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): December 16, 2009
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 December 16, 2009, ABM Industries Incorporated (the “Company”) issued a press release announcing financial results related to fiscal year 2009 and the fourth quarter of fiscal year 2009. 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 December 16, 2009, the Company announced that the Board of Directors of the Company declared a quarterly dividend of $0.135 per share, payable on February 1, 2010 to stockholders of record on January 7, 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 December 17, 2009 relating to the Company’s financial results for fiscal year 2009 and the fourth quarter of fiscal year 2009. 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 December 16, 2009, announcing financial results related to fiscal year 2009 and the fourth quarter of fiscal year 2009 and the declaration of a dividend payable February 1, 2010 to stockholders of record on January 7, 2010. |
| 99.2 | Slides of ABM Industries Incorporated, dated December 17, 2009. |
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: December 16, 2009
By: /s/ Sarah H. McConnell
Sarah H. McConnell
Senior Vice President and
General Counsel
Senior Vice President and
General Counsel
EXHIBIT INDEX
| 99.1 | Press Release issued by ABM Industries Incorporated, dated December 16, 2009, announcing financial results related to fiscal year 2009 and the fourth quarter of fiscal year 2009 and the declaration of a dividend. |
| 99.2 | Slides of ABM Industries Incorporated, dated December 17, 2009. |
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 FOURTH QUARTER AND FISCAL YEAR 2009
FINANCIAL RESULTS AND DECLARES QUARTERLY DIVIDEND
FINANCIAL RESULTS AND DECLARES QUARTERLY DIVIDEND
Company Reports Increase in Income from Continuing Operations and Record Net Cash Flow from
Operations
Operations
Improved Outlook for Fiscal Year 2010
Company Increases Quarterly Dividend
| Quarter Ended | Year Ended | |||||||||||||||||||||||
| (in millions, | October 31, | Incr | October 31, | Incr | ||||||||||||||||||||
| except per share data) | 2009 | 2008 | (Decr) | 2009 | 2008 | (Decr) | ||||||||||||||||||
Revenues |
$ | 868.0 | $ | 905.8 | (4.2 | )% | $ | 3,481.8 | $ | 3,623.6 | (3.9 | )% | ||||||||||||
Net cash provided by operating activities |
$ | 64.4 | $ | 31.5 | 104.6 | % | $ | 140.9 | $ | 68.3 | 106.2 | % | ||||||||||||
Net Income |
$ | 15.0 | $ | 11.6 | 29.7 | % | $ | 54.3 | $ | 45.4 | 19.5 | % | ||||||||||||
Net income per diluted share |
$ | 0.29 | $ | 0.21 | 38.1 | % | $ | 1.05 | $ | 0.88 | 19.3 | % | ||||||||||||
Income from continuing operations |
$ | 15.3 | $ | 14.8 | 3.2 | % | 55.5 | 52.7 | 5.2 | % | ||||||||||||||
Income from continuing operations per diluted share |
$ | 0.29 | $ | 0.28 | 3.6 | % | $ | 1.07 | $ | 1.03 | 3.9 | % | ||||||||||||
Adjusted income from continuing operations |
$ | 20.8 | $ | 18.9 | 10.0 | % | $ | 68.8 | $ | 56.4 | 22.0 | % | ||||||||||||
Adjusted income from continuing operations per
diluted share |
$ | 0.39 | $ | 0.36 | 8.3 | % | $ | 1.33 | $ | 1.10 | 20.9 | % | ||||||||||||
(See accompanying financial tables for supplemental financial data and corresponding
reconciliations to certain GAAP financial measures.)
NEW YORK, NY — December 16, 2009 — ABM Industries Incorporated (NYSE:ABM) today reported revenues
for the fourth quarter of fiscal year 2009 of $868.0 million compared to fourth quarter of fiscal
year 2008 revenues of $905.8 million. Net income for the fourth quarter of fiscal year 2009 was
$15.0 million, a 29.7% increase from $11.6 million in the fourth quarter of fiscal year 2008. Net
income per diluted share for the fourth quarter of fiscal year 2009 increased 38.1% to $0.29
compared to fourth quarter of fiscal year 2008 net income per diluted share of $0.21.
Income from continuing operations for the fourth quarter of fiscal year 2009 was $15.3 million
($0.29 per diluted share) compared to $14.8 million ($0.28 per diluted share) in the year-ago
quarter. Adjusted income from continuing operations (which excludes items impacting comparability)
increased to $20.8 million, or $0.39 per diluted share, for the fourth quarter of fiscal year 2009.
This compares to adjusted income from continuing operations of $18.9 million, or $0.36 per diluted
share, in the fourth quarter of fiscal year 2008. (See accompanying financial tables for
supplemental financial data and corresponding reconciliations to certain GAAP financial measures.)
“Despite a challenging business environment, operating profit from our four divisions improved
year-over-year for the quarter by $1.9 million, driven by continued cost controls and an aggressive
focus on operating margins,” said Henrik Slipsager, president and chief executive officer of ABM
Industries Incorporated.
The Company’s adjusted EBITDA (earnings before interest, taxes, depreciation and amortization and
excluding discontinued operations and items impacting comparability) for the fourth quarter of
fiscal year 2009 was $41.3 million compared to $42.0 million in the fourth quarter of fiscal year
2008. (See accompanying financial tables for supplemental financial data and corresponding
reconciliations to certain GAAP financial measures.)
Slipsager continued: “The Company delivered outstanding results for the quarter and the full year,
particularly in light of what was an exceptionally challenging economy through the course of the
2009 fiscal year. Revenues for the fourth quarter were essentially flat compared sequentially to
the third quarter, reversing earlier declines and showing signs of a stabilizing economy. Our
consistent focus on job profitability and expense management clearly contributed to our successful
performance. Adjusted income from continuing operations increased 22% for the fiscal year. These
solid financial results, combined with the revenue trends we are seeing, strongly position the
Company for a rebound in the U.S. economy and an improved outlook for fiscal year 2010.”
Slipsager concluded: “We also finished the fiscal year with record net cash from operations of more
than $140 million. Our cash flow enabled the Company to reduce the debt on our line of credit by
more than $57 million and pay out nearly $27 million in dividends.” (See accompanying financial
tables for supplemental financial data and corresponding reconciliations to certain GAAP financial
measures.)
The Company reported revenues for the fiscal year that ended October 31, 2009 of $3.5 billion
compared to fiscal year 2008 revenues of $3.6 billion. Net income for fiscal year 2009 was $54.3
million, an increase of 19.5% compared to $45.4 million for fiscal year 2008. Net income per
diluted share for fiscal year 2009 increased 19.3% to $1.05 compared to $0.88 per diluted share in
fiscal year 2008. Income from continuing operations for fiscal year 2009 increased to $55.5
million ($1.07 per diluted share) compared to $52.7 million ($1.03 per diluted share) for fiscal
year 2008. Adjusted income from continuing operations for fiscal year 2009 was $68.8 million, or
$1.33 per diluted share, compared to $56.4 million, or $1.10 per diluted share, for fiscal year
2008. (See accompanying financial tables for supplemental financial data and corresponding
reconciliations to certain GAAP financial measures.)
The Company also announced that the Board of Directors has declared a first quarter cash dividend
of $0.135 per common share, which is nearly a 4% increase, payable on February 1, 2010 to
stockholders of record on January 7, 2010. This will be ABM’s 175th consecutive
quarterly cash dividend.
Guidance
The Company 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. (See accompanying
financial tables for supplemental financial data and corresponding reconciliations to certain GAAP
financial measures.)
Conference Call
On Thursday, December 17, 2009 at 9:00 a.m. (EST), 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 James S. Lusk. The webcast will be accessible at:
[http://investor.abm.com/eventdetail.cfm?eventid=75460]
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 888-715-1387 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 #6020747.
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 Annual
Report on Form 10-K for the year ended October 31, 2009. 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; and (21) we
participate in multi-employer defined benefit plans which could result in substantial liabilities
being incurred. Additional information regarding these and other risks and uncertainties the
Company faces is contained in the Company’s Annual Report on Form 10-K/A for the year ended October
31, 2008 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 fourth quarter and fiscal years 2009 and 2008 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 fourth quarter
and fiscal years 2009 and 2008. 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 BALANCE SHEET INFORMATION (UNAUDITED)
| October 31, | October 31, | |||||||
| 2009 | 2008(a) | |||||||
Assets |
||||||||
Cash and cash equivalents |
$ | 34,153 | $ | 26,741 | ||||
Trade accounts receivable, net |
445,241 | 473,263 | ||||||
Prepaid income taxes |
13,473 | 7,097 | ||||||
Current assets of discontinued operations |
10,787 | 34,508 | ||||||
Prepaid expenses |
38,781 | 45,030 | ||||||
Notes receivable and other |
21,374 | 11,981 | ||||||
Deferred income taxes, net |
52,171 | 57,463 | ||||||
Insurance recoverables |
5,017 | 5,017 | ||||||
Total current assets |
620,997 | 661,100 | ||||||
Non-current assets of discontinued operations |
4,567 | 11,205 | ||||||
Insurance deposits |
42,500 | 42,506 | ||||||
Other investments and long-term receivables |
6,240 | 4,470 | ||||||
Deferred income taxes, net |
63,444 | 88,704 | ||||||
Insurance recoverables |
67,100 | 66,600 | ||||||
Other assets |
32,446 | 23,310 | ||||||
Investments in auction rate securities |
19,531 | 19,031 | ||||||
Property, plant and equipment, net |
56,892 | 61,067 | ||||||
Other intangible assets, net |
60,199 | 62,179 | ||||||
Goodwill |
547,237 | 535,772 | ||||||
Total assets |
$ | 1,521,153 | $ | 1,575,944 | ||||
Liabilities |
||||||||
Trade accounts payable |
$ | 84,701 | $ | 104,930 | ||||
Accrued liabilities |
||||||||
Compensation |
93,095 | 88,951 | ||||||
Taxes — other than income |
17,539 | 20,270 | ||||||
Insurance claims |
78,144 | 84,272 | ||||||
Other |
66,279 | 76,590 | ||||||
Income taxes payable |
1,871 | 2,025 | ||||||
Current liabilities of discontinued operations |
1,065 | 10,082 | ||||||
Total current liabilities |
342,694 | 387,120 | ||||||
Income taxes payable |
17,763 | 15,793 | ||||||
Line of credit |
172,500 | 230,000 | ||||||
Retirement plans and other |
32,963 | 37,095 | ||||||
Insurance claims |
268,183 | 261,885 | ||||||
Total liabilities |
834,103 | 931,893 | ||||||
Stockholders’ Equity |
687,050 | 644,051 | ||||||
Total liabilities and stockholders’ equity |
$ | 1,521,153 | $ | 1,575,944 | ||||
| (a) | Amounts shown as of October 31, 2008 reflect an immaterial correction of certain net book
credit cash balances which increased cash and cash equivalents and trade accounts payable by $26.0
million and $34.9 million, respectively, and reduced other accrued liabilities by $8.9 million. |
CONDENSED CONSOLIDATED CASH FLOW INFORMATION (UNAUDITED)
| Quarter Ended October 31, | ||||||||
| 2009 | 2008(a) | |||||||
Net cash provided by continuing operating activities |
68,619 | 31,325 | ||||||
Net cash (used in) provided by discontinued operating activities |
(4,213 | ) | 149 | |||||
Net cash provided by operating activities |
$ | 64,406 | $ | 31,474 | ||||
Net cash used in continuing investing activities |
(5,174 | ) | (8,172 | ) | ||||
Net cash provided by discontinued investing activities |
— | 33,466 | ||||||
Net cash (used in) provided by investing activities |
$ | (5,174 | ) | $ | 25,294 | |||
Proceeds from exercises of stock options (including income benefit) |
3,125 | 1,635 | ||||||
Dividends paid |
(6,720 | ) | (6,370 | ) | ||||
Deferred financing costs paid |
— | (1,616 | ) | |||||
Borrowings from line of credit |
111,000 | 152,000 | ||||||
Repayment of borrowings from line of credit |
(134,500 | ) | (207,000 | ) | ||||
Book overdraft payable |
(21,557 | ) | 6,730 | |||||
Net cash used in financing activities |
$ | (48,652 | ) | $ | (54,621 | ) | ||
| Year Ended October 31, | ||||||||
| 2009 | 2008(a) | |||||||
Net cash provided by continuing operating activities |
121,255 | 62,275 | ||||||
Net cash provided by discontinued operating activities |
19,616 | 6,032 | ||||||
Net cash provided by operating activities |
$ | 140,871 | $ | 68,307 | ||||
Net cash used in continuing investing activities |
(37,467 | ) | (455,162 | ) | ||||
Net cash provided by discontinued investing activities |
— | 33,640 | ||||||
Net cash used in investing activities |
$ | (37,467 | ) | $ | (421,522 | ) | ||
Proceeds from exercises of stock options (including income benefit) |
6,331 | 14,620 | ||||||
Dividends paid |
(26,727 | ) | (25,271 | ) | ||||
Deferred financing costs paid |
— | (1,616 | ) | |||||
Borrowings from line of credit |
636,000 | 810,500 | ||||||
Repayment of borrowings from line of credit |
(693,500 | ) | (580,500 | ) | ||||
Net increase in book cash overdraft |
(18,096 | ) | 14,506 | |||||
Net cash (used in) provided by financing activities |
$ | (95,992 | ) | $ | 232,239 | |||
| (a) | Amounts shown for the quarter and year ended October 31, 2008 reflect an immaterial correction
of certain net book credit cash balances; resulting in an increase in net cash (used in) provided
by financing activities for the quarter and year ended October 31, 2008 in the amounts of $6.7
million and $14.5 million, respectively. |
CONDENSED CONSOLIDATED INCOME STATEMENT INFORMATION (UNAUDITED)
| Quarter Ended October 31, | Increase | |||||||||||
| 2009 | 2008 | (Decrease) | ||||||||||
Revenues |
$ | 868,005 | $ | 905,782 | (4.2 | )% | ||||||
Expenses |
||||||||||||
Operating |
778,834 | 795,706 | (2.1 | )% | ||||||||
Selling, general and administrative |
63,245 | 79,955 | (20.9 | )% | ||||||||
Amortization of intangible assets |
2,929 | 4,292 | (31.8 | )% | ||||||||
Total expenses |
845,008 | 879,953 | (4.0 | )% | ||||||||
Operating profit |
22,997 | 25,829 | (11.0 | )% | ||||||||
Interest expense |
1,428 | 3,265 | (56.3 | )% | ||||||||
Income from continuing operations
before income taxes |
21,569 | 22,564 | (4.4 | )% | ||||||||
Provision for income taxes |
6,283 | 7,746 | (18.9 | )% | ||||||||
Income from continuing operations |
15,286 | 14,818 | 3.2 | % | ||||||||
Loss from discontinued operations |
(263 | ) | (3,232 | ) | NM | * | ||||||
Net Income |
$ | 15,023 | $ | 11,586 | 29.7 | % | ||||||
Net Income Per Common Share — Basic |
||||||||||||
Income from continuing operations |
$ | 0.30 | $ | 0.29 | 3.4 | % | ||||||
Loss from discontinued operations |
(0.01 | ) | (0.06 | ) | NM | * | ||||||
| $ | 0.29 | $ | 0.23 | 26.1 | % | |||||||
Net Income Per Common Share — Diluted |
||||||||||||
Income from continuing operations |
$ | 0.29 | $ | 0.28 | 3.6 | % | ||||||
Loss from discontinued operations |
— | (0.07 | ) | NM | * | |||||||
| $ | 0.29 | $ | 0.21 | 38.1 | % | |||||||
* Not Meaningful |
||||||||||||
Average Common And Common Equivalent Shares |
||||||||||||
Basic |
51,609 | 50,914 | ||||||||||
Diluted |
52,419 | 51,711 | ||||||||||
Dividends Declared Per Common Share |
$ | 0.130 | $ | 0.125 | ||||||||
CONDENSED CONSOLIDATED INCOME STATEMENT INFORMATION (UNAUDITED)
| Year Ended October 31, | Increase | |||||||||||
| 2009 | 2008 | (Decrease) | ||||||||||
Revenues |
$ | 3,481,823 | $ | 3,623,590 | (3.9 | )% | ||||||
Expenses |
||||||||||||
Operating |
3,114,699 | 3,224,696 | (3.4 | )% | ||||||||
Selling, general and administrative |
263,633 | 287,650 | (8.3 | )% | ||||||||
Amortization of intangible assets |
11,384 | 11,735 | (3.0 | )% | ||||||||
Total expenses |
3,389,716 | 3,524,081 | (3.8 | )% | ||||||||
Operating profit |
92,107 | 99,509 | (7.4 | )% | ||||||||
Other-than-temporary impairment losses
on auction rate securities: |
||||||||||||
Gross impairment losses |
3,695 | — | NM | * | ||||||||
Impairments recognized in
other comprehensive income |
(2,129 | ) | — | NM | * | |||||||
Interest expense |
5,881 | 15,193 | (61.3 | )% | ||||||||
Income from continuing operations
before income taxes |
84,660 | 84,316 | 0.4 | % | ||||||||
Provision for income taxes |
29,170 | 31,585 | (7.6 | )% | ||||||||
Income from continuing operations |
55,490 | 52,731 | 5.2 | % | ||||||||
Loss from discontinued operations |
(1,197 | ) | (7,297 | ) | NM | * | ||||||
Net Income |
$ | 54,293 | $ | 45,434 | 19.5 | % | ||||||
Net Income Per Common Share — Basic |
||||||||||||
Income from continuing operations |
$ | 1.08 | $ | 1.04 | 3.8 | % | ||||||
Loss from discontinued operations |
(0.02 | ) | (0.14 | ) | NM | * | ||||||
| $ | 1.06 | $ | 0.90 | 17.8 | % | |||||||
Net Income Per Common Share — Diluted |
||||||||||||
Income from continuing operations |
$ | 1.07 | $ | 1.03 | 3.9 | % | ||||||
Loss from discontinued operations |
(0.02 | ) | (0.15 | ) | NM | * | ||||||
| $ | 1.05 | $ | 0.88 | 19.3 | % | |||||||
* Not Meaningful |
||||||||||||
Average Common And Common Equivalent Shares |
||||||||||||
Basic |
51,373 | 50,519 | ||||||||||
Diluted |
51,845 | 51,386 | ||||||||||
Dividends Declared Per Common Share |
$ | 0.52 | $ | 0.50 | ||||||||
REVENUES AND OPERATING PROFIT BY SEGMENT (UNAUDITED)
| Quarter Ended October 31, | Increase | |||||||||||
| 2009 | 2008 | (Decrease) | ||||||||||
Revenues |
||||||||||||
Janitorial |
$ | 589,146 | $ | 622,174 | (5.3 | )% | ||||||
Parking |
113,740 | 119,003 | (4.4 | )% | ||||||||
Security |
82,123 | 84,952 | (3.3 | )% | ||||||||
Engineering |
82,502 | 79,070 | 4.3 | % | ||||||||
Corporate |
494 | 583 | (15.3 | )% | ||||||||
| $ | 868,005 | $ | 905,782 | (4.2 | )% | |||||||
Operating Profit |
||||||||||||
Janitorial |
$ | 37,610 | $ | 36,074 | 4.3 | % | ||||||
Parking |
6,316 | 5,721 | 10.4 | % | ||||||||
Security |
2,279 | 2,790 | (18.3 | )% | ||||||||
Engineering |
6,097 | 5,794 | 5.2 | % | ||||||||
Corporate |
(29,305 | ) | (24,550 | ) | 19.4 | % | ||||||
Operating profit |
22,997 | 25,829 | (11.0 | )% | ||||||||
Interest expense |
1,428 | 3,265 | (56.3 | )% | ||||||||
Income from continuing operations
before income taxes |
$ | 21,569 | $ | 22,564 | (4.4 | )% | ||||||
| Year Ended October 31, | Increase | |||||||||||
| 2009 | 2008 | (Decrease) | ||||||||||
Revenues |
||||||||||||
Janitorial |
$ | 2,382,025 | $ | 2,492,270 | (4.4 | )% | ||||||
Parking |
457,477 | 475,349 | (3.8 | )% | ||||||||
Security |
334,610 | 333,525 | 0.3 | % | ||||||||
Engineering |
305,694 | 319,847 | (4.4 | )% | ||||||||
Corporate |
2,017 | 2,599 | (22.4 | )% | ||||||||
| $ | 3,481,823 | $ | 3,623,590 | (3.9 | )% | |||||||
Operating Profit |
||||||||||||
Janitorial |
$ | 139,858 | $ | 118,538 | 18.0 | % | ||||||
Parking |
20,285 | 19,438 | 4.4 | % | ||||||||
Security |
8,221 | 7,723 | 6.4 | % | ||||||||
Engineering |
19,658 | 19,129 | 2.8 | % | ||||||||
Corporate |
(95,915 | ) | (65,319 | ) | 46.8 | % | ||||||
Operating profit |
92,107 | 99,509 | (7.4 | )% | ||||||||
Other-than-temporary impairment losses
on auction rate securities: |
||||||||||||
Gross impairment losses |
3,695 | — | NM | * | ||||||||
Impairments recognized in
other comprehensive income |
(2,129 | ) | — | NM | * | |||||||
Interest expense |
5,881 | 15,193 | (61.3 | )% | ||||||||
Income from continuing operations
before income taxes |
$ | 84,660 | $ | 84,316 | 0.4 | % | ||||||
| * | Not Meaningful |
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 October 31, | Year Ended October 31, | |||||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||||
Reconciliation of Adjusted Income from Continuing
Operations to Net Income |
||||||||||||||||
Adjusted Income from Continuing Operations |
$ | 20,759 | $ | 18,874 | $ | 68,818 | $ | 56,401 | ||||||||
Items Impacting Comparability, net of taxes |
(5,473 | ) | (4,056 | ) | (13,328 | ) | (3,670 | ) | ||||||||
Income from Continuing Operations |
15,286 | 14,818 | 55,490 | 52,731 | ||||||||||||
Loss from Discontinued Operations |
(263 | ) | (3,232 | ) | (1,197 | ) | (7,297 | ) | ||||||||
Net Income |
$ | 15,023 | $ | 11,586 | $ | 54,293 | $ | 45,434 | ||||||||
Reconciliation of Adjusted Income from Continuing
Operations to Income from Continuing Operations |
||||||||||||||||
Adjusted Income from Continuing Operations |
$ | 20,759 | $ | 18,874 | $ | 68,818 | $ | 56,401 | ||||||||
Items Impacting Comparability: |
||||||||||||||||
Corporate Initiatives (a) |
(3,371 | ) | (7,623 | ) | (20,666 | ) | (22,122 | ) | ||||||||
Third-Party Administrator Legal Settlement |
— | — | 9,601 | — | ||||||||||||
Insurance Adjustments |
(5,900 | ) | 7,700 | (9,435 | ) | 22,500 | ||||||||||
IT Deferred Expense Charge |
— | (6,250 | ) | — | (6,250 | ) | ||||||||||
Credit Loss on Auction Rate Security |
— | — | (1,566 | ) | — | |||||||||||
Total Items Impacting Comparability |
(9,271 | ) | (6,173 | ) | (22,066 | ) | (5,872 | ) | ||||||||
Income Taxes Expense |
(3,798 | ) | (2,117 | ) | (8,738 | ) | (2,202 | ) | ||||||||
Items Impacting Comparability, net of taxes |
(5,473 | ) | (4,056 | ) | (13,328 | ) | (3,670 | ) | ||||||||
Income from Continuing Operations |
$ | 15,286 | $ | 14,818 | $ | 55,490 | $ | 52,731 | ||||||||
Reconciliation of Adjusted EBITDA to Net Income |
||||||||||||||||
Adjusted EBITDA |
$ | 41,272 | $ | 41,977 | $ | 145,482 | $ | 133,456 | ||||||||
Items Impacting Comparability |
(9,271 | ) | (6,173 | ) | (22,066 | ) | (5,872 | ) | ||||||||
Discontinued Operations |
(263 | ) | (3,232 | ) | (1,197 | ) | (7,297 | ) | ||||||||
Income Tax |
(6,283 | ) | (7,746 | ) | (29,170 | ) | (31,585 | ) | ||||||||
Interest Expense |
(1,428 | ) | (3,265 | ) | (5,881 | ) | (15,193 | ) | ||||||||
Depreciation and Amortization |
(9,004 | ) | (9,975 | ) | (32,875 | ) | (28,075 | ) | ||||||||
Net Income |
$ | 15,023 | $ | 11,586 | $ | 54,293 | $ | 45,434 | ||||||||
(Continued)
| Quarter Ended October 31, | Year Ended October 31, | |||||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||||
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 |
$ | 0.39 | $ | 0.36 | $ | 1.33 | $ | 1.10 | ||||||||
Items Impacting Comparability, net of taxes |
(0.10 | ) | (0.08 | ) | (0.26 | ) | (0.07 | ) | ||||||||
Income from Continuing Operations
per Diluted Share |
$ | 0.29 | $ | 0.28 | $ | 1.07 | $ | 1.03 | ||||||||
Diluted Shares |
52,419 | 51,711 | 51,845 | 51,386 | ||||||||||||
| (a) | Corporate initiatives 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, and (iv) the integration costs associated
with OneSource. |
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) | The adjustment to income from continuing operations includes additional costs associated with
the implementation of new information technology systems and other unique one time items. |
Exhibit 99.2
| ABM Industries Incorporated Fourth Quarter Earnings Conference Call December 17, 2009 |
| 2 Agenda Introduction of call participants Henrik C. Slipsager, President & CEO James S. Lusk, EVP and CFO Sarah H. McConnell, SVP & General Counsel Q4 2009 Highlights Financial Review Operating Results 2010 Guidance |
| 3 Forward-Looking Statements Our presentation today contains predictions, estimates and other forward-looking statements. In addition, the financial results reported in this release continue to be subject to adjustment until filing of the Company's Annual Report on Form 10-K for the year ended October 31,2009. 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; and (21) we participate in multi-employer defined benefit plans which could result in substantial liabilities being incurred. Additional information regarding these and other risks and uncertainties the Company faces is contained in the Company's Annual Report on Form 10-K/A for the year ended October 31, 2008. in our subsequent reports on Form 10-Q and Form 8-K. We undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise. |
| 4 Statements Relating to Non-GAAP Financial Measures During the course of this presentation, certain financial measures that were not prepared in accordance with U.S. Generally Accepted Accounting Principles will be presented. Reconciliations of those non-U.S. GAAP financial measures to the most directly comparable U.S. GAAP financial measures are available on the Company's website under "Investor Relations" and at the end of this presentation. |
| 5 Fiscal Fourth Quarter 2009 Highlights (a) A reconciliation of certain non-GAAP financial information to GAAP financial measures is available on the Company's website under "Investor Relations" and at the end of this presentation |
| 6 Fourth Quarter & Fiscal 2009 Highlights Adjusted Income from Continuing Operations up 10% for the quarter and 22% for the year Operating segments deliver 4th straight quarter of solid growth with operating profit up nearly 4% Operating profit, excluding corporate segment, up 14% for the year Adjusted EBITDA for the quarter flat despite decline in revenues Adjusted EBITDA margins up 12 basis to 4.75% compared to year ago period For the year, Adjusted EBITDA margins up 50 basis points to 4.20% Cash Flow from Operations of $64 million For the year, record cash flow from operations of $140 million |
| 7 Q4 Financial Results (unaudited) (a) A reconciliation of certain non-GAAP financial information to GAAP financial measures is available on the Company's website under "Investor Relations" and at the end of this presentation |
| 8 Fiscal 2009 Financial Results (unaudited) (a) A reconciliation of certain non-GAAP financial information to GAAP financial measures is available on the Company's website under "Investor Relations" and at the end of this presentation |
| 9 Cash Flow Highlights (Unaudited) Aggressive collections and reduction in insurance claims paid Completed investment in upgrade of IT systems 1 See appendix for corresponding reconciliations to certain GAAP financial measures |
| 10 Condensed Balance Sheet (unaudited) (a) Amounts shown as of October 31, 2008 reflect an immaterial correction of certain net book credit cash balances which increased cash and cash equivalents and trade accounts payable by $26.0 million and $34.9 million, respectively and reduced other accrued liabilities by $8.9 million. |
| 11 Division Revenues(1) Summary: Sequential revenue growth essentially flat Engineering revenue increases both year over year and sequentially Continued stabilization of Janitorial tag revenues but at pre recession levels Sales pipeline and sales activity remains solid (1) Excludes Corporate ($ in thousands) |
| 12 Division Profits(1) Summary: Continued focus on job profitability and expense management leads to another quarter of growth in division profits Parking business achieves double digit growth in the quarter For the year, divisions record growth of 14% Continue to aggressively monitor credit strength of customers (1) Excludes Corporate ($ in thousands) |
| Closing Observations Company well positioned for fiscal 2010 Anticipate another year of growth in key financial measures Continue to anticipate sequential revenue growth in Q1 2010 Well-positioned to capitalize on additional M&A opportunities Poised to leverage investments in infrastructure 13 |
| 14 ABM will continue to follow proven strategies of: Actively managing customer accounts Focusing on cost control Managing credit risk and generating cash flow Fiscal 2010 notable expectations Approximately $4 million higher costs for depreciation and maintenance related to systems upgrades Effective tax rate of approximately 39% Tag revenue remains below pre recession levels Guidance FY10 Income from Continuing Operations, per diluted share, in the range of $1.25 - $1.35 Adjusted Income from Continuing Operations, excluding Items Impacting Comparability, per diluted share, in the range of $1.35 - $1.45 FY10 Outlook *A reconciliation of certain non-GAAP financial information to GAAP financial measures is available on the Company's website under "Investor Relations" and at the end of this presentation |
| 15 Appendix - Unaudited Reconciliation of Non-GAAP Financial Measures (in thousands, except per share data) |
| 16 Appendix - Unaudited Reconciliation of Non-GAAP Financial Measures (in thousands, except per share data) |
| 17 Appendix - Reconciliation (unaudited) |
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