UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Item 2.02. Results of Operations and Financial Condition.
On March 9, 2021, ABM Industries Incorporated (the “Company”) issued a press release announcing financial results related to the quarter ended January 31, 2021. A copy of the press release is being furnished as Exhibit 99.1 to this Form 8-K, which is incorporated into this item by reference.
Item 7.01. Regulation FD Disclosure.
As disclosed in the press release furnished as Exhibit 99.1, the Company will hold a live web cast on March 10, 2021, relating to the Company’s financial results for the quarter ended January 31, 2021. A copy of the slides to be presented during 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 8.01. Other Events.
On March 9, 2021, the Company announced that the Board of Directors of the Company declared a quarterly dividend of $0.190 per share, payable on May 3, 2021, to stockholders of record on April 1, 2021.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
| 99.1 | Press Release issued by ABM Industries Incorporated, dated March 9, 2021, announcing financial results related to the quarter ended January 31, 2021, and the declaration of a dividend payable May 3, 2021, to stockholders of record on April 1, 2021. |
| 99.2 | Slides of ABM Industries Incorporated, First Quarter 2021. |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
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 9, 2021 | By: | /s/ Andrea R. Newborn | |
| Andrea R. Newborn | ||||
| Executive Vice President, General Counsel and Secretary | ||||
Exhibit 99.1
ABM INDUSTRIES ANNOUNCES RESULTS FOR
FIRST QUARTER FISCAL 2021
GAAP Continuing EPS of $1.10; Adjusted Continuing EPS of $1.01
Cash Flow from Operations of More Than $45 Million
Fiscal 2021 Guidance Outlook Issued
Declaration of 220th Consecutive Quarterly Dividend
New York, NY - March 9, 2021 - ABM (NYSE: ABM), a leading provider of facility solutions, today announced financial results for the first quarter of fiscal 2021.
Scott Salmirs, President and Chief Executive Officer of ABM Industries commented, “Our strong performance for the first quarter underscores our clients’ focus on protecting their people and spaces. Revenue performance exceeded our expectations as we saw an acceleration of higher margin, Work Orders for virus protection and EnhancedClean™ services. Effective labor management also remained a critical component of our results as we navigated the hybrid occupancy environment across our Industry Groups. Our industry-leading execution during these challenging times led to record first quarter profit and earnings results.”
Mr. Salmirs continued, “In addition to our operational performance, we also built upon the disciplines we instituted last year in areas such as liquidity and working capital management. While the first quarter has historically been a period of cash flow usage, we have achieved more than $45 million in cash flow year-to-date. I am so proud of our entire organization for delivering an exceptional start to the new fiscal year.”
| Three Months Ended January 31, | ||||||||||
| (in millions, except per share amounts) (unaudited) | 2021 | 2020 | Increase/ (Decrease) | |||||||
| Revenues | $ | 1,492.4 | $ | 1,612.9 | (7.5)% | |||||
| Operating profit | $ | 109.7 | $ | 45.8 | 139.5% | |||||
| Income from continuing operations | $ | 74.6 | $ | 27.9 | 167.8% | |||||
| Income from continuing operations per diluted share | $ | 1.10 | $ | 0.41 | 168.3% | |||||
| Adjusted income from continuing operations | $ | 68.3 | $ | 26.2 | 160.7% | |||||
| Adjusted income from continuing operations per diluted share | $ | 1.01 | $ | 0.39 | 159.0% | |||||
| Net income | $ | 74.6 | $ | 28.0 | 166.6% | |||||
| Net income per diluted share | $ | 1.10 | $ | 0.42 | 161.9% | |||||
| Adjusted EBITDA | $ | 123.7 | $ | 68.8 | 79.9% | |||||
| Adjusted EBITDA margin | 8.3 | % | 4.3 | % | 403 bps | |||||
| Net cash provided by (used in) operating activities of continuing operations1 | $ | 45.3 | $ | (34.5 | ) | 231.7% | ||||
| Free cash flow1 | $ | 38.7 | $ | (45.8 | ) | 184.6% | ||||
1 The quarter ended January 31, 2021 includes the deferral of approximately $31 million of payroll taxes provided by the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act").
1
This release refers to certain non-GAAP financial measures described as “Adjusted EBITDA,” defined as earnings before income from discontinued operations, net of taxes, interest, taxes, depreciation and amortization and excluding items impacting comparability, "Adjusted EBITDA margin," defined as adjusted EBITDA divided by revenue, “Adjusted income from continuing operations,” "Adjusted income from continuing operations per diluted share,” and "free cash flow." Free cash flow is defined as net cash provided by (used in) operating activities less additions to property, plant and equipment. These adjustments have been made with the intent of providing financial measures that give management and investors a more representative understanding of underlying operational results and trends as well as the Company’s operational performance. Management also uses Adjusted EBITDA as a basis for planning and forecasting future periods. Please refer to the accompanying financial schedules for supplemental financial data and corresponding reconciliation of these non-GAAP financial measures to certain GAAP financial measures. We round amounts in these schedules to millions and calculate all percentages and per-share data from the underlying whole-dollar amounts. As a result, certain amounts may not foot, crossfoot, or recalculate based on reported numbers due to rounding. Unless otherwise noted, all references to years are to our fiscal year, which ends on October 31.
First Quarter Summary
| • | Revenue of $1,492.4 million, a decrease of 7.5% versus last year, reflecting full quarter impact of COVID-19 operating environment. |
| • | Increased demand for higher margin Work Orders and EnhancedClean™ services, as well as efficient labor management drove operating results for the quarter on both a GAAP and adjusted basis. |
| • | GAAP income from continuing operations increase of 167.8% to $74.6 million, or $1.10 per diluted share compared to $27.9 million, or $0.41 per diluted share last year. |
| • | Adjusted income from continuing operations increase of 160.7% to $68.3 million, or $1.01 per diluted share versus $26.2 million, or $0.39 per diluted share last year. |
| • | Net income of $74.6 million, or $1.10 per diluted share. |
| • | Adjusted EBITDA of $123.7 million compared to $68.8 million last year, resulting in an adjusted EBITDA margin of 8.3%. |
| • | Net cash provided by continuing operating activities of $45.3 million and free cash flow of $38.7 million despite working capital seasonality that typically occurs during the first quarter. |
| • | Fiscal 2021 outlook issued. |
First Quarter Results
For the first quarter of fiscal 2021, the Company reported revenues of approximately $1.5 billion, down 7.5% versus the first quarter of fiscal 2020. This revenue decline was driven primarily by COVID-19 related client disruptions, such as service scope changes and facility access limitations, primarily within the Company’s Aviation and Technical Solutions segments. Higher demand for disinfection-related work orders and EnhancedClean™ services, particularly in the Business & Industry and Technology & Manufacturing segments, partially offset these results.
On a GAAP basis, the Company reported income from continuing operations of $74.6 million, or $1.10 per diluted share, including an $11.4 million benefit from favorable prior year self-insurance adjustments compared to $6.6 million last year. These results compare to income from continuing operations of $27.9 million, or $0.41 per diluted share, last year.
Adjusted income from continuing operations for the first quarter of 2021 was $68.3 million, or $1.01 per diluted share, compared to $26.2 million, or $0.39 per diluted share for the first quarter of fiscal 2020. Adjusted results exclude items impacting comparability. A description of items impacting comparability can be found in the “Reconciliation of Non-GAAP Financial Measures” table.
Results from continuing operations for the quarter on both a GAAP and adjusted basis primarily reflect a significant increase in higher margin Work Orders and EnhancedCleanTM services as clients continue to incorporate disinfection into their operations. Management of direct labor also drove performance as the Company aligned operationally with the COVID-19 demand environment for certain services. Additionally, results also reflect one less working day, as well as a decrease in other items such as corporate discretionary expense, amortization and interest compared to last year. Partially offsetting these results were certain pre-planned corporate investments within areas such as information technology.
2
Net income for the first quarter of 2021 was $74.6 million, or $1.10 per diluted share, compared to net income of $28.0 million, or $0.42 per diluted share last year.
Adjusted EBITDA for the quarter was $123.7 million compared to $68.8 million in the first quarter of fiscal 2020. Adjusted EBITDA margin for the quarter was 8.3% versus 4.3% last year. Adjusted results exclude items impacting comparability. A description of items impacting comparability can be found in the “Reconciliation of Non-GAAP Financial Measures” table.
Liquidity & Capital Structure
Cash and cash equivalents totaled $378.3 million as of January 31, 2021.
The Company ended the quarter with total debt of $850.6 million, including $151.0 million in standby letters of credit. The Company's revolving line of credit remains predominantly undrawn.
Total debt to pro forma adjusted EBITDA (including standby letters of credit) was 1.8x for the first quarter of fiscal 2021.
These results led to total liquidity of more than $977 million, inclusive of cash and cash equivalents.
In addition, the Company paid its 219th quarterly cash dividend of $0.190 per common share for a total distribution of $12.7 million.
Declaration of Quarterly Cash Dividend
The Company also announced that the Board of Directors has declared a cash dividend of $0.190 per common share payable on May 3, 2021 to shareholders of record on April 1, 2021. This will be the Company’s 220th consecutive quarterly cash dividend.
Guidance
For fiscal 2021, the Company expects GAAP income from continuing operations of $2.85 to $3.10 per diluted share, and adjusted income from continuing operations of $3.00 to $3.25 per diluted share. With the exception of the 2021 Work Opportunity Tax Credit and anticipated excess tax benefits on stock-based awards, this guidance does not include any potential effects associated with certain other discrete tax items and other unrecognized tax benefits.
Mr. Salmirs concluded, “The impact of COVID-19 on our clients and communities continues to evolve and based on our current visibility, we believe the implications to our clients and end-markets will remain throughout fiscal 2021. We are encouraged by the development and rollout of the multiple vaccines and look forward to continuing to work with our clients as they develop re-entry plans and cultivate robust facility protections. When COVID-19 becomes more manageable, we believe post-pandemic normalcy will reflect a heightened sensitivity to health and hygiene. As such, we are making investments in our business that will allow us to continue to protect the safety of our employees and clients and maximize our strengths and market position.”
Conference Call Information
ABM will host its quarterly conference call for all interested parties on Wednesday, March 10, 2021, at 8:30 AM (ET). The live conference call can be accessed via audio webcast at the “Investors” section of the Company's website, located at www.abm.com, or by dialing (877) 451-6152 approximately 15 minutes prior to the scheduled time.
A supplemental presentation will accompany the webcast on the Company's website.
A replay will be available approximately two hours after the recording through March 24, 2021, and can be accessed by dialing (844) 512-2921 and then entering ID #13716798. An archive will also be available on the ABM website for 90 days.
3
ABOUT ABM
ABM (NYSE: ABM) is a leading provider of facility solutions with revenues of approximately $6.0 billion and more than 100,000 employees in 350+ offices throughout the United States and various international locations. ABM's comprehensive capabilities include janitorial, electrical & lighting, energy solutions, facilities engineering, HVAC & mechanical, landscape & turf, mission critical solutions and parking, provided through stand-alone or integrated solutions. ABM provides custom facility solutions in urban, suburban and rural areas to properties of all sizes - from schools and commercial buildings to hospitals, data centers, manufacturing plants and airports. ABM Industries Incorporated, which operates through its subsidiaries, was founded in 1909. For more information, visit www.abm.com.
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Cautionary Statement under the Private Securities Litigation Reform Act of 1995
This press release contains both historical and forward-looking statements about ABM Industries Incorporated (“ABM”) and its subsidiaries (collectively referred to as “ABM,” “we,” “us,” “our,” or the “Company”). We make forward-looking statements related to future expectations, estimates and projections that are uncertain, and often contain words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “intend,” “likely,” “may,” “outlook,” “plan,” “predict,” “should,” “target,” or other similar words or phrases. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties, and assumptions that are difficult to predict. For us, particular uncertainties that could cause our actual results to be materially different from those expressed in our forward-looking statements include: The COVID-19 pandemic has had and is expected to continue having a negative effect on the global economy, and the United States economy, and it has disrupted and is expected to continue disrupting our operations and our clients’ operations, which has adversely affected and may continue to adversely affect our business, results of operations, cash flows, and financial condition; our success depends on our ability to gain profitable business despite competitive market pressures; our business success depends on our ability to attract and retain qualified personnel and senior management and to manage labor costs; our ability to preserve long-term client relationships is essential to our continued success; changes to our businesses, operating structure, financial reporting structure, or personnel relating to the implementation of strategic transformations, enhanced business processes, and technology initiatives may not have the desired effects on our financial condition and results of operations; acquisitions, divestitures, and other strategic transactions could fail to achieve financial or strategic objectives, disrupt our ongoing business, and adversely impact our results of operations; our international business involves risks different from those we face in the United States that could have an effect on our results of operations and financial condition; our use of subcontractors or joint venture partners to perform work under customer contracts exposes us to liability and financial risk; we manage our insurable risks through a combination of third-party purchased policies and self-insurance, and we retain a substantial portion of the risk associated with expected losses under these programs, which exposes us to volatility associated with those risks, including the possibility that changes in estimates to our ultimate insurance loss reserves could result in material charges against our earnings; our risk management and safety programs may not have the intended effect of reducing our liability for personal injury or property loss; we may experience breaches of, or disruptions to, our information technology systems or those of our third-party providers or clients, or other compromises of our data that could adversely affect our business; unfavorable developments in our class and representative actions and other lawsuits alleging various claims could cause us to incur substantial liabilities; a significant number of our employees are covered by collective bargaining agreements that could expose us to potential liabilities in relation to our participation in multiemployer pension plans, requirements to make contributions to other benefit plans, and the potential for strikes, work slowdowns or similar activities, and union organizing drives; our business may be materially affected by changes to fiscal and tax policies; negative or unexpected tax consequences could adversely affect our results of operations; changes in general economic conditions, such as changes in energy prices, government regulations, or consumer preferences, could reduce the demand for facility services and, as a result, reduce our earnings and adversely affect our financial condition; future increases in the level of our borrowings or in interest rates could affect our results of operations; impairment of goodwill and long-lived assets could have a material adverse effect on our financial condition and results of operations; if we fail to maintain proper and effective internal control over financial reporting in the future, our ability to produce accurate and timely financial statements could be negatively impacted, which could harm our operating results and investor perceptions of our Company and as a result may have a material adverse effect on the value of our common stock; our business may be negatively impacted by adverse weather conditions; catastrophic events, disasters, and terrorist attacks could disrupt our services; actions of activist investors could disrupt our business. For additional information on these and other risks and uncertainties we face, see ABM’s risk factors, as they may be amended from time to time, set forth in our filings with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K and subsequent filings. We urge readers to consider these risks and uncertainties in evaluating our forward-looking statements. We caution readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.
5
Use of Non-GAAP Financial Information
To supplement ABM’s consolidated financial information, the Company has presented income from continuing operations and income from continuing operations per diluted share as adjusted for items impacting comparability, for the first quarter of fiscal years 2021 and 2020. 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 as well as ABM’s operational performance. In addition, the Company has presented earnings before income from discontinued operations, net of taxes, interest, taxes, depreciation and amortization and excluding items impacting comparability (adjusted EBITDA) for the first quarter of fiscal years 2021 and 2020. Adjusted EBITDA is among the indicators management uses as a basis for planning and forecasting future periods. The Company has also presented Free Cash Flow which is defined as net cash provided by (used in) operating activities less additions to property, plant and equipment. 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 accounting principles generally accepted in the United States of America. (See accompanying financial tables for supplemental financial data and corresponding reconciliations to certain GAAP financial measures.)
| Contact: | |
| Investor Relations & Treasury: | Susie A. Kim |
| (212) 297-9721 | |
| susie.kim@abm.com |
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ABM INDUSTRIES INCORPORATED AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENT INFORMATION (UNAUDITED)
| Three Months Ended January 31, | ||||||||||||
| (in millions, except per share amounts) | 2021 | 2020 | Increase / (Decrease) | |||||||||
| Revenues | $ | 1,492.4 | $ | 1,612.9 | (7.5 | )% | ||||||
| Operating expenses | 1,249.4 | 1,433.7 | (12.9 | )% | ||||||||
| Selling, general and administrative expenses | 122.6 | 117.6 | 4.2 | % | ||||||||
| Restructuring and related expenses | — | 3.1 | (100.0 | )% | ||||||||
| Amortization of intangible assets | 10.8 | 12.6 | (14.7 | )% | ||||||||
| Operating profit | 109.7 | 45.8 | 139.5 | % | ||||||||
| Income from unconsolidated affiliates | 0.6 | 0.9 | (32.1 | )% | ||||||||
| Interest expense | (8.5 | ) | (10.2 | ) | 16.9 | % | ||||||
| Income from continuing operations before income taxes | 101.9 | 36.5 | 178.9 | % | ||||||||
| Income tax provision | (27.2 | ) | (8.6 | ) | (215.0 | )% | ||||||
| Income from continuing operations | 74.6 | 27.9 | 167.8 | % | ||||||||
| Income from discontinued operations, net of taxes | — | 0.1 | (100.0 | )% | ||||||||
| Net income | $ | 74.6 | $ | 28.0 | 166.6 | % | ||||||
| Net income per common share — Basic | ||||||||||||
| Income from continuing operations | $ | 1.11 | $ | 0.42 | 164.3 | % | ||||||
| Income from discontinued operations | — | — | — | % | ||||||||
| Net income | $ | 1.11 | $ | 0.42 | 164.3 | % | ||||||
| Net income per common share — Diluted | ||||||||||||
| Income from continuing operations | $ | 1.10 | $ | 0.41 | 168.3 | % | ||||||
| Income from discontinued operations | — | — | — | % | ||||||||
| Net income | $ | 1.10 | $ | 0.42 | 161.9 | % | ||||||
| Weighted-average common and common equivalent shares outstanding | ||||||||||||
| Basic | 67.2 | 66.9 | ||||||||||
| Diluted | 67.6 | 67.2 | ||||||||||
| Dividends declared per common share | $ | 0.190 | $ | 0.185 | ||||||||
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ABM INDUSTRIES INCORPORATED AND SUBSIDIARIES
SELECTED CONSOLIDATED CASH FLOW INFORMATION (UNAUDITED)
| Three Months Ended January 31, | ||||||||
| (in millions) | 2021 | 2020 | ||||||
| Net cash provided by (used in) operating activities of continuing operations | 45.3 | $ | (34.5 | ) | ||||
| Net cash provided by operating activities of discontinued operations | — | 0.2 | ||||||
| Net cash provided by (used in) operating activities | $ | 45.3 | $ | (34.3 | ) | |||
| Additions to property, plant and equipment | (6.6 | ) | (11.5 | ) | ||||
| Other | 1.4 | 9.2 | ||||||
| Net cash used in investing activities | $ | (5.2 | ) | $ | (2.3 | ) | ||
| Taxes withheld from issuance of share-based compensation awards, net | (6.5 | ) | (2.4 | ) | ||||
| Dividends paid | (12.7 | ) | (12.3 | ) | ||||
| Borrowings from credit facility | 2.6 | 425.0 | ||||||
| Repayment of borrowings from credit facility | (32.6 | ) | (368.6 | ) | ||||
| Changes in book cash overdrafts | (12.0 | ) | 6.4 | |||||
| Financing of energy savings performance contracts | 4.0 | 1.1 | ||||||
| Repayment of finance lease obligations | (0.7 | ) | (0.8 | ) | ||||
| Net cash (used in) provided by financing activities | $ | (57.8 | ) | $ | 48.4 | |||
| Effect of exchange rate changes on cash and cash equivalents | 1.9 | (0.4 | ) | |||||
8
ABM INDUSTRIES INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET INFORMATION (UNAUDITED)
| (in millions) | January 31, 2021 | October 31, 2020 | ||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 378.3 | $ | 394.2 | ||||
| Trade accounts receivable, net of allowances | 917.2 | 854.2 | ||||||
| Costs incurred in excess of amounts billed | 38.6 | 52.2 | ||||||
| Prepaid expenses | 85.1 | 85.4 | ||||||
| Other current assets | 55.5 | 55.9 | ||||||
| Total current assets | 1,474.6 | 1,441.9 | ||||||
| Other investments | 11.8 | 11.1 | ||||||
| Property, plant and equipment, net of accumulated depreciation | 127.3 | 133.7 | ||||||
| Right-of-use assets | 136.2 | 143.1 | ||||||
| Other intangible assets, net of accumulated amortization | 229.0 | 239.7 | ||||||
| Goodwill | 1,674.6 | 1,671.4 | ||||||
| Other noncurrent assets | 128.7 | 136.1 | ||||||
| Total assets | $ | 3,782.2 | $ | 3,776.9 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities | ||||||||
| Current portion of long-term debt, net | $ | 116.9 | $ | 116.7 | ||||
| Trade accounts payable | 217.5 | 273.3 | ||||||
| Accrued compensation | 145.9 | 187.6 | ||||||
| Accrued taxes—other than income | 107.4 | 45.5 | ||||||
| Insurance claims | 156.7 | 155.2 | ||||||
| Income taxes payable | 38.6 | 6.2 | ||||||
| Current portion of lease liabilities | 33.9 | 35.0 | ||||||
| Other accrued liabilities | 200.8 | 167.3 | ||||||
| Total current liabilities | 1,017.8 | 986.9 | ||||||
| Long-term debt, net | 573.8 | 603.0 | ||||||
| Long-term lease liabilities | 125.3 | 131.4 | ||||||
| Deferred income tax liability, net | 3.7 | 10.8 | ||||||
| Noncurrent insurance claims | 360.2 | 366.3 | ||||||
| Other noncurrent liabilities | 122.2 | 168.1 | ||||||
| Noncurrent income taxes payable | 10.2 | 10.1 | ||||||
| Total liabilities | 2,213.1 | 2,276.6 | ||||||
| Total stockholders' equity | 1,569.1 | 1,500.3 | ||||||
| Total liabilities and stockholders’ equity | $ | 3,782.2 | $ | 3,776.9 | ||||
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ABM INDUSTRIES INCORPORATED AND SUBSIDIARIES
REVENUES AND OPERATING PROFIT BY SEGMENT (UNAUDITED)
| Three Months Ended January 31, | ||||||||||||
| (in millions) | 2021 | 2020 | Increase/ (Decrease) | |||||||||
| Revenues | ||||||||||||
| Business & Industry | $ | 809.4 | $ | 820.9 | (1.4 | )% | ||||||
| Technology & Manufacturing | 249.2 | 233.9 | 6.5 | % | ||||||||
| Education | 209.4 | 208.0 | 0.7 | % | ||||||||
| Aviation | 143.1 | 238.7 | (40.0 | )% | ||||||||
| Technical Solutions | 113.4 | 142.0 | (20.2 | )% | ||||||||
| Elimination of inter-segment revenues | (32.1 | ) | (30.6 | ) | (4.8 | )% | ||||||
| Total revenues | $ | 1,492.4 | $ | 1,612.9 | (7.5 | )% | ||||||
| Operating profit (loss) | ||||||||||||
| Business & Industry | $ | 85.7 | $ | 38.2 | 124.1 | % | ||||||
| Technology & Manufacturing | 26.9 | 16.7 | 61.3 | % | ||||||||
| Education | 21.5 | 11.2 | 91.3 | % | ||||||||
| Aviation | 3.2 | 5.6 | (42.9 | )% | ||||||||
| Technical Solutions | 6.0 | 8.3 | (27.7 | )% | ||||||||
| Government Services | (0.1 | ) | — | (100.0 | )% | |||||||
| Corporate | (32.6 | ) | (33.3 | ) | 2.1 | % | ||||||
| Adjustment for income from unconsolidated affiliates, included in Aviation and Technical Solutions | (0.6 | ) | (0.9 | ) | 32.1 | % | ||||||
| Adjustment for tax deductions for energy efficient government buildings, included in Technical Solutions | (0.2 | ) | — | (100.0 | )% | |||||||
| Total operating profit | 109.7 | 45.8 | 139.5 | % | ||||||||
| Income from unconsolidated affiliates | 0.6 | 0.9 | (32.1 | )% | ||||||||
| Interest expense | (8.5 | ) | (10.2 | ) | 16.9 | % | ||||||
| Income from continuing operations before income taxes | 101.9 | 36.5 | 178.9 | % | ||||||||
| Income tax provision | (27.2 | ) | (8.6 | ) | (215.0 | )% | ||||||
| Income from continuing operations | 74.6 | 27.9 | 167.8 | % | ||||||||
| Income from discontinued operations, net of taxes | — | 0.1 | (100.0 | )% | ||||||||
| Net income | $ | 74.6 | $ | 28.0 | 166.6 | % | ||||||
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ABM INDUSTRIES INCORPORATED AND SUBSIDIARIES
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (UNAUDITED)
| Three Months Ended January 31, | ||||||||
| (in millions, except per share amounts) | 2021 | 2020 | ||||||
| Reconciliation of Income from Continuing Operations to Adjusted Income from Continuing Operations | ||||||||
| Income from continuing operations | $ | 74.6 | $ | 27.9 | ||||
| Items impacting comparability(a) | ||||||||
| Prior year self-insurance adjustment(b) | (11.4 | ) | (6.6 | ) | ||||
| Other | 0.1 | (0.6 | ) | |||||
| Restructuring and related(c) | — | 3.1 | ||||||
| Legal costs and other settlements | 2.5 | 1.7 | ||||||
| Total items impacting comparability | (8.9 | ) | (2.3 | ) | ||||
| Income tax provision(d) | 2.5 | 0.7 | ||||||
| Items impacting comparability, net of taxes | (6.4 | ) | (1.7 | ) | ||||
| Adjusted income from continuing operations | $ | 68.3 | $ | 26.2 | ||||
| Three Months Ended January 31, | ||||||||
| 2021 | 2020 | |||||||
| Reconciliation of Net Income to Adjusted EBITDA | ||||||||
| Net income | $ | 74.6 | $ | 28.0 | ||||
| Items impacting comparability | (8.9 | ) | (2.3 | ) | ||||
| Income from discontinued operations | — | (0.1 | ) | |||||
| Income tax provision | 27.2 | 8.6 | ||||||
| Interest expense | 8.5 | 10.2 | ||||||
| Depreciation and amortization | 22.3 | 24.4 | ||||||
| Adjusted EBITDA | $ | 123.7 | $ | 68.8 | ||||
| Three Months Ended January 31, | ||||||||
| 2021 | 2020 | |||||||
| Reconciliation of Income from Continuing Operations per Diluted Share to Adjusted Income from Continuing Operations per Diluted Share | ||||||||
| Income from continuing operations per diluted share | $ | 1.10 | $ | 0.41 | ||||
| Items impacting comparability, net of taxes | (0.09 | ) | (0.03 | ) | ||||
| Adjusted income from continuing operations per diluted share | $ | 1.01 | $ | 0.39 | ||||
| Diluted shares | 67.6 | 67.2 | ||||||
11
| Three Months Ended January 31, | ||||||||
| 2021 | 2020 | |||||||
| Reconciliation of Net Cash Provided by (Used in) Operating Activities to Free Cash Flow | ||||||||
| Net cash provided by (used in) operating activities | $ | 45.3 | $ | (34.3 | ) | |||
| Additions to property, plant and equipment | (6.6 | ) | (11.5 | ) | ||||
| Free Cash Flow | $ | 38.7 | $ | (45.8 | ) | |||
(a) The Company adjusts income from continuing operations to exclude the impact of certain items that are unusual, non-recurring, or otherwise do not reflect management's views of the underlying operational results and trends of the Company.
(b) Represents the net adjustments to our self-insurance reserve for general liability, workers’ compensation, automobile and medical and dental insurance claims related to prior period accident years. Management believes these prior period reserve changes do not illustrate the performance of the Company’s normal ongoing operations given the current year's insurance expense is estimated by management in conjunction with the Company's outside actuary to take into consideration past history and current costs and regulatory trends. Once the Company develops its best estimate of insurance expense premiums for the year, the Company fully allocates such costs out to the business leaders to hold them accountable for the current year costs within operations. However, since these prior period reserve changes relate to claims that could date back many years, current management has limited ability to influence the ultimate development of the prior year changes. Accordingly, including the prior period reserve changes in the Company's current operational results would not depict how the business is run as the Company holds its management accountable for the current year’s operational performance. The Company believes the exclusion of the self-insurance adjustment from income from continuing operations is useful to investors by enabling them to better assess our operating performance in the context of current year profitability. For the three months ended January 31, 2021 and 2020, our self-insurance general liability, workers’ compensation, and automobile and medical and dental insurance claims related to prior period accident years decreased by $11.4 million and by $6.6 million, respectively.
(c) Represents restructuring costs related to the continued integration of GCA acquisition in September 2017.
(d) The Company's tax impact is calculated using the federal and state statutory rate of 28.11% for US and 19% for UK for FY 2021 and FY 2020. We calculate tax from the underlying whole-dollar amounts, as a result, certain amounts may not recalculate based on reported numbers due to rounding.
12
ABM INDUSTRIES INCORPORATED AND SUBSIDIARIES
2021 GUIDANCE
| Year Ending October 31, 2021 | ||||||||
| Reconciliation of Estimated Income from Continuing Operations per Diluted Share to Estimated Adjusted Income from Continuing Operations per Diluted Share | Low Estimate | High Estimate | ||||||
| Income from continuing operations per diluted share (a) | $ | 2.85 | $ | 3.10 | ||||
| Adjustments (b) | 0.15 | 0.15 | ||||||
| Adjusted Income from continuing operations per diluted share (a) | $ | 3.00 | $ | 3.25 | ||||
(a) With the exception of the 2021 Work Opportunity Tax Credits and anticipated excess tax benefits on stock-based awards, this guidance does not include any potential effects associated with certain other discrete tax items and other unrecognized tax benefits.
(b) Adjustments include costs associated with the strategic review, legal settlements, adjustments to self-insurance reserves pertaining to prior year's claims and other unique items impacting comparability.
13
Exhibit 99.2
1 Investor Presentation FIRST QUARTER 2021
2 Agenda Business Overview Forward - Looking Statements and Non - GAAP Financial Information : Our discussions during this conference call and in this presentation will include forward - looking statements . Actual results could differ materially from those projected in the forward - looking statements . Some of the factors that could cause actual results to differ are discussed in the Company’s SEC filings . Our filings are available on our website at http : //investor . abm . com under “Company Information” . A description of other factors that could cause actual results to differ is also set forth at the end of this presentation . Also, the discussion during this conference call and in this presentation will include certain financial measures that were not prepared in accordance with U . S . generally accepted accounting principles (“U . S . GAAP”) . Please see the Appendix for reconciliations of those historical non - GAAP financial measures and for information relating to the use of certain other non - GAAP financial measures . Reconciliations of certain non - GAAP financial measures can also be found on the Investor Relations portion of our website at http : //investor . abm . com . 1 2 Responding to COVID - 19 4 5 Capital Structure 6 Fiscal 2021 Outlook First Quarter 2021 Review 7 Appendix 3 Making a Difference
3 Business Overview
4
5 Founded in 1909 | $6.0 Billion in Revenue +100,00 Employees .
6 Aviation Business & Industry Education Technology & Manufacturing Building Value Through Industry Expertise Keeping your environment safe, clean, comfortable and energy efficient through individual or integrated solutions
7 Business & Industry (52%) Aviation ( 11% ) Technology & Manufacturing ( 16% ) Education ( 13% ) Technical Solutions (8%) Industries We Serve Results as of fiscal 2020. Technology & Manufacturing Technical Solutions Education Business & Industry Aviation
8 Services We Perform Technology & Manufacturing Technical Solutions Education Business & Industry Aviation
9 Impact to operating costs through SOPs , labor management , technology and purchasing energy and asset lifecycle management Majority self - performed services maximizes alignment with client workplace strategy, increases quality, efficiency and control, and reduces management costs + + $ Value = direct operational cost savings + increased client portfolio asset value + enhanced client workforce productivity Aligning workplace strategy with operational best practices for improved cost efficiencies, productivity, communication and s cal ability Targeting the Outsourcing Continuum SAVINGS SERVICES
10
11 Responding to COVID - 19
12 As with most companies, COVID - 19 has impacted our business This is a dynamic, rapidly shifting environment – with significant externalities Varying safety mandates managed by city/state A “new normal” for office occupancy and trends Most sensitive business segments include Aviation and Education Technical Solutions project related work experienced select site access impediments …and among our various end markets Impact felt across our national footprint…
13 We took rapid action | Our agile, action - oriented teams… Operational Response Team Capture cross - functional input on latest COVID developments Field Execution Team Cascade, execute, and track actions across IGs and the organization …working in lockstep to take coordinated actions across Activity Tracking Pods Provide real - time updates of contract activity in the field Actively managing our people, working capital, day - to - day operational risk & business continuity Our people Our clients / operations Financial resilience & risk mitigation
14 Potential opportunities in a post pandemic world New and increased expectations for workspace and building cleanliness and disinfection as well as air quality Rising demand for service volume and frequency Focus on higher value - added services, such as EnhancedClean Πand EnhancedFacility Π, to meet new "hyper - vigilant" cleaning environment and optimize facilities for improved air filtration and ventilation Higher importance on scale, reach, and reliability where competitors are disrupted and not dependable
15 C lients are expecting to re - open by September 2021 , with reduced capacity Pulse survey of ~200 clients conducted in February 2021 across all industry groups Despite increased usage of flexible work schedules and work from home, clients expect the total amount of space used to remain roughly the same C lients are interested in long - term measures to protect against viruses and are increasingly working with large facilities service providers . . .Validated by Our Clients Source: ABM Client Pulse, Survey 2021, approx. 200 respondents.
16 Client reentry plans & long - term outlook on space utilization remain focused on instilling occupant confidence Source: ABM Client Pulse, Survey 2021, approx. 200 respondents. 89% ABM clients expect to use the same or more space after reopening ABM clients expect to maintain or increase frequency of cleaning and disinfection and visual signage 87% Demand for space continues to be strong Our clients want a frequent and visible presence of cleanliness… Clients expressed interested in long - term surface and air disinfection measures 84% ...and expect to continue heightened precautions into the future
17 Clients have put measures in place focused on surfaces and facilities, and are more reliant on large partners 16% 84% % of Respondents that anticipate continuing cleaning and disinfection for virus protection for 2+ years Yes No 60% 9% 27% 11% 25% 21% 50% 40% 91% 73% 96% 89% 75% 79% 50% Medical office* K - 12 Leased office Pharma R&D* Hospi - tality* Airports/ Airlines* Data Center Govt facility Higher Ed Owner occupied office 100% Port. of office buildings Sports & ent.* Tech mfg* Ware - housing, and DCs* 100% 100% 100% 100% 100% 4% Yes No Source; ABM Client Pulse, Survey 2021, approx. 200 respondents . 8 out of 10 clients expect to continue cleaning and disinfection for years… … and this is consistent across nearly all industries and types of facilities
18 ABM’s EnhancedClean Œ program is a three - step approach that delivers healthy spaces under the guidance of experts 3 Key Differentiators Processes Backed by Experts Hospital Grade Disinfectants & Specialized Equipment Innovative Solutions and Technology
19 Safety You Can See Building brand trust through visual assurance throughout the day
20 ABM EnhancedFacility Œ ABM’s EnhancedFacility program delivers healthier indoor air and more efficient operations to take care of what’s most important – the health and safety of the people in your spaces. KEY DIFFERENTIATORS: • Fact - based approach based on expert - backed Healthy Building Risk Assessment • Turnkey financial solutions • Innovative solutions enabling continuous disinfection of air contaminants • Expert Advisory Council vetting the latest technologies to sort evidence - based solutions from market noise
21 TESTING AND VALIDATION HVAC SYSTEM OPTIMIZATION & PREVENTATIVE MAINTENANCE A BUILDING HEALTH RISK ASSESSMENT ENERGY EFFICIENCY UPGRADES TOUCHLESS FIXTURES AND DOORS ABM’S PASSION TO MAKE A DIFFERENCE A NEW NORMAL Getting back to moments like this requires. . . DISINFECTING LIGHTING SOLUTIONS BACK - UP POWER
22 Our Post - COVID Future | ABM strengths will drive advantage across markets Comprehensive service lines + EnhancedClean ΠDeep client relationships Engaged people These advantages are core components of our market strength today and will continue to propel us into the future Scale advantage Results oriented operating culture Dislocated competition
23 Making a Difference
24 Our Culture, Our Values and What We Believe We believe making a difference begins with our team — creating an environment that enables every person to feel connected, valued and inspired. Together, we bring this mission to life with all those we serve. It starts with us We are one team We promote open communication, positive environments and caring communities of engaged team members Our core values guide us We value respect, integrity, collaboration, innovation, excellence and trust We strive for continual growth We challenge ourselves to do better and be better
25 Turning Action into Impact Creating an inclusive culture where we all belong We’re committed to ensuring that everyone, from every background, can be seen, can be heard and can feel like they belong at ABM. Our first step was establishing a team member - led, executive leader sponsored Culture & Inclusion Council to turn our ideas into action and make a meaningful impact . The Council is focused on: Developing inspirational leaders Working as a team, we’ll create programs, tools and training to foster a supportive, dynamic and inclusive culture, including leadership development programs, mentorship opportunities and affinity groups Empowering team members We’ll enable every team member to be their best by reimagining how we support and develop talent at every level, approach succession planning, and develop diverse talent Showing up for our team Valuing our team members requires us to recognize and reward success, in ways that are that are meaningful to our team members Creating a culture of belonging Every team member has a story, and we will elevate every voice through new platforms, programs, networks and partnerships that foster a culture of connection and belonging to drive lasting change
26 The power of partnership ABM philanthropic partnership opportunity – Culture & Inclusion Council Equality as an Area of Focus Equality in the workplace means all team members receive fair treatment. There is transparency and everyone knows what to expect in terms of rewards and consequences. Equity ensures equal opportunity and advancement for all. Supported internship program and work experience for young persons with disabilities Empower Latino families to successfully complete higher education Structural changes to expand democracy, eliminate disparities and achieve racial justice Investment in quality afterschool program initiatives Ensure Black College Community success by promoting educational excellence
27
28 GreenCare Program Strategic partners on fighting climate change ABM is strongly committed to adding value to clients through our sustainable solutions portfolio We have designed solutions to increase waste diversion rates from landfills, conduct energy efficiency retrofits, install on - site generation of renewable electricity and improve the indoor environmental quality with our green cleaning program. - Our clients have saved more than 90 tons of CO 2 emissions through our Energy Performance Contracting services - We are one of the largest installers of electrical vehicle charging stations in the U.S. So far we have installed more than 16,500 EV charging stations - Our green cleaning program has been implemented in more than 361 million square feet across our client’s offices
29 First Quarter 2021 Review
30 First Quarter 2021 Review $1,612.9 $1,492.4 2020 2021 Q1 FY21 Revenue
31 Q1 FY21 Income from Continuing Operations $26.2 $68.3 2020 2021 Q1 FY21 Adj. Income from Continuing Operations $27.9 $74.6 2020 2021 1 Please refer to the appendix for a reconciliation of GAAP to non - GAAP measures. First Quarter 2021 Review $0.41 per share $0.39 per share $1.01 per share $1.10 per share 1 1
32 Q1 FY21 Net Income $68.8 $123.7 2020 2021 Q1 FY21 Adj. EBITDA $28.0 $74.6 2020 2021 First Quarter 2021 Review $0.42 per share $1.10 per share 8.3% margin 4.3% margin 1 Please refer to the appendix for a reconciliation of GAAP to non - GAAP measures. 1
33 First Quarter 2021 Segment Results Business & Industry • Revenues of $809.4m vs. $820.9m last year • Operating profit of $85.7m, operating margin of 10.6% Technology & Manufacturing • Revenues of $249.2m vs. $233.9m last year • Operating profit of $26.9m, operating margin of 10.8% Aviation • Revenues of $143.1m vs. $238.7m last year • Operating profit of $3.2m, operating margin of 2.2% Education • Revenues of $209.4m vs. $208.0m last year • Operating profit of $21.5m, operating margin of 10.2% Technical Solutions • Revenues of $113.4m vs. $142.0m last year • Operating profit of $6.0m, operating margin of 5.3%
34 Capital Structure
35 Select Cash Flow and Balance Sheet Items Leverage *Acquired GCA Services Group for approximately $1.3b, largest acquisition in Company’s history Other acquisitions shown represent purchase price above $15m Beginning in Q2 FY20, leverage calculated as total indebtedness net of $100m/bank - defined pro - forma adjusted EBITDA (in millions) Westway 8 Solutions GCA* Revolver Drawdown Revolver Paydown
36 Select Cash Flow and Balance Sheet Items Shareholder Return I N M ARCH 2020 , THE C OMPANY SUSPENDED ALL FURTHER SHARE REPURCHASES A S THE COVID - 19 P ANDEMIC DEVELOPED (in millions)
37 Select Cash Flow and Balance Sheet Items Annual Dividend HISTORY OF CONSECUTIVE DIVIDEND SINCE 1965 1Q21 MARKS THE 219 TH CONSECUTIVE QUARTERLY CASH DIVIDEND (in millions)
38 Fiscal 2021 Outlook
39 Fiscal 2021 Outlook Metric Amount Income from continuing operations per diluted share $2.85 - $3.10 Adjusted Income from continuing operations per diluted share $3.00 - $3.25 Adjusted EBITDA Margin 6.6% to 7.0% Tax Rate (excluding WOTC & other discrete tax items) ~30% 2021 Working Days Quarter Q1 Q2 Q3 Q4 Days 65 65 65 65 Δ y - o - y - 1 +1 - 1 0 1 With the exception of the 2021 Work Opportunity Tax Credits and anticipated excess tax benefits on stock - based awards, this guid ance does not include any potential effects associated with certain other discrete tax items and other unrecognized tax benefits. ² Please refer to the appendix for a reconciliation of GAAP to non - GAAP measures. 3 Adjusted EBITDA Margin is defined as adjusted EBITDA divided by revenue. We cannot provide a reconciliation of such forward l oo king non - GAAP measures to GAAP due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation. 1 1 2 3
40 Appendix
41 Forward Looking Statements This presentation contains both historical and forward - looking statements about ABM Industries Incorporated (“ABM”) and its subsidiaries (collectively referred to as “ABM,” “we,” “us,” “our,” or the “Company”) . We make forward - looking statements related to future expectations, estimates and projections that are uncertain, and often contain words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “intend,” “likely,” “may,” “outlook,” “plan,” “predict,” “should,” “target,” or other similar words or phrases . These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties, and assumptions that are difficult to predict . For us, particular uncertainties that could cause our actual results to be materially different from those expressed in our forward - looking statements include : The COVID - 19 pandemic has had and is expected to continue having a negative effect on the global economy, and the United States economy, and it has disrupted and is expected to continue disrupting our operations and our clients’ operations, which has adversely affected and may continue to adversely affect our business, results of operations, cash flows, and financial condition ; our success depends on our ability to gain profitable business despite competitive market pressures ; our business success depends on our ability to attract and retain qualified personnel and senior management and to manage labor costs ; our ability to preserve long - term client relationships is essential to our continued success ; changes to our businesses, operating structure, financial reporting structure, or personnel relating to the implementation of strategic transformations, enhanced business processes, and technology initiatives may not have the desired effects on our financial condition and results of operations ; acquisitions, divestitures, and other strategic transactions could fail to achieve financial or strategic objectives, disrupt our ongoing business, and adversely impact our results of operations ; our international business involves risks different from those we face in the United States that could have an effect on our results of operations and financial condition ; our use of subcontractors or joint venture partners to perform work under customer contracts exposes us to liability and financial risk ; we manage our insurable risks through a combination of third - party purchased policies and self - insurance, and we retain a substantial portion of the risk associated with expected losses under these programs, which exposes us to volatility associated with those risks, including the possibility that changes in estimates to our ultimate insurance loss reserves could result in material charges against our earnings ; our risk management and safety programs may not have the intended effect of reducing our liability for personal injury or property loss ; we may experience breaches of, or disruptions to, our information technology systems or those of our third - party providers or clients, or other compromises of our data that could adversely affect our business ; unfavorable developments in our class and representative actions and other lawsuits alleging various claims could cause us to incur substantial liabilities ; a significant number of our employees are covered by collective bargaining agreements that could expose us to potential liabilities in relation to our participation in multiemployer pension plans, requirements to make contributions to other benefit plans, and the potential for strikes, work slowdowns or similar activities, and union organizing drives ; our business may be materially affected by changes to fiscal and tax policies ; negative or unexpected tax consequences could adversely affect our results of operations ; changes in general economic conditions, such as changes in energy prices, government regulations, or consumer preferences, could reduce the demand for facility services and, as a result, reduce our earnings and adversely affect our financial condition ; future increases in the level of our borrowings or in interest rates could affect our results of operations ; impairment of goodwill and long - lived assets could have a material adverse effect on our financial condition and results of operations ; if we fail to maintain proper and effective internal control over financial reporting in the future, our ability to produce accurate and timely financial statements could be negatively impacted, which could harm our operating results and investor perceptions of our Company and as a result may have a material adverse effect on the value of our common stock ; our business may be negatively impacted by adverse weather conditions ; catastrophic events, disasters, and terrorist attacks could disrupt our services ; actions of activist investors could disrupt our business . For additional information on these and other risks and uncertainties we face, see ABM’s risk factors, as they may be amended from time to time, set forth in our filings with the Securities and Exchange Commission, including our most recent Annual Report on Form 10 - K and subsequent filings . We urge readers to consider these risks and uncertainties in evaluating our forward - looking statements . We caution readers not to place undue reliance upon any such forward - looking statements, which speak only as of the date made . We undertake no obligation to publicly update any forward - looking statements, whether as a result of new information, future events, or otherwise, except as required by law .
42 Use of Non - GAAP Financial Information To supplement ABM’s consolidated financial information, the Company has presented income from continuing operations and income from continuing operations per diluted share as adjusted for items impacting comparability, for the first quarter of fiscal years 2021 and 2020 . 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 as well as ABM’s operational performance . In addition, the Company has presented earnings before income from discontinued operations, net of taxes, interest, taxes, depreciation and amortization and excluding items impacting comparability (adjusted EBITDA) for the first quarter of fiscal years 2021 and 2020 . Adjusted EBITDA is among the indicators management uses as a basis for planning and forecasting future periods . The Company has also presented Free Cash Flow which is defined as net cash provided by operating activities less additions to property, plant and equipment . 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 accounting principles generally accepted in the United States of America . (See accompanying financial tables for supplemental financial data and corresponding reconciliations to certain GAAP financial measures . )
43 Unaudited Reconciliation of Non - GAAP Financial Measures (a) The Company adjusts income from continuing operations to exclude the impact of certain items that are unusual, non - recurring, or otherwise do not reflect management's views of the underlying operational results and trends of the Company . (b) Represents the net adjustments to our self - insurance reserve for general liability, workers’ compensation, automobile and medical and dental insurance claims related to prior period accident years . Management believes these prior period reserve changes do not illustrate the performance of the Company’s normal ongoing operations given the current year's insurance expense is estimated by management in conjunction with the Company's outside actuary to take into consideration past history and current costs and regulatory trends . Once the Company develops its best estimate of insurance expense premiums for the year, the Company fully allocates such costs out to the business leaders to hold them accountable for the current year costs within operations . However, since these prior period reserve changes relate to claims that could date back many years, current management has limited ability to influence the ultimate development of the prior year changes . Accordingly, including the prior period reserve changes in the Company's current operational results would not depict how the business is run as the Company holds its management accountable for the current year’s operational performance . The Company believes the exclusion of the self - insurance adjustment from income from continuing operations is useful to investors by enabling them to better assess our operating performance in the context of current year profitability . For the three months ended January 31 , 2021 and 2020 , our self - insurance general liability, workers’ compensation, and automobile and medical and dental insurance claims related to prior period accident years decreased by $ 11 . 4 million and by $ 6 . 6 million, respectively . (c) Represents restructuring costs related to the continued integration of GCA acquisition in September 2017 . (d) The Company's tax impact is calculated using the federal and state statutory rate of 28 . 11 % for US and 19 % for UK for FY 2021 and FY 2020 . We calculate tax from the underlying whole - dollar amounts, as a result, certain amounts may not recalculate based on reported numbers due to rounding .
44 Unaudited Reconciliation of Non - GAAP Financial Measures
45 Unaudited Reconciliation of Non - GAAP Financial Measures
46 2021 Guidance (a) With the exception of the 2021 Work Opportunity Tax Credits and anticipated excess tax benefits on stock - based awards, this guidance does not include any potential effects associated with certain other discrete tax items and other unrecognized tax benefits . (b) Adjustments include costs associated with the strategic review, legal settlements, adjustments to self - insurance reserves pertaining to prior year's claims and other unique items impacting comparability .
47 Contact Us INVESTOR RELATIONS Susie A. Kim (212) 297 - 9721 susie.kim@abm.com
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