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
Date of Report (Date of earliest event reported): March 1, 2010
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.) |
| 551 Fifth Avenue, Suite 300,
New York, New York |
10176 | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code: (212) 297-0200
| N/A |
| (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 March 1, 2010, ABM Industries Incorporated (the “Company”) issued a press release announcing financial results related to the first quarter of fiscal year 2010. 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 March 1, 2010, the Company announced that the Board of Directors of the Company declared a quarterly dividend of $0.135 per share, payable on May 3, 2010 to stockholders of record on April 8, 2010. A copy of the press release announcing the declaration of the dividend is attached as Exhibit 99.1, which is incorporated into this item by reference.
As disclosed in the press release attached as Exhibit 99.1, the Company will hold a live web cast on March 2, 2010 relating to the Company’s financial results for the first quarter of fiscal year 2010. A copy of the slides to be presented at the Company’s web cast and discussed in the conference call relating to such financial results is being furnished as Exhibit 99.2 to this Form 8-K.
Item 9.01. Financial Statements and Exhibits.
| (c) | Exhibits. |
| 99.1 | Press Release issued by ABM Industries Incorporated, dated March 1, 2010, announcing financial results related to the first quarter of fiscal year 2010 and the declaration of a dividend payable May 3, 2010 to stockholders of record on April 8, 2010. |
| 99.2 | Slides of ABM Industries Incorporated, dated March 2, 2010. |
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: March 1, 2010
By: /s/ Sarah H.
McConnell
Sarah H. McConnell
Senior Vice President and General Counsel
EXHIBIT INDEX
| 99.1 | Press Release issued by ABM Industries Incorporated, dated March 1, 2010, announcing financial results related the first quarter of fiscal year 2010 and the declaration of a dividend. |
| 99.2 | Slides of ABM Industries Incorporated, dated March 2, 2010. |
Exhibit 99.1
|
551 Fifth Avenue Suite 300 New York, NY 10176 |
PRESS RELEASE
Contact: |
||||||
Investors & Analysts:
|
David Farwell | Media: | Tony Mitchell | |||
| (212) 297-9792 | (212) 297-9828 | |||||
| dfarwell@abm.com | tony.mitchell@abm.com |
ABM INDUSTRIES ANNOUNCES FIRST QUARTER 2010 FINANCIAL RESULTS,
DECLARES QUARTERLY DIVIDEND AND REAFFIRMS GUIDANCE
DECLARES QUARTERLY DIVIDEND AND REAFFIRMS GUIDANCE
Income from Continuing Operations $12.8 Million for Quarter; Adjusted Income from Continuing
Operations $14 Million, up 8%
Operations $14 Million, up 8%
| Quarter Ended | ||||||||||||
| (in millions, | January 31, | Increase | ||||||||||
| except per share data) | 2010 | 2009 | (Decrease) | |||||||||
Revenues |
$ | 869.9 | $ | 887.5 | (2.0 | )% | ||||||
Net cash (used in) provided by operating
activities |
$ | (8.9 | ) | $ | 26.1 | (134.2 | )% | |||||
Net Income |
$ | 12.8 | $ | 14.2 | (10.1 | )% | ||||||
Net income per diluted share |
$ | 0.24 | $ | 0.28 | (14.3 | )% | ||||||
Adjusted EBITDA |
$ | 32.7 | $ | 30.3 | 7.7 | % | ||||||
Income from continuing operations |
$ | 12.8 | $ | 14.8 | (13.0 | )% | ||||||
Income from continuing operations per
diluted share |
$ | 0.24 | $ | 0.29 | (17.2 | )% | ||||||
Adjusted income from continuing operations |
$ | 14.0 | $ | 13.0 | 8.3 | % | ||||||
Adjusted income from continuing
operations per diluted share |
$ | 0.27 | $ | 0.25 | 8.0 | % | ||||||
(This release refers to non-GAAP financial measures described as “Adjusted EBITDA”, “Adjusted
Income from Continuing Operations”, and “Adjusted Income from Continuing Operations per Diluted
Share”. Refer to the accompanying financial tables for supplemental financial data and
corresponding reconciliation of these non-GAAP financial measures to certain GAAP financial
measures.)
NEW YORK, NY — March 1, 2010 — ABM Industries Incorporated (NYSE:ABM) today announced revenues
for the first quarter of fiscal year 2010 of $869.9 million compared to first quarter of fiscal
year 2009
revenues of $887.5 million. Net income for the first quarter of fiscal year 2010 was $12.8
million, a 10.1% decrease from $14.2 million in the first quarter of fiscal year 2009. Net income
per diluted share for the first quarter of fiscal year 2010 decreased 14.3% to $0.24 compared to
first quarter of fiscal year 2009 net income
per diluted share of $0.28. Net income for the first
quarter of 2010 included a $1.2 million after-tax expense ($0.03 per diluted share) from items
impacting comparability compared to a net gain of $1.8 million ($0.04 per diluted share) from items
impacting comparability in the first quarter of fiscal year 2009, which included a $5.8 million
after-tax benefit from a settlement with a former third-party administrator of workers’
compensation claims.
“The Company’s financial results essentially met our expectations for the first quarter of the
fiscal year” said Henrik Slipsager, president and chief executive officer, ABM Industries
Incorporated. “We are encouraged that revenues increased sequentially, our sales pipeline remains
strong and client retention is improving compared to the first half of fiscal 2009 — all pointing
to an improving sales outlook.
“We are successfully executing our operating strategies around cost controls and cash and expense
management. We decreased total expenses by nearly 2% in the first quarter, and reduced our SG&A
expenses by 12% year-over-year. SG&A reductions were driven by lower information technology costs
as we conclude the upgrade of our enterprise systems and continued aggressive cost controls
measures by the Janitorial Division. Operating cash flow remains on plan for the year. Our
rigorous focus on managing job profitability helped us achieve 8% increases in both adjusted income
and adjusted EBITDA year-over-year.
“Operating profit for our divisions increased nearly 6%. Engineering had a very strong first
quarter, with revenues growing nearly 16%, operating profit increasing 7% and a robust sales
pipeline building, particularly for ABM Energy Services. Parking increased operating profit by 21%
and Janitorial by nearly 6%. We also continue to meet our clients’ demand for an environmentally
sustainable approach to facility services as we surpassed more than 200 million square feet of
space operating under ABM Janitorial’s industry-leading green cleaning program, including more than
50 million square feet of space that is LEED®-certified by the U.S. Green Building Council.”
Income from continuing operations for the first quarter of fiscal year 2010 was $12.8 million
($0.24 per diluted share) compared to $14.8 million ($0.29 per diluted share) in the year-ago
quarter. Excluding items impacting comparability, income from continuing operations increased to
$14.0 million, or $0.27 per diluted share, for the first quarter of fiscal year 2010. This
compares to income from continuing operations (excluding items impacting comparability) of $13.0
million, or $0.25 per diluted share, in the first quarter of fiscal year 2009.
The Company’s adjusted EBITDA (earnings before interest, taxes, depreciation and amortization and
excluding discontinued operations and items impacting comparability) for the first quarter of
fiscal year 2010 was $32.7 million compared to $30.3 million in the first quarter of fiscal year
2009.
Slipsager continued: “During last year’s recession, we took a series of actions to navigate a
difficult economy and position the Company for future growth. We see the signs of progress as
revenue trends are moving in the right direction, even with extended sales cycles. While we
anticipated increases in state unemployment insurance rates, the states raised these even beyond
our projections, which impacted first quarter results by $0.01 to $0.02 cents per diluted share and
will have greater impact in the second quarter. We are taking the appropriate action across the
Company to mitigate the effect of these taxes going forward. Our existing sales pipeline, coupled
with an improving economy, should lead to top line growth year-over-year in the second half of
fiscal 2010, and we will continue our aggressive measures to generate bottom line savings by
successfully executing our operating strategies.”
The Company also announced that the Board of Directors has declared a second quarter cash dividend
of $0.135 per common share payable on May 3, 2010 to stockholders of record on April 8, 2010. This
will be ABM’s 176th consecutive quarterly cash dividend.
Guidance
The Company reiterates its estimates that full fiscal year 2010 income from continuing operations
per diluted share will be in the range of $1.25 to $1.35 and adjusted income from continuing
operations per diluted share, for the same period, will be in the range of $1.35 to $1.45. For
comparison purposes, the second quarter of fiscal year 2010 has one additional work day compared to
the year-ago quarter.
Conference Call
On Tuesday, March 2, 2010 at 9:00 a.m. (EST), ABM will host a live webcast of remarks by President
and Chief Executive Officer Henrik Slipsager and Executive Vice President and Chief Financial
Officer James Lusk.
The webcast will be accessible at: [http://investor.abm.com/eventdetail.cfm?eventid=78298]
Listeners are asked to be online at least 15 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 90 days.
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 888-213-3754 within 15 minutes before the event.
Telephonic replays will be accessible during the period from two hours to seven days after the call
by dialing 888-203-1112 and then entering ID #4391493.
Conference Call Presentation
In connection with the conference call to discuss earnings (see above), a slide presentation
related to earnings and operations will be available at the Company’s website at www.abm.com, and
can be accessed through the Investor Relations portion of ABM’s website by clicking on the
“Presentations” tab.
About ABM Industries Incorporated
ABM Industries Incorporated (NYSE:ABM), which operates through its subsidiaries (collectively
“ABM”), is the leading provider of facility services in the United States. With fiscal 2009
revenues of approximately $3.5 billion and approximately 91,000 employees, ABM provides janitorial,
facility, engineering, parking and security services for thousands of commercial, industrial,
institutional and retail facilities across the United States, Puerto Rico, and British Columbia,
Canada. ABM’s business services include ABM Janitorial Services, ABM Facility Services, ABM
Engineering Services, Ampco System Parking and ABM Security 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 current plans and assumptions. In addition, the financial results
reported in this release continue to be subject to adjustment until filing of the Company’s
quarterly report on Form 10-Q for the quarter ended January 31, 2010. Any number of factors could
cause the Company’s actual results to differ materially from those anticipated. Factors that could
cause actual results to differ include but are not limited to the following: (1) risks relating to
our acquisition strategy may adversely impact our results of operations; (2) intense competition
can constrain our ability to gain business, as well as our profitability; (3) we are subject to
volatility associated with high deductibles for certain insurable risks; (4) an increase in costs
that we cannot pass on to clients could affect our profitability; (5) we provide our services
pursuant to agreements which are cancelable by either party upon 30 to 60 days’ notice; (6) our
success depends on our ability to preserve our long-term relationships with clients; (7) our
transition to a shared services function could create
disruption in functions affected; (8) we incur significant accounting and other control costs that
reduce profitability; (9) a decline in commercial office building occupancy and rental rates could
affect our revenues and profitability; (10) deterioration in economic conditions in general could
further reduce the demand for facility services and, as a result, reduce our earnings and adversely
affect our financial condition; (11) the financial difficulties or bankruptcy of one or more of our
major clients could adversely affect results; (12) our ability to operate and pay our debt
obligations depends upon our access to cash; (13) because ABM conducts business operations through
operating subsidiaries, we depend on those entities to generate the funds necessary to meet
financial obligations; (14) certain future declines or fluctuations in the fair value of our
investments in
auction rate securities that are deemed other-than-temporarily impaired could
negatively impact our earnings; (15) uncertainty in the credit markets and the financial services
industry may impact our ability to collect receivables on a timely basis and may negatively impact
our cash flow; (16) any future increase in the level of debt or in interest rates can affect our
results of operations; (17) an impairment charge could have a material adverse effect on our
financial condition and results of operations; (18) we are defendants in several class and
representative actions or other lawsuits alleging various claims that could cause us to incur
substantial liabilities; (19) since we are an attractive employer for recent émigrés to this
country and many of our jobs are filled by such, changes in immigration laws or enforcement actions
or investigations under such laws could significantly adversely affect our labor force, operations
and financial results and our reputation; (20) labor disputes could lead to loss of revenues or
expense variations; (21) we participate in multi-employer defined benefit plans which could result
in substantial liabilities being incurred; and (22) natural disasters or acts of terrorism could
disrupt our services . Additional information regarding these and other risks and uncertainties
the Company faces is contained in the Company’s Annual Report on Form 10-K for the year ended
October 31, 2009 and in other reports we file from time to time with the Securities and Exchange
Commission. We undertake no obligation to publicly update forward-looking statements, whether as a
result of new information, future events or otherwise.
Use of Non-GAAP Financial Information
To supplement ABM’s consolidated financial information, the Company has presented income from
continuing operations for the first quarter of fiscal years 2010 and 2009 and guidance for fiscal
year 2010, as adjusted for items impacting comparability. These adjustments have been made with the
intent of providing financial measures that give management and investors a better understanding of
the underlying operational results and trends and ABM’s marketplace performance. In addition, the
Company has presented earnings before interest, taxes, depreciation and amortization and excluding
discontinued operations and items impacting comparability (adjusted EBITDA) for the first quarter
of fiscal years 2010 and 2009. Adjusted EBITDA is among the indicators management uses as a basis
for planning and forecasting future periods. The presentation of these non-GAAP financial measures
is not meant to be considered in isolation or as a substitute for financial statements prepared in
accordance with generally accepted accounting principles in the United States. (See accompanying
financial tables for supplemental financial data and corresponding reconciliations to certain GAAP
financial measures.)
###
Financial Schedules
(In thousands, except per share data)
(In thousands, except per share data)
CONDENSED CONSOLIDATED INCOME STATEMENT INFORMATION (UNAUDITED)
| Quarter Ended January 31, | Increase | |||||||||||
| 2010 | 2009 | (Decrease) | ||||||||||
Revenues |
$ | 869,884 | $ | 887,472 | (2.0 | )% | ||||||
Expenses |
||||||||||||
Operating |
782,101 | 787,268 | (0.7 | )% | ||||||||
Selling, general and administrative |
62,802 | 71,387 | (12.0 | )% | ||||||||
Amortization of intangible assets |
2,775 | 2,823 | (1.7 | )% | ||||||||
Total expenses |
847,678 | 861,478 | (1.6 | )% | ||||||||
Operating profit |
22,206 | 25,994 | (14.6 | )% | ||||||||
Interest expense |
1,215 | 1,668 | (27.2 | )% | ||||||||
Income from continuing operations
before income taxes |
20,991 | 24,326 | (13.7 | )% | ||||||||
Provision for income taxes |
8,155 | 9,571 | (14.8 | )% | ||||||||
Income from continuing operations |
12,836 | 14,755 | (13.0 | )% | ||||||||
Loss from discontinued operations |
(61 | ) | (538 | ) | NM* | |||||||
Net Income |
$ | 12,775 | $ | 14,217 | (10.1 | )% | ||||||
Net Income Per Common Share — Basic |
||||||||||||
Income from continuing operations |
$ | 0.25 | $ | 0.29 | (13.8 | )% | ||||||
Loss from discontinued operations |
0.00 | (0.01 | ) | NM* | ||||||||
| $ | 0.25 | $ | 0.28 | (10.7 | )% | |||||||
Net Income Per Common Share — Diluted |
||||||||||||
Income from continuing operations |
$ | 0.24 | $ | 0.29 | (17.2 | )% | ||||||
Loss from discontinued operations |
0.00 | (0.01 | ) | NM* | ||||||||
| $ | 0.24 | $ | 0.28 | (14.3 | )% | |||||||
* Not Meaningful |
||||||||||||
Average Common And Common Equivalent Shares |
||||||||||||
Basic |
51,821 | 51,110 | ||||||||||
Diluted |
52,548 | 51,470 | ||||||||||
Dividends Declared Per Common Share |
$ | 0.135 | $ | 0.130 | ||||||||
CONDENSED CONSOLIDATED CASH FLOW INFORMATION (UNAUDITED)
| Quarter Ended January 31, | ||||||||
| 2010 | 2009 (a) | |||||||
Net cash (used in) provided by continuing operating activities |
(12,220 | ) | 13,460 | |||||
Net cash provided by discontinued operating activities |
3,307 | 12,619 | ||||||
Net cash (used in) provided by operating activities |
$ | (8,913 | ) | $ | 26,079 | |||
Net cash used in investing activities |
$ | (6,924 | ) | $ | (5,649 | ) | ||
Proceeds from exercises of stock options
(including income tax benefit) |
1,251 | 463 | ||||||
Dividends paid |
(6,992 | ) | (6,641 | ) | ||||
Borrowings from line of credit |
131,000 | 173,000 | ||||||
Repayment of borrowings from line of credit |
(131,500 | ) | (176,000 | ) | ||||
Changes in book cash overdrafts |
9,102 | (13,852 | ) | |||||
Net cash provided by (used) in financing activities |
$ | 2,861 | $ | (23,030 | ) | |||
| (a) | Amount shown for the quarter ended January 31, 2009 reflects an immaterial correction of
certain net book credit cash balances; resulting in an increase in net cash used in financing
activities for the quarter ended January 31, 2009 in the amount of $13.9 million. |
CONDENSED CONSOLIDATED BALANCE SHEET INFORMATION (UNAUDITED)
| January 31, | October 31, | |||||||
| 2010 | 2009 | |||||||
| (Unaudited) | ||||||||
Assets |
||||||||
Cash and cash equivalents |
$ | 21,177 | $ | 34,153 | ||||
Trade accounts receivable, net |
476,910 | 445,241 | ||||||
Prepaid income taxes |
12,205 | 13,473 | ||||||
Current assets of discontinued operations |
8,480 | 10,787 | ||||||
Prepaid expenses |
40,332 | 38,781 | ||||||
Notes receivable and other |
17,567 | 21,374 | ||||||
Deferred income taxes, net |
49,729 | 52,171 | ||||||
Insurance recoverables |
4,917 | 5,017 | ||||||
Total current assets |
631,317 | 620,997 | ||||||
Non-current assets of discontinued operations |
3,573 | 4,567 | ||||||
Insurance deposits |
42,289 | 42,500 | ||||||
Other investments and long-term receivables |
5,884 | 6,240 | ||||||
Deferred income taxes, net |
61,018 | 63,444 | ||||||
Insurance recoverables |
65,800 | 67,100 | ||||||
Other assets |
31,852 | 32,446 | ||||||
Investments in auction rate securities |
19,651 | 19,531 | ||||||
Property, plant and equipment, net |
57,562 | 56,892 | ||||||
Other intangible assets, net |
57,425 | 60,199 | ||||||
Goodwill |
547,830 | 547,237 | ||||||
Total assets |
$ | 1,524,201 | $ | 1,521,153 | ||||
Liabilities |
||||||||
Trade accounts payable |
$ | 79,524 | $ | 84,701 | ||||
Accrued liabilities |
||||||||
Compensation |
83,658 | 93,095 | ||||||
Taxes — other than income |
20,401 | 17,539 | ||||||
Insurance claims |
78,174 | 78,144 | ||||||
Other |
70,629 | 66,279 | ||||||
Income taxes payable |
1,950 | 1,871 | ||||||
Current liabilities of discontinued operations |
1,170 | 1,065 | ||||||
Total current liabilities |
335,506 | 342,694 | ||||||
Income taxes payable |
20,713 | 17,763 | ||||||
Line of credit |
172,000 | 172,500 | ||||||
Retirement plans and other |
31,983 | 32,963 | ||||||
Insurance claims |
267,883 | 268,183 | ||||||
Total liabilities |
828,085 | 834,103 | ||||||
Stockholders’ Equity |
696,116 | 687,050 | ||||||
Total liabilities and stockholders’ equity |
$ | 1,524,201 | $ | 1,521,153 | ||||
REVENUES AND OPERATING PROFIT BY SEGMENT (UNAUDITED)
| Quarter Ended January 31, | Increase | |||||||||||
| 2010 | 2009 | (Decrease) | ||||||||||
Revenues |
||||||||||||
Janitorial |
$ | 584,079 | $ | 608,420 | (4.0 | )% | ||||||
Parking |
112,588 | 115,669 | (2.7 | )% | ||||||||
Security |
83,597 | 85,583 | (2.3 | )% | ||||||||
Engineering |
89,351 | 77,216 | 15.7 | % | ||||||||
Corporate |
269 | 584 | (53.9 | )% | ||||||||
| $ | 869,884 | $ | 887,472 | (2.0 | )% | |||||||
Operating Profit |
||||||||||||
Janitorial |
$ | 34,084 | $ | 32,311 | 5.5 | % | ||||||
Parking |
5,026 | 4,142 | 21.3 | % | ||||||||
Security |
1,346 | 1,794 | (25.0 | )% | ||||||||
Engineering |
4,992 | 4,666 | 7.0 | % | ||||||||
Corporate |
(23,242 | ) | (16,919 | ) | (37.4 | )% | ||||||
Operating profit |
22,206 | 25,994 | (14.6 | )% | ||||||||
Interest expense |
1,215 | 1,668 | (27.2 | )% | ||||||||
Income from continuing operations
before income taxes |
$ | 20,991 | $ | 24,326 | (13.7 | )% | ||||||
ABM Industries Incorporated
Reconciliations of Non-GAAP Financial Measures
(Unaudited)
Reconciliations of Non-GAAP Financial Measures
(Unaudited)
(in thousands, except per share data)
| Quarter Ended January 31, | ||||||||
| 2010 | 2009 | |||||||
Reconciliation of Adjusted Income from Continuing
Operations to Net Income |
||||||||
Adjusted Income from Continuing Operations |
$ | 14,040 | $ | 12,963 | ||||
Items Impacting Comparability, net of taxes |
(1,204 | ) | 1,792 | |||||
Income from Continuing Operations |
12,836 | 14,755 | ||||||
Loss from Discontinued Operations |
(61 | ) | (538 | ) | ||||
Net Income |
$ | 12,775 | $ | 14,217 | ||||
Reconciliation of Adjusted Income from Continuing
Operations to Income from Continuing Operations |
||||||||
Adjusted Income from Continuing Operations |
$ | 14,040 | $ | 12,963 | ||||
Items Impacting Comparability: |
||||||||
Corporate Initiatives and Other (a) |
(1,970 | ) | (6,648 | ) | ||||
Third-Party Administrator Legal Settlement |
— | 9,601 | ||||||
Total Items Impacting Comparability |
(1,970 | ) | 2,953 | |||||
Income Taxes (Benefit) Expense |
(766 | ) | 1,161 | |||||
Items Impacting Comparability, net of taxes |
(1,204 | ) | 1,792 | |||||
Income from Continuing Operations |
$ | 12,836 | $ | 14,755 | ||||
Reconciliation of Adjusted EBITDA to Net Income |
||||||||
Adjusted EBITDA |
$ | 32,669 | $ | 30,347 | ||||
Items Impacting Comparability |
(1,970 | ) | 2,953 | |||||
Discontinued Operations |
(61 | ) | (538 | ) | ||||
Income Tax |
(8,155 | ) | (9,571 | ) | ||||
Interest Expense |
(1,215 | ) | (1,668 | ) | ||||
Depreciation and Amortization |
(8,493 | ) | (7,306 | ) | ||||
Net Income |
$ | 12,775 | $ | 14,217 | ||||
Continued
| Quarter Ended January 31, | ||||||||
| 2010 | 2009 | |||||||
Reconciliation of Adjusted Income from Continuing Operations per Diluted
Share to Income from Continuing Operations per Diluted Share
|
||||||||
Adjusted Income from Continuing
Operations per Diluted Share |
$ | 0.27 | $ | 0.25 | ||||
Items Impacting Comparability, net of taxes |
(0.03 | ) | 0.04 | |||||
Income from Continuing Operations
per Diluted Share |
$ | 0.24 | $ | 0.29 | ||||
Diluted Shares |
52,548 | 51,470 | ||||||
| (a) | Corporate initiatives and other include: (i) costs associated with the implementation of a new
payroll and human resources information system, (ii) the upgrade of the Company’s accounting
system, (iii) the completion of the corporate move from San Francisco, (iv) the integration costs
associated with OneSource, and (v) the write-off of deferred acquisition costs due to the adoption of an accounting pronouncement. |
ABM Industries Incorporated
Reconciliation of Estimated Adjusted Income from Continuing Operations per Diluted Share to
Income from Continuing Operations per Diluted Share for the Year Ending October 31, 2010
Reconciliation of Estimated Adjusted Income from Continuing Operations per Diluted Share to
Income from Continuing Operations per Diluted Share for the Year Ending October 31, 2010
| Year Ending October 31, 2010 | ||||||||
| Low Estimate | High Estimate | |||||||
| (per diluted share) | ||||||||
Adjusted Income from Continuing Operations per Diluted Share |
$ | 1.35 | $ | 1.45 | ||||
Adjustments to Income from Continuing Operations (a) |
(0.10 | ) | (0.10 | ) | ||||
Income from Continuing Operations per Diluted Share |
$ | 1.25 | $ | 1.35 | ||||
| (a) | Adjustments to income from continuing operations are expected to include additional costs
associated with the implementation of new information technology systems and other unique items
impacting comparability. |
Exhibit 99.2
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| Introduction of call participants Henrik C. Slipsager, President & Chief Executive Officer James S. Lusk, Executive Vice President & Chief Financial Officer Sarah H. McConnell, Senior Vice President & General Counsel First Quarter 2010 Highlights Financial Review Operating Results 2010 Annual Guidance 2 |
| This presentation contains forward-looking statements that set forth management's anticipated results based on management's current plans and assumptions. In addition, the financial results reported in this presentation continue to be subject to adjustment until filing of the Company's quarterly report on Form 10-Q for the quarter ended January 31, 2010. Any number of factors could cause the Company's actual results to differ materially from those anticipated. Factors that could cause actual results to differ include but are not limited to the following: (1) risks relating to our acquisition strategy may adversely impact our results of operations; (2) intense competition can constrain our ability to gain business, as well as our profitability; (3) we are subject to volatility associated with high deductibles for certain insurable risks; (4) an increase in costs that we cannot pass on to clients could affect our profitability; (5) we provide our services pursuant to agreements which are cancelable by either party upon 30 to 60 days' notice; (6) our success depends on our ability to preserve our long-term relationships with clients; (7) our transition to a shared services function could create disruption in functions affected; (8) we incur significant accounting and other control costs that reduce profitability; (9) a decline in commercial office building occupancy and rental rates could affect our revenues and profitability; (10) deterioration in economic conditions in general could further reduce the demand for facility services and, as a result, reduce our earnings and adversely affect our financial condition; (11) the financial difficulties or bankruptcy of one or more of our major clients could adversely affect results; (12) our ability to operate and pay our debt obligations depends upon our access to cash; (13) because ABM conducts business operations through operating subsidiaries, we depend on those entities to generate the funds necessary to meet financial obligations; (14) certain future declines or fluctuations in the fair value of our investments in auction rate securities that are deemed other-than- temporarily impaired could negatively impact our earnings; (15) uncertainty in the credit markets and the financial services industry may impact our ability to collect receivables on a timely basis and may negatively impact our cash flow; (16) any future increase in the level of debt or in interest rates can affect our results of operations; (17) an impairment charge could have a material adverse effect on our financial condition and results of operations; (18) we are defendants in several class and representative actions or other lawsuits alleging various claims that could cause us to incur substantial liabilities; (19) since we are an attractive employer for recent emigres to this country and many of our jobs are filled by such, changes in immigration laws or enforcement actions or investigations under such laws could significantly adversely affect our labor force, operations and financial results and our reputation; (20) labor disputes could lead to loss of revenues or expense variations; (21) we participate in multi-employer defined benefit plans which could result in substantial liabilities being incurred; and (22) natural disasters or acts of terrorism could disrupt our services . Additional information regarding these and other risks and uncertainties the Company faces is contained in the Company's Annual Report on Form 10-K for the year ended October 31, 2009 and in other reports we file from time to time with the Securities and Exchange Commission. We undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise. 3 |
| During the course of this presentation, certain non- GAAP financial measures described as "Adjusted EBITDA," "Adjusted Income from Continuing Operations," and "Adjusted Income from Continuing Operations per Diluted Share" that were not prepared in accordance with U.S. GAAP will be presented. A reconciliation of these non-GAAP financial measures those numbers to GAAP financial measures is available on the Company's website under "Investor Relations" and at the end of this presentation. 4 |
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| Essentially met our expectations for the first quarter Adjusted Income from Continuing Operations up 8.3% to $14.0 million On a per diluted share basis, Adjusted Income from Continuing Operations increased 8% to $0.27 Operating profit, excluding corporate segment up 5.9% Adjusted EBITDA up 7.7% to $32.7 million Adjusted EBITDA margins increased 34 basis points year-over-year to 3.76% Cash Flow from operations a use of nearly $9 million Timing of account collections received from clients and payments made on vendor invoices Announced our 176th consecutive dividend 6 |
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| ($ in thousands) 1Excludes Corporate Summary Revenue base has stabilized Engineering revenue up again on a year-over-year basis as sales momentum continues Parking recorded $56 million related solely for reimbursable costs compared to $60 million in 2009 Tag revenue averaged approximately $13 million per month in the quarter Sales pipeline and sales activity remain robust, sales cycle is being extended 10 |
| ($ in thousands) 1Excludes Corporate Summary Continued focus on managing job profitability leads to another quarter of growth in division profits despite higher than anticipated state unemployment taxes Parking achieves another quarter of double digit growth Security segment significantly impacted by higher state unemployment taxes Taking the appropriate action across the Company to mitigate the effect of higher state unemployment taxes 11 |
| Continue to anticipate sequential revenue growth Expect revenue in second half of fiscal year to be above prior year comparable Working to leverage investments in infrastructure to generate savings in fiscal 2011 Positioned for improving cash flow. Cash tax rate for fiscal 2010 to be approximately 2% Guidance Reiterating previously issued range for full year income from continuing operations of $1.25 to $1.35 per diluted share Adjusted income from continuing operations of $1.35 to $1.45 per diluted share The second quarter of fiscal 2010 has one more work day compared to the second quarter of 2009 12 |
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Minimum 15 minutes delayed. Source: LSEG