SAN FRANCISCO, CA — June 6, 2006 — ABM Industries Incorporated (NYSE:ABM), a leading facility services contractor in the United States, today reported income from continuing operations for the second quarter of fiscal 2006 of $10.4 million ($0.21 per diluted share), up 17.5%, compared to $8.8 million ($0.17 per diluted share) for the prior year second quarter. Sales and other income for the second quarter of fiscal 2006 were $660.1 million, up 3.2% from $639.6 million in the second quarter of fiscal 2005.

 

The second quarter of fiscal 2006 had one fewer workday than the comparable period in fiscal 2005, favorably impacting fixed-priced contracts by approximately $2.4 million. This benefit was offset by $2.4 million of professional fees for the recently completed Audit Committee’s independent investigation of the prior year accounting at SSA, LLC, which is a wholly owned subsidiary of ABM Security.

“Substantially better than the year-before period, ABM’s second quarter results demonstrate strength in our core business performance and success in recent acquisitions,” commented Henrik Slipsager, ABM’s president and chief executive officer. “We continue to secure new business, and expand services to existing customers nationwide, through effective deployment of management and financial resources. Our Janitorial and Engineering businesses have recently added new financial services customers and expanded services with existing high-tech clients. And we won a significant job from a major pharmaceutical company, further highlighting our specialty cleaning capabilities.

“Second quarter sales growth was driven by contributions from acquisitions completed in 2005 and the first half of 2006 and new business in Engineering and Security.” Mr. Slipsager continued, “All operating segments showed improvements in operating income except Lighting. Although Lighting sales and profitability were disappointing, the backlog for this business increased dramatically and we believe Lighting will see improved performance in the coming months.”

The Company’s income from continuing operations during the first six months of fiscal 2006 was $14.4 million ($0.29 per diluted share), compared to $14.5 million ($0.28 per diluted share) for the same period last year. Sales and other income for the six months ended April 30, 2006 were $1.33 billion, up 3.8%, compared to $1.28 billion for the comparable period last year.

 

Mr. Slipsager concluded, “We repurchased eight hundred thousand shares during the quarter at a cost of $13.9 million. We ended the quarter with $25 million in cash and cash equivalents, approximately $242 million in working capital and no debt. We believe that we are well positioned to continue to expand our existing lines of business in the second half of fiscal 2006 through organic growth and acquisitions. Guidance for the third quarter is $0.28 to $0.31 per diluted share. For full-year 2006, we continue to anticipate income from continuing operations will be in the range of $0.85 to $0.95 per diluted share.”

Conference Call
On Wednesday, June 7, 2006 at 6:00 a.m. (PDT), ABM will host a live webcast of remarks by President and Chief Executive Officer Henrik C. Slipsager, and Executive Vice President and Chief Financial Officer George B. Sundby. The webcast will be accessible at www.irconnect.com/primecast/06/q2/abm_2q2006.html. Listeners are asked to be online at least fifteen minutes early to register, as well as to download and install any complimentary audio software that might be required. Following the call, the webcast will be available at this URL for a period of three months.

In addition to the webcast, a limited number of toll-free telephone lines will also be available for listeners who are among the first to call 877-440-9648 within fifteen minutes before the event. Telephonic replays will be accessible during the period from two hours to seven days after the call by dialing 800-642-1687, and then entering ID # 1141428.

About ABM Industries

ABM Industries Incorporated is among the largest facility services contractors listed on the New York Stock Exchange. With fiscal 2005 revenues in excess of $2.5 billion and more than 73,000 employees, ABM provides janitorial, parking, security, engineering and lighting services for thousands of commercial, industrial, institutional and retail facilities in hundreds of cities across the United States and British Columbia, Canada. The ABM Family of Services includes ABM Janitorial; Ampco System Parking; ABM Security Services, which includes American Commercial Security Services (ACSS) and Security Services of America (SSA); ABM Facility Services; ABM Engineering; and Amtech Lighting Services.

Cautionary Statement Under the Private Securities Litigation Reform Act of 1995. This press release contains forward-looking statements that set forth management’s anticipated results based on management’s plans and assumptions. Any number of factors could cause the Company’s actual results to differ materially from those anticipated. These risks and uncertainties include, but are not limited to: (1) delays in remediating the material weakness in controls identified in the Company’s security business; (2) a change in the frequency or severity of claims against the Company, a deterioration in claims management, or the cancellation or non-renewal of the Company's primary insurance policies; (3) a change in actuarial analysis that causes an unanticipated change in insurance reserves; (4) inadequate technology systems that cannot support the growth of the business; (5) labor disputes that lead to a loss of sales or expense variations; (6) acquisition activity slows or is unsuccessful; (7) a decline in commercial office building occupancy and rental rates lowers sales and profitability; (8) weakness in airline travel and the hospitality industry that affects the results of the Company's Parking segment; (9) financial difficulties or bankruptcy of a major customer; (10) the loss of long-term customers; (11) intense competition that lowers revenue or reduces margins; (12) an increase in costs that the Company cannot pass on to customers; (13) natural disasters or acts of terrorism that disrupt the Company in providing services; (14) significant accounting and other control costs that reduce the Company’s profitability; and (15) other issues and uncertainties that may include: new accounting pronouncements or changes in accounting policies, labor shortages that adversely affect the Company’s ability to employ entry level personnel, legislation or other governmental action that detrimentally impacts the Company’s expenses or reduces sales by adversely affecting the Company’s customers, unanticipated adverse jury determinations, judicial rulings or other developments in litigation to which the Company is subject, a reduction or revocation of the Company’s line of credit that increases interest expense and the cost of capital, and the resignation, termination, death or disability of one or more of the Company’s key executives that adversely affects customer retention or day-to-day management of the Company. Additional information regarding these and other risks and uncertainties the Company faces is contained in the Company’s Annual Report on Form 10-K and in other reports it files from time to time with the Securities and Exchange Commission. The Company undertakes no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise.