ABM Industries Announces Fourth Quarter Fiscal 2005 Financial Results; Company Achieves Record Fourth Quarter Revenues of $658.7 Million and EPS from Continuing Operations of $0.30 for the Fourth Quarter.SAN FRANCISCO San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden -- ABM Industries ABM Industries Incorporated NYSE: ABM is an American corporation involved in outsourced, building maintenance. Divisions include ABM Janitorial, Ampco System Parking, ABM Engineering, American Commercial Security (ACSS), Security Services of America (SSA), Amtech Lighting, and Incorporated (NYSE NYSE See: New York Stock Exchange :ABM ABM: see guided missile. ABM - Asynchronous Balanced Mode ), a leading facility services contractor in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , today reported income from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the for the fourth quarter ended October October: see month. 31, 2005 of $15.2 million ($0.30 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share), up 358.3%, compared to $3.3 million ($0.06 per diluted share) for the prior year fourth quarter. Sales and other income for the fourth quarter of fiscal 2005 were $658.7 million, up 6.3% from $619.8 million in the fourth quarter of fiscal 2004. In the fourth quarter of fiscal 2004, the Company recorded a $17.2 million or $10.5 million after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. ($0.21 per diluted share) charge for adverse developments in the Company's California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). workers' compensation workers' compensation, payment by employers for some part of the cost of injuries, or in some cases of occupational diseases, received by employees in the course of their work. claims. "This was a strong quarter of revenue growth and profitability -- with positive double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. comparisons across all of our operating segments," commented Henrik Henrik is a male given name of Germanic origin, primarily used in Scandinavia, Hungary and Slovenia[1]. Equivalents in other languages are Henry (English), Hendrik (Dutch), Heinrich (German), Enrico (Italian), Henri (French), Enrique (Spanish), and Henrique (Portuguese). Slipsager, ABM's president and chief executive officer. "ABM's focus on our key strategic initiatives -- combined with an improved economy and lower office vacancy VACANCY. A place which is empty. The term is principally applied to cases where an office is not filled. 2. By the constitution of the United States, the president has the power to fill up vacancies that may happen during the recess of the senate. rates -- resulted in new business across the country. "We're we're Contraction of we are. we're we are gaining momentum among all customer segments -- commercial, industrial, institutional and retail facilities. Customers are increasingly attracted to the benefits of our bundled and integrated services In computer networking, IntServ or integrated services is an architecture that specifies the elements to guarantee quality of service (QoS) on networks. IntServ can for example be used to allow video and sound to reach the receiver without interruption. , and the opportunity to contract multiple services from a single, leading national provider. In 2006, we expect to further leverage our customer value proposition through continued strategic acquisitions. "In addition to our business success, our financial position remains very strong. We ended fiscal 2005 with approximately $64 million in cash and equivalents, no long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. and more than $257 million in working capital, and we generated $52 million in operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. from continuing operations for fiscal 2005. For the first time in ABM's history, total assets exceeded $900 million." Influences on Quarterly Results The quarter ended October 31, 2005 included $4.3 million after-tax ($0.09 per diluted share) of higher professional fees related to initial compliance with the Sarbanes-Oxley internal controls certification requirement which was substantially offset by $2.6 million after-tax gain ($0.05 per diluted share) for the sale of the leasehold An estate, interest, in real property held under a rental agreement by which the owner gives another the right to occupy or use land for a period of time. leasehold n. interest for an off-airport parking facility and $1.6 million after-tax benefit ($0.03 per diluted share) from the reduction of 2004 and prior-year insurance reserves on three specialty risk programs. The fourth quarter of fiscal 2005 had one more workday than the comparable period in fiscal 2004, resulting in an additional expense of $1.4 million after-tax ($0.03 per diluted share) on janitorial contracts with variable labor cost but fixed monthly pricing. On a fiscal year basis, 2005 also had one additional workday compared to 2004. Full-Year 2005 The Company's income from continuing operations for fiscal 2005 was $55.1 million ($1.09 per diluted share), up 85.8%, compared to $29.6 million ($0.59 per diluted share) for fiscal 2004. Operating results for 2005 include $5.0 million of after tax benefits ($0.10 per diluted share) from prior year insurance reserve adjustments, a $2.7 million ($0.05 per diluted share) state income tax settlement and the fourth quarter parking leasehold gain. These benefits were substantially offset by the $7.0 million after-tax ($0.14 per diluted share) increase in Sarbanes-Oxley compliance professional fees and a $3.0 million after-tax ($0.06 per diluted share) settlement of former employee litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. . Sales and other income for the year ended October 31, 2005 were $2.59 billion, up 8.9%, compared to $2.38 billion in 2004. Net income, which includes income from discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. , was $69.5 million ($1.38 per diluted share), up 127.9%, compared to $30.5 million ($0.61 per diluted share) for fiscal 2004. The Company realized an after-tax gain from the sale of its Mechanical Services subsidiary of $14.2 million ($0.29 per diluted share) in fiscal 2005. 2006 Guidance Mr. Slipsager concluded, "Given the strength of our balance sheet and our cash flow from continuing operations, we remain well positioned to continue to expand our existing lines of business in fiscal 2006 through a combination of acquisition and organic growth. "Based on the current economic environment, our strong operational momentum and the recent increase in the level of sales activity, we expect income from continuing operations for fiscal 2006 will be in the range of $1.08 to $1.14 per diluted share. This is exclusive of future acquisitions, and includes $0.06 of stock-based compensation expense as a result of the adoption of SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System 123R in fiscal 2006. Excluding 2006 stock based compensation and 2005 insurance and tax benefits related to prior years, we expect to increase income from operations by more than 20 percent." Conference Call On Thursday Thursday: see week. , December December: see month. 15, 2005 at 6:00 a.m. (PST PST Paroxysmal supraventricular tachycardia, see there ), ABM will host a live webcast of remarks by President and Chief Executive Officer Henrik C. Slipsager, and Executive Vice President and Chief Financial Officer George George, river, c.345 mi (560 km) long, rising in a lake on the Quebec-Labrador boundary, E Canada. It flows N through Indian Lake (125 sq mi/324 sq km) to Ungava Bay (an arm of Hudson Strait). B. Sundby. A webcast of the conference call will be accessible at www.irconnect.com/primecast/05/q4/abm_4q2005.html. Listeners are asked to be online at least fifteen minutes early to register, as well as to download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. and install any complimentary audio software that might be required. Following the call, the webcast will be available at this URL URL in full Uniform Resource Locator Address of a resource on the Internet. The resource can be any type of file stored on a server, such as a Web page, a text file, a graphics file, or an application program. for a period of one year. In addition to the webcast, a limited number of toll-free telephone lines will also be available for listeners who are among the first to call 877-440-9648 within fifteen minutes before the event. Telephonic replays will be accessible during the period from two hours to seven days after the call by dialing 800-642-1687, and then entering ID # 3013802. About ABM Industries ABM Industries Incorporated is among the largest facility services contractors listed on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. . With more than 73,000 employees, ABM provides janitorial, parking, security, engineering and lighting services for thousands of commercial, industrial, institutional and retail facilities in hundreds of cities across the United States and British Columbia British Columbia, province (2001 pop. 3,907,738), 366,255 sq mi (948,600 sq km), including 6,976 sq mi (18,068 sq km) of water surface, W Canada. Geography , Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of . The ABM Family of Services includes ABM Janitorial; Ampco System Parking; ABM Security, which includes American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Commercial Security (ACSS ACSS Africa Center for Strategic Studies ACSS Aluminum Conductor Steel Supported (cable) ACSS African Crop Science Society ACSS Association of Computer Support Specialists ACSS Aviation Communication and Surveillance Systems ) and Security Services Security services are state institutions for the provision of intelligence, primarily of a strategic nature, but also including protective security intelligence. Examples include the Security Service (MI5) and the Secret Intelligence Service (MI6) in the United Kingdom, and the of America (SSA (Serial Storage Architecture) A fault tolerant peripheral interface from IBM that transfers data at 80 and 160 Mbytes/sec. SSA uses SCSI commands, allowing existing software to drive SSA peripherals, which are typically disk drives. ); ABM Facility Services; ABM Engineering; and Amtech Lighting Services. Cautionary Statement Under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that set forth management's anticipated results based on management's plans and assumptions. Any number of factors could cause the Company's actual results to differ materially from those anticipated. These risks and uncertainties include, but are not limited to: (1) a delay in the filing of the Company's Fork 10-K and an adverse internal control evaluation under Section 404 of the Sarbanes-Oxley Act See SOX. that affects ABM's stock price; (2) a significant increase in the Company's significant accounting and other control costs; (3) labor disputes that lead to a loss of sales and expense variations; (4) an increase in costs that the Company cannot pass on to customers; (5) a change in actuarial analysis Actuarial Analysis The analysis of an investment's risk done by an actuary. Notes: A highly educated actuary will use statistics and historical data in an attempt to measure the risk of a particular investment. See also: Actuary, Life Insurance, Risk, Risk Averse that causes an unanticipated change in insurance reserves; (6) a change in the frequency or severity of claims against the Company, a deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. in claims management, or the cancellation or non-renewal of the Company's primary insurance policies; (7) intense competition that lowers revenue or reduces margins; (8) low levels of capital investments by customers that impacts project sales of the Lighting segment; (9) a decline in commercial office building occupancy and rental rates lowers sales and profitability; (10) financial difficulties or bankruptcy bankruptcy, in law, settlement of the liabilities of a person or organization wholly or partially unable to meet financial obligations. The purposes are to distribute, through a court-appointed receiver, the bankrupt's assets equitably among creditors and, in most of a major customer; (11) the loss of long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. customers; (12) weakness in airline travel and the hospitality industry that affects the results of the Company's Parking segment; (13) acquisition activity slows or is unsuccessful; and (14) other issues and uncertainties that may include: natural or man made disasters, new accounting pronouncements or changes in accounting policies, labor shortages A Labor shortage is an economic condition in which there are insufficient qualified candidates (employees) to fill the market-place demands for employment at any price. This condition is sometimes referred to by Economists as "an insufficiency in the labor force. that adversely affect the Company's ability to employ entry level personnel, the on-going impact of Hurricane Katrina  Editing of this page by unregistered or newly registered users is currently disabled due to vandalism. on the United States economy and on the
Company's ability to provide services in the Gulf Coast region,
legislation or other governmental action that detrimentally det·ri·men·tal adj. Causing damage or harm; injurious. det  ri·men impacts the
Company's expenses or reduces sales by adversely affecting the
Company's customers such as state or locally mandated healthcare
benefits, impairment Impairment1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. of goodwill and other intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. , a reduction or revocation The recall of some power or authority that has been granted. Revocation by the act of a party is intentional and voluntary, such as when a person cancels a Power of Attorney that he has given or a will that he has written. of the Company's line of credit that increases interest expense and the cost of capital ,and the resignation, termination, death or disability of one or more of the Company's key executives that adversely affects customer retention or day-to-day management of the Company. Additional information regarding these and other risks and uncertainties the Company faces is contained in the Company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and in other reports it files from time to time with the Securities and Exchange Commission.
BALANCE SHEET SUMMARY (UNAUDITED)
October 31, October 31,
2005 2004
------------------------------------------------------- --------------
Assets
Cash and cash equivalents $63,991,000 $63,369,000
Trade accounts receivable, net 345,104,000 307,237,000
Assets held for sale - 14,441,000
Other current assets 112,462,000 100,079,000
------------------------------------------------------- --------------
Total current assets 521,557,000 485,126,000
Goodwill 243,559,000 225,495,000
Other intangibles, net 24,463,000 22,290,000
All other assets 114,232,000 109,613,000
------------------------------------------------------- --------------
Total assets $903,811,000 $842,524,000
======================================================= ==============
Liabilities
Liabilities held for sale $- $3,926,000
Other current liabilities 263,653,000 250,502,000
Non-current liabilities 152,710,000 145,935,000
------------------------------------------------------- --------------
Total liabilities 416,363,000 400,363,000
Stockholders' Equity 487,448,000 442,161,000
------------------------------------------------------- --------------
Total liabilities and stockholders'
equity $903,811,000 $842,524,000
======================================================= ==============
SELECTED CASH FLOW INFORMATION (UNAUDITED)
Three Months Ended October 31,
2005 2004
----------------------------------------------------------------------
Net cash flows from continuing operating
activities $37,507,000 $22,179,000
Net operational cash flows from
discontinued operations (7,720,000) (912,000)
----------------------------------------------------------------------
Net Cash Provided By Operating Activities $29,787,000 $21,267,000
Net Cash Used In Investing Activities $(7,601,000) $(5,051,000)
Common stock issued $3,750,000 $2,524,000
Dividends paid (5,147,000) (4,872,000)
----------------------------------------------------------------------
Net Cash Used In Financing Activities $(1,397,000) $(2,348,000)
Year Ended October 31,
2005 2004
----------------------------------------------------------------------
Net cash flows from continuing operating
activities $51,997,000 $64,412,000
Net operational cash flows from
discontinued operations (7,348,000) (30,722,000)
----------------------------------------------------------------------
Net Cash Provided By Operating Activities $44,649,000 $33,690,000
Net Cash Used In Investing Activities $(13,102,000) $(60,753,000)
Common stock issued $21,137,000 $10,034,000
Stock buyback (31,318,000) (11,073,000)
Dividends paid (20,744,000) (19,476,000)
----------------------------------------------------------------------
Net Cash Used In Financing Activities $(30,925,000) $(20,515,000)
INCOME STATEMENT (UNAUDITED)
Three Months Ended October 31, Increase
2005 2004 (Decrease)
----------------------------------------------------------------------
Revenues
Sales and other income $658,706,000 $619,794,000 6.3 %
Expenses
Operating expenses and cost
of goods sold 578,446,000 572,031,000 1.1 %
Selling, general and
administrative expenses 53,775,000 41,741,000 28.8 %
Intangible amortization 1,409,000 1,280,000 10.1 %
Interest expense 171,000 270,000 (36.7)%
----------------------------------------------------------------------
Total expenses 633,801,000 615,322,000 3.0%
----------------------------------------------------------------------
Income from continuing
operations before income
taxes 24,905,000 4,472,000 456.9 %
Income taxes 9,708,000 1,156,000 739.8 %
----------------------------------------------------------------------
Income from continuing
operations 15,197,000 3,316,000 358.3 %
Income (loss) from
discontinued operations,
net of income taxes (67,000) 334,000 (120.1)%
----------------------------------------------------------------------
Net Income $15,130,000 $3,650,000 314.5 %
======================================================================
Net Income Per Common Share
- Basic
Income from continuing
operations $0.31 $0.07 342.9 %
Income from discontinued
operations - 0.01 -
----------------------------------------------------------------------
$0.31 $0.08 287.5 %
======================================================================
Net Income Per Common Share
- Diluted
Income from continuing
operations $0.30 $0.06 400.0 %
Income from discontinued
operations - 0.01 -
----------------------------------------------------------------------
$0.30 $0.07 328.6 %
======================================================================
Average Common And Common
Equivalent Shares
Basic 48,922,000 48,591,000 0.7 %
Diluted 49,901,000 50,100,000 (0.4)%
Year Ended October 31, Increase
2005 2004 (Decrease)
----------------------------------------------------------------------
Revenues
Sales and other income $2,586,566,000 $2,375,149,000 8.9 %
Gain on insurance claim 1,195,000 - -
----------------------------------------------------------------------
Total revenues 2,587,761,000 2,375,149,000 9.0 %
----------------------------------------------------------------------
Expenses
Operating expenses and cost
of goods sold 2,304,988,000 2,157,637,000 6.8 %
Selling, general and
administrative expenses 193,230,000 166,981,000 15.7 %
Intangible amortization 5,673,000 4,519,000 25.5 %
Interest expense 884,000 1,016,000 (13.0)%
----------------------------------------------------------------------
Total expenses 2,504,775,000 2,330,153,000 7.5 %
----------------------------------------------------------------------
Income from continuing
operations before income
taxes 82,986,000 44,996,000 84.4 %
Income taxes 27,910,000 15,352,000 81.8 %
----------------------------------------------------------------------
Income from continuing
operations 55,076,000 29,644,000 85.8 %
Income from discontinued
operations, net of income
taxes 166,000 829,000 (80.0)%
Gain on sale of discontinued
operation, net of income
taxes 14,221,000 - -
----------------------------------------------------------------------
Net Income $69,463,000 $30,473,000 127.9 %
======================================================================
Net Income Per Common Share
- Basic
Income from continuing
operations $1.12 $0.61 83.6 %
Income from discontinued
operations - 0.02 -
Gain on sale of
discontinued operation 0.29 - -
----------------------------------------------------------------------
$1.41 $0.63 123.8 %
======================================================================
Net Income Per Common Share
- Diluted
Income from continuing
operations $1.09 $0.59 84.7 %
Income from discontinued
operations - 0.02 -
Gain on sale of
discontinued operation 0.29 - -
----------------------------------------------------------------------
$1.38 $0.61 126.2 %
======================================================================
Average Common And Common
Equivalent Shares
Basic 49,332,000 48,641,000 1.4 %
Diluted 50,367,000 50,064,000 0.6 %
SALES AND OPERATING PROFIT BY SEGMENT (UNAUDITED)
Three Months Ended October 31, Increase
2005 2004 (Decrease)
----------------------------------------------------------------------
Sales and Other Income
Janitorial $383,604,000 $369,426,000 3.8 %
Parking 106,813,000 99,163,000 7.7 %
Security 73,834,000 66,729,000 10.6 %
Engineering 62,737,000 54,741,000 14.6 %
Lighting 31,138,000 29,014,000 7.3 %
Corporate 580,000 721,000 (19.6)%
----------------------------------------------------------------------
$658,706,000 $619,794,000 6.3 %
======================================================================
Operating Profit
Janitorial $21,459,000 $18,908,000 13.5 %
Parking 7,922,000 3,245,000 144.1 %
Security 3,833,000 3,215,000 19.2 %
Engineering 3,873,000 3,405,000 13.7 %
Lighting 1,384,000 1,096,000 26.3 %
Corporate expenses (13,395,000) (25,127,000) (46.7)%
----------------------------------------------------------------------
Operating profit from
continuing operations 25,076,000 4,742,000 428.8 %
Interest expense (171,000) (270,000) (36.7)%
----------------------------------------------------------------------
Income from continuing
operations before income
taxes $24,905,000 $4,472,000 456.9 %
======================================================================
Year Ended October 31, Increase
2005 2004 (Decrease)
----------------------------------------------------------------------
Sales and Other Income
Janitorial $1,525,565,000 $1,442,901,000 5.7 %
Parking 409,886,000 384,547,000 6.6 %
Security 294,299,000 224,715,000 31.0 %
Engineering 238,794,000 209,156,000 14.2 %
Lighting 116,218,000 112,074,000 3.7 %
Corporate 1,804,000 1,756,000 2.7 %
----------------------------------------------------------------------
$2,586,566,000 $2,375,149,000 8.9 %
======================================================================
Operating Profit
Janitorial $69,254,000 $60,574,000 14.3 %
Parking 16,837,000 9,514,000 77.0 %
Security 13,589,000 9,002,000 51.0 %
Engineering 14,200,000 12,096,000 17.4 %
Lighting 3,805,000 2,822,000 34.8 %
Corporate expenses (35,010,000) (47,996,000) (27.1)%
----------------------------------------------------------------------
Operating profit from
continuing operations 82,675,000 46,012,000 79.7 %
Gain on insurance claim 1,195,000 - -
Interest expense (884,000) (1,016,000) (13.0)%
----------------------------------------------------------------------
Income from continuing
operations before income
taxes $82,986,000 $44,996,000 84.4 %
======================================================================
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