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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) June 10, 2003
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
Inapplicable
(Former name or former address if changed since last report)
| Item 5. Other Events and Regulation FD Disclosure. | ||||||||
| Item 7(c). Exhibits. | ||||||||
| Item 9. Regulation FD Disclosure. | ||||||||
| SIGNATURES | ||||||||
| Exhibit Index | ||||||||
| Exhibit 99.1 | ||||||||
| Exhibit 99.2 | ||||||||
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Item 5. Other Events and Regulation FD Disclosure.
On June 10, 2003, ABM Industries Incorporated issued a press release announcing that a quarterly dividend of $.095 per share would be paid on August 4, 2003, to the record holders of common stock as of the close of business on July 14, 2003. A copy of the press release is attached as Exhibit 99.1, which is incorporated into this item by reference.
Item 7(c). Exhibits.
| 99.1 | Press Release of ABM Industries Incorporated dated June 10, 2003, announcing the declaration of a dividend. |
Item 9. Regulation FD Disclosure.
The following information is furnished pursuant to Item 12, “Results of Operations and Financial Condition,” in accordance with the interim guidance provided by the Securities and Exchange Commission in Release No. 33-8216.
On June 10, 2003, ABM Industries Incorporated issued a press release announcing financial results related to the second quarter of fiscal year 2003. A copy of the press release is attached as Exhibit 99.2, which is incorporated into this item by reference.
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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 10, 2003 | By: | /s/ George B. Sundby | ||
| George B. Sundby | ||||
| Senior Vice
President and Chief Financial Officer |
||||
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Exhibit Index
99.1 Press Release of ABM Industries Incorporated dated June 10, 2003, announcing the declaration of a dividend.
99.2 Press Release of ABM Industries Incorporated dated June 10, 2003, announcing its earnings report for the second quarter of 2003.
EXHIBIT 99.1 For more information, please contact our Senior Vice President & Chief Financial Officer, George B. Sundby, at 415/733-4000 (or e-mail gsundby@abm.com). ABM INDUSTRIES CONTINUES BEST-EVER QUARTERLY DIVIDEND RATE SAN FRANCISCO, June 10, 2003 - The Board of Directors of ABM Industries Incorporated (NYSE: ABM) has declared an all-time-high third quarter cash dividend of $0.095 per common share for payment on August 4, 2003 to stockholders of record on July 14, 2003. This will be ABM's 149th consecutive quarterly cash dividend, and is $0.005 (5.5%) above the $0.09 per share quarterly dividend rate paid in 2002. ABM Industries Incorporated is one of the largest facility services contractor listed on the New York Stock Exchange. With fiscal 2002 revenues in excess of $2.1 billion and more than 62,000 employees, ABM provides janitorial, parking, engineering, security, lighting, elevator, mechanical and network services for thousands of commercial, industrial, institutional and retail facilities in hundreds of cities across North America. The ABM Family of Services includes ABM Janitorial, Ampco System Parking, ABM Engineering, American Commercial Security (ACSS), Amtech Lighting, Amtech Elevator, CommAir Mechanical and ABM Service Network. # # #
EXHIBIT 99.2 For further information, please contact ABM's Senior Vice President & Chief Financial Officer, George B. Sundby, at 415/733-4000 (or e-mail gsundby@abm.com). ABM INDUSTRIES ANNOUNCES SECOND QUARTER FINANCIAL RESULTS SAN FRANCISCO, June 10, 2003 -- ABM Industries Incorporated (NYSE:ABM) today reported net income for the quarter ended April 30, 2003 of $9.9 million ($0.20 per diluted share) compared to $14.0 million ($0.27 per diluted share) reported for the second quarter of fiscal 2002. Revenues for the second quarter of 2003 were $589.8 million, up 11% from $530.2 million in the second quarter of 2002. The quarter ended April 30, 2002 included a $4.3 million ($2.7 million after tax, $.05 per diluted share) gain from the receipt of an initial payment from the World Trade Center insurance claim. Included in the quarter ended April 30, 2003 were revenues and operating profits generated by ABM Lakeside Building Maintenance, which ABM acquired in July 2002, and the Company's acquisition of Horizon's self-performed janitorial operations in January 2003. Net income for the six months ended April 30, 2003 was $14.2 million ($0.29 per diluted share) compared to $22.0 million ($0.43 per diluted share) reported for the first half of fiscal 2002. Revenues for the first half of 2003 were $1,170.5 million, up 11% from $1,057.7 million in the first half of 2002. "Given the tough economic environment, our second quarter performance was solid," said Henrik C. Slipsager, ABM's President and Chief Executive Officer. "High vacancies in office buildings, the downturn in travel related to SARS and the Iraqi war, and customers' continued tightening of budgets that reduced higher margin capital project work and extra services, all made a difference in our results today," said Slipsager. "We are pleased that the changes we implemented to improve the performance of both our Lighting and Janitorial Northeast Region, which had disappointing first quarters, are showing positive returns. Furthermore, the integration of Horizon's self-performed janitorial acquisition is on schedule and we are very excited about the recently completed acquisition of the southern California operations of Valet Parking Service," said Slipsager. "Despite this progress, we anticipate that the difficult economic environment will continue for the remainder of 2003. We expect 2003 diluted earnings per share to be approximately $0.85 per share. We are fundamentally well-positioned for internal growth when the economy improves," he added. Wednesday morning, June 11, at 6:00 a.m. (Pacific Standard Time), ABM will host a live webcast of remarks by President & Chief Executive Officer Henrik C. Slipsager and Senior Vice President & Chief Financial Officer George B. Sundby, who will also answer questions from a panel of financial analysts who will join Slipsager and Sundby on the conference call. The webcast will be accessible at www.irconnect.com/primecast/03/q2/abm_2q2003.mhtml by clicking on ABM at that site. Listeners are requested 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. The webcast will be archived at this URL for the next year. In addition to the webcast, a limited number of toll-free telephone lines will 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 for 48 hours beginning two hours after the call ends by dialing 800/642-1687, and then entering ID #923689. ABM Industries Incorporated is one of the largest facility services contractor listed on the New York Stock Exchange. With fiscal 2002 revenues in excess of $2.1 billion and more than 62,000 employees, ABM provides janitorial, parking, engineering, security, lighting, elevator, mechanical and network services for thousands of commercial, industrial, institutional and retail facilities in hundreds of cities across North America. The ABM Family of Services includes ABM Janitorial, Ampco System Parking, ABM Engineering, American Commercial Security (ACSS), Amtech Lighting, Amtech Elevator, CommAir Mechanical and ABM Service Network. SAFE HARBOR STATEMENT Cautionary Safe Harbor Disclosure for Forward Looking Statements under the Private Securities Litigation Reform Act of 1995: Because of the factors set forth below, as well as other variables affecting the Company's operating results, past financial performance should not be considered a reliable indicator of future performance, and investors should not use historical trends to anticipate results or trends in future periods. The statements contained herein which are not historical facts are forward-looking statements that are subject to meaningful risks and uncertainties, including but not limited to: (1) significant decreases in commercial real estate occupancy, resulting in reduced demand and pricing pressures on building maintenance and other facility services in the Company's major markets, (2) inability to pass through cost increases in a timely manner, or at all, or to reduce expenses when sales decline, (3) loss or bankruptcy of one or more of the Company's major customers, which could adversely affect the Company's ability to collect its accounts receivable or recover its deferred costs as well as having an adverse impact on future revenue, (4) major collective bargaining issues that may cause loss of revenues or cost increases that non-union competitors can use to their advantage in gaining market share, (5) significant shortfalls in adding additional customers in existing and new territories and markets, (6) inability to successfully integrate acquisitions into the Company, (7) a protracted slowdown in the Company's acquisition activities, (8) legislation or other governmental action that severely impacts one or more of the Company's lines of business, such as price controls that could restrict price increases, or the unrecovered cost of any universal employer-paid health insurance, as well as government investigations that adversely affect the Company, (9) reduction or revocation of the Company's line of credit, which would increase interest expense or the cost of capital, (10) cancellation or nonrenewal of the Company's primary insurance policies, as many customers contract out services based on the contractor's ability to provide adequate insurance coverage and limits, (11) catastrophic uninsured or underinsured claims against the Company, the inability of the Company's insurance carriers to pay otherwise insured claims, or inadequacy in the Company's reserve for self-insured claims, (12) inability to employ entry level personnel at competitive wage rates due to labor shortages, (13) resignation, termination, death or disability of one or more of the Company's key executives, which could adversely affect customer retention and day-to-day management of the Company, and (14) other material factors that are disclosed from time to time in the Company's public filings with the United States Securities and Exchange Commission, such as reports on Forms 8-K, 10-Q and 10-K. BALANCE SHEET SUMMARY (UNAUDITED) SELECTED CASH FLOW INFORMATION (UNAUDITED)
APRIL 30, APRIL 30, INCREASE 2003 2002 (DECREASE) ---- ---- ---------- ASSETS Current assets $441,020,000 $444,112,000 -0.7% Goodwill 185,540,000 124,465,000 49.1% All other assets 103,330,000 99,529,000 3.8% Total assets $729,890,000 $668,106,000 9.2% LIABILITIES Current liabilities $246,796,000 $213,272,000 15.7% Other non-current liabilities 92,626,000 86,111,000 7.6% Total liabilities $339,422,000 $299,383,000 13.4% STOCKHOLDERS' EQUITY $390,468,000 $368,723,000 5.9% Total liabilities and stockholders' equity $729,890,000 $668,106,000 9.2%
THREE MONTHS ENDED APRIL 30, INCREASE 2003 2002 (DECREASE) ---- ---- ---------- NET CASH PROVIDED BY OPERATING ACTIVITIES $ 5,429,000 $ 27,850,000 -80.5% NET CASH USED IN INVESTING ACTIVITIES $ (4,511,000) $ (9,122,000) -50.5% Common stock issued $ 3,115,000 $ 5,753,000 -45.9% Stock buyback -- (16,670,000) -- Dividends paid (4,670,000) (4,463,000) 4.6% Net debt payments -- (942,000) -- Decrease in bank overdraft -- (7,299,000) -- NET CASH USED IN FINANCING ACTIVITIES $ (1,555,000) $(23,621,000) -93.4%
SIX MONTHS ENDED APRIL 30, INCREASE 2003 2002 (DECREASE) ---- ---- ---------- NET CASH PROVIDED BY OPERATING ACTIVITIES $ 23,243,000 $ 40,311,000 -42.3% NET CASH USED IN INVESTING ACTIVITIES $(21,222,000) $(14,698,000) 44.4% Common stock issued $ 7,674,000 $ 9,740,000 -21.2% Stock buyback (9,297,000) (16,670,000) -44.2% Dividends paid (9,310,000) (8,878,000) 4.9% Net debt payments -- (11,819,000) -- Increase in bank overdraft -- 1,687,000 -- NET CASH USED IN FINANCING ACTIVITIES $(10,933,000) $(25,940,000) -57.9% SUMMARY INCOME STATEMENT (UNAUDITED)
THREE MONTHS ENDED APRIL 30, INCREASE 2003 2002 (DECREASE) ---- ---- ---------- Sales and other income $589,829,000 $525,850,000 12.2% Gain on insurance claim -- 4,300,000 -- ------------ ------------ Total revenues 589,829,000 530,150,000 11.3% Operating expenses and cost of goods sold 526,613,000 468,563,000 12.4% Selling, general and administrative expenses 47,460,000 38,791,000 22.3% Interest expense 178,000 232,000 -23.3% Income before income taxes $ 15,578,000 $ 22,564,000 -31.0% Net income $ 9,892,000 $ 13,989,000 -29.3% Net income per common share: Basic $ 0.20 $ 0.28 28.6% Diluted $ 0.20 $ 0.27 25.9% Average common shares outstanding: Basic 48,994,000 49,256,000 -0.5% Diluted 49,877,000 51,494,000 -3.1%
SIX MONTHS ENDED APRIL 30, INCREASE 2003 2002 (DECREASE) ---- ---- ---------- Sales and other income $1,170,455,000 $1,053,402,000 11.1% Gain on insurance claim -- 4,300,000 -- -------------- -------------- Total revenues 1,170,455,000 1,057,702,000 10.7% Operating expenses and cost of goods sold 1,052,996,000 943,346,000 11.6% Selling, general and administrative expenses 95,066,000 78,407,000 21.2% Interest expense 303,000 497,000 -39.0% Income before income taxes $ 22,090,000 $ 35,452,000 -37.7% Net income $ 14,230,000 $ 21,980,000 -35.3% Net income per common share: Basic $ 0.29 $ 0.45 -35.6% Diluted $ 0.29 $ 0.43 -32.6% Average common shares outstanding: Basic 49,023,000 49,110,000 -0.2% Diluted 49,925,000 51,086,000 -2.3% SALES AND OPERATING PROFIT BY SEGMENT (UNAUDITED)
THREE MONTHS ENDED APRIL 30, INCREASE 2003 2002 (DECREASE) ---- ---- ---------- SALES AND OTHER INCOME Janitorial $ 343,505,000 $ 284,229,000 20.9% Parking 91,659,000 88,353,000 3.7% Engineering 43,945,000 42,667,000 3.0% Security 39,008,000 34,631,000 12.6% Lighting 33,577,000 32,071,000 4.7% Elevator 27,292,000 28,234,000 -3.3% Other 10,741,000 15,532,000 -30.8% Corporate 102,000 133,000 -23.3% ------------- ------------- $ 589,829,000 $ 525,850,000 12.2% OPERATING PROFIT Janitorial $ 15,570,000 $ 16,327,000 -4.6% Parking 1,022,000 1,783,000 -42.7% Engineering 2,586,000 2,339,000 10.6% Security 1,160,000 1,065,000 8.9% Lighting 1,813,000 2,095,000 -13.5% Elevator 1,043,000 608,000 71.5% Other 70,000 74,000 -5.4% Corporate expenses (7,508,000) (5,795,000) 29.6% ------------- ------------- OPERATING PROFIT 15,756,000 18,496,000 -14.8% Gain on insurance claim -- 4,300,000 -- Interest expense (178,000) (232,000) -23.3% ------------- ------------- Income before income taxes $ 15,578,000 $ 22,564,000 -31.0%
SIX MONTHS ENDED APRIL 30, INCREASE 2003 2002 (DECREASE) ---- ---- ---------- SALES AND OTHER INCOME Janitorial $ 674,357,000 $ 571,029,000 18.1% Parking 186,074,000 177,839,000 4.6% Engineering 89,572,000 86,337,000 3.7% Security 76,797,000 66,794,000 15.0% Lighting 66,723,000 64,638,000 3.2% Elevator 55,474,000 54,727,000 1.4% Other 21,225,000 31,688,000 -33.0% Corporate 233,000 350,000 -33.4% --------------- --------------- $ 1,170,455,000 $ 1,053,402,000 11.1% OPERATING PROFIT Janitorial $ 23,377,000 $ 27,170,000 -14.0% Parking 1,612,000 2,831,000 -43.1% Engineering 4,616,000 4,660,000 -0.9% Security 2,502,000 2,260,000 10.7% Lighting 2,493,000 4,004,000 -37.7% Elevator 1,994,000 1,524,000 30.8% Other (53,000) 772,000 -106.9% Corporate expenses (14,148,000) (11,572,000) 22.3% --------------- --------------- OPERATING PROFIT 22,393,000 31,649,000 -29.2% Gain on insurance claim -- 4,300,000 -- Interest expense (303,000) (497,000) -39.0% --------------- --------------- Income before income taxes $ 22,090,000 $ 35,452,000 -37.7%
Minimum 15 minutes delayed. Source: LSEG