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): March 3, 2015
ABM Industries Incorporated
(Exact name of registrant as specified in its charter)
Delaware | 1-8929 | 94-1369354 |
(State or other jurisdiction | (Commission | (IRS Employer |
of incorporation) | File Number) | 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 (see General Instruction A.2. below):
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | 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 March 3, 2015, ABM Industries Incorporated (the “Company”) issued a press release announcing financial results related to the first quarter of fiscal year 2015. 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 March 3, 2015, the Company announced that the Board of Directors of the Company declared a quarterly dividend of $0.16 per share, payable on May 4, 2015 to stockholders of record on April 2, 2015. 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 March 4, 2015 relating to the Company’s financial results for the first quarter of fiscal year 2015. 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 March 3, 2015, announcing financial results related to the first quarter of fiscal year 2015 and the declaration of a dividend payable May 4, 2015 to stockholders of record on April 2, 2015. |
99.2 | Slides of ABM Industries Incorporated dated March 4, 2015. |
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: March 3, 2015 | By: | /s/ Sarah H. McConnell |
Sarah H. McConnell | ||
Executive Vice President and | ||
General Counsel |
EXHIBIT INDEX
99.1 | Press Release issued by ABM Industries Incorporated, dated March 3, 2015, announcing financial results related to the first quarter of fiscal year 2015 and the declaration of a dividend payable May 4, 2015 to stockholders of record on April 2, 2015. |
99.2 | Slides of ABM Industries Incorporated dated March 4, 2015. |
Exhibit 99.1
ABM INDUSTRIES ANNOUNCES
2015 FIRST QUARTER FINANCIAL RESULTS
Q1 Revenues Increase 5.1% to a record $1.29 billion; Organic Growth of 3.2%
Raising Guidance due to Retroactive Reinstatement of
Work Opportunity Tax Credit; Adjusted EPS: $1.75 to $1.85 and EPS: $1.55 to $1.65
Declares 196th Consecutive Quarterly Dividend
New York, NY - March 3, 2015 - ABM (NYSE:ABM), a leading provider of facility solutions, today announced financial results for the fiscal 2015 first quarter that ended January 31, 2015.
Three Months Ended January 31, |
Increase (Decrease) | ||||||||||
($ in millions, except per share amounts) (unaudited) |
2015 | 2014 | |||||||||
Revenues | $ | 1,289.4 | $ | 1,226.5 | 5.1 | % | |||||
Operating profit | $ | 19.2 | $ | 23.9 | (19.7 | )% | |||||
Adjusted operating profit | $ | 25.8 | $ | 25.6 | 0.8 | % | |||||
Net income | $ | 17.7 | $ | 13.1 | 35.1 | % | |||||
Net income per diluted share | $ | 0.31 | $ | 0.23 | 34.8 | % | |||||
Adjusted net income | $ | 21.5 | $ | 14.1 | 52.5 | % | |||||
Adjusted net income per diluted share | $ | 0.38 | $ | 0.25 | 52.0 | % | |||||
Net cash used in operating activities | $ | (32.4 | ) | $ | (38.9 | ) | 16.7 | % | |||
Adjusted EBITDA | $ | 41.3 | $ | 41.5 | (0.5 | )% |
(This release refers to non-GAAP financial measures described as “Adjusted EBITDA”, “Adjusted net income”, “Adjusted net income per diluted share” (or “Adjusted EPS”) and “Adjusted operating profit”. Refer to the accompanying financial schedules for supplemental financial data and corresponding reconciliation of these non-GAAP financial measures to certain GAAP financial measures.)
Executive Summary:
• | Revenues were a record $1.29 billion in the three months of fiscal 2015, up 5.1% compared to $1.23 billion last year, due to organic growth of 3.2% and contributions from acquisitions. |
• | Other (Air Serv), Building & Energy Solutions, and Parking achieved organic growth of 13.6%, 8.9% and 3.6%, respectively. |
• | Corporate expenses for the first quarter increased $10.2 million, or 46.2% to $32.3 million. Excluding Corporate expenses that were classified as items impacting comparability, Corporate expenses for the first quarter increased $5.3 million or 26.0%. The increase was primarily related to an increase in compensation costs and related expenses to support sales, growth and IT initiatives across the company and professional fees associated with certain employment based tax credits. |
• | Adjusted net income after-tax of $21.5 million was up 52.5% compared to $14.1 million primarily from new business, enhancements to our in-year risk management and safety programs, one less day of labor expense and the benefit of tax credits associated with the retroactive reinstatement of the 2014 Work Opportunity Tax Credit ("WOTC"). Partially offsetting these items was an increase in compensation and related expenses to support sales and IT initiatives. |
• | Net cash used in operations was $32.4 million for the three months of fiscal 2015, compared to net cash used in operations of $38.9 million for the same period last year. |
First Quarter Results and Management Commentary
“The company's performance in the first quarter of fiscal 2015 was as expected. With organic growth of 3.2% and contributions from acquisitions made in the second half of fiscal 2014, ABM achieved record revenues of $1.29 billion, up 5.1% year-over-year. In particular, Air Serv experienced organic revenue growth of 13.6%. Building and Energy Solutions business saw revenue growth of 16.9% on contributions from new jobs and acquisitions but experienced a decline of $1.5 million in operating profit resulting from a $1.2 million expense associated with the settlement of two client disputes and $0.7 million increase in selling and business development costs. We expect BESG to achieve double digit growth in both revenue and operating profit for the fiscal year as contributions from projects traditionally increase in the third and fourth quarter. Compared to the three months of fiscal 2014, our Janitorial, Facility Services, Parking, and Air Serv segments achieved double-digit improvements in operating profit," said ABM's president and chief executive officer Henrik Slipsager. "Our Janitorial segment posted a 4.5% increase in revenue primarily due to new contract wins in the West, where organic revenue growth exceeded 8%, strong tag sales in the Northeast and contributions from the acquisition of GBM Support Services Group. Operating profit for Janitorial increased 15.2% mainly due to new business, lower payroll expenses as a result of one less working day, enhancements to our risk management and safety programs, and realignment savings. Our Parking business achieved revenue growth of 3.6% and operating profit increased by 25.0%. And Air Serv, with strong growth in the U.S. and U.K. posted an increase of 36.8% in operating profit, an outstanding start to the year for our aviation vertical. Outside of operations, we were very pleased to win a unanimous reversal of a $94 million judgment in a wage-and-hour class action suit.”
Slipsager continued, “Adjusted net income for the first quarter of fiscal 2015 increased 52.5% to $21.5 million from $14.1 million in the first quarter of fiscal 2014. The increase was largely due to new business, reduced in-year insurance expense associated with enhancements to our risk management and safety programs, lower payroll expense of $2.3 million from one less working day, and tax credits of $4.8 million associated with the retroactive reinstatement of the 2014 WOTC in December. These benefits were partially offset by an increase in Corporate expenses for compensation associated with sales and IT personnel working on growth initiatives. For the fiscal year, we anticipate these types of expenses will be seven to nine percent higher compared to fiscal 2014."
James Lusk, executive vice president and chief financial officer, added, “As is typical for the first quarter of a fiscal year, the Company's operations used $32.4 million in cash, which was a 16.7% improvement from the prior year. During the quarter, the Company paid a quarterly cash dividend of $8.9 million. We ended the three months with $362.5 million of borrowings under our credit facility, up $42.7 million from $319.8 million in the prior quarter.”
Interest expense for the three months of fiscal 2015 was $2.7 million, flat compared to the first quarter of fiscal 2014.
The effective tax rate for the three months of fiscal 2015 was 1.7%, down from 42.3% in the same period last year primarily due to the retroactive reinstatement of the 2014 WOTC. The anticipated effective tax rate for fiscal year 2015 is in a range of 34% to 38%.
Slipsager concluded, “Our pipeline of new business remains robust, we continue to invest in sales, marketing, and systems to enhance our long-term position as a leading provider of integrated facility services. The three acquisitions we made in the prior fiscal year are continuing to meet our expectations and their integration into the ABM environment is going well. We are confident in our opportunities, strategies, and team. Our formula is straightforward, combining the best people and the best technologies to uniquely provide our end-to-end service delivery system. Our competitive strengths and culture of success in servicing our clients, coupled with an improving operating environment, drive our expectations for a full-year adjusted earnings per share growth in the mid to upper-teens this year, and for superior shareholder returns in the longer-term.”
Dividend
The Company also announced that the Board of Directors has declared a second quarter cash dividend of $0.16 per common share payable on May 4, 2015 to stockholders of record on April 2, 2015. This will be ABM’s 196th consecutive quarterly cash dividend.
Guidance
The Company is raising guidance based on the retroactive reinstatement of the calendar 2014 WOTC. We now expect adjusted after-tax net income of $1.75 to $1.85 per diluted share and after-tax net income of $1.55 to $1.65 per diluted share. This guidance excludes potential benefits associated with an extension of WOTC for calendar 2015. If Congress were to extend the WOTC for calendar 2015 prior to October 31, 2015, the Company could have a further benefit of $0.08 per diluted share.
Earnings Webcast
On Wednesday, March 4, 2015 at 8:30 a.m. ET, ABM will host a live webcast of remarks by president and chief executive officer Henrik Slipsager, executive vice president and incoming CEO Scott Salmirs and
executive vice president and chief financial officer James Lusk. A supplemental presentation will accompany the webcast and will be accessible through the Investor Relations portion of ABM’s website by clicking on the “Events” tab.
The webcast will be accessible at: http://investor.abm.com/events.cfm.
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 # 87076836.
Earnings Webcast Presentation
In connection with the webcast to discuss earnings (see above), a slide presentation related to earnings and operations will be available on the Company’s website at www.abm.com and can be accessed through the Investor Relations section of ABM’s website by clicking on the “Events and Presentations” tab.
ABOUT ABM
ABM (NYSE: ABM) is a leading provider of end-to-end facility solutions with revenues of approximately $5.0 billion and 118,000 employees in over 300 offices deployed throughout the United States and various international locations. ABM's comprehensive capabilities include facilities engineering, commercial cleaning, energy solutions, HVAC, electrical, landscaping, parking and security, 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, 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 forward-looking statements that set forth management’s anticipated results based on management’s current plans and assumptions. Any number of factors could cause actual results to differ materially from those anticipated. These factors include, but are not limited to the following: (1) risks relating to our acquisition strategy may adversely impact our results of operations; (2) our strategy of moving to an integrated facility solutions provider platform, which focuses on vertical markets, may not generate the organic growth in revenues or profitability that we expect; (3) we are subject to intense competition that can constrain our ability to gain business as well as our profitability; (4) our business success depends on our ability to preserve our long-term relationships with clients; (5) increases in costs that we cannot pass on to clients could affect our profitability; (6) we have high deductibles for certain insurable risks, and therefore we are subject to volatility associated with those risks; (7) our restructuring initiatives may not achieve the expected cost reductions; (8) our business success depends on retaining senior management and attracting and retaining qualified personnel; (9) we are at risk of losses stemming from accidents or other incidents at facilities in which we operate, which could cause significant damage to our reputation and financial loss; (10) negative or unexpected
tax consequences could adversely affect our results of operations; (11) federal health care reform legislation may adversely affect our business and results of operations; (12) changes in energy prices and government regulations could adversely impact the results of operations of our Building & Energy Solutions business; (13) significant delays or reductions in appropriations for our government contracts may negatively affect our business and could have an adverse effect on our financial position, results of operations, and cash flows; (14) we conduct some of our operations through joint ventures, and our ability to do business may be affected by the failure of our joint venture partners to perform their obligations; (15) our business may be negatively affected by adverse weather conditions; (16) we are subject to business continuity risks associated with centralization of certain administrative functions; (17) our services in areas of military conflict expose us to additional risks; (18) we are subject to cyber-security risks arising out of breaches of security relating to sensitive company, client, and employee information and to the technology that manages our operations and other business processes; (19) a decline in commercial office building occupancy and rental rates could affect our revenues and profitability; (20) deterioration in general economic conditions could reduce the demand for facility services and, as a result, reduce our earnings and adversely affect our financial condition; (21) financial difficulties or bankruptcy of one or more of our clients could adversely affect our results; (22) we incur accounting and other control costs that reduce profitability; (23) any future increase in the level of our debt or in interest rates could affect our results of operations; (24) our ability to operate and pay our debt obligations depends upon our access to cash; (25) goodwill impairment charges could have a material adverse effect on our financial condition and results of operations; (26) impairment of long-lived assets may adversely affect our operating results; (27) we are defendants in class and representative actions and other lawsuits alleging various claims that could cause us to incur substantial liabilities; (28) changes in immigration laws or enforcement actions or investigations under such laws could significantly adversely affect our labor force, operations, and financial results; (29) labor disputes could lead to loss of revenues or expense variations; (30) we participate in multiemployer pension plans that under certain circumstances could result in material liabilities being incurred; and (31) disasters or acts of terrorism could disrupt 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, 2014, and in other reports the Company files from time to time with the Securities and Exchange Commission. The Company urges readers to consider these risks and uncertainties in evaluating its forward-looking statements. The Company cautions readers not to place undue reliance upon any such forward- looking statements, which speak only as of the date made. The Company disclaims any obligation or undertaking to publicly release any updates or revisions to any forward-looking statements contained herein (or elsewhere) to reflect any change in the Company’s expectations with regard thereto, or any change in events, conditions or circumstances on which any such statement is made, 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 net income and operating profit, as adjusted for items impacting comparability, for the first quarter of fiscal years 2015 and 2014. 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 marketplace performance. In addition, the Company has presented earnings before interest, taxes, depreciation and amortization and excluding items impacting comparability (adjusted
EBITDA) for the first quarter of fiscal years 2015 and 2014. 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 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.)
# # #
Contact: | ||||
Investors & Analysts: | David Farwell | Media: | Chas Strong | |
(212) 297-9792 | (770) 953-5072 | |||
dfarwell@abm.com | chas.strong@abm.com |
Financial Schedules
ABM INDUSTRIES INCORPORATED AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENT INFORMATION (UNAUDITED)
Three Months Ended January 31, | |||||||||||
($ in millions, except per share amounts) | 2015 | 2014 | Increase / (Decrease) | ||||||||
Revenues | $ | 1,289.4 | $ | 1,226.5 | 5.1 | % | |||||
Expenses | |||||||||||
Operating | 1,161.2 | 1,108.5 | 4.8 | % | |||||||
Selling, general and administrative | 102.8 | 87.4 | 17.6 | % | |||||||
Amortization of intangible assets | 6.2 | 6.7 | (7.5 | )% | |||||||
Total expenses | 1,270.2 | 1,202.6 | 5.6 | % | |||||||
Operating profit | 19.2 | 23.9 | (19.7 | )% | |||||||
Income from unconsolidated affiliates, net | 1.5 | 1.5 | — | % | |||||||
Interest expense | (2.7 | ) | (2.7 | ) | — | % | |||||
Income before income taxes | 18.0 | 22.7 | (20.7 | )% | |||||||
Provision for income taxes | (0.3 | ) | (9.6 | ) | 96.9 | % | |||||
Net income | $ | 17.7 | $ | 13.1 | 35.1 | % | |||||
Net income per common share | |||||||||||
Basic | $ | 0.31 | $ | 0.23 | 34.8 | % | |||||
Diluted | $ | 0.31 | $ | 0.23 | 34.8 | % | |||||
Weighted-average common and common equivalent shares outstanding | |||||||||||
Basic | 56.4 | 55.7 | |||||||||
Diluted | 57.2 | 57.1 | |||||||||
Dividends declared per common share | $ | 0.160 | $ | 0.155 |
ABM INDUSTRIES INCORPORATED AND SUBSIDIARIES
SELECTED CONSOLIDATED CASH FLOW INFORMATION (UNAUDITED)
Three Months Ended January 31, | ||||||||
(in millions) | 2015 | 2014 | ||||||
Net cash used in operating activities | $ | (32.4 | ) | $ | (38.9 | ) | ||
Purchase of businesses, net of cash acquired | $ | 0.2 | $ | 0.2 | ||||
Other | (3.8 | ) | (9.7 | ) | ||||
Net cash used in investing activities | $ | (3.6 | ) | $ | (9.5 | ) | ||
Proceeds from exercises of stock options | $ | 4.9 | $ | 2.3 | ||||
Incremental tax benefit from share-based compensation awards | 0.3 | — | ||||||
Dividends paid | (8.9 | ) | (8.6 | ) | ||||
Deferred financing costs paid | (0.3 | ) | (1.2 | ) | ||||
Borrowings from line of credit | 226.7 | 289.2 | ||||||
Repayment of borrowings from line of credit | (184.0 | ) | (237.0 | ) | ||||
Changes in book cash overdrafts | — | 6.3 | ||||||
Repayment of capital lease obligations | (0.6 | ) | (1.0 | ) | ||||
Net cash provided by financing activities | $ | 38.1 | $ | 50.0 |
ABM INDUSTRIES INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET INFORMATION (UNAUDITED)
(in millions) | January 31, 2015 | October 31, 2014 | ||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 38.8 | $ | 36.7 | ||||
Trade accounts receivable, net of allowances | 781.2 | 748.2 | ||||||
Prepaid expenses | 76.6 | 65.5 | ||||||
Deferred income taxes, net | 50.1 | 46.6 | ||||||
Other current assets | 30.8 | 30.2 | ||||||
Total current assets | 977.5 | 927.2 | ||||||
Other investments | 31.4 | 32.9 | ||||||
Property, plant and equipment, net of accumulated depreciation | 79.3 | 83.4 | ||||||
Other intangible assets, net of accumulated amortization | 122.3 | 128.8 | ||||||
Goodwill | 904.6 | 904.6 | ||||||
Other assets | 115.8 | 116.0 | ||||||
Total assets | $ | 2,230.9 | $ | 2,192.9 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current Liabilities | ||||||||
Trade accounts payable | $ | 163.5 | $ | 175.9 | ||||
Accrued compensation | 114.3 | 131.2 | ||||||
Accrued taxes—other than income | 41.1 | 29.4 | ||||||
Insurance claims | 77.1 | 80.0 | ||||||
Income taxes payable | 0.6 | 2.0 | ||||||
Other accrued liabilities | 109.5 | 107.9 | ||||||
Total current liabilities | 506.1 | 526.4 | ||||||
Noncurrent income taxes payable | 54.5 | 53.7 | ||||||
Line of credit | 362.5 | 319.8 | ||||||
Deferred income tax liability, net | 19.9 | 16.4 | ||||||
Noncurrent insurance claims | 266.8 | 269.7 | ||||||
Other liabilities | 37.5 | 38.1 | ||||||
Total liabilities | 1,247.3 | 1,224.1 | ||||||
Total stockholders' equity | 983.6 | 968.8 | ||||||
Total liabilities and stockholders’ equity | $ | 2,230.9 | $ | 2,192.9 |
ABM INDUSTRIES INCORPORATED AND SUBSIDIARIES
REVENUES AND OPERATING PROFIT BY SEGMENT (UNAUDITED)
Three Months Ended January 31, | |||||||||||
($ in millions) | 2015 | 2014 | Increase/(Decre ase) | ||||||||
Revenues | |||||||||||
Janitorial | $ | 666.0 | $ | 637.1 | 4.5 | % | |||||
Facility Services | 156.2 | 151.7 | 3.0 | % | |||||||
Parking | 155.7 | 150.3 | 3.6 | % | |||||||
Security | 94.9 | 99.7 | (4.8 | )% | |||||||
Building & Energy Solutions | 119.4 | 102.1 | 16.9 | % | |||||||
Other | 97.2 | 85.6 | 13.6 | % | |||||||
Total revenues | $ | 1,289.4 | $ | 1,226.5 | 5.1 | % | |||||
Operating profit | |||||||||||
Janitorial | $ | 34.9 | $ | 30.3 | 15.2 | % | |||||
Facility Services | 5.9 | 5.1 | 15.7 | % | |||||||
Parking | 6.5 | 5.2 | 25.0 | % | |||||||
Security | 1.9 | 2.3 | (17.4 | )% | |||||||
Building & Energy Solutions | 1.2 | 2.7 | (55.6 | )% | |||||||
Other | 2.6 | 1.9 | 36.8 | % | |||||||
Corporate | (32.3 | ) | (22.1 | ) | (46.2 | )% | |||||
Adjustment for income from unconsolidated affiliates, net included in Building & Energy Solutions | (1.5 | ) | (1.5 | ) | — | % | |||||
Total operating profit | 19.2 | 23.9 | (19.7 | )% | |||||||
Income from unconsolidated affiliates, net | 1.5 | 1.5 | — | % | |||||||
Interest expense | (2.7 | ) | (2.7 | ) | — | % | |||||
Income before income taxes | 18.0 | 22.7 | (20.7 | )% | |||||||
Provision for income taxes | (0.3 | ) | (9.6 | ) | 96.9 | % | |||||
Net income | $ | 17.7 | $ | 13.1 | 35.1 | % |
ABM INDUSTRIES INCORPORATED AND SUBSIDIARIES
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (UNAUDITED)
(in millions, except per share amounts) | Three Months Ended January 31, | |||||||
2015 | 2014 | |||||||
Reconciliation of Adjusted Net Income to Net Income | ||||||||
Adjusted net income | $ | 21.5 | $ | 14.1 | ||||
Items impacting comparability: | ||||||||
CEO Change (a) | (3.2 | ) | — | |||||
Litigation and other settlements | (2.3 | ) | — | |||||
Restructuring (b) | (0.7 | ) | (0.6 | ) | ||||
Acquisition costs | (0.2 | ) | (0.2 | ) | ||||
Rebranding (c) | (0.1 | ) | (0.4 | ) | ||||
U.S. Foreign Corrupt Practices Act investigation (d) | (0.1 | ) | (0.5 | ) | ||||
Total items impacting comparability | (6.6 | ) | (1.7 | ) | ||||
Benefit from income taxes | 2.8 | 0.7 | ||||||
Items impacting comparability, net of taxes | (3.8 | ) | (1.0 | ) | ||||
Net income | $ | 17.7 | $ | 13.1 |
Three Months Ended January 31, | ||||||||
2015 | 2014 | |||||||
Reconciliation of Adjusted Operating Profit to Operating Profit | ||||||||
Adjusted operating profit | $ | 25.8 | $ | 25.6 | ||||
Total items impacting comparability | (6.6 | ) | (1.7 | ) | ||||
Operating profit | $ | 19.2 | $ | 23.9 | ||||
Reconciliation of Adjusted EBITDA to Net Income | ||||||||
Adjusted EBITDA | $ | 41.3 | $ | 41.5 | ||||
Items impacting comparability | (6.6 | ) | (1.7 | ) | ||||
Provision for income taxes | (0.3 | ) | (9.6 | ) | ||||
Interest expense | (2.7 | ) | (2.7 | ) | ||||
Depreciation and amortization | (14.0 | ) | (14.4 | ) | ||||
Net income | $ | 17.7 | $ | 13.1 |
Three Months Ended January 31, | ||||||||
2015 | 2014 | |||||||
Reconciliation of Adjusted Net Income per Diluted Share to Net Income per Diluted Share | ||||||||
Adjusted net income per diluted share | $ | 0.38 | $ | 0.25 | ||||
Items impacting comparability, net of taxes | (0.07 | ) | (0.02 | ) | ||||
Net income per diluted share | $ | 0.31 | $ | 0.23 | ||||
Diluted shares | 57.2 | 57.1 |
(a) Represents severance and other costs related to the upcoming departure of our CEO. (b) Restructuring costs associated with realignment of our operational structure. (c) Represents costs related to the Company's branding initiative. (d) Includes legal and other cost incurred in connection with an internal investigation into a foreign entity affiliated with a former joint venture partner. |
ABM INDUSTRIES INCORPORATED AND SUBSIDIARIES
RECONCILIATION OF ESTIMATED ADJUSTED NET INCOME PER DILUTED SHARE TO
ESTIMATED NET INCOME PER DILUTED SHARE FOR THE YEAR ENDING OCTOBER 31, 2015
Year Ended October 31, 2015 | ||||||||
Estimated net income per diluted share (a)
|
Low Estimate | High Estimate | ||||||
(per diluted share) | ||||||||
Adjusted net income per diluted share | $ | 1.75 | $ | 1.85 | ||||
Adjustments (b) | $ | (0.20 | ) | $ | (0.20 | ) | ||
Net income per diluted share | $ | 1.55 | $ | 1.65 |
(a) This guidance excludes potential benefit associated with the Work Opportunity Tax Credit for calendar 2015. If Congress were to extend the WOTC for calendar 2015 prior to October 31,2015, the Company could have a further benefit of $0.08 per diluted share.
(b) Adjustments include certain rebranding costs and legal settlements, adjustments to self-insurance reserves pertaining to prior year's claims and other unique items impacting comparability.
Exhibit 99.2
Cover Slide Title (20pt. Bold) First Quarter 2015 Teleconference March 4, 2015
1 2 3 4 5 Agenda 2 Introduction & Overview | Henrik Slipsager, CEO First Quarter 2015 Review of Financial Results | Jim Lusk, CFO First Quarter 2015 Operational Summary | Henrik Slipsager, CEO Fiscal 2015 Outlook | Jim Lusk, CFO Questions & Answers Forward - Looking Statements and Non - GAAP Financial Information: Our discussions during this conference call will include forward - looking statements. Actual results could differ materially from th ose projected in the forward - looking statements. The factors that could cause actual results to differ are discussed in the Company’s 2014 Annual Report on Form 10 - K and in our 2015 reports on Form 10 - Q and Form 8 - K that will be filied by Wednesday, March 4th. These reports are available on our website at http://investor.abm.com/ under “SEC Filings”. A description of factors that could cause actual results to differ is also set forth at the end of this presen tat ion. Also, the discussion during this conference call will include certain financial measures that were not prepared in accordance wi th U.S. generally accepted accounting principles (“U.S. GAAP”). Reconciliations of those non - GAAP financial measures to the most directly comparable U.S. GAAP financial measures can be found on the Investor Relations portion of our website at http://investor.abm.com and at the end of this presentation.
First Quarter 2015 Review of Financial Results
Fiscal First Quarter 2015 Overview • Achieved record revenue for the first quarter of $1.29 billion, up 5.1% – Select organic growth rates: ▪ Janitorial 2.1%; excluding large contract exited by ABM 4.4%; ▪ Building & Energy Solutions 8.9%; and ▪ Other (Air Serv) 13.6% • Net income up 35.1%, Adjusted net income up 52.5% – Items positively affecting adjusted net income comparison: ▪ Retroactive Reinstatement of 2014 Work Opportunity Tax Credit (“WOTC”) ▪ One less working day ▪ Safety initiatives ▪ Realignment savings ▪ Organic growth – Items adversely affecting adjusted net income comparison: ▪ Higher compensation costs associated with Sales & IT staff to support long - term growth initiatives • Integration of GBM Support Services Group, proceeding as planned. Starting to see opportunities for leveraging U.S. clients with operations in U.K. • Announced 196th consecutive quarterly dividend 4
First Quarter Results Synthesis – Key Financial Metrics 5 Note: Reconciliation of adjusted operating p rofit, adjusted net income, adjusted net income per diluted share, and adjusted EBITDA to nearest GAAP measure is in the appendix of this presentation. Net Income • N et income of $ 17 . 7 million or $ 0 . 31 per diluted share was up 35 . 1 % compared to $ 13 . 1 million, or $ 0 . 23 per diluted share in fiscal 2014 . The increase is the result of the retroactive reenactment of the 2014 Work Opportunity Tax Credit, a decrease in labor expense due to one less working day, lower insurance expense as a result of safety initiatives, and new business . Partially offsetting these items were higher compensation costs associated with sales and IT staff to support growth initiatives and higher legal & settlement costs . Adjusted Net Income • Adjusted net income of $ 21 . 5 million or $ 0 . 38 per diluted share was up 52 . 5 % compared to $ 14 . 1 million, or $ 0 . 25 per diluted share in fiscal 2014 . The increase is the result of the retroactive reenactment of the 2014 Work Opportunity Tax Credit, a decrease in labor expense due to one less working day, lower insurance expense as a result of safety initiatives, and new business . Partially offsetting these items were higher compensation costs associated with sales and IT staff to support growth initiatives . Net Cash from Operating Activities • For the quarter, net cash used in operating a ctivities improved by 16 . 7 % to $ 32 . 4 million, primarily related to the timing of collecting client receivables . 2015 2014 Increase/ (Decrease) Revenues 1,289.4$ 1,226.5$ 5.1% 19.2$ 23.9$ (19.7)% 25.8$ 25.6$ 0.8% Net income 17.7$ 13.1$ 35.1% 0.31$ 0.23$ 34.8% 21.5$ 14.1$ 52.5% 0.38$ 0.25$ 52.0% (32.4)$ (38.9)$ 16.7% Adjusted EBITDA 41.3$ 41.5$ (0.5)% Operating profit Adjusted operating profit Three Months Ended January 31, ($ in millions, except per share amounts) (unaudited) Net cash used in operating activities Adjusted net income Adjusted net income per diluted share Net income per diluted share
Select Cash Flow & Balance Sheet Items Cash Flow from Operating Activities (in millions) • Q1 2015 Insurance claim liabilities of $343.9 million down $13.7 million compared to Q1 2014 • Q1 2015 Self - insurance claims paid $22.9 million down $0.2 million compared to Q1 2014 • Q1 2015 c apital expenditures of $6.4 million, down $3.4 million Y - o - Y 6 • Days sales outstanding (DSO) for the first quarter were 56 days • DSO unchanged on a Y - o - Y basis and up 3 days sequentially • Q1 2015 Depreciation and amortization of $14.0 million down $0.4 million Y - o - Y -$40 -$20 $0 $20 $40 $60 $80 $100 $120 $140 $160 Q1 Q2 Q3 Q4 FY FY10 FY11 FY12 FY13 FY14 FY15
Select Cash Flow & Balance Sheet Items – Continued 7 Line of Credit OneSource Linc Air Serv/HHA In Millions Dividends Paid (Fiscal Year Basis) Per Share GBM $0.250 $0.300 $0.350 $0.400 $0.450 $0.500 $0.550 $0.600 $0.650 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 $0.395 $0.415 $0.435 $0.470 $0.495 $0.515 $0.535 $0.555 $0.575 $0.595 $0.615 $0 $50 $100 $150 $200 $250 $300 $350 $400 $450 Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Q111 Q211 Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214 Q314 Q414 Q115
First Quarter 2015 Operational Review
Q1 2015 Results Synthesis - Revenues • Revenues of $666.0 million, up organically $13.1 million or 2.1% (a) compared to 2014 Q1 • Janitorial tag business up 8.5% compared to first quarter of 2014 Consolidated revenues up 5.1% at ~ $1.29 billion – A Q1 Record Janitorial Services 9 Facility Services Parking & Shuttle Services Security Services Building & Energy Solutions Other (Air Serv) • Revenues of $156.2 million, up $4.5 million or 3.0% compared to 2014 Q1 • Recent wins in automotive and high - tech verticals and strong tag revenue • Revenues of $155.7 million, up $5.4 million or 3.6% compared to 2014 Q1 • Management reimbursement revenues were essentially flat at $77.0 million • Revenues of $94.9 million, down $4.8 million or 4.8% compared to 2014 Q1 • Revenues of $119.4 million, up $17.3 million or 16.9% compared to 2014 Q1; organic revenue grew 8.9% • Y - o - Y organic growth of 9.9% in ABES and 21.0% in ABM Healthcare Support Services • Revenues of $97.2 million, up $11.6 million or 13.6% compared to 2014 Q1 • Strong organic growth in the U.K. and improving growth trends among U.S. commercial carrier clients (a) Excluding large contract exited by ABM, organic growth was 4.4%
Q1 2015 Results Synthesis - Operating Profits 1 • Janitorial operating profit of $34.9 million, increased $4.6 million or 15.2%. This significant growth was primarily related to one less working day, new business added, lower expenses as a result of safety initiatives and realignment savings • Operating profit for Facility Services was $5.9 million, up $0.8 million or 15.7% Y - o - Y. Lower insurance expense as a result of safety initiatives and realignment savings • Parking operating profit increased $1.3 million, or 25.0%, as compared to the fiscal first quarter of 2014. The increase is attributable to improved safety performance and lower expense from the Onsite realignment • Operating profit for Security was down $0.4 million • Building & Energy Solutions profit decreased $1.5 million to $1.2 million due to $1.2 million expense associated with the settlement of two client disputes and $0.7 million increase in selling and business development costs • Operating profit for Air Serv (Other) increased $0.7 million to $2.6 million, primarily from lower amortization expense and higher revenues ($ in millions) 2015 2014 Change Janitorial 34.9$ 30.3$ 15.2% Facility Services 5.9 5.1 15.7% Parking 6.5 5.2 25.0% Security 1.9 2.3 (17.4)% Building & Energy Solutions 1.2 2.7 (55.6)% Other 2.6 1.9 36.8% Total Profit 53.0 47.5 11.6% First Quarter 10 1 Excludes Corporate
O utlook
Fiscal 2015 Outlook 12 • The Company is providing the following guidance: o Increasing adjusted net income to $ 1.75 to $ 1.85 per diluted share o Increasing net income of $ 1.55 to $ 1.65 per diluted share o This guidance excludes potential benefits associated with the Work Opportunity Tax Credit, should Congress extend the WOTC for calendar 2015, prior to October 31, 2015,the Company could have a further benefit of $0.08 per diluted share in fiscal 2015. • Effective tax rate in the range of 34% to 38%. • Fiscal 2015 has one less work day, which the Company anticipates will reduce labor expense by approximately $4.0 million on a pre - tax basis: o Work days for fiscal 2015 by quarter are as follows: Q1 65; Q2 64; Q3 66; and Q4 65. Year - over - year compared to fiscal 2014, Q1 has one less work day; Q2 has one more work day; Q3 works days are the same; and Q4 has one less work day. • Interest expense of $11.0 million to $13.0 million • Depreciation and amortization expense of $56.0 million to $60.0 million. • Capital expenditures are expected to be in the range of $31.0 million to $35.0 million.
Forward - Looking Statement 13 This presentation 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 strategy may adversely impact our results of operations ; ( 2 ) our strategy of moving to an integrated facility solutions provider platform, which focuses on vertical markets, may not generate the organic growth in revenues or profitability that we expect ; ( 3 ) we are subject to intense competition that can constrain our ability to gain business as well as our profitability ; ( 4 ) our business success depends on our ability to preserve our long - term relationships with clients ; ( 5 ) increases in costs that we cannot pass on to clients could affect our profitability ; ( 6 ) we have high deductibles for certain insurable risks, and therefore we are subject to volatility associated with those risks ; ( 7 ) our restructuring initiatives may not achieve the expected cost reductions ; ( 8 ) our business success depends on retaining senior management and attracting and retaining qualified personnel ; ( 9 ) we are at risk of losses stemming from accidents or other incidents at facilities in which we operate, which could cause significant damage to our reputation and financial loss ; ( 10 ) negative or unexpected tax consequences could adversely affect our results of operations ; ( 11 ) federal health care reform legislation may adversely affect our business and results of operations ; ( 12 ) changes in energy prices and government regulations could adversely impact the results of operations of our Building & Energy Solutions business ; ( 13 ) significant delays or reductions in appropriations for our government contracts may negatively affect our business and could have an adverse effect on our financial position, results of operations, and cash flows ; ( 14 ) we conduct some of our operations through joint ventures, and our ability to do business may be affected by the failure of our joint venture partners to perform their obligations ; ( 15 ) our business may be negatively affected by adverse weather conditions ; ( 16 ) we are subject to business continuity risks associated with centralization of certain administrative functions ; ( 17 ) our services in areas of military conflict expose us to additional risks ; ( 18 ) we are subject to cyber - security risks arising out of breaches of security relating to sensitive company, client, and employee information and to the technology that manages our operations and other business processes ; ( 19 ) a decline in commercial office building occupancy and rental rates could affect our revenues and profitability ; ( 20 ) deterioration in general economic conditions could reduce the demand for facility services and, as a result, reduce our earnings and adversely affect our financial condition ; ( 21 ) financial difficulties or bankruptcy of one or more of our clients could adversely affect our results ; ( 22 ) we incur accounting and other control costs that reduce profitability ; ( 23 ) any future increase in the level of our debt or in interest rates could affect our results of operations ; ( 24 ) our ability to operate and pay our debt obligations depends upon our access to cash ; ( 25 ) goodwill impairment charges could have a material adverse effect on our financial condition and results of operations ; ( 26 ) impairment of long - lived assets may adversely affect our operating results ; ( 27 ) we are defendants in class and representative actions and other lawsuits alleging various claims that could cause us to incur substantial liabilities ; ( 28 ) changes in immigration laws or enforcement actions or investigations under such laws could significantly adversely affect our labor force, operations, and financial results ; ( 29 ) labor disputes could lead to loss of revenues or expense variations ; ( 30 ) we participate in multiemployer pension plans that under certain circumstances could result in material liabilities being incurred ; and ( 31 ) disasters or acts of terrorism could disrupt services .
Appendix - Unaudited Reconciliation of non - GAAP Financial Measures
Unaudited Reconciliation of non - GAAP Financial Measures 15 ABM INDUSTRIES INCORPORATED AND SUBSIDIARIES RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) (in millions) 2015 2014 Reconciliation of Adjusted Net Income to Net Income Adjusted net income 21.5$ 14.1$ Items impacting comparability: CEO Change (a) (3.2) - Litigation and other settlements (2.3) - Restructuring (b) (0.7) (0.6) Acquisition costs (0.2) (0.2) Rebranding (c) (0.1) (0.4) U.S. Foreign Corrupt Practices Act investigation (d) (0.1) (0.5) Total items impacting comparability (6.6) (1.7) Benefit from income taxes 2.8 0.7 Items impacting comparability, net of taxes (3.8) (1.0) Net income 17.7$ 13.1$ (a) Represents severance and other costs related to the upcoming departure of our CEO. (b) Restructuring costs associated with realignment of our operational structure. (c) Represents costs related to the Company's branding initiative. Three Months Ended January 31, (d) Includes legal and other cost incurred in connection with an internal investigation into a foreign entity affiliated with a former joint venture partner.
Unaudited Reconciliation of non - GAAP Financial Measures 16 ABM INDUSTRIES INCORPORATED AND SUBSIDIARIES RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) (in millions, except per share amounts) 2015 2014 Reconciliation of Adjusted Operating Profit to Operating Profit Adjusted operating profit 25.8$ 25.6$ Total items impacting comparability (6.6) (1.7) Operating profit 19.2$ 23.9$ Reconciliation of Adjusted EBITDA to Net Income Adjusted EBITDA 41.3$ 41.5$ Items impacting comparability (6.6) (1.7) Provision for income taxes (0.3) (9.6) Interest expense (2.7) (2.7) Depreciation and amortization (14.0) (14.4) Net income 17.7$ 13.1$ 2015 2014 Adjusted net income per diluted share 0.38$ 0.25$ Items impacting comparability, net of taxes (0.07) (0.02) Net income per diluted share 0.31$ 0.23$ Diluted shares 57.2 57.1 Three Months Ended January 31, Three Months Ended January 31, Reconciliation of Adjusted Net Income per Diluted Share to Net Income per Diluted Share
Unaudited Reconciliation of non - GAAP Financial Measures 17 ABM INDUSTRIES INCORPORATED AND SUBSIDIARIES RECONCILIATION OF ESTIMATED ADJUSTED NET INCOME PER DILUTED SHARE TO ESTIMATED NET INCOME PER DILUTED SHARE FOR THE YEAR ENDING OCTOBER 31, 2015 Estimated net income per diluted share (a) Low Estimate High Estimate Adjusted net income per diluted share 1.75$ 1.85$ Adjustments (b) (0.20)$ (0.20)$ Net income per diluted share 1.55$ 1.65$ Year Ending October 31, 2015 (per diluted share) (b)Adjustmentsincludecertainrebrandingcostsandlegalsettlements,adjustmentstoself-insurancereservespertainingtoprioryear's claims and other unique items impacting comparability. (a)ThisguidanceexcludespotentialbenefitassociatedwiththeWorkOpportunityTaxCreditforcalendar2015.IfCongresswereto extend the WOTC for calendar 2015 prior to October 31, 2015, the Company could have a further benefit of $0.08 per diluted share.
%Z_
MTNWIG475OK%3+QZ]+&_1:UY.ZG_K%GZ/_,6 %Z_TNWIG475OK%3+QZ]+&_1:UY.ZG_K%GZ/_,6 '!A8VME="!B96=I;CTB[[N_(B!I9#TB5S5-,$UP0V5H:4AZ
M -!%/&U93210U"@#7J<-I5,:]
M14N]JA5W32%+J&.Q83[C.?C5.;B,'6SC$"@P*1'I1V]KO;198OV5@+:J-+D*
M5(FXL`N$KW-JJ5;EC/5RNLXL.G<]%.K6&6IA;IZSK?QURV5CE:%7D]^L:_)A
MXG(ZC,#5:+N,TKI=\=1FLX#:26Z6Y61997*N2VZXG,L!7RE-D5$M@U5);40S
MV%\?:<0*PB]Q?R-E=C;NR\-EAF29XY@!Z^0%7!:OG=V_01JKM*G";8`^/NP'
M!V)!H;:P+R23[CD4@Y/84?Y>P%>8_=_E],E>6XZ-LZI6Y=.P5\?JO#PVBT;@
M-4Q_CU?BWQ[8$/#\E5+*.20NM9O.1M;".?=_=[Q!^\J45[NNT2RMHSUH
M#N)'WFRVWL&>]<\1 I2P%;`I-B8)7#
MU'M6_?80NE?=_$0/XQ"#/A%GCRE8R,GJ)P_,GAN4U_GQOV/G6WM:NCN;>TOP
M?CT^5F1SV``````````````````````!XF7H;/5Y_B
M72Z=WL\VGK]K0N="ZW*PS/":>MN:A&-F$V:H2JO6VM4XMD;.?HLRQKF`8P2Q
M75G=MO.W)=J4,].&<9PN`E6GO:V.VS?S^AKGBFVHZJ,M8TK):W@^$*L(`\17@#9]
MM2?M@8-VT]II[33VFAK83$'JQ"`9@3QGC/&,K`G(F3#XF>W7/9Q/&P1O*
M?M@R(6=9YJ8,>/6QO)OR+.^48SWE$%JQF4D*AF.E0R1Z,"8F854QJ\0]!,G.
M8)9:5*-Y"#H6$[3Q$\1"G)$PT[]`)B=ID1H.\48'Y`>4PQ@6>*PHD\5$((GC9/%Q"6C-,3
M$P)B8]&88!,3$\
8L`'F9;6+!;Q=F?':UV.[9FC6W<)3N
M^8XBFV6\-=C%FL_#TU^U^>?:UJ`^_:\N--L*E2OF[MI[E:FO)IV>,JB\AI-/
M*FQ3Q^I9'XC5C5UK$MW[#;=OM*;M2M$Y#6B[5;1C4TNU^-(^2:.II;]6Q;6S
MVO<=IK*=FLA+UV&"U;Q66V^%K*I"L`+!BPC+(B336HT>RIEF@;3R6LU3\+LW
MU-M;KML5[E8-.U0\X)5MY#(,8*9?Q.IL/;\>UC+?CVTD;2WZ`UK)HUV,\]Y:
MSJ;%HV!L.9[PG[6GM*8==XU92"!O&>XL-@$:PSRNA:Y979Y*'[I6,PK7/:$\+!/)A`Z&8!F(6,SUJ7+
M?D2X$]P"!Q/,3R!G[8Y2$SS*SWR)[X,]U9[JSWEGO)!8AF>A/JR9F9F8#B`@
MSM,"#(GFXGNYGDD7QF&AQ/%#/%L'Z]:UPOY$(N"HGMM/;:*")Y-,YZ6'MZ,]
M,1681;<^C';HB!@PP>F(`>F9F9.`9YM/(D^30,T%G86`PG)Z5+EOR1)GD0`S
M17,-D=LGI8<^H#T*XGML9X(L:\89V;T!PR@=$
M'8#\YL5"VMU*ML#]_P",&(BWS*&*#,0@1KJUC;#$EVSGTH<$0Q!VZ4VHP]T)
M=]^/`[3^UJ6/936+-DIM-4AO`M&Y^_[PFRC=;VAMCQU[S<-H6H&:ZVU;[WU6
MO==#3;+?@\I1X/L_7\BMC+/N"8S,8P[_`(%;9$08'34I:JI]=VL;7L^WIU'4
M:J6)4VOL5Q=2YJQ1>UJ:5P:BEDL&E;[:ZC^%*%*[:-EKWIO#U4>WKK1:NO13
M9[OX.U2+:MI<"#TX_$6*?VLOK'2D_N5>H&3]B^&&":F%?HKK:Q[:_;;\GRVM
MXN?R0GT&>SU?M]>NF?2/^R"HLK5&JO"E+Q8&7R12$K56_KH7;-%$NY8]&(.F)CIB?/>;`%6&K9<*I_02GBM*J*M:#(F1"TG6\<5:&L&QFVJX)3QUZ-7L;0!OY!A
M!NV755*C4ZU]E=(N06;.T7<6J%J1GH:HU5Z5IJ%+J].Z]:(M*@\!6/+A;,:F
M+&@H$'M++MG7J%O.4B..1WX.#8K9JVU-3MW4FCD*'E;5$$F`@^@X@($R)L6Z
MWM[!UR/X_>;7@6+3Q)E=%]AIXC9_N)]/PR,CG>9MTVU?D6_7=4XL3\''7'3&8!B8A$Q.XF9Y3,
MS,P']W)'RY/;8T7;GDHK#8HL)NNL2M:Z@FDMG]?[AA>USAJW+%B7;60"6VI2
M7L/G5Y.X+EJ@C2PLRWD%^/3]M25M9R6D_FU3K.'W61N%Y6BK8V-^FE#M\ILL
MG%;5C)Q^A2=2N[7M:^PP,P9-@",NM>M_#TL+=3;UI1R>Q7*N5HLBMYJUU2PW
MX%G)5*;MS8L9K]A@2,=S"C!340`/&:^^U`;FP!9RNY;/9W-B4<5L637X34$'
M$Z(7=X1E-B65NFU9*[*W#(A7]VN]>_3<6UJK%30N)''4B4^]KG5W*=I+:,Q@
MRD-B9!@8K%=3T!C=Q\MXO[#E>B(SMP/&+QW&CZ=2T\H6QT#3RA;$#0F?(^,V
M+;=3CMK:NI5:JP<_@YZ8F)B8Q,P&&9F83"1,PDSR,:P+7LV>>SRY'W.Y=[EN
M/:UO?8OM6UDVY71=&6BMR(:3A6K05GNEA$M\B*R@*-4M6HS,:5\:49:ES^Q%
M9+=7MSH(ZN"EH!K<,&0L+-*IA?Q%+2_C]BHEG4U6@QEAC
M?W&$)##.#[YP;K#,DS6U]AFU^'0BC6UZ0:*&(KM2"VT1+JF-?E*.Q?!%JG-B
M9%38-;9%;9%_[;6<@YM8A`(F9\&'_D`.U:>/HU_DORS=V_O?]A3F+OD-?'<:
MVV^AUY+?IXW2X#EFY?1GR7Y4O$LNW_L%Z_CGRYM[8]?%_)J^4Y?T_*/DIX<6
M?)OEO'0\WICAO_J/E>S7\>YQ.:TOD/R+5XG6^(
?I2`U]];I:MH)(E@CCO639I?446`
M0-D6*8`(3">A['M"(Z]G7!J8S.8PF80#&0RQ?&5L#&7LPQ'$L/B*W%BUL:WJ
M;$;N'6`D2MH#!%Z(<2I_$UNSBVD8N24MAO;0A>SFOW*BZY/B0*G=_C'!KQ>D
M!@>CC_C_`!G&[4Y/B-'E:K.(T;>,X[C=3C-;D^"XOE9J_"^!U[;]>C9HT?B7
M#Z.W-S2U-ZD_!N`+\C\$T+FW>)T=[3U?B'!ZR<;P^AQE+?"OC[7K\
Y(A@5FB`XQ!P*!Y>9C,=^T[#\*`C``@5+:>O;_