ABM Industries Reports Fourth Quarter Income from Continuing Operations up 15%.Business Editors SAN FRANCISCO--(BUSINESS WIRE)--Dec. 9, 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 its 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 quarter ended October October: see month. 31, 2003 was $12.8 million ($0.26 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 15% compared to $ 11.1 million ($0.22 per diluted share) for the fourth quarter of fiscal 2002. Sales and other income for the fourth quarter of fiscal 2003 were $578.4 million, up 4% from $555.1 million for the fourth quarter of the prior year. Net income for the quarter ended October 31, 2003, which included an 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. gain of $51.5 million ($1.03 per diluted share) as a result of the previously announced sale of the assets of Amtech 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, Services to Otis Elevator ("Otis") on August 15, 2003, was $64.5 million ($1.29 per diluted share) compared to $12.1 million ($0.24 per diluted share) for fourth quarter of fiscal 2002. The quarter ended October 31, 2003 included a $1.1 million ($0.7 million after-tax) settlement for prior period services performed related to a managed parking lot contract in Houston Houston, city (1990 pop. 1,630,553), seat of Harris co., SE Tex., a deepwater port on the Houston Ship Channel; inc. 1837. Economy The fourth largest city in the nation and the largest in the entire South and Southwest, Houston is a port of entry; which was substantially offset by a provision of $1.0 million ($0.6 million after-tax) for parking sales taxes sales tax, levy on the sale of goods or services, generally calculated as a percentage of the selling price, and sometimes called a purchase tax. It is usually collected in the form of an extra charge by the retailer, who remits the tax to the government. for prior years based on a sales tax audit. The 2003 fourth quarter also included 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 the self-performed janitorial operations of Horizon National Commercial Services acquired in January January: see month. 2003, the commercial parking 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 acquired in May 2003 and the operations of HGO HGO Hidalgo (postcode, Mexico) HGO Hepatic Glucose Output HgO Mercury Oxide HGO Heavy Gas Oil HGO Hip-Guided Orthosis HGO Hayes, Grebogi and Ott , Inc., a provider of janitorial services based in King of Prussia, Pennsylvania For Kings of Prussia, see List of rulers of Prussia King of Prussia is an unincorporated community in Upper Merion Township, Montgomery County, Pennsylvania, United States. As of the 2000 census, its population was 18,511. , acquired in August 2003. The fourth quarter of fiscal 2002 included $1.0 million of interest income ($0.6 million after-tax) from the resolution of past due balances with two janitorial customers, as well as a $0.5 million gain ($0.3 million after-tax) on the early termination of a parking lease. Income from continuing operations for the year ended October 31, 2003 was $36.4 million ($0.73 per diluted share) compared to $ 44.1 million ($0.86 per diluted share) for fiscal 2002, Sales and other income for the year 2003 were $2,262.5 million, up 9% from $2,068.1 million for the prior year. Net income for the year ended October 31, 2003, which included the operating result of the Elevator segment prior to its August 15, 2003 sale to Otis and the previously mentioned after-tax gain of $51.5 million ($1.03 per diluted share), was $90.5 million ($1.81 per diluted share) compared to $46.7 million ($0.92 per diluted share) for fiscal 2002. A number of events affected the comparability of the years. In addition to the fourth quarter items previously discussed income from continuing operations for fiscal year 2002 benefited from a $10.0 million gain ($6.3 million after-tax) from two partial settlements on the World Trade Center insurance claim, and a $2.0 million tax benefit from the adjustment of prior-year estimated tax Federal and state tax laws require a quarterly payment of estimated taxes due from corporations, trusts, estates, non-wage employees, and wage employees with income not subject to withholding. liabilities. Fiscal year 2002 was adversely affected by a $3.2 million provision ($2.0 million after-tax) for costs associated with the elimination of the Chief Administrative Officer A chief administrative officer (CAO) is responsible for administrative management of private, public or governmental corporations. The CAO is one of the highest ranking members of an organization, managing daily operations and usually reporting directly to the chief executive position, the early retirement of the Corporate General Counsel and the replacement of the President of the ABM Facility Services. Fiscal year 2003 benefited from the previously discussed acquisitions completed in 2003 and a full year of revenue and operating profits generated from Lakeside Building Maintenance which was acquired in July July: see month. 2002. "Fourth quarter performance was solid across all operating segments," 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 & Chief Executive Officer. "In addition to our solid quarter, we are extremely pleased with the completion of the successful sale of the operating assets Operating Assets Another term for working capital. of our Elevator segment to Otis Elevator and the acquisition of HGO, Inc., a premier janitorial operation," said Slipsager. "With $111 million of cash at year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. and no debt, we are in a financial position that ABM has never seen before. We expect over time to continue to make acquisitions in our core services The introduction to this article provides insufficient context for those unfamiliar with the subject matter. Please help [ improve the introduction] to meet Wikipedia's layout standards. You can discuss the issue on the talk page. , " said Slipsager. " Looking into the new year, all operations are seeing a marked increase in business activity which bodes well for the future. Excluding any acquisition, we expect income from continuing operations for fiscal year 2004 will be in the range of $0.80- $0.90 per diluted share." Wednesday Wednesday: see week. morning, December December: see month. 10th, at 6:00 a.m. (Pacific Standard 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/04/q4/abm_4q2003.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 one year thereafter. 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 #2432289. 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 64,000 employees, ABM provides janitorial, parking, engineering, security, lighting, 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, 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 and that may give non-union competitors an advantage in gaining market share, (5) significant shortfalls in adding additional customers in existing and new territories and markets, (6) weakness in the travel and hospitality industry, which could adversely affect parking revenues from airport and hotel facilities, (7) reduced capital projects spending by customers which could negatively impact the project revenue of the lighting and mechanical segments, (8) inability to successfully integrate acquisitions into the Company, (9) 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, (10) 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, (11) 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, (12) 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, (13) 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, (14) 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. , (15) 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 management of the Company, and (16) 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
Oct. 31, Oct. 31, Increase
2003 2002 (Decrease)
------------------------------ ----------
Assets
----------------
Assets held for sale $ - $32,136,000 -
Other current assets 500,648,000 410,024,000 22.1%
Goodwill 201,866,000 164,009,000 23.1%
All other assets 93,469,000 98,770,000 -5.4%
Total assets $795,983,000 $704,939,000 12.9%
Liabilities
----------------
Liabilities held for sale $ - $7,403,000 -
Other current liabilities 256,691,000 219,687,000 16.8%
Non-current liabilities 95,256,000 91,179,000 4.5%
Total liabilities $351,947,000 $318,269,000 10.6%
Stockholders' Equity $444,036,000 $386,670,000 14.8%
-----------------------------
Total liabilities and
stockholders' equity $795,983,000 $704,939,000 12.9%
SELECTED CASH FLOW INFORMATION
Three Months Ended Oct. 31, Increase
2003 2002 (Decrease)
------------------------------ ----------
(UNAUDITED)
Net Cash Provided By
Operating Activities $11,084,000 $47,769,000 -76.8%
Net Cash Provided By (Used
In) Investing Activities $92,796,000 $(4,707,000) -
Common stock issued $3,097,000 $4,299,000 -28.0%
Stock buyback (18,262,000) (6,962,000) 162.3%
Dividends paid (4,632,000) (4,447,000) 4.2%
Repayment of long-term
borrowings - (15,000,000) -
Increase in bank overdraft - (4,281,000) -
Net Cash Used In Financing
Activities $(19,797,000) $(26,391,000) -25.0%
Years Ended Oct. 31, Increase
2003 2002 (Decrease)
------------------------------ ----------
Net Cash Provided By
Operating Activities $60,142,000 $110,919,000 -45.8%
Net Cash Provided By (Used
In) Investing Activities $66,054,000 $(59,318,000) -
Common stock issued $14,324,000 $17,955,000 -20.2%
Stock buyback (30,354,000) (23,632,000) 28.4%
Dividends paid (18,635,000) (17,730,000) 5.1%
Repayment of long-term
borrowings - (11,819,000) -
Net Cash Used In Financing
Activities $(34,665,000) $(35,226,000) -1.6%
SUMMARY INCOME STATEMENT
Three Months Ended Oct. 31, Increase
2003 2002 (Decrease)
------------------------------ ----------
(UNAUDITED)
Sales and other income $578,402,000 $555,123,000 4.2%
Operating expenses and cost
of goods sold 514,751,000 495,778,000 3.8%
Selling, general and
administrative expenses 44,108,000 42,462,000 3.9%
Interest expense 255,000 326,000 -21.8%
Income from continuing
operations before income
taxes 19,288,000 16,557,000 16.5%
Income from continuing
operations, net of income
taxes 12,844,000 11,129,000 15.4%
Income from discontinued
operation, net of income
taxes 146,000 985,000 -85.2%
Gain on sale of discontinued
operation, net of income
taxes 51,500,000 - -
------------------------------
Net income $64,490,000 $12,114,000 432.4%
Net income per common share:
Basic -
From continuing operations $0.26 $0.23 13.0%
From discontinued operation - 0.02 -
Net gain on sale of
discontinued operation 1.05 - -
------------------------------
Net income $1.31 $0.25 424.0%
Diluted -
From continuing operations $0.26 $0.22 18.2%
From discontinued operation - 0.02 -
Net gain on sale of
discontinued operation 1.03 - -
------------------------------
Net income $1.29 $0.24 437.5%
Average common shares
outstanding:
Basic 48,945,000 49,186,000 -0.5%
Diluted 49,922,000 50,710,000 -1.6%
Years Ended Oct. 31, Increase
2003 2002 (Decrease)
------------------------------ ----------
Sales and other income $2,262,476,000 $2,068,058,000 9.4%
Gain on insurance claim - 10,025,000 -
------------------------------
Total revenues 2,262,476,000 2,078,083,000 8.9%
Operating expenses and cost
of goods sold 2,035,731,000 1,855,980,000 9.7%
Selling, general and
administrative expenses 171,135,000 156,042,000 9.7%
Interest expense 758,000 1,052,000 -27.9%
Income from continuing
operations before income
taxes 54,852,000 65,009,000 -15.6%
Income from continuing
operations, net of income
taxes 36,398,000 44,058,000 -17.4%
Income from discontinued
operation, net of income
taxes 2,560,000 2,670,000 -4.1%
Gain on sale of discontinued
operation, net of income
taxes 51,500,000 - -
------------------------------
Net income $90,458,000 $46,728,000 93.6%
Net income per common share:
Basic -
From continuing operations $0.74 $0.90 -17.8%
From discontinued operation 0.05 0.05 -
Net gain on sale of
discontinued operation 1.05 - -
------------------------------
Net income $1.84 $0.95 93.7%
Diluted -
From continuing operations $0.73 $0.86 -15.1%
From discontinued operation 0.05 0.06 -16.7%
Net gain on sale of
discontinued operation 1.03 - -
------------------------------
Net income $1.81 $0.92 96.7%
Average common shares
outstanding:
Basic 49,065,000 49,116,000 -0.1%
Diluted 50,004,000 51,015,000 -2.0%
SALES AND OPERATING PROFIT BY SEGMENT
Three Months Ended Oct. 31, Increase
2003 2002 (Decrease)
------------------------------ ----------
Sales and Other Income (UNAUDITED)
Janitorial $350,611,000 $330,450,000 6.1%
Parking 96,667,000 93,760,000 3.1%
Engineering 46,166,000 43,951,000 5.0%
Security 41,424,000 37,172,000 11.4%
Lighting 30,159,000 34,352,000 -12.2%
Other 12,866,000 15,315,000 -16.0%
Corporate 509,000 123,000 313.8%
------------------------------
$578,402,000 $555,123,000 4.2%
Operating Profit
Janitorial $16,251,000 $14,725,000 10.4%
Parking 2,411,000 2,040,000 18.2%
Engineering 2,678,000 2,747,000 -2.5%
Security 2,086,000 1,911,000 9.2%
Lighting 1,780,000 2,377,000 -25.1%
Other 1,057,000 197,000 436.5%
Corporate expenses (6,720,000) (7,114,000) -5.5%
------------------------------
Operating profit from
continuing operations 19,543,000 16,883,000 15.8%
Interest expense (255,000) (326,000) -21.8%
------------------------------
Income from continuing
operations before income
taxes $19,288,000 $16,557,000 16.5%
Years Ended Oct. 31, Increase
2003 2002 (Decrease)
------------------------------ ----------
Sales and Other Income
Janitorial $1,368,282,000 $1,197,035,000 14.3%
Parking 380,576,000 363,511,000 4.7%
Engineering 180,230,000 173,561,000 3.8%
Security 159,670,000 140,569,000 13.6%
Lighting 127,539,000 130,858,000 -2.5%
Other 45,394,000 61,963,000 -26.7%
Corporate 785,000 561,000 39.9%
------------------------------
$2,262,476,000 $2,068,058,000 9.4%
Operating Profit
Janitorial $53,487,000 $54,337,000 -1.6%
Parking 6,349,000 6,948,000 -8.6%
Engineering 9,925,000 10,033,000 -1.1%
Security 6,485,000 5,639,000 15.0%
Lighting 5,646,000 8,261,000 -31.7%
Other 1,337,000 (1,190,000) 212.4%
Corporate expenses (27,619,000) (27,992,000) -1.3%
------------------------------
Operating profit from
continuing operations 55,610,000 56,036,000 -0.8%
Gain on insurance claim - 10,025,000 -
Interest expense (758,000) (1,052,000) -27.9%
------------------------------
Income from continuing
operations before income
taxes $54,852,000 $65,009,000 -15.6%
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