ABM Industries Announces Third Quarter Financial Results.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 -- Third Quarter 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 Increases 26.9% to $13.4 Million on Record Quarterly Revenue 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 third quarter of fiscal 2004 of $13.4 million ($0.27 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 $11.7 million ($0.23 per diluted share) for the prior year third quarter. Net income for the third quarter of fiscal 2003 includes $1.2 million ($0.02 per diluted share) 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. income from the 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, operations that were sold to Otis Elevator in the fourth quarter of 2003. Sales and other income for the third quarter of fiscal 2004 were a quarterly record of $623.8 million, up 9.6% from $569.1 million in the third quarter of fiscal 2003. Commenting on the results, 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, stated, "We are pleased with our third quarter results, which included record revenue and solid net income growth. Our top four businesses in terms of revenue 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. all generated 20% or higher gains in year over year quarterly operating profits. Parking and Security were the two highest with gains of 48.6% and 36.7%, respectively. ABM's operations benefited from recent acquisitions in Security and Janitorial, new business, expanded service to our existing customers, and one fewer day of labor expense in our Janitorial operations." "Our Lighting business experienced another difficult quarter in terms of achieving revenue and operating profit targets," Mr. Slipsager continued. "We are taking strong measures to improve the operating results of our Lighting business, while continuing to build on the momentum generated in our Janitorial, Security, Engineering, Parking and Facility Service operations," he added. Net income for the nine months ended July July: see month. 31, 2004, was $27.3 million ($0.55 per diluted share), compared to $26.0 million ($0.52 per diluted share) reported for the first nine months of fiscal 2003. Net income for the first nine months of fiscal 2003 included $2.4 million ($0.05 per diluted share) after-tax income from the discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: Elevator operations. Sales and other income for the first nine months of fiscal 2004 were $1,785 million, up 6.0% from the first nine months of fiscal 2003. Mr. Slipsager stated, "We remain encouraged about our prospects for growth and believe that we are well positioned to meet our previously issued fiscal 2004 guidance of $0.80 to $0.85 per diluted share." Conference Call ABM will host a conference call on Thursday Thursday: see week. , September September: see month. 9, 2004 at 6:00 a.m. Pacific Time (9:00 a.m. Eastern Time). The call, which will be hosted by Henrik Slipsager, President and Chief Executive Officer, and 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). Sundby, Executive Vice President and Chief Financial Officer, will be broadcast live over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the and accessible at www.irconnect.com/primecast/04/q3/abm_3q2004.html for 90 days and through the Investor Relations Investor relations The process by which the corporation communicates with its investors. section of the Company's website at www.abm.com for a period of 12 months. The webcast will be archived online within one hour of the completion of the conference call and available at www.abm.com. 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 available for 48 hours after the call by dialing (800) 642-1687, and then entering ID #9837238. The telephonic replay will remain available for a period of 7 days following the call. About ABM Industries Incorporated 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 2003 revenues in excess of $2.2 billion and more than 70,000 employees, ABM provides janitorial, parking, engineering, security, lighting and mechanical services for thousands of commercial, industrial, institutional, and retail facilities in hundreds of cities across 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. 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 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 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 (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 ), Security Services of America America [for Amerigo Vespucci], the lands of the Western Hemisphere—North America, Central (or Middle) America, and South America. The world map published in 1507 by Martin Waldseemüller is the first known cartographic use of the name. (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. ), Amtech Lighting, CommAir Mechanical and ABM Facility Services. Certain statements made in this press release, including statements regarding ABM's expected financial performance 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. as defined in 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 that are subject to meaningful risks and uncertainties. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to: (1) a decline in commercial office building occupancy Gaining or having physical possession of real property subject to, or in the absence of, legal right or title. In a fire insurance policy, for example, the term occupancy and rental rates could affect the Company's sales and profitability, (2) an increase in costs that the Company cannot pass on to customers could affect profitability, (3) the 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 one or more of the Company's major customers could adversely affect results, (4) the Company could experience 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. disputes that would lead to the loss of sales or expense increases, (5) the Company is subject to intense competition, (6) the Company's success depends on its ability to preserve its 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. relationships with its customers, (7) weakness in airline travel and the hospitality industry could adversely impact the Company's Parking results, (8) low levels of capital investments by customers could negatively impact the project sales of the Lighting and Mechanical segments, (9) acquisition activity could slow or be unsuccessful, (10) the Company incurs significant accounting and other control costs, which could increase, (11) an inadequacy in the Company's self-insurance self-insurance, n the setting aside of funds by an individual or organization to meet anticipated dental care expenses or dental care claims, and accumulation of a fund to absorb fluctuations in the amount of expenses and claims. reserves, or the cancellation cancellation (See: cancel) CANCELLATION. Its general acceptation, is the act of crossing a writing; it is used sometimes to signify the manual operation of tearing or destroying the instrument itself. Hyde v. Hyde, 1 Eq. Cas. Abr. 409; Rob. or non-renewal of the Company's primary insurance policies, could adversely impact the Company's results, or (12) other issues and uncertainties which may include: 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, 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 could increase interest expense and the cost of capital, 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, new accounting pronouncements or changes in
accounting policies, 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. , the resignation, termination The point where a line, channel or circuit ends. See SCSI termination and hybrid. , death or disability of one or more of the Company's key executives that adversely affects customer retention or 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 inclement in·clem·ent adj. 1. Stormy: inclement weather. 2. Showing no clemency; unmerciful. in·clem weather which could disrupt the Company in providing its services.
BALANCE SHEET SUMMARY
July 31, October 31, Increase
2004 2003 (Decrease)
--------------- --------------- ----------
Assets (UNAUDITED)
Cash and cash equivalents $49,501,000 $110,947,000 -55.4%
Trade accounts receivable,
net 307,900,000 287,906,000 6.9%
Other current assets 101,204,000 101,795,000 -0.6%
--------------- ---------------
Total current assets 458,605,000 500,648,000 -8.4%
Goodwill 221,754,000 201,866,000 9.9%
Other intangibles, net 23,392,000 3,691,000 533.8%
All other assets 96,863,000 89,778,000 7.9%
--------------- ---------------
Total assets $800,614,000 $795,983,000 0.6%
=============== ===============
Liabilities
Current liabilities $244,851,000 $256,691,000 -4.6%
Non-current liabilities 101,036,000 95,256,000 6.1%
--------------- ---------------
Total liabilities 345,887,000 351,947,000 -1.7%
Stockholders' Equity 454,727,000 444,036,000 2.4%
--------------- ---------------
Total liabilities and
stockholders' equity $800,614,000 $795,983,000 0.6%
=============== ===============
SELECTED CASH FLOW
INFORMATION (UNAUDITED)
Three Months Ended July 31, Increase
2004 2003 (Decrease)
--------------- --------------- ----------
Net cash flows from
continuing operating
activities $6,597,000 $25,841,000 -74.5%
Net operational cash flows
from discontinued operation - (26,000) -
--------------- ---------------
Net Cash Provided By
Operating Activities $6,597,000 $25,815,000 -74.4%
Net Cash Used In Investing
Activities $(4,866,000) $(5,520,000) -11.8%
Common stock issued $1,848,000 $3,553,000 -48.0%
Stock buyback (9,384,000) (2,795,000) 235.7%
Dividends paid (4,869,000) (4,693,000) 3.8%
--------------- ---------------
Net Cash Used In Financing
Activities $(12,405,000) $(3,935,000) 215.2%
Nine Months Ended July 31, Increase
2004 2003 (Decrease)
--------------- --------------- ----------
Net cash flows from
continuing operating
activities $42,930,000 $42,782,000 0.3%
Net operational cash flows
from discontinued operation (30,507,000) 6,276,000 -
--------------- ---------------
Net Cash Provided By
Operating Activities $12,423,000 $49,058,000 -74.7%
Net Cash Used In Investing
Activities $(55,702,000) $(26,742,000) 108.3%
Common stock issued $7,510,000 $11,227,000 -33.1%
Stock buyback (11,073,000) (12,092,000) -8.4%
Dividends paid (14,604,000) (14,003,000) 4.3%
--------------- ---------------
Net Cash Used In Financing
Activities $(18,167,000) $(14,868,000) 22.2%
INCOME STATEMENT (UNAUDITED)
Three Months Ended July 31, Increase
2004 2003 (Decrease)
--------------- --------------- ----------
Revenues
Sales and other income $623,773,000 $569,093,000 9.6%
Expenses
Operating expenses and cost
of goods sold 555,348,000 511,720,000 8.5%
Selling, general and
administrative expenses 46,045,000 41,404,000 11.2%
Intangible amortization 1,294,000 285,000 354.0%
Interest expense 255,000 216,000 18.1%
--------------- ---------------
602,942,000 553,625,000 8.9%
--------------- ---------------
Income from continuing
operations before income
taxes 20,831,000 15,468,000 34.7%
Income taxes 7,437,000 4,912,000 51.4%
--------------- ---------------
Income from continuing
operations, net of income
taxes 13,394,000 10,556,000 26.9%
Income from discontinued
operation, net of income
taxes - 1,182,000 -
--------------- ---------------
Net Income $13,394,000 $11,738,000 14.1%
=============== ===============
Net Income Per Common Share
- Basic
From continuing operations $0.27 $0.21 28.6%
From discontinued operation - 0.03 -
--------------- ---------------
$0.27 $0.24 12.5%
=============== ===============
Net Income Per Common Share
- Diluted
From continuing operations $0.27 $0.21 28.6%
From discontinued operation - 0.02 -
--------------- ---------------
$0.27 $0.23 17.4%
=============== ===============
Average Common And Common
Equivalent Shares
Basic 48,748,000 49,269,000 -1.1%
Diluted 50,226,000 50,244,000 0.0%
Nine Months Ended July 31, Increase
2004 2003 (Decrease)
--------------- --------------- ----------
Revenues
Sales and other income $1,784,941,000 $1,684,074,000 6.0%
Expenses
Operating expenses and cost
of goods sold 1,605,307,000 1,520,980,000 5.5%
Selling, general and
administrative expenses 132,239,000 126,183,000 4.8%
Intangible amortization 4,138,000 844,000 390.3%
Interest expense 746,000 503,000 48.3%
--------------- ---------------
1,742,430,000 1,648,510,000 5.7%
--------------- ---------------
Income from continuing
operations before income
taxes 42,511,000 35,564,000 19.5%
Income taxes 15,177,000 12,010,000 26.4%
--------------- ---------------
Income from continuing
operations, net of income
taxes 27,334,000 23,554,000 16.0%
Income from discontinued
operation, net of income
taxes - 2,414,000 -
--------------- ---------------
Net Income $27,334,000 $25,968,000 5.3%
=============== ===============
Net Income Per Common Share
- Basic
From continuing operations $0.56 $0.48 16.7%
From discontinued operation - 0.05 -
--------------- ---------------
$0.56 $0.53 5.7%
=============== ===============
Net Income Per Common Share
- Diluted
From continuing operations $0.55 $0.47 17.0%
From discontinued operation - 0.05 -
--------------- ---------------
$0.55 $0.52 5.8%
=============== ===============
Average Common And Common
Equivalent Shares
Basic 48,658,000 49,105,000 -0.9%
Diluted 50,052,000 50,031,000 0.0%
SALES AND OPERATING PROFIT BY SEGMENT
(UNAUDITED)
Three Months Ended July 31, Increase
2004 2003 (Decrease)
--------------- --------------- ----------
Sales and Other Income
Janitorial $367,539,000 $343,314,000 7.1%
Parking 97,856,000 97,835,000 0.0%
Engineering 51,550,000 44,492,000 15.9%
Security 65,012,000 41,449,000 56.8%
Lighting 27,510,000 30,657,000 -10.3%
Other 13,722,000 11,303,000 21.4%
Corporate 584,000 43,000 1258.1%
--------------- ---------------
$623,773,000 $569,093,000 9.6%
=============== ===============
Operating Profit
Janitorial $17,868,000 $13,859,000 28.9%
Parking 3,457,000 2,326,000 48.6%
Engineering 3,157,000 2,631,000 20.0%
Security 2,594,000 1,897,000 36.7%
Lighting 442,000 1,373,000 -67.8%
Other 531,000 333,000 59.5%
Corporate expenses (6,963,000) (6,735,000) 3.4%
--------------- ---------------
Operating Profit From
Continuing Operations 21,086,000 15,684,000 34.4%
Interest expense (255,000) (216,000) 18.1%
--------------- ---------------
Income from continuing
operations before income
taxes $20,831,000 $15,468,000 34.7%
=============== ===============
Nine Months Ended July 31, Increase
2004 2003 (Decrease)
--------------- --------------- ----------
Sales and Other Income
Janitorial $1,073,475,000 $1,017,671,000 5.5%
Parking 285,384,000 283,909,000 0.5%
Engineering 148,527,000 134,064,000 10.8%
Security 157,986,000 118,246,000 33.6%
Lighting 83,060,000 97,380,000 -14.7%
Other 35,474,000 32,528,000 9.1%
Corporate 1,035,000 276,000 275.0%
--------------- ---------------
$1,784,941,000 $1,684,074,000 6.0%
=============== ===============
Operating Profit
Janitorial $40,878,000 $37,236,000 9.8%
Parking 6,158,000 3,938,000 56.4%
Engineering 8,569,000 7,247,000 18.2%
Security 5,787,000 4,399,000 31.6%
Lighting 1,726,000 3,866,000 -55.4%
Other 937,000 280,000 234.6%
Corporate expenses (20,798,000) (20,899,000) -0.5%
--------------- ---------------
Operating Profit From
Continuing Operations 43,257,000 36,067,000 19.9%
Interest expense (746,000) (503,000) 48.3%
--------------- ---------------
Income from continuing
operations before income
taxes $42,511,000 $35,564,000 19.5%
=============== ===============
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