ABM Industries Announces Second Quarter Financial Results.Business Editors SAN FRANCISCO--(BUSINESS WIRE)--June 10, 2003 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 ) today reported net income for the quarter ended April 30, 2003 of $9.9 million ($0.20 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) compared to $14.0 million ($0.27 per diluted share) reported for the second quarter of fiscal 2002. Revenues for the second quarter of 2003 were $589.8 million, up 11% from $530.2 million in the second quarter of 2002. The quarter ended April 30, 2002 included a $4.3 million ($2.7 million after tax, $0.05 per diluted share) gain from the receipt of an initial payment from the World Trade Center insurance claim. Included in the quarter ended April 30, 2003 were revenues and operating profits Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. generated by ABM Lakeside Building Maintenance, which ABM acquired in July July: see month. 2002, and the Company's acquisition of Horizon's self-performed janitorial operations in January January: see month. 2003. Net income for the six months ended April 30, 2003 was $14.2 million ($0.29 per diluted share) compared to $22.0 million ($0.43 per diluted share) reported for the first half of fiscal 2002. Revenues for the first half of 2003 were $1,170.5 million, up 11% from $1,057.7 million in the first half of 2002. "Given the tough economic environment, our second quarter performance was solid," said 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). C. Slipsager, ABM's President and Chief Executive Officer. "High vacancies in office buildings, the downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. in travel related to SARS and the Iraqi war, and customers' continued tightening of budgets that reduced higher margin capital project work and extra services, all made a difference in our results today," said Slipsager. "We are pleased that the changes we implemented to improve the performance of both our Lighting and Janitorial Northeast Region, which had disappointing first quarters, are showing positive returns. Furthermore, the integration of Horizon's self-performed janitorial acquisition is on schedule and we are very excited about the recently completed acquisition of the southern California Southern California, also colloquially known as SoCal, is the southern portion of the U.S. state of California. Centered on the cities of Los Angeles and San Diego, Southern California is home to nearly 24 million people and is the nation's second most populated region, operations of Valet Parking valet parking n. Parking arrangements provided by a commercial establishment, such as a restaurant, whereby patrons leave their cars at the entrance and attendants park and retrieve them. Noun 1. Service," said Slipsager. "Despite this progress, we anticipate that the difficult economic environment will continue for the remainder of 2003. We expect 2003 diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of to be approximately $0.85 per share. We are fundamentally well-positioned for internal growth when the economy improves," he added. Wednesday Wednesday: see week. morning, June June: see month. 11, at 6:00 a.m. (Pacific Daylight Time), ABM will host a live webcast of remarks by President & Chief Executive Officer Henrik C. Slipsager and Senior Vice President & 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, who will also answer questions from a panel of financial analysts who will join Slipsager and Sundby on the conference call. The webcast will be accessible at www.irconnect.com/primecast/03/q2/abm_2q2003.mhtml by clicking on ABM at that site. Listeners are requested 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. The webcast will be archived 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 the next year. In addition to the webcast, a limited number of toll-free telephone lines will 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 for 48 hours beginning two hours after the call ends by dialing 800/642-1687, and then entering ID #923689. ABM Industries Incorporated is one of 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 fiscal 2002 revenues in excess of $2.1 billion and more than 62,000 employees, ABM provides janitorial, parking, engineering, security, lighting, elevator elevator, in machinery elevator, in machinery, device for transporting people or goods from one level to another. The term is applied to the enclosed structures as well as the open platforms used to provide vertical transportation in buildings, large ships, , mechanical and network services for thousands of commercial, industrial, institutional and retail facilities in hundreds of cities across North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. . The ABM Family of Services includes ABM Janitorial, Ampco System Parking, ABM Engineering, 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 ), Amtech Lighting, Amtech Elevator, CommAir Mechanical and ABM Service Network. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement Cautionary Safe Harbor Disclosure for Forward Looking Statements 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: Because of the factors set forth below, as well as other variables affecting the Company's operating results, past financial performance should not be considered a reliable indicator of future performance, and investors should not use historical trends to anticipate results or trends in future periods. The statements contained herein which are not historical facts are 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 are subject to meaningful risks and uncertainties, including but not limited to: (1) significant decreases in commercial real estate occupancy, resulting in reduced demand and pricing pressures on building maintenance and other facility services in the Company's major markets, (2) inability to pass through cost increases in a timely manner, or at all, or to reduce expenses when sales decline, (3) loss 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 one or more of the Company's major customers, which could adversely affect the Company's ability to collect its accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying or recover its deferred costs as well as having an adverse impact on future revenue, (4) major collective bargaining collective bargaining, in labor relations, procedure whereby an employer or employers agree to discuss the conditions of work by bargaining with representatives of the employees, usually a labor union. issues that may cause loss of revenues or cost increases that non-union competitors can use to their advantage in gaining market share, (5) significant shortfalls in adding additional customers in existing and new territories and markets, (6) inability to successfully integrate acquisitions into the Company, (7) a protracted pro·tract tr.v. pro·tract·ed, pro·tract·ing, pro·tracts 1. To draw out or lengthen in time; prolong: disputants who needlessly protracted the negotiations. 2. slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. in the Company's acquisition activities, (8) legislation or other governmental action that severely impacts one or more of the Company's lines of business, such as price controls that could restrict price increases, or the unrecovered cost of any universal employer-paid health insurance, as well as government investigations that adversely affect the Company, (9) 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, which would increase interest expense or the cost of capital, (10) cancellation or nonrenewal of the Company's primary insurance policies, as many customers contract out services based on the contractor's ability to provide adequate insurance coverage and limits, (11) catastrophic uninsured or underinsured un·der·in·sure tr.v. un·der·in·sured, un·der·in·sur·ing, un·der·in·sures To insure under a policy that provides inadequate benefits: Be certain that you are not underinsured against catastrophic illness. claims against the Company, the inability of the Company's insurance carriers to pay otherwise insured claims, or inadequacy in the Company's reserve for self-insured self-insured Self fund Health insurance adjective Referring to the practice of carrying an individual health insurance policy for oneself; self insurance is usually more expensive than group insurance claims, (12) inability to employ entry level personnel at competitive wage rates due to 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. , (13) resignation, termination, death or disability of one or more of the Company's key executives, which could adversely affect customer retention and day-to-day day-to-day adj. 1. Occurring on a routine or daily basis: the day-to-day movements of the stock market. 2. management of the Company, and (14) other material factors that are disclosed from time to time in the Company's public filings with 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. Securities and Exchange Commission, such as reports on Forms 8-K, 10-Q and 10-K.
BALANCE SHEET SUMMARY (UNAUDITED)
April 30, April 30, Increase
2003 2002 (Decrease)
------------------------------ ----------
Assets
------
Current assets $441,020,000 $444,112,000 -0.7%
Goodwill 185,540,000 124,465,000 49.1%
All other assets 103,330,000 99,529,000 3.8%
Total assets $729,890,000 $668,106,000 9.2%
Liabilities
-----------
Current liabilities $246,796,000 $213,272,000 15.7%
Other non-current liabilities 92,626,000 86,111,000 7.6%
Total liabilities $339,422,000 $299,383,000 13.4%
Stockholders' Equity $390,468,000 $368,723,000 5.9%
--------------------
Total liabilities and
stockholders' equity $729,890,000 $668,106,000 9.2%
SELECTED CASH FLOW INFORMATION (UNAUDITED)
Three Months Ended April 30, Increase
2003 2002 (Decrease)
------------------------------ ----------
Net Cash Provided By
Operating Activities $5,429,000 $27,850,000 -80.5%
Net Cash Used In Investing
Activities $(4,511,000) $(9,122,000) -50.5%
Common stock issued $3,115,000 $5,753,000 -45.9%
Stock buyback -- (16,670,000) --
Dividends paid (4,670,000) (4,463,000) 4.6%
Net debt payments -- (942,000) --
Decrease in bank overdraft -- (7,299,000) --
Net Cash Used In Financing
Activities $(1,555,000) $(23,621,000) -93.4%
Six Months Ended April 30, Increase
2003 2002 (Decrease)
------------------------------ ----------
Net Cash Provided By
Operating Activities $23,243,000 $40,311,000 -42.3%
Net Cash Used In Investing
Activities $(21,222,000) $(14,698,000) 44.4%
Common stock issued $7,674,000 $9,740,000 -21.2%
Stock buyback (9,297,000) (16,670,000) -44.2%
Dividends paid (9,310,000) (8,878,000) 4.9%
Net debt payments -- (11,819,000) --
Increase in bank overdraft -- 1,687,000 --
Net Cash Used In Financing
Activities $(10,933,000) $(25,940,000) -57.9%
SUMMARY INCOME STATEMENT (UNAUDITED)
Three Months Ended April 30, Increase
2003 2002 (Decrease)
------------------------------ ----------
Sales and other income $589,829,000 $525,850,000 12.2%
Gain on insurance claim -- 4,300,000 --
------------------------------
Total revenues 589,829,000 530,150,000 11.3%
Operating expenses and cost
of goods sold 526,613,000 468,563,000 12.4%
Selling, general and
administrative expenses 47,460,000 38,791,000 22.3%
Interest expense 178,000 232,000 -23.3%
Income before income taxes $15,578,000 $22,564,000 -31.0%
Net income $9,892,000 $13,989,000 -29.3%
Net income per common share:
Basic $0.20 $0.28 28.6%
Diluted $0.20 $0.27 25.9%
Average common shares
outstanding:
Basic 48,994,000 49,256,000 -0.5%
Diluted 49,877,000 51,494,000 -3.1%
Six Months Ended April 30, Increase
2003 2002 (Decrease)
------------------------------ ----------
Sales and other income $1,170,455,000 $1,053,402,000 11.1%
Gain on insurance claim -- 4,300,000 --
------------------------------
Total revenues 1,170,455,000 1,057,702,000 10.7%
Operating expenses and cost
of goods sold 1,052,996,000 943,346,000 11.6%
Selling, general and
administrative expenses 95,066,000 78,407,000 21.2%
Interest expense 303,000 497,000 -39.0%
Income before income taxes $22,090,000 $35,452,000 -37.7%
Net income $14,230,000 $21,980,000 -35.3%
Net income per common share:
Basic $0.29 $0.45 -35.6%
Diluted $0.29 $0.43 -32.6%
Average common shares
outstanding:
Basic 49,023,000 49,110,000 -0.2%
Diluted 49,925,000 51,086,000 -2.3%
SALES AND OPERATING PROFIT BY SEGMENT (UNAUDITED)
Three Months Ended April 30, Increase
2003 2002 (Decrease)
------------------------------ ----------
Sales and Other Income
Janitorial $343,505,000 $284,229,000 20.9%
Parking 91,659,000 88,353,000 3.7%
Engineering 43,945,000 42,667,000 3.0%
Security 39,008,000 34,631,000 12.6%
Lighting 33,577,000 32,071,000 4.7%
Elevator 27,292,000 28,234,000 -3.3%
Other 10,741,000 15,532,000 -30.8%
Corporate 102,000 133,000 -23.3%
------------------------------
$589,829,000 $525,850,000 12.2%
Operating Profit
Janitorial $15,570,000 $16,327,000 -4.6%
Parking 1,022,000 1,783,000 -42.7%
Engineering 2,586,000 2,339,000 10.6%
Security 1,160,000 1,065,000 8.9%
Lighting 1,813,000 2,095,000 -13.5%
Elevator 1,043,000 608,000 71.5%
Other 70,000 74,000 -5.4%
Corporate expenses (7,508,000) (5,795,000) 29.6%
------------------------------
Operating Profit 15,756,000 18,496,000 -14.8%
Gain on insurance claim -- 4,300,000 --
Interest expense (178,000) (232,000) -23.3%
------------------------------
Income before income taxes $15,578,000 $22,564,000 -31.0%
Six Months Ended April 30, Increase
2003 2002 (Decrease)
------------------------------ ----------
Sales and Other Income
Janitorial $674,357,000 $571,029,000 18.1%
Parking 186,074,000 177,839,000 4.6%
Engineering 89,572,000 86,337,000 3.7%
Security 76,797,000 66,794,000 15.0%
Lighting 66,723,000 64,638,000 3.2%
Elevator 55,474,000 54,727,000 1.4%
Other 21,225,000 31,688,000 -33.0%
Corporate 233,000 350,000 -33.4%
------------------------------
$1,170,455,000 $1,053,402,000 11.1%
Operating Profit
Janitorial $23,377,000 $27,170,000 -14.0%
Parking 1,612,000 2,831,000 -43.1%
Engineering 4,616,000 4,660,000 -0.9%
Security 2,502,000 2,260,000 10.7%
Lighting 2,493,000 4,004,000 -37.7%
Elevator 1,994,000 1,524,000 30.8%
Other (53,000) 772,000 -106.9%
Corporate expenses (14,148,000) (11,572,000) 22.3%
------------------------------
Operating Profit 22,393,000 31,649,000 -29.2%
Gain on insurance claim -- 4,300,000 --
Interest expense (303,000) (497,000) -39.0%
------------------------------
Income before income taxes $22,090,000 $35,452,000 -37.7%
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