ABM (NYSE: ABM), a leading provider of facility solutions, today
announced financial results for the third quarter of fiscal 2021.
Scott Salmirs, President and Chief Executive
Officer of ABM Industries commented, “ABM generated strong third
quarter financial results, driven by continued broad-based demand
for our services and efficient execution within an improving
business environment. Revenue increased at a double-digit rate,
with each of our business segments achieving year-over-year growth,
led by Aviation and Technical Solutions, along with continued solid
growth in Business & Industry. Demand for our virus protection
services remained strong, a trend that we expect to continue as
clients value the health and safety benefits associated with
frequent cleaning and disinfecting of high traffic locations.”
“Higher revenues, favorable mix, labor
efficiencies as well as lower interest expense led to a 20% gain in
adjusted earnings per share to $0.90. At the same time, we
continued to execute on our long-term growth strategy by making
investments in people and in technology that enhance our
capabilities.”
Mr. Salmirs continued, “Our recently-announced
acquisition of Able Services is expected to close by the end of
September, and we will be delighted to welcome their talented and
dedicated team to ABM. This transaction strengthens our engineering
capabilities and expands our janitorial services, enabling us to
better serve our clients with a broader array of services and
solutions. We expect the addition of Able will be immediately
accretive to our adjusted earnings per share, and we have
identified $30 million to $40 million in operating synergies, the
majority of which we expect to achieve in the first year after the
transaction closes.”
Third Quarter Financial and Business
Results
For the third quarter of fiscal 2021, the
Company reported revenue of $1.54 billion, up 10.7% versus the
third quarter of fiscal 2020. Year-over-year revenue growth in the
Business & Industry segment benefited from the gradual
re-occupancy of offices and the return of fans to sports venues.
Aviation revenue grew more than 50% and segment operating margin
was higher than pre-pandemic levels, driven by increased domestic
air travel and a favorable mix of airport business. Technical
Solutions’ revenues and operating income increased at double-digit
rates, reflecting effective execution on a growing backlog of
energy efficiency projects and greater access to client sites.
Client demand for disinfection-related services remained elevated,
driving revenue growth and enhancing operating profitability.
On a GAAP basis, the Company reported a loss
from continuing operations of $13.7 million, or $0.20 per diluted
share, which included a $1.24 per share reserve to resolve
outstanding litigation. These results compare to income from
continuing operations of $56.0 million in last year’s third
quarter.
Adjusted income from continuing operations for
the third quarter of 2021 was $61.3 million, or $0.90 per diluted
share, increases of 22% and 20%, respectively, from the $50.1
million, or $0.75 per diluted share for the third 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 reflected an increase in
higher margin virus protection services as clients continued to
incorporate disinfection into their operations. Results also
benefited from efficient management of direct labor and lower bad
debt expense, as well as one less workday compared to the third
quarter of fiscal 2020. Partially offsetting these favorable
factors were higher corporate expenses, primarily reflecting
planned investments in information technology as well as higher
personnel costs than the prior year due to furlough and related
cost-saving actions taken at the beginning of the pandemic.
Net loss for the third quarter of 2021 was $13.7
million, or $0.20 per diluted share, compared to net income of
$56.0 million, or $0.83 per diluted share last year.
Adjusted EBITDA for the quarter was $113.5
million compared to $109.7 million in the third quarter of fiscal
2020. Adjusted EBITDA margin for the quarter was 7.4% versus 7.9%
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.
Recent Corporate
Developments/Recognitions
- August 25, 2021 — ABM announced a
definitive agreement to acquired Able Services, a leading provider
of engineering and janitorial facilities with $1.1 billion in
revenues.
- June 28, 2021 — ABM announced an
expansion of its credit agreement to $1.95 billion. The upsized
credit facility consists of a $1.3 billion revolving credit
facility and a $650 million term loan and has a maturity date of
June 28, 2026.
- June 30, 2021 — ABM announced it
had received three Gold Quill Awards from the International
Association of Business Communicators (IABC) for its COVID-19
response plan and approach in delivering the science-based cleaning
and disinfecting program to market. In April, the Company received
a Silver Stevie Award from the American Business Awards (ABA) for
the “Most Valuable Corporate Response” to the COVID-19 pandemic.
Additionally, ABM Franchising Group, LLC, a subsidiary of ABM, won
a Bronze Stevie Award for the “Support Team of the Year.”
Liquidity & Capital
Structure
Cash and cash equivalents totaled $505.4 million
as of July 31, 2021.
The Company ended the quarter with total debt of
$811.6 million, including $148.8 million in standby letters of
credit.
Total debt to pro forma adjusted EBITDA
(including standby letters of credit) was 1.4x for the third
quarter of fiscal 2021.
Year-to-date operating cash flow was $258.8
million, compared to $258.8 million in the same period of fiscal
2020.
Year-to-date free cash flow was $235.5 million,
compared to $229.9 million in the same period of fiscal 2020.
The Company paid its 221st quarterly cash
dividend of $0.190 per common share for a total distribution of
$12.8 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 November 1, 2021 to shareholders of record on October 7,
2021. This will be the Company’s 222nd consecutive quarterly cash
dividend.
Guidance
As a result of its strong year-to-date
performance, the Company is increasing its guidance for full year
2021 adjusted income from continuing operations to $3.45 to $3.55
per share, up from $3.30 to $3.50 per diluted share previously.
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. In addition, this revised guidance excludes any
contribution from the pending acquisition of Able Services. The
Company is unable to provide an accurate estimate of the items
impacting comparability relating to the Able Services acquisition,
such as acquisition-related contingent advisory fees and
integration costs, and therefore the Company is not providing
guidance for full year 2021 GAAP income from continuing
operations.
Mr. Salmirs concluded, “ABM has performed
exceptionally well through the first nine months of our fiscal
year, reflecting excellent execution on the part of ABM’s team
members as we accommodated heightened demand for our specialized
services and managed labor scarcity in an evolving business
environment. Our outlook for the fourth quarter is positive,
supported by current business trends, and we look forward to
joining with Able Services in a transaction that expands our core
businesses, enhances our capabilities and accelerates our next
phase of growth.”
Conference Call Information
ABM will host its quarterly conference call for
all interested parties on Thursday, September 9, 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 September 23, 2021, and can be
accessed by dialing (844) 512-2921 and then entering ID #13719930.
An archive will also be available on the ABM website for 90
days.
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.
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 pending acquisition of Able Services may
not occur at all or may not occur in the expected time frame;
failure to complete the Able acquisition could negatively impact
the price of our common shares as well as our future business and
financial results; the Able acquisition may be less accretive than
expected, or may be dilutive, to our earnings per share, which may
negatively affect the market price of our common shares; we are
subject to business uncertainties while the Able acquisition is
pending, which could adversely affect our business; we may not
realize the growth opportunities and cost synergies that are
anticipated from the Able acquisition or may experience other
difficulties integrating Able; following completion of the proposed
Able acquisition, our debt may limit our financial
flexibility; 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.
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 third
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 third 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.)
The Company has also provided guidance for full
year 2021 adjusted income from continuing operations per share.
Certain of the items impacting comparability that are adjusted for
in the adjusted income from continuing operations guidance relate
to the impact of the acquisition of Able Services, such as
acquisition-related contingent advisory fees and integration costs.
Because the Company is unable to provide a meaningful or accurate
calculation or estimation of the items impacting comparability
relating to the Able Services acquisition, the Company is not
providing a reconciliation of full year 2021 adjusted income from
continuing operations per share to the most directly comparable
GAAP financial measure. Each of these adjustments has not yet
occurred, are out of the Company’s control and/or cannot be
reasonably predicted. For the same reasons, the Company is unable
to address the probable significance of the unavailable
information.
Contact: |
|
Investor Relations: |
David Gold |
|
(212) 750-5800 |
|
ir@abm.com |
ABM INDUSTRIES INCORPORATED AND
SUBSIDIARIES
CONSOLIDATED INCOME (LOSS) STATEMENT INFORMATION
(UNAUDITED)
|
|
Three Months Ended July 31, |
|
Increase /(Decrease) |
(in millions, except per share
amounts) |
|
2021 |
|
2020 |
|
Revenues |
|
$ |
1,543.1 |
|
|
$ |
1,394.1 |
|
|
10.7% |
Operating expenses |
|
1,288.1 |
|
|
1,174.9 |
|
|
9.6% |
Selling, general and
administrative expenses(1) |
|
253.8 |
|
|
113.7 |
|
|
NM* |
Amortization of intangible
assets |
|
10.6 |
|
|
11.8 |
|
|
(10.2)% |
Operating (loss)
profit |
|
(9.4 |
) |
|
93.6 |
|
|
NM* |
Income from unconsolidated
affiliates |
|
0.5 |
|
|
0.2 |
|
|
NM* |
Interest expense |
|
(6.3 |
) |
|
(13.8 |
) |
|
54.4% |
(Loss) income from continuing
operations before income taxes |
|
(15.2 |
) |
|
80.0 |
|
|
NM* |
Income tax benefit
(provision) |
|
1.5 |
|
|
(24.0 |
) |
|
NM* |
(Loss) income from continuing
operations |
|
(13.7 |
) |
|
56.0 |
|
|
NM* |
Income from discontinued
operations, net of taxes |
|
— |
|
|
— |
|
|
NM* |
Net (loss)
income |
|
$ |
(13.7 |
) |
|
$ |
56.0 |
|
|
NM* |
Net (loss) income per
common share — Basic |
|
|
|
|
|
|
(Loss) income from continuing operations |
|
$ |
(0.20 |
) |
|
$ |
0.84 |
|
|
NM* |
Income from discontinued operations |
|
— |
|
|
— |
|
|
NM* |
Net (loss) income |
|
$ |
(0.20 |
) |
|
$ |
0.84 |
|
|
NM* |
Net (loss) income per
common share — Diluted |
|
|
|
|
|
|
(Loss) income from continuing operations |
|
$ |
(0.20 |
) |
|
$ |
0.83 |
|
|
NM* |
Income from discontinued operations |
|
— |
|
|
— |
|
|
NM* |
Net (loss) income |
|
$ |
(0.20 |
) |
|
$ |
0.83 |
|
|
NM* |
Weighted-average
common and common equivalent shares
outstanding |
|
|
|
|
|
|
Basic |
|
67.5 |
|
|
66.9 |
|
|
|
Diluted(2) |
|
67.5 |
|
|
67.2 |
|
|
|
Dividends declared per
common share |
|
$ |
0.190 |
|
|
$ |
0.185 |
|
|
|
*Not meaningful (due to variance greater than or equal to
+/-100%)
(1) 2021 includes $112.9 million litigation settlement reserve |
(2) The dilutive impact of the Company’s PSUs, RSUs and stock
options has been excluded from the calculation of diluted (loss)
earnings per share for the three months ended July 31, 2021 because
their inclusion would have an antidilutive effect on the net loss
per share. |
ABM INDUSTRIES INCORPORATED AND
SUBSIDIARIES
CONSOLIDATED INCOME (LOSS) STATEMENT INFORMATION
(UNAUDITED)
|
|
Nine Months Ended July 31, |
|
Increase /(Decrease) |
(in millions, except per share
amounts) |
|
2021 |
|
2020 |
|
Revenues |
|
$ |
4,533.0 |
|
|
$ |
4,503.0 |
|
|
0.7% |
Operating expenses |
|
3,812.0 |
|
|
3,914.8 |
|
|
(2.6)% |
Selling, general and
administrative expenses(1) |
|
538.3 |
|
|
350.8 |
|
|
53.5% |
Restructuring and related |
|
— |
|
|
5.0 |
|
|
NM* |
Amortization of intangible
assets |
|
32.1 |
|
|
37.0 |
|
|
(13.2)% |
Impairment loss of goodwill
and other intangibles |
|
— |
|
|
172.8 |
|
|
NM* |
Operating
profit |
|
150.6 |
|
|
22.8 |
|
|
NM* |
Income from unconsolidated
affiliates |
|
1.4 |
|
|
2.0 |
|
|
(31.4)% |
Interest expense |
|
(22.6 |
) |
|
(34.5 |
) |
|
34.5% |
Income (loss) from continuing
operations before income taxes |
|
129.4 |
|
|
(9.7 |
) |
|
NM* |
Income tax provision |
|
(37.4 |
) |
|
(43.2 |
) |
|
13.3% |
Income (loss) from continuing
operations |
|
92.0 |
|
|
(52.9 |
) |
|
NM* |
Income from discontinued
operations, net of taxes |
|
— |
|
|
0.1 |
|
|
NM* |
Net income
(loss) |
|
$ |
92.0 |
|
|
$ |
(52.8 |
) |
|
NM* |
Net income (loss) per
common share — Basic |
|
|
|
|
|
|
Income (loss) from continuing operations |
|
$ |
1.37 |
|
|
$ |
(0.79 |
) |
|
NM* |
Income from discontinued operations |
|
— |
|
|
— |
|
|
NM* |
Net income (loss) |
|
$ |
1.37 |
|
|
$ |
(0.79 |
) |
|
NM* |
Net income (loss) per
common share — Diluted |
|
|
|
|
|
|
Income (loss) from continuing operations |
|
$ |
1.36 |
|
|
$ |
(0.79 |
) |
|
NM* |
Income from discontinued operations |
|
— |
|
|
— |
|
|
NM* |
Net income (loss) |
|
$ |
1.36 |
|
|
$ |
(0.79 |
) |
|
NM* |
Weighted-average
common and common equivalent shares
outstanding |
|
|
|
|
|
|
Basic |
|
67.3 |
|
|
66.9 |
|
|
|
Diluted(2) |
|
67.8 |
|
|
66.9 |
|
|
|
Dividends declared per
common share |
|
$ |
0.570 |
|
|
$ |
0.555 |
|
|
|
*Not meaningful (due to variance greater than or equal to
+/-100%)
(1) 2021 includes $142.9 million litigation settlement reserve |
(2) The dilutive impact of the Company’s PSUs, RSUs and stock
options has been excluded from the calculation of diluted earnings
(loss) per share for the nine months ended July 31, 2020
because their inclusion would have an antidilutive effect on the
net loss per share. |
ABM INDUSTRIES INCORPORATED AND
SUBSIDIARIES
SELECTED CONSOLIDATED CASH FLOW INFORMATION
(UNAUDITED)
|
|
Three Months Ended July 31, |
(in millions) |
|
2021 |
|
2020 |
Net cash provided by operating
activities of continuing operations |
|
87.6 |
|
|
$ |
130.9 |
|
Net cash provided by operating
activities of discontinued operations |
|
— |
|
|
— |
|
Net cash provided by operating activities |
|
$ |
87.6 |
|
|
$ |
130.9 |
|
Additions to property, plant
and equipment |
|
(8.4 |
) |
|
(9.8 |
) |
Other |
|
0.6 |
|
|
0.9 |
|
Net cash used in
investing activities |
|
$ |
(7.8 |
) |
|
$ |
(8.8 |
) |
(Taxes withheld) proceeds from
issuance of share-based compensation awards, net |
|
(2.2 |
) |
|
0.8 |
|
Dividends paid |
|
(12.8 |
) |
|
(12.3 |
) |
Deferred financing costs
paid |
|
(6.4 |
) |
|
(4.4 |
) |
Borrowings from credit
facility |
|
30.1 |
|
|
3.7 |
|
Repayment of borrowings from
credit facility |
|
(15.1 |
) |
|
(445.0 |
) |
Changes in book cash
overdrafts |
|
(6.4 |
) |
|
13.1 |
|
Financing of energy savings
performance contracts |
|
3.3 |
|
|
0.4 |
|
Repayment of finance lease
obligations |
|
(0.8 |
) |
|
(1.2 |
) |
Net cash used in
financing activities |
|
$ |
(10.2 |
) |
|
$ |
(444.9 |
) |
Effect of exchange
rate changes on cash and cash equivalents |
|
0.2 |
|
|
(3.6 |
) |
ABM INDUSTRIES INCORPORATED AND
SUBSIDIARIES
SELECTED CONSOLIDATED CASH FLOW INFORMATION
(UNAUDITED)
|
|
Nine Months Ended July 31, |
(in millions) |
|
2021 |
|
2020 |
Net cash provided by operating activities of continuing
operations |
|
$ |
258.8 |
|
|
$ |
258.7 |
|
Net cash provided by operating
activities of discontinued operations |
|
— |
|
|
0.1 |
|
Net cash provided by
operating activities |
|
$ |
258.8 |
|
|
$ |
258.8 |
|
Additions to property, plant
and equipment |
|
(23.3 |
) |
|
(28.9 |
) |
Other |
|
2.1 |
|
|
10.8 |
|
Net cash used in
investing activities |
|
$ |
(21.2 |
) |
|
$ |
(18.1 |
) |
Taxes withheld from issuance
of share-based compensation awards, net |
|
(7.8 |
) |
|
(0.6 |
) |
Repurchases of common
stock |
|
— |
|
|
(5.1 |
) |
Dividends paid |
|
(38.2 |
) |
|
(37.0 |
) |
Deferred financing costs
paid |
|
(6.4 |
) |
|
(4.4 |
) |
Borrowings from credit
facility |
|
32.7 |
|
|
1,052.0 |
|
Repayment of borrowings from
credit facility |
|
(97.9 |
) |
|
(1,103.1 |
) |
Changes in book cash
overdrafts |
|
(19.6 |
) |
|
31.3 |
|
Financing of energy savings
performance contracts |
|
10.8 |
|
|
1.5 |
|
Repayment of finance lease
obligations |
|
(2.3 |
) |
|
(2.7 |
) |
Net cash used in
financing activities |
|
$ |
(128.7 |
) |
|
$ |
(68.1 |
) |
Effect of exchange
rate changes on cash and cash equivalents |
|
2.3 |
|
|
(1.7 |
) |
ABM INDUSTRIES INCORPORATED AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET INFORMATION
(UNAUDITED)
(in millions) |
|
July 31, 2021 |
|
October 31, 2020 |
ASSETS |
|
|
|
|
Current assets |
|
|
|
|
Cash and cash equivalents |
|
$ |
505.4 |
|
|
$ |
394.2 |
|
Trade accounts receivable, net of allowances |
|
910.2 |
|
|
854.2 |
|
Costs incurred in excess of amounts billed |
|
43.0 |
|
|
52.2 |
|
Prepaid expenses |
|
87.8 |
|
|
85.4 |
|
Other current assets |
|
54.0 |
|
|
55.9 |
|
Total current assets |
|
1,600.3 |
|
|
1,441.9 |
|
Other investments |
|
11.1 |
|
|
11.1 |
|
Property, plant and equipment,
net of accumulated depreciation |
|
111.8 |
|
|
133.7 |
|
Right-of-use assets |
|
129.5 |
|
|
143.1 |
|
Other intangible assets, net
of accumulated amortization |
|
207.7 |
|
|
239.7 |
|
Deferred income tax asset,
net |
|
38.2 |
|
|
— |
|
Goodwill |
|
1,675.5 |
|
|
1,671.4 |
|
Other noncurrent assets |
|
123.2 |
|
|
136.1 |
|
Total assets |
|
$ |
3,897.4 |
|
|
$ |
3,776.9 |
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
Current liabilities |
|
|
|
|
Current portion of long-term debt, net |
|
$ |
31.4 |
|
|
$ |
116.7 |
|
Trade accounts payable |
|
224.8 |
|
|
273.3 |
|
Accrued compensation |
|
171.3 |
|
|
187.6 |
|
Accrued taxes—other than income |
|
106.3 |
|
|
45.5 |
|
Insurance claims |
|
154.9 |
|
|
155.2 |
|
Income taxes payable |
|
15.3 |
|
|
6.2 |
|
Current portion of lease liabilities |
|
32.4 |
|
|
35.0 |
|
Other accrued liabilities |
|
369.0 |
|
|
167.3 |
|
Total current liabilities |
|
1,105.5 |
|
|
986.9 |
|
Long-term debt, net |
|
623.8 |
|
|
603.0 |
|
Long-term lease
liabilities |
|
119.4 |
|
|
131.4 |
|
Deferred income tax liability,
net |
|
— |
|
|
10.8 |
|
Noncurrent insurance
claims |
|
344.4 |
|
|
366.3 |
|
Other noncurrent
liabilities |
|
111.6 |
|
|
168.1 |
|
Noncurrent income taxes
payable |
|
12.4 |
|
|
10.1 |
|
Total liabilities |
|
2,317.1 |
|
|
2,276.6 |
|
Total stockholders’
equity |
|
1,580.3 |
|
|
1,500.3 |
|
Total liabilities and
stockholders’ equity |
|
$ |
3,897.4 |
|
|
$ |
3,776.9 |
|
ABM INDUSTRIES INCORPORATED AND
SUBSIDIARIES
REVENUES AND OPERATING PROFIT (LOSS) BY SEGMENT
(UNAUDITED)
|
|
Three Months Ended July 31, |
|
Increase/(Decrease) |
(in millions) |
|
2021 |
|
2020 |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
Business & Industry |
|
$ |
807.7 |
|
|
$ |
756.9 |
|
|
6.7% |
Technology &
Manufacturing |
|
246.1 |
|
|
243.2 |
|
|
1.2% |
Education |
|
208.4 |
|
|
188.6 |
|
|
10.5% |
Aviation |
|
175.7 |
|
|
116.4 |
|
|
51.0% |
Technical Solutions |
|
146.1 |
|
|
119.2 |
|
|
22.7% |
Elimination of inter-segment
revenues |
|
(40.9 |
) |
|
(30.1 |
) |
|
(36.0)% |
Total
Revenues |
|
$ |
1,543.1 |
|
|
$ |
1,394.1 |
|
|
10.7% |
Operating (loss)
profit |
|
|
|
|
|
|
Business & Industry |
|
$ |
84.7 |
|
|
$ |
71.6 |
|
|
18.2% |
Technology &
Manufacturing |
|
25.5 |
|
|
24.5 |
|
|
3.9% |
Education |
|
17.7 |
|
|
18.3 |
|
|
(3.3)% |
Aviation |
|
10.3 |
|
|
(8.2 |
) |
|
NM* |
Technical Solutions |
|
14.5 |
|
|
13.2 |
|
|
10.1% |
Corporate (2021 includes
$112.9m litigation settlement reserve) |
|
(161.1 |
) |
|
(24.8 |
) |
|
NM* |
Adjustment for income from
unconsolidated affiliates, included in Aviation and Technical
Solutions |
|
(0.5 |
) |
|
(0.2 |
) |
|
NM* |
Adjustment for tax deductions
for energy efficient government buildings, included in Technical
Solutions |
|
(0.5 |
) |
|
(0.8 |
) |
|
38.0% |
Total operating (loss)
profit |
|
(9.4 |
) |
|
93.6 |
|
|
NM* |
Income from unconsolidated
affiliates |
|
0.5 |
|
|
0.2 |
|
|
NM* |
Interest expense |
|
(6.3 |
) |
|
(13.8 |
) |
|
54.4% |
(Loss) income from continuing
operations before income taxes |
|
(15.2 |
) |
|
80.0 |
|
|
NM* |
Income tax benefit
(provision) |
|
1.5 |
|
|
(24.0 |
) |
|
NM* |
(Loss) income from continuing
operations |
|
(13.7 |
) |
|
56.0 |
|
|
NM* |
Income from discontinued
operations, net of taxes |
|
— |
|
|
— |
|
|
NM* |
Net (loss)
income |
|
$ |
(13.7 |
) |
|
$ |
56.0 |
|
|
NM* |
*Not meaningful (due to variance greater than or equal to
+/-100%)
ABM INDUSTRIES INCORPORATED AND
SUBSIDIARIES
REVENUES AND OPERATING PROFIT (LOSS) BY SEGMENT
(UNAUDITED)
|
|
Nine Months Ended July 31, |
|
Increase/(Decrease) |
(in millions) |
|
2021 |
|
2020 |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
Business & Industry |
|
$ |
2,413.3 |
|
|
$ |
2,363.4 |
|
|
2.1% |
Technology &
Manufacturing |
|
741.6 |
|
|
710.8 |
|
|
4.3% |
Education |
|
632.0 |
|
|
596.6 |
|
|
5.9% |
Aviation |
|
467.2 |
|
|
539.9 |
|
|
(13.5)% |
Technical Solutions |
|
385.0 |
|
|
383.5 |
|
|
0.4% |
Elimination of inter-segment
revenues |
|
(106.1 |
) |
|
(91.1 |
) |
|
(16.5)% |
Total
Revenues |
|
$ |
4,533.0 |
|
|
$ |
4,503.0 |
|
|
0.7% |
Operating
profit |
|
|
|
|
|
|
Business & Industry |
|
$ |
255.6 |
|
|
$ |
169.1 |
|
|
51.2% |
Technology &
Manufacturing |
|
79.2 |
|
|
60.9 |
|
|
30.2% |
Education (2020 includes
$99.3m impairment charge) |
|
52.8 |
|
|
(56.3 |
) |
|
NM* |
Aviation (2020 includes $61.1m
impairment charge) |
|
19.3 |
|
|
(63.0 |
) |
|
NM* |
Technical Solutions (2020
includes $12.4m impairment charge) |
|
30.8 |
|
|
13.1 |
|
|
NM* |
Government Services |
|
(0.1 |
) |
|
— |
|
|
NM* |
Corporate (2021 includes
$142.9m litigation settlement reserve) |
|
(284.5 |
) |
|
(97.7 |
) |
|
NM* |
Adjustment for income from
unconsolidated affiliates, included in Aviation and Technical
Solutions |
|
(1.4 |
) |
|
(2.0 |
) |
|
31.4% |
Adjustment for tax deductions
for energy efficient government buildings, included in Technical
Solutions |
|
(1.1 |
) |
|
(1.2 |
) |
|
11.6% |
Total operating
profit |
|
150.6 |
|
|
22.8 |
|
|
NM* |
Income from unconsolidated
affiliates |
|
1.4 |
|
|
2.0 |
|
|
(31.4)% |
Interest expense |
|
(22.6 |
) |
|
(34.5 |
) |
|
34.5% |
Income (loss) from continuing
operations before income taxes |
|
129.4 |
|
|
(9.7 |
) |
|
NM* |
Income tax provision |
|
(37.4 |
) |
|
(43.2 |
) |
|
13.3% |
Income (loss) from continuing
operations |
|
92.0 |
|
|
(52.9 |
) |
|
NM* |
Income from discontinued
operations, net of taxes |
|
— |
|
|
0.1 |
|
|
NM* |
Net income
(loss) |
|
$ |
92.0 |
|
|
$ |
(52.8 |
) |
|
NM* |
*Not meaningful (due to variance greater than or equal to
+/-100%)
ABM INDUSTRIES INCORPORATED AND
SUBSIDIARIES
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
(in millions, except per share
amounts) |
|
Three Months Ended July 31, |
|
Nine Months Ended July 31, |
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Reconciliation of (Loss)
Income from ContinuingOperations to Adjusted Income from Continuing
Operations |
|
|
|
|
|
|
|
|
(Loss) income from continuing operations |
|
$ |
(13.7 |
) |
|
$ |
56.0 |
|
|
$ |
92.0 |
|
|
$ |
(52.9 |
) |
Items impacting
comparability(a) |
|
|
|
|
|
|
|
|
Prior year self-insurance adjustment(b) |
|
(26.1 |
) |
|
(8.5 |
) |
|
(37.5 |
) |
|
(11.2 |
) |
Restructuring and related(c) |
|
— |
|
|
— |
|
|
— |
|
|
5.0 |
|
Legal costs and other settlements(d) |
|
114.9 |
|
|
0.9 |
|
|
151.4 |
|
|
5.9 |
|
Acquisition costs |
|
2.6 |
|
|
— |
|
|
2.6 |
|
|
— |
|
Impairment loss |
|
— |
|
|
— |
|
|
— |
|
|
172.8 |
|
Other(g) |
|
9.1 |
|
|
(0.6 |
) |
|
9.1 |
|
|
(1.0 |
) |
Total items impacting
comparability |
|
100.5 |
|
|
(8.2 |
) |
|
125.6 |
|
|
171.5 |
|
Income tax (benefit) provision
(e)(f) |
|
(25.4 |
) |
|
2.3 |
|
|
(32.5 |
) |
|
(1.8 |
) |
Items impacting comparability,
net of taxes |
|
75.1 |
|
|
(5.9 |
) |
|
93.1 |
|
|
169.6 |
|
Adjusted income from continuing
operations |
|
$ |
61.3 |
|
|
$ |
50.1 |
|
|
$ |
185.1 |
|
|
$ |
116.7 |
|
|
|
Three Months Ended July 31, |
|
Nine Months Ended July 31, |
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Reconciliation of Net
(Loss) Income to Adjusted EBITDA |
|
|
|
|
|
|
|
|
Net (loss) income |
|
$ |
(13.7 |
) |
|
$ |
56.0 |
|
|
$ |
92.0 |
|
|
$ |
(52.8 |
) |
Items impacting comparability |
|
100.5 |
|
|
(8.2 |
) |
|
125.6 |
|
|
171.5 |
|
Income from discontinued operations, net of taxes |
|
— |
|
|
— |
|
|
— |
|
|
(0.1 |
) |
Income tax (benefit) provision |
|
(1.5 |
) |
|
24.0 |
|
|
37.4 |
|
|
43.2 |
|
Interest expense |
|
6.3 |
|
|
13.8 |
|
|
22.6 |
|
|
34.5 |
|
Depreciation and amortization |
|
21.9 |
|
|
24.1 |
|
|
66.2 |
|
|
73.2 |
|
Adjusted EBITDA |
|
$ |
113.5 |
|
|
$ |
109.7 |
|
|
$ |
343.8 |
|
|
$ |
269.4 |
|
|
|
Three Months Ended July 31, |
|
Nine Months Ended July 31, |
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Reconciliation of (Loss)
Income from ContinuingOperations per Diluted Share to Adjusted
Income fromContinuing Operations per Diluted Share |
|
|
|
|
|
|
|
|
(Loss) income from continuing operations per diluted share |
|
$ |
(0.20 |
) |
|
$ |
0.83 |
|
|
$ |
1.36 |
|
|
$ |
(0.79 |
) |
Items impacting comparability, net of taxes |
|
1.10 |
|
|
(0.09 |
) |
|
1.37 |
|
|
2.53 |
|
Adjusted income from continuing
operations per diluted share |
|
$ |
0.90 |
|
|
$ |
0.75 |
|
|
$ |
2.73 |
|
|
$ |
1.74 |
|
|
|
Three Months Ended July 31, |
|
Nine Months Ended July 31, |
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Reconciliation of Net
Cash Provided by Operating Activities to Free Cash
Flow |
|
|
|
|
|
|
|
|
Net cash provided by operating activities |
|
$ |
87.6 |
|
|
$ |
130.9 |
|
|
$ |
258.8 |
|
|
$ |
258.8 |
|
Additions to property, plant and equipment |
|
(8.4 |
) |
|
(9.8 |
) |
|
(23.3 |
) |
|
(28.9 |
) |
Free Cash Flow |
|
$ |
79.2 |
|
|
$ |
121.1 |
|
|
$ |
235.5 |
|
|
$ |
229.9 |
|
(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 and nine months ended July 31, 2021, our self-insurance
general liability, workers’ compensation, and automobile and
medical and dental insurance claims related to prior period
accident years decreased by $26.1 million and $37.5 million,
respectively. For the three and nine months ended July 31,
2020, the liability decreased by $8.5 million and $11.2 million,
respectively.
(c) Represents restructuring costs related to
the integration of GCA acquisition in September 2017.
(d) The three and nine months ended July 31,2021
includes a reserve for an ongoing litigation of $112.9 million and
$142.9 million, respectively, which will be detailed in the
Company’s third quarter Form 10-Q.
(e) 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.
(f) The three and nine months ended July 31, 2021, includes a
$2.8 million charge from change of tax reserves. The nine months
ended July 31, 2020, includes a $45.2 million tax charge related to
impairment of nondeductible goodwill.
(g) The three and nine months ended July 31, 2021, includes $9.1
million of non-cash impairment charge for previously capitalized
internal-use software related to our ERP system implementation as
we determined that certain components developed will no longer be
incorporated into the new ERP system.
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