost of goods sold			1,810,932,000				1,731,042,000				4.6	%
Selling, general and administrative expenses			150,851,000				142,855,000				5.6	%
Intangible amortization			4,428,000				4,264,000				3.8	%
Interest expense			366,000				713,000				(48.7	)%
Total expenses			1,966,577,000				1,878,874,000				4.7	%
Income from continuing operations before income taxes			49,407,000				50,181,000				(1.5	)%
Income taxes			17,773,000				15,121,000				17.5	%
Income from continuing operations			31,634,000				35,060,000				(9.8	)%
Income from discontinued operations, net of income taxes			—				233,000				—
Gain on sale of discontinued operations, net of income taxes			—				14,221,000				—
Net Income		$	31,634,000			$	49,514,000				(36.1	)%
Net Income Per Common Share — Basic
Income from continuing operations		$	0.64			$	0.71				(9.9	)%
Income from discontinued operations			—				—				—
Gain on sale of discontinued operations			—				0.29				—
		$	0.64			$	1.00				(36.0	)%
Net Income Per Common Share — Diluted
Income from continuing operations		$	0.64			$	0.69				(7.2	)%
Income from discontinued operations			—				—				—
Gain on sale of discontinued operations			—				0.29				—
		$	0.64			$	0.98				(34.7	)%
Average Common And Common Equivalent Shares
Basic			49,086,000				49,470,000				(0.8	)%
Diluted			49,735,000				50,522,000				(1.6	)%

SALES AND OPERATING PROFIT BY SEGMENT (UNAUDITED)

		Three Months Ended July 31,								Increase
		2006				2005				(Decrease)
Sales and Other Income
Janitorial		$	395,872,000			$	384,381,000				3.0	%
Parking			115,719,000				102,767,000				12.6	%
Security			77,404,000				74,702,000				3.6	%
Engineering			71,665,000				60,882,000				17.7	%
Lighting			28,097,000				26,877,000				4.5	%
Corporate			518,000				531,000				(2.4	)%
		$	689,275,000			$	650,140,000				6.0	%
Operating Profit
Janitorial		$	23,131,000			$	25,165,000				(8.1	)%
Parking			4,552,000				4,079,000				11.6	%
Security			1,980,000				2,502,000				(20.9	)%
Engineering			4,450,000				4,146,000				7.3	%
Lighting			116,000				927,000				(87.5	)%
Corporate expenses			(7,173,000	)			(5,285,000	)			35.7	%
Operating Profit From Continuing Operations			27,056,000				31,534,000				(14.2	)%
Interest expense			(122,000	)			(220,000	)			(44.5	)%
Income from continuing operations before income taxes		$	26,934,000			$	31,314,000				(14.0	)%
		Nine Months Ended July 31,								Increase
		2006				2005				(Decrease)
Sales and Other Income
Janitorial		$	1,164,830,000			$	1,141,961,000				2.0	%
Parking			327,503,000				303,073,000				8.1	%
Security			230,978,000				220,465,000				4.8	%
Engineering			206,705,000				176,057,000				17.4	%
Lighting			84,241,000				85,080,000				(1.0	)%
Corporate			1,727,000				1,224,000				41.1	%
		$	2,015,984,000			$	1,927,860,000				4.6	%
Operating Profit
Janitorial		$	58,786,000			$	47,795,000				23.0	%
Parking			9,202,000				8,915,000				3.2	%
Security			2,442,000				1,856,000				31.6	%
Engineering			11,400,000				10,327,000				10.4	%
Lighting			700,000				2,421,000				(71.1	)%
Corporate expenses			(32,757,000	)			(21,615,000	)			51.5	%
Operating Profit From Continuing Operations			49,773,000				49,699,000				0.1	%
Gain on insurance claim			—				1,195,000				—
Interest expense			(366,000	)			(713,000	)			(48.7	)%
Income from continuing operations before income taxes		$	49,407,000			$	50,181,000				(1.5	)%

ABM Industries Incorporated
George B. Sundby
Executive Vice President and
Chief Financial Officer
(415) 733-4000

EXHIBIT 99.2

ABM INDUSTRIES CONTINUES BEST-EVER QUARTERLY DIVIDEND RATE

SAN FRANCISCO — September 6, 2006 — The Board of Directors of ABM Industries Incorporated (NYSE: ABM) has declared an all-time-high fourth quarter cash dividend of $0.11 per common share payable on November 6, 2006 to stockholders of record on October 13, 2006. This will be ABM’s 162^nd consecutive quarterly cash dividend, and is $0.005 (4.8%) above the $0.105 per share quarterly dividend rate declared and paid for the fourth quarter of 2005.

About ABM Industries

     ABM Industries Incorporated (NYSE:ABM) 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.

# # #

CONTACT:

ABM Industries Incorporated
George B. Sundby
Executive Vice President and Chief Financial Officer
(415) 733-4000