NEW YORK, NY — March 3, 2008 — ABM Industries Incorporated (NYSE:ABM), a leading facility services contractor, today reported sales and other income for the first quarter of fiscal 2008 of $922.6 million, up 31.1% from $703.5 million in the first quarter of fiscal 2007. Net income for the first quarter of fiscal 2008 was $6.4 million ($0.13 per diluted share), compared to $8.7 million ($0.18 per diluted share) for the prior year first quarter.
“Our record first quarter revenue and solid earnings per share of $0.13, which exceeded guidance, reflects the initial operational improvements and synergies we are achieving with our recent acquisitions combined with the strength of our existing business,” stated Henrik Slipsager, ABM’s president and chief executive officer.
The Company’s non-GAAP earnings from operations increased 93.5% to $18.0 million in the first quarter of fiscal 2008 from $9.3 million in the first quarter of fiscal 2007. The non-GAAP earnings from operations excludes several items affecting comparability, including a benefit from the reduction of the Company's self-insurance reserves that increased net income in the first quarter of fiscal 2007 and expenses associated with achieving synergies at OneSource and corporate initiatives that reduced net income in the first quarter of fiscal 2008 (see “Reconciliation of ABM Industries Non-GAAP Earnings from Operations to Consolidated Operating Income” in the accompanying financial tables).
Mr. Slipsager concluded, “We are very pleased with our performance, which is primarily due to the revenues contributed by the recent OneSource acquisition, new business in Janitorial, Parking and Engineering segments and cost saving synergies. The pace of our business remains strong despite the current economic climate. We are on track with the integration of OneSource and our most recent acquisition, Southern Management, and the development of our new strategic core platform. OneSource has surprised us to the upside with a annual revenue run rate $25 million to $50 million higher than anticipated.”
Based on continued organic growth, the benefit of recent acquisitions and lower costs associated with the Company’s infrastructure initiatives, the Company is increasing its fiscal 2008 guidance. The Company now expects fiscal 2008 non-GAAP diluted earnings per share to be in the range of $1.20 to $1.35. This excludes expenses of approximately $16.0 million ($0.20 per diluted share) associated with achieving infrastructure initiatives. In addition, fiscal 2008 has one additional work day, which is expected to increase labor expenses in the second quarter by approximately $4.0 million ($0.05 per diluted share) due to janitorial fixed price contracts. Including the approximately $16.0 million of expenses for infrastructure initiatives, the Company now expects fiscal 2008 GAAP diluted earnings per share to be in the range of $1.00 to $1.15.
A reconciliation of non-GAAP guidance and non-GAAP earnings from operations for the quarter ended January 31, 2008 and applicable prior periods is included in the tables below titled: "Reconciliation of ABM Industries Non-GAAP Earnings from Operations to Consolidated Operating Income”.
On Tuesday, March 4, 2008 at 6:00 a.m. (PT), ABM will host a live webcast of remarks by President and Chief Executive Officer Henrik Slipsager, and Executive Vice President and Chief Financial Officer Jim Lusk. The webcast will be accessible at:
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 one year.
In addition to the webcast, a limited number of toll-free telephone lines will also be available for listeners who are among the first to call (877) 660-8922 within fifteen minutes before the event. Telephonic replays will be accessible during the period from two hours to seven days after the call by dialing (888) 203-1112, and then entering ID #3764491.
About ABM Industries
ABM Industries Incorporated (NYSE:ABM) is among the largest facility services contractors listed on the New York Stock Exchange. With fiscal 2007 revenues in excess of $2.8 billion and more than 105,000 employees, ABM provides janitorial, parking, security, engineering and lighting services for thousands of commercial, industrial, institutional and retail facilities across the United States as well as Puerto Rico and British Columbia, Canada. The ABM Family of Services includes ABM Janitorial Services; Ampco System Parking; ABM Security Services; ABM Facility Services; ABM Engineering; and Amtech Lighting Services.
Cautionary Statement under the Private Securities Litigation Reform Act of 1995
This press release contains forward-looking statements that set forth management's anticipated results based on management's plans and assumptions. . 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, 2008. Any number of factors could cause the Company's actual results to differ materially from those anticipated in the remainder of the year. These risks and uncertainties include, but are not limited to: (1) diversion of management focus from operations as a result of the OneSource and other acquisitions or the failure to timely realize anticipated cost savings and synergies or at all; (2) a technology environment that may be inadequate to support the growth of the business; (3) disruption in functions affected by the transition to a Shared Services Center and relocation of corporate headquarters from San Francisco to New York City; (4) a change in the frequency or severity of claims against the Company, a deterioration in claims management, the cancellation or non-renewal of the Company's primary insurance policies or a change in our customers' insurance needs; (5) a change in estimated claims; (6) debt service requirements that cause expense variations and affect cash flow; (7) labor disputes that lead to a loss of sales or expense variations; (8) a decline in commercial office building occupancy and rental rates lowers sales and profitability; (9) financial difficulties or bankruptcy of a major customer; (10) acquisition activity slows; (11) the loss of long-term customers; (12) intense competition that lowers revenue or reduces margins; (13) an increase in costs that the Company cannot pass on to customers; (14) natural disasters or acts of terrorism that disrupt the Company in providing services; (15) significant accounting and other control costs that reduce the Company's profitability; and (16) other issues and uncertainties that may include: unanticipated adverse jury determinations, judicial rulings or other developments in litigation to which the Company is subject, new accounting pronouncements or changes in accounting policies, changes in U.S. immigration law that raise the Company's administration costs, labor shortages that adversely affect the Company's ability to employ entry level personnel, legislation or other governmental action that detrimentally impacts the Company's expenses or reduces sales by adversely affecting the Company's customers, a reduction or revocation of the Company's line of credit that increases interest expense and the cost of capital, low levels of capital investments by customers, which tend to be cyclical in nature, that adversely impact the results of the Company's Lighting segment; and the resignation, termination, death or disability of one or more of the Company's key executives that adversely affects customer retention or day-to-day management of the Company. Additional information regarding these and other risks and uncertainties the Company faces is contained in the Company's Annual Report on Form 10-K and in other reports it files from time to time with the Securities and Exchange Commission. The Company undertakes no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise.
Use of Non-GAAP Financial Information
To supplement ABM's consolidated condensed financial statements presented on a GAAP basis, ABM has presented its first quarter operating income for fiscal 2008 and 2007, and fiscal 2008 guidance 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 non-GAAP earnings from operations measure is among the primary 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 gross margin or earnings per share prepared in accordance with generally accepted accounting principles in the United States.