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 THIRD QUARTER 2011 FINANCIAL RESULTS
AND DECLARES QUARTERLY DIVIDEND
AND DECLARES QUARTERLY DIVIDEND
Revenues Increase 24% Driven by Acquired Companies
Weaker Economy Impacts Outlook
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
| (in millions, | July 31, | Increase | July 31, | Increase | ||||||||||||||||||||
| except per share data) | 2011 | 2010 | (Decrease) | 2011 | 2010 | (Decrease) | ||||||||||||||||||
Revenues |
$ | 1,076.2 | $ | 869.0 | 23.8 | % | $ | 3,165.5 | $ | 2,594.4 | 22.0 | % | ||||||||||||
Net cash provided by continuing operating activities |
$ | 51.0 | $ | 35.2 | 44.9 | % | $ | 82.6 | $ | 73.0 | 13.1 | % | ||||||||||||
Income from continuing operations |
$ | 27.9 | $ | 21.0 | 33.1 | % | $ | 50.5 | $ | 42.4 | 19.1 | % | ||||||||||||
Income from continuing operations per diluted share |
$ | 0.51 | $ | 0.40 | 27.5 | % | $ | 0.93 | $ | 0.80 | 16.3 | % | ||||||||||||
Net income |
$ | 27.9 | $ | 21.0 | 33.0 | % | $ | 50.5 | $ | 42.3 | 19.2 | % | ||||||||||||
Net income per diluted share |
$ | 0.51 | $ | 0.40 | 27.5 | % | $ | 0.93 | $ | 0.80 | 16.3 | % | ||||||||||||
Adjusted income from continuing operations |
$ | 27.9 | $ | 22.0 | 27.0 | % | $ | 54.6 | $ | 47.9 | 13.9 | % | ||||||||||||
Adjusted income from continuing operations per diluted share |
$ | 0.51 | $ | 0.42 | 21.4 | % | $ | 1.01 | $ | 0.91 | 11.0 | % | ||||||||||||
Adjusted EBITDA |
$ | 54.9 | $ | 45.9 | 19.7 | % | $ | 132.7 | $ | 108.0 | 22.9 | % | ||||||||||||
(This release refers to non-GAAP financial measures described as “Adjusted EBITDA”, “Adjusted
Income from Continuing Operations”, and “Adjusted Income from Continuing Operations per Diluted
Share” (or “Adjusted EPS”). Refer to the accompanying financial tables for supplemental financial
data and corresponding reconciliation of these non-GAAP financial measures to certain GAAP
financial measures.)
NEW YORK, NY — September 8, 2011 — ABM Industries Incorporated (NYSE:ABM) today announced
revenues for the third quarter of fiscal year 2011 of $1.08 billion, a 23.8% increase compared to
third quarter of fiscal year 2010 revenues of $869.0 million. Income from continuing operations
for the third quarter of fiscal year 2011 was $27.9 million, a 33.1% increase from $21.0 million in
the third quarter of fiscal year 2010. Income from continuing operations per diluted share for the
third quarter of fiscal year 2011 increased 27.5% to $0.51 compared to income from continuing
operations per diluted share of $0.40 in the third quarter of fiscal year 2010. Income from
continuing operations increased primarily as a result of a $4.7 million after-tax increase in
Divisional operating profit, driven by the companies acquired in calendar 2010, $4.7 million
related to a re-measurement of certain unrecognized tax benefits and $1.5 million after-tax from
settling a dispute related to an acquisition. This year-over-year increase in income from
continuing operations was partially offset by higher share-based compensation expense of $2.2
million after-tax and a $1.9 million after-tax increase in interest expense compared to the
year-ago quarter.
“Our Divisions once again generated quarterly revenues exceeding $1 billion, driven by the
companies we acquired last year, and including slight organic growth,” said Henrik Slipsager,
president and chief executive officer, ABM Industries. “All four Divisions produced higher
revenues year-over-year, consistent with prior quarters in the 2011 fiscal year. The higher
revenues helped the Divisions’ combined operating profit, excluding corporate, increase 15% to more
than $60.0 million. Janitorial operating profit increased 4.6%, despite year-over-year increases
in fuel costs and state unemployment insurance expenses. Our Engineering and Parking segments
generated double digit growth. Engineering profits were up 61.5%, reflecting the contribution from
the Linc operations we acquired in the first quarter of the current fiscal year. Parking achieved
year-over-year growth of 23.1%, primarily related to operating profit associated with lots acquired
in the L&R acquisition. Even as we produced higher revenues and profit in the quarter, we also saw
clear signs that the current slow to no growth economy is causing clients to take additional cost
containment measures, leading to further price reductions in an already compressed market. This
erosion, combined with the shift in revenues from delayed federal appropriations, impacts our view
of the fourth quarter.”
“In the third quarter, net income and adjusted income from continuing operations both increased to
nearly $28 million and $0.51 per diluted share as items impacting comparability did not
significantly influence the quarter’s results. As noted, our results included the $4.7 million
related to a re-measurement of certain unrecognized tax benefits compared to the year-ago quarter,
partially offset by the $2.2 million after-tax increase in share-based compensation expense.
Adjusted EBIDTA increased to $54.9 million, up nearly 20%, and our adjusted EBITDA margin increased
sequentially 114 basis points to 5.1%. We grew our cash from continuing operations, increasing
nearly 45% to $51.0 million, compared to the third quarter of fiscal year 2010.”
Excluding items impacting comparability, adjusted income from continuing operations was $27.9
million, or $0.51 per diluted share, for the third quarter of fiscal year 2011. This compares to
adjusted income from continuing operations of $22.0 million, or $0.42 per diluted share, in the
third quarter of fiscal year 2010.
The Company’s adjusted EBITDA (earnings before interest, taxes, depreciation and amortization, and
excluding discontinued operations and items impacting comparability) for the third quarter of
fiscal year 2011 was $54.9 million, a 19.7% increase compared to $45.9 million in the third quarter
of fiscal year 2010.
Net cash from continuing operations was $51.0 million in the third quarter of fiscal year 2011, a
44.9% increase compared to $35.2 million in the third quarter of fiscal year 2010.
- 2 -
The Company reported revenues for the nine months ended July 31, 2011 of $3.17 billion, driven by
the companies acquired in calendar 2010, a 22.0% increase compared to year-ago revenues of $2.59
billion. Income from continuing operations for the first nine months of fiscal year 2011 was $50.5
million, or $0.93 per diluted share, compared to $42.4 million, or $0.80 per diluted share, for the
first nine months of fiscal year 2010. Adjusted income from continuing operations for the first
nine months of fiscal year 2011 was $54.6 million, or $1.01 per diluted share, compared to $47.9
million, or $0.91 per diluted share, for the first nine months of fiscal year 2010. Adjusted
EBITDA for the first nine months of fiscal year 2011 was $132.7 million, a 22.9% increase compared
to $108.0 million for the first nine months of fiscal year 2010. Net cash from continuing
operation increased to $82.6 million for the first nine months of fiscal year 2011, a 13.1%
increase compared to $73.0 million for the first nine months of fiscal year 2010.
The Company also announced that the Board of Directors has declared a fourth quarter cash dividend
of $0.14 per common share payable on November 7, 2011 to stockholders of record on October 6, 2011.
This will be ABM’s 182nd consecutive quarterly cash dividend.
Guidance
Slipsager concluded: “Through the first two quarters, our performance was essentially in line with
our expectations. During the third quarter, it became clear that the U.S. economy will be weaker
than anticipated, impacting our clients and resulting in further price compression, particularly in
our Janitorial business. Further, as we have previously discussed, the delay in passing federal
appropriations had an adverse impact on the timing of awarding contracts to Linc Government
Services, which we expect to shift the start of projects from fiscal year 2011 to fiscal year 2012.
Taken together, along with higher unemployment insurance expense and fuel and related costs, we
are lowering our expectations for the fourth quarter.”
The Company now estimates that income from continuing operations per diluted share for the full
2011 fiscal year will be in the lower end of the range of $1.23 to $1.33 and is revising the range
for adjusted income from continuing operations per diluted share, for the same period, to $1.32 to
$1.42.
Earnings Webcast
On Friday, September 9, 2011, at 9:00 a.m. (EDT), ABM will host a live webcast of remarks by
President and Chief Executive Officer Henrik Slipsager and Executive Vice President and Chief
Financial Officer James Lusk.
The webcast will be accessible at: http://investor.abm.com/eventdetail.cfm?eventid=101716
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 877-664-7395 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 855-859-2056 and then entering ID #94700142.
Earnings Webcast Presentation
In connection with the webcast 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 a leading provider of integrated facility services. With fiscal 2010 revenues of
approximately $3.5 billion and nearly 100,000 employees, ABM provides commercial cleaning and
maintenance, facility engineering, energy efficiency, parking and security services for thousands
of commercial, industrial, government and retail clients across the United States and various
international locations. ABM’s business services include ABM Janitorial Services, ABM Facility
Services, ABM Engineering Services, Ampco System Parking and ABM Security Services. For more
information, visit www.abm.com.
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Cautionary Statement under the Private Securities Litigation Reform Act of 1995
This press release contains forward-looking statements that set forth management’s anticipated
results based on management’s current plans and assumptions. Any number of factors could cause the
Company’s actual results to differ materially from those anticipated. These factors include but are
not limited to the following: (1) risks relating to our acquisition of Linc, including risks
relating to reductions in government spending on outsourced services as well as payment delays, may
adversely affect a significant portion of revenues generated by government contracts, and political
and compliance risks, both domestically and abroad, may adversely impact our operations; (2) our
acquisition strategy may adversely impact our results of operations; (3) intense competition can
constrain our ability to gain business, as well as our profitability; (4) we are subject to
volatility associated with high deductibles for certain insurable risks; (5) an increase in costs
that we cannot pass on to clients could affect our profitability; (6) we provide our services
pursuant to agreements which are generally cancelable by either party upon 30 to 90 days’ notice;
(7) our success depends on our ability to preserve our long-term relationships with clients; (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)
financial difficulties or bankruptcy of one or more of our major clients could adversely affect
results; (12) we are subject to risks relating to foreign currency fluctuations and foreign
exchange exposure; (13) our ability to operate and pay our debt obligations depends upon our access
to cash; (14) because we conduct our business through operating subsidiaries, we depend on those
entities to generate the funds necessary to meet financial obligations; (15) that portion of our
revenues which are generated from international operations are subject to political risks and
changes in socio-economic conditions, laws and regulations, including labor, monetary and fiscal
policies, which could negatively impact our ability to operate and grow our business in the
international arena; (16) 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; (17) uncertainty in the credit markets may negatively impact our costs of borrowings, our
ability to collect receivables on a timely basis, and our cash flow; (18) any future increase in
the level of debt or in interest rates can affect our results of operations; (19) an impairment
charge could have a material adverse effect on our financial condition and results of operations;
(20) we are defendants in several class and representative actions or other lawsuits alleging
various claims that could cause us to incur substantial liabilities; (21) 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 as well as our
reputation; (22) labor disputes could lead to loss of revenues or expense variations; (23) federal
health care reform legislation may adversely affect our business and results of operations; (24) we
participate in multi-employer defined benefit plans that could result in substantial liabilities
being incurred; and (25) natural disasters or acts of terrorism could disrupt our services.
Additional information regarding these and other risks and uncertainties the Company faces is
contained in the Company’s Annual Report on Form 10-K for the year ended October 31, 2010 and in
other reports the Company files from time to time with the Securities and Exchange Commission.
- 4 -
Use of Non-GAAP Financial Information
To supplement ABM’s consolidated financial information, the Company has presented income from
continuing operations, as adjusted for items impacting comparability, for the third quarter of
fiscal years 2011 and 2010. The Company also presents guidance for fiscal year 2011, as adjusted.
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 third quarter of fiscal years 2011 and 2010. 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.)
###
- 5 -
Financial Schedules
ABM INDUSTRIES INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED INCOME STATEMENT INFORMATION
(UNAUDITED)
| Three Months Ended July 31, | Increase | |||||||||||
| (In thousands, except per share data) | 2011 | 2010 | (Decrease) | |||||||||
Revenues |
$ | 1,076,247 | $ | 869,029 | 23.8 | % | ||||||
Expenses |
||||||||||||
Operating |
952,844 | 776,224 | 22.8 | % | ||||||||
Selling, general and administrative |
76,356 | 54,697 | 39.6 | % | ||||||||
Amortization of intangible assets |
6,314 | 2,782 | 127.0 | % | ||||||||
Total expenses |
1,035,514 | 833,703 | 24.2 | % | ||||||||
Operating profit |
40,733 | 35,326 | 15.3 | % | ||||||||
Income from unconsolidated affiliates, net |
1,166 | — | NM | * | ||||||||
Interest expense |
(4,114 | ) | (1,149 | ) | 258.1 | % | ||||||
Income from continuing operations
before income taxes |
37,785 | 34,177 | 10.6 | % | ||||||||
Provision for income taxes |
(9,874 | ) | (13,204 | ) | (25.2 | )% | ||||||
Income from continuing operations |
27,911 | 20,973 | 33.1 | % | ||||||||
Loss from discontinued operations, net of taxes |
(36 | ) | (10 | ) | NM | * | ||||||
Net Income |
$ | 27,875 | $ | 20,963 | 33.0 | % | ||||||
Net Income Per Common Share — Basic |
||||||||||||
Income from continuing operations |
$ | 0.52 | $ | 0.40 | 30.0 | % | ||||||
Loss from discontinued operations |
— | — | NM | * | ||||||||
Net Income |
$ | 0.52 | $ | 0.40 | 30.0 | % | ||||||
Net Income Per Common Share — Diluted |
||||||||||||
Income from continuing operations |
$ | 0.51 | $ | 0.40 | 27.5 | % | ||||||
Loss from discontinued operations |
— | — | NM | * | ||||||||
Net Income |
$ | 0.51 | $ | 0.40 | 27.5 | % | ||||||
* Not Meaningful |
||||||||||||
Average Common And Common Equivalent Shares |
||||||||||||
Basic |
53,207 | 52,149 | ||||||||||
Diluted |
54,201 | 52,996 | ||||||||||
Dividends Declared Per Common Share |
$ | 0.140 | $ | 0.135 | ||||||||
- 6 -
ABM INDUSTRIES INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED INCOME STATEMENT INFORMATION
(UNAUDITED)
| Nine Months Ended July 31, | Increase | |||||||||||
| (In thousands, except per share data) | 2011 | 2010 | (Decrease) | |||||||||
Revenues |
$ | 3,165,499 | $ | 2,594,374 | 22.0 | % | ||||||
Expenses |
||||||||||||
Operating |
2,821,672 | 2,330,299 | 21.1 | % | ||||||||
Selling, general and administrative |
242,406 | 182,743 | 32.6 | % | ||||||||
Amortization of intangible assets |
17,273 | 8,251 | 109.3 | % | ||||||||
Total expenses |
3,081,351 | 2,521,293 | 22.2 | % | ||||||||
Operating profit |
84,148 | 73,081 | 15.1 | % | ||||||||
Other-than-temporary impairment losses
on auction rate security: |
||||||||||||
Gross impairment losses |
— | (114 | ) | NM | * | |||||||
Impairments
recognized in other comprehensive income |
— | (13 | ) | NM | * | |||||||
Income from unconsolidated affiliates, net |
2,785 | — | NM | * | ||||||||
Interest expense |
(12,477 | ) | (3,541 | ) | 252.4 | % | ||||||
Income from continuing operations
before income taxes |
74,456 | 69,413 | 7.3 | % | ||||||||
Provision for income taxes |
(23,940 | ) | (26,981 | ) | (11.3 | )% | ||||||
Income from continuing operations |
50,516 | 42,432 | 19.1 | % | ||||||||
Loss from discontinued operations, net of taxes |
(60 | ) | (117 | ) | NM | * | ||||||
Net Income |
$ | 50,456 | $ | 42,315 | 19.2 | % | ||||||
Net Income Per Common Share — Basic |
||||||||||||
Income from continuing operations |
$ | 0.95 | $ | 0.81 | 17.3 | % | ||||||
Loss from discontinued operations |
— | — | NM | * | ||||||||
Net Income |
$ | 0.95 | $ | 0.81 | 17.3 | % | ||||||
Net Income Per Common Share — Diluted |
||||||||||||
Income from continuing operations |
$ | 0.93 | $ | 0.80 | 16.3 | % | ||||||
Loss from discontinued operations |
— | — | NM | * | ||||||||
Net Income |
$ | 0.93 | $ | 0.80 | 16.3 | % | ||||||
* Not Meaningful |
||||||||||||
Average Common And Common Equivalent Shares |
||||||||||||
Basic |
53,051 | 51,992 | ||||||||||
Diluted |
54,084 | 52,754 | ||||||||||
Dividends Declared Per Common Share |
$ | 0.420 | $ | 0.405 | ||||||||
- 7 -
ABM INDUSTRIES INCORPORATED AND SUBSIDIARIES
SELECTED CONSOLIDATED CASH FLOW INFORMATION
(UNAUDITED)
| Three Months Ended July 31, | ||||||||
| (In thousands) | 2011 | 2010 | ||||||
Net cash provided by continuing operating activities |
51,028 | 35,219 | ||||||
Net cash provided by discontinued operating activities |
631 | 748 | ||||||
Net cash provided by operating activities |
$ | 51,659 | $ | 35,967 | ||||
Net cash (used in) investing activities |
$ | (4,840 | ) | $ | (36,193 | ) | ||
Proceeds from exercises of stock options
(including income tax benefit) |
1,788 | 3,121 | ||||||
Dividends paid |
(7,444 | ) | (7,037 | ) | ||||
Borrowings from line of credit |
179,000 | 69,500 | ||||||
Repayment of borrowings from line of credit |
(210,000 | ) | (64,500 | ) | ||||
Changes in book cash overdrafts |
6,160 | 11,101 | ||||||
Net cash (used in) provided by financing activities |
$ | (30,496 | ) | $ | 12,185 | |||
| Nine Months Ended July 31, | ||||||||
| (In thousands) | 2011 | 2010 | ||||||
Net cash provided by continuing operating activities |
82,552 | 72,959 | ||||||
Net cash provided by discontinued operating activities |
2,285 | 7,331 | ||||||
Net cash provided by operating activities |
$ | 84,837 | $ | 80,290 | ||||
Acquisition of Linc (net of cash acquired) |
(290,253 | ) | — | |||||
Other investing |
(12,312 | ) | (47,932 | ) | ||||
Net cash used in investing activities |
$ | (302,565 | ) | $ | (47,932 | ) | ||
Proceeds from exercises of stock options
(including income tax benefit) |
9,519 | 6,166 | ||||||
Dividends paid |
(22,278 | ) | (21,051 | ) | ||||
Deferred financing costs paid |
(4,991 | ) | — | |||||
Borrowings from line of credit |
740,500 | 298,500 | ||||||
Repayment of borrowings from line of credit |
(516,000 | ) | (321,000 | ) | ||||
Changes in book cash overdrafts |
11,146 | 3,776 | ||||||
Net cash provided by (used in) financing activities |
217,896 | $ | (33,609 | ) | ||||
- 8 -
ABM INDUSTRIES INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET INFORMATION
(UNAUDITED)
| July 31, | October 31, | |||||||
| (In thousands) | 2011 | 2010 | ||||||
Assets |
||||||||
Cash and cash equivalents |
$ | 39,614 | $ | 39,446 | ||||
Trade accounts receivable, net |
565,267 | 450,513 | ||||||
Prepaid income taxes |
4,187 | 1,498 | ||||||
Current assets of discontinued operations |
2,954 | 4,260 | ||||||
Prepaid expenses |
46,615 | 41,306 | ||||||
Notes receivable and other |
56,923 | 20,402 | ||||||
Deferred income taxes, net |
40,256 | 46,193 | ||||||
Insurance recoverables |
9,240 | 5,138 | ||||||
Total current assets |
765,056 | 608,756 | ||||||
Non-current assets of discontinued operations |
322 | 1,392 | ||||||
Insurance deposits |
35,860 | 36,164 | ||||||
Other investments and long-term receivables |
3,273 | 4,445 | ||||||
Deferred income taxes, net |
42,479 | 51,068 | ||||||
Insurance recoverables |
61,557 | 70,960 | ||||||
Other assets |
43,223 | 37,869 | ||||||
Investments in auction rate securities |
15,148 | 20,171 | ||||||
Investments in unconsolidated affiliates, net |
15,911 | — | ||||||
Property, plant and equipment, net |
62,055 | 58,088 | ||||||
Other intangible assets, net |
135,119 | 65,774 | ||||||
Goodwill |
746,832 | 593,983 | ||||||
Total assets |
$ | 1,926,835 | $ | 1,548,670 | ||||
Liabilities |
||||||||
Trade accounts payable |
$ | 129,076 | $ | 78,928 | ||||
Accrued liabilities |
||||||||
Compensation |
98,499 | 89,063 | ||||||
Taxes — other than income |
20,141 | 17,663 | ||||||
Insurance claims |
79,316 | 77,101 | ||||||
Other |
114,549 | 70,119 | ||||||
Income taxes payable |
728 | 977 | ||||||
Total current liabilities |
442,309 | 333,851 | ||||||
Income taxes payable |
33,791 | 29,455 | ||||||
Line of credit |
365,000 | 140,500 | ||||||
Retirement plans and other |
39,134 | 34,626 | ||||||
Insurance claims |
262,463 | 271,213 | ||||||
Total liabilities |
1,142,697 | 809,645 | ||||||
Stockholders’ Equity |
784,138 | 739,025 | ||||||
Total liabilities and stockholders’ equity |
$ | 1,926,835 | $ | 1,548,670 | ||||
- 9 -
ABM INDUSTRIES INCORPORATED AND SUBSIDIARIES
REVENUES AND OPERATING PROFIT BY SEGMENT (UNAUDITED)
| Three Months Ended July 31, | Increase | |||||||||||
| (In thousands) | 2011 | 2010 | (Decrease) | |||||||||
Revenues |
||||||||||||
Janitorial |
$ | 598,697 | $ | 575,204 | 4.1 | % | ||||||
Engineering |
236,213 | 94,383 | 150.3 | % | ||||||||
Parking |
153,323 | 114,222 | 34.2 | % | ||||||||
Security |
87,736 | 84,900 | 3.3 | % | ||||||||
Corporate |
278 | 320 | (13.1 | )% | ||||||||
| $ | 1,076,247 | $ | 869,029 | 23.8 | % | |||||||
Operating Profit |
||||||||||||
Janitorial |
$ | 40,144 | $ | 38,380 | 4.6 | % | ||||||
Engineering |
9,878 | 6,118 | 61.5 | % | ||||||||
Parking |
7,171 | 5,823 | 23.1 | % | ||||||||
Security |
2,813 | 2,026 | 38.8 | % | ||||||||
Corporate |
(19,273 | ) | (17,021 | ) | (13.2 | )% | ||||||
Operating profit |
40,733 | 35,326 | 15.3 | % | ||||||||
Income from unconsolidated affiliates, net |
1,166 | — | NM | * | ||||||||
Interest expense |
(4,114 | ) | (1,149 | ) | 258.1 | % | ||||||
Income from continuing operations
before income taxes |
$ | 37,785 | $ | 34,177 | 10.6 | % | ||||||
REVENUES AND OPERATING PROFIT BY SEGMENT (UNAUDITED)
| Nine Months Ended July 31, | Increase | |||||||||||
| (In thousands) | 2011 | 2010 | (Decrease) | |||||||||
Revenues |
||||||||||||
Janitorial |
$ | 1,783,557 | $ | 1,717,537 | 3.8 | % | ||||||
Engineering |
658,058 | 285,716 | 130.3 | % | ||||||||
Parking |
462,316 | 340,813 | 35.7 | % | ||||||||
Security |
260,630 | 249,209 | 4.6 | % | ||||||||
Corporate |
938 | 1,099 | (14.6 | )% | ||||||||
| $ | 3,165,499 | $ | 2,594,374 | 22.0 | % | |||||||
Operating Profit |
||||||||||||
Janitorial |
$ | 104,942 | $ | 101,040 | 3.9 | % | ||||||
Engineering |
24,170 | 16,415 | 47.2 | % | ||||||||
Parking |
16,799 | 16,033 | 4.8 | % | ||||||||
Security |
5,011 | 4,313 | 16.2 | % | ||||||||
Corporate |
(66,774 | ) | (64,720 | ) | (3.2 | )% | ||||||
Operating profit |
84,148 | 73,081 | 15.1 | % | ||||||||
Other-than-temporary impairment losses
on auction rate security: |
||||||||||||
Gross impairment losses |
— | (114 | ) | NM | * | |||||||
Impairments
recognized in other comprehensive income |
— | (13 | ) | NM | * | |||||||
Income from unconsolidated affiliates, net |
2,785 | — | NM | * | ||||||||
Interest expense |
(12,477 | ) | (3,541 | ) | 252.4 | % | ||||||
Income from continuing operations
before income taxes |
$ | 74,456 | $ | 69,413 | 7.3 | % | ||||||
| * | Not Meaningful |
- 10 -
ABM Industries Incorporated and Subsidiaries
Reconciliations of Non-GAAP Financial Measures
(Unaudited)
Reconciliations of Non-GAAP Financial Measures
(Unaudited)
(in thousands, except per share data)
| Three Months Ended July 31, | Nine Months Ended July 31, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Reconciliation of Adjusted Income from Continuing Operations to Net Income | ||||||||||||||||
Adjusted income from continuing operations |
$ | 27,882 | $ | 21,952 | $ | 54,585 | $ | 47,917 | ||||||||
Items impacting comparability, net of taxes |
29 | (979 | ) | (4,069 | ) | (5,485 | ) | |||||||||
Income from continuing operations |
27,911 | 20,973 | 50,516 | 42,432 | ||||||||||||
Loss from discontinued operations |
(36 | ) | (10 | ) | (60 | ) | (117 | ) | ||||||||
Net income |
$ | 27,875 | $ | 20,963 | $ | 50,456 | $ | 42,315 | ||||||||
| Reconciliation of Adjusted Income from Continuing Operations to Income from Continuing Operations | ||||||||||||||||
Adjusted income from continuing operations |
$ | 27,882 | $ | 21,952 | $ | 54,585 | $ | 47,917 | ||||||||
Items impacting comparability: |
||||||||||||||||
Linc purchase accounting |
(140 | ) | — | (838 | ) | — | ||||||||||
Corporate initiatives and other (a) |
(328 | ) | — | (328 | ) | (1,869 | ) | |||||||||
Insurance adjustment |
(1,079 | ) | — | (1,079 | ) | — | ||||||||||
Litigation and other settlements |
1,967 | (1,006 | ) | 1,047 | (5,406 | ) | ||||||||||
Acquisition costs |
(385 | ) | (552 | ) | (5,312 | ) | (1,658 | ) | ||||||||
Total items impacting comparability |
35 | (1,558 | ) | (6,510 | ) | (8,933 | ) | |||||||||
Income taxes (expense) benefit |
(6 | ) | 579 | 2,441 | 3,448 | |||||||||||
Items impacting comparability, net of taxes |
29 | (979 | ) | (4,069 | ) | (5,485 | ) | |||||||||
Income from continuing operations |
$ | 27,911 | $ | 20,973 | $ | 50,516 | $ | 42,432 | ||||||||
| Reconciliation of Adjusted EBITDA to Net Income | ||||||||||||||||
Adjusted EBITDA |
$ | 54,937 | $ | 45,912 | $ | 132,684 | $ | 107,959 | ||||||||
Items impacting comparability |
35 | (1,558 | ) | (6,510 | ) | (8,933 | ) | |||||||||
Discontinued operations |
(36 | ) | (10 | ) | (60 | ) | (117 | ) | ||||||||
Income tax |
(9,874 | ) | (13,204 | ) | (23,940 | ) | (26,981 | ) | ||||||||
Interest expense |
(4,114 | ) | (1,149 | ) | (12,477 | ) | (3,541 | ) | ||||||||
Depreciation and amortization |
(13,073 | ) | (9,028 | ) | (39,241 | ) | (26,072 | ) | ||||||||
Net income |
$ | 27,875 | $ | 20,963 | $ | 50,456 | $ | 42,315 | ||||||||
| (a) | Corporate initiatives for the three and nine months ended July 2011 includes the integration
costs associated with The Linc Group (TLG). Corporate initiatives for the nine months
ended July 2010 includes: (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.
|
-11-
(Continued)
Reconciliation of Adjusted Income from Continuing Operations per Diluted
Share to Income from Continuing Operations per Diluted Share
Share to Income from Continuing Operations per Diluted Share
| Three Months Ended July 31, | Nine Months Ended July 31, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
Adjusted income from continuing
operations per diluted share |
$ | 0.51 | $ | 0.42 | $ | 1.01 | $ | 0.91 | ||||||||
Items impacting comparability, net of taxes |
— | (0.02 | ) | (0.08 | ) | (0.11 | ) | |||||||||
Income from continuing operations
per diluted share |
$ | 0.51 | $ | 0.40 | $ | 0.93 | $ | 0.80 | ||||||||
Diluted shares |
54,201 | 52,996 | 54,084 | 52,754 | ||||||||||||
-12-
ABM Industries Incorporated and Subsidiaries
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, 2011
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, 2011
| Year Ending October 31, 2011 | ||||||||
| Low Estimate | High Estimate | |||||||
| (per diluted share) | ||||||||
Adjusted income from continuing operations per diluted share |
$ | 1.32 | $ | 1.42 | ||||
Adjustments to income from continuing operations (a) |
(0.09 | ) | (0.09 | ) | ||||
Income from continuing operations per diluted share |
$ | 1.23 | $ | 1.33 | ||||
| (a) | Adjustments to income from continuing operations are expected to include transaction and
integration costs associated with the acquisition of The Linc Group (TLG) and other unique items
impacting comparability.
|
-13-
